BrightView Holdings, Inc. [BV] Filings

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

10-Q 1 bv-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38579

BrightView Holdings, Inc.

(Exact name of Registrant as specified in its Charter)


Delaware	46-4190788
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
980 Jolly Road Blue Bell, Pennsylvania	19422
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (484) 567-7204

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of exchange on which registered
Common Stock, Par Value $0.01 Per Share	BV	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Registrant’s Common Stock outstanding as of July 31, 2024 was 94,600,000.

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		Page
PART I.	FINANCIAL INFORMATION	6
Item 1.	Financial Statements (Unaudited)	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations	7
	Consolidated Statements of Comprehensive Income (Loss)	8
	Consolidated Statements of Stockholders’ Equity	9
	Consolidated Statements of Cash Flows	10
	Notes to Unaudited Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II.	OTHER INFORMATION	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains “forward-looking statements” within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10¬Q, including statements concerning our plans, objectives, goals, beliefs, business outlook, business trends, expectations regarding our industry, strategy, future events, future operations, future liquidity and financial position, future revenues, projected costs, prospects, plans and objectives of management and other information, may be forward-looking statements.

Words such as “outlook,” “guidance,” “projects,” “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” “continues,” or “anticipates,” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, or guarantees of future performance and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under the heading “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Some of the key factors that could cause actual results to differ from our expectations include risks related to:

•

general business, economic, and financial market conditions;

•

increases in raw material costs, fuel prices, wages and other operating costs, and changes in our ability to source adequate supplies and materials in a timely manner;

•

competitive industry pressures;

•

the failure to retain current customers, renew existing customer contracts and obtain new customer contracts;

•

the failure to enter into profitable contracts, or maintaining customer contracts that are unprofitable;

•

a determination by customers to reduce their outsourcing or use of preferred vendors;

•

the dispersed nature of our operating structure;

•

our ability to implement our business strategies and achieve our growth objectives;

•

the possibility that the anticipated benefits from our business acquisitions will not be realized in full or at all or may take longer to realize than expected;

•

the possibility that costs or difficulties related to the integration of acquired businesses’ operations will be greater than expected and the possibility that integration efforts will disrupt our business and strain management time and resources;

•

the potential impacts on revenues and our financial condition caused by any disposition of assets or discontinuation of lines of business;

•

the seasonal nature of our landscape maintenance services;

•

our dependence on weather conditions and the impact of severe weather and climate change on our business;

•

disruptions in our supply chain and changes in our ability to source adequate supplies and materials in a timely manner;

•

any failure to accurately estimate the overall risk, requirements, or costs when we bid on or negotiate contracts that are ultimately awarded to us;

•

the conditions and periodic fluctuations of real estate markets, including residential and commercial construction;

•

the level, timing and location of snowfall;

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•

our ability to retain or hire our executive management and other key personnel, and particularly reflecting competition for talent in light of non-compete rulemaking and legislation;

•

our ability to attract and retain field and hourly employees, trained workers, and third-party contractors and re-employ seasonal workers;

•

any failure to properly verify employment eligibility of our employees;

•

subcontractors taking actions that harm our business;

•

our recognition of future impairment charges;

•

laws and governmental regulations, including those relating to employees, wage and hour, immigration, human health, safety, transportation and the associated financial impact of such regulations;

•

environmental, health and safety laws and regulations, including regulatory costs, claims and litigation related to the use of chemicals and pesticides by employees and related third-party claims;

•

the distraction and impact caused by litigation, of adverse litigation judgments and settlements resulting from legal proceedings;

•

tax increases and changes in tax rules;

•

increase in on-job accidents involving employees;

•

any failure, inadequacy, interruption, security failure or breach of our information technology systems;

•

compliance with data privacy requirements;

•

our ability to adequately protect our intellectual property;

•

restrictions imposed by our debt agreements that limit our flexibility in operating our business;

•

increases in interest rates governing our variable rate indebtedness increasing the cost of servicing our substantial indebtedness;

•

our ability to generate sufficient cash flow to satisfy our significant debt service obligations;

•

our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements;

•

risks related to counterparty credit worthiness or non-performance of the derivative financial instruments we utilize;

•

any future sales, or the perception of future sales, by us or our affiliates, which could cause the market price for our common stock to decline;

•

the ability of KKR BrightView Aggregator L.P., Birch-OR Equity Holdings, LLC and Birch Equity Holdings, LP, which collectively hold approximately 58.7% of our shares as of June 30, 2024, to exert significant influence over us;

•

the fact that the holders of our Series A Preferred Stock may have different interests from and vote their shares in a manner deemed adverse to, holders of our common stock;

•

the dividend, liquidation, and redemption rights of the holders of our Series A Preferred Stock;

•

occurrence of natural disasters, terrorist attacks, or other external events;

•

occurrence of a pandemic, epidemic or other public health emergency;

•

heightened inflation, geopolitical conflicts, recession, financial market disruptions and other economic conditions;

•

our ability to pursue and achieve our environmental, social and corporate governance goals and targets and the possibility that complying with such standards and meeting our goals may be significantly more costly than anticipated; and

•

costs and requirements imposed as a result of maintaining compliance with the requirements of being a public company.

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We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, any change in assumptions, beliefs or expectations or any change in circumstances upon which any such forward-looking statements are based, except as required by law.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BrightView Holdings, Inc.

Consolidated Balance Sheets

(Unaudited)

(In millions, except par value and share data)


	June 30, 2024			September 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	115.9		$	67.0
Accounts receivable, net		446.4			442.3
Unbilled revenue		123.5			143.5
Other current assets		74.3			89.3
Total current assets		760.1			742.1
Property and equipment, net		355.6			315.2
Intangible assets, net		104.1			132.3
Goodwill		2,015.7			2,021.4
Operating lease assets		83.0			86.1
Other assets		44.7			55.1
Total assets	$	3,363.2		$	3,352.2
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	140.5		$	136.2
Deferred revenue		94.6			68.2
Current portion of self-insurance reserves		54.2			54.8
Accrued expenses and other current liabilities		210.0			180.2
Current portion of operating lease liabilities		25.3			27.3
Total current liabilities		524.6			466.7
Long-term debt, net		807.0			888.1
Deferred tax liabilities		40.5			51.1
Self-insurance reserves		111.1			105.1
Long-term operating lease liabilities		64.0			65.1
Other liabilities		45.1			34.6
Total liabilities		1,592.3			1,610.7
Mezzanine equity:
Series A convertible preferred shares, $0.01 par value, 7% cumulative dividends; 500,000 shares issued and outstanding as of June 30, 2024 and September 30, 2023, aggregate liquidation preference of $512.0 and $503.2 as of June 30, 2024 and September 30, 2023, respectively		507.1			498.2
Stockholders’ equity:
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding as of June 30, 2024 and September 30, 2023		—			—
Common stock, $0.01 par value; 500,000,000 shares authorized; 108,000,000 and 106,600,000 shares issued and 94,600,000 and 93,600,000 shares outstanding as of June 30, 2024 and September 30, 2023, respectively		1.1			1.1
Treasury stock, at cost; 13,400,000 and 13,000,000 shares as of June 30, 2024 and September 30, 2023, respectively		(173.5	)		(170.4	)
Additional paid-in capital		1,520.0			1,530.8
Accumulated deficit		(94.5	)		(135.3	)
Accumulated other comprehensive income		10.7			17.1
Total stockholders’ equity		1,263.8			1,243.3
Total liabilities, mezzanine equity and stockholders’ equity	$	3,363.2		$	3,352.2

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BrightView Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

(In millions, except per share data)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Net service revenues	$	738.8		$	766.0		$	2,038.4		$	2,072.3
Cost of services provided		561.2			567.4			1,575.0			1,579.0
Gross profit		177.6			198.6			463.4			493.3
Selling, general and administrative expense		120.1			136.6			375.0			413.0
Gain on divestiture		(0.1	)		—			(44.0	)		—
Amortization expense		8.6			10.8			27.4			33.7
Income from operations		49.0			51.2			105.0			46.6
Other expense (income)		0.5			(0.6	)		(1.5	)		(2.1	)
Interest expense, net		15.1			27.4			48.2			78.3
Income (loss) before income taxes		33.4			24.4			58.3			(29.6	)
Income tax expense (benefit)		9.9			7.6			17.5			(5.5	)
Net income (loss)	$	23.5		$	16.8		$	40.8		$	(24.1	)
Less: dividends on Series A convertible preferred shares		8.9			—			26.7			—
Net income (loss) attributable to common stockholders	$	14.6		$	16.8		$	14.1		$	(24.1	)
Earnings (loss) per share:
Basic and diluted earnings (loss) per share	$	0.10		$	0.18		$	0.09		$	(0.26	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BrightView Holdings, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In millions)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Net income (loss)	$	23.5		$	16.8		$	40.8		$	(24.1	)
Net derivative gains (losses) and other costs arising during the period, net of tax expense of $0.8; $5.8; $0.0; and $6.2, respectively (1)		2.5			16.0			(0.2	)		17.2
Reclassification of (gains) into net income (loss), net of tax (expense) of $(0.8); $(0.5); $(2.3); and $(1.5), respectively		(2.1	)		(2.1	)		(6.2	)		(5.4	)
Other comprehensive income (loss)		0.4			13.9			(6.4	)		11.8
Comprehensive income (loss)	$	23.9		$	30.7		$	34.4		$	(12.3	)

(1)

Other costs include the effects of foreign currency translation adjustments which were immaterial during the periods presented.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BrightView Holdings, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Three and Nine Months Ended June 30, 2024 and 2023

(Unaudited)

(In millions)


	Stockholders’ Equity																				Mezzanine Equity
	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Treasury			Total Stockholders’			Preferred
	Shares			Amount		Capital			Deficit			Income (Loss)			Stock			Equity			Shares		Amount
Balance, March 31, 2024		107.9		$	1.1	$	1,523.4		$	(118.0	)	$	10.3		$	(172.9	)	$	1,243.9			0.5	$	507.1
Net income		—			—		—			23.5			—			—			23.5			—		—
Other comprehensive income, net of tax		—			—		—			—			0.4			—			0.4			—		—
Capital contributions and issuance of common stock		0.1			—		0.4			—			—			—			0.4			—		—
Equity-based compensation		—			—		5.1			—			—			—			5.1			—		—
Repurchase of common stock and distributions		—			—		—			—			—			(0.6	)		(0.6	)		—		—
Series A Preferred Stock dividends		—			—		(8.9	)		—			—			—			(8.9	)		—		—
Balance, June 30, 2024		108.0		$	1.1	$	1,520.0		$	(94.5	)	$	10.7		$	(173.5	)	$	1,263.8			0.5	$	507.1

Balance, September 30, 2023		106.6		$	1.1	$	1,530.8		$	(135.3	)	$	17.1		$	(170.4	)	$	1,243.3			0.5	$	498.2
Net income		—			—		—			40.8			—			—			40.8			—		—
Other comprehensive (loss), net of tax		—			—		—			—			(6.4	)		—			(6.4	)		—		—
Capital contributions and issuance of common stock		1.4			—		0.8			—			—			—			0.8			—		—
Equity-based compensation		—			—		15.1			—			—			—			15.1			—		—
Repurchase of common stock and distributions		—			—		—			—			—			(3.1	)		(3.1	)		—		—
Series A Preferred Stock dividends		—			—		(26.7	)		—			—			—			(26.7	)		—		8.9
Balance, June 30, 2024		108.0		$	1.1	$	1,520.0		$	(94.5	)	$	10.7		$	(173.5	)	$	1,263.8			0.5	$	507.1

	Stockholders’ Equity																				Mezzanine Equity
	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Treasury			Total Stockholders’			Preferred
	Shares			Amount		Capital			Deficit			Income (Loss)			Stock			Equity			Shares		Amount
Balance, March 31, 2023		106.4		$	1.1	$	1,522.8		$	(168.5	)	$	(0.1	)	$	(169.4	)	$	1,185.9			—	$	—
Net income		—			—		—			16.8			—			—			16.8			—		—
Other comprehensive income, net of tax		—			—		—			—			13.9			—			13.9			—		—
Capital contributions and issuance of common stock		(0.1	)		—		—			—			—			—			—			—		—
Equity-based compensation		—			—		3.9			—			—			—			3.9			—		—
Repurchase of common stock and distributions		—			—		—			—			—			(0.1	)		(0.1	)		—		—
Balance, June 30, 2023		106.3		$	1.1	$	1,526.7		$	(151.7	)	$	13.8		$	(169.5	)	$	1,220.4			—	$	—

Balance, September 30, 2022		105.7		$	1.1	$	1,509.5		$	(127.6	)	$	2.0		$	(168.2	)	$	1,216.8			—	$	—
Net (loss)		—			—		—			(24.1	)		—			—			(24.1	)		—		—
Other comprehensive income, net of tax		—			—		—			—			11.8			—			11.8			—		—
Capital contributions and issuance of common stock		0.6			—		1.5			—			—			—			1.5			—		—
Equity-based compensation		—			—		15.7			—			—			—			15.7			—		—
Repurchase of common stock and distributions		—			—		—			—			—			(1.3	)		(1.3	)		—		—
Balance, June 30, 2023		106.3		$	1.1	$	1,526.7		$	(151.7	)	$	13.8		$	(169.5	)	$	1,220.4			—	$	—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BrightView Holdings, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In millions)


	Nine Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net income (loss)	$	40.8		$	(24.1	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		79.8			80.9
Amortization of intangible assets		27.4			33.7
Amortization of financing costs and original issue discount		2.0			2.7
Loss on debt extinguishment		0.6			—
Deferred taxes		(10.1	)		(23.0	)
Equity-based compensation		15.1			15.7
Realized gain on hedges		(8.5	)		(6.9	)
Gain on divestiture		(44.0	)		—
Other non-cash activities		(6.0	)		0.1
Change in operating assets and liabilities:
Accounts receivable		(9.9	)		(53.3	)
Unbilled and deferred revenue		47.1			11.0
Other operating assets		21.4			17.3
Accounts payable and other operating liabilities		(3.6	)		35.2
Net cash provided by operating activities		152.1			89.3
Cash flows from investing activities:
Purchase of property and equipment		(46.0	)		(57.9	)
Proceeds from sale of property and equipment		14.1			6.8
Business acquisitions, net of cash acquired		—			(13.8	)
Proceeds from divestiture		51.6			—
Other investing activities		3.2			1.9
Net cash provided (used) by investing activities		22.9			(63.0	)
Cash flows from financing activities:
Repayments of finance lease obligations		(26.4	)		(20.9	)
Repayments of term loan		—			(9.0	)
Repayments of receivables financing agreement		(82.2	)		(448.0	)
Repayments of revolving credit facility		—			(33.5	)
Proceeds from receivables financing agreement, net of issuance costs		0.5			460.0
Proceeds from revolving credit facility		—			33.5
Debt issuance and prepayment costs		(2.4	)		—
Series A preferred stock dividend		(8.9	)		—
Proceeds from issuance of common stock, net of share issuance costs		1.3			1.0
Repurchase of common stock and distributions		(3.1	)		(1.3	)
Contingent business acquisition payments		(4.7	)		(18.5	)
Other financing activities		(0.2	)		(0.1	)
Net cash (used) by financing activities		(126.1	)		(36.8	)
Net change in cash and cash equivalents		48.9			(10.5	)
Cash and cash equivalents, beginning of period		67.0			20.1
Cash and cash equivalents, end of period	$	115.9		$	9.6
Supplemental Cash Flow Information:
Cash paid (received) for income taxes, net	$	14.8		$	(18.4	)
Cash paid for interest	$	61.9		$	62.9
Non-cash Series A Preferred Stock dividends	$	8.9		$	—
Accrual for property and equipment	$	21.3		$	—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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BrightView Holdings, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

(In millions, except per share and share data)

1. Business

BrightView Holdings, Inc. (the “Company” and, collectively with its consolidated subsidiaries, “BrightView”) provides landscape maintenance and enhancements, landscape development, snow removal and other landscape related services for commercial customers throughout the United States. BrightView is aligned into two reportable segments: Maintenance Services and Development Services. Prior to its initial public offering completed in July 2018 (the “IPO”), the Company was a wholly-owned subsidiary of BrightView Parent L.P. (“Parent”), an affiliate of KKR & Co. Inc. (“KKR”). The Parent and Company were formed through a series of transactions entered into by KKR to acquire the Company on December 18, 2013 (the “KKR Acquisition”). The Parent was dissolved in August 2018 following the IPO.

Basis of Presentation

These consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and are unaudited.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, including normal, recurring accruals that are necessary for a fair presentation of the Company’s operations for the periods presented in conformity with GAAP. All intercompany activity and balances have been eliminated from the consolidated financial statements. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year.

The Consolidated Balance Sheet as of September 30, 2023, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the fiscal year ended September 30, 2023, but does not include all disclosures required by GAAP, for annual financial statements. For a more complete discussion of the Company’s accounting policies and certain other information, refer to the audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2023, filed with the Securities and Exchange Commission (“SEC”).

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. On an ongoing basis, management reviews its estimates, including those related to allowances for doubtful accounts, revenue recognition, self-insurance reserves, estimates related to the Company’s assessment of goodwill for impairment, useful lives for depreciation and amortization, realizability of deferred tax assets, and litigation based on currently available information. Changes in facts and circumstances may result in revised estimates and actual results may differ from estimates.

2. Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional expedients and exceptions for the accounting for contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01 to clarify the scope of certain optional expedients for derivatives that are affected by the discounting transition. In December 2022, the FASB issued ASU 2022-06 to defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. As of June 30, 2024, the Company was not party to any contracts, hedging relationships, or other transactions affected by reference rate reform.

Segment Reporting

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount

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and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The purpose of the guidance is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the impact of ASU No. 2023-07 on its consolidated financial statements.

Income Taxes

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU expands public entities tax disclosures including improving disclosures surrounding the company's rate reconciliation, cash taxes paid, and disaggregation of income tax expense (or benefit) from continuing operations. The amendment is effective for annual periods beginning after December 15, 2024. The Company is in the process of evaluating the impact of ASU No. 2023-09 on its consolidated financial statements.

3. Revenue

The Company’s revenue is generated from Maintenance Services and Development Services. The Company generally recognizes revenue from the sale of services as the services are performed, typically ratably over the term of the contract(s), which the Company believes to be the best measure of progress. The Company recognizes revenues as it transfers control of products and services to its customers. The Company recognizes revenue in an amount reflecting the total consideration it expects to receive from the customer. Revenue is recognized according to the following five step model: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. The Company determined that for contracts containing multiple performance obligations, stand-alone selling price is readily determinable for each performance obligation and therefore allocation of the transaction price to multiple performance obligations is not necessary. The transaction price will include estimates of variable consideration, such as returns and provisions for doubtful accounts and sales incentives, to the extent it is probable that a significant reversal of revenue recognized will not occur. In all cases, when a sale is recorded by the Company, no significant uncertainty exists surrounding the purchaser’s obligation to pay.

Maintenance Services

The Company’s Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services. Landscape maintenance services that are primarily viewed as non-discretionary, such as lawn care, mowing, gardening, mulching, leaf removal, irrigation and tree care, are provided under recurring annual contracts, which typically range from one to three years in duration and are generally cancellable by the customer with 30-90 days’ notice. Snow removal services are provided on either fixed fee based contracts or per occurrence contracts. Both landscape maintenance services and snow removal services can also include enhancement services that represent supplemental maintenance or improvement services generally provided under contracts of short duration related to specific services. Revenue for landscape maintenance and snow removal services under fixed fee models is recognized over time using an output based method. Additionally, a portion of the Company’s recurring fixed fee landscape maintenance and snow removal services are recorded under the series guidance. The right to invoice practical expedient is generally applied to revenue related to landscape maintenance and snow removal services performed in relation to per occurrence contracts as well as enhancement services. When use of the practical expedient is not appropriate for these contracts, revenue is recognized using a cost-to-cost input method. Fees for contracted landscape maintenance services are typically billed on an equal monthly basis. Fees for fixed fee snow removal services are typically billed on an equal monthly basis during snow season, while fees for time and material or other activity-based snow removal services are typically billed as the services are performed. Fees for enhancement services are typically billed as the services are performed.

Development Services

Development Services revenues are generated primarily through landscape architecture and development services. These revenues are primarily recognized over time using the cost-to-cost input method, measured by the percentage of cost incurred to date to the estimated total cost for each contract, which we believe to be the best measure of progress. The full amount of anticipated losses on contracts is recorded as soon as such losses can be estimated. These losses are immaterial to current and historical operations. Changes in job performance, job conditions, and estimated profitability, including final contract settlements, may result in revisions to costs and revenue and are recognized in the period in which the revisions are determined.

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Disaggregation of revenue

The following table presents the Company’s reportable segment revenues, disaggregated by revenue type. The Company disaggregates revenue from contracts with customers into major services lines. The Company has determined that disaggregating revenue into these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the business segment reporting information in Note 12 “Segments”, the Company’s reportable segments are Maintenance Services and Development Services.


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Landscape Maintenance	$	516.2		$	555.3		$	1,256.3		$	1,335.8
Snow Removal		8.5			9.3			221.2			209.9
Maintenance Services		524.7			564.6			1,477.5			1,545.7
Development Services		215.0			203.4			564.8			533.3
Eliminations		(0.9	)		(2.0	)		(3.9	)		(6.7	)
Net service revenues	$	738.8		$	766.0		$	2,038.4		$	2,072.3

Remaining Performance Obligations

Remaining performance obligations represent the estimated revenue expected to be recognized in the future related to performance obligations which are fully or partially unsatisfied at the end of the period.

As of June 30, 2024, the estimated future revenues for remaining performance obligations that are part of a contract that has an original expected duration of greater than one year was approximately $556.4. The Company expects to recognize revenue on 58% of the remaining performance obligations over the next 12 months and an additional 42% over the 12 months thereafter.

Contract Assets and Liabilities

When a contract results in revenue being recognized in excess of the amount the Company has invoiced or has the right to invoice to the customer, a contract asset is recognized. Contract assets are transferred to Accounts receivable, net when the rights to the consideration become unconditional. Contract assets are presented as Unbilled revenue on the Consolidated Balance Sheets.

There were $139.7 of amounts billed and $119.7 of additions to our unbilled revenue balance during the nine month period ended June 30, 2024.

Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services such that control has not passed to the customer. Contract liabilities are presented as Deferred revenue on the Consolidated Balance Sheets.

Changes in Deferred revenue for the nine month period ended June 30, 2024 were as follows:


	Deferred Revenue
Balance, September 30, 2023	$	68.2
Recognition of revenue		(850.1	)
Deferral of revenue		877.4
Divestiture (Note 6)		(0.9	)
Balance, June 30, 2024	$	94.6

Practical Expedients and Exemptions

The Company offers certain interest-free contracts to customers where payments are received over a period not exceeding one year. Additionally, certain Maintenance Services and Development Services customers may pay in advance for services. The Company does not adjust the promised amount of consideration for the effects of these financing components. At contract inception, the period of time between the performance of services and the customer payment is one year or less.

As permitted under the practical expedient available under ASU No. 2014-09, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the

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series guidance and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed.

4. Accounts Receivable, net

Accounts receivable of $446.4 and $442.3, is net of an allowance for doubtful accounts of $10.0 and $5.1 and includes amounts of retention on incomplete projects to be completed within one year of $61.7 and $58.7 as of June 30, 2024 and September 30, 2023, respectively.

5. Property and Equipment, net

Property and equipment, net consists of the following:


	Useful Life	June 30, 2024		September 30, 2023
Land	—	$	42.9	$	44.7
Buildings and leasehold improvements	2-40 yrs.		45.9		45.6
Operating equipment

BrightView Holdings, Inc. [BV] Filings
10-Q	[2024-07-31]
10-Q	[2024-05-01]
10-Q	[2024-01-31]
10-K	[2023-11-16]
10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-Q	[2023-02-07]
10-K	[2022-11-17]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-Q	[2022-02-03]
10-K	[2021-11-17]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-Q	[2021-02-04]
10-K	[2020-11-18]
10-Q	[2020-08-05]
10-Q	[2020-05-07]
10-Q	[2020-02-06]
10-K	[2019-11-21]
10-Q	[2019-08-07]
10-Q	[2019-05-08]
10-Q	[2019-02-07]
10-K	[2018-11-28]
10-Q	[2018-08-09]
S-1	[2018-05-30]