XML 30 R20.htm IDEA: XBRL DOCUMENT v3.22.2
Revenue and Credit Losses
 6 Months Ended
Jun. 30, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE AND CREDIT LOSSES REVENUE AND CREDIT LOSSES
Our operations primarily consist of providing environmental services. The following table disaggregates our revenue by service line for the three and six months ended June 30, 2022 and 2021 (in millions of dollars and as a percentage of revenue):
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Collection:
Residential
$654.1 19.2 %$611.6 21.7 %$1,282.0 20.1 %$1,204.7 22.2 %
Small-container
975.6 28.6 843.2 30.0 1,891.2 29.6 1,653.4 30.5 
Large-container
687.4 20.1 594.6 21.1 1,308.5 20.5 1,129.0 20.9 
Other
13.3 0.4 13.0 0.5 25.7 0.4 25.4 0.5 
Total collection
2,330.4 68.3 2,062.4 73.3 4,507.4 70.6 4,012.5 74.1 
Transfer407.8 383.7 770.4 715.0 
Less: intercompany(215.9)(208.1)(413.7)(393.2)
Transfer, net
191.9 5.6 175.6 6.2 356.7 5.6 321.8 6.0 
Landfill699.0 654.2 1,316.1 1,219.3 
Less: intercompany(292.9)(283.2)(560.5)(532.5)
Landfill, net
406.1 11.9 371.0 13.2 755.6 11.8 686.8 12.7 
Environmental solutions308.0 37.6 416.9 76.6 
Less: intercompany(13.7)(3.5)(23.3)(7.6)
Environmental solutions, net
294.38.6 34.11.2 393.66.2 69.01.3 
Other:
Recycling processing and commodity sales
113.6 3.3 103.0 3.7 213.3 3.3 190.6 3.5 
Other non-core
77.4 2.3 66.2 2.4 157.0 2.5 127.5 2.4 
Total other
191.0 5.6 169.2 6.1 370.3 5.8 318.1 5.9 
Total revenue$3,413.6 100.0 %$2,812.3 100.0 %$6,383.7 100.0 %$5,408.2 100.0 %
Other non-core revenue consists primarily of revenue from National Accounts, which represents the portion of revenue generated from nationwide or regional contracts in markets outside our operating areas where the associated material handling is subcontracted to local operators. Consequently, substantially all of this revenue is offset with related subcontract costs, which are recorded in cost of operations.
Environmental solutions revenue includes revenue generated by US Ecology following its acquisition on May 2, 2022.
The factors that impact the timing and amount of revenue recognized for each service line may vary based on the nature of the service performed. Generally, we recognize revenue at the time we perform a service. In the event that we bill for services in advance of performance, we recognize deferred revenue for the amount billed and subsequently recognize revenue at the time the service is provided. Depending on the nature of the contract, we may also generate revenue through the collection of fuel recovery fees and environmental fees which are designed to recover our internal costs of providing services to our customers. Substantially all of the deferred revenue recognized as of December 31, 2021 was recognized as revenue during the six months ended June 30, 2022 when the service was performed.
See Note 12, Segment Reporting, for additional information regarding revenue by reportable segment.
Revenue Recognition
Our service obligations of a long-term nature, e.g., certain collection service contracts and waste treatment and disposal contracts are satisfied over time, and we recognize revenue based on the value provided to the customer during the period. The amount billed to the customer is based on variable elements such as the number of residential homes or businesses for which collection services are provided, the volume of material collected, transported and disposed, and the nature of the material accepted. We do not disclose the value of unsatisfied performance obligations for these contracts as our right to consideration corresponds directly to the value provided to the customer for services completed to date and all future variable consideration is allocated to wholly unsatisfied performance obligations.
Certain elements of our long-term customer contracts are unknown upon entering into the contract, including the amount that will be billed in accordance with annual price escalation clauses, our fuel recovery fee program and commodity prices. The amount to be billed is often tied to changes in an underlying base index such as a consumer price index or a fuel or commodity index, and revenue can be recognized once the index is established for the period.
Deferred Contract Costs
We incur certain upfront payments to acquire customer contracts which are recognized as other assets in our consolidated balance sheet, and we amortize the asset over the respective contract life. In addition, we recognize sales commissions that represent an incremental cost of the contract as other assets in our consolidated balance sheets, and we amortize the asset over the average life of the customer relationship. As of June 30, 2022 and December 31, 2021, we recognized $79.8 million and $80.6 million, respectively, of deferred contract costs and capitalized sales commissions. During the three and six months ended June 30, 2022, we amortized $3.5 million and $6.7 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $1.5 million and $3.0 million, respectively, of other deferred contract costs as a reduction of revenue. During the three and six months ended June 30, 2021, we amortized $3.2 million and $6.4 million, respectively, of capitalized sales commissions to selling, general and administrative expenses and we amortized $1.6 million and $3.1 million, respectively, of other deferred contract costs as a reduction of revenue.
Credit Losses
Accounts receivable represent receivables from customers for environmental services, including collection and processing of recyclable materials, collection, transfer, and disposal of solid waste, and other environmental solutions. Our receivables are recorded when billed or when the related revenue is earned and represent claims against third parties that will be settled in cash. The carrying value of our receivables, net of the allowance for doubtful accounts and customer credits, represents their estimated net realizable value.
We establish an allowance for doubtful accounts based on various factors including the age of receivables outstanding, historical trends, economic conditions and other information. We also review outstanding balances on an account-specific basis based on the credit risk of the customer. We determined that all of our accounts receivable share similar risk characteristics. We monitor our credit exposure on an ongoing basis and assess whether assets in the pool continue to display similar risk characteristics. We perform ongoing credit evaluations of our customers, but generally do not require collateral to support customer receivables.
The following table reflects the activity in our allowance for doubtful accounts for the six months ended June 30, 2022 and 2021:
20222021
Balance at beginning of year$38.5 $34.7 
Additions charged to expense17.2 11.4 
Accounts written-off(5.1)(7.0)
Balance at end of period$50.6 $39.1