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SEGMENT REPORTING
 9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 12 – SEGMENT REPORTING

Our reportable segments are:

 

•

Domestic and Canada RCS

 

•

International RCS

 

•

All Other (which includes Domestic CRS, Corporate and shared services)

Our Domestic and Canada, and International Regulated Waste and Compliance Services segments include medical waste disposal, pharmaceutical waste disposal, hazardous waste management, sustainability solutions for expired or unused inventory, secure information destruction of documents and e-media, training and consulting through our Steri-Safe® and Clinical Services programs, and other regulatory compliance services.

All Other includes Domestic Communication and Related Services operations which consists of services including inbound/outbound communication, automated patient reminders, online scheduling, notifications, product retrievals, product returns, and quality audits, as well as expenses related to Corporate support, shared services functions, and stock-based compensation.

Beginning in the first quarter of 2018, we have changed our measure of segment profitability to Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (“Adjusted EBITDA”).  Adjusted EBITDA is Income from operations excluding certain specified items, Depreciation and Intangible Amortization.  As a result of this change in segment reporting, all applicable historical segment information has been revised to conform to the new presentation.

The following tables show financial information for the Company's reportable segments:

 

In millions

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada RCS

$

644.3

 

 

$

634.7

 

 

$

1,927.3

 

 

$

1,917.5

 

International RCS

 

151.1

 

 

 

174.6

 

 

 

503.0

 

 

 

536.2

 

All Other

 

59.5

 

 

 

73.5

 

 

 

202.9

 

 

 

239.2

 

Total

$

854.9

 

 

$

882.8

 

 

$

2,633.2

 

 

$

2,692.9

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada RCS

$

261.5

 

 

$

276.7

 

 

$

786.2

 

 

$

839.7

 

International RCS

 

49.9

 

 

 

55.0

 

 

 

169.7

 

 

 

170.0

 

All Other

 

24.1

 

 

 

36.4

 

 

 

91.4

 

 

 

108.8

 

Total

$

335.5

 

 

$

368.1

 

 

$

1,047.3

 

 

$

1,118.5

 

Depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada RCS

$

19.0

 

 

$

17.6

 

 

$

56.7

 

 

$

50.8

 

International RCS

 

6.7

 

 

 

7.8

 

 

 

21.4

 

 

 

23.4

 

All Other

 

6.4

 

 

 

5.0

 

 

 

17.5

 

 

 

14.5

 

Total

$

32.1

 

 

$

30.4

 

 

$

95.6

 

 

$

88.7

 

Intangible Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada RCS

$

23.7

 

 

$

22.0

 

 

$

71.1

 

 

$

65.6

 

International RCS

 

6.0

 

 

 

5.9

 

 

 

19.2

 

 

 

16.8

 

All Other

 

2.1

 

 

 

2.0

 

 

 

6.3

 

 

 

6.1

 

Total

$

31.8

 

 

$

29.9

 

 

$

96.6

 

 

$

88.5

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic and Canada RCS

$

196.6

 

 

$

202.6

 

 

$

583.4

 

 

$

619.7

 

International RCS

 

20.9

 

 

 

23.5

 

 

 

80.8

 

 

 

77.4

 

All Other

 

(33.6

)

 

 

(19.9

)

 

 

(100.1

)

 

 

(79.1

)

Total

$

183.9

 

 

$

206.2

 

 

$

564.1

 

 

$

618.0

 

The following table reconciles the Company's primary measure of segment profitability (Adjusted EBITDA) to Income from operations:

 

In millions

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Domestic and Canada RCS Adjusted EBITDA

$

196.6

 

 

$

202.6

 

 

$

583.4

 

 

$

619.7

 

International RCS Adjusted EBITDA

 

20.9

 

 

 

23.5

 

 

 

80.8

 

 

 

77.4

 

All Other Adjusted EBITDA

 

(33.6

)

 

 

(19.9

)

 

 

(100.1

)

 

 

(79.1

)

Depreciation

 

(32.1

)

 

 

(30.4

)

 

 

(95.6

)

 

 

(88.7

)

Business Transformation

 

(21.0

)

 

 

(4.2

)

 

 

(64.9

)

 

 

(4.2

)

Intangible Amortization

 

(31.8

)

 

 

(29.9

)

 

 

(96.6

)

 

 

(88.5

)

Acquisition and Integration

 

(1.6

)

 

 

(10.8

)

 

 

(7.5

)

 

 

(33.5

)

Operational Optimization

 

(3.6

)

 

 

(16.0

)

 

 

(19.5

)

 

 

(52.4

)

Divestitures

 

(2.0

)

 

 

(9.1

)

 

 

(19.1

)

 

 

(12.7

)

Litigation, Settlements and Regulatory Compliance

 

(17.3

)

 

 

(1.3

)

 

 

(61.2

)

 

 

(304.9

)

Other

 

(6.2

)

 

 

(10.9

)

 

 

(14.9

)

 

 

(17.3

)

Income from operations

$

68.3

 

 

$

93.6

 

 

$

184.8

 

 

$

15.8

 

The following table presents consolidated revenues by service:

 

In millions

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Regulated Waste and Compliance Services

$

476.6

 

 

$

502.5

 

 

$

1,457.8

 

 

$

1,525.9

 

Secure Information Destruction Services

 

227.6

 

 

 

204.7

 

 

 

677.5

 

 

 

621.2

 

Manufacturing and Industrial Services

 

79.1

 

 

 

86.6

 

 

 

253.1

 

 

 

260.4

 

Communication and Related Services

 

71.6

 

 

 

89.0

 

 

 

244.8

 

 

 

285.4

 

Revenues

$

854.9

 

 

$

882.8

 

 

$

2,633.2

 

 

$

2,692.9