NOTE 15. OPERATING SEGMENTS

Financial Information by Segment

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

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

Field & Industrial Services - This segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through our 10-day transfer facilities. Services include on-site management, waste characterization, transportation and disposal of non-hazardous and hazardous waste. This segment also provides specialty services such as high-pressure cleaning, tank cleaning, decontamination, remediation, transportation, spill cleanup and emergency response and other services to commercial and industrial facilities and to government entities.

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 June 30, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	98,960	$	37,952	$	—	$	136,912
Depreciation, amortization and accretion	$	8,676	$	1,415	$	330	$	10,421
Capital expenditures	$	4,935	$	1,849	$	618	$	7,402
Total assets	$	599,706	$	126,797	$	98,160	$	824,663


	Three Months Ended June 30, 2017
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	89,591	$	36,466	$	—	$	126,057
Depreciation, amortization and accretion	$	9,105	$	1,451	$	128	$	10,684
Capital expenditures	$	7,771	$	1,839	$	723	$	10,333
Total assets	$	608,207	$	124,466	$	56,773	$	789,446


	Six Months Ended June 30, 2018
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	185,431	$	71,540	$	—	$	256,971
Depreciation, amortization and accretion	$	17,186	$	2,770	$	446	$	20,402
Capital expenditures	$	10,939	$	2,887	$	1,134	$	14,960
Total assets	$	599,706	$	126,797	$	98,160	$	824,663


	Six Months Ended June 30, 2017
			Field &
	Environmental		Industrial
$s in thousands	Services		Services		Corporate		Total
Revenue	$	170,894	$	65,397	$	—	$	236,291
Depreciation, amortization and accretion	$	17,895	$	2,909	$	258	$	21,062
Capital expenditures	$	13,610	$	2,339	$	1,603	$	17,552
Total assets	$	608,207	$	124,466	$	56,773	$	789,446

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

The primary financial measure used by management to assess segment performance is Adjusted EBITDA. Adjusted EBITDA is defined as net income before interest expense, interest income, income tax expense, depreciation, amortization, stock-based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss 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, 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; and

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.

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


	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2018		2017		2018		2017
Net income	$	13,220	$	5,049	$	22,463	$	10,234
Income tax expense		4,258		2,718		7,778		5,797
Interest expense		2,907		8,474		5,716		12,604
Interest income		(39)		(21)		(63)		(31)
Foreign currency (gain) loss		139		(158)		153		(246)
Other income		(193)		(166)		(2,316)		(303)
Depreciation and amortization of plant and equipment		7,044		6,987		13,649		13,621
Amortization of intangibles		2,296		2,615		4,598		5,286
Stock-based compensation		1,011		1,043		2,079		1,959
Accretion and non-cash adjustment of closure & post-closure liabilities		1,081		1,082		2,155		2,155
Adjusted EBITDA	$	31,724	$	27,623	$	56,212	$	51,076

Adjusted EBITDA, by operating segment, is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2018		2017		2018		2017
Adjusted EBITDA:
Environmental Services	$	39,860	$	34,642	$	74,532	$	66,498
Field & Industrial Services		4,562		4,119		6,907		6,183
Corporate		(12,698)		(11,138)		(25,227)		(21,605)
Total	$	31,724	$	27,623	$	56,212	$	51,076

Property and Equipment and Intangible Assets Outside of the United States

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


	June 30,		December 31,
$s in thousands	2018		2017
United States	$	390,769	$	396,066
Canada		58,487		61,178
Total long-lived assets	$	449,256	$	457,244