13.Segments

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. Development Services also includes our tree and nursery division, which grows and sells trees as well as manages removal and installation of specimen trees as part of many development 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 for the nine month period ended September 30, 2017 in the Prospectus. Corporate includes corporate executive compensation, finance, legal and information technology which are not allocated to the segments. 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 June 30,						Nine Months Ended June 30,
	2018			2017			2018			2017
Maintenance Services	$	474,581		$	461,191		$	1,341,375		$	1,233,222
Development Services		157,379			166,945			433,620			427,344
Eliminations		(1,630	)		(646	)		(3,195	)		(1,702	)
Net service revenues	$	630,330		$	627,490		$	1,771,800		$	1,658,864
Maintenance Services	$	91,349		$	90,371		$	210,241		$	181,155
Development Services		21,953			23,365			55,284			59,374
Corporate		(15,469	)		(15,257	)		(49,649	)		(53,746	)
Adjusted EBITDA ₍₁₎	$	97,833		$	98,479		$	215,876		$	186,783
Maintenance Services	$	14,292		$	15,086		$	33,759		$	42,663
Development Services		2,182			1,993			3,955			4,359
Corporate		11,174			1,556			34,029			4,000
Capital expenditures	$	27,648		$	18,635		$	71,743		$	51,022

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

	Three Months Ended					Nine Months Ended
	June 30, 2018			June 30, 2017		June 30, 2018			June 30, 2017
Net (loss) income	$	(1,397	)	$	15,402		(4,139	)	$	(37,873	)
Interest expense		27,499			24,922		77,481			73,372
Income tax provision (benefit)		1,247			1,102		(58,150	)		(22,037	)
Depreciation expense		17,839			19,919		56,642			60,740
Amortization expense		29,247			31,250		89,611			94,800
Establish public company financial reporting compliance (a)		555			407		3,372			2,379
Business transformation and integration costs (b)		2,466			2,645		21,402			10,808
Expenses related to initial public offering (c)		4,678			—		6,808			—
Equity-based compensation (d)		14,951			2,193		20,753			2,637
Management fees (e)		748			639		2,096			1,957
Adjusted EBITDA	$	97,833		$	98,479	$	215,876		$	186,783

(a)

Represents costs incurred to establish public company financial reporting compliance, including costs to comply with the requirements of Sarbanes-Oxley and the accelerated adoption of the new revenue recognition standard (ASC 606 – Revenue from Contracts with Customers) and other miscellaneous costs.

(b)	Business transformation and integration costs consist of (i) severance and related costs; (ii) rebranding of vehicle fleet; (iii) business integration costs and (iv) information technology infrastructure transformation costs and other.

(c)	Represents expenses incurred in connection with the IPO.

(d)	Represents equity-based compensation expense recognized for equity incentive plans outstanding.

(e)	Represents management fees paid to our Sponsors pursuant to the Monitoring Agreement.