Segment Reporting | 10. 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. Effective April 1, 2023, the Company modified its organizational structure under new regional operating segments as the result of continued growth in its business. The Company now reports revenue and segment EBITDA based on the following six geographic solid waste operating segments: Southern, Western, Central, Eastern, Canada and MidSouth. A small number of operating locations have been reallocated from the Western segment to the Central segment, the previous Eastern segment has been bifurcated into two smaller geographies now referred to as the Eastern segment and MidSouth segment, and a small number of operating locations have been reallocated from the Southern segment to the MidSouth segment. The Company’s six geographic solid waste operating segments comprise its reportable 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 regions. 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 10. Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2023 and 2022, is shown in the following tables: Three Months Ended Intercompany Reported Segment March 31, 2023 Revenue Revenue (b) Revenue EBITDA (c) Southern $ 451,000 $ (51,107) $ 399,893 $ 121,914 Western 444,796 (48,957) 395,839 110,689 Central 383,525 (43,540) 339,985 115,756 Eastern 388,797 (59,669) 329,128 73,275 Canada 253,670 (26,514) 227,156 82,984 MidSouth 251,085 (42,583) 208,502 57,731 Corporate (a) — — — (2,454) $ 2,172,873 $ (272,370) $ 1,900,503 $ 559,895 Three Months Ended Intercompany Reported Segment March 31, 2022 Revenue Revenue (b) Revenue EBITDA (c) Southern $ 385,636 $ (39,570) $ 346,066 $ 101,124 Western 376,538 (42,879) 333,659 100,000 Central 322,998 (32,936) 290,062 96,951 Eastern 315,967 (45,165) 270,802 65,287 Canada 240,215 (25,508) 214,707 84,844 MidSouth 228,162 (37,203) 190,959 49,819 Corporate (a) — — — (4,702) $ 1,869,516 $ (223,261) $ 1,646,255 $ 493,323 ____________________ (a) The majority of Corporate expenses are allocated to the six operating segments. Direct acquisition expenses, expenses associated with common shares held in the deferred compensation plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the six operating segments and comprise the net EBITDA of the Company’s Corporate segment for the periods presented. (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. The following tables show changes in goodwill during the three months ended March 31, 2023 and 2022, by reportable segment: Southern Western Central Eastern Canada MidSouth Total Balance as of December 31, 2022 $ 1,547,894 $ 732,335 $ 1,003,470 $ 1,189,111 $ 1,684,670 $ 744,817 $ 6,902,297 Goodwill acquired — 30,703 397 3,440 — 3,249 37,789 Goodwill acquisition adjustments (647) — — — (289) — (936) Impact of changes in foreign currency — — — — 1,417 — 1,417 Balance as of March 31, 2023 $ 1,547,247 $ 763,038 $ 1,003,867 $ 1,192,551 $ 1,685,798 $ 748,066 $ 6,940,567 Southern Western Central Eastern Canada MidSouth Total Balance as of December 31, 2021 $ 1,457,437 $ 503,223 $ 931,269 $ 992,578 $ 1,559,512 $ 743,624 $ 6,187,643 Goodwill acquired — — 2,794 85,866 123,384 — 212,044 Goodwill acquisition adjustments — 2,652 — — — (95) 2,557 Impact of changes in foreign currency — — — — 25,519 — 25,519 Balance as of March 31, 2022 $ 1,457,437 $ 505,875 $ 934,063 $ 1,078,444 $ 1,708,415 $ 743,529 $ 6,427,763 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 March 31, 2023 2022 Southern segment EBITDA $ 121,914 $ 101,124 Western segment EBITDA 110,689 100,000 Central segment EBITDA 115,756 96,951 Eastern segment EBITDA 73,275 65,287 Canada segment EBITDA 82,984 84,844 MidSouth segment EBITDA 57,731 49,819 Subtotal reportable segments 562,349 498,025 Unallocated corporate overhead (2,454) (4,702) Depreciation (204,059) (179,950) Amortization of intangibles (39,282) (37,635) Impairments and other operating items (1,865) (1,878) Interest expense (68,353) (41,324) Interest income 2,715 137 Other income (expense), net 3,174 (3,466) Income before income tax provision $ 252,225 $ 229,207 | 17. 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. Effective April 1, 2023, the Company modified its organizational structure under new regional operating segments as the result of continued growth in its business. The Company now reports revenue and segment EBITDA based on the following six geographic solid waste operating segments: Southern, Western, Central, Eastern, Canada and MidSouth. A small number of operating locations have been reallocated from the Western segment to the Central segment, the previous Eastern segment has been bifurcated into two smaller geographies now referred to as the Eastern segment and MidSouth segment, and a small number of operating locations have been reallocated from the Southern segment to the MidSouth segment. The Company’s six geographic solid waste operating segments comprise its reportable 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 regions. 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 loss on early extinguishment of debt. 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 17. Summarized financial information concerning the Company’s reportable segments for the years ended December 31, 2022, 2021 and 2020, is shown in the following tables: Year Ended Intercompany Reported Segment Depreciation and Capital December 31, 2022 Revenue Revenue (b) Revenue EBITDA (c) Amortization Expenditures Total Assets (e) Southern $ 1,670,864 $ (176,425) $ 1,494,439 $ 466,519 $ 175,614 $ 151,093 $ 3,410,888 Western 1,605,574 (177,543) 1,428,031 424,935 155,882 232,714 3,239,679 Central 1,447,703 (159,355) 1,288,348 446,315 156,895 181,065 2,803,853 Eastern 1,445,193 (211,498) 1,233,695 281,522 190,480 138,028 2,752,436 Canada 1,047,672 (107,048) 940,624 349,403 118,388 70,051 2,773,882 MidSouth 992,922 (166,200) 826,722 235,705 112,866 133,849 1,727,323 Corporate (a), (d) — — — (25,019) 8,835 5,877 426,542 $ 8,209,928 $ (998,069) $ 7,211,859 $ 2,179,380 $ 918,960 $ 912,677 $ 17,134,603 Year Ended Intercompany Reported Segment Depreciation and Capital December 31, 2021 Revenue Revenue (b) Revenue EBITDA (c) Amortization Expenditures Total Assets (e) Southern $ 1,493,588 $ (172,526) $ 1,321,062 $ 369,221 $ 173,235 $ 139,258 $ 3,154,940 Western 1,383,124 (154,498) 1,228,626 386,513 126,192 147,556 2,168,804 Central 1,243,666 (142,261) 1,101,405 379,644 138,683 149,360 2,429,811 Eastern 1,111,546 (155,836) 955,710 245,091 156,499 90,212 2,314,663 Canada 965,705 (108,982) 856,723 339,859 111,458 68,183 2,513,608 MidSouth 832,386 (144,551) 687,835 184,218 97,564 101,098 1,690,234 Corporate (a), (d) — — — (19,596) 9,378 48,648 427,864 $ 7,030,015 $ (878,654) $ 6,151,361 $ 1,884,950 $ 813,009 $ 744,315 $ 14,699,924 Year Ended Intercompany Reported Segment Depreciation and Capital December 31, 2020 Revenue Revenue (b) Revenue EBITDA (c) Amortization Expenditures Total Assets (e) Southern $ 1,419,987 $ (169,817) $ 1,250,170 $ 343,181 $ 173,885 $ 125,972 $ 3,193,211 Western 1,244,745 (141,993) 1,102,752 346,585 111,515 126,370 1,770,403 Central 1,058,909 (127,885) 931,024 332,321 117,499 109,013 2,256,992 Eastern 969,011 (142,927) 826,084 196,068 143,744 111,912 1,908,333 Canada 805,757 (95,297) 710,460 256,119 103,334 109,886 2,544,379 MidSouth 761,978 (136,478) 625,500 172,559 94,172 75,661 1,428,929 Corporate (a), (d) — — — (15,283) 8,255 5,747 890,117 $ 6,260,387 $ (814,397) $ 5,445,990 $ 1,631,550 $ 752,404 $ 664,561 $ 13,992,364 (a) The majority of Corporate expenses are allocated to the six operating segments. Direct acquisition expenses, expenses associated with common shares held in the deferred compensation plan exchanged for other investment options and share-based compensation expenses associated with Progressive Waste share-based grants outstanding at June 1, 2016 that were continued by the Company are not allocated to the six operating segments and comprise the net EBITDA of the Company’s Corporate segment for the periods presented. (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 Note 3. (d) Corporate assets include cash, debt issuance costs, equity investments, operating lease right-of-use assets and corporate facility leasehold improvements and equipment. (e) Goodwill is included within total assets for each of the Company’s six operating segments. The following table shows changes in goodwill during the years ended December 31, 2021 and 2022, by reportable segment: Southern Western Central Eastern Canada MidSouth Total Balance as of December 31, 2020 $ 1,532,215 $ 442,862 $ 824,204 $ 1,374,577 $ 1,552,792 $ — $ 5,726,650 Goodwill transferred (a) (77,430) (36,486) 39,037 (557,353) — 632,232 — Goodwill acquired 2,976 96,847 68,028 175,354 — 111,392 454,597 Goodwill acquisition adjustments — — — — (2) — (2) Goodwill divested (324) — — — — — (324) Impact of changes in foreign currency — — — — 6,722 — 6,722 Balance as of December 31, 2021 1,457,437 503,223 931,269 992,578 1,559,512 743,624 6,187,643 Goodwill acquired 90,457 229,112 72,201 196,533 235,095 1,193 824,591 Impact of changes in foreign currency — — — — (109,937) — (109,937) Balance as of December 31, 2022 $ 1,547,894 $ 732,335 $ 1,003,470 $ 1,189,111 $ 1,684,670 $ 744,817 $ 6,902,297 (a) Effective April 1, 2023, the Company completed an evaluation of its organizational structure and, as a result of continued growth in the business, modified its organizational structure and changed its five geographic operating segments (Southern, Western, Central, Eastern and Canada) to six geographic operating segments (Southern, Western, Central, Eastern, Canada and MidSouth). Additionally, the Company realigned certain of the Company’s districts between operating segments. This realignment resulted in the reallocation of goodwill among its segments, which is reflected in the “Goodwill transferred” line item. Property and equipment, net relating to operations in the United States and Canada are as follows: December 31, 2022 2021 United States $ 6,201,011 $ 5,075,184 Canada 749,904 646,765 Total $ 6,950,915 $ 5,721,949 A reconciliation of the Company’s primary measure of segment profitability (segment EBITDA) to Income before income tax provision in the Consolidated Statements of Net Income is as follows: Years ended December 31, 2022 2021 2020 Southern segment EBITDA $ 466,519 $ 369,221 $ 343,181 Western segment EBITDA 424,935 386,513 346,585 Central segment EBITDA 446,315 379,644 332,321 Eastern segment EBITDA 281,522 245,091 196,068 Canada segment EBITDA 349,403 339,859 256,119 MidSouth segment EBITDA 235,705 184,218 172,559 Subtotal reportable segments 2,204,399 1,904,546 1,646,833 Unallocated corporate overhead (25,019) (19,596) (15,283) Depreciation (763,285) (673,730) (621,102) Amortization of intangibles (155,675) (139,279) (131,302) Impairments and other operating items (18,230) (32,316) (466,718) Interest expense (202,331) (162,796) (162,375) Interest income 5,950 2,916 5,253 Other income (expense), net 3,154 6,285 (1,392) Loss on early extinguishment of debt — (115,288) — Income before income tax provision $ 1,048,963 $ 770,742 $ 253,914 |