SEGMENT REPORTING

6 Months Ended

Jun. 30, 2019

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's operations are managed in two operating segments: Environmental Services and Safety-Kleen.

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.”

The following table reconciles third-party revenues to direct revenues for the three and six months ended June 30, 2019 and June 30, 2018 (in thousands):



	For the Three Months Ended June 30, 2019											For the Three Months Ended June 30, 2018
	Third-party revenues		Intersegment revenues, net			Corporate Items, net			Direct revenues			Third-party revenues		Intersegment revenues, net			Corporate Items, net			Direct revenues
Environmental Services	$	526,294	$	36,206		$	576		$	563,076		$	519,916	$	34,291		$	607		$	554,814
Safety-Kleen	342,182		(36,206		)	8			305,984			328,715		(34,291		)	11			294,435
Corporate Items	202		—			(584		)	(382		)	509		—			(618		)	(109		)
Total	$	868,678	$	—		$	—		$	868,678		$	849,140	$	—		$	—		$	849,140



	For the Six Months Ended June 30, 2019											For the Six Months Ended June 30, 2018
	Third-party revenues		Intersegment revenues, net			Corporate Items, net			Direct revenues			Third-party revenues		Intersegment revenues, net			Corporate Items, net			Direct revenues
Environmental Services	$	999,992	$	70,281		$	1,825		$	1,072,098		$	959,604	$	66,256		$	1,401		$	1,027,261
Safety-Kleen	648,729		(70,281		)	13			578,461			638,633		(66,256		)	22			572,399
Corporate Items	796		—			(1,838		)	(1,042		)	681		—			(1,423		)	(742		)
Total	$	1,649,517	$	—		$	—		$	1,649,517		$	1,598,918	$	—		$	—		$	1,598,918

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, depreciation and amortization, interest expense, net of interest income, provision for income taxes and other gains or non-cash charges 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.

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



	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Adjusted EBITDA:
Environmental Services	$	117,868		$	109,199		$	207,378		$	170,616
Safety-Kleen	79,459			73,069			134,252			134,953
Corporate Items	(47,502		)	(42,707		)	(90,142		)	(77,743		)
Total	149,825			139,561			251,488			227,826
Reconciliation to Consolidated Statements of Operations:
Accretion of environmental liabilities	2,560			2,448			5,134			4,878
Depreciation and amortization	74,217			72,760			149,572			147,604
Income from operations	73,048			64,353			96,782			75,344
Other expense (income), net	564			(846		)	(2,419		)	(547		)
Interest expense, net of interest income	20,215			20,769			39,979			41,039
Income before provision for income taxes	$	52,269		$	44,430		$	59,222		$	34,852

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



	June 30, 2019		December 31, 2018
Property, plant and equipment, net
Environmental Services	$	956,381	$	951,867
Safety-Kleen	559,510		553,220
Corporate Items	81,026		56,891
Total property, plant and equipment, net	$	1,596,917	$	1,561,978

Goodwill and Permits and other intangibles, net
Environmental Services
Goodwill	$	212,808	$	207,019
Permits and other intangibles, net	93,303		93,313
Total Environmental Services	306,111		300,332

Safety-Kleen
Goodwill	$	312,236	$	307,170
Permits and other intangibles, net	340,550		348,562
Total Safety-Kleen	652,786		655,732

Total	$	958,897	$	956,064

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



	June 30, 2019		December 31, 2018
Environmental Services	$	1,756,818	$	1,640,706
Safety-Kleen	1,513,920		1,431,381
Corporate Items	684,583		666,234
Total	$	3,955,321	$	3,738,321

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



	June 30, 2019		December 31, 2018
United States	$	3,270,464	$	3,090,311
Canada	684,857		648,010
Total	$	3,955,321	$	3,738,321