OPERATING SEGMENTS

3 Months Ended

Mar. 31, 2020

OPERATING SEGMENTS

OPERATING SEGMENTS

NOTE 17.   OPERATING SEGMENTS

Financial Information by Segment

Our operations are managed in two reportable segments reflecting our internal management reporting structure and nature of services offered as follows:

Environmental Services - This segment provides a broad range of specialty material management services including transportation, recycling, treatment and disposal of hazardous, non-hazardous and radioactive waste at Company-owned landfill, wastewater, deep-well injection and other treatment facilities.

Field & Industrial Services - This segment provides specialty field services and total waste management solutions to commercial and industrial facilities and to government entities through our 10-day transfer facilities and at customer sites, both domestic and international. Specialty field services include standby services, emergency response, industrial cleaning and maintenance, remediation, lab packs, retail services, transportation, and other services. Total waste management services include on-site management, waste characterization, transportation and disposal of non- hazardous and hazardous waste.

The operations not managed through our two reportable segments are recorded as “Corporate.” Corporate selling, general and administrative expenses include typical corporate items such as legal, accounting and other items of a general corporate nature. Income taxes are assigned to Corporate, but all other items are included in the segment where they originated. Inter-company transactions have been eliminated from the segment information and are not significant between segments.

Summarized financial information of our reportable segments is as follows:

	Three Months Ended March 31, 2020
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	126,745	$	113,975	$	—	$	240,720
Depreciation, amortization and accretion	$	16,042	$	12,015	$	628	$	28,685
Capital expenditures	$	11,532	$	5,289	$	2,310	$	19,131
Total assets	$	997,271	$	878,774	$	102,594	$	1,978,639

	Three Months Ended March 31, 2019
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	92,332	$	38,705	$	—	$	131,037
Depreciation, amortization and accretion	$	9,625	$	2,132	$	304	$	12,061
Capital expenditures	$	6,712	$	178	$	333	$	7,223
Total assets	$	703,453	$	161,299	$	68,580	$	933,332

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)

Management uses Adjusted EBITDA as a financial measure to assess segment performance. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, share-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash property and equipment impairment charges, non-cash goodwill impairment charges, gain on property insurance recoveries, business development and integration expenses and other income/expense. In 2019, we updated our Adjusted EBITDA definition to include adjustments for business development and integration expenses and gain on property insurance recoveries. Throughout this Quarterly Report on Form 10-Q, our Adjusted EBITDA results for all periods presented have been recast to reflect these adjustments. Adjusted EBITDA is a complement to results provided in accordance with GAAP and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:

● Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

● Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

● Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

● Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

● Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

● Adjusted EBITDA does not reflect our business development and integration expenses.

A reconciliation of Net income to Adjusted EBITDA is as follows:

	Three Months Ended March 31,
$s in thousands	2020		2019
Net (loss) income	$	(298,086)	$	8,043
Income tax (benefit) expense		(263)		3,041
Interest expense		9,310		4,030
Interest income		(89)		(207)
Foreign currency (gain) loss		(937)		139
Other income		(171)		(110)
Property and equipment impairment charges		—		25
Goodwill impairment charges		300,300		—
Depreciation and amortization of plant and equipment		17,978		8,125
Amortization of intangible assets		9,441		2,811
Share-based compensation		1,564		1,222
Accretion and non-cash adjustment of closure & post-closure liabilities		1,266		1,125
Gain on property insurance recoveries		—		(4,653)
Business development and integration expenses		2,907		141
Adjusted EBITDA	$	43,220	$	23,732

Adjusted EBITDA, by operating segment, is as follows:

	Three Months Ended March 31,
$s in thousands	2020		2019
Environmental Services	$	46,124	$	35,260
Field & Industrial Services		14,478		2,554
Corporate		(17,382)		(14,082)
Total	$	43,220	$	23,732

Property and Equipment and Intangible Assets Outside of the United States

We provide services primarily in the United States, Canada and the EMEA region. Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location are as follows:

	March 31,		December 31,
$s in thousands	2020		2019
United States	$	946,125	$	954,102
Canada		64,383		70,691
EMEA		22,940		23,587
Other (1)		16,001		5,290
Total long-lived assets	$	1,049,449	$	1,053,670

(1) Includes Mexico, Asia Pacific, and Latin America and Caribbean geographical regions.