SEGMENT REPORTING

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

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. The Company is managed and reports as two operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment.

Third-party revenue is revenue billed to outside customers by a particular segment. Direct revenues 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. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers. The intersegment revenues are shown net. The operations not managed through the Company’s operating segments described above are recorded as “Corporate Items.”

The following table reconciles third-party revenues to direct revenues for the three months ended March 31, 2022 and 2021 (in thousands):

	For the Three Months Ended March 31, 2022						For the Three Months Ended March 31, 2021
	Third-party revenues		Intersegment revenues, net		Direct revenues		Third-party revenues		Intersegment revenues, net		Direct revenues
Environmental Services	$	940,798	$	6,647	$	947,445	$	652,878	$	1,724	$	654,602
Safety-Kleen Sustainability Solutions	228,239		(6,647)		221,592		155,191		(1,724)		153,467
Corporate Items	72		—		72		79		—		79
Total	$	1,169,109	$	—	$	1,169,109	$	808,148	$	—	$	808,148

The primary financial measure by which the Company evaluates the performance of its segments is "Adjusted EBITDA," which consists of net income plus accretion of environmental liabilities, stock-based compensation, depreciation and amortization, net interest expense, loss on early extinguishment of debt, provision for income taxes and excludes other gains, losses or non-cash charges not deemed representative of fundamental segment results and other (income) expense, net.

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

	For the Three Months Ended
	March 31,
	2022		2021
Adjusted EBITDA:
Environmental Services	$	183,602	$	140,254
Safety-Kleen Sustainability Solutions	51,877		31,632
Corporate Items	(55,220)		(42,435)
Total	180,259		129,451
Reconciliation to Consolidated Statements of Operations:
Accretion of environmental liabilities	3,156		2,953
Stock-based compensation	5,712		3,480
Depreciation and amortization	84,298		72,163
Income from operations	87,093		50,855
Other (income) expense, net	(704)		1,228
Interest expense, net of interest income	25,017		17,918
Income before provision for income taxes	$	62,780	$	31,709