The operations of the Company are conducted through two operating segments: Maintenance Services and Development Services, which are also its reportable segments.

Maintenance Services primarily consists of recurring landscape maintenance services and snow removal services as well as supplemental landscape enhancement services.

Development Services primarily consists of landscape architecture and development services for new construction and large scale redesign projects.

The operating segments identified above are determined based on the services provided, and they reflect the manner in which operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance. The CODM is the Company’s Chief Executive Officer. The CODM evaluates the performance of the Company’s operating segments based upon Net Service Revenues, Adjusted EBITDA and Capital Expenditures. Management uses Adjusted EBITDA to evaluate performance and profitability of each operating segment.

The accounting policies of the segments are the same as those described in Note 2 “Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Corporate includes corporate executive compensation, finance, legal and information technology which are not allocated to the segments. Eliminations represent eliminations of intersegment revenues. The Company does not currently provide asset information by segment, as this information is not used by management when allocating resources or evaluating performance.

The following is a summary of certain financial data for each of the segments:


	Three Months Ended March 31,						Six Months Ended March 31,
	2024			2023			2024			2023
Maintenance Services	$	510.5		$	497.8		$	952.8		$	981.1
Development Services		164.4			155.6			349.7			329.9
Eliminations		(2.0	)		(3.0	)		(2.9	)		(4.7	)
Net Service Revenues	$	672.9		$	650.4		$	1,299.6		$	1,306.3
Maintenance Services	$	66.5		$	51.7		$	108.5		$	102.2
Development Services		14.4			13.1			34.0			29.6
Corporate		(16.1	)		(18.0	)		(31.0	)		(36.5	)
Adjusted EBITDA(1)	$	64.8		$	46.8		$	111.5		$	95.3
Maintenance Services	$	8.8		$	12.7		$	16.5		$	36.7
Development Services		3.1			2.7			4.3			4.7
Corporate		0.7			0.1			1.9			1.3
Capital Expenditures	$	12.6		$	15.5		$	22.7		$	42.7

(1)

Presented below is a reconciliation of Net income (loss) to Adjusted EBITDA:


	Three Months Ended March 31,						Six Months Ended March 31,
	2024			2023			2024			2023
Net income (loss)	$	33.7		$	(22.0	)	$	17.3		$	(40.9	)
Interest expense, net		16.0			27.7			33.0			50.9
Income tax expense (benefit)		13.3			(7.7	)		7.6			(13.2	)
Depreciation expense		26.1			27.4			51.7			54.5
Amortization expense		8.7			11.0			18.8			22.9
Business transformation and integration costs (a)		6.1			4.1			16.9			8.7
Gain on divestiture (b)		(43.9	)		—			(43.9	)		—
Equity-based compensation (c)		4.8			6.3			10.1			12.0
COVID-19 related expenses (d)		—			—			—			0.4
Adjusted EBITDA	$	64.8		$	46.8		$	111.5		$	95.3

(a)

Business transformation and integration costs consist of (i) severance and related costs; (ii) business integration costs and (iii) information technology infrastructure, transformation, and other costs.


	Three Months Ended March 31,					Six Months Ended March 31,
(in millions)	2024			2023		2024			2023
Severance and related costs	$	3.7		$	1.8	$	6.2		$	1.9
Business integration (e)		(1.5	)		-		(0.9	)		2.5
IT infrastructure, transformation, and other (f)		3.9			2.3		11.6			4.3
Business transformation and integration costs	$	6.1		$	4.1	$	16.9		$	8.7

(b)

Represents the realized gain on sale and transaction related expenses from the divestiture of U.S. Lawns on January 12, 2024.

(c)

Represents equity-based compensation expense and related taxes recognized for equity incentive plans outstanding.

(d)

Represents expenses related to the Company’s response to the COVID-19 pandemic, principally temporary and incremental salary and related expenses, personal protective equipment, cleaning and supply purchases, and other.

(e)

Represents isolated expenses specifically related to the integration of acquired companies such as one-time employee retention costs, employee onboarding and training costs, fleet and uniform rebranding costs, and adjustments to performance based contingent consideration. The Company excludes Business integration costs from the measures disclosed above since such expenses vary in amount due to the number of acquisitions and size of acquired companies as well as factors specific to each acquisition, and as a result lack predictability as to occurrence and/or timing, and create a lack of comparability between periods.

(f)

Represents expenses related to distinct initiatives, typically significant enterprise-wide changes. Such expenses are excluded from the measures disclosed above since such expenses vary in amount based on occurrence as well as factors specific to each of the activities, are outside of the normal operations of the business, and create a lack of comparability between periods.