ADVANCED DISPOSAL SERVICES, INC., 10-Q filed on 7/31/2020
Quarterly Report
v3.20.2
Cover Page - shares
6 Months Ended
Jun. 30, 2020
Jul. 23, 2020
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Entity File Number 001-37904  
Entity Registrant Name Advanced Disposal Services, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 90-0875845  
Entity Address, Address Line One 90 Fort Wade Road  
Entity Address, City or Town Ponte Vedra  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 32081  
City Area Code 904  
Local Phone Number 737-7900  
Title of 12(b) Security Common Stock, $0.01 par value  
Trading Symbol ADSW  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   90,758,187
Amendment Flag false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Entity Central Index Key 0001585790  
Current Fiscal Year End Date --12-31  
v3.20.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 31.4 $ 12.5
Accounts receivable, net of allowance for doubtful accounts of 4.8 and $4.5, respectively 193.8 208.3
Prepaid expenses and other current assets 34.6 44.0
Total current assets 259.8 264.8
Other assets 52.6 53.3
Property and equipment, net of accumulated depreciation of $1,809.6 and $1,720.7, respectively 1,748.2 1,767.6
Goodwill 1,224.8 1,224.8
Other intangible assets, net of accumulated amortization of $333.6 and $318.1, respectively 217.5 233.0
Total assets 3,502.9 3,543.5
Current liabilities    
Accounts payable 121.9 120.7
Accrued expenses 109.1 124.5
Deferred revenue 67.5 71.3
Current maturities of landfill retirement obligations 20.2 28.0
Current maturities of long-term debt 41.3 76.1
Total current liabilities 360.0 420.6
Other long-term liabilities 90.1 82.7
Long-term debt, less current maturities 1,762.7 1,792.1
Accrued landfill retirement obligations, less current maturities 255.1 236.2
Deferred income taxes 89.1 88.5
Total liabilities 2,557.0 2,620.1
Equity    
Common stock: $.01 par value, 1,000,000,000 shares authorized, 90,906,005 and 89,836,069 issued including shares held in treasury, respectively 0.9 0.9
Treasury stock at cost, 178,540 and 132,930 shares, respectively (5.6) (4.1)
Additional paid-in capital 1,551.0 1,527.7
Accumulated deficit (598.2) (598.1)
Accumulated other comprehensive loss (2.2) (3.0)
Total stockholders' equity 945.9 923.4
Total liabilities and stockholders’ equity $ 3,502.9 $ 3,543.5
v3.20.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts receivable $ 4.8 $ 4.5
Accumulated depreciation property and equipment 1,809.6 1,720.7
Accumulated amortization other intangible assets $ 333.6 $ 318.1
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Common stock, shares outstanding (in shares) 90,906,005 89,836,069
Treasury stock at cost (in shares) 178,540 132,930
v3.20.2
Condensed Consolidated Statements of Operations - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Service revenues $ 380.3 $ 419.1 $ 767.0 $ 803.1
Operating costs and expenses        
Operating (exclusive of items shown separately below) 242.3 277.2 499.7 526.6
Selling, general and administrative 45.7 62.2 96.7 112.0
Depreciation and amortization 64.1 70.3 128.7 136.2
Acquisition and development costs 0.0 0.2 0.0 1.0
Loss on disposal of assets and asset impairments 0.5 0.5 0.6 0.7
Total operating costs and expenses 352.6 410.4 725.7 776.5
Operating income 27.7 8.7 41.3 26.6
Other (expense) income        
Interest expense (19.8) (26.2) (42.4) (52.2)
Other income (expense), net 0.2 (3.5) 0.9 (2.8)
Total other expense (19.6) (29.7) (41.5) (55.0)
Income (loss) before income taxes 8.1 (21.0) (0.2) (28.4)
Income tax expense (benefit) 1.9 (20.0) (0.1) (21.4)
Net income (loss) $ 6.2 $ (1.0) $ (0.1) $ (7.0)
Net income (loss) attributable to common stockholders per share        
Basic income (loss) per share (in dollars per share) $ 0.07 $ (0.01) $ 0 $ (0.08)
Diluted income (loss) per share (in dollars per share) $ 0.07 $ (0.01) $ 0 $ (0.08)
Basic average shares outstanding (in shares) 90,424,107 88,857,948 90,167,026 88,790,157
Diluted average shares outstanding (in shares) 91,557,116 88,857,948 90,167,026 88,790,157
v3.20.2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ 6.2 $ (1.0) $ (0.1) $ (7.0)
Change in fair value of interest rate caps, net of tax for the three months ended June 30, 2020 and 2019 of ($0.2) and $0.5, respectively and for the six months ended June 30, 2020 and 2019 of ($0.3) and $1.3, respectively 0.4 (1.3) 0.8  
Change in fair value of interest rate caps, net of tax for the three months ended June 30, 2020 and 2019 of ($0.2) and $0.5, respectively and for the six months ended June 30, 2020 and 2019 of ($0.3) and $1.3, respectively   (1.3)   (3.3)
Comprehensive income (loss) $ 6.6 $ (2.3) $ 0.7 $ (10.3)
v3.20.2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]            
Change in fair value of interest rate caps, tax $ (0.2) $ (0.1) $ 0.5 $ 0.8 $ (0.3) $ 1.3
v3.20.2
Condensed Consolidated Statements of Stockholders' Equity - USD ($)
$ in Millions
Total
Common Stock
Treasury Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive (Loss) Income
Balance (in shares) at Dec. 31, 2018   88,685,920 2,274      
Balance at Dec. 31, 2018 $ 911.5 $ 0.9 $ 0.0 $ 1,501.7 $ (591.1) $ 0.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) (6.0)       (6.0)  
Stock-based compensation (in shares)   18,735        
Stock-based compensation 4.1     4.1    
Stock option exercises (in shares)   90,807        
Stock option exercises 1.9     1.9    
Balance (in shares) at Mar. 31, 2019   88,795,462 2,274      
Balance at Mar. 31, 2019 909.5 $ 0.9 $ 0.0 1,507.7 (597.5) (1.6)
Balance (in shares) at Dec. 31, 2018   88,685,920 2,274      
Balance at Dec. 31, 2018 911.5 $ 0.9 $ 0.0 1,501.7 (591.1) 0.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) (7.0)          
Balance (in shares) at Jun. 30, 2019   88,934,243 18,636      
Balance at Jun. 30, 2019 910.8 $ 0.9 $ (0.6) 1,511.9 (598.5) (2.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Impact of implementing new revenue recognition and new derivatives standards, net of tax 0.0       (0.4) 0.4
Balance (in shares) at Mar. 31, 2019   88,795,462 2,274      
Balance at Mar. 31, 2019 909.5 $ 0.9 $ 0.0 1,507.7 (597.5) (1.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) (1.0)       (1.0)  
Stock-based compensation 2.2     2.2    
Unrealized loss resulting from change in fair value of derivative instruments, net of tax (1.3)         (1.3)
Stock option exercises and performance stock units vested (in shares)   138,781        
Stock option exercises and performance stock units vested 2.0     2.0    
Stock repurchases (in shares) [1]     16,362      
Stock repurchases [1] (0.6)   $ (0.6)      
Balance (in shares) at Jun. 30, 2019   88,934,243 18,636      
Balance at Jun. 30, 2019 910.8 $ 0.9 $ (0.6) 1,511.9 (598.5) (2.9)
Balance (in shares) at Dec. 31, 2019   89,836,069 132,930      
Balance at Dec. 31, 2019 923.4 $ 0.9 $ (4.1) 1,527.7 (598.1) (3.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) (6.3)       (6.3)  
Stock-based compensation 1.6     1.6    
Unrealized loss resulting from change in fair value of derivative instruments, net of tax 0.4         0.4
Stock option exercises and performance stock units vested (in shares)   441,632        
Stock option exercises and performance stock units vested 6.4     6.4    
Stock repurchases (in shares) [1]     45,610      
Stock repurchases [1] (1.5)   $ (1.5)      
Balance (in shares) at Mar. 31, 2020   90,277,701 178,540      
Balance at Mar. 31, 2020 924.0 $ 0.9 $ (5.6) 1,535.7 (604.4) (2.6)
Balance (in shares) at Dec. 31, 2019   89,836,069 132,930      
Balance at Dec. 31, 2019 923.4 $ 0.9 $ (4.1) 1,527.7 (598.1) (3.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) (0.1)          
Unrealized loss resulting from change in fair value of derivative instruments, net of tax 0.8          
Balance (in shares) at Jun. 30, 2020   90,906,005 178,540      
Balance at Jun. 30, 2020 945.9 $ 0.9 $ (5.6) 1,551.0 (598.2) (2.2)
Balance (in shares) at Mar. 31, 2020   90,277,701 178,540      
Balance at Mar. 31, 2020 924.0 $ 0.9 $ (5.6) 1,535.7 (604.4) (2.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) 6.2       6.2  
Stock-based compensation 1.3     1.3    
Unrealized loss resulting from change in fair value of derivative instruments, net of tax 0.4         0.4
Stock option exercises and performance stock units vested (in shares)   628,304        
Stock option exercises and performance stock units vested 14.0     14.0    
Balance (in shares) at Jun. 30, 2020   90,906,005 178,540      
Balance at Jun. 30, 2020 $ 945.9 $ 0.9 $ (5.6) $ 1,551.0 $ (598.2) $ (2.2)
[1] Stock repurchases represent shares withheld by the Company to pay employee taxes associated with restricted stock unit vesting and performance stock unit vesting.
v3.20.2
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical)
$ in Millions
3 Months Ended
Mar. 31, 2019
USD ($)
Statement of Stockholders' Equity [Abstract]  
Unrealized loss resulting from change in fair value of derivative instruments, tax $ 0.8
Impact of implementing new revenue recognition standard, tax $ (0.2)
v3.20.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash flows from operating activities    
Net income (loss) $ (0.1) $ (7.0)
Adjustments to reconcile net loss to net cash provided by operating activities    
Depreciation and amortization 128.7 136.2
Change in fair value of derivative instruments 0.0 4.6
Amortization of debt issuance costs and original issue discount 3.0 2.8
Accretion on landfill retirement obligations 8.9 8.7
Other accretion and amortization 3.5 3.4
Provision for doubtful accounts 2.7 3.2
Loss on disposition of property and equipment 0.6 0.7
Stock based compensation 2.9 6.3
Deferred tax expense (benefit) 0.3 (17.8)
Earnings in equity investee (0.4) (1.1)
Write-off of 2012 Veolia acquisition related indemnification receivable 0.0 3.9
Changes in operating assets and liabilities, net of businesses acquired    
Decrease (increase) in accounts receivable 11.8 (10.2)
Decrease in prepaid expenses and other current assets 9.4 3.4
(Increase) decrease in other assets (1.2) 1.9
Increase in accounts payable 8.3 15.4
(Decrease) increase in accrued expenses (15.4) 4.4
Decrease in deferred revenue (3.8) (1.1)
Increase (decrease) in other long-term liabilities 7.1 (1.7)
Capping, closure and post-closure obligations (4.6) (7.5)
Net cash provided by operating activities 161.7 148.5
Cash flows from investing activities    
Purchases of property and equipment and construction and development (87.5) (83.4)
Proceeds from sale of property and equipment and insurance recoveries 0.8 1.7
Acquisition of businesses, net of cash acquired 0.0 (27.1)
Net cash used in investing activities (86.7) (108.8)
Cash flows from financing activities    
Proceeds from borrowings on debt instruments 70.0 101.0
Repayment on debt instruments, including finance leases (145.0) (140.1)
Proceeds from stock option exercises net of stock repurchases 18.9 3.3
Net cash used in financing activities (56.1) (35.8)
Net increase in cash and cash equivalents 18.9 3.9
Cash and cash equivalents, beginning of period 12.5 6.8
Cash and cash equivalents, end of period $ 31.4 $ 10.7
v3.20.2
Business Operations
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Operations
Business Operations
Operations
Advanced Disposal Services, Inc. together with its consolidated subsidiaries (the "Company"), as a consolidated entity, is a non-hazardous solid waste services company which provides collection, transfer, recycling and disposal services. The Company manages and evaluates its principal operations through three reportable operating segments on a regional basis. Those operating segments are the South, East and Midwest regions. Additional information related to segments can be found in Note 10.
Acquisitions
No acquisitions were completed during the six months ended June 30, 2020. Two acquisitions were completed during the six months ended June 30, 2019 for aggregate consideration consisting of a cash purchase price of $24.9. Additionally, the Company made a $2.2 deferred purchase price payment during the six months ended June 30, 2019 related to an acquisition completed during the fourth quarter of fiscal 2018. The results of operations of each acquisition are included in the Company's unaudited condensed consolidated statements of operations subsequent to the closing date of each acquisition.
COVID-19

The Company is experiencing volume declines in all of its lines of business except residential due to deteriorating macroeconomic conditions and stay-at-home orders resulting from the COVID-19 pandemic. The Company is taking a number of steps to respond to this challenge including the following:

Reducing or eliminating face-to-face interactions with its employees;
Executing on enhanced protocols to keep vehicles, common areas, and offices extra clean;
Procuring additional personal protective equipment including masks, gloves, hand sanitizer, and cleaning solutions;
Reallocating resources, reducing overtime, and parking surplus equipment to reduce operating costs;
Rerouting where needed to maximize productivity and meet customer needs;
Flexing capital spending while still meeting business needs;
Significantly reducing travel and discretionary spending; and
Maintaining higher target cash balances and as of June 30, 2020 able to access $271.7 million of additional liquidity from its revolving credit facility supported by a diverse group of lenders.
v3.20.2
Basis of Presentation
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation
The Company’s condensed consolidated financial statements include its wholly-owned subsidiaries and their respective subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The condensed consolidated financial statements as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 are unaudited. In the opinion of management, these condensed consolidated financial statements include all adjustments, which, unless otherwise disclosed, are of a normal recurring nature, necessary for a fair statement of the balance sheet, results of operations, comprehensive income (loss), cash flows, and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The financial statements presented herein should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
In conformity with accounting principles generally accepted in the United States of America, the Company uses estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. The Company must make these estimates and assumptions because certain information that it uses is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. In preparing the Company's financial statements, the more subjective areas that deal with the greatest amount of uncertainty relate to: accounting for long-lived assets, including recoverability; landfill development costs; final capping, closure and post-closure costs; valuation allowances for accounts receivable and deferred tax assets; liabilities for potential litigation, claims and assessments; liabilities for environmental remediation; stock compensation; accounting for goodwill and intangible asset impairments; deferred taxes; uncertain tax positions; self-insurance reserves; and estimates of the fair value of assets acquired and liabilities assumed in any acquisition. Actual results could differ materially from the estimates and assumptions that the Company uses in preparation of its financial statements.
Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU 2016-13 associated with the measurement of credit losses on financial instruments. The amended guidance replaces the previous incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. The amended guidance was effective for the Company on January 1, 2020. Based on the amended guidance, the Company estimates credit losses for uncollectible accounts based on an evaluation of the aged accounts receivable and the likelihood of collection of the receivable based on historical collection data adjusted for forward-looking economic conditions. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on its condensed consolidated financial statements.
v3.20.2
Revenue Recognition
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Revenue Recognition
Revenue by Segment
See Note 10 for information related to revenue by reportable segment and major line of business.
Capitalized Sales Commissions
Under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company capitalizes sales commissions as contract assets related to commercial and permanent rolloff collection customers and amortizes those sales commissions over the estimated customer life. The balance of capitalized sales commissions as of June 30, 2020 and December 31, 2019 were $4.5 and $4.7, respectively. The Company recorded amortization expense of $0.4 and $0.4 related to capitalized sales commissions for the three months ended June 30, 2020 and 2019, respectively. The Company recorded amortization expense of $0.8 and $0.8 related to capitalized sales commissions for the six months ended June 30, 2020 and 2019, respectively.
Deferred Revenues
The Company records deferred revenue when cash payments are received or are due in advance of the Company's performance. The decrease in the deferred revenue balance from December 31, 2019 to June 30, 2020 is primarily driven by $69.6 of revenues recognized that were included in the deferred revenue balance at December 31, 2019, offset by cash payments received or due in advance of the Company satisfying its performance obligations.
Practical Expedients
As allowed by ASC 606, the Company does not disclose the value of unsatisfied performance obligations related to its contracts and service agreements as the Company accounts for its revenue as variable consideration and has the right to invoice for services performed each period.
v3.20.2
Landfill Liabilities
6 Months Ended
Jun. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]  
Landfill Liabilities
Landfill Liabilities
Liabilities for final closure and post-closure costs for the year ended December 31, 2019 and for the six months ended June 30, 2020 are shown in the table below:
Balance at December 31, 2018
$
248.0

Increase in retirement obligation
11.0

Accretion of closure and post-closure costs
18.0

Asset retirement obligation adjustments
6.9

Costs incurred
(19.7
)
Balance at December 31, 2019
264.2

Increase in retirement obligation
5.2

Accretion of closure and post-closure costs
8.9

Costs incurred
(3.0
)
Balance at June 30, 2020
275.3

Less: Current portion
(20.2
)

$
255.1


v3.20.2
Income (loss) Per Share
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Income (loss) Per Share oss) Per Share

The following table sets forth the computation of basic income (loss) per share and income (loss) per share, assuming dilution:

 
Three Months Ended June 30,

Six Months Ended June 30,

 
2020

2019

2020

2019
Numerator:











Net income (loss)
$
6.2


$
(1.0
)

$
(0.1
)

$
(7.0
)
Denominator:









Average common shares outstanding
90,424,107


88,857,948


90,167,026


88,790,157


Other potentially dilutive common shares
1,133,009








Average common shares outstanding, assuming dilution
91,557,116


88,857,948


90,167,026


88,790,157















Basic net income (loss) per share
$
0.07


$
(0.01
)

$


$
(0.08
)

Diluted net income (loss) per share
$
0.07


$
(0.01
)

$


$
(0.08
)

Basic net income (loss) per share is based on the weighted-average number of shares of common stock outstanding for each of the periods presented. Diluted net income (loss) per share is based on the weighted-average number of shares of common stock equivalents outstanding adjusted for the effects of common stock that may be issued as a result of potentially dilutive instruments. The Company's potentially dilutive instruments are made up of equity awards, which include stock options, restricted stock units and performance stock units. Since the Company is in a loss position for the six months ended June 30, 2020 and the three and six months ended June 30, 2019, no potentially dilutive common shares are included in the average common shares outstanding, assuming dilution for those periods presented.
No outstanding stock awards were excluded from the diluted net income per share calculation for the three months ended June 30, 2020 and 3.7 million stock awards were excluded from the diluted loss per share calculation for the six months ended June 30, 2020, because their effect was antidilutive. Approximately 5.4 million and 5.5 million of outstanding stock awards were excluded from the diluted net loss per share calculation for the three and six months ended June 30, 2019, respectively, because their effect was antidilutive.
v3.20.2
Debt
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Debt
Debt
The following table summarizes the major components of debt at each balance sheet date and provides the maturities and interest rate ranges of each major category of debt:
 
June 30,
2020
 
December 31,
2019
Revolving line of credit with lenders (Revolver), interest at applicable rate plus margin, as defined (0.00% and 5.43% at June 30, 2020 and December 31, 2019, respectively) due quarterly; balance due at maturity in November 2021
$

 
$
30.0

Term loans (Term Loan B); quarterly payments of $3.75 commencing March 31, 2017 through September 30, 2023 with final payment due November 10, 2023; interest at an alternate base rate or adjusted LIBOR rate with a 0.75% floor plus an applicable margin
1,346.1

 
1,372.5

Senior notes (Senior Notes) payable; interest at 5.625% payable in arrears semi-annually commencing May 15, 2017; maturing on November 15, 2024
425.0

 
425.0

Finance lease obligations, maturing through 2024
43.5

 
52.6

Other debt
6.8

 
8.1

 
1,821.4

 
1,888.2

Less: Original issue discount and debt issuance costs classified as a reduction to long-term debt
(17.4
)
 
(20.0
)
Less: Current portion
(41.3
)
 
(76.1
)
 
$
1,762.7

 
$
1,792.1


All borrowings under the Term Loan B, Revolver and Senior Notes are guaranteed by each of the Company's current and future domestic subsidiaries, subject to certain agreed-upon exemptions. All guarantors are jointly, severally, fully and unconditionally liable. There are no significant restrictions on the Company or any guarantor to obtain funds from its subsidiaries by dividend or loan.

Revolver and Letter of Credit Facilities

As of June 30, 2020, the Company had an aggregate committed capacity of $300.0, of which $100.0 was available for letters of credit under its credit facilities. The Company’s Revolver is its primary source of letter of credit capacity and expires in 2021. As of June 30, 2020 and December 31, 2019, the Company had $0.0 and $30.0 of borrowings outstanding on the Revolver, respectively. As of June 30, 2020 and December 31, 2019, the Company had an aggregate of $28.3 and $28.5, respectively, of letters of credit outstanding under its credit facilities. The Company has ample liquidity available through its Revolver which is supported by a diverse group of lenders.
v3.20.2
Derivative Instruments and Hedging Activities
6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities
The following table summarizes the fair values of derivative instruments recorded in the Company’s condensed consolidated balance sheets:


Balance Sheet Location

June 30, 2020

December 31,
2019
Derivatives Designated as Hedging Instruments








2017 Interest rate caps

Accrued expenses

(2.4
)

(2.4
)
2017 Interest rate caps

Other long-term liabilities

(0.6
)

(1.7
)
Total derivatives



$
(3.0
)

$
(4.1
)

The Company has not offset fair value of assets and liabilities recognized for its derivative instruments.
Interest Rate Caps

In November 2017, the Company entered into two interest rate cap agreements as cash flow hedges (the "2017 interest rate caps") to hedge the risk of a rise in interest rates and associated cash flows on its variable rate debt. The Company has applied hedge accounting to the 2017 interest rate caps; therefore, changes in the fair value of the 2017 interest rate caps are recorded in change in fair value of interest rate caps, net of tax in the condensed consolidated statements of comprehensive income (loss). The 2017 interest rate caps commenced in 2019 and expire in 2021. The Company is paying the $4.9 premium on the 2017 interest rate caps in monthly installments beginning in October 2019. The Company recorded a loss of $0.2 related to the 2017 interest rate caps for the three months ended June 30, 2020 of which a $0.6 loss was recorded to interest expense in the consolidated statement of operations and a $0.4 gain was recorded in change in fair value of interest rate caps, net of tax in the condensed consolidated statement of comprehensive income (loss). The Company recorded a loss of $1.8 related to the 2017 interest rate caps for the three months ended June 30, 2019 which was recorded in change in fair value of interest rate caps, net of tax in the condensed consolidated statement of comprehensive income (loss). The Company recorded a loss of $0.4 related to the 2017 interest rate caps for the six months ended June 30, 2020 of which a $1.2 loss was recorded to interest expense in the consolidated statement of operations and a $0.8 gain was recorded in change in fair value of interest rate caps, net of tax in the condensed consolidated statement of comprehensive income (loss). The Company recorded a loss of $4.6 related to the 2017 interest rate caps for the six months ended June 30, 2019 which was recorded in change in fair value of interest rate caps, net of tax in the condensed consolidated statement of comprehensive income (loss). The notional value of the 2017 interest rate cap contracts aggregated were $600.0 as of June 30, 2020 and will remain constant through maturity in 2021.
In May 2016, the Company entered into three interest rate cap agreements (the "2016 interest rate caps") as economic hedges against the risk of a rise in interest rates and the associated cash flows on its variable rate debt. The Company paid the $5.5 premium of the 2016 interest rate caps equally over eleven quarters beginning on March 31, 2017. The Company elected not to apply hedge accounting to the 2016 interest rate caps; therefore, changes in the fair value of the 2016 interest rate caps were recorded in other (expense) income, net in the condensed consolidated statements of operations. The Company recorded a loss related to the 2016 interest rate caps of $0.5 for the three months ended June 30, 2019. The Company recorded a loss related to
the 2016 interest rate caps of $0.9 for the six months ended June 30, 2019. The notional value of the 2016 interest rate cap contracts aggregated were constant at $800.0 over their term and matured on September 30, 2019.
v3.20.2
Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes

The Company’s effective income tax rate for the three months ended June 30, 2020 and 2019 was 23.5% and 95.3%, respectively. The Company evaluates its effective income tax rate at each interim period and adjusts it accordingly as facts and circumstances warrant. The difference between income taxes computed at the federal statutory rate of 21% and reported income taxes for the three months ended June 30, 2020 was primarily due to state and local taxes. The difference between income taxes computed at the federal statutory rate of 21% and reported income taxes for the three months ended June 30, 2019 was primarily due to the favorable impact of the settlement of the IRS audit of the Veolia subsidiaries for tax years 2004 - 2012.
The Company’s effective income tax rate for the six months ended June 30, 2020 and 2019 was 50.0% and 75.4%, respectively. The Company's effective income tax rate for the six months ended June 30, 2020 differs from the federal statutory rate of 21% as a result of income taxes on near break even pre tax loss.The difference between income taxes computed at the federal statutory rate of 21% and reported income tax benefit for the six months ended June 30, 2020 was primarily due to state and local taxes. The difference between income taxes computed at the federal statutory rate of 21% and reported income tax benefit for the six months ended June 30, 2019 was primarily due to the favorable impact of the settlement of the IRS audit of the Veolia subsidiaries for tax years 2004 - 2012.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted.  The CARES Act is designed to bring economic and fiscal relief to companies, small businesses, and individuals due to the COVID-19 health crisis.  In accordance with ASC 740, the income tax effects of the CARES Act should be reflected in the period of enactment.  The CARES Act enacts changes to net operating losses limitations, carry back of net operating losses, changes to depreciation of certain property, the acceleration of refunds for Alternative Minimum Tax (“AMT”), changes to the deductibility of interest expense, the deferral of certain payroll taxes and the allowance of certain employment tax credits.  The enactment of the CARES Act resulted in an additional acceleration of $1.5 of the minimum tax credit carryforward to the Company.  The current assets of the Company include a receivable of $3.0 for the refund of AMT credit. The AMT credit refund has subsequently been received in early July 2020. The additional provisions of the CARES Act did not have a material impact on the unaudited condensed consolidated financial statements for the six months ended June 30, 2020.
v3.20.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Financial Instruments
The Company has obtained letters of credit, performance bonds and insurance policies for the performance of the following: landfill final capping, closure and post-closure requirements; certain collection, landfill and transfer station contracts; environmental remediation; and other obligations. Letters of credit are supported by the Company’s Revolver (Note 6).
The Company does not expect that any claims against or draws on these instruments would have a material adverse effect on the Company’s condensed consolidated financial statements. The Company has not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for its current operations. In an ongoing effort to mitigate risks of future cost increases and reductions in available capacity, the Company continues to evaluate various options to access cost-effective sources of financial assurance.
Insurance
The Company carries insurance coverage for protection of its assets and operations from certain risks including automobile liability, general liability, real and personal property, workers' compensation, directors' and officers' liability, pollution, legal liability and other coverages the Company believes are customary to the industry. The Company's exposure to loss for insurance claims is generally limited to the per incident deductible, or self-insured retention, under the related insurance policy. Its exposure, however, could increase if its insurers are unable to meet their commitments on a timely basis.
The Company has retained a significant portion of the risks related to its automobile, general liability, workers' compensation and health claims programs. For its self-insured retentions, the exposure for unpaid claims and associated expenses, including incurred but not reported losses, is based on an actuarial valuation and internal estimates. The accruals for these liabilities could be revised if future occurrences or loss development significantly differ from the Company's assumptions used. The Company
does not expect the impact of any known casualty, property, environmental or other contingency to have a material impact on its financial condition, results of operations or cash flows.
Landfill Remediation
In fiscal 2018, the Company observed surface anomalies in specific areas of a landfill and received a proposed consent order, from a state environmental regulatory agency, outlining conditions required to be met at the landfill. As of June 30, 2020, $16.1 of expenditures related to the remediation accrual estimates have been incurred and $10.5 remains on the consolidated balance sheet which are expected to be incurred through 2023. These accruals include costs for an enhanced de-watering system and the associated removal, treatment, and disposal of leachate at the landfill. This amount could increase or decrease as a result of actual costs incurred to completion. Although it is reasonably possible this amount could change as a result of actual cost incurred to completion, the Company is unable to estimate a range of potential exposure due to the uncertainty of the remediation efforts required due to the nature of the process being undertaken.

Litigation and Other Matters

The Company and certain of its subsidiaries have been named as defendants in various class action suits. Past suits have alleged the Company charged improper charges (fuel, administrative and environmental charges) that were in breach of the Company's service agreements. The Company reached a settlement for $9.0 (inclusive of plaintiff attorneys’ fees and costs), resolving four of these cases in fiscal 2019. One of these cases (the "Flaccus" suit) has not been settled and is still pending. Given the inherent uncertainties of litigation, including the early stage of the Flaccus case, the unknown size of any potential class, and legal and factual issues in dispute, the outcome of this case cannot be predicted and a range of loss, if any, cannot currently be estimated.
The Company is subject to various other proceedings, lawsuits, disputes and claims and regulatory investigations arising in the ordinary course of its business. Many of these actions raise complex factual and legal issues and are subject to uncertainties. Actions filed against the Company include commercial, customer, and employment-related claims. The plaintiffs in some actions seek unspecified damages or injunctive relief, or both. These actions are in various procedural stages, and some are covered in part by insurance. Although the Company cannot predict the ultimate outcome and the range of loss cannot be currently estimated, the Company does not believe that the eventual outcome of any such action could have a material adverse effect on its business, financial condition, results of operations, or cash flows.     
Multiemployer Defined Benefit Pension Plans
Approximately 13.8% of the Company’s workforce is covered by collective bargaining agreements with various local unions across its operating regions. As a result of some of these agreements, certain of the Company’s subsidiaries are participating employers in a number of trustee-managed multiemployer, defined benefit pension plans for the affected employees.
A complete or partial withdrawal from a multiemployer pension plan may occur if employees covered by a collective bargaining agreement vote to decertify a union from continuing to represent them. The Company is not aware of any such actions in connection with continuing operations. As a result of certain prior discontinued operations, the Company is potentially exposed to certain withdrawal liabilities.
The Company does not believe that any future withdrawals, individually or in the aggregate, from the multiemployer plans to which it contributes could have a material adverse effect on the Company's business, financial condition or liquidity. However, such withdrawals could have a material adverse effect on the Company's results of operations for a particular reporting period, depending on the number of employees withdrawn in any future period and the financial condition of the multiemployer plan(s) at the time of such withdrawal(s).
v3.20.2
Segment and Related Information
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment and Related Information Segment and Related Information
The Company manages and evaluates its operations primarily through its South, East and Midwest regional segments. These three groups are presented below as the Company’s reportable segments. The Company’s three geographic operating segments provide collection, transfer, disposal and recycling services. The Company serves residential, commercial and industrial, and municipal customers throughout its operating segments.



Service revenues, operating income (loss) and depreciation and amortization for the Company's reportable segments for the periods indicated are shown in the following tables:
 
Service
Revenues
 
Operating
Income
(Loss)
 
Depreciation
and
Amortization
 
 
 
 
 
 
Three Months Ended June 30, 2020
 
 
 
 
 
South
$
155.2

 
$
24.3

 
$
21.5

East
93.3

 
5.4

 
19.1

Midwest
131.8

 
16.1

 
22.2

Corporate

 
(18.1
)
 
1.3

 
$
380.3

 
$
27.7

 
$
64.1

 
 
 
 
 
 
Three Months Ended June 30, 2019
 
 
 
 
 
South
$
162.0

 
$
14.3

 
$
21.7

East
109.5

 
6.8

 
21.6

Midwest
147.6

 
19.2

 
25.7

Corporate

 
(31.6
)
 
1.3

 
$
419.1

 
$
8.7

 
$
70.3

 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2020
 
 
 
 
 
South
$
317.4


$
46.0


$
44.0

East
187.2


6.7


37.9

Midwest
262.4


26.5


44.1

Corporate


(37.9
)

2.7

 
$
767.0


$
41.3


$
128.7

 
 
 
 
 
 
Six Months Ended June 30, 2019
 
 
 
 
 
South
$
321.9

 
$
38.3

 
$
44.4

East
204.4

 
8.5

 
40.7

Midwest
276.8

 
33.1

 
48.6

Corporate

 
(53.3
)
 
2.5

 
$
803.1

 
$
26.6

 
$
136.2











The following table presents the Company's revenues disaggregated by major line of business. Recycling rebates paid to customers, franchise fees paid to customers and state landfill taxes are excluded from revenues.


Three Months Ended June 30,
 
Six Months Ended June 30,


2020

2019
 
2020

2019
Residential Collection Revenue

$
107.3


$
102.3

 
$
213.1


$
203.0

Commercial Collection Revenue

91.9


99.6

 
192.2


197.5

Rolloff Collection Revenue

60.4


69.3

 
122.7


131.6

Disposal Revenue

62.3


77.3

 
120.3


138.1

Fuel and Environmental Charges

23.1


29.1

 
49.3


56.7

Sale of Recyclables

3.0


2.3

 
5.0


5.4

Other Revenue

32.3


39.2

 
64.4


70.8



$
380.3


$
419.1

 
$
767.0


$
803.1



Fluctuations in the Company's operating results may be caused by many factors, including period-to-period changes in the relative contribution of revenue by each line of business and operating segment and by general economic conditions. In addition, its revenues and income from operations typically reflect seasonal patterns. The Company expects its operating results to vary seasonally, with revenues typically lowest in the first quarter, higher in the second and third quarters and lower in the fourth quarter than in the second and third quarters. This seasonality reflects the lower volume of solid waste generated during the late fall, winter and early spring in the East and Midwest segments because of decreased construction and demolition activities during winter months in these regions of the United States. In addition, some of the Company's operating costs may be higher in the winter months. Adverse winter weather conditions slow waste collection activities, resulting in higher labor and operational costs. Greater precipitation in the winter increases the weight of collected municipal solid waste, resulting in higher disposal costs, which are calculated on a per ton basis.
Additionally, certain destructive weather conditions that tend to occur during the second half of the year, such as hurricanes that most often impact the South region, can increase the Company’s revenues in the areas affected. While weather-related and other occurrences can boost revenues through additional work, the earnings generated can be moderated as a result of significant start-up costs and other factors, resulting in earnings at comparatively lower margins. These destructive weather conditions can result in higher fuel costs, higher labor costs, reduced municipal contract productivity and higher disposal costs in disposal neutral markets. Certain weather conditions, including severe winter storms, may result in the temporary suspension of the Company’s operations, which can significantly affect the operating results of the affected regions.
v3.20.2
Fair Value Measurements
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Assets and Liabilities Accounted for at Fair Value
In measuring fair values of assets and liabilities, the Company uses valuation techniques that maximize the use of observable inputs (Level 1) and minimize the use of unobservable inputs (Level 3). The Company does not have any assets or liabilities measured using unobservable Level 3 inputs. The Company also uses market data or assumptions that it believes market participants would use in pricing an asset or liability, including assumptions about risk when appropriate. The carrying value for certain of the Company's financial instruments approximate fair value because of their short-term nature. The Company’s assets and liabilities that are measured at fair value on a recurring basis include the following:
 
 
 
Fair Value Measurement at June 30, 2020
Reporting Date Using
 
Total
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Carrying
Value
 
 
 
 
 
 
 
 
Recurring fair value measurements
 
 
 
 
 
 
 
Cash and cash equivalents
$
31.4

 
$
31.4

 
$

 
$
31.4

Interest rate caps - liability position
(3.0
)
 

 
(3.0
)
 
(3.0
)
Total recurring fair value measurements
$
28.4

 
$
31.4

 
$
(3.0
)
 
$
28.4

 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement at December 31, 2019
Reporting Date Using
 
Total
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Carrying
Value
 
 
 
 
 
 
 
 
Recurring fair value measurements
 
 
 
 
 
 
 
Cash and cash equivalents
$
12.5

 
$
12.5

 
$

 
$
12.5

Interest rate caps - liability position
(4.1
)

$


(4.1
)

(4.1
)
Total recurring fair value measurements
$
8.4


$
12.5


$
(4.1
)

$
8.4


The fair value of the interest rate caps are determined using standard option valuation models with assumptions about interest rates based on those observed in underlying markets (Level 2 in fair value hierarchy).
Fair Value of Debt
The fair value of the Company’s debt (Level 2) is estimated using indirectly observable market inputs, except for the Revolver for which cost approximates fair value due to the short-term nature of the interest rate. Although the Company has determined the estimated fair value amounts using quoted market prices, considerable judgment is required in interpreting the information and in developing the estimated fair values. Therefore, these estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. The fair value estimates are based on information available as of June 30, 2020 and December 31, 2019, respectively.





The estimated fair value of the Company’s debt is as follows:
 
June 30,
2020
 
December 31,
2019
Revolver
$


$
30.0

Senior Notes
440.9


443.4

Term Loan B
1,329.3


1,379.4


$
1,770.2


$
1,852.8


The carrying value of the Company’s debt at June 30, 2020 and December 31, 2019 was $1,771.1 and $1,827.5, respectively.
v3.20.2
Merger
6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
Merger Merger

Agreement and Plan of Merger

On April 14, 2019, the Company entered into an Agreement and Plan of Merger with Waste Management, Inc., a Delaware corporation (“Waste Management”)and a merger subsidiary of Waste Management.  On June 24, 2020, the Company, Waste Management, and the merger subsidiary of Waste Management entered into Amendment No. 1 to the merger agreement.  In exchange for agreeing to reduce the per share merger consideration to $30.30 per share in cash, the Company and Waste Management agreed to amend the terms of the original merger agreement to provide increased closing certainty to the Company’s stockholders, including by, among other things: (i) extending the end date from July 13, 2020 to September 30, 2020, which will be further extended automatically to November 30, 2020, subject to certain conditions; (ii) providing for a  $250.0 termination fee payable by Waste Management to the Company in certain circumstances; and (iii) providing that Waste Management must use ‘‘best efforts’’ to take all actions to consummate the transactions by the end date, including using its ‘‘best efforts’’ to obtain antitrust approval, and eliminating the $200.0 revenue threshold on the divestiture obligation of Waste Management as provided in the original merger agreement.

In connection with entering into the merger agreement amendment at the request of Waste Management in furtherance of the merger, Advanced Disposal entered into a Securities and Asset Purchase Agreement with GFL Holdco (US), LLC (“GFL”), Waste Management, and solely for the purposes set forth therein, GFL Environmental Inc., dated as of June 24, 2020 (as amended on July 29, 2020), which was executed to address all of the divestitures anticipated to be required by the U.S. Department of Justice to obtain antitrust approval for the merger. Pursuant to such agreement, GFL will purchase certain equity interests and assets from Advanced Disposal and Waste Management for an aggregate purchase price of $863.5 subsequent to the merger between Advanced Disposal and Waste Management.
v3.20.2
Equity Method Investment
6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investment Equity Method Investment

The Company uses the equity method to account for its 50% financial interest in Sanitation Services Company Limited. Summarized financial information for Sanitation Services Company Limited consists of the following:

(in millions)
Six Months Ended June 30,
 
2020
 
2019
Service revenue
$
7.4

 
$
7.8

Operating income
$
0.8

 
$
2.3

Income before income taxes
$
0.9

 
$
2.4

Net income
$
0.9

 
$
2.4


v3.20.2
Basis of Presentation (Policies)
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Consolidation
The Company’s condensed consolidated financial statements include its wholly-owned subsidiaries and their respective subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
In conformity with accounting principles generally accepted in the United States of America, the Company uses estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. The Company must make these estimates and assumptions because certain information that it uses is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. In preparing the Company's financial statements, the more subjective areas that deal with the greatest amount of uncertainty relate to: accounting for long-lived assets, including recoverability; landfill development costs; final capping, closure and post-closure costs; valuation allowances for accounts receivable and deferred tax assets; liabilities for potential litigation, claims and assessments; liabilities for environmental remediation; stock compensation; accounting for goodwill and intangible asset impairments; deferred taxes; uncertain tax positions; self-insurance reserves; and estimates of the fair value of assets acquired and liabilities assumed in any acquisition. Actual results could differ materially from the estimates and assumptions that the Company uses in preparation of its financial statements.
Recently Adopted Accounting Standards
Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU 2016-13 associated with the measurement of credit losses on financial instruments. The amended guidance replaces the previous incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. The amended guidance was effective for the Company on January 1, 2020. Based on the amended guidance, the Company estimates credit losses for uncollectible accounts based on an evaluation of the aged accounts receivable and the likelihood of collection of the receivable based on historical collection data adjusted for forward-looking economic conditions. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on its condensed consolidated financial statements.
v3.20.2
Landfill Liabilities (Tables)
6 Months Ended
Jun. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]  
Summary of Liabilities for Final Closure and Post-Closure Costs
Liabilities for final closure and post-closure costs for the year ended December 31, 2019 and for the six months ended June 30, 2020 are shown in the table below:
Balance at December 31, 2018
$
248.0

Increase in retirement obligation
11.0

Accretion of closure and post-closure costs
18.0

Asset retirement obligation adjustments
6.9

Costs incurred
(19.7
)
Balance at December 31, 2019
264.2

Increase in retirement obligation
5.2

Accretion of closure and post-closure costs
8.9

Costs incurred
(3.0
)
Balance at June 30, 2020
275.3

Less: Current portion
(20.2
)

$
255.1


v3.20.2
Income (loss) Per Share (Tables)
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Computation of Basic and Dilutive Income (Loss) Per Share

The following table sets forth the computation of basic income (loss) per share and income (loss) per share, assuming dilution:

 
Three Months Ended June 30,

Six Months Ended June 30,

 
2020

2019

2020

2019
Numerator:











Net income (loss)
$
6.2


$
(1.0
)

$
(0.1
)

$
(7.0
)
Denominator:









Average common shares outstanding
90,424,107


88,857,948


90,167,026


88,790,157


Other potentially dilutive common shares
1,133,009








Average common shares outstanding, assuming dilution
91,557,116


88,857,948


90,167,026


88,790,157















Basic net income (loss) per share
$
0.07


$
(0.01
)

$


$
(0.08
)

Diluted net income (loss) per share
$
0.07


$
(0.01
)

$


$
(0.08
)

v3.20.2
Debt (Tables)
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Summary of Long-Term Debt
The following table summarizes the major components of debt at each balance sheet date and provides the maturities and interest rate ranges of each major category of debt:
 
June 30,
2020
 
December 31,
2019
Revolving line of credit with lenders (Revolver), interest at applicable rate plus margin, as defined (0.00% and 5.43% at June 30, 2020 and December 31, 2019, respectively) due quarterly; balance due at maturity in November 2021
$

 
$
30.0

Term loans (Term Loan B); quarterly payments of $3.75 commencing March 31, 2017 through September 30, 2023 with final payment due November 10, 2023; interest at an alternate base rate or adjusted LIBOR rate with a 0.75% floor plus an applicable margin
1,346.1

 
1,372.5

Senior notes (Senior Notes) payable; interest at 5.625% payable in arrears semi-annually commencing May 15, 2017; maturing on November 15, 2024
425.0

 
425.0

Finance lease obligations, maturing through 2024
43.5

 
52.6

Other debt
6.8

 
8.1

 
1,821.4

 
1,888.2

Less: Original issue discount and debt issuance costs classified as a reduction to long-term debt
(17.4
)
 
(20.0
)
Less: Current portion
(41.3
)
 
(76.1
)
 
$
1,762.7

 
$
1,792.1


The estimated fair value of the Company’s debt is as follows:
 
June 30,
2020
 
December 31,
2019
Revolver
$


$
30.0

Senior Notes
440.9


443.4

Term Loan B
1,329.3


1,379.4


$
1,770.2


$
1,852.8


v3.20.2
Derivative Instruments and Hedging Activities (Tables)
6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of Fair Values of Derivative Instruments Recorded in Condensed Consolidated Balance Sheets
The following table summarizes the fair values of derivative instruments recorded in the Company’s condensed consolidated balance sheets:


Balance Sheet Location

June 30, 2020

December 31,
2019
Derivatives Designated as Hedging Instruments








2017 Interest rate caps

Accrued expenses

(2.4
)

(2.4
)
2017 Interest rate caps

Other long-term liabilities

(0.6
)

(1.7
)
Total derivatives



$
(3.0
)

$
(4.1
)

v3.20.2
Segment and Related Information (Tables)
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Summary of Financial Information Concerning Reportable Segments
Service revenues, operating income (loss) and depreciation and amortization for the Company's reportable segments for the periods indicated are shown in the following tables:
 
Service
Revenues
 
Operating
Income
(Loss)
 
Depreciation
and
Amortization
 
 
 
 
 
 
Three Months Ended June 30, 2020
 
 
 
 
 
South
$
155.2

 
$
24.3

 
$
21.5

East
93.3

 
5.4

 
19.1

Midwest
131.8

 
16.1

 
22.2

Corporate

 
(18.1
)
 
1.3

 
$
380.3

 
$
27.7

 
$
64.1

 
 
 
 
 
 
Three Months Ended June 30, 2019
 
 
 
 
 
South
$
162.0

 
$
14.3

 
$
21.7

East
109.5

 
6.8

 
21.6

Midwest
147.6

 
19.2

 
25.7

Corporate

 
(31.6
)
 
1.3

 
$
419.1

 
$
8.7

 
$
70.3

 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2020
 
 
 
 
 
South
$
317.4


$
46.0


$
44.0

East
187.2


6.7


37.9

Midwest
262.4


26.5


44.1

Corporate


(37.9
)

2.7

 
$
767.0


$
41.3


$
128.7

 
 
 
 
 
 
Six Months Ended June 30, 2019
 
 
 
 
 
South
$
321.9

 
$
38.3

 
$
44.4

East
204.4

 
8.5

 
40.7

Midwest
276.8

 
33.1

 
48.6

Corporate

 
(53.3
)
 
2.5

 
$
803.1

 
$
26.6

 
$
136.2











Summary of Disaggregation of Revenue
The following table presents the Company's revenues disaggregated by major line of business. Recycling rebates paid to customers, franchise fees paid to customers and state landfill taxes are excluded from revenues.


Three Months Ended June 30,
 
Six Months Ended June 30,


2020

2019
 
2020

2019
Residential Collection Revenue

$
107.3


$
102.3

 
$
213.1


$
203.0

Commercial Collection Revenue

91.9


99.6

 
192.2


197.5

Rolloff Collection Revenue

60.4


69.3

 
122.7


131.6

Disposal Revenue

62.3


77.3

 
120.3


138.1

Fuel and Environmental Charges

23.1


29.1

 
49.3


56.7

Sale of Recyclables

3.0


2.3

 
5.0


5.4

Other Revenue

32.3


39.2

 
64.4


70.8



$
380.3


$
419.1

 
$
767.0


$
803.1


v3.20.2
Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis The Company’s assets and liabilities that are measured at fair value on a recurring basis include the following:
 
 
 
Fair Value Measurement at June 30, 2020
Reporting Date Using
 
Total
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Carrying
Value
 
 
 
 
 
 
 
 
Recurring fair value measurements
 
 
 
 
 
 
 
Cash and cash equivalents
$
31.4

 
$
31.4

 
$

 
$
31.4

Interest rate caps - liability position
(3.0
)
 

 
(3.0
)
 
(3.0
)
Total recurring fair value measurements
$
28.4

 
$
31.4

 
$
(3.0
)
 
$
28.4

 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement at December 31, 2019
Reporting Date Using
 
Total
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Carrying
Value
 
 
 
 
 
 
 
 
Recurring fair value measurements
 
 
 
 
 
 
 
Cash and cash equivalents
$
12.5

 
$
12.5

 
$

 
$
12.5

Interest rate caps - liability position
(4.1
)

$


(4.1
)

(4.1
)
Total recurring fair value measurements
$
8.4


$
12.5


$
(4.1
)

$
8.4


Estimated Fair Value of Company's Debt
The following table summarizes the major components of debt at each balance sheet date and provides the maturities and interest rate ranges of each major category of debt:
 
June 30,
2020
 
December 31,
2019
Revolving line of credit with lenders (Revolver), interest at applicable rate plus margin, as defined (0.00% and 5.43% at June 30, 2020 and December 31, 2019, respectively) due quarterly; balance due at maturity in November 2021
$

 
$
30.0

Term loans (Term Loan B); quarterly payments of $3.75 commencing March 31, 2017 through September 30, 2023 with final payment due November 10, 2023; interest at an alternate base rate or adjusted LIBOR rate with a 0.75% floor plus an applicable margin
1,346.1

 
1,372.5

Senior notes (Senior Notes) payable; interest at 5.625% payable in arrears semi-annually commencing May 15, 2017; maturing on November 15, 2024
425.0

 
425.0

Finance lease obligations, maturing through 2024
43.5

 
52.6

Other debt
6.8

 
8.1

 
1,821.4

 
1,888.2

Less: Original issue discount and debt issuance costs classified as a reduction to long-term debt
(17.4
)
 
(20.0
)
Less: Current portion
(41.3
)
 
(76.1
)
 
$
1,762.7

 
$
1,792.1


The estimated fair value of the Company’s debt is as follows:
 
June 30,
2020
 
December 31,
2019
Revolver
$


$
30.0

Senior Notes
440.9


443.4

Term Loan B
1,329.3


1,379.4


$
1,770.2


$
1,852.8


v3.20.2
Equity Method Investment (Tables)
6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Summary of Financial Information of Equity Method Investment Summarized financial information for Sanitation Services Company Limited consists of the following:

(in millions)
Six Months Ended June 30,
 
2020
 
2019
Service revenue
$
7.4

 
$
7.8

Operating income
$
0.8

 
$
2.3

Income before income taxes
$
0.9

 
$
2.4

Net income
$
0.9

 
$
2.4


v3.20.2
Business Operations (Details)
$ in Millions
6 Months Ended
Jun. 30, 2020
USD ($)
Segment
acquisition
Business Acquisition [Line Items]  
Number of reportable segments | Segment 3
Number of operating segments | Segment 3
Business Acquisition  
Business Acquisition [Line Items]  
Number of acquisitions completed | acquisition 2
Consideration transferred $ 24.9
Deferred purchase price payment 2.2
Revolving Credit Facility  
Business Acquisition [Line Items]  
Additional liquidity available from facility $ 271.7
v3.20.2
Revenue Recognition (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]          
Capitalized sales commissions $ 4.5   $ 4.5   $ 4.7
Capitalized sales commissions, amortization expense $ 0.4 $ 0.4 0.8 $ 0.8  
Recognized deferred revenue     $ 69.6    
v3.20.2
Landfill Liabilities - Summary of Liabilities for Final Closure and Post-Closure Costs (Details) - USD ($)
$ in Millions
6 Months Ended 12 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]      
Beginning balance $ 264.2 $ 248.0 $ 248.0
Increase in retirement obligation 5.2   11.0
Accretion of closure and post-closure costs 8.9 $ 8.7 18.0
Asset retirement obligation adjustments     6.9
Costs incurred (3.0)   (19.7)
Ending balance 275.3   $ 264.2
Less: Current portion (20.2)    
Noncurrent portion $ 255.1    
v3.20.2
Income (loss) Per Share (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Numerator:            
Net income (loss) $ 6.2 $ (6.3) $ (1.0) $ (6.0) $ (0.1) $ (7.0)
Denominator:            
Average common shares outstanding (in shares) 90,424,107   88,857,948   90,167,026 88,790,157
Other potentially dilutive common shares (in shares) 1,133,009   0   0 0
Average common shares outstanding, assuming dilution (in shares) 91,557,116   88,857,948   90,167,026 88,790,157
Basic net income (loss) per share (in dollars per share) $ 0.07   $ (0.01)   $ 0 $ (0.08)
Diluted net income (loss) per share (in dollars per share) $ 0.07   $ (0.01)   $ 0 $ (0.08)
Antidilutive stock awards excluded from calculation (in shares) 0   0     0
Stock option            
Denominator:            
Antidilutive stock awards excluded from calculation (in shares)     5,400,000   3,700,000 5,500,000
v3.20.2
Debt - Summary of Long-Term Debt - Principal (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Finance lease obligations, maturing through 2024 $ 43.5 $ 52.6
Other debt 6.8 8.1
Long-term debt, gross 1,821.4 1,888.2
Less: Original issue discount and debt issuance costs classified as a reduction to long-term debt (17.4) (20.0)
Less: Current portion (41.3) (76.1)
Long-term debt, less original issue discount and current maturities 1,762.7 1,792.1
Revolver    
Debt Instrument [Line Items]    
Long-term debt 0.0 30.0
Term Loan B    
Debt Instrument [Line Items]    
Long-term debt 1,346.1 1,372.5
Senior Notes    
Debt Instrument [Line Items]    
Long-term debt $ 425.0 $ 425.0
v3.20.2
Debt - Summary of Long-Term Debt - Interest Rates (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Revolver    
Debt Instrument [Line Items]    
Line of credit interest rate 0.00% 5.43%
Term Loan B    
Debt Instrument [Line Items]    
Debt periodic principal payment $ 3,750,000.00 $ 3,750,000.00
Term Loan B | LIBOR    
Debt Instrument [Line Items]    
Debt reference rate 0.75% 0.75%
Senior Notes    
Debt Instrument [Line Items]    
Debt interest rate 5.625% 5.625%
v3.20.2
Debt - Additional Information (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Letters of credit outstanding $ 28,300,000 $ 28,500,000
Revolver    
Debt Instrument [Line Items]    
Long-term debt 0.0 $ 30,000,000.0
Revolving Credit Facility    
Debt Instrument [Line Items]    
Line of credit maximum borrowing capacity 300,000,000.0  
Letters of Credit    
Debt Instrument [Line Items]    
Line of credit maximum borrowing capacity $ 100,000,000.0  
v3.20.2
Derivative Instruments and Hedging Activities - Summary of Fair Values of Derivative Instruments Recorded in Condensed Consolidated Balance Sheets (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Total derivatives $ (3.0) $ (4.1)
Interest rate caps | Derivatives Designated as Hedging Instruments | Accrued expenses    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Derivative liabilities (2.4) (2.4)
Interest rate caps | Derivatives Designated as Hedging Instruments | Other long-term liabilities    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Derivative liabilities $ (0.6) $ (1.7)
v3.20.2
Derivative Instruments and Hedging Activities - Additional Information (Details)
3 Months Ended 6 Months Ended
Mar. 31, 2019
USD ($)
Jun. 30, 2020
USD ($)
Mar. 31, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Sep. 30, 2019
USD ($)
Nov. 30, 2017
USD ($)
Agreement
May 31, 2016
USD ($)
Agreement
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
(Loss) gain recorded in statement of operations $ (2,000,000.0) $ 400,000 $ 400,000 $ (1,300,000) $ 800,000        
Premium payment period         33 months        
Interest rate caps | Derivatives Designated as Hedging Instruments                  
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
Number of interest rate cap agreements | Agreement               2  
Derivative premium               $ 4,900,000  
Notional amounts of the contracts   600,000,000.0     $ 600,000,000.0        
Interest rate caps | Derivatives Not Designated as Hedging Instruments                  
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
Number of interest rate cap agreements | Agreement                 3
Derivative premium                 $ 5,500,000
Notional amounts of the contracts             $ 800,000,000.0    
Interest rate caps | Derivatives Not Designated as Hedging Instruments | Interest Expense                  
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
Gain (loss) on derivative instruments       (500,000)   $ (900,000)      
Interest Rate Cap, Maturing In 2021 | Derivatives Designated as Hedging Instruments                  
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
(Loss) gain recorded in statement of operations   (200,000)     (400,000) $ (4,600,000)      
Interest Rate Cap, Maturing In 2021 | Derivatives Designated as Hedging Instruments | Interest Expense                  
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
(Loss) gain recorded in statement of operations   (600,000)     (1,200,000)        
Interest Rate Cap, Maturing In 2021 | Derivatives Designated as Hedging Instruments | Change In Fair Value Of Interest Rate Caps, Net Of Tax                  
Derivative Instruments and Hedging Activities Disclosures [Line Items]                  
(Loss) gain recorded in statement of operations   $ 400,000   $ (1,800,000) $ 800,000        
v3.20.2
Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 27, 2020
Income Tax Disclosure [Abstract]          
Effective income tax rate continuing operations 23.50% 95.30% 50.00% 75.40%  
Tax credit carryforward, AMT         $ 1.5
Income tax receivable         $ 3.0
v3.20.2
Commitments and Contingencies (Details)
$ in Millions
6 Months Ended 12 Months Ended
Jun. 30, 2020
USD ($)
Dec. 31, 2019
USD ($)
case
Site Contingency [Line Items]    
Expenditures related to remediation accrual estimates $ 16.1  
Remediation accrual estimates remaining on consolidated balance sheet $ 10.5  
Number of cases resolved | case   4
Percentage of workforce covered under collective bargaining 13.80%  
Tiger Pride    
Site Contingency [Line Items]    
Litigation settlement, amount   $ 9.0
v3.20.2
Segment and Related Information - Additional Information (Details)
6 Months Ended
Jun. 30, 2020
Segment
Segment Reporting [Abstract]  
Number of reportable segments 3
Number of geographic operating segments 3
v3.20.2
Segment and Related Information - Summary of Financial Information Concerning Reportable Segments (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Segment Reporting Information [Line Items]        
Service revenues $ 380.3 $ 419.1 $ 767.0 $ 803.1
Operating Income (Loss) 27.7 8.7 41.3 26.6
Depreciation and Amortization 64.1 70.3 128.7 136.2
Operating Segments | South        
Segment Reporting Information [Line Items]        
Service revenues 155.2 162.0 317.4 321.9
Operating Income (Loss) 24.3 14.3 46.0 38.3
Depreciation and Amortization 21.5 21.7 44.0 44.4
Operating Segments | East        
Segment Reporting Information [Line Items]        
Service revenues 93.3 109.5 187.2 204.4
Operating Income (Loss) 5.4 6.8 6.7 8.5
Depreciation and Amortization 19.1 21.6 37.9 40.7
Operating Segments | Midwest        
Segment Reporting Information [Line Items]        
Service revenues 131.8 147.6 262.4 276.8
Operating Income (Loss) 16.1 19.2 26.5 33.1
Depreciation and Amortization 22.2 25.7 44.1 48.6
Corporate        
Segment Reporting Information [Line Items]        
Service revenues 0.0 0.0 0.0 0.0
Operating Income (Loss) (18.1) (31.6) (37.9) (53.3)
Depreciation and Amortization $ 1.3 $ 1.3 $ 2.7 $ 2.5
v3.20.2
Segment and Related Information - Disaggregated Revenue (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Disaggregation of Revenue [Line Items]        
Revenue $ 380.3 $ 419.1 $ 767.0 $ 803.1
Residential Collection Revenue        
Disaggregation of Revenue [Line Items]        
Revenue 107.3 102.3 213.1 203.0
Commercial Collection Revenue        
Disaggregation of Revenue [Line Items]        
Revenue 91.9 99.6 192.2 197.5
Rolloff Collection Revenue        
Disaggregation of Revenue [Line Items]        
Revenue 60.4 69.3 122.7 131.6
Disposal Revenue        
Disaggregation of Revenue [Line Items]        
Revenue 62.3 77.3 120.3 138.1
Fuel and Environmental Charges        
Disaggregation of Revenue [Line Items]        
Revenue 23.1 29.1 49.3 56.7
Sale of Recyclables        
Disaggregation of Revenue [Line Items]        
Revenue 3.0 2.3 5.0 5.4
Other Revenue        
Disaggregation of Revenue [Line Items]        
Revenue $ 32.3 $ 39.2 $ 64.4 $ 70.8
v3.20.2
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Total Fair Value    
Recurring fair value measurements    
Cash and cash equivalents $ 31.4 $ 12.5
Interest rate caps - liability position (3.0) (4.1)
Total recurring fair value measurements 28.4 8.4
Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Recurring fair value measurements    
Cash and cash equivalents 31.4 12.5
Interest rate caps - liability position 0.0 0.0
Total recurring fair value measurements 31.4 12.5
Total Fair Value | Significant Other Observable Inputs (Level 2)    
Recurring fair value measurements    
Cash and cash equivalents 0.0 0.0
Interest rate caps - liability position (3.0) (4.1)
Total recurring fair value measurements (3.0) (4.1)
Carrying Value    
Recurring fair value measurements    
Cash and cash equivalents 31.4 12.5
Interest rate caps - liability position (3.0) (4.1)
Total recurring fair value measurements $ 28.4 $ 8.4
v3.20.2
Fair Value Measurements - Estimated Fair Value of Company's Debt (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Debt instruments carrying value $ 1,771.1 $ 1,827.5
Significant Other Observable Inputs (Level 2)    
Debt Instrument [Line Items]    
Estimated fair value debt 1,770.2 1,852.8
Significant Other Observable Inputs (Level 2) | Revolver    
Debt Instrument [Line Items]    
Estimated fair value debt 0.0 30.0
Significant Other Observable Inputs (Level 2) | Senior Notes    
Debt Instrument [Line Items]    
Estimated fair value debt 440.9 443.4
Significant Other Observable Inputs (Level 2) | Term Loan B    
Debt Instrument [Line Items]    
Estimated fair value debt $ 1,329.3 $ 1,379.4
v3.20.2
Merger (Details) - USD ($)
Jun. 24, 2020
Apr. 14, 2019
Merger    
Business Acquisition [Line Items]    
Merger consideration (in dollars per share)   $ 30.30
Termination fee   $ 250,000,000.0
Revenue threshold on divestiture eliminated in acquisition   $ 200,000,000.0
Securities and Asset Purchase Agreement with GFL Holdco (US), LLC    
Business Acquisition [Line Items]    
Aggregate purchase price $ 863,500,000  
v3.20.2
Equity Method Investment (Details) - Sanitation Services Company Limited - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Schedule of Equity Method Investments [Line Items]    
Financial interest in equity method investment 50.00%  
Service revenue $ 7.4 $ 7.8
Operating income 0.8 2.3
Income before income taxes 0.9 2.4
Net income $ 0.9 $ 2.4
v3.20.2
Label Element Value
AOCI Attributable to Parent [Member]  
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax us-gaap_OtherComprehensiveIncomeLossCashFlowHedgeGainLossAfterReclassificationAndTax $ (2,000,000.0)