Segment Reporting | 12. 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. Prior to July 2020, the Company managed its operations through five geographic solid waste operating segments and its E&P segment, which were also its reportable segments. As of July 2020, the Company’s chief operating decision maker determined that the Company’s E&P and Southern operating segments met all the aggregation criteria and eliminated the E&P segment by combining all operations of the E&P segment into the Southern segment. After giving effect to this combination, the Company’s reportable segments consist of its five geographic solid waste operating segments. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. The segment information presented herein reflects the realignment of these districts. Segment results for the 2019 periods reflected in this report have been reclassified to reflect the realignment of the Company’s reportable segments for comparison with the same period in 2020. Under the current orientation, the Company’s Eastern segment services customers located in northern Illinois, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, eastern Tennessee, Vermont, Virginia and Wisconsin; the Company’s Southern segment services customers located in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Dakota, southern Oklahoma, western Tennessee, Texas, Wyoming and along the Gulf of Mexico; the Company’s Western segment services customers located in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Central segment services customers located in Arizona, Colorado, southern Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, western Texas, Utah and eastern Wyoming; and 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. 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, and other income (expense). 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 before income tax provision is included at the end of this Note 12. Summarized financial information concerning the Company’s reportable segments for the three and nine months ended September 30, 2020 and 2019, is shown in the following tables: Three Months Ended Intercompany Reported Segment September 30, 2020 Revenue Revenue (b) Revenue EBITDA (c) Eastern $ 413,499 $ (69,146) $ 344,353 $ 90,991 Southern 375,636 (45,061) 330,575 81,394 Western 337,768 (36,547) 301,221 101,071 Central 262,458 (33,892) 228,566 82,887 Canada 210,577 (25,740) 184,837 72,516 Corporate (a) — — — (4,132) $ 1,599,938 $ (210,386) $ 1,389,552 $ 424,727 Three Months Ended Intercompany Reported Segment September 30, 2019 Revenue Revenue (b) Revenue EBITDA (c) Eastern $ 399,936 $ (69,049) $ 330,887 $ 88,101 Southern 417,133 (45,678) 371,455 113,209 Western 324,859 (35,651) 289,208 90,059 Central 262,737 (32,663) 230,074 81,746 Canada 217,879 (27,059) 190,820 66,794 Corporate (a) — — — (446) $ 1,622,544 $ (210,100) $ 1,412,444 $ 439,463 Nine Months Ended Intercompany Reported Segment September 30, 2020 Revenue Revenue (b) Revenue EBITDA (c) Eastern $ 1,194,213 $ (198,767) $ 995,446 $ 258,333 Southern 1,171,709 (138,412) 1,033,297 276,844 Western 953,861 (105,122) 848,739 267,523 Central 749,093 (95,365) 653,728 235,742 Canada 586,514 (69,985) 516,529 185,589 Corporate (a) — — — (10,462) $ 4,655,390 $ (607,651) $ 4,047,739 $ 1,213,569 Nine Months Ended Intercompany Reported Segment September 30, 2019 Revenue Revenue (b) Revenue EBITDA (c) Eastern $ 1,137,258 $ (189,924) $ 947,334 $ 250,106 Southern 1,214,125 (129,931) 1,084,194 327,139 Western 922,737 (101,552) 821,185 253,504 Central 715,997 (89,685) 626,312 219,280 Canada 624,470 (76,776) 547,694 193,702 Corporate (a) — — — (11,751) $ 4,614,587 $ (587,868) $ 4,026,719 $ 1,231,980 ____________________ (a) Corporate consists of expenses associated with its administrative departments and certain centralized expenses including cash and equity-based incentive compensation, direct acquisition expenses and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company. Amounts reflected are net of allocations to the five 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 September 30, 2020 and December 31, 2019, were as follows: September 30, December 31, 2020 2019 Eastern $ 3,055,672 $ 3,099,283 Southern 3,441,079 3,952,449 Western 1,860,596 1,718,015 Central 1,956,234 1,885,468 Canada 2,444,922 2,490,291 Corporate 1,090,944 592,189 Total Assets $ 13,849,447 $ 13,737,695 The following tables show changes in goodwill during the nine months ended September 30, 2020 and 2019, by reportable segment: Eastern Southern Western Central Canada Total Balance as of December 31, 2019 $ 1,331,180 $ 1,528,225 $ 400,037 $ 729,470 $ 1,521,939 $ 5,510,851 Goodwill acquired 6,228 3,648 43,151 10,450 174 63,651 Impact of changes in foreign currency — — — — (39,935) (39,935) Balance as of September 30, 2020 $ 1,337,408 $ 1,531,873 $ 443,188 $ 739,920 $ 1,482,178 $ 5,534,567 Eastern Southern Western Central Canada Total Balance as of December 31, 2018 $ 1,126,486 $ 1,517,610 $ 398,174 $ 540,435 $ 1,448,980 $ 5,031,685 Goodwill acquired 22,146 10,329 1,334 189,194 25 223,028 Goodwill divested — (845) — — — (845) Impact of changes in foreign currency — — — — 43,688 43,688 Balance as of September 30, 2019 $ 1,148,632 $ 1,527,094 $ 399,508 $ 729,629 $ 1,492,693 $ 5,297,556 A reconciliation of the Company’s primary measure of segment profitability (segment EBITDA) to Income before income tax provision in the Condensed Consolidated Statements of Net Income is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Eastern segment EBITDA $ 90,991 $ 88,101 $ 258,333 $ 250,106 Southern segment EBITDA 81,394 113,209 276,844 327,139 Western segment EBITDA 101,071 90,059 267,523 253,504 Central segment EBITDA 82,887 81,746 235,742 219,280 Canada segment EBITDA 72,516 66,794 185,589 193,702 Subtotal reportable segments 428,859 439,909 1,224,031 1,243,731 Unallocated corporate overhead (4,132) (446) (10,462) (11,751) Depreciation (157,590) (157,994) (459,641) (461,616) Amortization of intangibles (32,653) (31,934) (96,062) (93,821) Impairments and other operating items (3,805) (12,935) (442,582) (32,949) Interest expense (40,636) (36,780) (119,562) (111,313) Interest income 903 2,056 4,396 7,186 Other income (expense), net 702 (19) (3,046) 4,562 Income before income tax provision $ 191,648 $ 201,857 $ 97,072 $ 544,029 |