SEGMENT REPORTING

12 Months Ended

Dec. 31, 2021

OPERATING SEGMENTS

OPERATING SEGMENTS

NOTE 21. SEGMENT REPORTING

Financial Information by Segment

Effective in the fourth quarter of 2020, we made changes to the manner in which we manage our business, make operating decisions and assess our performance. The energy waste business that was acquired through the NRC Merger now comprises our Energy Waste segment. Prior to this change, the energy waste business was included in the Waste Solutions segment (formerly “Environmental Services”). All periods presented below have been recast to reflect these changes. Under our new structure our operations are managed in three reportable segments reflecting our internal management reporting structure and nature of services offered as follows:

Waste Solutions (formerly “Environmental Services”)—This segment provides safe and compliant specialty waste management services including treatment, disposal, beneficial re-use, and recycling of hazardous, non-hazardous, and other specialty waste at Company-owned treatment, storage, and disposal facilities, excluding the services within our Energy Waste segment.

Field Services (formerly “Field & Industrial Services”)—This segment provides safe and compliant logistics and response solutions focusing on “in-field’ service offerings through our network of 10-day transfer facilities. Our logistics solutions include specialty waste packaging, collection, transportation, and total waste management. Our response solutions include land and marine based emergency response, OSRO standby compliance, remediation, and industrial services. The Field Services segment completes our vertically integrated model and serves to increase waste volumes into our Waste Solutions segment.

Energy Waste— This segment provides safe and compliant energy waste management and critical support services to up-stream oil and gas customers in the Permian and Eagle Ford basins primarily operating in Texas. Services include spill containment and site remediation, equipment cleaning and maintenance services, specialty equipment rental, including tanks, pumps and containment, safety monitoring and management and transportation and disposal. This segment includes all of the energy waste business of the legacy NRC operations and none of the legacy US Ecology operations.

The operations not managed through our three reportable segments are recorded as “Corporate.” Corporate selling, general and administrative expenses include typical corporate items of a general nature such as certain labor, information technology, legal, accounting and other expenses not associated with a specific reportable segment. 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.

Effective in the first quarter of 2021, we changed our management structure resulting in the reclassification of certain overhead expenses from our Waste Solutions, Field Services and Energy Waste reportable segments to Corporate. As a result, certain regional overhead costs historically presented within our reportable segments as Direct operating costs were further reclassified to Corporate as Selling, general and administrative expenses to conform to the current period’s presentation. Throughout this Annual Report on Form 10-K, all periods presented have been recast to reflect these changes.

Summarized financial information of our reportable segments for the years ended December 31, 2021, 2020 and 2019 is as follows:

	2021
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total
Revenue	$	451,249	$	500,187	$	36,565	$	—	$	988,001
Depreciation, amortization and accretion	$	43,746	$	44,368	$	19,520	$	3,142	$	110,776
Capital expenditures	$	45,602	$	15,393	$	4,923	$	2,748	$	68,666
Total assets	$	796,645	$	733,086	$	216,292	$	59,375	$	1,805,398

	2020
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total
Revenue	$	425,413	$	473,754	$	34,687	$	—	$	933,854
Depreciation, amortization and accretion	$	41,540	$	43,465	$	19,814	$	3,086	$	107,905
Capital expenditures	$	31,027	$	16,149	$	6,189	$	4,034	$	57,399
Total assets	$	773,448	$	762,854	$	231,475	$	63,506	$	1,831,283

	2019
	Waste		Field		Energy
$s in thousands	Solutions		Services		Waste		Corporate		Total
Revenue	$	440,547	$	232,402	$	12,560	$	—	$	685,509
Depreciation, amortization and accretion	$	41,133	$	15,007	$	3,402	$	1,760	$	61,302
Capital expenditures	$	46,202	$	5,986	$	1,391	$	4,521	$	58,100
Total assets	$	755,566	$	865,540	$	534,738	$	75,400	$	2,231,244

Management uses Adjusted EBITDA as a financial measure to assess segment performance. Adjusted EBITDA is defined as net income (loss) 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 and intangible asset impairment charges, gain on property insurance recoveries, business development and integration expenses and other income/expense. 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 (loss), 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 (loss) to Adjusted EBITDA for the years ended December 31, 2021, 2020 and 2019 is as follows:

$s in thousands	2021		2020		2019
Net income (loss)	$	5,337	$	(389,359)	$	33,140
Income tax expense (benefit)		4,765		(4,242)		16,659
Interest expense		28,966		32,595		19,239
Interest income		(1,417)		(258)		(605)
Foreign currency loss		171		1,134		733
Other income		(4,476)		(788)		(455)
Property and equipment impairment charges		—		—		25
Goodwill and intangible asset impairment charges		—		404,900		—
Depreciation and amortization of plant and equipment		70,799		66,561		41,423
Amortization of intangible assets		34,614		37,344		15,491
Share-based compensation		7,478		6,651		5,544
Accretion and non-cash adjustment of closure & post-closure liabilities		5,363		4,000		4,388
Gain on property insurance recoveries		—		—		(12,366)
Business development and integration expenses		3,274		11,621		26,150
Adjusted EBITDA	$	154,874	$	170,159	$	149,366

Adjusted EBITDA, by reportable segment, for the years ended December 31, 2021, 2020 and 2019 is as follows:

$s in thousands	2021		2020		2019
Waste Solutions	$	170,953	$	176,702	$	184,133
Field Services		70,578		81,770		26,707
Energy Waste		11,321		4,982		3,626
Corporate		(97,978)		(93,295)		(65,100)
Total	$	154,874	$	170,159	$	149,366

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 as of December 31, 2021 and 2020 are as follows:

$s in thousands	2021		2020
United States	$	855,200	$	882,639
Canada		65,437		68,623
EMEA		15,604		18,042
Other (1)		9,716		11,321
Total long-lived assets, net	$	945,957	$	980,625

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