Segment Reporting

3 Months Ended

Mar. 31, 2013

Segment Reporting

9. SEGMENT REPORTING

The Company’s revenues include 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 October 2012, the Company managed its operations through three geographic operating segments which were also its reportable segments. In October 2012, as a result of the R360 acquisition, the Company realigned its reporting structure and created a fourth operating segment, the E&P group, which includes the majority of the Company’s E&P waste treatment and disposal operations. As a result, the Company’s three geographic operating segments and its E&P group comprise the Company’s reportable segments. Additionally, in January 2013, the Company transferred an E&P operation in Louisiana, owned by the Company prior to the R360 acquisition, from its Central region to its E&P group. Each operating segment is responsible for managing several vertically integrated operations, which are comprised of districts. The segment information presented herein reflects the addition of the new E&P group and the transfer of the Company’s E&P operation in Louisiana to the E&P group. Under the current structure, the Company’s Western Region is comprised of operating locations in Alaska, California, Idaho, Montana, Nevada, Oregon, Washington and western Wyoming; the Company’s Central Region is comprised of operating locations in Arizona, Colorado, Kansas, Louisiana, Minnesota, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Utah and eastern Wyoming; and the Company’s Eastern Region is comprised of operating locations in Alabama, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Mississippi, New York, North Carolina, South Carolina and Tennessee. The E&P group is comprised of the Company’s E&P operations in Louisiana, New Mexico, North Dakota, Oklahoma, Texas, Wyoming and along the Gulf of Mexico.

The Company’s Chief Operating Decision Maker (“CODM”) evaluates operating segment profitability and determines resource allocations based on several factors, of which the primary financial measure is EBITDA. The Company defines EBITDA as earnings before interest, taxes, depreciation, amortization, gain (loss) on disposal of assets and other income (expense). 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 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 EBITDA to Income before income tax provision is included at the end of this Note 9.

Summarized financial information concerning the Company’s reportable segments for the three months ended March 31, 2013 and 2012, is shown in the following tables:

Three Months Ended March 31, 2013	Gross Revenues		Intercompany Revenues(b)			Net Revenues		EBITDA(c)
Western	$	216,345	$	(23,194	)	$	193,151	$	58,576
Central		127,963		(13,370	)		114,593		40,238
Eastern		105,430		(17,660	)		87,770		25,881
E&P		57,021		(2,643	)		54,378		22,587
Corporate(a)		—		—			—		(2,604	)
	$	506,759	$	(56,867	)	$	449,892	$	144,678

Three Months Ended March 31, 2012	Gross Revenues		Intercompany Revenues(b)			Net Revenues		EBITDA(c)
Western	$	204,681	$	(24,021	)	$	180,660	$	53,802
Central		116,913		(13,084	)		103,829		35,450
Eastern		107,158		(18,121	)		89,037		24,534
E&P		2,904		—			2,904		1,932
Corporate(a)		—		—			—		(7,143	)
	$	431,656	$	(55,226	)	$	376,430	$	108,575

(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 four 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 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, 2013 and 2012, by reportable segment:

	Western		Central			Eastern		E&P		Total
Balance as of December 31, 2012	$	373,143	$	430,412		$	380,561	$	452,441	$	1,636,557
Goodwill transferred		—		(9,196	)		—		9,196		—
Goodwill acquired		—		1			24		757		782
Balance as of March 31, 2013	$	373,143	$	421,217		$	380,585	$	462,394	$	1,637,339
	Western		Central			Eastern		E&P		Total
Balance as of December 31, 2011	$	313,038	$	424,223		$	379,627	$	—	$	1,116,888
Goodwill acquired		56,747		2,867			23		—		59,637
Goodwill divested		—		(496	)		—		—		(496	)
Balance as of March 31, 2012	$	369,785	$	426,594		$	379,650	$	—	$	1,176,029

The Company has no accumulated impairment losses associated with goodwill.

A reconciliation of the Company’s primary measure of segment profitability (EBITDA) to Income before income tax provision in the Condensed Consolidated Statements of Net Income is as follows:

	Three months ended March 31,
	2013			2012
Western segment EBITDA	$	58,576		$	53,802
Central segment EBITDA		40,238			35,450
Eastern segment EBITDA		25,881			24,534
E&P segment EBITDA		22,587			1,932
Subtotal reportable segments		147,282			115,718
Unallocated corporate overhead		(2,604	)		(7,143	)
Depreciation		(51,649	)		(37,173	)
Amortization of intangibles		(6,438	)		(5,631	)
Gain (loss) on disposal of assets		322			(715	)
Interest expense		(19,012	)		(12,285	)
Other income, net		742			819
Income before income tax provision	$	68,643		$	53,590

The following table shows, for the periods indicated, the Company’s total reported revenues by service line and with intercompany eliminations:

	Three months ended March 31,
	2013			2012
Solid waste collection	$	293,144		$	277,088
Solid waste disposal and transfer		122,772			117,739
E&P waste treatment, disposal and recovery		59,931			4,256
Solid waste recycling		18,794			21,215
Intermodal and other		12,118			11,358
		506,759			431,656
Less: intercompany elimination		(56,867	)		(55,226	)
Total revenues	$	449,892		$	376,430