REVENUES FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUES FROM CONTRACTS WITH CUSTOMERS

REVENUES FROM CONTRACTS WITH CUSTOMERS

The Company provides RWCS, which provide collection and processing of regulated and specialized waste, including medical, pharmaceutical and hazardous waste, for disposal and compliance programs and SID services, which provide for the collection of personal and confidential information for secure destruction and recycling of shredded paper.

The Company’s customers typically enter into a contract for the provision of services on a regular and scheduled basis, e.g., weekly, monthly or on an as needed basis over the contract term, e.g. one-time service. Under the contract terms, the Company receives fees based on a monthly, quarterly or annual rate and/or fees based on contractual rates depending upon measures including the volume, weight, and type of waste, number and size of containers collected, and weight and type of shredded paper.

Amounts are invoiced based on the terms of the underlying contract either on a regular basis, e.g., monthly or quarterly, or as services are performed and are generally due within a short period of time after invoicing based upon normal terms and conditions for our business type and the geography of the services performed.

Disaggregation of Revenue

The following table presents revenues disaggregated by service and reportable segments:

In millions
	Three Months Ended March 31,
	2023		2022
Revenue by Service
Regulated Waste and Compliance Services	$	451.3	$	452.6
Secure Information Destruction Services	233.0		211.6
Total Revenues	$	684.3	$	664.2
North America
Regulated Waste and Compliance Services	$	368.7	$	362.1
Secure Information Destruction Services	204.7		181.6
Total North America Segment	$	573.4	$	543.7
International
Regulated Waste and Compliance Services	$	82.6	$	90.5
Secure Information Destruction Services	28.3		30.0
Total International Segment	$	110.9	$	120.5

Contract Liabilities

Contract liabilities at March 31, 2023 and December 31, 2022, were $8.7 million and $7.9 million, respectively. Substantially all of the contract liabilities as of March 31, 2023, are expected to be recognized in Revenues, as the amounts are earned, which is anticipated over the next 12 months.

Contract Acquisition Costs

The Company’s incremental direct costs of obtaining a contract, which consist primarily of sales incentives, are deferred and amortized to SG&A over a weighted average estimated period of benefit of 6.5 years.

During the three months ended March 31, 2023 and 2022, the Company amortized $4.0 million and $3.4 million, respectively, of deferred sales incentives to SG&A.

Total contract acquisition costs, net of accumulated amortization, were classified as follows:

In millions
	March 31, 2023		December 31, 2022
Other current assets	$	15.0	$	14.2
Other assets	43.4		40.5
Total contract acquisition costs	$	58.4	$	54.7

Allowance for Doubtful Accounts

The Company estimates its allowance for doubtful accounts based on past collection history and specific risks identified among uncollected amounts, as well as management’s expectation of future economic conditions. If current or expected future economic trends, events, or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. Past-due receivable balances are written off when the Company’s internal collection efforts have been exhausted.

The changes in allowance for doubtful accounts were reported as follows:

In millions
	Three Months Ended March 31,
	2023		2022
Beginning Balance	$	53.3	$	43.3
Bad debt expense, net of recoveries	2.2		5.4
Write-offs	(5.8)		(2.5)
Other changes (1)	0.5		2.0
Ending Balance	$	50.2	$	48.2

(1)Amounts consist primarily of currency translation adjustments.