bv-10q_20190630.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 ☒

As of July 31, 2019, the registrant had 104,842,195 shares of common stock, $0.01 par value per share, outstanding.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains “forward-looking statements” within the meaning of 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 strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements.

Words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” 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 “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018, and in this Form 10-Q, as such risk factors may be updated from time to time in our periodic filings with the SEC, and are accessible on the SEC’s website at www.sec.gov, and also include the following:

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. All forward-looking statements in this Form 10-Q apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

We use our website www.brightview.com as a channel of distribution of Company information. Financial and other important information regarding the Company is routinely accessible through and posted on our website. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about BrightView Holdings, Inc. when you enroll your e-mail address by visiting the “Email Alerts” page of the Investor Resources section of our website at https://investor.brightview.com. The contents of our website are not, however, a part of this Form 10-Q.

	June 30, 2019			September 30, 2018
Assets
Current assets:
Cash and cash equivalents	$	10,942		$	35,224
Accounts receivable, net		346,833			317,056
Unbilled revenue		102,348			99,876
Inventories		25,239			23,830
Other current assets		38,177			55,179
Total current assets		523,539			531,165
Property and equipment, net		278,252			256,806
Intangible assets, net		263,495			290,455
Goodwill		1,806,542			1,766,761
Other assets		44,058			46,711
Total assets	$	2,915,886		$	2,891,898
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	97,542		$	93,603
Current portion of long-term debt		10,370			12,963
Deferred revenue		62,675			72,476
Current portion of self-insurance reserves		40,283			34,537
Accrued expenses and other current liabilities		133,988			117,891
Total current liabilities		344,858			331,470
Long-term debt, net		1,145,833			1,141,279
Deferred tax liabilities		56,415			67,219
Self-insurance reserves		85,895			93,400
Other liabilities		28,056			31,203
Total liabilities		1,661,057			1,664,571
Stockholders’ equity:
Preferred stock, $0.01 par value; 50,000 shares authorized; no shares issued or outstanding as of June 30, 2019 and September 30, 2018		—			—
Common stock, $0.01 par value; 500,000 shares authorized; 104,842 and 104,470 shares issued and outstanding as of June 30, 2019 and September 30, 2018, respectively		1,049			1,045
Additional paid-in-capital		1,438,167			1,426,344
Accumulated deficit		(171,452	)		(189,636	)
Accumulated other comprehensive loss		(12,935	)		(10,426	)
Total stockholders’ equity		1,254,829			1,227,327
Total liabilities and stockholders’ equity	$	2,915,886		$	2,891,898

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

	Three Months Ended June 30,						Nine Months Ended June 30,
	2019			2018			2019			2018
Net service revenues	$	657,209		$	630,330		$	1,779,859		$	1,771,800
Cost of services provided		468,589			454,753			1,313,284			1,311,441
Gross profit		188,620			175,577			466,575			460,359
Selling, general and administrative expense		113,964			119,246			343,519			356,840
Amortization expense		13,936			29,247			42,873			89,611
Income from operations		60,720			27,084			80,183			13,908
Other income		382			265			104			1,284
Interest expense		18,360			27,499			54,429			77,481
Income (loss) before income taxes		42,742			(150	)		25,858			(62,289	)
Income tax (expense) benefit		(11,033	)		(1,247	)		(6,582	)		58,150
Net income (loss)	$	31,709		$	(1,397	)	$	19,276		$	(4,139	)
Income (loss) per share:
Basic and diluted	$	0.31		$	(0.02	)	$	0.19		$	(0.05	)

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

	Common Stock						Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
	Shares			Amount
Balance, March 31, 2019		104,962		$	1,050		$	1,437,859		$	(203,161	)	$	(11,784	)	$	1,223,964
Net income		—			—			—			31,709			—			31,709
Other comprehensive loss, net of tax		—			—			—			—			(1,151	)		(1,151	)
Capital contributions and issuance of common stock, net of forfeitures		(120	)		(1	)		1			—			—			—
Equity-based compensation		—			—			307			—			—			307
Balance, June 30, 2019		104,842		$	1,049		$	1,438,167		$	(171,452	)	$	(12,935	)	$	1,254,829

Balance, September 30, 2018		104,470		$	1,045		$	1,426,344		$	(189,636	)	$	(10,426	)	$	1,227,327
Net income		—			—			—			19,276			—			19,276
Other comprehensive loss, net of tax		—			—			—			—			(2,509	)		(2,509	)
Capital contributions and issuance of common stock, net of forfeitures		372			4			(3	)		—			—			1
Equity-based compensation		—			—			11,826			—			—			11,826
Adoption of ASU No. 2014-09 (Refer to Note 2)		—			—			—			(1,092	)		—			(1,092	)
Balance, June 30, 2019		104,842		$	1,049		$	1,438,167		$	(171,452	)	$	(12,935	)	$	1,254,829

	Common Stock						Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
	Shares			Amount
Balance, March 31, 2018		76,985		$	770		$	897,187		$	(177,289	)	$	(16,054	)	$	704,614
Net loss		—			—			—			(1,397	)		—			(1,397	)
Other comprehensive income, net of tax		—			—			—			—			3,315			3,315
Capital contributions and issuance of common stock		910			—			—			—			—			—
Equity-based compensation		—			—			14,951			—			—			14,951
Repurchase of common stock and distributions		—			(1	)		(111	)		—			—			(112	)
Other		—			—			—			(2	)		—			(2	)
Balance, June 30, 2018		77,895		$	769		$	912,027		$	(178,688	)	$	(12,739	)	$	721,369

Balance, September 30, 2017		77,083		$	771		$	894,089		$	(178,015	)	$	(20,584	)	$	696,261
Net loss		—			—			—			(4,139	)		—			(4,139	)
Other comprehensive income, net of tax		—			—			—			—			11,311			11,311
Capital contributions and issuance of common stock		922			—			99			—			—			99
Equity-based compensation		—			—			20,753			—			—			20,753
Repurchase of common stock and distributions		(110	)		(2	)		(2,914	)		—			—			(2,916	)
Reclassification of effects of tax reform enactment		—			—			—			3,466			(3,466	)		—
Balance, June 30, 2018		77,895		$	769		$	912,027		$	(178,688	)	$	(12,739	)	$	721,369

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

	Nine Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	19,276		$	(4,139	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		61,851			56,642
Amortization of intangible assets		42,873			89,611
Amortization of financing costs and original issue discount		2,790			8,080
Deferred taxes		(9,960	)		(57,837	)
Equity-based compensation		11,826			20,753
Realized loss on hedges		4,927			7,338
Provision for doubtful accounts		1,987			1,137
Other non-cash activities, net		(2,644	)		2,281
Change in operating assets and liabilities:
Accounts receivable		(26,023	)		(1,597	)
Unbilled and deferred revenue		(15,573	)		4,219
Inventories		(1,172	)		4,290
Other operating assets		19,637			(11,073	)
Accounts payable and other operating liabilities		(592	)		3,945
Net cash provided by operating activities		109,203			123,650
Cash flows from investing activities:
Purchase of property and equipment		(77,225	)		(71,743	)
Proceeds from sale of property and equipment		6,760			3,946
Business acquisitions, net of cash acquired		(59,453	)		(104,377	)
Other investing activities, net		1,347			(403	)
Net cash used in investing activities		(128,571	)		(172,577	)
Cash flows from financing activities:
Repayments of capital lease obligations		(4,085	)		(4,786	)
Repayments of debt		(125,370	)		(64,820	)
Proceeds from receivables financing agreement		115,000			70,000
Proceeds from revolving credit facility		10,000			55,000
Repurchase of common stock and distributions		—			(2,916	)
Proceeds from issuance of common stock		—			99
Other financing activities, net		(459	)		—
Net cash (used in) provided by financing activities		(4,914	)		52,577
Net change in cash and cash equivalents		(24,282	)		3,650
Cash and cash equivalents, beginning of period		35,224			12,779
Cash and cash equivalents, end of period	$	10,942		$	16,429

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

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.

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, 2018, presented herein, has been derived from the Company’s audited consolidated financial statements as of and for the fiscal year ended September 30, 2018, 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, 2018, filed with the Securities and Exchange Commission (“SEC”).

The preparation of 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 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.

On July 2, 2018, the Company completed the IPO in which the Company issued and sold 24,495 shares of common stock. The shares sold in the offering were registered under the Securities Act pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-225277) (the “Registration Statement”), which was declared effective by the SEC on June 27, 2018. The shares of the Company’s common stock were sold at an initial offering price of $22.00 per share, which generated net proceeds of approximately $501,172 to the Company, after deducting underwriting discounts and estimated offering expenses of approximately $37,717, which included $5,497 paid to KKR Capital Markets LLC (“KCM”), an affiliate of KKR, for underwriting services in connection with the IPO. The Company used the net proceeds from the IPO to repay all $110,000 of the Company’s second lien term loans, all $55,000 outstanding under the Company’s Revolving Credit Facility (as defined below) and approximately $336,100 of the Company’s first lien term loans and accrued and unpaid interest thereon. These repayments resulted in an extinguishment of debt in the amount of approximately $501,100, which was recognized in the fourth quarter of fiscal 2018.

BrightView was party to a Monitoring Agreement, dated as of December 18, 2013 (the “Monitoring Agreement”), with KKR and MSD Partners (“MSD” and together with KKR, the “Sponsors”), which was terminated on July 2, 2018 in accordance with its terms upon the completion of the IPO. In connection with such termination, during the fourth quarter of fiscal 2018, the Company paid termination fees of approximately $7,598 and $3,438 to KKR and MSD, respectively. Affiliates of KKR and MSD retained 55.9% and 13.0% ownership interest, respectively, in the Company immediately after the IPO.

The Company’s Third Amended and Restated Certificate of Incorporation (the “Charter”) became effective in connection with the completion of the IPO on July 2, 2018. The Charter, among other things, provides that the Company’s authorized capital stock consists of 500,000 shares of common stock, and 50,000 shares of preferred stock, par value $0.01 per share. The Company’s bylaws were also amended and restated as of July 2, 2018.

In connection with preparing for the IPO, the Company’s Board of Directors approved a 2.33839-for-one reverse stock split of the Company’s common stock. The reverse stock split became effective June 8, 2018. The par value per share of common stock and authorized shares of common stock remain unchanged. The accompanying consolidated financial statements and notes thereto give retroactive effect to the reverse stock split for all periods presented.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which was further updated in March and April 2016. The updated accounting guidance clarifies the principles for recognizing revenue and provides a single, contract-based revenue recognition model in order to create greater comparability for financial statement users across industries and jurisdictions. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the guidance in the first quarter of fiscal 2019 using the modified retrospective approach transition method.

The Company concluded that is has substantially similar performance obligations under the amended guidance as compared with deliverables previously recognized. Additionally, the Company made policy elections within the amended standards that are consistent with current accounting policies. The adoption of ASU 2014-09 has an immaterial impact on the timing of revenue recognition and did not have a significant impact on the Company’s consolidated financial statements. The Company recognized the cumulative effect of adopting the new standard as an adjustment to the opening balance of retained earnings resulting in an increase in the Accumulated deficit of $1,092. The additional revenue recognition disclosures required by the amended standard are presented in Note 3 “Revenue”. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This guidance requires that an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Company adopted the guidance in the first quarter of fiscal 2019. The adoption of ASU No. 2016-16 did not have a material impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities which amends and simplifies existing guidance to allow companies to more accurately present the economic effects of risk management activities in the financial statements. For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. The Company adopted the guidance in the first quarter of fiscal 2019. The adoption of ASU 2017-12 did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The updated accounting guidance requires lessees to recognize all leases on their balance sheet as a right-of-use asset and a lease liability with the exception of short-term leases. For income statement purposes, the criteria for recognition, measurement and presentation of expense is largely similar to previous guidance, but without the requirement to use bright-line tests in the determination of lease classification. The updated accounting guidance is effective for the Company as of October 1, 2019 and early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases: Targeted Improvements, which allows entities the option to adopt this standard using the modified retrospective transition method and include required disclosures for prior period.

The Company is in the process of reviewing its leasing arrangements in order to determine the impact the new guidance will have on its accounting, financial statement presentation and disclosure and to compare its accounting policies and practices to the requirements of the new standard. The Company intends to elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, will allow the Company to carry forward the historical lease classification. The Company is in the process of implementing system, control and process changes to capture lease data necessary to apply the new standard. The Company anticipates an increase in lease-related assets and liabilities on its consolidated balance sheets as a result of recognition of most operating leases, and anticipates adopting the standard using the modified retrospective transition method, in accordance with ASU No. 2018-11.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments, which was amended in May 2019 by ASU No. 2019-04, Codification Improvements to Topic 326, Financial Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief. These ASUs require entities to account for expected credit losses on financial instruments including trade receivables. The guidance is effective for the Company in the first quarter of fiscal 2021 and early adoption is permitted. The Company is currently evaluating the impact of the updated guidance on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income. The guidance is effective for the Company in the first quarter of fiscal 2021. Early adoption is permitted for any removed or modified disclosures and adoption of the additional disclosures can be delayed until the effective date. The Company does not currently expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements and disclosures due to the nature and materiality of the Company’s financial assets and liabilities.

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.

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 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, defined below, 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.

For Development Services, revenue is 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 have been immaterial in prior periods. 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.

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 achieves the disclosure objective to depict 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 13 “Segments”, the Company’s reportable segments are Maintenance Services and Development Services. Revenues shown for fiscal 2018 are in accordance with ASC 605, Revenue Recognition.

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, 2019, 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 $339,352. The Company expects to recognize revenue on 69% of the remaining performance obligations over the next 12 months and an additional 31% over the 12 months thereafter.

In accordance with the disclosure provisions of ASU 2014-09, the paragraph above excludes the following, i) estimated future revenues for performance obligations that are part of a contract that has an original expected duration 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 series guidance and iii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

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.

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, 2019 were as follows:

There were $113,181 of amounts billed during the period and $115,653 of additions to our unbilled revenue balance during the nine month period from October 1, 2018 to June 30, 2019.

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

The Company utilizes the right to invoice practical expedient for services performed on a per occurrence basis for land maintenance and snow removal services. This simplifies the recognition of revenue for entities when the amount invoiced to a customer directly corresponds with the value transferred to the customer.

The Company elected to apply the revenue standard only to contracts that are not completed as of the date of initial application.

Accounts receivable of $346,833 and $317,056, is net of an allowance for doubtful accounts of $5,482 and $5,629 and includes amounts of retention on incomplete projects to be completed within one year of $38,755 and $40,215 at June 30, 2019 and September 30, 2018, respectively.

Construction in progress includes costs incurred for software and other assets that have not yet been placed in service. Depreciation expense related to property and equipment was $20,884 and $17,839 for the three months ended June 30, 2019 and 2018, respectively. Depreciation expense related to property and equipment was $61,851 and $56,642 for the nine months ended June 30, 2019 and 2018, respectively.

Identifiable intangible assets consist of acquired customer contracts and relationships, trademarks and non-compete agreements. Amortization expense related to intangible assets was $13,936 and $29,247 for the three months ended June 30, 2019 and 2018, respectively. Amortization expense related to intangible assets was $42,873 and $89,611 for the nine months ended June 30, 2019 and 2018, respectively. These assets are amortized over their estimated useful lives of which the reasonableness is continually evaluated by the Company.

Intangible assets as of June 30, 2019 and September 30, 2018 consisted of the following:

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)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	BV	New York Stock Exchange

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive (Loss) Income	3
	Consolidated Statements of Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

	Three Months Ended June 30,						Nine Months Ended June 30,
	2019			2018			2019			2018
Net income (loss)	$	31,709		$	(1,397	)	$	19,276		$	(4,139	)
Net derivative (losses) gains arising during the period, net of tax of $854, $(559), $2,293 and $(2,881), respectively		(2,273	)		1,488			(6,051	)		6,303
Reclassification of losses into net income (loss), net of tax of $422, $688, $1,435 and $2,330, respectively		1,122			1,827			3,542			5,008
Other comprehensive (loss) income		(1,151	)		3,315			(2,509	)		11,311
Comprehensive income	$	30,558		$	1,918		$	16,767		$	7,172

	Three Months Ended June 30,						Nine Months Ended June 30,
	2019			2018			2019			2018
Landscape Maintenance	$	486,451		$	465,668		$	1,112,596		$	1,088,785
Snow Removal		5,654			8,913			245,356			252,590
Maintenance Services		492,105			474,581			1,357,952			1,341,375
Development Services		166,319			157,379			424,692			433,620
Eliminations		(1,215	)		(1,630	)		(2,785	)		(3,195	)
Net service revenues	$	657,209		$	630,330		$	1,779,859		$	1,771,800

	Deferred Revenue
Balance, October 1, 2018	$	72,476
Recognition of revenue		(743,452	)
Deferral of revenue		733,651
Balance, June 30, 2019	$	62,675

	June 30, 2019		September 30, 2018
Finished products	$	7,004	$	6,913
Semi-finished products		10,191		8,580
Raw materials and supplies		8,044		8,337
Inventories	$	25,239	$	23,830

	Useful Life	June 30, 2019		September 30, 2018
Land	—	$	54,060	$	51,490
Buildings and leasehold improvements	2-40 yrs.		40,663		36,275
Operating equipment	2-7 yrs.		203,135		186,499
Transportation vehicles	3-7 yrs.		230,746		208,371
Office equipment and software	3-10 yrs.		62,174		57,976
Construction in progress	—		6,803		4,202
Property and equipment			597,581		544,813
Less: Accumulated depreciation			319,329		288,007
Property and equipment, net		$	278,252	$	256,806