48 / Schnitzer Steel Industries, Inc. Form 10-K 2021 Adjusted EBITDA, adjusted selling, general, and administrative expense, adjusted income from continuing operations attributable to SSI shareholders, and adjusted diluted earnings per share from continuing operations attributable to SSI shareholders Management believes that providing these non-GAAP financial measures adds a meaningful presentation of our results from business operations excluding adjustments for legacy environmental matters (net of recoveries), business development costs not related to ongoing operations including pre-acquisition expenses, restructuring charges and other exit-related activities, charges related to nonordinary course legal settlements, asset impairment charges (net of recoveries), and the income tax benefit allocated to these adjustments, items which are not related to underlying business operational performance, and improves the period-to-period comparability of our results from business operations. Following are reconciliations of net income (loss) to adjusted EBITDA, and adjusted selling, general, and administrative expense (in thousands): Year Ended August 31, 2021 2020 2019 Reconciliation of adjusted EBITDA: Net income (loss) $ 169,975 $ (2,200) $ 58,322 Loss from discontinued operations, net of tax 79 95 248 Interest expense 5,285 8,669 8,266 Income tax expense 37,935 166 17,670 Depreciation and amortization 58,599 58,173 53,336 Charges for legacy environmental matters, net(1) 13,773 4,097 2,419 Business development costs 2,155 1,619 — Restructuring charges and other exit-related activities 1,008 8,993 365 Charges related to legal settlements(2) 400 73 2,330 Asset impairment charges, net — 5,729 63 Adjusted EBITDA $ 289,209 $ 85,414 $ 143,019 Selling, general and administrative expense: As reported $ 242,463 $ 187,876 $ 191,405 Charges for legacy environmental matters, net(1) (13,773) (4,097) (2,419) Business development costs (2,155) (1,619) — Charges related to legal settlements(2) — (73) (2,330) Adjusted $ 226,535 $ 182,087 $ 186,656 (1) Legal and environmental charges, net of recoveries, for legacy environmental matters including those related to the Portland Harbor Superfund site and to other legacy environmental loss contingencies. See Note 9 - Commitments and Contingencies, "Portland Harbor" and "Other Legacy Environmental Loss Contingencies" in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report. (2) Charges related to legal settlements in fiscal 2021 relate to a claim by a utility provider for past charges, and in fiscal 2020 and fiscal 2019 relate to the settlement of a wage and hour class action lawsuit.
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