| SEGMENT REPORTING |
SEGMENT REPORTING Our senior management evaluates, oversees and manages the financial performance of our operations through three field groups, referred to as Group 1, Group 2 and Group 3. Group 1 is our recycling and solid waste business operating in geographic areas located in the western United States. Group 2 is our recycling and solid waste business operating in geographic areas located in the southeastern and mid-western United States, and the eastern seaboard of the United States. Group 3 is our environmental solutions business in geographic areas located across the United States and Canada. These groups are presented below as our reportable segments, which each provide integrated environmental services, including but not limited to collection, transfer, recycling, and disposal. Prior to the third quarter of 2022, our environmental services operating segment, now referred to as our Group 3 reportable segment, was aggregated with Corporate entities and other. Summarized financial information concerning our reportable segments for the three months ended September 30, 2022 and 2021 follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Group 1 | | Group 2 | | Recycling & Solid Waste Subtotal | | Group 3
(Environmental Solutions) | | Corporate entities and other | | Total | | Three Months Ended September 30, 2022 | | Gross Revenue | $ | 1,876.2 | | | $ | 1,803.6 | | | $ | 3,679.8 | | | $ | 411.0 | | | $ | 62.4 | | | $ | 4,153.2 | | | Intercompany Revenue | (285.2) | | | (242.8) | | | (528.0) | | | (11.3) | | | (16.1) | | | (555.4) | | | Net Revenue | $ | 1,591.0 | | | $ | 1,560.8 | | | $ | 3,151.8 | | | $ | 399.7 | | | $ | 46.3 | | | $ | 3,597.8 | | | Gross Adjusted EBITDA | $ | 506.6 | | | $ | 441.1 | | | $ | 947.7 | | | $ | 89.2 | | | $ | 14.4 | | | $ | 1,051.3 | | | Adjusted EBITDA allocations | 15.0 | | | 14.0 | | | 29.0 | | | (14.6) | | | (14.4) | | | — | | | Net Adjusted EBITDA | $ | 521.6 | | | $ | 455.1 | | | $ | 976.7 | | | $ | 74.6 | | | $ | — | | | $ | 1,051.3 | | | Adjusted EBITDA margin | 32.3 | % | | 28.7 | % | | 30.5 | % | | 18.7 | % | | — | % | | 29.2 | % | | Capital Expenditures | $ | 199.1 | | | $ | 140.2 | | | $ | 339.3 | | | $ | 35.2 | | | $ | (0.5) | | | $ | 374.0 | | | Total Assets | $ | 12,199.9 | | | $ | 10,233.8 | | | $ | 22,433.7 | | | $ | 3,991.7 | | | $ | 1,975.6 | | | $ | 28,401.0 | | | | | | | | | | | | | | Three Months Ended September 30, 2021 | | Gross Revenue | $ | 1,719.5 | | | $ | 1,626.5 | | | $ | 3,346.0 | | | $ | 60.2 | | | $ | 55.1 | | | $ | 3,461.3 | | | Intercompany Revenue | (277.9) | | | (238.5) | | | (516.4) | | | (3.2) | | | (7.8) | | | (527.4) | | | Net Revenue | $ | 1,441.6 | | | $ | 1,388.0 | | | $ | 2,829.6 | | | $ | 57.0 | | | $ | 47.3 | | | $ | 2,933.9 | | | Gross Adjusted EBITDA | $ | 481.8 | | | $ | 389.7 | | | $ | 871.5 | | | $ | 12.8 | | | $ | 10.7 | | | $ | 895.0 | | | Adjusted EBITDA allocations | 5.6 | | | 5.1 | | | 10.7 | | | — | | | (10.7) | | | — | | | Net Adjusted EBITDA | $ | 487.4 | | | $ | 394.8 | | | $ | 882.2 | | | $ | 12.8 | | | $ | — | | | $ | 895.0 | | | Adjusted EBITDA margin | 33.2 | % | | 28.0 | % | | 30.7 | % | | 22.5 | % | | — | % | | 30.5 | % | | Capital Expenditures | $ | 144.3 | | | $ | 141.1 | | | $ | 285.4 | | | $ | 9.3 | | | $ | 0.9 | | | $ | 295.6 | | | Total Assets | $ | 12,018.7 | | | $ | 9,723.4 | | | $ | 21,742.1 | | | $ | 852.2 | | | $ | 1,834.6 | | | $ | 24,428.9 | |
Summarized financial information concerning our reportable segments for the nine months ended September 30, 2022 and 2021 follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Group 1 | | Group 2 | | Recycling & Solid Waste Subtotal | | Group 3 | | Corporate entities and other | | Total | | Nine Months Ended September 30, 2022 | | Gross Revenue | $ | 5,406.0 | | | $ | 5,170.9 | | | $ | 10,576.9 | | | $ | 827.8 | | | $ | 171.9 | | | $ | 11,576.6 | | | Intercompany Revenue | (826.1) | | | (702.0) | | | (1,528.1) | | | (32.8) | | | (34.2) | | | (1,595.1) | | | Net Revenue | $ | 4,579.9 | | | $ | 4,468.9 | | | $ | 9,048.8 | | | $ | 795.0 | | | $ | 137.7 | | | $ | 9,981.5 | | | Gross Adjusted EBITDA | $ | 1,488.7 | | | $ | 1,274.1 | | | $ | 2,762.8 | | | $ | 163.0 | | | $ | 38.5 | | | $ | 2,964.3 | | | Adjusted EBITDA allocations | 32.4 | | | 30.0 | | | 62.4 | | | (23.9) | | | (38.5) | | | — | | | Net Adjusted EBITDA | $ | 1,521.1 | | | $ | 1,304.1 | | | $ | 2,825.2 | | | $ | 139.1 | | | $ | — | | | $ | 2,964.3 | | | Adjusted EBITDA margin | 32.7 | % | | 28.8 | % | | 30.8 | % | | 17.5 | % | | — | % | | 29.7 | % | | Capital Expenditures | $ | 380.7 | | | $ | 325.2 | | | $ | 705.9 | | | $ | 80.4 | | | $ | 138.5 | | | $ | 924.8 | | | Total Assets | $ | 12,199.9 | | | $ | 10,233.8 | | | $ | 22,433.7 | | | $ | 3,991.7 | | | $ | 1,975.6 | | | $ | 28,401.0 | | | | | | | | | | | | | | Nine Months Ended September 30, 2021 | | Gross Revenue | $ | 4,935.4 | | | $ | 4,626.1 | | | $ | 9,561.5 | | | $ | 136.8 | | | $ | 153.6 | | | $ | 9,851.9 | | | Intercompany Revenue | (801.9) | | | (674.7) | | | (1,476.6) | | | (10.8) | | | (22.3) | | | (1,509.7) | | | Net Revenue | $ | 4,133.5 | | | $ | 3,951.4 | | | $ | 8,084.9 | | | $ | 126.0 | | | $ | 131.3 | | | $ | 8,342.2 | | | Gross Adjusted EBITDA | $ | 1,383.8 | | | $ | 1,111.3 | | | $ | 2,495.1 | | | $ | 30.3 | | | $ | 28.0 | | | $ | 2,553.4 | | | Adjusted EBITDA allocations | 14.7 | | | 13.3 | | | 28.0 | | | — | | | (28.0) | | | — | | | Net Adjusted EBITDA | $ | 1,398.5 | | | $ | 1,124.6 | | | $ | 2,523.1 | | | $ | 30.3 | | | $ | — | | | $ | 2,553.4 | | | Adjusted EBITDA margin | 33.3 | % | | 28.0 | % | | 30.7 | % | | 24.1 | % | | — | % | | 30.6 | % | | Capital Expenditures | $ | 420.6 | | | $ | 341.9 | | | $ | 762.5 | | | $ | 14.9 | | | $ | 126.8 | | | $ | 904.2 | | | Total Assets | $ | 12,018.7 | | | $ | 9,723.4 | | | $ | 21,742.1 | | | $ | 852.2 | | | $ | 1,834.6 | | | $ | 24,428.9 | |
Intercompany revenue reflects transactions within and between segments that generally are made on a basis intended to reflect the market value of such services. Capital expenditures for Corporate entities and other primarily include vehicle inventory acquired but not yet assigned to operating locations and facilities. National Accounts revenue included in Corporate entities and other represents the portion of revenue generated from nationwide and regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators. Corporate functions include legal, tax, treasury, information technology, risk management, human resources, closed landfills, and other administrative functions. Revenue and overhead costs of Corporate entities and other are primarily allocated to our Group 1 and Group 2 reportable segments as we continue to integrate the acquisitions included in our Group 3 reportable segment. Net Adjusted EBITDA reflects the allocation of Gross Adjusted EBITDA from Corporate entities and other to our reportable segments. As presented in the tables below, Adjusted EBITDA reflects certain adjustments for US Ecology deal and integration costs, losses on equity method investments, gains on business divestitures, restructuring expenses, withdrawal costs from multi-employer pension funds, and accelerated vesting of compensation expense related to the 2021 CEO transition. The following table calculates EBITDA and EBITDA margin for the three and nine months ended September 30, 2022 and 2021 (in millions of dollars and as a percentage of revenue): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | Net income attributable to Republic Services, Inc. | $ | 416.9 | | | 11.6 | % | | $ | 350.3 | | | 11.9 | % | | $ | 1,140.8 | | | 11.4 | % | | $ | 977.3 | | | 11.7 | % | | Net income (loss) attributable to noncontrolling interests | — | | | | | 0.5 | | | | | (0.2) | | | | | 1.9 | | | | | Provision for income taxes | 90.9 | | | | | 119.9 | | | | | 317.5 | | | | | 319.0 | | | | | Other expense (income), net | 0.3 | | | | | 0.9 | | | | | 6.5 | | | | | (0.6) | | | | | Interest income | (0.8) | | | | | (0.6) | | | | | (2.0) | | | | | (2.0) | | | | | Interest expense | 105.2 | | | | | 78.1 | | | | | 282.7 | | | | | 234.9 | | | | | Depreciation, amortization and depletion | 353.9 | | | | | 301.3 | | | | | 1,001.8 | | | | 886.5 | | | | | Accretion | 22.8 | | | | | 20.8 | | | | | 66.9 | | | | | 61.9 | | | | | EBITDA and EBITDA margin | $ | 989.2 | | | 27.5 | % | | $ | 871.2 | | | 29.7 | % | | $ | 2,814.0 | | | 28.2 | % | | $ | 2,478.9 | | | 29.7 | % |
The following table calculates adjusted EBITDA and adjusted EBITDA margin for the three and nine months ended September 30, 2022 and 2021 (in millions of dollars and as a percentage of revenue): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | EBITDA | $ | 989.2 | | | 27.5 | % | | $ | 871.2 | | | 29.7 | % | | $ | 2,814.0 | | | 28.2 | % | | $ | 2,478.9 | | | 29.7 | % | | Loss from unconsolidated equity method investment | 51.8 | | | | | 15.1 | | | | | 69.2 | | | | | 44.0 | | | | | Withdrawal costs - multiemployer pension funds | — | | | | | — | | | | | 2.2 | | | | | — | | | | | Restructuring charges | 6.8 | | | | | 4.6 | | | | | 18.8 | | | | | 11.2 | | | | | Gain on business divestitures and impairments, net | (5.2) | | | | | — | | | | | (5.3) | | | | | (0.2) | | | | | US Ecology, Inc. acquisition integration and deal costs | 8.7 | | | | | — | | | | | 65.4 | | | | | — | | | | | Accelerated vesting of compensation expense for CEO transition | — | | | | | 4.1 | | | | | — | | | | | 19.5 | | | | | Total adjustments | 62.1 | | | | | 23.8 | | | | | 150.3 | | | | | 74.5 | | | | | Adjusted EBITDA and adjusted EBITDA margin | $ | 1,051.3 | | | 29.2 | % | | $ | 895.0 | | | 30.5 | % | | $ | 2,964.3 | | | 29.7 | % | | $ | 2,553.4 | | | 30.6 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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