SEGMENT REPORTING

Segment reporting is prepared on the same basis that the Company's chief executive officer, who is the Company's chief operating decision maker, manages the business, makes operating decisions and assesses performance. During the first quarter of fiscal year 2018, certain of the Company's businesses undertook a reorganization which included changes to the underlying business and management structures. The reorganization resulted in combining the Environmental Services businesses from an operational and management perspective, deepening customer relationships and allowing for efficiencies across the Company's operations through the sharing of resources, namely labor and equipment, which will reduce third party spending and promote cross selling of such business offerings. In connection with this reorganization, the Company’s chief operating decision maker requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. These changes required a reconsideration of the Company’s operating segments in the first quarter of 2018 and resulted in a change in the Company’s assessment of its operating segments. Upon reconsideration of the identification of the Company’s operating segments, the Company concluded that there are now two operating segments for disclosure purposes; (i) the Environmental Services segment which consists of the Company’s historical Technical Services, Industrial Services, Field Services and Oil, Gas and Lodging businesses, and (ii) the Safety-Kleen segment. The amounts presented for the years ended December 31, 2017 and 2016 have been reclassified to conform to the new segment presentation. These reclassifications and adjustments had no effect on the consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of cash flows or consolidated statements of stockholders' equity for any of the periods presented.

Third-party revenue is revenue billed to outside customers by a particular segment. Direct revenue is revenue allocated to the segment providing the product or service. Intersegment revenues represent the sharing of third-party revenues among the segments based on products and services provided by each segment as if the products and services were sold directly to the third-party. The intersegment revenues are shown net. The operations not managed through the Company’s operating segments described above are recorded as “Corporate Items.”

(19) SEGMENT REPORTING (Continued)

The following table reconciles third-party revenues to direct revenues for the years ended December 31, 2018, 2017 and 2016 (in thousands):



	For the Year Ended December 31, 2018
	Environmental Services		Safety-Kleen			Corporate Items			Totals
Third-party revenues	$	2,003,843	$	1,295,355		$	1,105		$	3,300,303
Intersegment revenues, net	134,104		(134,104		)	—			—
Corporate Items, net	3,247		31			(3,278		)	—
Direct revenues	$	2,141,194	$	1,161,282		$	(2,173	)	$	3,300,303



	For the Year Ended December 31, 2017
	Environmental Services		Safety-Kleen			Corporate Items			Totals
Third-party revenues	$	1,728,700	$	1,213,703		$	2,575		$	2,944,978
Intersegment revenues, net	125,822		(125,822		)	—			—
Corporate Items, net	2,952		5			(2,957		)	—
Direct revenues	$	1,857,474	$	1,087,886		$	(382	)	$	2,944,978



	For the Year Ended December 31, 2016
	Environmental Services		Safety-Kleen			Corporate Items			Totals
Third-party revenues	$	1,641,432	$	1,110,727		$	3,067		$	2,755,226
Intersegment revenues, net	115,013		(115,013		)	—			—
Corporate Items, net	2,388		369			(2,757		)	—
Direct revenues	$	1,758,833	$	996,083		$	310		$	2,755,226

The primary financial measure by which the Company evaluates the performance of its segments is Adjusted EBITDA, which consists of net income (loss) plus accretion of environmental liabilities, depreciation and amortization, net interest expense, loss on early extinguishment of debt, provision (benefit) for income taxes, other gains or non-cash charges (including gain on sale of businesses and goodwill impairment charge) not deemed representative of fundamental segment results and excludes other expense (income), net. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers.

(19) SEGMENT REPORTING (Continued)

The following table presents Adjusted EBITDA information used by management by reported segment (in thousands):



	For the Year Ended December 31,
	2018			2017			2016
Adjusted EBITDA:
Environmental Services	$	380,856		$	321,310		$	319,075
Safety-Kleen	282,029			249,811			219,546
Corporate Items	(171,880		)	(145,464		)	(138,267		)
Total	491,005			425,657			400,354
Reconciliation to Consolidated Statements of Operations:
Accretion of environmental liabilities	9,806			9,460			10,177
Depreciation and amortization	298,625			288,422			287,002
Goodwill impairment charge	—			—			34,013
Income from operations	182,574			127,775			69,162
Other expense (income), net	4,510			6,119			(6,195		)
Loss on early extinguishment of debt	2,488			7,891			—
Gain on sale of businesses	—			(30,732		)	(16,884		)
Interest expense, net of interest income	81,094			85,808			83,525
Income from operations before provision (benefit) for income taxes	$	94,482		$	58,689		$	8,716

Geographical Information

For the years ended December 31, 2018, 2017, and 2016, the Company generated direct revenues in the following geographic locations (in thousands):



	For the Year Ended December 31,
	2018				2017				2016
	Revenue		% of Total		Revenue		% of Total		Revenue		% of Total
United States	$	2,721,814	82.5	%	$	2,392,000	81.2	%	$	2,213,355	80.3	%
Canada	578,489		17.5	%	552,978		18.8	%	541,871		19.7	%
Total Revenues	$	3,300,303	100.0	%	$	2,944,978	100.0	%	$	2,755,226	100.0	%

As of December 31, 2018 and 2017, the Company had property, plant and equipment, net of depreciation and amortization and permits and other intangible assets in the following geographic locations (in thousands):



	For the Year Ended December 31,
	2018				2017
	Total		% of Total		Total		% of Total
Property, plant and equipment, net
United States	$	1,233,949	79.0	%	$	1,175,437	74.0	%
Canada	328,029		21.0	%	411,928		26.0	%
Total property, plant and equipment, net	$	1,561,978	100.0	%	$	1,587,365	100.0	%

Permits and other intangibles, net
United States	$	393,045	88.9	%	$	408,654	87.1	%
Canada	48,830		11.1	%	60,474		12.9	%
Total permits and other intangibles, net	$	441,875	100.0	%	$	469,128	100.0	%

(19) SEGMENT REPORTING (Continued)

The following table presents assets by reported segment and in the aggregate (in thousands):



	December 31, 2018		December 31, 2017
Property, plant and equipment, net
Environmental Services	$	951,867	$	927,139
Safety-Kleen	553,220		582,162
Corporate Items	56,891		78,064
Total property, plant and equipment, net	$	1,561,978	$	1,587,365

Goodwill and Permits and other intangibles, net
Environmental Services
Goodwill	$	207,019	$	172,386
Permits and other intangibles, net	93,313		97,519
Total Environmental Services	300,332		269,905

Safety-Kleen
Goodwill	$	307,170	$	306,137
Permits and other intangibles, net	348,562		371,609
Total Safety-Kleen	655,732		677,746

Total	$	956,064	$	947,651

The following table presents the total assets by reported segment (in thousands):



	December 31, 2018		December 31, 2017
Environmental Services	$	1,640,706	$	1,541,241
Safety-Kleen	1,431,381		1,471,291
Corporate Items	666,234		694,038
Total	$	3,738,321	$	3,706,570

The following table presents the total assets by geographical area (in thousands):



	December 31, 2018		December 31, 2017
United States	$	3,090,311	$	2,985,394
Canada	648,010		721,176
Total	$	3,738,321	$	3,706,570