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Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Information

Note 16.     Segment Information

The Company manages its operations under three operating segments, which represent the Company’s three reportable segments: Safety Services, Specialty Services, and Industrial Services. The segments derive their revenue from distribution, fabrication and various types of service and contracts, primarily in the United States as well as Canada and the United Kingdom.

The Safety Services segment focuses on end-to-end integrated occupancy systems (fire protection services, HVAC, and entry systems) including design, installation, inspection and service of these integrated systems. The work performed within this segment spans across industries and facilities and includes commercial, education, healthcare, high tech, industrial and special-hazard settings.

The Specialty Services segment provides infrastructure services and specialized industrial plant services, which include maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer and telecommunications infrastructure. Customers within this segment vary from private and public utilities, communications, healthcare, education, manufacturing, industrial plants and governmental agencies throughout the United States.

The Industrial Services segment provides a variety of services to the energy industry focused on transmission and distribution. Services within this segment include oil and gas pipeline infrastructure, access and road construction, supporting facilities, and performing ongoing integrity management and maintenance.

The accounting policies of the reportable segments are the same as those described in Note 2 – “Basis of Presentation and Significant Accounting Policies”. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenue and costs between entities within a reportable segment are eliminated to arrive at segment totals, and eliminations between segments are separately presented. Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition-related transaction costs (exclusive of acquisition integration costs, which are included within the segment results of the acquired businesses), and other discrete items.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting. As appropriate, the Company supplements the reporting of consolidated financial information determined in accordance with U.S. GAAP with certain non-U.S. GAAP financial measures, including EBITDA. The Company believes these non-U.S. GAAP measures provide meaningful information and help investors understand the Company’s financial results and assess its prospects for future performance. The Company uses EBITDA to evaluate its performance, both internally and as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results for its reportable segments. Segment EBITDA is calculated in a manner consistent with consolidated EBITDA.

Summarized financial information for the Company’s reportable segments are presented and reconciled to consolidated financial information in the following tables, including a reconciliation of consolidated operating income to EBITDA. The tables below may contain slight summation differences due to rounding: 

 

  

 

Three Months Ended September 30, 2020 (Successor)

 

 

 

Safety

Services

 

 

Specialty

Services

 

 

Industrial

Services

 

 

Corporate and

Eliminations

 

 

Consolidated

 

Net revenues

 

$

404

 

 

$

400

 

 

$

158

 

 

$

(4

)

 

$

958

 

EBITDA Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(24

)

 

$

105

 

 

$

17

 

 

$

(36

)

 

$

62

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income and other, net

 

 

4

 

 

 

5

 

 

 

—

 

 

 

(3

)

 

 

6

 

Depreciation(1)

 

 

2

 

 

 

11

 

 

 

6

 

 

 

2

 

 

 

21

 

Amortization(2)

 

 

35

 

 

 

5

 

 

 

(10

)

 

 

1

 

 

 

31

 

EBITDA

 

$

17

 

 

$

126

 

 

$

13

 

 

$

(36

)

 

$

120

 

Total assets

 

$

1,702

 

 

$

1,105

 

 

$

341

 

 

$

678

 

 

$

3,826

 

Capital expenditures

 

 

—

 

 

 

5

 

 

 

2

 

 

 

—

 

 

 

7

 

 

 

 

Three Months Ended September 30, 2019 (Predecessor)

 

 

 

Safety

Services

 

 

Specialty

Services

 

 

Industrial

Services

 

 

Corporate and

Eliminations

 

 

Consolidated

 

Net revenues

 

$

472

 

 

$

407

 

 

$

245

 

 

$

(6

)

 

$

1,118

 

EBITDA Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

56

 

 

$

32

 

 

$

6

 

 

$

(81

)

 

$

13

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income and other, net

 

 

—

 

 

 

6

 

 

 

1

 

 

 

1

 

 

 

8

 

Depreciation

 

 

1

 

 

 

10

 

 

 

6

 

 

 

2

 

 

 

19

 

Amortization

 

 

1

 

 

 

5

 

 

 

2

 

 

 

—

 

 

 

8

 

EBITDA

 

$

58

 

 

$

53

 

 

$

15

 

 

$

(78

)

 

$

48

 

Total assets

 

$

812

 

 

$

882

 

 

$

394

 

 

$

227

 

 

$

2,315

 

Capital expenditures

 

 

—

 

 

 

7

 

 

 

5

 

 

 

1

 

 

 

13

 

 

 

 

Nine Months Ended September 30, 2020 (Successor)

 

 

 

Safety

Services

 

 

Specialty

Services

 

 

Industrial

Services

 

 

Corporate and

Eliminations

 

 

Consolidated

 

Net revenues

 

$

1,199

 

 

$

1,049

 

 

$

468

 

 

$

(11

)

 

$

2,705

 

EBITDA Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

$

(12

)

 

$

(9

)

 

$

(37

)

 

$

(87

)

 

$

(145

)

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income and other, net

 

 

9

 

 

 

13

 

 

 

—

 

 

 

(2

)

 

 

20

 

Depreciation(1)

 

 

4

 

 

 

35

 

 

 

19

 

 

 

4

 

 

 

62

 

Amortization(2)

 

 

83

 

 

 

41

 

 

 

7

 

 

 

3

 

 

 

134

 

EBITDA

 

$

84

 

 

$

80

 

 

$

(11

)

 

$

(82

)

 

$

71

 

Total assets

 

$

1,702

 

 

$

1,105

 

 

$

341

 

 

$

678

 

 

$

3,826

 

Capital expenditures

 

 

1

 

 

 

14

 

 

 

8

 

 

 

1

 

 

 

24

 

 

 

 

Nine Months Ended September 30, 2019 (Predecessor)

 

 

 

Safety

Services

 

 

Specialty

Services

 

 

Industrial

Services

 

 

Corporate and

Eliminations

 

 

Consolidated

 

Net revenues

 

$

1,342

 

 

$

1,107

 

 

$

670

 

 

$

(12

)

 

$

3,107

 

EBITDA Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

161

 

 

$

60

 

 

$

—

 

 

$

(119

)

 

$

102

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income and other, net

 

 

1

 

 

 

7

 

 

 

1

 

 

 

2

 

 

 

11

 

Depreciation

 

 

4

 

 

 

28

 

 

 

14

 

 

 

6

 

 

 

52

 

Amortization

 

 

4

 

 

 

16

 

 

 

6

 

 

 

—

 

 

 

26

 

EBITDA

 

$

170

 

 

$

111

 

 

$

21

 

 

$

(111

)

 

$

191

 

Total assets

 

$

812

 

 

$

882

 

 

$

394

 

 

$

227

 

 

$

2,315

 

Capital expenditures

 

 

4

 

 

 

27

 

 

 

21

 

 

 

1

 

 

 

53

 

 

(1)

Depreciation for the nine months ended September 30, 2020 includes a cumulative adjustment to depreciation expense resulting from the measurement period adjustments of property and equipment. Refer to Note 10 – “Property and Equipment, Net” for additional information. The adjustment to depreciation expense recorded during the nine months ended September 30, 2020 was $(2), $5, $3 and $(2) for the Safety Services, Specialty Services, Industrial Services and Corporate and Eliminations segments, respectively. If the property and equipment fair values had been known at the date of the APi Acquisition, depreciation expense for the year ended December 31, 2019 (Successor) would have changed by $(1), $2, $2, and $(1) for the Safety Services, Specialty Services, Industrial Services and Corporate and Eliminations segments, respectively. If the property and equipment fair values had been known at the date of the APi Acquisition, depreciation expense for the three months ended March 30, 2020 would have changed by $(1), $3, $1, and $(1) for the Safety Services, Specialty Services, Industrial Services and Corporate and Eliminations segments, respectively. EBITDA as presented in the above EBITDA reconciliation tables, would not have been impacted by these changes.  

(2)

Amortization for the three and nine months ended September 30, 2020 includes a cumulative adjustment to amortization expense resulting from the measurement period adjustments to intangible assets. Refer to Note 7 – “Goodwill and Intangibles” for additional information. The adjustment to amortization expense recorded during the three and nine months ended September 30, 2020 was $8, $(9), and $(14) for the Safety Services, Specialty Services, and Industrial Services segments, respectively. If the intangible asset values had been known at the date of the APi Acquisition, amortization expense would have changed for the Safety Services, Specialty Services and Industrial Services segments by $3, $(3), and $(5) for the year ended December 31, 2019, $3, $(3), and $(5) for the three months ended March 30, 2020, and $2, $(3), and $(4) for the three months ended June 30, 2020, respectively. EBITDA, as presented in the above EBITDA reconciliation tables, would not have been impacted by these changes.