Segment Reporting | 10. SEGMENT REPORTING The Company’s revenues are generated from the collection, transfer, recycling and disposal of non-hazardous solid waste and the treatment, recovery and disposal of non-hazardous E&P waste. No single contract or customer accounted for more than 10% of the Company’s total revenues at the consolidated or reportable segment level during the periods presented. The Company manages its operations through five geographic operating segments and its E&P segment , which includes the majority of the Company’s E&P waste treatment and disposal operations. The Company’s five geographic operating segments and its E&P segment comprise the Company’s reportable segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. In the third quarter of 2017, the Company moved a district from the Eastern segment to the Canada segment as a significant amount of its revenues are received from Canadian-based customers. The segment information presented herein reflects the realignment of this district. Under the current orientation, the Company’s Southern segment services customers located in Alabama, Arkansas, Florida, Louisiana, Mississippi, southern Oklahoma, western Tennessee and Texas; the Company’s Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Eastern segment services customers located in Illinois, Iowa, Kentucky, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; the Company’s Canada segment services customers located in the state of Michigan and in the provinces of Alberta, British Columbia, Manitoba, Ontario, Québec and Saskatchewan; and the Company’s Central segment services customers located in Arizona, Colorado, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, western Texas, Utah and eastern Wyoming. The E&P segment services E&P customers located in Arkansas, Louisiana, New Mexico, North Dakota, Oklahoma, Texas, Wyoming and along the Gulf of Mexico. The Company’s Chief Operating Decision Maker evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is segment EBITDA. The Company defines segment EBITDA as earnings before interest, taxes, depreciation, amortization, impairments and other operating items, other income (expense) and foreign currency transaction gain (loss). Segment EBITDA is not a measure of operating income, operating performance or liquidity under GAAP and may not be comparable to similarly titled measures reported by other companies. The Company’s management uses segment EBITDA in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments. A reconciliation of segment EBITDA to Income (loss) before income tax provision is included at the end of this Note 10. Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2018 and 2017 , is shown in the following tables: Three Months Ended March 31, 2018 Revenue Intercompany Revenue (b) Reported Revenue Segment EBITDA (c) Southern $ 308,955 $ (35,616) $ 273,339 $ 68,907 Western 275,121 (29,958) 245,163 72,658 Eastern 287,839 (45,960) 241,879 67,433 Canada 191,687 (21,713) 169,974 59,266 Central 175,200 (21,410) 153,790 58,421 E&P 57,621 (1,635) 55,986 28,679 Corporate (a) - - - (6,344) $ 1,296,423 $ (156,292) $ 1,140,131 $ 349,020 Three Months Ended March 31, 2017 Revenue Intercompany Revenue (b) Reported Revenue Segment EBITDA (c) Southern $ 317,339 $ (37,216) $ 280,123 $ 68,940 Western 264,001 (28,411) 235,590 75,569 Eastern 270,674 (41,705) 228,969 64,629 Canada 187,954 (22,401) 165,553 58,121 Central 163,812 (19,503) 144,309 52,652 E&P 39,066 (2,344) 36,722 14,545 Corporate (a) - - - (15,621) $ 1,242,846 $ (151,580) $ 1,091,266 $ 318,835 ____________________ (a) Corporate functions include accounting, legal, tax, treasury, information technology, risk management, human resources, training and other administrative functions. Amounts reflected are net of allocations to the six operating segments. (b) Intercompany revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments. Transactions within and between segments are generally made on a basis intended to reflect the market value of the service. (c) For those items included in the determination of segment EBITDA, the accounting policies of the segments are the same as those described in the Company’s most recent Annual Report on Form 10-K. Total assets for each of the Company’s reportable segments at March 31, 2018 and December 31, 2017, were as follows: March 31, 2018 December 31, 2017 Southern $ 2,694,866 $ 2,718,296 Western 1,542,251 1,573,955 Eastern 2,240,584 2,024,527 Canada 2,580,194 2,677,557 Central 1,430,485 1,297,118 E&P 974,266 981,980 Corporate 500,572 741,248 Total Assets $ 11,963,218 $ 12,014,681 The following tables show changes in goodwill during the three months ended March 31, 2018 and 2017, by reportable segment: Southern Western Eastern Canada Central E&P Total Balance as of December 31, 2017 $ 1,436,320 $ 397,508 $ 804,133 $ 1,575,538 $ 468,275 $ - $ 4,681,774 Goodwill acquired 604 640 95,702 - 36,725 - 133,671 Impact of changes in foreign currency - - - (42,496) - - (42,496) Balance as of March 31, 2018 $ 1,436,924 $ 398,148 $ 899,835 $ 1,533,042 $ 505,000 $ - $ 4,772,949 Southern Western Eastern Canada Central E&P Total Balance as of December 31, 2016 $ 1,470,023 $ 376,537 $ 533,160 $ 1,465,274 $ 467,924 $ 77,343 $ 4,390,261 Goodwill acquired 11,736 - 246,491 3,316 370 - 261,913 Impairment loss - - - - - (77,343) (77,343) Goodwill adjustment for assets sold - - 321 - - - 321 Goodwill adjustment for assets held for sale (29,000) - - - - - (29,000) Goodwill reclassified as assets held for sale (29,295) - - - - - (29,295) Impact of changes in foreign currency - - - 12,788 - - 12,788 Balance as of March 31, 2017 $ 1,423,464 $ 376,537 $ 779,972 $ 1,481,378 $ 468,294 $ - $ 4,529,645 A reconciliation of the Company’s primary measure of segment profitability (segment EBITDA) to Income (loss) before income tax provision in the Condensed Consolidated Statements of Net Income is as follows: Three months ended March 31 , 2018 2017 Southern segment EBITDA $ 68,907 $ 68,940 Western segment EBITDA 72,658 75,569 Eastern segment EBITDA 67,433 64,629 Canada segment EBITDA 59,266 58,121 Central segment EBITDA 58,421 52,652 E&P segment EBITDA 28,679 14,545 Subtotal reportable segments 355,364 334,456 Unallocated corporate overhead (6,344) (15,621) Depreciation (133,185) (125,240) Amortization of intangibles (26,098) (25,510) Impairments and other operating items (1,030) (141,681) Interest expense (32,370) (29,131) Interest income 1,155 449 Other income (expense), net (387) 1,017 Foreign currency transaction loss (221) (590) Income (loss) before income tax provision $ 156,884 $ (1,851) The following tables reflect a breakdown of the Company’s revenue and inter-company eliminations for the periods indicated: Three months ended March 31, 2018 Revenue Intercompany Revenue Reported Revenue % of Reported Revenue Solid waste collection $ 809,646 $ (2,399) $ 807,247 70.8% Solid waste disposal and transfer 370,929 (149,568) 221,361 19.4 Solid waste recycling 23,485 (972) 22,513 2.0 E&P waste treatment, recovery and disposal 58,359 (2,749) 55,610 4.9 Intermodal and other 34,004 (604) 33,400 2.9 Total $ 1,296,423 $ (156,292) $ 1,140,131 100.0% Three months ended March 31, 2017 Revenue Intercompany Revenue Reported Revenue % of Reported Revenue Solid waste collection $ 768,346 $ (2,200) $ 766,146 70.2% Solid waste disposal and transfer 357,025 (143,441) 213,584 19.6 Solid waste recycling 43,889 (2,584) 41,305 3.8 E&P waste treatment, recovery and disposal 39,821 (2,968) 36,853 3.4 Intermodal and other 33,765 (387) 33,378 3.0 Total $ 1,242,846 $ (151,580) $ 1,091,266 100.0% |