SEGMENT REPORTING

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING 

Segment reporting is prepared on the same basis that the Company's chief operating decision maker, which is a committee comprised of the Company's co-Chief Executive Officers, 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. 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, 2023 and 2022 (in thousands):

	For the Three Months Ended						For the Three Months Ended
	March 31, 2023						March 31, 2022
	Third-Party Revenues		Intersegment Revenues (Expenses), net		Direct Revenues		Third-Party Revenues		Intersegment Revenues (Expenses), net		Direct Revenues
Environmental Services	$	1,060,982	$	9,759	$	1,070,741	$	940,798	$	6,647	$	947,445
Safety-Kleen Sustainability Solutions	246,298		(9,759)		236,539		228,239		(6,647)		221,592
Corporate Items	107		—		107		72		—		72
Total	$	1,307,387	$	—	$	1,307,387	$	1,169,109	$	—	$	1,169,109

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 and provision for income taxes and excludes other gains, losses and non-cash charges not deemed representative of fundamental segment results and other income, net. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers.

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

	For the Three Months Ended
	March 31,
	2023		2022
Adjusted EBITDA:
Environmental Services	$	228,345	$	183,602
Safety-Kleen Sustainability Solutions	41,463		51,877
Corporate Items	(54,670)		(55,220)
Total	215,138		180,259
Reconciliation to Consolidated Statements of Operations:
Accretion of environmental liabilities	3,407		3,156
Stock-based compensation	6,018		5,712
Depreciation and amortization	84,758		84,298
Income from operations	120,955		87,093
Other income, net	(116)		(704)
Loss on early extinguishment of debt	2,362		—
Interest expense, net of interest income	20,632		25,017
Income before provision for income taxes	$	98,077	$	62,780