SEGMENT REPORTING

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2022 and 2021 (in thousands):

	For the Three Months Ended June 30, 2022						For the Three Months Ended June 30, 2021
	Third-party revenues		Intersegment revenues, net		Direct revenues		Third-party revenues		Intersegment revenues, net		Direct revenues
Environmental Services	$	1,084,506	$	6,237	$	1,090,743	$	723,147	$	950	$	724,097
Safety-Kleen Sustainability Solutions	271,727		(6,237)		265,490		203,232		(950)		202,282
Corporate Items	79		—		79		79		—		79
Total	$	1,356,312	$	—	$	1,356,312	$	926,458	$	—	$	926,458

	For the Six Months Ended June 30, 2022						For the Six Months Ended June 30, 2021
	Third-party revenues		Intersegment revenues, net		Direct revenues		Third-party revenues		Intersegment revenues, net		Direct revenues
Environmental Services	$	2,025,304	$	12,884	$	2,038,188	$	1,376,025	$	2,674	$	1,378,699
Safety-Kleen Sustainability Solutions	499,966		(12,884)		487,082		358,423		(2,674)		355,749
Corporate Items	151		—		151		158		—		158
Total	$	2,525,421	$	—	$	2,525,421	$	1,734,606	$	—	$	1,734,606

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				For the Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Adjusted EBITDA:
Environmental Services	$	269,341	$	176,041	$	452,943	$	316,295
Safety-Kleen Sustainability Solutions	97,010		63,314		148,887		94,946
Corporate Items	(57,281)		(51,584)		(112,501)		(94,019)
Total	309,070		187,771		489,329		317,222
Reconciliation to Consolidated Statements of Operations:
Accretion of environmental liabilities	3,197		2,873		6,353		5,826
Stock-based compensation	6,835		3,305		12,547		6,785
Depreciation and amortization	87,868		71,592		172,166		143,755
Income from operations	211,170		110,001		298,263		160,856
Other (income) expense, net	(1,265)		1,480		(1,969)		2,708
Gain on sale of business	(8,864)		—		(8,864)		—
Interest expense, net of interest income	26,256		18,051		51,273		35,969
Income before provision for income taxes	$	195,043	$	90,470	$	257,823	$	122,179