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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR FISCAL YEAR ENDED DECEMBER 31, 2000 COMMISSION FILE NUMBER 0-11688

AMERICAN ECOLOGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 95-3889638
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

805 W. IDAHO, SUITE #200, BOISE, IDAHO 83702-8916
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (208) 331-8400

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value per share
(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ].

At March 27, 2001, Registrant had outstanding 13,729,569 shares of its Common
Stock. The aggregate market value of the Registrant's voting stock held by
non-affiliates at this date was approximately $16,930,158 based on the closing
price of $2.13 per share as reported on the NASDAQ Stock Market, Inc.'s National
Market System. For purposes of the foregoing calculation, all directors and
executive officers of the Registrant have been deemed to be affiliates, but the
Registrant disclaims that any of such directors or executive officers is an
affiliate.

Documents Incorporated by Reference

Portions of the Proxy Statement for 2000 Annual Meeting of
Stockholders. Part III


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TABLE OF CONTENTS



PART I

Item 1. Business.................................................................................. 1
Item 2. Properties................................................................................10
Item 3. Legal Proceedings.........................................................................11
Item 4. Submission of Matters to a Vote of Security Holders.......................................13
PART II
Item 5. Market for American Ecology Corporation Common Stock and Related Stockholders Matters.....14
Item 6. Selected Financial Data...................................................................15
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.....16
Item 8. Financial Statements and Supplementary Data...............................................28
Item 9. Changes and Disagreements with Accountants on Accounting and Financial
Disclosure................................................................................47
PART III
Items 10, 11, 12 and 13 are incorporated by reference from the definitive proxy
statement...............................................................................47
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K...........................47


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PART I

ITEM 1. BUSINESS

American Ecology Corporation, through its subsidiaries (collectively "the
Company" or "AEC") provide radioactive and hazardous materials management
services to commercial and government entities, such as nuclear power plants,
medical and academic institutions, and petro-chemical facilities. Headquartered
in Boise, Idaho, the Company is one of the nation's oldest radioactive and
hazardous chemical waste companies. The Company and its predecessor companies
have been in business for 49 years and were incorporated in 1952. The Company
currently operates in multiple states and employs approximately 300 people.

The Company's principal wholly owned subsidiaries are: US Ecology, Inc., a
California corporation ("US Ecology"), Texas Ecologists, Inc., a Texas
corporation wholly owned by US Ecology ("Texas Ecologists"); American Ecology
Recycle Center, Inc., a Delaware corporation ("AERC"), American Ecology
Environmental Services Corporation, a Texas corporation ("AEESC"), Nuclear
Equipment Services Center, Inc., a Delaware corporation ("NESC"), and Envirosafe
Services of Idaho, Inc., a Delaware corporation ("ESII") wholly owned by AEESC,
and American Liability and Excess Liability Insurance Company ("ALEX").

The current Company was incorporated in California in October 1983 and in May
1987, was reincorporated, as a Delaware corporation by merger into a newly
formed wholly owned subsidiary incorporated in Delaware for that purpose.

AEC operates two market-focused business segments. These are the Chemical
Services and the Low-Level Radioactive Waste ("LLRW") Services segments. In
2000, 44% of the Company's revenues were derived from Chemical Services and 56%
from LLRW Services.

Chemical Services provides hazardous, non-hazardous, and PCB waste treatment,
storage, transportation, disposal and brokerage services. Principal Chemical
Services customers are in the chemical, petroleum, pharmaceutical,
manufacturing, electronics and transportation industries. Hazardous waste
consists primarily of industrial waste regulated under the Resource Conservation
and Recovery Act of 1976 ("RCRA"), and hazardous substances regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA" or "Superfund"), as amended. Polychlorinated biphenyls ("PCBs") are
regulated under the Toxic Substance Control Act of 1976 ("TSCA"). Chemical
Services also includes operation of a municipal solid waste recycling and
disposal facility at Robstown, Texas, known as El Centro Landfill.

LLRW Services offers disposal, recycling, waste compaction/volume reduction,
decontamination, brokerage and other services for managing LLRW and Naturally
Occurring Radioactive Material ("NORM"). LLRW and NORM consist primarily of
solid material containing radioactive contamination, generally decaying to safe
levels within several years to approximately 500 years. Examples include
contaminated equipment, discarded glassware, tools, gloves and protective
clothing, and hospital and laboratory waste. LLRW Services customers include
electric utilities, pharmaceutical companies and other commercial businesses,
universities and hospitals. LLRW Services also provides large components, motor
decontamination and rebuilding services to electric utilities through NESC.


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The following table identifies sites currently operated by each segment of the
Company:



SUBSIDIARY LOCATION SERVICE

CHEMICAL SERVICES

Envirosafe Services of Idaho Grand View, Idaho Hazardous Waste, PCB and NORM Waste Treatment and
Disposal Site and Rail Transfer Station
Envirosafe Services of Idaho Sterling, Illinois Hazardous Waste Treatment
Texas Ecologists Robstown, Texas Hazardous Waste Treatment and Disposal
Texas Ecologists Robstown, Texas Municipal Solid Waste Disposal
US Ecology Beatty, Nevada Hazardous Waste and PCB Treatment and Disposal

LLRW SERVICES

US Ecology Richland, Washington LLRW and NORM Disposal
AERC Oak Ridge, Tennessee LLRW Processing
NESC Oak Ridge, Tennessee Nuclear Equipment Service Center - decontamination and
refurbishment of large electric motors


INDUSTRIAL, PCB, HAZARDOUS AND NON-HAZARDOUS WASTE SERVICES

Grand View, Idaho Facility. The Company owns 1,760 acres of land about 50 miles
southeast of Boise, Idaho where it operates a hazardous waste disposal facility.
This operation was acquired February 1, 2001, as Envirosafe Services of Idaho
and it increases the Company's position for handling and disposing of RCRA
hazardous, TSCA PCB and NORM waste. The Company also acquired a rail transfer
station located approximately 30 miles from the Grand View site. One of the
major services acquired with Envirosafe is a patented, US EPA-approved steel
mill waste treatment technology to stabilize and delist certain hazardous wastes
generated by steel mills, allowing economical disposal as non-hazardous
industrial waste. A second market for the Company is accepting certain naturally
occurring radioactive material ("NORM") waste under a contract the U.S. Army
Corps of Engineers. The Idaho facilities operate under regulations and permits
issued by the Idaho Department of Environmental Quality and the U.S.
Environmental Protection Agency ("US EPA").

Sterling, Illinois Facility. The Company is also licensed to use the patented
delisting technology at a dedicated use treatment facility operated under
contract to a steel mill in Sterling, Illinois. The facility is regulated by the
Illinois Environmental Protection Agency.

Robstown, Texas Hazardous Waste Facility. The Company owns 440 acres of land
near Robstown, Texas about 15 miles west of Corpus Christi, and operates a
hazardous waste disposal site known as TECO on 240 acres. The site is operated
under regulations and permits issued by the Texas Natural Resource Conservation
Commission ("TNRCC"). The site is also subject to US EPA regulations.

Robstown, Texas Municipal Waste Facility. In December 1999, the Company
permitted a municipal and industrial waste recycling and disposal facility on
160 acres of land adjacent to the TECO facility and has 40 acres for future
expansion. The municipal waste disposal facility is named El Centro, for its
central location in the Gulf Coast area. The site is operated under regulations
and permits issued by the Texas Natural Resource Conservation Commission
("TNRCC"). The site is also subject to US EPA regulations.

Beatty, Nevada Facility. US Ecology leases approximately 80 acres from the State
of Nevada pursuant to a 1977 20- year lease, with a ten-year renewal option that
was exercised in 1997. The site is located approximately 100 miles northwest of
Las Vegas, Nevada. The RCRA hazardous waste and TSCA PCB waste facility was
opened in 1970 and operates under authority of the Nevada Department of
Conservation and Natural Resources and the USEPA.



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LOW-LEVEL RADIOACTIVE WASTE SERVICES

Richland, Washington Facility. This US Ecology facility is located on 100 acres
of the Department of Energy's Hanford Reservation ("Hanford") approximately 35
miles north of Richland, Washington. The State of Washington leases the land
from the federal government and the Company subleases the land from the State.
The lease between the State and the Federal government terminates in 2061. The
Company intends to seek renewal of its sublease with the State, which expires in
2005. Under the terms of the sublease the facility is to be used for LLRW burial
and related activities.

The facility is licensed by the Washington Department of Health and is regulated
by the Washington Utilities and Transportation Commission (WUTC), which set
disposal rates at the Richland facility. Rates are set by the WUTC at an amount
sufficient to cover the costs of operations and provide the Company with a
reasonable profit margin. The current rate agreement expires December 31, 2001.
While the Company expects approval of a new 6-year rate agreement in 2001, the
new rate agreement will be materially less than the current agreement due to
cost efficiencies and other savings achieved during the current rate period. The
State of Washington also assesses facility user fees for local economic
development, state regulatory agency expenses, and for a dedicated trust account
to pay for long-term care and maintenance of the Richland site after it closes.

The Richland facility is also permitted to accept naturally occurring and
accelerator produced radioactive materials (NARM) waste and exempt quantity
radioactive waste from throughout the nation.

Oak Ridge, Tennessee Facility. This facility (the "Recycle Center") is used for
commercial processing and volume reduction of LLRW. The facility is situated on
16 acres of Company owned property. The Company acquired the facility from
Quadrex Corp. in September 1994. The facility provides services primarily to the
commercial nuclear power industry.

LLRW Brokerage Services. The Company packages and transports to the Recycle
Center small quantities of LLRW from laboratories, hospitals, universities and
other facilities for processing and disposal. The Recycle Center does not
dispose of any waste at the site facility. All waste is disposed of at either a
company owned facility or another third party disposal facility. The waste is
either shipped by the Company or is shipped by common carriers under
subcontract. The Company supplies many of these customers with equipment and
material for the packaging, labeling, and transportation of the LLRW material.

Metal Waste Decontamination. Radioactive contaminated metals exist
primarily in the form of large components such as pumps, valves, fuel racks, and
larger items such as condensers, heat exchangers and other large components. The
Recycle Center can decontaminate these metals through various techniques.

Dry Active Waste ("DAW") Processing. DAW processing services include volume
reduction and free release programs. This waste is primarily in the form of
plastics, clothing, and paper products. The facility uses its super-compactor to
reduce the volume of this waste before it is shipped for disposal. The facility
also sorts and segregates waste prior to super-compaction.

Remedial Services. The Oak Ridge Field Services Division offers a range of
services including site characterization, verification, on-site volume
reduction, license termination, decontamination, and decommissioning. The
subsidiary has been involved in conducting radiological decontamination projects
for over 20 years.

Nuclear Equipment Service Center. NESC provides refurbishment and repair
services for high value nuclear power plant electric motors and power plant
equipment. These services include decontamination, disassembly, modifications,
reassembly and testing to meet stringent client requirements for safety and
reliability. Additionally, the Company provides field services to nuclear power
plants for removal, inspection, maintenance, and reinstallation of high value
equipment.

Proposed Ward Valley, CA and Butte, NE Facilities. The Company has been licensed
to construct and operate the low-level radioactive waste ("LLRW") facility, for
the Southwestern Compact ("Ward Valley facility"), and has


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been selected to obtain a license to develop and operate the Central Interstate
Compact LLRW facility ("Butte facility").

The State of California, where the Ward Valley Site is located, has not obtained
the project property from the U.S. Department of the Interior. For the Company
to realize its investment, the US Government will need to transfer the land to
the State of California, or the Company will need to recover monetary damages
from the U.S. Government, the State of California, or both. The Company has
taken steps to protect its investment in Ward Valley and will continue to do so.

In the first quarter of 1997, the Company filed two lawsuits against the United
States. In the first case, US Ecology is suing to recover approximately $73.1
million of Ward Valley site development costs as well as lost profits and lost
opportunity costs. US Ecology lost this case at the trial court level and has
appealed to the Federal Circuit Court of Appeals. In the second case US Ecology
sought an order (writ of mandamus) from a federal court to compel the transfer
of the Ward Valley LLRW site. Both the trial court and the D.C. Circuit Court of
Appeals ruled against US Ecology in this second case and such rulings are now
final. The Company also filed a lawsuit against the State of California on May
2, 2000, seeking to compel California to acquire the property to build the Ward
Valley project and monetary damages in excess of $162 million. On October 24,
2000, the California trial court granted the state's motion to dismiss the case
on demurrer, and the Company has appealed the trial court's decision.

The Company expects all costs that it has incurred for this facility, and
project interest costs, to be included in the rate-base. However, there can be
no assurance that California will complete the land transfer, that all of these
costs will be approved by California, or that the facility will be constructed,
or that money damages will be recovered if it is not constructed.

The Company has incurred reimbursable costs and received revenues for the
development of the Butte, Nebraska facility under a contract with the Central
Interstate LLRW Compact Commission ("CIC"). Major generators of waste within the
CIC's five-state region have provided over 90% of the funding to develop the
Butte facility. In December 1998, the State of Nebraska denied US Ecology's
license application to build and operate the facility. The CIC directed US
Ecology to pursue a Petition for a contested case challenging the State's
denial. US Ecology filed its Petition pursuant to Nebraska law on January 15,
1999.

The Major Generators funding the development project filed suit in the Federal
District Court for Nebraska on December 30, 1998, seeking to recover certain
costs expended on the Nebraska licensing process and prevent the State of
Nebraska from proceeding with the contested case. US Ecology intervened as a
plaintiff to protect the Company's interest and is seeking relief. The contested
case is stayed by a preliminary injunction issued by the presiding federal
judge. The Company believes the case will go to trial in 2002. In the meantime,
minimal effort has been required to maintain the viability of the pending
license application. Consequently, the Company's revenue from this project has
declined substantially since April 1999.

The timing and outcome of the above matters are unknown. The Company continues
to pursue the conveyance of the land from the federal government to California
as well as its remedies in federal and state court to cure alleged defects in
the State of Nebraska's licensing process for the Butte, Nebraska facility. The
Company believes that the facility development costs for both facilities will be
realized. In the event the Butte facility license is not granted, operations of
either facility do not commence, or the Company is unable to recoup its
investments through legal recourse, it may have an adverse effect on its
financial position. See Item 3. Legal Proceedings.

BACKGROUND

During the 1990s, the environmental services and hazardous waste industries
underwent significant changes that fundamentally altered the economics and
structure of the business. In the 1970s and 1980s, new environmental laws and
regulations were introduced and aggressively enforced by federal and state
agencies. Regulatory compliance at existing waste generation facilities and
clean up of former disposal areas under federal Superfund law were the primary
market drivers. By the early 1990s, many generators of hazardous waste had
realized that improved waste management practices offered significant economic
and risk management benefits. To protect assets, reduce



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liabilities, and reduce increased waste handling costs, many generators
instituted industrial process changes and other methods to minimize waste
production.

The volume of waste shipped for disposal from Superfund and other clean-up sites
diminished as the worst sites were addressed and on-site remedies were
increasingly approved. Improved waste management by generators coupled with a
maturing federal Superfund program has resulted in a major industry
consolidation. Management believes that the hazardous waste management business
is continuing to mature and consolidate. Management intends to expand its core
business through acquisitions, investment, and the introduction of new
technologies.

The commercial LLRW business is also experiencing market changes, including
increased disposal prices, due to delays in implementing the LLRW Policy Act of
1980 ("Policy Act") and interstate disposal Compacts envisioned by that law.
Since the Policy Act's passage, no new full-service LLRW disposal site has been
established and prices have risen substantially. AEC's Richland, Washington
disposal facility, which accepts LLRW from eleven western states, is the
nation's only operating Compact disposal facility. Beginning in 1993, when
Northwest Compact waste import restrictions took effect, the Company lost
substantial market share for disposal services at its Richland, Washington
facility.

In addition to significantly altering the disposal marketplace, Policy Act
delays have created significant opportunities for economical LLRW volume
reduction services. AEC's purchase of the Oak Ridge facility in 1994 and
expansion of the Company's brokerage business were undertaken to participate in
this expanding volume reduction market.

In recent years, these price increases have encouraged a search for alternative
disposal for soil, debris, and certain other wastes containing very low levels
of radioactive contamination. The Envirosafe Services of Idaho facility in Grand
View is a national leader in providing such disposal services. Management
believes its acquisition of the Grand View, Idaho facility and related rail
transfer station positions the Company to take advantage of this industry growth
area.

PERMITS, LICENSES, REGULATORY APPROVALS AND PUBLIC POLICY

The Company's hazardous, non-hazardous, and LLRW business is subject to
extensive and evolving federal, state, and local environmental, health, safety,
and transportation laws and regulations. These regulations are administered by
the EPA in the United States, various other federal, state, and local
environmental, zoning, transportation, land use, health, and safety agencies in
the United States and various other agencies outside of the United States. Many
of these agencies regularly examine the Company's operations to monitor
compliance with these laws and regulations. Governmental authorities have the
power to enforce compliance with these laws and regulations and to obtain
injunctions or impose civil or criminal penalties in case of violations. These
laws contribute to demand for Company services. They also represent significant
obstacles for new market entrants.

RCRA provides a comprehensive framework for regulating hazardous waste handling,
transportation, treatment, storage, and disposal. Listed chemical compounds and
residues derived from listed industrial processes are subject to RCRA standards
unless they are delisted through a formal rulemaking process. RCRA liability may
be imposed for improper waste management or for failure to take corrective
action to address releases of hazardous wastes.

CERCLA and subsequent amendments (collectively the "Superfund") impose strict,
joint and several liability on owners or operators of facilities where a release
of hazardous substances has occurred, on parties who generated hazardous
substances that were released at such facilities, and on parties who arranged
for the transportation of hazardous substances to such facilities. Liability
under Superfund may be imposed if releases of hazardous substances occur at
treatment, storage, or disposal sites used or operated by the Company. Because
customers of the Company face the same liabilities, Superfund creates incentives
for potential customers to minimize the number of commercial disposal sites
utilized and to manage their own wastes when feasible. To the extent waste can
be recycled or beneficially reused, regulatory controls diminish.

TSCA establishes a comprehensive regulatory program for PCBs. Other federal,
state, and local environmental, health and safety requirements may also be
applicable to the Company's business. The Company has adopted


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practices to minimize its risk through employee training, operational controls,
and careful management of its relationships with contractors.

The Atomic Energy Act of 1954 ("AEA") and the Energy Reorganization Act of 1974
give the Nuclear Regulatory Commission ("NRC") regulatory authority for the
receipt, possession, use and transfer of radioactive materials. The NRC has
adopted regulations for licensing commercial LLRW treatment and disposal sites.
The U.S. Department of Transportation regulates transport of radioactive
materials. Shippers and carriers of radioactive materials must comply with both
the general requirements for hazardous materials transportation and with
specific requirements for radioactive materials. The States, rather than the
NRC, regulate NORM.

The process of applying for and obtaining licenses and permits to operate a
radioactive, hazardous, or municipal solid waste facility is lengthy and
complex. Management believes it has significant knowledge and expertise
regarding environmental laws, regulations and related public policy. The Company
believes it possesses all applicable permits, licenses, and regulatory approvals
necessary to operate its facilities and maintains the special expertise needed
to secure additional approvals to build its business.

INSURANCE, FINANCIAL ASSURANCE, AND RISK MANAGEMENT

The Company carries a broad range of insurance coverages, including general
liability, automobile liability, real and personal property, workers'
compensation, directors' and officers' liability, environmental impairment
liability, and other coverages we believe are customary to the industry. Except
as discussed in the Item 3. "Legal Proceedings" section of this report, the
Company does not expect the impact of any known casualty, property,
environmental insurance or other contingency to be material to our financial
condition, results of operations or cash flows.

Through December 31, 2000, the Company did not experience any difficulty in
obtaining insurance. However, if the Company were unable to obtain adequate
insurance in the future, or decided to operate without insurance, any partially
or completely uninsured claim against the Company, if successful and of
sufficient magnitude, could have a material adverse effect upon the Company's
financial condition, results of operations or cash flows. Additionally,
continued access to casualty and pollution legal liability insurance with
sufficient limits at acceptable terms is an important aspect of obtaining
revenue-producing waste service contracts.

State governments typically require financial assurance for the final closure
and post-closure obligations with respect to landfills. States where the Company
owns the land may require the Company to provide financial assurance including
escrow-type accounts funded by revenue during the operational life of a
facility, letters of credit from third parties, surety bonds, and traditional
insurance. States that own the land where the Company operates disposal
facilities require the Company to fund escrow type or trust accounts during the
operational life of the facility.

As of December 31, 2000, the Company provided letters of credit of approximately
$1,150,000 surety bonds of approximately $3.6 million and insurance policies of
approximately $35.1 million for performance of landfill final closure and
post-closure requirements. The Company has not experienced difficulty in
obtaining financial assurance for our current operations. However, continued
availability of surety bonds, letters of credit and insurance policies in
sufficient amounts at acceptable rates is an important aspect of obtaining and
retaining disposal site or transfer station operating permits.

During 2000, pledged cash and securities remained relatively constant at about
$235,000 while during 1999, the total value of pledged securities decreased by
$5,179,000. This decrease in 1999 reflects the sale of assets previously held by
the Company's ALEX subsidiary and their replacement with an insurance agreement
with Reliance Insurance Company. The Company has prepaid a three-year insurance
premium, pledged investment securities, and has a cash reserve to pay the
deductible portion should the Company need to exercise these policies. The
closure costs for its Oak Ridge and Winona, Texas facilities, proposed LLRW
sites in Nebraska and California, and a rate settlement with waste generators
using the Richland, Washington facility are also covered by financial assurance.

The Company is in the remedial phase of the Sheffield program set forth in the
EPA's corrective measures implementation plan. During 2000 and 1999, the Company
spent approximately $83,000 and $290,000 respectively on remediation at the
closed Sheffield hazardous disposal site, a reduction from $610,000 spent in
1998.



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Primary casualty insurance programs do not generally cover accidental
environmental contamination losses. To provide insurance protection for such
environmental claims, the Company has obtained environmental impairment
liability insurance and professional environmental consultants liability
insurance for non-nuclear occurrences. For the latter, the Company has purchased
nuclear liability insurance covering the operations of its facilities,
suppliers, and transporters. The Company has also purchased primary property,
casualty and excess liability policies through traditional third party
insurance.

In September 1998, the Company elected to discontinue providing financial
assurance for its closure and post-closure responsibilities through its wholly
owned subsidiary. The Company was able to secure economically more advantageous
and favorable terms from traditional insurance sources for its facilities and
operations, subject to site-specific deductibles for which the Company maintains
a cash reserve. Due to a drop in the financial rating of the insurance carrier,
the Company elected to rewrite closure, post-closure policies with a stronger
carrier in June 2000. Coverage has been rewritten on an extended three-year
pre-paid policy. ALEX was dissolved in November 2000.

CLOSED FACILITIES

The Company has made substantial progress in recent years to resolve legal
disputes and fulfill its obligations to properly close and maintain formerly
operating facilities. While work remains, the Company believes this progress has
significantly reduced its environmental liability exposure.

Beatty, Nevada LLRW Site. The Beatty site, operated by the Company from 1962 to
1993, was the nation's first commercial facility licensed to dispose of LLRW. In
1997, it became the first and only commercial LLRW disposal facility to
successfully complete closure and site stabilization activities and transfer its
license to the State for institutional control. Since that time, Nevada has
performed long-term maintenance and surveillance using a State-controlled fund
contributed during facility operations. The Company has a contract with the
State to perform long-term monitoring maintenance.

Bruneau, Idaho Hazardous Waste Site. The Bruneau site was acquired the same time
as the Grand View, Idaho site in February 2001. This site was closed under an
approved RCRA plan and is anticipated to be in the post closure monitoring phase
for about 30 years in accordance with regulatory requirements. The State of
Idaho has indicated its satisfaction with the closure of this 88-acre facility,
which is in a remote location with no nearby neighbors.

Sheffield, Illinois LLRW and Hazardous Waste Site. The Company previously
operated two hazardous waste disposal facilities and a 20-acre, state-owned LLRW
disposal site. One hazardous waste site was opened in 1974 and ceased accepting
waste in 1983. The second site occupied less than five acres, and accepted
hazardous waste from 1968 through 1974. The LLRW site operated from 1968 to
1978. During 1999, the Company renegotiated its corrective measures
implementation plan agreement for groundwater remedial design monitoring and
extraction programs, which allowed the Company's financial assurance requirement
to be reduced from a $2.5 million to $1.5 million.

The LLRW disposal facility is maintained under a 1988 Settlement Agreement with
the state and EPA. The Company anticipates that its remaining financial
requirements and related obligations will be resolved during 2001 and that the
LLRW license will then be transferred to the State.

Winona, Texas, Hazardous Waste Facility. From 1980 to 1994, Gibraltar Chemical
Resources operated the facility. In 1994, American Ecology Corporation purchased
the Winona facility. The facility provided solvent recovery, deep well injection
and waste brokerage services at an eight (8) acre permitted site. The Company
owns an additional 597 acres contiguous to the permitted site. In March 1997,
the Company announced closure of the facility. The Company has complied with all
of the requirements of the Agreed Order signed with the TNRCC for closure of the
facility including financial assurances in the amount of $1,318,478. A Closure
Certification Report was submitted in November 1999, and comments from the Texas
Natural Resource Conservation Commission are pending.




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CUSTOMERS

In 2000, the Company managed the disposal of hazardous waste for Tamco Steel in
Rancho Cucamonga, California for $5,500,000 which constituted 13% of the
Company's consolidated revenue. In 1999, no single customer accounted for 10% or
more of the Company's consolidated revenues. In 1998, revenue from a cost
reimbursement contract with the Central Interstate LLRW Commission was
approximately $6,808,000 or 18% of consolidated revenue. No other single
customer accounted for 10% or more of consolidated revenue in 2000, 1999, or
1998.

MARKETS

Chemical Services

The hazardous waste treatment and disposal business is highly competitive and
sensitive to transportation costs. The Company's Robstown, Texas facility, TECO,
is geographically well positioned to serve petro-chemical companies and other
industries concentrated along the Texas Gulf coast. The Beatty, Nevada facility
primarily competes for business in the California and Nevada markets. Due to the
site's superior geologic and climate conditions in the Amargosa Desert, the
Nevada facility also competes successfully for wastes shipped from more distant
locations. The Nevada facility also competes over a broader geographic area for
PCB waste due to a limited number of TSCA facilities nationwide. The Idaho
facility accepts wastes from across the United States and operates a
Company-owned rail transfer station located adjacent to a main east-west rail
line, generally allowing much lower cost transportation than by truck. The Idaho
facility's two primary markets are for steel mill dust and NORM waste under a
five year renewable U.S. Army Corps of Engineers contract.

Waste stabilization and other treatment technologies are employed at Idaho,
Nevada and Texas facilities to meet federal land disposal restrictions. This
treatment capability allows the sites to manage a significantly broader spectrum
of wastes than if treatment was not offered. The Company's new El Centro
municipal and industrial landfill, located adjacent to the Texas facility,
competes in a local south Texas market in the vicinity of Corpus Christi.
Management believes the continued marketing efforts for the El Centro landfill
will allow sufficient market share to sustain profitable operations.

LLRW Services

The Richland, Washington disposal facility exclusively serves LLRW producers in
the eight states that are members of the Northwest Compact. The three Rocky
Mountain Compact members are also eligible to use the facility. As a monopoly
service provider, Washington State approves the facility's rates. The Richland
site also accepts naturally occurring radioactive material and naturally
accelerator radioactive material ("NORM/NARM") from customers across the country
and, in limited cases, internationally.

The Oak Ridge LLRW volume reduction facility, motor rebuilding center, field
services business and brokerage group compete primarily for business in the
eastern United States. Through cross-selling and expanded marketing, the Company
continues to compete nationally, but difficult market and competitive conditions
combined with ongoing labor disputes has resulted in a loss of market share in
2000 and 1999.

COMPETITION

The Company competes with both large and small companies in each of the markets
or segments in which it operates. The radioactive, hazardous and non-hazardous
waste management industry is highly competitive, which applies to both current
and planned business lines. The Company believes that its principal hazardous
and non-hazardous waste business competitors are Waste Management, Waste
Masters, Safety-Kleen, Allied Waste, City of Corpus Christi landfill and various
other municipal landfills. Its principal radioactive waste business competitors
are Envirocare of Utah, Waste Control Specialists, and Duratek for disposal and
Duratek, ATG, and Permafix for waste processing.



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The Company believes that the principal competitive factors applicable to all
areas of its business are:

o Customer service reputation

o Geography

o Price

o Breadth of services offered and environmental licenses and permits held

o Dependability, technical proficiency and environmental integrity

o Operational experience and

o Quality of working relations with federal and state regulators

Management believes the Company is, and will continue to be, competitive based
on these factors. The Company further believes that it possesses a number of
competitive advantages which distinguish it from its competitors including its
strong industry name recognition, unique range of services and capabilities,
extensive portfolio of licenses and permits, and established relationships with
its customers, federal and state regulators, and neighboring communities. The
Company also believes its reputation as a provider of environmentally sound
solutions contributes to its competitive advantage.

PERSONNEL

As of March 27, 2001, the Company had 300 employees, of which 58 were members of
the Paper, Allied-Industrial, Chemical and Energy Workers International Union
AFL-CIO-CLC ("PACE"), 6 of United Steel Workers of America and 1 of United
States Workers of America.

In March 1998, the Company ended discussions with PACE on a new labor agreement
and implemented its final offer. PACE subsequently charged the Company with
unfair labor practices. The National Labor Relations Board ("NLRB") hearing
officer ruled against the Company. After a subsequent adverse ruling by the
three member panel of the NLRB, the Company appealed to the United States Court
of Appeals for the Sixth Circuit, which has not yet ruled. In the event the
Company is unsuccessful in its appeal, it may be required to retroactively apply
the prior labor agreement and bargain with PACE.



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ITEM 2. PROPERTIES

The Company believes that its property and equipment are well maintained, in
good operating condition and suitable for the Company's current and projected
needs. Company headquarters are located in Boise, Idaho in leased office space.
AEC also leases sales and administrative offices in Washington, Illinois,
Nevada, Texas, and Kentucky. The following table sets forth certain information
regarding the principal operating, treatment, processing, and disposal
facilities owned or leased by the Company.



LOCATION FUNCTION ACREAGE OWN/LEASE UTILIZATION
- -------- -------- ------- --------- -----------

Boise, Idaho Corporate Office 10,000 sq. ft. Lease 100%


CHEMICAL SERVICES

Beatty, Nevada Hazardous and PCB Waste Treatment 80 acre(s) Lease 100%
and Disposal Facility

Grand View, Idaho Hazardous, PCB and NORM Waste 1,760 acre(s) Own 100%
Treatment and Disposal Facility and
State-Approved Expansion Area

Elmore County, Idaho Rail Transfer Station 110 acre(s) Own 100%

Bruneau, Idaho Closed Facility 88 acre(s) Own 100%

Sheffield, Illinois Closed Facility 204 acre(s) Own 100%

Robstown, Texas Hazardous Waste Treatment and 240 acre(s) Own 100%
Disposal Facility

Robstown, Texas Municipal and Industrial Disposal 160 acre(s) Own 100%
Facility

Robstown, Texas Possible Expansion Area 40 acre(s) Own 100%

Winona, Texas Closed Facility 620 acre(s) Own 10%

LLRW SERVICES

Oak Ridge, Tennessee LLRW Processing Facility 16 acre(s) Own 100%

Sheffield, Illinois Closed Facility 170 acre(s) Own 100%

Richland, Washington LLRW and NORM Disposal Facility 100 acre(s) Lease 100%


The principal properties of the Company make up less than 10% of the total
assets. The assets that are utilized are sufficient and suitable to the
Company's needs.


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ITEM 3. LEGAL PROCEEDINGS

The Company's business inherently involves the potential risk of unintended
release of hazardous materials. In the ordinary course of conducting business,
the Company also becomes involved in routine judicial and administrative
proceedings incidental to its business. These proceedings may involve federal,
state and local governmental authorities, groups or individuals in connection
with facility permitting actions, alleged permit violations, or claims for
damages suffered from alleged exposure to hazardous substances purportedly
released from Company operated sites, and other litigation. The Company
maintains insurance intended to cover property, environmental and personal
injury claims asserted as a result of its operations (See Item 1. Insurance).
Management periodically reviews and establishes reserves for legal and
administrative matters, or fees expected to be incurred in connection with such
matters. At this time, management believes that resolution of pending matters
will not have a material adverse effect on the Company's financial position,
results of operations or cash flows.

The Company and its subsidiaries are also parties to various other matters or
proceedings, including permit application and renewal proceedings in connection
with its operations, closure and post-closure activities, and other
circumstances that could result in further proceedings or litigation.

GENERAL LITIGATION

U.S. Ecology Corporation and Oil, Chemical & Atomic Workers International Union,
AFL-CIO, Cases 10-Ca-30847 and 10-Ca-31149.

On May 23, 2000, a three-member panel of the NLRB rendered an adverse ruling
against the Company's subsidiary and issued a finding of unfair labor practices.
On May 26, 2000, the Company's subsidiary filed with the U.S. Sixth Circuit
Court Of Appeals a petition for review of the decision of the NLRB and a motion
to stay the order of the NLRB pending review by the court. The Sixth Circuit
Court of Appeals has not yet ruled in this matter.

On August 1, 2000, a previously reported legal proceeding, Virgie Adams, et al.
v. American Ecology Environmental Services Corporation, et al., Cause No.
236-165224-6 (Tarrant County, Texas District Court) was settled. The settlement
did not have a material adverse impact on the Company's financial position,
results of operations, or cash flows.

On October 26, 2000, a previously reported legal proceeding, Erin L. Dalton v.
Brown Distributing Co. et al., Defendants/Third-Party Plaintiffs v Sam Tarlton,
Jr. And American Ecology Services Corporation d/b/a American Ecology Trans.,
Inc. Third Party Defendants, Case No. 99-06725, 250th Judicial District Court,
Travis County, Texas was settled. The settlement did not have a material adverse
impact on the Company's financial position, results of operations, or cash
flows.

On January 31, 2001, a previously reported legal proceeding, David Dupuy and
Richard Hammond v. American Ecology Environmental Services Corporation, et al.,
Cause No. 98-1304-C, 241st Judicial District Court, Smith County, Texas, was
settled. The settlement did not have a material adverse impact on the Company's
financial position, results of operations, or cash flows.

On January 31, 2001, a previously reported legal proceeding, Sarah Randall v.
Danny Wells, American Ecology Corporation, et al., Cause No. 00-04270, 68th
Judicial Court Dallas County, Texas, was settled. The settlement did not have a
material adverse impact on the Company's financial position, results of
operations, or cash flows.

Mattie Cuba, et al. v. American Ecology Environmental Services Corporation, et
al., Cause No. 2000-092, 4th Judicial District Court, Rusk County, Texas.

The complaint in this legal proceeding was served on the Company and its
subsidiaries, American Ecology Environmental Services Corporation, American
Ecology Management Corporation, and American Ecology Services Corporation on
November 20, 2000. The lawsuit is a toxic tort lawsuit brought by 28 named
plaintiffs against the Company and the named subsidiaries, as well as the former
facility owners and potentially approximately 60 former customers of the Winona,
Texas facility. The plaintiffs seek damages based generally on intentional and
negligence



11
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tort claims, as well a punitive damages. The Company believes it has conducted
its operations in accordance with applicable laws and regulations that the
lawsuit is without merit and intends to vigorously defend the action. The
Company's current insurance carrier has agreed to pay for the defense of this
matter, subject to the Company's $250,000 deductible. The Company timely filed
an answer on December 27, 2000, and intends to defend the case vigorously.
Discovery is in the very early stages.

Zurich American Insurance Company v. National Union Fire Insurance Company of
Pittsburgh, et al incl. AEC, AEESC, AEMC and AESC; Supreme Court of State of New
York, County of New York; Case No. 604662/99

In an action filed October 12, 1999, Plaintiff Zurich American Insurance Co.
("Zurich"), seeks declaratory and other relief against National Union Fire
Insurance Company of Pittsburgh ("National Union"), AEC and named subsidiaries
("AEC Defendants") and Doe Insurers 1-50 ("Doe Defendants") with respect to
Zurich's defense coverage in the Virgie Adams and the General Motors action. In
December 2000, Zurich filed a motion with the court for leave to amend its
complaint to seek recoupment of moneys paid to defend and settle the Adams case
and to defend the General Motors case. The Company intends to vigorously defend
this action.

General Motors Corporation v. American Ecology Environmental Services Corp., et
al., Case No. 3-99CV2626-L, U.S. District Court, Northern District of Texas.

The Complaint names the Company and certain named subsidiaries as defendants in
the suit. The former owner of the Winona Facility and its associated business
entities settled their portion of the suit in November 2000. General Motors
seeks contribution and indemnity, including reimbursement of defense costs,
attorneys' fees, court costs and a settlement payment to the Adams plaintiffs,
incurred by General Motors. In December 2000, the Company's insurance carrier,
Zurich, notified the Company that it was disclaiming coverage for the suit and
would not indemnify the Company or its subsidiaries. The Company does not
believe it breached the contract or was negligent, and intends to vigorously
defend the case.

Manchak v. US Ecology, Inc., U.S. District Court for the District of Nevada,
Civil Action No. 96-494.

In this case, initially commenced in April 1996, Plaintiffs are alleging
infringement of a patent by US Ecology from the prior use at US Ecology' Beatty,
Nevada site of a general process to stabilize hazardous waste prior to landfill
disposal. Plaintiffs are seeking unspecified damages for infringement, treble
damages, interest, costs and attorneys' fees. A change of venue to the Nevada
Federal District Court was granted on May 20, 1997. US Ecology does not believe
that the process it previously used to stabilize waste are similar to the
processes the plaintiff claims it has patented. To date, mediation has been
unsuccessful in resolving the case, and discovery is ongoing. The Company will
continue to vigorously defend the case.

ENVIRONMENTAL MATTERS

The EPA has requested information regarding waste the Company may have shipped
to a former LLRW storage facility near Denver, Colorado, which is now a
Superfund site. The EPA has subsequently informed the Company it may be liable
for approximately $29,000 for clean-up costs as a potentially responsible party.
The Company does not believe these amounts are material.

On September 29, 1999, investigators associated with the Federal Bureau of
Investigation, EPA, and Tennessee Valley Authority arrived at the Oak Ridge
Facility to investigate the site in connection with a search warrant issued by
the U.S. District Court, Eastern District of Tennessee. The Company fully
cooperated with the investigators and provided requested information. Since the
initial visit, the Company has not been asked to provide additional information
and has no information regarding outcome at this time. The Company currently is
conducting an internal investigation as a precautionary measure, believes it has
conducted its operations in compliance with the applicable statutes and
regulations, and intends to vigorously contest any allegations arising from the
investigation.

On July 18, 2000, a previously reported legal proceeding, In the Matter of
American Ecology Recycle Center, Inc., RCRA Docket No.: RCRA-4-99-0020 was
settled. The settlement did not have a material adverse impact on the Company's
financial position, results of operations, or cash flows.

OTHER MATERIAL LITIGATION

One of the Company's principal subsidiaries is a plaintiff in a case against the
United States and in a case against the State of California seeking to protect
its interest in the Ward Valley site. In the federal case, US Ecology is suing
to recover development costs, as well as lost profits and lost opportunity costs
related to development of the Southwestern LLRW Compact disposal facility in
Ward Valley, California. The trial court dismissed this case on March 27, 2000,
and the Company appealed the decision. Oral argument was heard before the
Federal Circuit Court of Appeals on February 6, 2001, but the Court has not yet
ruled. The Company was also a plaintiff in a second federal case in which, US
Ecology sought an order (writ of mandamus) to compel completion of the federal
land transfer required for construction of the state-licensed facility to
proceed. The trial court rendered an adverse judgment in this case on March 31,
1999, which the Company appealed. The D.C. Circuit Court of Appeals ruled
against the Company, dismissing the case on November 14, 2000. This dismissal is
now final. In a further effort to protect its investment in the Ward Valley
project, the Company filed a lawsuit against the State of California on May 2,
2000, seeking (1) a writ of mandate to compel California to acquire the property
to build the Ward Valley project, (2) a court declaration of the state's duties
to the Company, and (3) damages in excess of $162 million, primarily for costs
incurred in developing the project, interest, and future lost profits. On July
6, 2000, the state of California filed a motion to dismiss the case. On October
24, 2000, the California court signed an order granting the state's motion to
dismiss the case on demurrer. The Company has appealed the trial court's
decision.

The Company has intervened in a lawsuit against the State of Nebraska seeking
recovery of approximately $6.5 million investment and future lost profits
related to development of the proposed Central Interstate Compact LLRW disposal
facility near Butte, Nebraska. The trial court has ruled on several preliminary
matters that are now under appeal by the State of Nebraska. The trial court has
not yet ruled on whether the Company may be awarded money damages. On April 12,
2000, the appeals court upheld the trial court's ruling that Nebraska is not
immune to suit in this case and also upheld the trial court's preliminary
injunction prohibiting Nebraska from taking any further steps in the state
license hearing process until the matter is decided. The case is expected to go
to trial in 2002.

The Company filed an amended federal income tax refund claim in 1996 for
approximately $740,000. On September 29, 1999 the Internal Revenue Service
("IRS") proposed to deny this claim. On November 29, 1999 the





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Company protested this denial, which is currently pending with the IRS. The
Company believes that this claim was improperly denied but has tentatively
agreed to settle this claim on a basis which would allow a partial refund. This
settlement must be submitted to the Congressional Joint Committee on Taxation
for approval. In December 2000, the Company extinguished the claim by its prior
bank for a portion of this potential refund. (see Notes to the Consolidated
Financial Statements and Management Discussion and Analysis)

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the Company's security holders during the fourth
quarter of 2000.




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PART II


ITEM 5. MARKET FOR AMERICAN ECOLOGY CORPORATION COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

American Ecology Corporation common stock is currently listed on the NASDAQ
National Market System under the symbol ECOL. As of March 23, 2001, there were
approximately 9,000 record holders of common stock. The high and low sales
prices for the common stock on the NASDAQ and the dividends paid per common
share for each quarter in the last two years are shown below:



2000 1999 Dividends Per Share
------------- ------------- ---------------------
PERIOD High Low High Low 2000 1999
---- --- ---- --- ---- ----

1st Quarter 3.00 1.27 3.25 1.22 $ -- $ --
2nd Quarter 4.00 2.06 3.13 1.75 -- --
3rd Quarter 3.94 2.31 2.81 1.75 -- --
4th Quarter 3.38 1.75 2.06 1.00 -- --


In the first quarter of 1999 the Company borrowed approximately $1.3 million
from two significant shareholders of the Company. The terms of the $1.3 million
notes payable from shareholders, among other terms and conditions, prohibited
the payment of any cash dividends until the notes were retired. On December 8,
2000, the Company repaid the notes payable in full. In August of 2000, the
Company established a credit facility with a local bank, which also prohibited
the payment of dividends. This credit facility provides the Company with $8
million of borrowing capacity, but prohibits cash dividends on any of the
Company's outstanding stock while the credit facility is in place. The credit
facility matures on August 30, 2002.



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ITEM 6. SELECTED FINANCIAL DATA

AMERICAN ECOLOGY CORPORATION

This summary should be read in conjunction with the consolidated financial
statements and related notes.

(Dollars in thousands, except per share amounts)



YEARS ENDED DECEMBER 31, 2000 1999 1998 1997 1996
- ------------------------ -------- -------- -------- -------- --------

Revenue $ 41,958 $ 34,352 $ 38,960 $ 41,522 $ 49,972
% Increase (decrease) in revenues from prior year 22.1% (11.8)% (6.2)% (16.9)% (26.4)%

Net income (loss) $ 4,697 $ 4,409 $ 762 $ (676) $(11,407)
Basic earnings per share (1) $ .31 $ .30 $ .03 $ (.17) $ (1.47)

Shares used to compute income (loss) per share (000's) 13,711 13,585 12,772 8,163 7,907


Working capital (deficit) $ 2,279 $ (2,309) $ (7,567) $(16,930) $(16,693)

Total assets $ 65,750 $ 58,459 $ 61,800 $ 98,431 $ 99,027

Long-term debt, net of current portion $ 10,775 $ 3,569 $ 2,223 $ 39,872 $ 36,202

Shareholders' equity $ 25,984 $ 21,582 $ 17,460 $ 13,380 $ 13,604

Long-term debt to total capitalization as a percentage (2) 29.3% 14.2% 11.3% 74.9% 72.7%
Current ratio (current assets divided by current liabilities)
1.17:1 0.9:1 0.7:1 0.4:1 0.4:1

Return on average equity 18.9% 22.6% 4.9% (5.0)% (64.0)%


Dividends declared per common share $ -- $ -- $ -- $ -- $ --

Capital spending, including capital expenditures and site
development costs $ 6,442 $ 3,740 $ 2,128 $ 3,442 $ 5,659
Depletion, depreciation and amortization expense $ 2,028 $ 2,054 $ 3,152 $ 3,106 $ 5,383



(1) No dividends have been declared.
(2) In August 2000, the Company entered a new bank agreement with an $8 million
credit facility.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion contains forward-looking statements that involve known
and unknown risks and uncertainties which may cause actual results in future
periods to differ materially from those indicated herein as a result of a number
of factors, including, but not limited to, those set forth under "Factors That
May Affect Future Results," Notes to the Consolidated Financial Statements, Part
I, Item 3., Legal Proceedings, and the discussion below. When the Company uses
words like "may," "believes," "expects," "anticipates," "should," "estimate,"
"project," "plan," their opposites and similar expressions, the Company is
making forward-looking statements. These expressions are most often used in
statements relating to business plans, strategies, anticipated benefits or
projections about the anticipated revenues, earnings or other aspects of our
operating results. We make these statements in an effort to keep stockholders
and the public informed about our business, and have based them on our current
expectations about future events. Such statements should be viewed with caution.
These statements are not guarantees of future performance or events. As noted
elsewhere in this report, all phases of our business are subject to
uncertainties, risks and other influences, many of which the Company has no
control over. Additionally, any of these factors, either alone or taken
together, could have a material adverse effect on the Company and could change
whether any forward-looking statement ultimately turns out to be true. The
Company undertakes no obligation to publicly release updates or revisions to
these statements. The following discussion should be read in conjunction with
audited consolidated financial statements and the notes thereto for the year
ending December 31, 2000, included elsewhere in this Form 10-K.

The Company is a hazardous, non-hazardous, and radioactive waste management
company that offers comprehensive treatment and disposal solutions for hazardous
and low-level radioactive waste to commercial and government entities including,
but not limited to nuclear power plants, petro-chemical plants, steel mills, the
U.S. Department of Defense, medical facilities, universities and research
institutions. The Company principally derives its revenue from fees charged for
access to the Company's five fixed waste disposal facilities and one LLRW
processing facility. Fees are charged for transportation, processing, and
disposal of waste, subject to strict waste acceptance criteria. The Company has
been in business for more than 49 years.

2000 FINANCIAL RESULTS COMPARED WITH 1999 FINANCIAL RESULTS

The Company's 2000 revenue reached $41.9 million which was a 22% increase over
revenue in 1999. Operating costs in 2000 increased 31% over 1999, but were only
a 4% increase over 1999 while there was a 22% revenue growth. Year 2000
represented the first year in 5 years that the Company posted increasing
revenue. The combination of higher revenue improved gross margin and relatively
flat operating costs have improved the Company's profitability. For the years
ended December 2000 and 1999, the Company posted a net income (before dividends)
of $4.7 and $4.4 million. Both years compared favorably to a net loss of $48.9
million in 1995.

Through the first two months of 2001, the Company has maintained revenue growth
and profitability and anticipates this trend to continue.

EXPENSES

Operating expenses include direct and indirect costs for labor, transportation,
maintenance and repairs, subcontracted costs and equipment, insurance, taxes,
appropriate accruals for burial fees, and other costs. The Company has properly
accounted for fees assessed by regulatory authorities for the issuance of
permits and licenses.

Selling, general & administrative costs include management salaries, sales and
marketing efforts, clerical and administrative costs, legal and consulting fees,
office rentals, insurance, and other administrative costs included under general
corporate overhead.


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STRATEGY

Management continues to evaluate the Company's relative position and presence in
the marketplace. In 2000, the Company actively pursued new business
opportunities, entered an agreement to acquire a new subsidiary, implemented new
technologies, expanded its licenses and permits, and made new business
alliances. The acquisition of Envirosafe Services of Idaho, Inc. was completed
February 1, 2001. Other strategic plan implementation activities have continued
into 2001. The environmental services industry is dynamic and highly
competitive. The Company believes that aggressively pursuing growth and market
consolidation opportunities are critical to its future success. The Company
annually develops a strategic plan and budget that reflects market and
competitive changes, as well as good business practices, flexibility, and
regulatory compliance. The Company's strategic plan focuses on six key areas.


1. Emphasize Safety and Compliance

The Company believes that its success and economic performance is based on
providing scientific solution for the waste it receives in a safe and
compliant manner. The Company has a stringent health and safety plan for
all of its operations and has hired, from time to time, outside consultants
to advise the Company on ongoing improvements to the Company's health and
safety policies and procedures. In addition, the Company manages all of its
facilities in a manner to assure compliance with applicable state and
federal law and regulations. Company management emphasizes to employees on
an ongoing basis the importance of health, safety, and compliance.

2. Emphasize Business Fundamentals and Cost Control

The Company continues to stress business fundamentals and cost control.
Management remains committed to improving core business operations at each
of its sites by increasing revenue, profitability and cash flow. The
Company continues to implement and enforce new policies, procedures, and
systems to ensure that appropriate business controls are in place.

3. Expand Services and Increase Utilization of Assets at Existing Facilities

In mid-year 2000, the Company opened its El Centro municipal and industrial
solid waste landfill located at Robstown, Texas. In late 2000, the Company
introduced Thermal Treatment and Recovery processes at its Nevada location.
The Company intends to introduce this technology at other locations during
2001. Successful permitting of vertical disposal space expansions at its
Nevada and Texas disposal sites further demonstrates the Company's ability
to maximize the value of its existing core business assets. In 2001, the
Company's substantial operating experience will be applied to the newly
acquired Grand View, Idaho treatment and disposal facility. The Company
continues to work with its regulators to expand service capabilities at its
existing sites.

4. Increase Emphasis on E-Business and Automation

The Company recognizes the value of a comprehensive electronic business
strategy and has committed significant resources to improving its
electronic business capabilities. This includes but is not limited to
improving the Company's website, automating customer forms and government
approval documents, posting facility waste acceptance criteria on its
website, and providing customers with on-line access to information
regarding their waste and their account activity. In 2000, the Company has
started implementing order processing and accounts receivable information
on the Internet. The Company is also using the Internet to find new
customers, improve sales force integration, speed waste processing, and
reduce costs. The Company believes that its electronic business
capabilities will allow it to better serve existing customers and develop
new business.



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5. Increase Cross Selling

The Company believes it offers excellent customer service and a
complimentary and unique set of services through its multiple sites and
operations. The Company is committed to cross-selling this integrated array
of services to both existing customers and prospects. To achieve this goal
the Company is updating marketing and sales materials, arming sales
personnel with updated information on Company capabilities and services,
and cross training key personnel. Management believes the addition of
experienced sales personnel and rail transportation expertise acquired as
part of the Envirosafe Services of Idaho transaction will further enhance
cross-selling in 2001 and beyond.

6. Execute Well Conceived Mergers and Acquisitions

The Company will continue to evaluate and pursue strategic mergers or
acquisitions of companies or assets that fit the Company's core
competencies. Management believes that well-conceived mergers or
acquisitions will continue to significantly enhance the Company's market
position and value. The Company will also continue to pursue strategic
alliances, joint ventures or partnership arrangements.

RECENT DEVELOPMENTS AND FUTURE CONSIDERATIONS

FACTORS THAT MAY AFFECT FUTURE RESULTS

COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

The changing regulatory framework governing the Company's business creates
significant risks, including potential liabilities from violations of
environmental statutes and regulations. Failure to timely obtain, or to comply
with the conditions of applicable federal, state and local governmental
licenses, permits or approvals for our waste treatment and disposal facilities
could prevent or inhibit the Company from operating our facilities and providing
services, resulting in a significant loss of revenue and earnings. Changes in
laws or regulations may require the Company to obtain additional operating
licenses, permits or approvals if new environmental legislation or regulations
are enacted or existing legislation or regulations are amended, reinterpreted or
enforced differently than in the past. Any new governmental requirements that
raise compliance standards may impose significant cost upon the Company. The
Company's failure to comply with applicable statutes and regulations may result
in the imposition of substantial fines and penalties and could adversely affect
the Company's ability to carry on its business as presently constituted.

CHANGES IN LAWS AND REGULATIONS

A substantial relaxation of the requirements of compliance with environmental
laws or a substantial reduction of enforcement activities by governmental
agencies could materially reduce the demand for the Company's services. A large
portion of the Company's revenues are generated as a result of requirements
arising under federal and state laws, regulations and programs related to
protection of the environment. If the requirements of compliance with
environmental laws and regulations were substantially relaxed in the future or
were less vigorously enforced, particularly those relating to the
transportation, treatment, storage or disposal of hazardous and low-level
radioactive waste, the demand for the Company's services could decrease and
revenues could be significantly reduced.

EXPOSURE TO LITIGATION

Since Company personnel routinely handle radioactive and hazardous materials,
the Company may be subject to liability claims by employees, customers and third
parties. There can be no assurance that the Company's existing liability
insurance is adequate to cover claims asserted against the Company or that the
Company will be able to maintain such insurance in the future. The Company has
adopted risk management programs designed to reduce these risks and potential
liabilities, however, there can be no assurance that such programs will fully
protect the Company.


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ACCESS TO CAPITAL

The Company needs to have cost effective access to capital in order to implement
its strategic and financial plan. If the Company cannot retain its existing
access to capital or raise additional capital the Company may need to curtail or
scale back its planned expansion. The Company requires additional financing for
working capital, capital expenditures and new acquisitions.

NEW TECHNOLOGIES

The Company expects to increase its utilization of new thermal treatment and
possibly other advanced technologies. The Company's future growth is somewhat
reliant upon its ability to discern emerging industry service niches and respond
to clients' needs. If the Company cannot successfully implement commercially
viable technologies for treatment of wastes in a manner that is responsive to
the clients' requirements, the business could be adversely affected.

COMPETITIVE ENVIRONMENT

The Company faces competition from companies with greater resources and
potentially more cost-effective waste treatment and disposal solutions. Any
increase in the number of licensed commercial treatment facilities or disposal
sites for hazardous or low-level radioactive waste in the United States, or any
decrease in the treatment or disposal fees charged by competitive facilities or
sites, could reduce the competitive advantage of the Company's facilities and
services.

LOSS OF MAJOR CONTRACTS

A loss on one or more of the Company's larger contracts could significantly
reduce the Company's revenues and negatively impact earnings. The Company's
contract with the Corps of Engineers for example is a contract that could have a
material adverse impact on the Company if lost or not renewed, and represents a
significant portion of the revenue for the Company's newly acquired Grand View,
Idaho site.

THE COMPANY MAY FACE RISKS RELATING TO GENERAL ECONOMIC CONDITIONS

The Company believes there is risk related to general economic and market
conditions, including the potential impact of any economic slowdown, recession,
interest rate fluctuation or other adverse external economic conditions.
Negative general economic conditions could adversely affect our financial
condition, results of operation and cash flows.

RESULTS OF OPERATIONS

The Company has continued to show improved operations since 1994, especially for
the last three years ended 2000, 1999, and 1998 when the Company reported net
income of $4,697,000, $4,409,000, and $762,000 respectively. Operationally, the
Company has continued to grow and reposition itself after having difficulty from
three unsuccessful acquisitions in 1994 that affected the reporting years ending
December 31, 1997, 1996, and 1995.

The following table summarizes the operational performance of the operating
segments, Chemical Services, LLRW Services, and Corporate & Other. Only Chemical
Services and LLRW Services generate revenue and profit. The Corporate & Other
part of the Company generate no revenue and provide administrative, managerial,
and support services for Chemical Services, LLRW Services and the ongoing
closure and post closure operations of closed facilities. Since there is no
revenue generated at the corporate level or at closed facilities there is no
profitability at this level.



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Summarized financial information concerning the Company's reportable segments is
shown in the following table. The "Corporate & Other" column includes
corporate-related items not allocated to the reportable segments.



Reported in $(000) CHEMICAL LLRW CORPORATE
SERVICES SERVICES & OTHER TOTAL
------------- ------------- ------------- -------------

2000

Revenue 18,975 23,725 (742) 41,958
Direct Cost 10,084 12,223 (475) 21,832
------------- ------------- ------------- -------------
Gross Profit 8,891 11,502 (267) 20,126
S,G&A 3,975 7,113 5,577 16,665
------------- ------------- ------------- -------------
Income (loss) from operations 4,916 4,389 (5,844) 3,461
Investment income 51 1 383 435
Gain on sale of assets 69 23 -- 92
Interest expense (57) (109) (184) (350)
Other income 164 380 297 841
------------- ------------- ------------- -------------
Income before extraordinary items and taxes 5,143 4,684 (5,348) 4,479
Extraordinary item and taxes -- -- 218 218
------------- ------------- ------------- -------------
Net Income 5,143 4,684 (5,130) 4,697
Total Assets 23,875 39,537 2,338 65,750

1999

Revenue 12,074 23,070 (792) 34,352
Direct Cost 7,482 9,740 (613) 16,609
------------- ------------- ------------- -------------
Gross Profit 4,592 13,330 (179) 17,743
S,G&A 3,218 6,191 5,353 14,762
------------- ------------- ------------- -------------
Income (loss) from operations 1,374 7,139 (5,532) 2,981
Investment income 29 1 750 780
Gain on sale of assets 895 1 (70) 826
Interest expense (14) (65) (129) (208)
Other income 76 6 143 225
------------- ------------- ------------- -------------
Income before extraordinary items and taxes 2,360 7,082 (4,838) 4,604
Extraordinary item and taxes -- -- (195) (195)
------------- ------------- ------------- -------------
Net Income 2,360 7,082 (5,033) 4,409
Total Assets 16,162 38,866 3,431 58,459

1998

Revenue 16,030 22,930 -- 38,960
Direct Cost 9,488 14,057 -- 23,545
------------- ------------- ------------- -------------
Gross Profit 6,542 8,873 -- 15,415
S,G&A 6,544 6,272 2,886 15,702
------------- ------------- ------------- -------------
Income (loss) from operations (2) 2,601 (2,886) (287)
Investment income 29 1 588 618
Gain on sale of assets 55 -- 17 72
Interest expense (11) (58) (3) (72)
Other income 381 118 (13) 486
------------- ------------- ------------- -------------
Income before extraordinary items and taxes 452 2,662 (2,297) 817
Extraordinary item and taxes -- -- (55) (55)
------------- ------------- ------------- -------------
Net Income 452 2,662 (2,352) 762
Total Assets 15,535 38,000 8,265 61,800




20
23

The following table sets forth items in the Statements of Operations for the
three years ended December 31, 2000, as a percentage of revenue:



Percentage of Revenues for the
Year Ended December 31,
-----------------------------------------
2000 1999 1998
--------- --------- ---------

Revenue 100.0% 100.0% 100.0%
Operating costs 52.0 48.3 60.4
--------- --------- ---------

Gross profit 48.0 51.7 39.6
Selling, general and administrative expenses 39.7 43.0 40.3
--------- --------- ---------

Income (loss) from operations 8.3 8.7 (.7)
Other (income) expense, net 2.4 .7 2.8
--------- --------- ---------

Income (loss) before income taxes and extraordinary item 10.7 13.4 2.1
Extraordinary item .4 -- --
Income tax expense (benefit) -- .6 .1
Preferred stock dividends .9 1.2 1.1
--------- --------- ---------

Net income to common shareholders 10.2% 11.7% .9%
========= ========= =========


The following table compares the Company's two operating segments without
consolidated corporate costs, intercompany charges, or the captive insurance
company ALEX.

CONDENSED STATEMENT OF OPERATIONS



Reported in $000 DECEMBER 31, 2000 December 31, 1999
CHEMICAL LLRW Chemical LLRW
--------- --------- --------- ---------

Revenue $ 18,975 $ 23,725 $ 12,074 $ 23,070
Operating costs 10,084 12,223 7,482 9,740
--------- --------- --------- ---------

Gross Profit $ 8,891 $ 11,502 $ 4,592 $ 13,330
Selling, G & A 3,975 7,113 3,218 6,192
--------- --------- --------- ---------
Income from operations $ 4,916 $ 4,389 $ 1,374 $ 7,139
--------- --------- --------- ---------


REVENUE

Revenue for 2000, increased to $41,958,000 a 22% increase over 1999 revenue of
$34,352,000. During 1999, revenue had decreased 11.8% from 1998 revenue of
$38,960,000. The increase in revenue was principally the result of growth in the
Chemical Services business, while the LLRW business remained relatively flat.
The Chemical Services division has increased profitability in each of the last
three years and substantially grew revenue in 2000 from 1999. This was mainly
due to adding new hazardous waste customers and successfully bidding and winning
several new projects, including one large steel mill project and one large
remediation project. While it had little effect on revenue, the Company opened
El Centro municipal and industrial waste landfill in 2000. The Beatty, Nevada
facility had two large contracts, and made a very large contribution to revenue
in 2000, for hazardous waste disposal.

Management expects revenue to continue to increase in 2001, as the newly
constructed vertical expansion airspace is utilized at the Beatty and Texas
facilities, the newly acquired Idaho facility contributes to revenue, and El
Centro captures a greater share of the Corpus Christi, Texas market.



21
24

The LLRW services revenue remained relatively flat in 2000, 1999, and 1998 at
between $23 and $24 million. Production increased slightly at the Oak Ridge,
Tennessee LLRW facility with revenue of $14,506,000 in 2000 compared to
$13,575,000 in 1999, and $9,129,000 in 1998. While revenue has increased at Oak
Ridge, operating costs increases rendered this facility unprofitable in each of
these reported years. Revenue increased to $8,857,000 compared to $7,500,000 in
1999 and 1998 at the Company's Richland, Washington rate regulated LLRW
facility. This increase was due to significant NARM contracts, which are not
rate regulated. The Company expects approval of a new 5-year Washington rate
agreement in May 2001. The Company expects that the minimum revenue requirement
under a new rate agreement will be materially less than the current agreement.
While both Oak Ridge and Richland have increased revenues, the Company has
decreased its business with the Central Interstate Compact Commission pending
the outcome of litigation, as explained in Item 1. Low Level Radioactive Waste
Services.

DIRECT OPERATING COSTS

Direct operating costs for 2000, totaled $21,832,000 an increase of $5,223,000
or 31% from the prior year. Direct operating costs were $16,609,000 in 1999, and
$23,545,000 in 1998. Direct operating costs increased in 2000, as the result of
increased revenue and activity, principally at Chemical Services sites. Further
contributing to the increase in direct operating costs was the Company's
decision to broker transportation when it made economic sense and introduction
of new thermal treatment and recovery processes at the Nevada site. Management
expects operating costs to increase, commensurate with and relative to revenue
in 2001.



Reported in $000 DECEMBER 31, 2000 December 31, 1999 December 31, 1998
CHEMICAL LLRW Chemical LLRW Chemical LLRW
--------- --------- --------- --------- --------- ---------

Operating Costs $ 10,084 $ 12,223 $ 7,482 $ 9,740 $ 9,488 $ 14,057


In 2000, Chemical Services direct operating costs increased $2,602,000 or 35%
from the prior year. The increase in direct operating costs was primarily the
result of additional service and activity associated with contracts. In 2000,
the Company capitalized approximately $2,478,000 of costs compared to $1,822,000
of capitalized costs in 1999. The capitalization of labor, engineering, and
material costs for the development of additional disposal capacity at the Nevada
and Texas facilities will generate revenue and contribute to profit in the
future.

In 2000, LLRW Services direct operating costs increased $2,483,000 or 25% from
the prior year. This increase is only moderately reflective of a 3% increase in
revenue. The increases in direct operating costs are mainly at the Oak Ridge
facility where an NLRB judgment was received against the Company for $547,000
additional subcontract and consulting costs at the motor center that the Company
made no profit on and additional equipment rental. The Company continues to have
difficulty in managing costs at the Oak Ridge facility. Operating costs continue
to be high at this facility mainly for labor, transportation and subcontracted
services, and equipment rental.

Consolidated Results of Operations (in thousands):



2000 1999 1998
---- ---- ----

Revenue $ 41,958 $ 34,352 $ 38,960
Direct operating costs 21,832 52.0% 16,609 48.3% 23,545 60.4%
--------- --------- ---------
Gross profit (loss) $ 20,126 48.0% $ 17,743 51.7% $ 15,415 39.6%


For the year ended 2000, direct operating costs were 52.0% of revenue compared
to 48.3% in 1999 and 60.4% in 1998. The increase in direct operating costs
reflect the increased activity levels associated with growing the business, as
well as higher than anticipated costs at the Company's Oak Ridge facility.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses ("SG&A") for 2000 totaled
$16,665,000, an increase of 13% from the prior year. SG&A were $14,762,000 and
$15,702,000 in 1999 and 1998 respectively. While SG&A expenses increased in
absolute terms $1,903,000, SG&A actually decreased relative to revenue, dropping
from 43% of



22
25

revenue last year to 39.7% of revenue this year. The higher SG&A spending (in
dollars) was caused by additional investment in infrastructure, information
systems, more travel, additional sales personnel, outside consulting expense,
and legal expense. The Company expects that SG&A will grow in absolute dollars,
but actually decrease relative to sales.

Consolidated Results of Operations (in thousands):



2000 1999 1998
---- ---- ----

Revenue $ 41,958 $ 34,352 $ 38,960
Selling, G&A expenses 16,665 39.7% 14,762 43% 15,702 40.3%
--------- --------- ---------


The following table includes SG&A for the Chemical and LLRW Services, but
excludes corporate consolidated adjustments and eliminations.



Reported in $000 DECEMBER 31, 2000 December 31, 1999
CHEMICAL LLRW Chemical LLRW
-------- ---- -------- ----

SG&A $3,974 $7,113 $3,219 $6,192


In 2000, Chemical Service's SG&A increased 23.5%. The main reason for the
increase was additional sales people, new contracts, and new customers described
earlier. Chemical services had previously reduced costs as a result of selling
the transportation operations. LLRW Services SG&A increased by 14.9% from 1999.
The increase for LLRW is the result of 35% SG&A to revenue spending at the Oak
Ridge facility, compared to 22.7% at the Richland facility. However, on January
2, 2001 the Company's Oak Ridge facility implemented an aggressive cost
containment program that included a reduction in force of 10 people. The
reduction in force coupled with ongoing spending controls is expected to reduce
SG&A expense at the Company's Oak Ridge facility.

INVESTMENT INCOME

Investment income is comprised principally of interest income earned on various
investments in securities held-to-maturity, dividend income, and realized and
unrealized gains and losses earned on the Company's stock portfolio classified
as trading securities in 1999 and 1998. As of December 31, 2000, the Company
reported investment income of $435,000 compared to $225,000 and $618,000 in 1999
and 1998, respectively. The main reason for this increase in 2000 is realized
gain on the sale of invests in ALEX, and the Company used this capital for the
expansion of plant and equipment and capital projects, and withdrew
approximately $6,000,000 and $1,000,000 from the ALEX stock portfolio in 1998
and 1999 respectively. The ALEX stock portfolio was used as collateral for
insurance in the event of a claim at certain closed sites. The Company has
secured alternate financial assurance and the ALEX portfolio and subsidiary has
been dissolved.

GAIN ON SALE OF FIXED ASSETS

As a result of the sale lease back in August 2000, the Company recognizes a
portion of the deferred gain each month. Payments are made to the bank for
$35,000 and a gain is recognized for $16,600. In 2000, a $83,000 gain was
realized on the sale of the fixed assets for the sale-leaseback. Other
miscellaneous assets were sold during the year for a gain of approximately
$9,000.

In May of 1999, the Company sold its Houston-based hazardous and non hazardous
waste transportation service provider (formerly WPI) and Surecycle(R) (a
business division that operated a containerized hazardous waste collection
service in the Gulf coast market) to Clean Harbors Environmental Services, Inc.
The sale of the two operations and related facilities produced working capital
of $1.9 million and a gain on the sale over remaining book value of $843,000
before sales commissions.



23
26

INTEREST EXPENSE

The Company incurred interest expense of $350,000, $208,000, and $72,000 in
2000, 1999, and 1998 respectively. Before July 1999, the majority of this
interest expense was capitalized for the development of the Company's proposed
LLRW facilities in California and Nebraska in accordance with Statement of
Financial Accounting Standards No. 34, Capitalization of Interest Cost. In 1999,
the Company ceased capitalization of interest costs. In 2000, the Company opened
a new bank credit facility with an $8 million borrowing base. Interest charges
for 2000 and 1999 are from bank borrowings and interest on long-term capital
leases for heavy equipment. Substantially all of the interest cost incurred in
1998 related to borrowings under the Company's Credit Agreement with its former
commercial bank lender.

OTHER INCOME

Other income was $841,000, $780,000 and $486,000 as of December 31, 2000, 1999,
and 1998. The amounts of other income are generally the result of adjustments,
or money received that was originally recorded in a prior period. In 2000, the
Company had some changes in accounting estimates that resulted in certain
year-end adjustments. The largest adjustments included in the year 2000 amount
of $841,000 was a $260,000 reduction in accrued fees and taxes for rate
post closure obligation at owed facilities. Other income can also include
collecting accounts that were previously written off, or certain credits that
apply to a previous year.

INCOME TAXES

The Company's effective income tax (benefit) rates were .2%, 4.2%, and 14.3% for
the fiscal years 2000, 1999, and 1998 respectively. In 2000, the Company
generated a $12,000 income tax benefit with the dissolution of its ALEX
subsidiary. ALEX had generated a positive tax allowance to cover the sale of
investment securities, which is consolidated to the corporate level as a tax
credit following the dissolution. The income tax expense of $195,000 and $55,000
for 1999 and 1998 is for payments on different state and local taxes including
franchise taxes. The Company has a valuation allowance of approximately $19.8
million for deferred tax assets with more than $2.7 million of limited loss
carry-forwards and $34.4 million of unlimited net operating loss carry-forwards.
See Item 8. Note 14. Income Taxes.

EXTRAORDINARY GAIN - EARLY EXTINGUISHMENTS OF DEBT

On December 19, 2000, the Company entered into an agreement with Chase Bank of
Texas for settlement of debt associated with the Company's 1994 Federal Income
Tax Claim. The Company had pledged the income tax receivable and a deed of trust
on the Company's Winona, Texas site to Chase Bank in 1998. The settlement, which
was paid in December 2000, allowed the Company to pay $350,000 to Chase Bank and
receive in return release and discharge from all obligations of the $556,000
loan. The result is an extraordinary gain on early extinguishment of debt of
$206,000 and the release by the bank of its security interest in the Winona
property and the income tax refund claim.

NET INCOME

Net income and earnings per share for the last 5 years are listed below.




Dollars in Thousands
EXCEPT PER SHARE AMOUNTS 2000 1999 1998 1997 1996
------ ------ ----- ----- --------

Net Income (Loss) $4,697 $4,409 $ 762 $(676) $(11,407)

Basic Earnings Per Share $ .31 $ .30 $ .03 $(.17) $ (1.47)



24
27

CAPITAL RESOURCES AND LIQUIDITY

As of December 31, 2000, the Company had positive working capital of $2,279,000.
This compares favorably to the working capital deficits of $2,309,000 and
$7,567,000 reported for 1999 and 1998 respectively. This significant improvement
in working capital reflects financing activities in 2000 combined with increased
revenue and profit and a reduction in current liabilities.

During 1999, the Company also met certain obligations allowing a cash secured
for a $2.5 million dollar letter of credit to be replaced with a $1.5 million
performance bond. Also, certain cash assets previously pledged were released
allowing for reclassification of assets from long term to short term. The $1.5
million bond was replaced by an insurance policy in year 2000.

The Company's current ratio improved to 1.17:1 in 2000 compared with 0.9:1.0 and
0.7:1.0 for the years ending December 31, 1999, and 1998. Liquidity, as measured
by day's receivables outstanding ("DRO"), was constant for 2000 and 1999.
Average DRO for 2000 and 1999 was 69 days down from an average of 89 days in
1998. The overall improvement in the Company's liquidity allowed the Company to
continuously pay down accounts payable and retire other short-term obligations.

The Company's leverage has increased since 1999, as evidenced by a .46:1 debt to
equity ratio at December 31, 2000, compared to .20:1 for the same period one
year before. This debt to equity ratio is debt divided by shareholder's equity
as of year-end, where debt includes bank line of credit, long and short-term
borrowings through notes, commercial paper, and lease agreements all of which
are included in either current or total liabilities. Equity is the shareholder's
equity excluding any deferred tax assets or liabilities. The year-end 2000 ratio
increasing to .46:1 reflects an $8.0 million credit facility established with
First Security Bank of Boise, Idaho. The Company did not have any bank debt for
the preceding two years before 2000. This new credit facility provided available
cash for the expansion at both the Beatty, Nevada and Robstown, Texas facilities
and improved the daily operational cash position for the Company as a whole. The
Company has borrowed on this line and repaid when business dictates and cash
receipts are available.

As of March 27, 2001, the Company has maintained a business banking relationship
with First Security Bank, Boise, Idaho that provides this $8,000,000 line of
credit. At this date the Company had $3,500,000 borrowed.

OTHER MATTERS

ENVIRONMENTAL MATTERS

The Company maintains reserves and insurance policies for costs associated with
future closure and post-closure obligations for both current and formerly
operated disposal facilities. These reserves and insurance policies are based on
professional engineering studies and interpretations of current regulatory
requirements and potential regulatory changes performed at least annually.
Accounting for closure and post-closure costs includes final disposal unit
capping for the site, gas emission control, subsurface soil and groundwater
monitoring, and other monitoring and routine maintenance costs expected after a
site stops accepting waste. The Company believes it has made adequate provisions
through reserves and the insurance policy for its obligations.

The Company estimates that the aggregate final closure and post-closure costs
for all insured facilities owned or operated was approximately $15,953,000 as of
December 31, 2000. This compares to recorded closure and post-closure
liabilities of $17,285,000 and $19,539,000 for 1999 and 1998 respectively. As
described in Item 1, Insurance, the Company has a three-year prepaid insurance
policy for closure and post closure of these facilities, and has set aside
certain pledged cash and investment securities to pay certain deductible limits.

Management believes that disposition of these environmental matters will not
have a material adverse effect on the financial condition of the Company. The
Company's operation of disposal facilities creates operational, monitoring, site
maintenance, closure and post-closure obligations that could result in
unforeseen costs for monitoring and corrective action. The Company cannot
predict the likelihood or effect of such costs, regulations or legislation
enacted, or other future events affecting these facilities.


25
28

SEASONAL EFFECTS

The Company's operating revenue is generally lower in the winter months, and
increases in the warmer summer months. The volume of both hazardous waste and
LLRW tends to decrease during winter months, however, market conditions have a
larger effect on revenue than seasonality.

SENIOR MANAGEMENT

In the third quarter of 2000, Jack K. Lemley, Chairman, Chief Executive Officer
and President and the Company's Board of Directors appointed Barbara Trenary as
a Vice President of the Company. Ms. Trenary's responsibilities principally
relate to management of the Company's LLRW operations.

NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standards 137 "Deferral of the Effective Date of FASB
Statement 133." FASB 133 established standards for recognizing all derivative
instruments including those for hedging activities as either assets or
liabilities in the statement of financial position and measuring those
instruments at fair value. FASB No. 133 is deferred until fiscal quarters
beginning after June 15, 2000. Management believes the adoption of this
statement will have no material impact on the Company's financial statements.



26
29

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
American Ecology Corporation

We have audited the accompanying consolidated balance sheets of American Ecology
Corporation and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of operations, shareholders' equity and cash flows for
the years ended December 31, 2000, 1999, and 1998. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of American Ecology
Corporation and subsidiaries as of December 31, 2000 and 1999, and the results
of their operations and their cash flows for the years ended December 31, 2000,
1999, and 1998, in conformity with generally accepted accounting principles in
the United States.




Balukoff, Lindstrom & Co., P.A.


Boise, Idaho
February 16, 2001






27
30


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.

AMERICAN ECOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
($ IN 000'S EXCEPT PER SHARE AMOUNTS)



As of December 31,
-----------------------
2000 1999
-------- --------

ASSETS
Current Assets:
Cash and cash equivalents $ 4,122 $ 4,771
Receivables, net of allowance for doubtful
accounts of $568 and $619 respectively 9,839 7,696
Income taxes receivable 740 740
Prepayments and other 1,316 1,207
-------- --------
Total current assets 16,017 14,414

Cash and investment securities, pledged 235 226
Property and equipment, net 18,488 12,818
Facility development costs 27,430 27,430
Intangible assets relating to acquired businesses, net 366 390
Other assets 3,214 3,181
-------- --------
Total Assets $ 65,750 $ 58,459
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:

Current portion of long term debt $ 1,094 $ 781
Accounts payable 2,680 2,706
Accrued liabilities 9,149 12,334
Accrued closure and post closure obligation, current portion
700 700
Income taxes payable 115 202
-------- --------
Total current liabilities 13,738 16,723

Long term debt 10,775 3,569
Accrued closure and post closure obligation, excluding current portion 15,253 16,585
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock, $.01 par value,
1,000,000 shares authorized, none issued -- --

Series D cumulative convertible preferred stock, $.01 par value, 100,001
authorized, issued and outstanding; 5,263 converted and retired
1 1
Series E redeemable convertible preferred stock, $10.00 par value,
300,000 authorized, 300,000 shares converted and retired -- --
Common stock, $.01 par value, 50,000,000 authorized, 13,729,632
and 13,704,050 shares issued and outstanding, respectively
137 137
Additional paid-in capital 54,610 54,513
Retained earnings (deficit) (28,764) (33,069)
-------- --------
Total shareholders' equity 25,984 21,582
-------- --------

Total Liabilities and Shareholders' Equity $ 65,750 $ 58,459
======== ========


The accompanying notes are an integral part of these financial statements.



28
31


AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN 000'S EXCEPT PER SHARE AMOUNTS)




As of December 31,
--------------------------------------
2000 1999 1998
-------- -------- --------

Revenue $ 41,958 $ 34,352 $ 38,960
Direct operating costs 21,832 16,609 23,545
-------- -------- --------

Gross profit 20,126 17,743 15,415
Selling, general and administrative expenses 16,665 14,762 15,702
-------- -------- --------

Income (loss) from operations 3,461 2,981 (287)
Investment income 435 225 618
Gain on sale of assets 92 826 72
Interest expense (350) (208) (72)
Other income 841 780 486
-------- -------- --------

Income before income tax and extraordinary item 4,479 4,604 817
Income tax expense (benefit) (12) 195 55
-------- -------- --------

Income before extraordinary item 4,491 4,409 762

Extraordinary gain - early extinguishments of debt 206 -0- -0-

Net income 4,697 4,409 762

Preferred stock dividends 398 397 417
-------- -------- --------
Net income (loss) available to common shareholders $ 4,299 $ 4,012 $ 345
======== ======== ========

Basic earnings per share $ .31 $ .30 $ .03
======== ======== ========

Diluted earnings per share $ .26 $ .27 $ .03
======== ======== ========

Dividends paid per common share $ -- $ -- $ --
======== ======== ========


The accompanying notes are an integral part of these financial statements.

29
32
AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ 000's)




Year Ended December 31,
--------------------------------------
2000 1999 1998
-------- -------- --------

Cash flows from operating activities:
Net income $ 4,697 $ 4,409 $ 762
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depletion, depreciation and amortization 2,028 2,054 3,152
(Gain) loss on sale of assets (92) (826) (72)
Gain on sale of investments -- (14) --
Income Taxes Payable (87) 111 --
Stock compensation 79 129 79
Changes in assets and liabilities:
Receivables (2,143) 1,810 (1,577)
Investment securities classified as trading (9) 820 1,942
Other assets (507) (1,415) (1,034)
Closure and post closure obligation (1,332) (2,254) (1,640)
Accounts payable and accrued liabilities (1,410) (7,328) 90
-------- -------- --------
Total adjustments (3,473) (6,913) 940
-------- -------- --------
Net cash provided (used) by operating activities 1,224 (2,504) 1,702

Cash flows from investing activities:
Capital expenditures, excluding site development costs (6,442) (3,219) (697)
Facility development costs, including capitalized interest -- (521) (1,431)
Proceeds from sales of assets 2,000 1,840 72
Net proceeds from sales of investment securities -- 2,497 6,940
Transfers to (from) cash and investment securities, pledged -- 1,876 --
-------- -------- --------
Net cash provided by (used in) investing activities (4,442) 2,473 4,884

Cash flows from financing activities:
Proceeds from issuances and indebtedness 4,912 558 16,096
Payments of indebtedness (2,361) (198) (21,519)
Proceeds from rights offering -- -- 2,913
Stock options exercised 18 -- --
-------- -------- --------
Net cash provided by (used in) financing activities 2,569 360 (2,510)
-------- -------- --------

Increase (decrease) in cash and cash equivalents (649) 329 4,076
Cash and cash equivalents at beginning of year 4,771 4,442 366
-------- -------- --------
Cash and cash equivalents at end of year $ 4,122 $ 4,771 $ 4,442
======== ======== ========
Supplemental disclosures of cash flow information: Cash paid during the year
for:
Interest, net of amounts capitalized $ 350 $ 208 $ 72
Income taxes paid 74 156 144
Non-cash investing and financing activities:
Long-term debt exchange for asset interest -- -- 24,323
Long-term offset capitalized interest -- -- 12,461
Warrants issued on exchange for debt -- -- 1,660
Stock issuance--Director's compensation 79 129 79
Preferred Stock Dividends 398 397 417
Acquisition of equipment with capital leases 1,769 1,235 --


The accompanying notes are an integral part of these financial statements.



30
33


AMERICAN ECOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($ in 000's)




Additional Retained
Preferred Common Paid-In Earnings
Stock Stock Capital (Deficit)
--------- -------- ---------- ----------

Balance, December 31, 1997 $ 3,001 $ 85 $ 47,701 $(37,407)

Net income -- -- -- 762
Common stock issuance -- 51 5,024 --
Dividends of preferred stock -- -- -- (417)
Common stock warrants -- -- 1,660 --
Preferred stock-retired (3,000) -- -- --
-------- -------- -------- --------
Balance, December 31, 1998 $ 1 $ 136 $ 54,385 $(37,062)

Net income -- -- -- 4,409
Common stock issuance -- 1 109 --
Dividends of preferred stock -- -- -- (397)
Preferred stock-retired -- -- 19 (19)
-------- -------- -------- --------
Balance, December 31, 1999 $ 1 $ 137 $ 54,513 $(33,069)

Net income -- -- -- 4,491
Common stock issuance -- -- 97 --
Dividends of preferred stock -- -- -- (398)
Extraordinary gain -- -- -- 206
Other -- -- -- 6
-------- -------- -------- --------
BALANCE, DECEMBER 31, 2000 $ 1 $ 137 $ 54,610 $(28,764)
======== ======== ======== ========



Note: Convertible Preferred Stock is not shown above because no shares have been
issued.

The accompanying notes are an integral part of these financial statements




31
34


AMERICAN ECOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS.

American Ecology Corporation (a Delaware Corporation) and its subsidiaries ("the
Company") provide a variety of processing, recycling, packaging and hazardous
and non-hazardous waste services to commercial and government customers,
remediation and disposal services for generators of low-level radioactive waste.
The Company has one of the largest motor rebuilding facilities in the United
States for large electric motors from nuclear power plants. The Company acquired
Envirosafe Services of Idaho, Inc., on February 1, 2001. This purchase is a
significant addition to the Chemical division for the treatment and disposal of
hazardous and PCB waste. The Company also services the needs of hazardous waste
generators nationally, but the larger market share is in the Gulf and West Coast
regions of the country at its hazardous waste landfill disposal sites in
Robstown, Texas and Beatty, Nevada. The Company services the needs of low-level
radioactive waste ("LLRW") generators in the Northwest and Rocky Mountain
Compact regions at its rate regulated LLRW facility located near Richland,
Washington and provides LLRW processing and recycling services to LLRW waste
generators in the Mid-West and East Coast regions at its Oak Ridge, Tennessee
facility.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Principles of Consolidation. The accompanying financial statements are prepared
on a consolidated basis. Six reporting subsidiaries and the parent company were
active in 2000. The consolidated financial statements include the accounts of
the Company and its subsidiaries after the elimination of all significant
inter-company balances and transactions. Certain estimates and assumptions are
made to accurately reflect the business operations under the accrual basis of
accounting. The Company's year-end is December 31, 2000 and there were fifty-two
weeks of reporting compared to fifty-three weeks of reporting in 1999 and
fifty-two weeks in 1998. The Company has made certain estimates and assumptions
for the consolidated financial statements. The consolidated financial statements
are prepared in accordance with generally accepted accounting principles (GAAP).

Reclassification. Reclassifications have been made to prior year financial
statements to conform to the fiscal 2000 presentations.

Cash and Investment Securities Pledged. Pledged cash and investment securities
totaled $235,000 at December 31, 2000. These consisted of a letter of credit and
money market accounts. The Company maintains these investments to cover an
insurance policy commitment and the escrow account for the closed Sheffield
facility.

Revenue Recognition. Generally, revenues are recognized as services are
performed, and as waste materials are buried or processed. Revenue also includes
sales from the Company's subsidiary Nuclear Equipment Services Corporation
("NESC"), which accounts for revenue on a percentage of completion basis. The
Company had both unbilled and deferred revenue at year-end 2000, 1999, and 1998.

Property and Equipment. Property and equipment are recorded at cost and
depreciated on straight-line and declining balance methods over estimated useful
lives. See Note 6 for major categories of property and equipment. Lease
obligations for which the Company assumes or retains substantially all the
property rights and risks of ownership are capitalized. Replacements and major
repairs of property and equipment are capitalized and retirements are made when
the useful life has been exhausted. Minor components and parts are charged to
expense as incurred. During 2000, 1999, and 1998 maintenance and repair expenses
were $176,000, $241,000, and $209,000 respectively.

Land is comprised of property owned at the processing and disposal sites. Land
owned and used for disposal is depleted over the estimated useful life of the
disposal site on a straight-line basis. Cell development costs represent waste
disposal facility preparation costs that are capitalized and charged to
operating costs as disposal space is utilized. The Company engaged certified
engineers and surveyors to make independent surveys and measure remaining cell
volume.



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35


Intangible Assets. Intangible assets relating to acquired businesses consist
primarily of the cost of purchased businesses in excess of fair value of net
assets acquired ("goodwill"). Intangible assets are being amortized on the
straight-line method over periods not exceeding 40 years with the majority being
amortized over 25 years. The accumulated amortization of intangible assets
amounted to $384,000, $360,000, and $336,000 at December 31, 2000, 1999, and
1998 respectively. Amortization of intangible assets was $24,000 for each of the
last three years. On an ongoing basis, the Company measures the value of its
intangible assets. In the event that facts and circumstances indicate intangible
or other assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation was required, the estimated future undiscounted cash
flows associated with the assets would be compared to the asset's carrying
amount to determine if a write-down to market value or discounted cash flow
value was necessary.

Permitting Costs. Permitting costs, included under the caption Other Assets in
the Consolidated Balance Sheets, are primarily comprised of outside engineering
and legal expenses and are capitalized and amortized over the life of the
applicable permits. At December 31, 2000, and 1999 there were $3,009,000 and
$3,001,000 respectively of net capitalized permitting costs included in other
assets in the accompanying consolidated balance sheets.

The Company operates its various sites under the regulations of, and permits
issued by, various state and federal agencies. In December 1999, the Robstown,
Texas facility received its permit for a municipal waste landfill and in
February 2000, it received a permit to vertically stack either hazardous or
non-hazardous waste on top of existing cells.

Self-Insurance. The Company has insurance policies that cover any annual losses
exceeding $50,000 per employee for employee health care. The Oak Ridge union
employees are not covered under the self-insured healthcare program, but are
covered by a traditional insurance plan as negotiated under their collective
bargaining agreement. The Company also maintains a Pollution and Remediation
Legal Liability Policy pursuant to RCRA regulations. The policy is subject to a
$250,000 self-insured retention. In addition, the Company is insured for
consultant's environmental liability. The policy is subject to a $100,000
retention.

The Company restructured its closure and post-closure insurance with Indian
Harbor Insurance Company on an extended prepaid policy term for June 2000 to
September 2003. The Company no longer is reinsuring financial assurances
requirements for closure and post-closure of its facilities. Alex, the inactive
captive insurance company was dissolved in November 2000.

Accrued Closure and Post-Closure. Accrued closure and post-closure liability
includes the accruals associated with obligations for closure and post-closure
of the Company's operating and closed disposal sites and for corrective actions
and remediation. The Company generally provides accruals for the estimated costs
of closures and post-closure monitoring and maintenance as permitted disposal
space is consumed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable, and the costs can be reasonably estimated.
The Company performs routine periodic reviews of both closed and operating sites
and revises accruals for estimated post-closure, remediation or other costs
related to these locations as deemed necessary. The Company's recorded
liabilities are based on best estimates of current costs and are updated
periodically to include the effects of existing technology, presently enacted
laws and regulations, inflation and other economic factors. In 2000, the Company
completed a review with an independent engineering firm and determined that
Texas Ecologists will have a reduced cost of closure with the addition of a
slurry wall, which was completed in 2000 for approximately $1.2 million. The
Company completed a study on ground water contamination and the U.S. EPA
concurred that such remediation will be complete by 2002. The Company has
closely monitored its closure obligations and reduced the amount to $15,253,000
in 2000 from $16,585,000 and $18,839,000 in 1999 and 1998 respectively.

The Company estimates its future cost requirements for closure and post-closure
monitoring and maintenance for operating chemical disposal sites based on
Resource Conservation and Recovery Act ("RCRA") and the respective site permits.
RCRA requires that companies provide financial assurance for the closure and
post-closure care and maintenance of their chemical sites for at least thirty
years following closure.

Income Per Share. Basic earnings per share are computed based on net income and
the weighted average number of common shares outstanding. Diluted earnings per
share reflect the assumed issuance of common shares under long-term incentive,
stock option and stock purchase plans and pursuant to the terms of the 1992
Stock Option Plans. The



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computation of diluted earnings per share does not assume conversion or exercise
of securities that would have an antidilutive effect on earnings per share.



(000's except per share amounts)
Year Ended December 31,
---------------------------------
2000 1999 1998
-------- ------- --------

Income before extraordinary item $ 4,491 $ 4,409 $ 762
Net Income $ 4,697 $ 4,409 $ 762
Preferred stock dividends 398 397 417
------- ------- -------
Net income available to
common shareholders $ 4,299 $ 4,012 $ 345

Weighted average shares outstanding-
Common shares outstanding at year end 13,711 12,772
13,585
Effect of dilutive shares
------- ------- -------
3,157 1,475 --
------- ------- -------

Adjusted shares 16,868 15,060 12,772

Basic earnings per share $ .31 $ .30 $ .03
======= ======= =======
Diluted earnings per share $ .26 $ .27 $ .03
======= ======= =======


Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenue and expenses during the
reporting period. The Company used significant estimates in the accompanying
consolidated financial statements primarily related to recoverability of closure
and post closure obligation costs and facility development assets, waste
processing and burial costs, and deferred site maintenance. Actual results could
differ from these estimates.

Major Customers. In 2000, the Company managed the disposal of hazardous waste
for Tamco Steel of Rancho Cucamonga, California, for $5,500,000 or 13% of
consolidated revenue. The Company does not expect this to be a reoccurring event
in 2001. In 1999, no single customer accounted for 10% or more of the Company's
consolidated revenue. Revenue resulting from the cost reimbursement contract
with the Central Interstate Low-Level Radioactive Waste Commission was
approximately $6,808,000 in 1998 or 18% of the Company's consolidated revenue
that year. No other single customer accounted for 10% or more of the Company's
consolidated revenue for these years.

Credit Risk Concentration. The Company maintains most of its cash with First
Security Bank. Substantially all of the cash balances are uninsured and are not
collateralized. Concentrations of credit risk with respect to accounts
receivable are believed to be limited due to the number, diversification and
character of the obligors and the Company's credit evaluation process.
Typically, the Company has not required collateral for such obligations.

Commitments. The Company has various long term lease commitments, payments on a
sale lease back, a bank credit facility, customer and vendor obligations and
certain state and federal regulatory commitments all of which the Company
believes it has properly accounted for or has made proper accruals to meet these
obligations in the future.

The Company signed an agreement in January 1999 to dispose of a minimum of
60,000 cubic feet of waste material; stored at the Oak Ridge, Tennessee facility
before December 31, 2001. The Company has been disposing of this waste on
schedule and expects to meet this commitment.

Labor Concentrations. The Paper, Allied-Industrial Chemical & Energy Workers
International Union, AFL-CIO, CLC (PACE), formerly the OCAW, represent 58
employees at two of the Companies facilities and 6 employees are represented by
the United Steel Workers of America and 1 by the United States Workers of
America.



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37


In March 1998, the Company ended discussions on a new labor agreement and
reached an impasse in negotiations of a new collective bargaining agreement. The
Company implemented its final offer. PACE subsequently charged the Company with
unfair labor practices. The National Labor Relations Board ("NLRB") hearing
office ruled against the Company, which was sustained by a three member panel of
the NLRB. The Company has petitioned the court to reverse this decision and
moved to stay the NLRB order pending review. This matter is pending. If the
Company is unsuccessful in its appeal, it may be required to retroactively apply
the prior labor agreement and bargain with PACE.

New Accounting Pronouncements.

The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standards 137 "Deferral of the Effective Date of FASB
statement 133." FASB 133 established standards for recognizing all derivative
instruments including those for hedging activities as either assets or
liabilities in the statement of financial position and measuring those
instruments at fair value. FASB No. 133 is deferred until fiscal quarters
beginning after June 15, 2000. Management believes the adoption of this
statement will have no material impact on the Company's financial statements.

NOTE 3. OPERATING SEGMENTS.

The Company operates with two segments, Chemical Services and LLRW Services. The
Chemical Services division provides hazardous, non-hazardous and municipal waste
management services. The LLRW Services division processes, packages, and
disposes of material contaminated with low-level radioactive material. The
accounting policies of the segments are the same as those described in Note 2,
"Summary of Significant Accounting Policies." The Company evaluates the
performance of its operating segments based on gross profit, selling, general
and administrative expense, interest expense and income, corporate allocation
and after an apportioned income tax. Segment data includes intercompany
transactions at cost, as well as allocation for certain corporate costs.

Summarized financial information concerning the Company's reportable segments
are shown in the following table. The "Corporate & Other" column includes
corporate-related items not allocated to the reportable segments.



Reported in $(000) CHEMICAL LLRW CORPORATE
2000 SERVICES SERVICES & OTHER TOTAL
- ------------------------------------------- -------- -------- --------- ------

Revenue 18,975 23,725 (742) 41,958
Direct Cost 10,084 12,223 (475) 21,832
------- ------- ------- -------
Gross Profit 8,891 11,502 (267) 20,126
S,G&A 3,975 7,113 5,577 16,665
------- ------- ------- -------
Income (loss) from operations 4,916 4,389 (5,844) 3,461
Investment income 51 1 383 435
Gain on sale of assets 69 23 -- 92
Interest expense (57) (109) (184) (350)
Other income 164 380 297 841
------- ------- ------- -------
Income before extraordinary items and taxes 5,143 4,684 (5,348) 4,479
Extraordinary item and taxes -- -- 218 218
------- ------- ------- -------
Net Income 5,143 4,684 (5,130) 4,697
Total Assets 23,875 39,537 2,338 65,750

1999

Revenue 12,074 23,070 (792) 34,352
Direct Cost 7,482 9,740 (613) 16,609
------- ------- ------- -------
Gross Profit 4,592 13,330 (179) 17,743
S,G&A 3,218 6,191 5,353 14,762
------- ------- ------- -------
Income (loss) from operations 1,374 7,139 (5,532) 2,981
Investment income 29 1 750 780
Gain on sale of assets 895 1 (70) 826
Interest expense (14) (65) (129) (208)
Other income 76 6 143 225
------- ------- ------- -------




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38




CHEMICAL LLRW CORPORATE
REPORTED IN $(000) SERVICES SERVICES & OTHER TOTAL
- ------------------------------------------- -------- -------- --------- ------

1999

Income before extraordinary items and taxes 2,360 7,082 (4,838) 4,604
Extraordinary item and taxes -- -- (195) (195)
------ ------ ------ ------
Net Income 2,360 7,082 (5,033) 4,409
Total Assets 16,162 38,866 3,431 58,459

1998

Revenue 16,030 22,930 -- 38,960
Direct Cost 9,488 14,057 -- 23,545
------ ------ ------ ------
Gross Profit 6,542 8,873 -- 15,415
S,G&A 6,544 6,272 2,886 15,702
------ ------ ------ ------
Income (loss) from operations (2) 2,601 (2,886) (287)
Investment income 29 1 588 618
Gain on sale of assets 55 -- 17 72
Interest expense (11) (58) (3) (72)
Other income 381 118 (13) 486
------ ------ ------ ------
Income before extraordinary items and taxes 452 2,662 (2,297) 817
Extraordinary item and taxes -- -- (55) (55)
------ ------ ------ ------
Net Income 452 2,662 (2,352) 762
Total Assets 15,535 38,000 8,265 61,800


NOTE 4. UNAUDITED SELECTED QUARTERLY FINANCIAL DATA.

The unaudited consolidated quarterly results of operations for 2000 and 1999 (in
thousands, except per share amounts) were:



FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER

2000 1999 2000 1999 2000 1999 2000 1999
------ ----- ------ ----- ------ ----- ------ ------

Revenue 9,319 9,179 10,485 8,907 11,796 6,007 10,358 10,259

Gross profit 4,444 4,356 4,587 4,710 5,241 2,343 5,854 6,334

Income before 1,483 125 723 1,466 1,108 (155) 1,165 3,168
extraordinary items
Net Income (loss) 1,381 119 764 1,425 1,100 (126) 1,452 2,990
------ ------ ------ ------ ------ ------ ------ ------

Basic earnings (loss) .09 .001 .05 .10 .07 (.02) .10 .21
per share

Diluted earning (loss) .08 .001 .04 .08 .06 (.02) .08 .18
------ ------ ------ ------ ------ ------ ------ ------


Basic and diluted earnings per common share for each of the quarters presented
above is based on the respective weighted average number of common shares for
the quarters. The dilutive potential common shares outstanding for each period
and the sum of the quarters may not necessarily be equal to the full year basic
and diluted earnings per common share amounts.



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39


NOTE 5. CASH AND INVESTMENT SECURITIES.

In 2000 and 1999, the Company has restructured its insurance policies allowing
more flexibility with cash and investment securities pledged. The Company now
only holds sufficient pledged securities to cover letters of credit for closed
facilities and an insurance bond for a total of $235,000 and $226,000 for 2000
and 1999 respectively. The Company holds no securities for trading, and all cash
is held in money market, certificate of deposit, or the business checking
accounts.

Cash and investment securities at December 31, 2000, and 1999 were as follows
(in thousands):



Market Unrealized
December 31, 2000 Cost Value Gain/(loss)
- --------------------------- ---- ------ -----------

Cash and cash equivalents $4,122 $4,122 $ --
Securities held-to-maturity
235 235 --
------ ------ ------
$4,357 $4,357 $ 0
====== ====== ======
December 31, 1999
- ---------------------------

Cash and cash equivalents $4,452 $4,771 $ 319
Securities held-to-maturity 226 226 --
------ ------ ------
$4,678 $4,997 $ 319
====== ====== ======


The change in net unrealized gains on trading securities was $0, $276,000, and
$(495,000) in 2000, 1999, and 1998 respectively, each of which has been included
in earnings. Investments in securities held-to-maturity mature over various
dates during 2001 and are reported at their amortized cost basis, which
approximates fair value at December 31, 2000. Investments in securities
held-to-maturity at December 31, 1999, and 1998 consisted of the following (in
thousands):



2000 1999
---- ----

Corporate Bonds/Commercial Paper 106 $100
Certificates of deposit -- 52
Money market accounts and other 129 74
---- ----
$235 $226
==== ====


Certain cash accounts and substantially all investments in securities
held-to-maturity and trading securities totaling $235,000 and $226,000 at
December 31, 2000, and 1999 respectively, have been classified as non-current
assets as cash and investment securities pledged.



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40


NOTE 6. PROPERTY AND EQUIPMENT.

Property and equipment at December 31, 2000, and 1999, were as follows (in
thousands):



2000 1999
-------- --------

Construction in progress $ 1,754 $ 1,754
Land 1,546 1,537
Cell development costs 14,767 12,289
Buildings and improvements 6,411 5,968
Decontamination and processing equipment 419 1,144
Vehicles and other equipment 16,988 16,084
-------- --------
41,885 38,776
Less: Accumulated depletion, depreciation and amortization (23,397) (25,958)
-------- --------
$ 18,488 $ 12,818
======== ========


Depreciation expense was $1,439,000, $1,433,000, and $1,958,000 for 2000, 1999,
and 1998 respectively.

The Company leases equipment under various noncancellable capital leases. The
cost and accumulated depreciation are as follows at December 31, 2000:



Accumulated
Cost Depreciation
---------- ------------

Capitalized Cost $3,260,000 $538,000
========== ========


NOTE 7. FACILITY DEVELOPMENT COSTS.

The Company has been licensed to construct and operate the low-level radioactive
waste ("LLRW") facility for the Southwestern Compact ("Ward Valley facility"),
and been selected to obtain a license to develop and operate the Central
Interstate Compact LLRW facility ("Butte facility").

The State of California, where the Ward Valley Site is located, has not obtained
the project property from the U.S. Department of the Interior. For the Company
to realize its investment, the US Government will need to transfer the land to
the State of California, or the Company will need to recover monetary damages
from the U.S. Government, the State of California or both. The Company has taken
steps to protect its investment in Ward Valley and will continue to do so.

In the first quarter of 1997, the Company filed two lawsuits against the United
States. In the first case, US Ecology is suing to recover approximately $73.1
million of Ward Valley site development costs as well as lost profits and lost
opportunity costs. US Ecology lost this case at the trial court level and has
appealed to the Federal Circuit Court of Appeals. In the second case US Ecology
sought an order (writ of mandamus) from a federal court to compel the transfer
of the Ward Valley LLRW site. Both the trial court and the D.C. Circuit Court of
Appeals have ruled against US Ecology in this second case and such rulings are
now final. The Company also filed a lawsuit against the State of California on
May 2, 2000, seeking to compel California to acquire the property to build the
Ward Valley project and monetary damages in excess of $162 million. On October
24, 2000, the California trial court granted the state's motion to dismiss the
case on demurrer, and the Company has appealed the trial court's decision.

All costs through July 31, 1999 related to the development of the Ward Valley
facility had been capitalized, and since then have been expensed as incurred.
After adjusting for the bank settlement in November 1998, and as of December 31,
2000, the Company had deferred $20,952,000 (32% of total assets) of
pre-operational facility development costs of which $895,000 represents
capitalized interest. These deferred costs are to be recovered during the
facility's first 20 years of operation from disposal fees approved by the
Department of Health Services (DHS). The approval process is to include a
prudency review of pre-operational costs incurred by the Company. The Company
expects all costs that it has deferred for this facility, and uncapitalized
project interest costs, to be included in the rate-base. However, there can be
no assurance that California will complete the land transfer, that all of these
costs will be approved by the DHS, or that the facility will ever be
constructed. From the beginning of 2000, the Company is no longer required to
pay the $250,000 annual license fee to the state of California, Department of
Health Services, pending further notice.




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41


The Company has incurred reimbursable costs and received revenues for the
development of the Butte, Nebraska facility under a contract with the Central
Interstate LLRW Compact Commission ("CIC"). While US Ecology has a minor equity
position in the Butte, Nebraska project, it has acted principally as a
contractor to the Central Interstate Low-Level Radioactive Waste Commission.
Major generators of waste within the CIC's five-state region have provided
substantially all funding to develop the Butte facility. As of December 30,
2000, the Company has contributed and capitalized approximately $6,478,000 of
costs (9.9% of total assets), $386,000 of which is capitalized interest toward
development of the Butte facility. In December 1998, the State of Nebraska
denied US Ecology's license application to build and operate the facility. The
CIC directed US Ecology to pursue a Petition for a contested case challenging
the State's denial. US Ecology filed its Petition pursuant to Nebraska law on
January 15, 1999.

The Major Generators funding the development project filed suit in the Federal
District Court for Nebraska on December 30, 1998, seeking to recover certain
costs expended on the Nebraska licensing process and prevent the State of
Nebraska from proceeding with the contested case. US Ecology intervened as a
plaintiff to protect the Company's interest and is seeking relief. The Contested
Case is stayed by a preliminary injunction issued by the presiding federal
judge. The Company believes the case will go to trial in 2002. In the meantime,
the major generators have only been willing to fund the minimum amounts
necessary to maintain the project. Consequently, the Company's revenue from this
project has declined substantially since April 1999.

The timing and outcome of the above matters are unknown. The Company continues
to pursue the conveyance of the land from the federal government to California
as well as its remedies in federal and state court, and, if necessary in the
future, will attempt to cure alleged defects in the State of Nebraska's
licensing process for the Butte, Nebraska facility. The Company believes that
the deferred site development costs for both facilities will be realized. In the
event the Butte facility license is not granted, operations of either facility
do not commence or the Company is unable to recoup its investments through legal
recourse, it may have an adverse effect on its financial position.

The following table shows the ending capitalized balances for facility
development costs for the periods ended December 31, 2000 and December 31, 1999
(in thousands):



December 31, Capitalized Capitalized
2000 and 1999 Costs Interest Total
- ------------- ----------- ----------- -------

Ward Valley, CA Project $20,057 $ 895 $20,952
Butte, Nebraska Project 6,092 386 6,478
------- ------- -------
Total $26,149 $ 1,281 $27,430
======= ======= =======


NOTE 8. ACCRUED CLOSURE AND POST CLOSURE OBLIGATION.

Closure and post closure obligation accruals at December 31, 2000 and 1999 were
as follows (in thousands):




2000 1999
-------- --------

Accrued costs associated with open facilities $ 8,993 $ 10,376
Accrued costs associated with closed facilities 6,960 6,909
-------- --------
Sub-total 15,953 17,285
Less: current portion (700) (700)
-------- --------
Closure and post closure obligation, excluding current portion $ 15,253 $ 16,585
======== ========


Closure and post closure obligation includes the accruals associated with
obligations and liabilities of the Company's operating and closed disposal sites
and for corrective actions and remediation. The Company generally provides
accruals for the estimated costs of closures and post-closures monitoring and
maintenance as permitted airspace of such sites is consumed. Liabilities are
recorded when environmental assessments and/or remedial efforts are probable,
and the costs can be reasonably estimated. These estimates are made by third
party engineering companies.



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42


The Company does not bear responsibility for closure and post-closure costs for
the state owned land used for waste disposal. The Company leases two such
facilities at Beatty, Nevada and Richland, Washington. The State of Nevada and
the State of Washington have collected money from a portion of the tipping fees
on disposal for these two facilities and ultimately controls the dispensation of
those funds for proper closure. The funds are maintained in segregated accounts
for the future costs of closure and post-closure care and maintenance of the
Richland, Washington and Beatty, Nevada facilities. The Company currently
submits waste volume-based fees to these state maintained funds. Such fees are
periodically negotiated with, or established by, the states and are based upon
engineering cost estimates provided by the Company and approved by the state.

The Texas Natural Resources Conservation Commission (TNRCC) issued to Texas
Ecologists a permit on December 15, 1999, for the El Centro Municipal Waste
Landfill and then on February 9, 2000, a permit for vertically stacking
hazardous and non-hazardous waste on current existing closed cells. In 2000, the
Company engaged an independent engineer to assess the closure and post closure
costs for these facilities, and a $105,000 reduction was made to the closure and
post-closure accrual.

NOTE 9. LONG TERM DEBT.

Long term debt at December 31, 2000 and 1999 consisted of the following (in
thousands):



2000 1999
-------- --------

Notes payable $ 792 $ 1,847
Credit facility loan 4,093 --
Capital lease obligations and other 6,984 2,503
-------- --------
11,869 4,350
Less: Current maturities (1,094) (781)
-------- --------
Long term debt $ 10,775 $ 3,569
======== ========


Aggregate maturity of future minimum payments under notes payable and capital
leases is as follows (in thousands):



Year Ended
December 31,
------------

2001 $ 1,094
2002 8,586
2003 805
2004 621
2005 19
-------
TOTAL $11,869
=======


In December 2000 the Company repaid $1,431,000 including $131,000 of interest
for two notes payable to two of the Company's shareholders and board members.
These notes were issued in March 1999 with an eighteen-month term, 9% interest,
and $1.3 million principal, and prohibited the Company from paying dividends on
common or preferred shares. In April 1999, the Company issued a note with AFCO
Finance for a one-year term for $705,000 financing an insurance premium, with an
average interest rate of 9% to 10.5%.

The Company has several long-term capital leases. The value of these leases is
approximately $2.5 million. These leases are at Oak Ridge, Tennessee with 10%
interest, at Beatty, Nevada at 5.8% and 8.9%, Richland, Washington with 5.25%
through 6.14% and at Robstown, Texas at rates between 6% and 14% interest
expiring over the next 5 years.

On August 17, 2000, the Company entered into a 2-year, revolving line of credit
with a local bank. The line of credit is secured by the Company's accounts
receivable and is governed by a Credit Agreement. Under the terms of the Credit
Agreement, borrowings cannot exceed 80% of eligible accounts receivable or $5.0
million, whichever is less. Interest



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43
on borrowings under the Credit Agreement are based on a `pricing grid,' whereby
after the first 6 months, the interest rate decreases or increases based on the
Company's ratio of funded debt to earnings before interest, taxes, depreciation
and amortization (EBITDA). The Company can elect to borrow monies utilizing the
Prime Rate or the offshore London Inter-Bank Offering Rate (LIBOR) plus an
applicable spread. During the first six months of the credit facility,
borrowings are Prime plus 0.75% or LIBOR plus 3.25%, at the election of the
Company, subject to certain conditions. The Credit Agreement contains certain
financial covenants that the Company must adhere to quarterly, including a
maximum leverage ratio, a minimum current ratio and a debt service coverage
ratio. At December 31, 2000, the Company was in compliance with all applicable
bank financial covenants.

At December 31, 2000, the outstanding balance on principal loan and revolving
line of credit was $4,093,000, with $807,000 available with any balance due June
30, 2002. During the fourth quarter, the interest rate on borrowings ranged from
9.8% to 10.5%. The Company has continued to borrow and repay according to
business demands and availability of cash. The Company anticipates that with the
new acquisition of Envirosafe of Idaho that borrowings as such will continue to
fluctuate and with the continued plans for growth that additional borrowing
capacity will be required in the future. Subsequent to year end the Company
increased the line of credit to $8.0 million. There can be no assurance that the
Company can raise additional financing beyond the current $8.0 million line of
credit, and if the Company is not successful it will reassess its current plans
for expansion and growth.

The Company expects to refinance approximately $2.8 million of current
liabilities with its long-term revolving line of credit. These liabilities have
been reclassified to long-term debt as of December 31, 2000.

NOTE 10. SALE LEASEBACK.

On August 3, 2000, the Company entered into a $2 million equipment sale and
leaseback transaction. The Company sold various Company-owned equipment and
rolling stock to a third party lessor. The Company received $2,000,000 in
proceeds from the asset sale and entered into an operating lease for the use of
the equipment beginning August 8, 2000 with monthly payments through January 8,
2006, with no security deposit. The lease allows for the early buyout of the
equipment at a fixed price at the 60th month. The lease requires the Company to
pay customary operating and repair expenses and to observe certain operating
restrictions and covenants.



At December 31: Minimum Lease Payment

2000 $173,971
2001 417,529
2002 417,530
2003 417,530
2004 417,530
2005 417,530
2006 34,794
----------
Total Minimum Payments $2,296,414


The Company realized a $1,098,000 gain on the sale of the equipment that will be
amortized over the life of the lease. The gain will be recognized proportionate
to the gross rental charged over the 66-month lease life. Proceeds from this
sale of assets were used to fund expansion of the El Centro facility and other
general business obligations.

NOTE 11. PREFERRED STOCK.

In November 1996, the Company issued 300,000 shares of Series E Redeemable
Convertible Preferred Stock ("Series E") in a private offering to four of its
directors for $3,000,000 in cash. The Series E bore an 11.25% annual dividend,
paid quarterly in shares of the Company's common stock. The Series E was issued
to fulfill a prior banking requirement. There were no voting rights or powers
attached to this 11.25% Series E Preferred Stock.

There was a partial redemption and mandatory conversion of the remaining Series
E at the conclusion of the rights offering on February 10, 1998, as a term of
the Series E Designation Certificate. The Series E stock is now retired but
carries 3,000,000 warrants with no assigned value and a $1.50 per share exercise
price, which expire June 2008.



41
44


In September 1995, the Board of Directors authorized 105,264 shares of preferred
stock designated as 8 3/8% Series D Cumulative Convertible Preferred Stock
("8 3/8% Preferred Stock") and authorized the issuance of 105,264 of such shares
and warrants to purchase 1,052,640 shares of the Company's common stock. The
Company sold 105,264 of 8 3/8% Preferred Stock with warrants in a private
offering to a group of members or past members of the Board of Directors for
$4,759,000. Offering expenses of $101,000 and $140,000 in settlement of
liabilities was deducted from the proceeds. At December 31, 2000, each 8 3/8%
Preferred Stock share is convertible at any time at the option of the holder
into 14.52 shares of the Company's common stock, equivalent to a conversion
price of $5.50 on the $47.50 total per share offering price plus accrued
dividends times 1.44 due to dilution by later securities sales.

Dividends on the 8 3/8% Preferred Stock are cumulative from the date of issuance
and payable quarterly commencing on October 15, 1995. Current bank credit
facility covenants prohibit the payment of dividends. Accrued dividends at
December 31, 2000 totaled $796,000.

On September 12, 1999, the warrants on the 8 3/8% Preferred Stock expired except
for those belonging to one Series D holder. The Company extended an offer to all
Series D holders that if they converted their Series D to common stock the
warrants would be extended until September 13, 2002. One holder converted
5,263.2 preferred shares for 69,264 common shares and extended 64,211 warrants.
Each warrant has an exercise price of $4.75. No value was assigned to the
warrants in the accompanying consolidated financial statements as the value is
deemed de minimus. The remaining Series D preferred stock outstanding is 100,001
shares.

NOTE 12. STOCK OPTION PLANS.

The Company presently maintains three stock option plans. One, which expired in
1998, afforded employees and outside directors of the Company the right to
purchase shares of its common stock. The exercise price, term and other
conditions applicable to each option granted under the Company's plans are
generally determined by the Compensation Committee of the Board of Directors at
the time of the grant of each option and may vary with each option granted. No
option may be granted at a price less than the fair market value of the shares
when the option is granted, and no options may have a term longer than ten
years.

The first plan is the 1988 plan that provided a 10-year life and all but 260,000
options have expired. In 1992, the Company adopted the second and third plans as
the 1992 Stock Option Plan for Employees and the 1992 Stock Option Plan for
Directors. On May 13, 1999, 500,000 options were added to the Employee's Plan of
1992. Options under the employee plan are designated as incentive or
non-qualified in nature at the discretion of the Compensation Committee, and
only employees will receive options under the 1992 Stock Option Plan for
Employees. Only directors will receive options under the Director's Plan.

As of December 31, 2000, the 1992 Stock Option Plan for Employees had issued
777,498 options with 522,502 remaining available and under the Stock Option Plan
for Directors, 542,500 options had been issued with 107,500 available.

The Company accounts for these plans under APB Opinion No. 25, "Accounting for
Stock Issued to Employees". Under this opinion, the Company recorded
compensation cost for 2000, and none for 1999, and 1998. Had compensation cost
for the plans been determined consistent with FASB Statement No. 123,
"Accounting for Stock-Based Compensation", the Company's 2000, 1999 and 1998 net
income would have been decreased by $354,000, $316,000 and $661,000
respectively. Basic income per share would have decreased $.03, $.02 and $.05
for 2000, 1999 and 1998 respectively. Diluted income per share would have been
decreased by the same amount per share as basic income per share as the common
stock equivalents are anti-dilutive. The pro forma compensation cost may not be
representative of that to be expected in future years.

The fair value of each option grant is estimated using the Black-Scholes
option-pricing model with the following weighted-average assumptions used for
grants in 2000, 1999, and 1998:



42
45




2000 1999 1998
----------- ---------- ----------

Expected volatility 116% 136% 213%
Risk-free interest rates 5.01% 6.3% 6.0%
Expected lives 3 years 3 years 3 years
Dividend yield 0% 0% 0%
Weighted-average fair value of options granted
during the year (Black-Scholes) $ 2.23 $ 1.94 $ 1.14

Under option:
Options outstanding, beginning of year 1,326,572 1,186,572 688,650
Granted 135,926 147,500 607,922
Exercised (13,600) 7,500 (110,000)
Canceled -- -- --
----------- ---------- ----------
Options outstanding, end of year 1,448,898 1,326,572 1,186,572
=========== ========== ==========

Price range per share of outstanding options $ 1.00- $ 1.00 $ 1.00-
$ 14.75 $ 14.75 $ 14.75
=========== ========== ==========

Price range per share of options exercised $ 1.25 $ 1.25 $ --
$ 2.00 $ 1.25 $ --
=========== ========== ==========

Price range per share of options canceled $ -- $ 1.25 $ 8.58-
$ -- $ 7.13 $ 8.58-
=========== ========== ==========

Options exercisable at end of year 1,448,898 1,121,872 1,124,772
=========== ========== ==========

Options available for future grant at end of year 630,002 852,728 461,928
=========== ========== ==========


NOTE 13. EMPLOYEE'S BENEFIT PLANS.

401(k) Plan. The Company maintains a 401(k) plan for employees who voluntarily
contribute a portion of their compensation, thereby deferring income for federal
income tax purposes. The plan is called The American Ecology Corporation 401(k)
Savings Plan.

The Plan covers substantially all of the Company's employees after one full year
of employment. Participants may contribute a percentage of salary up to the IRS
limits. The Company's contribution matches 55% of participant contributions up
to 6% of deferred compensation.

The Company contributions for the 401(k) plan were $176,000, $181,000, and
$119,000 for 2000, 1999 and 1998 respectively. The Company has no
post-retirement or post-employment benefit plan.



43
46


NOTE 14. INCOME TAXES.

The components of the income tax provision (benefit) were as follows (in
thousands):



Year Ended December 31,
2000 1999 1998
----- ----- ------

Current - Federal $ -- $ -- $ --
- State (12) 195 55
----- ----- ------
(12) 195 55
----- ----- ------
Deferred - Federal -- -- --
----- ----- ------
$ (12) $ 195 $ 55
----- ----- ------


The following reconciles between the effective income tax (benefit) rate and the
applicable statutory federal and state income tax (benefit) rate:



Year Ended December 31,
2000 1999 1998
----- ----- -----

Income tax (benefit) - statutory rate 34.0% 34.0% 34.0%
Valuation allowance for deferred tax assets (20.7) (33.1) (38.7)
State income tax and loss carry forward (11.8) 8.4 12.2
Other, net (1.3) (5.1) 6.8
----- ---- ----
Total effective tax rate .2% 4.2% 14.3%
----- ---- ----


The tax effects of temporary differences between income for financial reporting
and taxes that gave rise to significant portions of the deferred tax assets and
liabilities and their changes during the year were as follows (in thousands):



DEFERRED
DECEMBER 31, 2000 PROVISION December 31, 1999
----------------- --------- -----------------

DEFERRED TAX ASSETS
Environmental compliance and other site related
costs, principally due to accruals for financial
reporting purposes $ 4,405 $ (1,371) $ 5,776
Depreciation and amortization 3,568 (495) 4,063
State operating loss carry forward 952 952 --
Net operating loss carryforward 11,593 30 11,563
Other 880 84 796
-------- -------- --------
Total gross deferred tax assets 21,398 (800) 22,198
--
Less valuation allowance (19,799) 858 (20,657)
-------- -------- --------
Net deferred tax assets 1,599 58 1,541
--
DEFERRED TAX LIABILITY
Site development costs (1,230) (58) (1,172)
Capitalized interest (369) -- (369)
-------- -------- --------
Total gross deferred tax liabilities (1,599) (58) (1,541)
-------- -------- --------
Net deferred tax assets $ -- $ -- $ --
======== ======== ========




44
47
The Company has established a valuation allowance for certain deferred tax
assets due to realization uncertainties inherent with the long-term nature of
deferred site maintenance costs, uncertainties regarding future operating
results and for limitations on utilization of acquired net operating loss carry
forwards for tax purposes. The realization of a significant portion of net
deferred tax assets is based in part on the Company's estimates of the timing of
reversals of certain temporary differences and on the generation of taxable
income before such reversals. The net operating loss carry forward of
approximately $34,097,000 at December 31, 2000, begins to expire in the year
2006. Of this carry forward, $2,745,000 is limited pursuant to the net operating
loss limitation rules of Internal Revenue Code Section 382. The portion of the
carry forward limited under Internal Revenue Code Section 382 expires $793,000
in 2006, $1,079,000 in 2007, and $872,000 in 2008. The remaining unrestricted
net operating loss carry forward expires $4,280,000 in 2010, $8,657,000 in 2011,
$7,828,000 in 2012, $6,927,000 in 2018, $3,574,000 in 2019, and $454,000 in
2020. The amount of the Company's net operating loss carry forwards could be
reduced if the Company is ultimately unsuccessful in pursuing the refund claim
discussed below.

The Company filed an amended federal income tax refund claim in 1996 for
approximately $740,000. On September 29, 1999 the Internal Revenue Service
("IRS") proposed to deny this claim, sought to recover portions of tentative
refunds previously received by the Company and proposed to reduce the Company's
net operating loss carryforwards. On November 29, 1999 the Company protested
this denial which is currently pending with the IRS. The Company has tentatively
settled this claim on a basis which would allow a partial refund, retain a
portion of the tentative refunds already received and retain the net operating
loss carryforwards. This settlement requires the approval of the Congressional
Joint Committee on Taxation.

NOTE 15. COMMITMENTS AND CONTINGENCIES.


In the ordinary course of conducting business, the Company becomes involved in
judicial and administrative proceedings involving federal, state, and local
governmental authorities. There may also be actions brought by individuals or
groups in connection with permitting of planned facilities, alleging violations
of existing permits, or alleging damages suffered from exposure to hazardous
substances purportedly released from Company operated sites, and other
litigation. The Company maintains insurance intended to cover property and
damage claims asserted as a result of its operations.

Periodically management reviews and may establish reserves for legal and
administrative matters, or fees expected to be incurred in connection therewith.
At this time, management believes that resolution of these matters will not have
a material adverse effect on the Company's financial position, results of
operations or cash flows.

LITIGATION

One of the Company's principal subsidiaries is a plaintiff in a case against the
United States and in a case against the State of California seeking to protect
its interest in the Ward Valley site. In the federal case, US Ecology is suing
to recover approximately $73.1 million of Ward Valley site development costs as
well as lost profits and lost opportunity costs. US Ecology lost this case at
the trial court level and has appealed to the Federal Circuit Court of Appeals.
The Company was also a Plaintiff in a second case where US Ecology sought an
order (writ of mandamus) to compel the federal land transfer required for
construction of the state licensed facility to proceed. Both the trial court and
the D.C. Circuit Court of Appeals ruled against US Ecology in this case. This
decision is now final. The Company also filed a lawsuit against the State of
California on May 2, 2000, seeking to compel California to acquire the property
to build the Ward Valley project and monetary damages in excess of $162 million.
On October 24, 2000, the California trial court granted the state's motion to
dismiss the case on demurrer, and the Company has appealed the trial court's
decision. If the Company is unsuccessful in this litigation and in other avenues
available to it for recovery, the Company might be required to write-off a
portion of its deferred site development cost. A similar situation exists in
regard to the litigation relating to the Company's Butte, Nebraska site. See
Note 7 above.

Zurich American Insurance Company v. National Union Fire Insurance Company of
Pittsburgh, et al incl. AEC, AEESC, AEMC and AESC; Supreme Court of State of New
York, County of New York; Case No. 604662/99

In an action filed October 12, 1999, Plaintiff Zurich American Insurance Co.
("Zurich"), seeks declaratory and other relief against National Union Fire
Insurance Company of Pittsburgh ("National Union"), AEC and named subsidiaries
("AEC Defendants") and Doe Insurers 1-50 ("Doe Defendants") with respect to
Zurich's defense coverage in the Virgie Adams and the General Motors action. In
December 2000, Zurich filed a motion with the court for leave to amend its



45
48
complaint to seek recoupment of moneys paid to defend and settle the Adams case
and to defend the General Motors case. The Company intends to vigorously defend
this action.

General Motors Corporation v. American Ecology Environmental Services Corp., et
al., Case No. 3-99CV2626-L, U.S. District Court, Northern District of Texas.

The Complaint names the Company and certain named subsidiaries as defendants in
the suit. The former owner of the Winona Facility and its associated business
entities settled their portion of the suit in November 2000. General Motors
seeks contribution and indemnity, including reimbursement of defense costs,
attorneys' fees, court costs and a settlement payment to the Adams plaintiffs,
incurred by General Motors. In December 2000, the Company's insurance carrier,
Zurich, notified the Company that it was disclaiming coverage for the suit and
would not indemnify the Company or its subsidiaries. The Company does not
believe it breached the contract or was negligent, and intends to vigorously
defend the case.

Mattie Cuba, et al. v. American Ecology Environmental Services Corporation, et
al., Cause No. 2000-092, 4th Judicial District Court, Rusk County, Texas.

The complaint in this legal proceeding was served on the Company and its
subsidiaries, American Ecology Environmental Services Corporation, American
Ecology Management Corporation and American Ecology Services Corporation on
November 20, 2000. The lawsuit is a toxic tort lawsuit brought by 28 named
plaintiffs against the Company and the named subsidiaries, as well as the former
facility owners and potentially approximately 60 former customers of the Winona,
Texas facility. The plaintiffs seek damages based generally on intentional and
negligence tort claims, as well as punitive damages. The Company believes it has
conducted its operations in accordance with applicable laws and regulations and
that the lawsuit is without merit and intends to vigorously defend the action.
The Company's current insurance carrier has agreed to pay for the defense of
this matter, subject to the Company's $250,000 deductible. The Company timely
filed an answer on December 27, 2000, and intends to defend the case vigorously.
Discovery is in the very early stages.

ENVIRONMENTAL MATTERS

The United States Environmental Protection Agency (EPA) has requested
information regarding waste the Company may have shipped to a former LLRW
storage facility near Denver, Colorado, which is now a Superfund site. The EPA
has subsequently informed the Company it may be liable for approximately $29,000
for clean-up costs as a potentially responsible party. The Company does not
believe these amounts are material.

On September 29, 1999, investigators associated with the Federal Bureau of
Investigation, EPA, and Tennessee Valley Authority arrived at the Oak Ridge
Facility to investigate the site in connection with a search warrant issued by
the U.S. District Court, Eastern District of Tennessee. The Company fully
cooperated with the investigators and provided requested information. Since the
initial visit, the Company has not been asked to provide additional information
and has no information regarding outcome at this time. The Company currently is
conducting an internal investigation as a precautionary measure, believes it has
conducted its operations in compliance with the applicable statutes and
regulations, and intends to vigorously contest any allegations arising from the
investigation.


In the Matter of American Ecology Recycle Center, Inc., RCRA Docket No.:
RCRA-4-99-0020

On July 18, 2000, In the Matter of American Ecology Recycle Center, Inc., RCRA
Docket No.: RCRA-4-99-0020 was settled. The settlement did not have a material
adverse impact on the Company's financial position, results of operations, or
cash flows.



46
49


NOTE 16. SUBSEQUENT EVENT.

On February 1, 2001, the Company, by its wholly-owned subsidiary American
Ecology Environmental Services Corporation, a Texas corporation, acquired
Envirosafe Services of Idaho, Inc. a Delaware corporation ("ESII"), pursuant to
a Stock Purchase Agreement from Envirosource Technologies Inc., a Delaware
corporation and Envirosource, Inc., a Delaware corporation, and parent company
of Envirosource Technologies Inc.

Under the terms of the Agreement, the Company paid One Thousand and 00/100
dollars ($1,000.00) in cash for all of the outstanding shares of ESII, a
subsidiary of Envirosource Technologies Inc., subject to approximately $20.4
million in liabilities. This acquisition was accounted for as a purchase. The
acquisition was approved by the respective board of directors of each company
and is now complete. There was no prior relationship between the Company and
Envirosource, Inc.

Pursuant to the Agreement, the Company acquired all of the authorized and issued
stock of ESII, thereby obtaining ownership of all ESII assets and liabilities.
The principal ESII assets are a RCRA and TSCA permitted hazardous and PCB waste
treatment and disposal facility located in southwestern Idaho, a hazardous waste
treatment facility operating under contract at an Illinois steel mill site, and
exclusive rights to use a patented hazardous waste treatment process for steel
mill electric arc furnace waste within a defined service territory in the
western United States. The assets acquired totaled approximately $20.4 million
as of the December 31, 2000, unaudited balance sheet date. This purchase
increased the Company's asset base by approximately 25%.

ESII currently provides commercial hazardous and PCB waste treatment, storage
and disposal services and intends to increase its share of the U.S. market for
this business through the acquired assets and continued operation of its
existing hazardous and PCB waste treatment and disposal facilities.

Balukoff, Lindstrom & Co., P.A., the independent auditors for the Company are
currently conducting an audit of ESII in March 2001. The required financial
statements will be prepared by management and filed in a Form 8-K on or within
60 days from February 15, 2001, the date the initial report on Form 8-K was
required to be filed.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.

None.

PART III


Items 10, 11, 12, and 13 of Part III have been omitted from this report because
the Company will file with the Securities and Exchange Commission, no later than
120 days after the close of its fiscal year, a definitive proxy statement. The
information required by Items 10, 11, 12, and 13 of this report, which will
appear in the definitive proxy statement, is incorporated by reference into Part
III of this report.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS

1. Financial statements and report of Balukoff, Lindstrom &
Co., P.A.
Independent Auditors' Report
Consolidated Balance Sheets - December 31, 2000 and
1999
Consolidated Statements of Operations for the years
ended December 31, 2000, 1999 and 1998
Consolidated Statements of Shareholders' Equity for
the years ended December 31, 2000, 1999 and 1998



47
50


Consolidated Statements of Cash Flows for the years
ended December 31, 2000, 1999 and 1998
Notes to Consolidated Financial Statements

2. Financial statement schedules

Other schedules are omitted because they are not
required or because the information is included in
the financial statements or notes thereto

3. Exhibits



Exhibit Incorporated by Reference from
No. Description Registrant's
- ------- -------------------------------------------------------------------- ------------------------------

3.1 Restated Certificate of Incorporation, as amended 1989 Form 10-K

3.2 Certificate of Amendment to Restated Certificate of Incorporation Form S-4 dated 12-24-92
dated June 4, 1992

3.3 Amended and Restated Bylaws dated February 28, 1995 1994 Form 10-K

10.1 Sublease dated February 26, 1976, between the State of Washington, Form 10 filed 3-8-84
the United States Dept. of Commerce and Economic Development, and
Nuclear Engineering Company with Amendments dated January 11, 1980,
and January 14, 1982.

10.2 Lease dated May 1, 1977 ("Nevada Lease"), between the state of Form 10 filed 3-8-84
Nevada, Dept. of Human Resources and Nuclear Engineering Company,
with Addendum thereto, dated December 7, 1982

10.3 Addendum to Nevada Lease dated March 28, 1988 1989 Form 10-K

10.4 Nevada State Health Division, Radioactive Material License issued to 1989 Form 10-K
US Ecology, Inc. dated December 29, 1989

10.5 Administrative Order by Consent between the United States 1985 Form 10-K
Environmental Protection Agency and US Ecology, Inc. ("USE") dated
September 30, 1985

10.6 State of Washington Radioactive Materials License issued to US 1986 Form 10-K
Ecology, Inc. dated January 21, 1987

10.11 Agreement between the Central Interstate Low-Level Radioactive Waste 2nd Quarter 1988 10-Q
Compact Commission and US Ecology, Inc. for the development of a
facility for the disposal of low-level radioactive waste dated
January 28, 1988 ("Central Interstate Compact Agreement")

10.12 Amendment to Central Interstate Compact Agreement May 1, 1990 1994 Form 10-K

10.13 Second Amendment to Central Interstate Compact Agreement dated June 1994 Form 10-K
24, 1991

10.14 Third Amendment to Central Interstate Compact Agreement dated July 1994 Form 10-K
1, 1994

10.15 Settlement agreement dated May 25, 1988, among the Illinois Form 8-K
dated 6-7-88 Department of Nuclear Safety, US Ecology, Inc. and
American Ecology Corporation of a December 1978 action related to
the closure, care and maintenance of the Sheffield, Illinois LLRW
disposal site

10.16 Nevada Division of Environmental Protection Permit for Hazardous 1988 Form 10-K
Waste Treatment, Storage and Disposal (Part B) issued to US Ecology,
Inc. dated June 24, 1988




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51




Exhibit Incorporated by Reference from
No. Description Registrant's
- ------- -------------------------------------------------------------------- ------------------------------

10.17 Texas Water Commission Permit for Industrial Solid Waste Management 1988 Form 10-K
Site (Part B) issued to Texas Ecologists, Inc. dated December 5,
1988

10.18 Memorandum of Understanding between American Ecology Corporation and
1989 Form 10-K the State of California dated August 15, 1988

10.19 United States Environmental Protection Agency approval to dispose of 1989 Form 10-K
non-liquid polychlorinated biphenyl (PCB) wastes at the Beatty,
Nevada chemical waste disposal facility

10.26 Amended and Restated American Ecology Corporation 1992 Stock Option Proxy Statement dated 4-26-94
Plan *

10.27 Amended and Restated American Ecology Corporation 1992 Outside Proxy Statement dated 4-26-94
Director Stock Option Plan *

10.28 American Ecology Corporation 401 (k) Savings Plan * 1994 Form 10-K

10.29 American Ecology Corporation Retirement Plan * 1994 Form 10-K

10.33 Lease Agreement between American Ecology Corporation and VPM 1988-1, Form S-4 filed 12-24-92
Ltd. dated October 14, 1992

10.34 Rights Agreement dated as of December 7, 1993, between American Form 8-K dated 12-7-93
Ecology Corporation and Chemical Shareholders Services Group,
Inc. as Rights Agent

10.36 Settlement Agreement dated September 24, 1993, by US Ecology, Inc., 1993 Form 10-K
the State of Nevada, the Nevada State Environmental Commission, and
the Nevada Dept. of Human Resources

10.37 Settlement Agreement dated as of January 19, 1994, by and among US 1993 Form 10-K
Ecology, Inc., Staff of the Washington Utilities and Transportation
Commission, Precision Castparts Corp., Teledyne Wah Chang, Portland
General Electric Company, the Washington Public Power
Supply System and Public Service Company of Colorado.

10.38 Agreement dated January 28, 1994, between American Ecology Form 8-K dated 2-3-94
Corporation, Edward F. Heil, Edward F. Heil as trustee for Edward F.
Heil, Jr., Sandra Heil, and Karen Heil Irrevocable Trust Agreement
#2, Thomas W. McNamara and Thomas W. McNamara as a trustee of
The Jenner & Block Profit Sharing Trust No. 082.

10.49 First Security Bank Master Equipment Lease - Sale Leaseback 3rd Qtr 2000 Form 10-Q filed 11-13-00

10.50a First Security Bank Credit Agreement 3rd Qtr 2000 Form 10-Q filed 11-13-00

10.50 Increase Additional Number of Share Options to Directors Plan of 1992 Form S-8 dated 12-30-98

10.51 Increase Additional Number of Share Options of 1992 Employees Plan Form S-8 dated 12-20-99

10.52 Amended and Restated American Ecology Corporation 1992 Outside Proxy Statement dated 4-8-98
Director Stock Option Plan

10.53 Amended and Restated American Ecology Corporation 1992 Stock Option Proxy Statement dated 4-12-99
Plan

21 List of Subsidiaries 1994 Form 10-K

23.2 Consent of Balukoff, Lindstrom & Co., P.A.



*Management contract or compensatory plan.

(b) REPORTS ON FORM 8-K



49
52



16.1 Change of Auditors Letter - November 25, 1996 Form 8-K

10.44 Series E Redeemable Convertible Preferred Stock - November 27, 1996 Form 8-K

10.45 Third Amended & Restated Credit Agreement - February 18, 1997 Form 8-K

10.48 Court Judgement Houston 88-January 26, 1998 Form 8-K

10.49 Bank Restructure-Chase Bank of Texas N.A. November 19, 1998 Form 8-K

10.54 Acquisition of Envirosafe Services of Idaho - February 2,2001 Form 8-K












50
53


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this annual report to be signed
on its behalf by the undersigned, thereunto duly authorized.


AMERICAN ECOLOGY CORPORATION



Dated: March 30, 2000 By: /s/ Jack K. Lemley
-------------------------------
Jack K. Lemley
Chairman of the Board, Chief
Executive Officer and President



SIGNATURE TITLE DATE
- --------- ----- ----

/s/ Jack K. Lemley Chairman of the Board, Chief March 30, 2001
- --------------------------- Executive Officer and President
JACK K. LEMLEY

/s/ James R. Baumgardner Chief Financial Officer March 30, 2001
- ---------------------------
JAMES R. BAUMGARDNER

/s/ Robert S. Thorn Vice President and Treasurer March 30, 2001
- ---------------------------
ROBERT S. THORN

/s/ Keith D. Bronstein Director March 30, 2001
- ---------------------------
KEITH D. BRONSTEIN

/s/ Rotchford L. Barker Director March 30, 2001
- ---------------------------
ROTCHFORD L. BARKER

/s/ Paul Bergson Director March 30, 2001
- ---------------------------
PAUL BERGSON

/s/ Patricia M. Eckert Director March 30, 2001
- ---------------------------
PATRICIA M. ECKERT

/s/ Edward F. Heil Director March 30, 2001
- ---------------------------
EDWARD F. HEIL

/s/ Dan Rostenkowski Director March 30, 2001
- ---------------------------
DAN ROSTENKOWSKI

/s/ Paul F. Schutt Director March 30, 2001
- ---------------------------
PAUL F. SCHUTT

/s/ John J. Scoville Director March 30, 2001
- ---------------------------
JOHN J. SCOVILLE


51
54


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this annual report to be signed
on its behalf by the undersigned, thereunto duly authorized.

AMERICAN ECOLOGY CORPORATION


Dated: March 30, 2000 By:
-------------------------------
Jack K. Lemley
Chairman of the Board, Chief
Executive Officer and President



SIGNATURE TITLE DATE
- --------------------------- ------------------------------- --------------

Chairman of the Board, Chief March 30, 2001
- --------------------------- Executive Officer and President
JACK K. LEMLEY

Chief Financial Officer March 30, 2001
- ---------------------------
JAMES R. BAUMGARDNER

Vice President and Treasurer March 30, 2001
- ---------------------------
ROBERT S. THORN

Director March 30, 2001
- ---------------------------
ROTCHFORD L. BARKER

Director March 30, 2001
- ---------------------------
PAUL BERGSON

Director March 30, 2001
- ---------------------------
KEITH BRONSTEIN

Director March 30, 2001
- ---------------------------
PATRICIA M. ECKERT

Director March 30, 2001
- ---------------------------
EDWARD F. HEIL

Director March 30, 2001
- ---------------------------
DAN ROSTENKOWSKI

Director March 30, 2001
- ---------------------------
PAUL F. SCHUTT

Director March 30, 2001
- ---------------------------
JOHN J. SCOVILLE




52
55


INDEX TO EXHIBITS



EXHIBIT INCORPORATED BY REFERENCE FROM
NO. DESCRIPTION REGISTRANT'S
- ------- -------------------------------------------------------------------- ------------------------------

3.1 Restated Certificate of Incorporation, as amended 1989 Form 10-K

3.2 Certificate of Amendment to Restated Certificate of Incorporation Form S-4 dated 12-24-92
dated June 4, 1992

3.3 Amended and Restated Bylaws dated February 28, 1995 1994 Form 10-K

10.1 Sublease dated February 26, 1976, between the State of Washington, Form 10 filed 3-8-84
the United States Dept. of Commerce and Economic Development, and
Nuclear Engineering Company with Amendments dated January 11, 1980,
and January 14, 1982.

10.2 Lease dated May 1, 1977 ("Nevada Lease"), between the state of Form 10 filed 3-8-84
Nevada, Dept. of Human Resources and Nuclear Engineering Company,
with Addendum thereto, dated December 7, 1982

10.3 Addendum to Nevada Lease dated March 28, 1988 1989 Form 10-K

10.4 Nevada State Health Division, Radioactive Material License issued to 1989 Form 10-K
US Ecology, Inc. dated December 29, 1989

10.5 Administrative Order by Consent between the United States 1985 Form 10-K
Environmental Protection Agency and US Ecology, Inc. ("USE") dated
September 30, 1985

10.6 State of Washington Radioactive Materials License issued to US 1986 Form 10-K
Ecology, Inc. dated January 21, 1987

10.11 Agreement between the Central Interstate Low-Level Radioactive Waste 2nd Quarter 1988 10-Q
Compact Commission and US Ecology, Inc. for the development of a
facility for the disposal of low-level radioactive waste dated
January 28, 1988 ("Central Interstate Compact Agreement")

10.12 Amendment to Central Interstate Compact Agreement May 1, 1990 1994 Form 10-K

10.13 Second Amendment to Central Interstate Compact Agreement dated June 1994 Form 10-K
24, 1991

10.14 Third Amendment to Central Interstate Compact Agreement dated July 1994 Form 10-K
1, 1994

10.15 Settlement agreement dated May 25, 1988, among the Illinois Form 8-K
dated 6-7-88 Department of Nuclear Safety, US Ecology, Inc. and
American Ecology Corporation of a December 1978 action related to
the closure, care and maintenance of the Sheffield, Illinois LLRW
disposal site

10.16 Nevada Division of Environmental Protection Permit for Hazardous 1988 Form 10-K
Waste Treatment, Storage and Disposal (Part B) issued to US Ecology,
Inc. dated June 24, 1988




56




EXHIBIT INCORPORATED BY REFERENCE FROM
NO. DESCRIPTION REGISTRANT'S
- ------- -------------------------------------------------------------------- ------------------------------

10.17 Texas Water Commission Permit for Industrial Solid Waste Management 1988 Form 10-K
Site (Part B) issued to Texas Ecologists, Inc. dated December 5,
1988

10.18 Memorandum of Understanding between American Ecology Corporation and
1989 Form 10-K the State of California dated August 15, 1988

10.19 United States Environmental Protection Agency approval to dispose of 1989 Form 10-K
non-liquid polychlorinated biphenyl (PCB) wastes at the Beatty,
Nevada chemical waste disposal facility

10.26 Amended and Restated American Ecology Corporation 1992 Stock Option Proxy Statement dated 4-26-94
Plan *

10.27 Amended and Restated American Ecology Corporation 1992 Outside Proxy Statement dated 4-26-94
Director Stock Option Plan *

10.28 American Ecology Corporation 401 (k) Savings Plan * 1994 Form 10-K

10.29 American Ecology Corporation Retirement Plan * 1994 Form 10-K

10.33 Lease Agreement between American Ecology Corporation and VPM 1988-1, Form S-4 filed 12-24-92
Ltd. dated October 14, 1992

10.34 Rights Agreement dated as of December 7, 1993, between American Form 8-K dated 12-7-93
Ecology Corporation and Chemical Shareholders Services Group,
Inc. as Rights Agent

10.36 Settlement Agreement dated September 24, 1993, by US Ecology, Inc., 1993 Form 10-K
the State of Nevada, the Nevada State Environmental Commission, and
the Nevada Dept. of Human Resources

10.37 Settlement Agreement dated as of January 19, 1994, by and among US 1993 Form 10-K
Ecology, Inc., Staff of the Washington Utilities and Transportation
Commission, Precision Castparts Corp., Teledyne Wah Chang, Portland
General Electric Company, the Washington Public Power
Supply System and Public Service Company of Colorado.

10.38 Agreement dated January 28, 1994, between American Ecology Form 8-K dated 2-3-94
Corporation, Edward F. Heil, Edward F. Heil as trustee for Edward F.
Heil, Jr., Sandra Heil, and Karen Heil Irrevocable Trust Agreement
#2, Thomas W. McNamara and Thomas W. McNamara as a trustee of
The Jenner & Block Profit Sharing Trust No. 082.

10.49 First Security Bank Master Equipment Lease - Sale Leaseback 3rd Qtr 2000 Form 10-Q filed 11-13-00

10.50a First Security Bank Credit Agreement 3rd Qtr 2000 Form 10-Q filed 11-13-00

10.50 Increase Additional Number of Share Options to Directors Plan of 1992 Form S-8 dated 12-30-98

10.51 Increase Additional Number of Share Options of 1992 Employees Plan Form S-8 dated 12-20-99

10.52 Amended and Restated American Ecology Corporation 1992 Outside Proxy Statement dated 4-8-98
Director Stock Option Plan

10.53 Amended and Restated American Ecology Corporation 1992 Stock Option Proxy Statement dated 4-12-99
Plan

21 List of Subsidiaries 1994 Form 10-K

23.2 Consent of Balukoff, Lindstrom & Co., P.A.



*Management contract or compensatory plan.