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What changed in BrightView Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BrightView Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+304 added−307 removedSource: 10-K (2024-11-13) vs 10-K (2023-11-16)

Top changes in BrightView Holdings, Inc.'s 2024 10-K

304 paragraphs added · 307 removed · 262 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe chart below illustrates the diversity of our Maintenance Services revenues: 2023 Maintenance Services Revenue by End Market (1) (1) Reflects the fiscal year ended September 30, 2023. 8 Table of Contents In addition to contracted maintenance services, we also have a strong track record of providing value-added landscape enhancements, defined as supplemental, non-contract specified maintenance or improvement services which are typically sold by our account managers to our maintenance services customers.
Biggest changeIn addition to contracted maintenance services, we also have a strong track record of providing value-added landscape enhancements, defined as supplemental, non-contract specified maintenance or improvement services which are typically sold by our account managers to our maintenance services customers. These landscape enhancements typically have a predictable level of demand related to our amount of contracted revenue with a customer.
We believe that due to our unmatched geographic scale and breadth of service offerings, we are the only commercial landscaping services provider able to service clients whose geographically disperse locations require a broad range of landscaping services delivered consistently and with high quality.
We believe that due to our geographic scale and breadth of service offerings, we are the only commercial landscaping services provider able to service clients whose geographically disperse locations require a broad range of landscaping services delivered consistently and with high quality.
In addition to our network of branch managers, production managers and account managers, our platform is differentiated by a highly experienced team of operational senior vice presidents and vice presidents, organized regionally, with an average tenure of 14 years. These team members are responsible for leading, teaching and developing branch managers as well as maintaining adherence to key operational strategies.
In addition to our network of branch managers, production managers and account managers, our platform is differentiated by a highly experienced team of operational senior vice presidents and vice presidents, organized regionally, with an average tenure of 18 years. These team members are responsible for leading, teaching and developing branch managers as well as maintaining adherence to key operational strategies.
These complex and specialized offerings showcase our technical expertise across a broad range of end market verticals. We perform our services across the full spectrum of project sizes, with landscape development projects generally ranging from $100,000 to over $10 million, with an average size of approximately $1.2 million.
These complex and specialized offerings showcase our technical expertise across a broad range of end market verticals. We perform our services across the full spectrum of project sizes, with landscape development projects generally ranging from $100,000 to over $10 million, with an average size of approximately $1.3 million.
Our SEC filings are also available on our website at https://www.brightview.com as soon as reasonably practicable after they are filed with or furnished to the SEC. From time to time, we may use our website as a distribution channel of material company information.
Our SEC filings are also available on our website at https://www.brightview.com as soon as reasonably practicable after they are filed with or furnished to the SEC. From time to time, we may use press releases or our website as a distribution channel of material company information.
Irrespective of whether a headquarters or corporate campus is located in an urban area or suburban area, we believe that companies are increasingly viewing their exterior landscaping as a competitive differentiator and are making significant investments to create visually appealing outdoor spaces. • Growth of Private Non-residential Construction.
Irrespective of whether a headquarters or corporate campus is located in an urban area or suburban area, we believe that companies are increasingly viewing their exterior landscaping as a competitive differentiator and are making significant investments to create visually appealing outdoor spaces. 12 Table of Contents • Growth of Private Non-residential Construction.
A portion of our snow removal business is contracted each year under fixed fee servicing arrangements that are subject to guaranteed minimum payments regardless of the season’s snowfall. The performance of our snow removal services business, however, is correlated with the amount of snowfall, the number of snowfall events and the nature of those events in a given season.
A portion of our snow removal business is contracted each year under fixed fee servicing arrangements that are subject to guaranteed minimum payments regardless of the season’s snowfall. 9 Table of Contents The performance of our snow removal services business, however, is correlated with the amount of snowfall, the number of snowfall events and the nature of those events in a given season.
Historically, we have used, and expect to continue to use in the future, a U.S. government program that provides H-2B temporary, non-immigrant visas to foreign workers to help satisfy a portion of our need for seasonal labor in certain markets.
Historically, we have used, and expect to 13 Table of Contents continue to use in the future, a U.S. government program that provides H-2B temporary, non-immigrant visas to foreign workers to help satisfy a portion of our need for seasonal labor in certain markets.
Similarly, our mobile quality site assessment application, which is designed for account managers to capture and 14 Table of Contents annotate customer feedback, provides us with the ability to “walk the site” with our customers, confirm our understanding of their needs and highlight future enhancement opportunities.
Similarly, our mobile quality site assessment application, which is designed for account managers to capture and annotate customer feedback, provides us with the ability to “walk the site” with our customers, confirm our understanding of their needs and highlight future enhancement opportunities.
Approximately three-quarters of the industry participants are classified as sole proprietors, with a limited set of companies having the capabilities to deliver sophisticated, large-scale landscaping services or operate regionally or nationally. The chart below illustrates the segmentation of the landscape maintenance industry and highlights BrightView’s coverage of the non-residential sectors of the industry: (1) Source: IBISWorld-Landscaping Services in the U.S.
The majority of industry participants are classified as sole proprietors, with a limited set of companies having the capabilities to deliver sophisticated, large-scale landscaping services or operate regionally or nationally. The chart below illustrates the segmentation of the landscape maintenance industry and highlights BrightView’s coverage of the non-residential sectors of the industry: (1) Source: IBISWorld-Landscaping Services in the U.S.
Our top ten customers accounted for approximately 12% of our fiscal 2023 revenues, with no single customer accounting for more than 3% of our fiscal 2023 revenues. Our business model is characterized by stable, recurring revenues, a scalable operating model, strong operating margins, limited capital expenditures and low working capital requirements that together generate significant Free Cash Flow.
Our top ten customers accounted for approximately 9% of our fiscal 2024 revenues, with no single customer accounting for more than 3% of our fiscal 2024 revenues. Our business model is characterized by stable, recurring revenues, a scalable operating model, strong operating margins, limited capital expenditures and low working capital requirements that together generate significant Free Cash Flow.
Such seasonality causes our results of operations to vary from quarter to quarter. Weather Conditions Weather may impact the timing of performance of landscape maintenance and enhancement services and progress on development projects from quarter to quarter.
Such seasonality causes our results of operations to vary from quarter to quarter. 14 Table of Contents Weather Conditions Weather may impact the timing of performance of landscape maintenance and enhancement services and progress on development projects from quarter to quarter.
(June 2022) (2) Source: IBISWorld-Snowplowing Services in the U.S. (June 2023) Steady growth in the commercial property markets has underpinned the commercial landscaping industry’s growth. Unlike individual residential customers, HOAs and military housing managers possess the same sophistication and expectation of high-quality services as corporations, and thus are more inclined to outsource landscaping needs to professional, scaled companies.
(April 2024) (2) Source: IBISWorld-Snowplowing Services in the U.S. (May 2024) Steady growth in the commercial property markets has underpinned the commercial landscaping industry’s growth. Unlike individual residential customers, HOAs and military housing managers possess the same sophistication and expectation of high-quality services as corporations, and thus are more inclined to outsource landscaping needs to professional, scaled companies.
Despite being the largest provider of commercial landscaping services, we currently hold only a 2.1% market share, representing a significant opportunity for future consolidation. According to the 2022 IBISWorld Report, there are over 600,000 enterprises providing landscape maintenance services in the United States.
Despite being the largest provider of commercial landscaping services, we currently hold only a 1.7% market share, representing a significant opportunity for future consolidation. According to the 2024 IBISWorld Report, there are over 660,000 enterprises providing landscape maintenance services in the United States.
As the number one player in the highly attractive and growing $96 billion commercial landscape maintenance and snow removal market, we believe our size and scale present several compelling value propositions for our customers, and allow us to offer a single-source landscaping services solution to a diverse group of commercial customers across all 50 U.S. states.
As the number one player in the highly attractive and growing $113 billion commercial landscape maintenance and snow removal market, we believe our size and scale present several compelling value propositions for our customers, and allow us to offer a single-source landscaping services solution to a diverse group of commercial customers across the United States.
We believe growth in commercial construction promotes growth in commercial landscape maintenance and development services. 11 Table of Contents Organization Our core operating strategy is to systematically deliver our services on a local level.
We believe growth in commercial construction promotes growth in commercial landscape maintenance and development services. Organization Our core operating strategy is to systematically deliver our services on a local level.
Presents commercial landscaping services and commercial snowplowing services as a share of the overall U.S. market at rates constant with IBISWorld figures for 2022 and 2023, respectively. 10 Table of Contents In addition to its stable characteristics, the industry is also highly fragmented.
Presents commercial landscaping services and commercial snowplowing services as a share of the overall U.S. market at rates constant with IBISWorld figures for 2024. 11 Table of Contents In addition to its stable characteristics, the industry is also highly fragmented.
Our website and the information contained on or connected to that site are not incorporated into this Annual Report on Form 10-K. 15 Table of Contents
Our website and the information contained on or connected to that site are not incorporated into this Annual Report on Form 10-K.
In 2022, commercial landscape maintenance, including snow removal, represented a $96 billion industry that is characterized by a number of attractive market drivers. The industry benefits from commercial customers’ need to provide consistently accessible and aesthetically-pleasing environments.
In 2024, commercial landscape maintenance, including snow removal, represents an $113 billion industry that is characterized by a number of attractive market drivers. The industry benefits from commercial customers’ need to provide consistently accessible and aesthetically-pleasing environments.
We employed approximately 1,900 and 2,100 seasonal workers in 2023 and 2022, respectively, through the H-2B visa program. 12 Table of Contents Safety We care about our employees and we believe that our commercial success is linked to a safe and healthy workforce.
We employed approximately 2,000 and 1,900 seasonal workers in 2024 and 2023, respectively, through the H-2B visa program. Safety We care about our employees and we believe that our commercial success is linked to a safe and healthy workforce.
Human Capital Employees As of September 30, 2023, we had a total of approximately 21,000 employees, including seasonal workers, consisting of approximately 20,400 full-time and approximately 600 part-time employees in our two business segments. The number of part-time employees varies significantly from time to time during the year due to seasonal and other operating requirements.
Human Capital Employees As of September 30, 2024, we had a total of approximately 19,600 employees, including seasonal workers, consisting of approximately 19,100 full-time and approximately 500 part-time employees in our two business segments. The number of part-time employees varies significantly from time to time during the year due to seasonal and other operating requirements.
Highlighting the consistency of this growth, the combined industry is expected to grow at a 3.0% CAGR from 2018 through 2027, as depicted in the chart below: Growth in the U.S.
Highlighting the consistency of this growth, the combined industry is expected to grow at a 2.3% CAGR from 2020 through 2029, as depicted in the chart below: Growth in the U.S.
Total Rewards Our total rewards philosophy is designed to offer compensation and benefits programs that enable us to attract, motivate, reward and retain high-caliber employees who are capable of creating and sustaining value for our stockholders over the long-term and to design programs that are fair and competitive in order to appropriately reward employees for their contributions to our success.
Total Rewards Our total rewards philosophy is designed to offer compensation and benefits programs that enable us to attract, motivate, reward and retain high-caliber employees who are capable of creating and sustaining value for our stockholders over the long-term.
Fleet Our highly visible fleet of approximately 15,000 trucks and trailers foster the strong brand equity associated with BrightView. We manage our fleet with a dedicated centralized team, as well as regional equipment managers, who together focus on compliance, maintenance, asset utilization and procurement. We believe we have the largest fleet of vehicles in the commercial landscape maintenance industry.
Fleet Our highly visible fleet of approximately 15,500 trucks and trailers foster the strong brand equity associated with BrightView. We manage our fleet with a dedicated centralized team, as well as regional equipment managers, who together focus on compliance, maintenance, asset utilization and procurement.
We generally experience our highest level of employment during the spring and summer seasons, which correspond with our third and fourth fiscal quarters. The approximate number of full-time employees by segment, as of September 30, 2023, is as follows: Maintenance Services: 16,900; Development Services: 3,200. In addition, our corporate staff is approximately 300 employees.
We generally experience our highest level of employment during the spring and summer seasons, which correspond with our third and fourth fiscal quarters. The approximate number of full-time employees by segment, as of September 30, 2024, is as follows: Maintenance Services: 15,750; Development Services: 2,950. In addition, our corporate staff is approximately 400 employees.
For the year ended September 30, 2023, in Development Services, we generated net service revenues of $758.0 million and Segment Adjusted EBITDA of $82.8 million, with a Segment Adjusted EBITDA Margin of 10.9%. Our History In 2013, affiliates of KKR acquired our predecessor business, Brickman Holding Group, Inc. In 2014, we acquired ValleyCrest Holding Co.
For the year ended September 30, 2024, in Development Services, we generated net service revenues of $808.8 million and Segment Adjusted EBITDA of $106.3 million, with a Segment Adjusted EBITDA Margin of 13.1%. 10 Table of Contents Our History In 2013, affiliates of KKR acquired our predecessor business, Brickman Holding Group, Inc. In 2014, we acquired ValleyCrest Holding Co.
Commercial Landscaping and Snow Removal Services Industry (US$ in billions) (1) (1) Source: IBISWORLD - Landscaping Services in the U.S (June 2022), IBISWorld - Snowplowing Services in the U.S (June 2023).
Commercial Landscaping and Snow Removal Services Industry (US$ in billions) (1) (1) Source: IBISWORLD - Landscaping Services in the U.S (April 2024), IBISWorld - Snowplowing Services in the U.S (May 2024).
Extreme weather events such as hurricanes and tropical storms can result in a positive impact to our business in the form of increased enhancement services revenues related to cleanup and other services.
Extreme weather events such as hurricanes and tropical storms can result in a positive impact to our business in the form of increased enhancement services revenues related to cleanup and other services. However, such weather events may also negatively impact our ability to deliver our contracted services, sell and deliver enhancement services or impact the timing of performance.
We operate through a differentiated and integrated national service model which systematically delivers services at the local level by combining our network of over 280 branches with a qualified service partner network.
We provide commercial landscaping services, ranging from landscape maintenance and enhancements to tree care and landscape development. We operate through a differentiated and integrated national service model which systematically delivers services at the local level by combining our network of over 280 branches with a qualified service partner network.
Maintenance Services Overview Our Maintenance Services segment delivers a full suite of recurring commercial landscaping services ranging from mowing, gardening, mulching and snow removal, to more horticulturally advanced services, such as water management, irrigation maintenance, tree care, golf course maintenance and specialty turf maintenance.
We serve a geographically diverse set of customers through our strategically located network of branches, as illustrated below. 8 Table of Contents Maintenance Services Overview Our Maintenance Services segment delivers a full suite of recurring commercial landscaping services ranging from mowing, gardening, mulching and snow removal, to more horticulturally advanced services, such as water management, irrigation maintenance, tree care, golf course maintenance and specialty turf maintenance.
These landscape enhancements typically have a predictable level of demand related to our amount of contracted revenue with a customer. We have a strong maintenance presence in both evergreen and seasonal markets. Evergreen markets are defined as those which require year-round landscape maintenance. In our seasonal markets, we are also a leading provider of snow removal services.
We have a strong maintenance presence in both evergreen and seasonal markets. Evergreen markets are defined as those which require year-round landscape maintenance. In our seasonal markets, we are also a leading provider of snow removal services.
Sourcing and Suppliers Our size and broad national network make us an attractive partner for many industry-leading manufacturers and suppliers, which has allowed us to maintain strong, long-term relationships with our supply base.
We believe we have the largest fleet of vehicles in the commercial landscape maintenance industry. 16 Table of Contents Sourcing and Suppliers Our size and broad national network make us an attractive partner for many industry-leading manufacturers and suppliers, which has allowed us to maintain strong, long-term relationships with our supply base.
For the year ended September 30, 2023, in Maintenance Services, we generated net service revenues of $2,066.5 million, including $209.0 million from snow removal services, and Segment Adjusted EBITDA of $277.9 million, with a Segment Adjusted EBITDA Margin of 13.4%.
For the year ended September 30, 2024, in Maintenance Services, we generated net service revenues of $1,964.0 million, including $220.8 million from snow removal services, and Segment Adjusted EBITDA of $279.7 million, with a Segment Adjusted EBITDA Margin of 14.2%.
Our diverse customer base includes approximately 8,800 office parks and corporate campuses, 7,100 residential communities, and 550 educational institutions.
Our diverse customer base includes approximately 11,700 office parks and corporate campuses, 10,000 residential communities, and 700 educational institutions.
We believe the quality of our work is also well-regarded by our end-customers, some of whom directly request that their general contractors utilize our services when outsourcing their landscape development projects.
In our Development Services business, we are typically hired by general contractors with whom we maintain strong relationships as a result of our superior technical and project management capabilities. We believe the quality of our work is also well-regarded by our end-customers, some of whom directly request that their general contractors utilize our services when outsourcing their landscape development projects.
Branch managers are supported by production managers, who focus on managing crew leaders, and account managers, who focus on customer retention and sales of landscape enhancement services.
Branch managers are supported by production managers, who focus on managing crew leaders, and account managers, who focus on customer retention and sales of landscape enhancement services. Each branch is also supported by a dedicated business developer, who is focused on winning new customers at a local level.
We also have a separate 14-member sales team that is focused on targeting and capturing high-value, high-margin opportunities, including national accounts. Within our Maintenance Services segment, every customer relationship is maintained by one of our more than 600+ branch-level account managers, who are responsible for ensuring customer satisfaction, tracking service levels, promoting enhancement services and driving contract renewals.
Within our Maintenance Services segment, every customer relationship is maintained by one of our more than 665+ branch-level account managers, who are responsible for ensuring customer satisfaction, tracking service levels, promoting enhancement services and driving contract renewals.
We believe that our capabilities as a single-source landscape development provider represent a point of comfort for our customers who can be certain that we are managing their landscape development project from inception to completion. 9 Table of Contents In our Development Services business, we are typically hired by general contractors with whom we maintain strong relationships as a result of our superior technical and project management capabilities.
We believe that our capabilities as a single-source landscape development provider represent a point of comfort for our customers who can be certain that we are managing their landscape development project from inception to completion.
We believe these investments position BrightView at the forefront of technology within the commercial landscaping industry, enabling us to drive operational efficiencies throughout the business. Our IT systems allow us to provide a high level of convenience and service to our customers, representing a competitive advantage that is difficult to replicate for less technologically sophisticated competitors.
Our IT systems allow us to provide a high level of convenience and service to our customers, representing a competitive advantage that is difficult to replicate for less technologically sophisticated competitors.
Our programs are structured to meet the diverse needs of our employees and their families. Among other things, we offer eligible employees comprehensive health and wellness plans, retirement savings plans, continuing education support, and the opportunity to earn short-term and long-term incentive awards.
Among other things, we offer eligible employees comprehensive health and wellness plans, retirement savings plans, continuing education support, and the opportunity to earn short-term and long-term incentive awards. Training We are committed to fostering an engaged and skilled workforce that aligns with our company's long-term growth and performance goals.
Certain facilities used by our Development Services segment are shared or co-located with our Maintenance organization. Our Development Services branch network is supported by two design centers, as well as centralized support functions similar to our Maintenance Services organization.
Our Development Services organization is centered around approximately 40 branch locations strategically located in large metropolitan areas with supportive demographics for growth and real estate development. Certain facilities used by our Development Services segment are shared or co-located with our Maintenance organization. Our Development Services branch network is supported by centralized support functions similar to our Maintenance Services organization.
ETC not only provides accurate information for compliance and payroll purposes, but also enables our leadership with granular, analytical insights into job costing and crew productivity. Sales and Marketing Our sales and marketing efforts are focused on both developing new customers and increasing penetration at existing customers.
ETC not only provides accurate information for compliance and payroll purposes, but also enables our leadership with granular, analytical insights into job costing and crew productivity. For information on our cyber risk management and response strategies, see Part I. Item 1C. "Cybersecurity" below.
We primarily sell our services to businesses, commercial property managers, general contractors and landscape architects through our professionally trained core sales force. We have a field-based sales approach driven by our growing team of more than 160 business developers that are focused on winning new customers at a local level.
Sales and Marketing Our sales and marketing efforts are focused on both developing new customers and increasing penetration at existing customers. We primarily sell our services to businesses, commercial property managers, general contractors and landscape architects through our professionally trained core sales force.
However, such weather events may also negatively impact our ability to deliver our contracted services, sell and deliver enhancement services or impact the timing of performance. 13 Table of Contents In our seasonal markets, the performance of our snow removal services is correlated with the amount of snowfall, the number of snowfall events and the nature of those events in a given season.
In our seasonal markets, the performance of our snow removal services is correlated with the amount of snowfall, the number of snowfall events and the nature of those events in a given season. We benchmark our performance against ten-, fifteen-, and thirty-year averages.
As of September 30, 2023, we had marks that were protected by registration (either by direct registration or by treaty) in the United States.
Intellectual Property We hold or have rights to use various service marks, trademarks and trade names we use in the operation of our businesses that are necessary to the operations of our businesses. As of September 30, 2024, we had a number of marks that were protected by registration (either by direct registration or by treaty) in the United States.
Our Company We are the largest provider of commercial landscaping services in the United States, with revenues approximately 5 times those of our next largest commercial landscaping competitor. We provide commercial landscaping services, ranging from landscape maintenance and enhancements to tree care and landscape development.
The holding company and BrightView are collectively referred to in this Form 10-K (the “Annual Report”) as “we,” “us,” “our,” “ourselves,” “Company,” or “BrightView.” Our Company We are the largest provider of commercial landscaping services in the United States, with revenues approximately 5 times those of our next largest commercial landscaping competitor.
For the year ended September 30, 2023, we generated net service revenues of $2,816.0 million, net loss of $7.7 million and Adjusted EBITDA of $298.7 million, with a net loss margin of 0.3% and an Adjusted EBITDA margin of 10.6%. 7 Table of Contents Our Operating Segments We deliver our broad range of services through two operating segments: Maintenance Services and Development Services.
For the year ended September 30, 2024, we generated net service revenues of $2,767.1 million, net income of $66.4 million and Adjusted EBITDA of $324.7 million, with a net income margin of 2.4% and an Adjusted EBITDA margin of 11.7%.
During fiscal 2023, there were no material capital expenditures for environmental control facilities. Information Technology We have invested in technology designed to accelerate business performance, enhancing our ability to support standard processes while retaining local and regional flexibility.
Information Technology We have invested in technology designed to accelerate business performance, enhancing our ability to support standard processes while retaining local and regional flexibility. We believe these investments position BrightView at the forefront of technology within the commercial landscaping industry, enabling us to drive operational efficiencies throughout the business.
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The holding company and BrightView are collectively referred to on Form 10-K (the “Annual Report”) as “we,” “us,” “our,” “ourselves,” “Company,” or “BrightView.” 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 Kohlberg Kravis Roberts & Co. Inc. (“KKR”).
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For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to their most directly comparable GAAP measures, see "Non-GAAP Financial Measures" in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 Table of Contents Our Operating Segments We deliver our broad range of services through two operating segments: Maintenance Services and Development Services.
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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.
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The chart below illustrates the diversity of our Maintenance Services revenues: 2024 Maintenance Services Revenue by End Market (1) (1) Reflects the fiscal year ended September 30, 2024.
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We serve a geographically diverse set of customers through our strategically located network of branches in 36 U.S. states and, through our qualified service partner network, we are able to efficiently provide nationwide coverage in all 50 U.S. states, as illustrated below.
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In November 2023, the Company launched our One BrightView initiative to position ourselves for sustained profitable growth. Through this, BrightView has undergone an organizational transformation re-centered around a customer centric approach, investing in frontline employees, and streamlining our operating structure.
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In 2016, we reconstituted our senior leadership team and refocused our strategy to realign with the fundamental strengths of our business. BrightView has undergone an organizational transformation recentered around a branch-centric model, empowering leaders at the local and regional levels, and supporting branch locations with appropriate back office functions and an effective corporate framework.
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We design our programs with a focus on being fair and competitive in order to appropriately reward employees for their contributions to our success. Our programs are structured to meet the diverse needs of our employees and their families.
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We supplement our branch network with our qualified service partner network, which is managed by our BrightView Enterprise Solutions team, or BES. Through our BES platform, we are able to provide landscape maintenance services in all 50 U.S. states. BES identifies qualified service providers in areas where we do not have branches, thereby extending our service area.
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We have integrated microlearning modules and mobile platforms for accessible, on-the-go skill development, ensuring that all team members, from hourly employees to leadership, can continuously improve their capabilities. We remain committed to aligning our workforce's development with BrightView's strategic priorities.
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Our qualified service partner screening process is designed to ensure that each of our service partners has the appropriate technical expertise, equipment and resources, including insurance coverage, to support the projects we assign to them. Our Development Services organization is centered around 40 branch locations strategically located in large metropolitan areas with supportive demographics for growth and real estate development.
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Other than the BrightView brand, which includes our logo design, and the BrightView word mark, we do not consider our service marks, trademarks, or trade names to be material to the operations of our business.
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Training We are committed to developing and unlocking the potential of our people and we make significant investments in training and professional development. BrightView University, our learning and development platform, underpins the development of leadership and professional skills.
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During fiscal 2024, there were no material capital expenditures for environmental control facilities. 15 Table of Contents There are a number of proposed and pending rules and regulations relating to climate-related disclosures that we will be subject to if such rules become effective and survive pending legal challenges.
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We benchmark our performance against ten-, fifteen-, and thirty-year averages. Intellectual Property We, primarily through our subsidiaries, hold or have rights to use various service marks, trademarks and trade names we use in the operation of our businesses that we deem particularly important to each of our businesses.
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For example, on March 6, 2024, the SEC adopted a final rule requiring public companies to include various climate-related disclosures in certain documents filed with the SEC, including climate-related financial statement metrics, greenhouse gas emissions and climate related targets and goals, and management's role in managing material climate-related risks.
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A number of state legislators and regulators have adopted or are currently considering proposing or adopting other rules, regulations, directives, initiatives and laws requiring climate-related disclosures or limiting (or affirmatively requiring) certain climate-related conduct, including California laws S.B. 253, S.B. 261 and A.B. 1305. The Company is monitoring the status of such regulations.
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We have a field-based sales approach driven by our growing team of more than 200 business developers that are focused on winning new customers at a local level. We also have a separate 34-member sales team that is focused on targeting and capturing high-value, high-margin opportunities, including national accounts.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

87 edited+10 added−20 removed194 unchanged
Biggest changeOur certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the sole and exclusive forums for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
Biggest changeOur Series A Preferred Stock, if not converted into common stock, will also be senior to our common stock in distribution and liquidation if such shares are not converted into common stock, which could negatively affect the value of our common stock and impair our ability to raise additional capital. 27 Table of Contents Our certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the sole and exclusive forums for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
We seek to manage price and availability risks related to raw materials, such as fuel, fertilizer, chemicals, road salt and mulch, through procurement strategies, these efforts may not be successful and we may experience adverse impacts due to the rising prices of such products.
Although we seek to manage price and availability risks related to raw materials, such as fuel, fertilizer, chemicals, road salt and mulch, through procurement strategies, these efforts may not be successful and we may experience adverse impacts due to the rising prices of such products.
Tax increases and changes in tax rules may adversely affect our financial results As a company conducting business with physical operations throughout North America, we are exposed, both directly and indirectly, to the effects of changes in U.S., state and local tax rules.
Tax increases and changes in tax rules may adversely affect our financial results As a company conducting business with physical operations throughout North America, we are exposed, both directly and indirectly, to the effects of changes in U.S. federal, state and local tax rules.
Variability in the frequency of which we must perform our services can affect the margins we realize on a given contract. Certain extreme weather events, such as hurricanes and tropical storms, can result in increased enhancement revenues related to cleanup and other services.
Variability in the frequency of which we must perform our services can affect the margins we realize on a given contract. Certain extreme weather events, such as hurricanes and tropical storms, can result in increased revenues related to cleanup and other services.
If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock. Item 1B.
If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.
Beginning in 2024, the Inflation Reduction Act of 2022 (“IRA”) will impose a 15% minimum tax on global adjusted financial statement income for corporations with three-year average annual adjusted financial statement income exceeding $1 billion. The IRA also imposes a 1% excise tax on certain repurchases (including certain redemptions) of stock by publicly traded domestic corporations.
Beginning in 2024, the Inflation Reduction Act of 2022 (“IRA”) imposes a 15% minimum tax on global adjusted financial statement income for corporations with three-year average annual adjusted financial statement income exceeding $1 billion. The IRA also imposes a 1% excise tax on certain repurchases (including certain redemptions) of stock by publicly traded domestic corporations.
These provisions provide for, among other things, our Board of Directors to issue one or more series of preferred stock; advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual 26 Table of Contents meetings; certain limitations on convening special stockholder meetings; the removal of directors only upon the affirmative vote of the holders of at least 66 2 ⁄ 3 % of the shares of common stock entitled to vote generally in the election of directors if KKR and its affiliates cease to beneficially own at least 40% of shares of common stock entitled to vote generally in the election of directors.
These provisions provide for, among other things, our Board of Directors to issue one or more series of preferred stock; advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; certain limitations on convening special stockholder meetings; the removal of directors only upon the affirmative vote of the holders of at least 66 2 ⁄ 3 % of the shares of common stock entitled to vote generally in the election of directors if KKR and its affiliates cease to beneficially own at least 40% of shares of common stock entitled to vote generally in the election of directors.
We perform landscape services, the demand for which is affected by weather conditions, including impacts from climate change, droughts, severe storms, significant rain or snowfall and other severe weather conditions or events, all of which may impact the timing and frequency of the performance of our services, or our ability to perform the services at all.
We perform landscape services, the demand for which is affected by weather conditions, including impacts from climate change, droughts, severe storms, significant rain or snowfall and other severe weather conditions or events (including hurricanes and wildfires), all of which may impact the timing and frequency of the performance of our services, or our ability to perform the services at all.
Any of our competitors may foresee the course of market development more accurately than we do, provide superior service, have the ability to deliver similar services at a 16 Table of Contents lower cost, develop stronger relationships with our customers and other consumers in the landscape services industry, adapt more quickly to evolving customer requirements, devote greater resources to the promotion and sale of their services or access financing on more favorable terms than we can obtain.
Any of our competitors may foresee the course of market development more accurately than we do, provide superior service, have the ability to deliver similar services at a lower cost, develop stronger relationships with our customers and other consumers in the landscape services industry, adapt more quickly to evolving customer requirements, devote greater resources to the promotion and sale of their services or access financing on more favorable terms than we can obtain.
Although we conduct due diligence investigations prior to each acquisition, there can be no assurance that we will discover or adequately protect against all material liabilities of an acquired business for which we may be responsible as a successor owner or operator.
Although we conduct due diligence investigations prior to each acquisition, there can be no assurance that we will discover or adequately protect against liabilities of an acquired business for which we may be responsible as a successor owner or operator.
Our financial performance has been adversely affected by increases in our operating expenses, including fuel, fertilizer, chemicals, road salt, mulch, wages and salaries, employee benefits, health care, subcontractor costs, vehicle, facilities and equipment leases, insurance and regulatory compliance costs.
Our financial performance has been adversely affected in the past by increases in our operating expenses, including fuel, fertilizer, chemicals, road salt, mulch, wages and salaries, employee benefits, health care, subcontractor costs, vehicle, facilities and equipment leases, insurance and regulatory compliance costs.
There can be no assurance that we will be able to obtain new business, renew existing customer contracts at the same or higher levels of pricing or that our current customers will not cease operations, elect to self-operate or terminate contracts with us.
There can be no assurance that we will be able to obtain new business, renew existing customer contracts at the same or higher levels of pricing or that our current customers will not elect to self-operate or terminate contracts with us.
Consequently, we cannot predict with certainty whether, if challenged, a court will enforce any particular non-competition agreement. Any increased competition from businesses started by former employees may reduce our market share and adversely affect our business, financial position, results of operations and cash flows. Our business success depends on our ability to preserve long-term customer relationships.
Consequently, we cannot predict with certainty whether, if challenged, a court will enforce any particular non-competition agreement. Any increased competition from businesses started by former employees may reduce our market share and adversely affect our business, financial position, results of operations and cash flows. 17 Table of Contents Our business success depends on our ability to preserve long-term customer relationships.
A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that these assets are impaired. Accounting for our numerous historical acquisitions has resulted in the generation of various amounts of goodwill.
A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that these assets are impaired. Accounting for our numerous historical transactions has resulted in the generation of various amounts of goodwill.
Geopolitical instability, including overseas conflicts, may increase the risk that we will experience cyber-attacks or 23 Table of Contents cyber-intrusions. Any unauthorized disclosure of confidential information could damage our reputation, interrupt our operations and could result in a violation of applicable laws, regulations, industry standards or agreements and potentially subject us to costs, penalties and liabilities.
Geopolitical instability, including overseas conflicts, may increase the risk that we will experience cyber-attacks or cyber-intrusions. Any unauthorized disclosure of confidential information could damage our reputation, interrupt our operations and could result in a violation of applicable laws, regulations, industry standards or agreements and potentially subject us to costs, penalties and liabilities.
For example, due to the highly fragmented nature of our industry, it may be difficult for us to identify potential targets with revenues sufficient to justify taking on the risks associated with pursuing their acquisition.
For example, due to the highly fragmented nature of our industry, it may be difficult for us to identify potential targets with revenues sufficient to justify taking on the risks associated with pursuing the acquisition of such targets.
As a result, a decline in frequency or total amounts of snowfall in multiple regions for an extended time could cause our results of operations to decline and adversely affect our ability to generate cash flow.
As a result, a decline in frequency or total amounts of snowfall in multiple regions for an extended time could cause our results of operations to decline and adversely affect our ability to generate cash flows.
To the extent such costs continue to increase, we may be prevented, in whole or in part, from passing these cost increases through to our existing and prospective customers, which could have a material adverse impact on our business, financial position, results of operations and cash flows.
To the extent such costs continue to increase, we may be prevented, 28 Table of Contents in whole or in part, from passing these cost increases through to our existing and prospective customers, which could have a material adverse impact on our business, financial position, results of operations and cash flows.
The Biden administration has announced, and in certain cases has enacted, a number of tax proposals in the past three years to fund new government investments in infrastructure, healthcare, and education, among other things.
The Biden administration has announced, and in certain cases has enacted, a number of tax proposals in the past four years to fund new government investments in infrastructure, healthcare, and education, among other things.
Our level of debt could have important consequences, including making it more difficult for us to satisfy our obligations with respect to our debt, limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements, requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions and other general corporate purposes, increasing our vulnerability to adverse changes in general economic, industry and competitive conditions, exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the Credit Agreement, are at variable rates of interest, limiting our flexibility in planning for and reacting to changes in the industries in which we compete, placing us at a disadvantage compared to other, less leveraged competitors, increasing our cost of borrowing and hampering our ability to execute on our growth strategy.
Our level of debt could have important consequences, including making it more difficult for us to satisfy our obligations with respect to our debt, limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements, requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions and other general corporate purposes, increasing our vulnerability to adverse changes in general economic, industry and competitive conditions, exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our credit agreement dated December 18, 2013 (as amended, the “Credit Agreement”), are at variable rates of interest, limiting our flexibility in planning for and reacting to changes in the industries in which we compete, placing us at a disadvantage compared to other, less leveraged competitors, increasing our cost of borrowing and hampering our ability to execute on our growth strategy.
These rules and regulations have increased our legal and financial compliance costs and made some activities more time-consuming and costly. Our management devotes a substantial amount of time to ensure that we comply with all of these 29 Table of Contents requirements, diverting the attention of management away from revenue-producing activities.
These rules and regulations have increased our legal and financial compliance costs and made some activities more time-consuming and costly. Our management devotes a substantial amount of time to ensure that we comply with all of these requirements, diverting the attention of management away from revenue-producing activities.
We are subject to governmental regulation at the federal, state, and local levels in many areas of our business, such as employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, transportation laws, environmental laws, false claims or whistleblower statutes, disadvantaged business enterprise statutes, tax codes, antitrust and competition laws, intellectual property laws, governmentally funded entitlement programs and cost and accounting principles, the Foreign Corrupt Practices Act, other anti-corruption laws, lobbying laws, motor carrier safety laws and data privacy and security laws.
We are subject to governmental regulation at the federal, state, and local levels in many areas of our business, such as employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, transportation laws, environmental laws, false claims or whistleblower statutes, disadvantaged business enterprise statutes, tax codes, antitrust and competition laws, intellectual property laws, government-funded entitlement programs and cost and accounting principles, the Foreign Corrupt Practices 21 Table of Contents Act, other anti-corruption laws, lobbying laws, motor carrier safety laws and data privacy and security laws.
If we fail to comply with applicable laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions or civil remedies, including fines, 21 Table of Contents penalties, damages, reimbursement, injunctions, seizures, disgorgements or the loss of the ability to operate our motor vehicles.
If we fail to comply with applicable laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, disgorgements or the loss of the ability to operate our motor vehicles.
We are subject to risks caused by data breaches and operational disruptions, particularly through cyber-attack, cyber-intrusion, ransomware attacks, phishing attempts or other social engineering attempts to fraudulently induce the transfer of company funds, including by computer hackers, foreign governments and cyber terrorists.
We are subject to risks caused by data breaches and 23 Table of Contents operational disruptions, particularly through cyber-attack, cyber-intrusion, ransomware attacks, phishing attempts or other social engineering attempts to fraudulently induce the transfer of company funds, including by computer hackers, foreign governments and cyber terrorists.
KKR or One Rock and their respective affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
KKR or One Rock and their respective affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. 26 Table of Contents Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
Additionally, the effects of climate change may impact the frequency and total amounts of future snowfall, which could have a material adverse effect on our revenues, results of operations and cash flow. 19 Table of Contents Our success depends on our executive management and other key personnel.
Additionally, the effects of climate change may impact the frequency and total amounts of future snowfall, which could have a material adverse effect on our revenues, results of operations and cash flow. Our success depends on our executive management and other key personnel.
In addition, geopolitical conflicts, such as the current war in Ukraine, the Israel-Hamas war, or potential conflict between China and Taiwan and any related international response may exacerbate these inflationary pressures. Therefore, the recessionary risks discussed above and elsewhere in these risk factors are more pronounced in the current economic environment.
In addition, geopolitical conflicts, such as the current war in Ukraine, conflicts in the Middle East, or potential conflict between China and Taiwan and any related international response may exacerbate these inflationary pressures. Therefore, the recessionary risks discussed above and elsewhere in these risk factors are more pronounced in the current economic environment.
Our industry and the markets in which we operate are highly competitive and increased competitive pressures could reduce our share of the markets we serve and adversely affect our business, financial position, results of operations and cash flows.
Risks Related to Our Business Our industry and the markets in which we operate are highly competitive and increased competitive pressures could reduce our share of the markets we serve and adversely affect our business, financial position, results of operations and cash flows.
See Note 10 “Fair Value Measurements and Derivative Instruments” to our audited consolidated financial statements included in Part II. Item 8 of this Form 10-K. Our debt agreements contain restrictions that limit our flexibility in operating our business. The Credit Agreement imposes significant operating and financial restrictions.
See Note 10 " Fair Value Measurements and Derivative Instruments" to our audited consolidated financial statements included in Part II. Item 8 of this Form 10-K. Our debt agreements contain restrictions that limit our flexibility in operating our business. The Credit Agreement imposes significant operating and financial restrictions.
Although the Credit Agreement contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
Although the Credit Agreement contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness 25 Table of Contents incurred in compliance with these restrictions could be substantial.
We employed approximately 1,900 seasonal workers in fiscal year 2023 and approximately 2,100 in fiscal year 2022 through the H-2B visa program. If we are unable to hire sufficient numbers of seasonal workers, through the H-2B program or otherwise, we may experience a labor shortage.
We employed approximately 2,000 seasonal workers in fiscal year 2024 and approximately 1,900 seasonal workers in fiscal year 2023 through the H-2B visa program. If we are unable to hire sufficient numbers of seasonal workers, through the H-2B visa program or otherwise, we may experience a labor shortage.
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, have adversely impacted our business, financial position, results of operations and cash flows.
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, can adversely impact our business, financial position, results of operations and cash flows.
If we are unable to compete effectively with our existing competitors or new competitors enter the markets in which we operate, or our current customers stop outsourcing their landscape maintenance services, our financial position, results of operations and cash flows may be materially and adversely affected.
If we are unable to compete effectively with our existing competitors, or new competitors enter the markets in which we operate, or our current customers choose to discontinue landscape maintenance services, our financial position, results of operations and cash flows may be materially and adversely affected.
KKR and One Rock have the ability to exert significant influence over us and their interests may conflict with ours or yours in the future. As of September 30, 2023, the Affiliated Investors beneficially own approximately 71.6% of the combined voting power of our outstanding shares of preferred stock and common stock.
KKR and One Rock have the ability to exert significant influence over us and their interests may conflict with ours or yours in the future. As of September 30, 2024, the Affiliated Investors beneficially own approximately 58.7% of the combined voting power of our outstanding shares of preferred stock and common stock.
Additionally, in the event we were to withdraw from some or all of these plans as a result of our exiting certain markets or otherwise, and the relevant plans are underfunded, we may become subject to a withdrawal liability.
Additionally, in the event we were to withdraw from some or all of these plans as a result of our exiting certain markets or otherwise, and the relevant plans are underfunded, we may become subject to a withdrawal liability. The amount of these required contributions may be material.
A future impairment, if any, could have a material adverse effect to our financial position or results of operations. See Note 7 “Intangible Assets, Goodwill and Acquisitions” to our audited consolidated financial statements included in Part II.
A future impairment, if any, could have a material adverse effect to our financial position or results of operations. See Note 7 "Intangible Assets, Goodwill, Acquisitions, and Divestitures” to our audited consolidated financial statements included in Part II.
The strength of these markets depends on, among other things, housing starts, local occupancy rates, demand for commercial space, non-residential construction spending activity, business investment and general economic conditions, which are a function of many factors beyond our control, including interest rates, employment levels, availability of credit, consumer spending, consumer confidence and capital spending.
The strength of these markets depends on, among other things, housing starts, local occupancy rates, demand for commercial space, increased adoption of remote-working arrangements, non-residential construction spending activity, business investment and general economic conditions, which are a function of many factors beyond our control, including interest rates, employment levels, availability of credit, consumer spending, 19 Table of Contents consumer confidence and capital spending.
In accordance with accounting principles generally accepted in the United States of America (“GAAP”), goodwill and indefinite lived intangible assets are evaluated for impairment annually, or more frequently if circumstances indicate impairment may have occurred. As of September 30, 2023, the net carrying value of goodwill and other intangible assets, net, represented $2,153.7 million, or 64.2% of our total assets.
In accordance with accounting principles generally accepted in the United States of America (“GAAP”), goodwill and indefinite lived intangible assets are evaluated for impairment annually, or more frequently if circumstances indicate impairment may have occurred. As of September 30, 2024, the net carrying value of goodwill and other intangible assets, net, represented $2,111.5 million, or 62% of our total assets.
Such allegations, claims or proceedings may, for example, relate to personal injury, property damage, general liability claims relating to properties where we perform services, vehicle accidents involving our vehicles and our employees, regulatory issues, contract disputes or employment matters and may include class actions. See Part I. Item 3 “Legal Proceedings”.
Such allegations, claims or proceedings may, for example, relate to personal injury, property damage, general liability claims relating to properties where we perform services, vehicle accidents involving our vehicles and our employees, regulatory issues, contract disputes or employment matters and may include class actions.
We reserve currently for anticipated losses and related expenses. We periodically evaluate and adjust our claims reserves to reflect trends in our own experience as well as industry trends. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts.
We periodically evaluate and adjust our claims reserves to reflect trends in our own experience as well as industry trends. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts.
To the extent we are subject to a higher frequency of claims, are subject to more serious claims or insurance coverage is not available, our liquidity, financial position and results of operations could be materially adversely affected. 22 Table of Contents We are also responsible for our legal expenses relating to such claims.
To the extent we are subject to a higher frequency of claims, are subject to more serious claims or insurance coverage is not available, our liquidity, financial position and results of operations could be materially adversely affected. We are also responsible for our legal expenses relating to such claims. We reserve currently for anticipated losses and related expenses.
Our certificate of incorporation provides, subject to limited exceptions, that unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee or stockholder of our company to the Company or our stockholders, creditors or other constituents, (iii) action asserting a claim against the Company or any director or officer of the Company arising pursuant to any provision of the Delaware General Corporation Law, or the DGCL, or our amended and restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine. 27 Table of Contents Our certificate of incorporation further provides that, to the fullest extent permitted by law, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the United States federal securities laws.
Our certificate of incorporation provides, subject to limited exceptions, that unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee or stockholder of our company to the Company or our stockholders, creditors or other constituents, (iii) action asserting a claim against the Company or any director or officer of the Company arising pursuant to any provision of the Delaware General Corporation Law, or the DGCL, or our amended and restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine.
Risks Related to Our Business Our business is affected by general business, financial market and economic conditions, which could adversely affect our financial position, results of operations and cash flows. Our business and results of operations are significantly affected by general business, financial market and economic conditions.
General Risk Factors Our business is affected by general business, financial market and economic conditions, which could adversely affect our financial position, results of operations and cash flows. Our business and results of operations are significantly affected by general business, financial market and economic conditions.
We have entered into interest rate swap instruments to limit our exposure to changes in variable interest rates. While our hedging strategy is designed to minimize the impact of increases in interest rates applicable to our variable rate debt, there can be no guarantee that our hedging strategy will be effective, and we may experience credit-related losses in some circumstances.
While our hedging strategy is designed to minimize the impact of increases in interest rates applicable to our variable rate debt, there can be no guarantee that our hedging strategy will be effective, and we may experience credit-related losses in some circumstances.
If we are unable to effectively manage the seasonality and year-to-year variability, our results of operations, financial position and cash flow may be adversely affected. Our operations are impacted by weather conditions and climate change.
Consequently, our results of operations and financial position can vary from year-to-year, as well as from quarter-to-quarter. If we are unable to effectively manage the seasonality and year-to-year variability, our results of operations, financial position and cash flow may be adversely affected. Our operations are impacted by weather conditions and climate change.
We have access to capital through our Revolving Credit Facility, which is governed by the Credit Agreement. Each financial institution which is part of the syndicate for our Revolving Credit Facility is responsible on a several, but not joint, basis for providing a portion of the loans to be made under our facility.
Each financial institution which is part of the syndicate for our Revolving Credit Facility is responsible on a several, but not joint, basis for providing a portion of the loans to be made under our facility.
As of September 30, 2023, we had approximately 21,000 employees, approximately 5% of which are represented by a union pursuant to collective bargaining agreements.
As of September 30, 2024, we had approximately 19,600 employees, approximately 5% of which are represented by a union pursuant to collective bargaining agreements.
In addition, we can increase the borrowing availability under the Credit Agreement by up to $303.0 million in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans plus an additional amount so long as we do not exceed a specified first lien secured leverage ratio.
In addition, we can increase the borrowing availability under the Credit Agreement by up to the greater of (1) $303.0 million and (2) 100% of Consolidated EBITDA (as defined in the Credit Agreement) for the most recently ended four consecutive fiscal quarters, in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans plus an additional amount so long as we do not exceed a specified first lien secured leverage ratio.
Recent increases in interest rates have resulted in increases to the cost of servicing our debt under our Credit Agreement and Receivables Financing Agreement. For the year ended September 30, 2023, our interest expense was $97.4 million, compared to $53.3 million for the year ended September 30, 2022.
Increases in interest rates can result in increases to the cost of servicing our debt under our Credit Agreement and Receivables Financing Agreement. For the year ended September 30, 2024, our interest expense was $62.4 million, compared to $97.4 million for the year ended September 30, 2023.
If any of these claims or proceedings were to be determined adversely to us, a judgment, a fine or a settlement involving a payment of a material sum of money were to occur, or injunctive relief were issued against us, our business, financial position and results of operations could be materially adversely affected.
If any of these claims or proceedings were to be determined adversely to us, a judgment, a fine or a settlement involving a payment of a material sum of money were to occur, or injunctive relief were issued against us, our business, financial position and results of operations could be materially adversely affected. 22 Table of Contents Currently, we carry a broad range of insurance for the protection of our assets and operations.
Our business and growth strategies benefit from customers and prospective customers continuing to outsource services. Customers will outsource if they perceive that outsourcing may provide quality services at a lower overall cost and permit them to focus on their core business activities.
Our business and growth strategies benefit from customers and prospective customers continuing to outsource services. Customers will outsource if they perceive that outsourcing may provide quality services at a lower overall cost and permit them to focus on their core business activities. We cannot be certain that customers that have outsourced functions will not decide to perform these functions themselves.
We face risks related to heightened inflation, geopolitical conflicts, recession, financial market disruptions and other economic conditions. Customer and consumer demand for our services may be impacted by weak economic conditions, recession, equity market volatility or other negative economic factors in the U.S. or other nations.
Customer and consumer demand for our services may be impacted by weak economic conditions, heightened inflation, equity market volatility or other negative economic factors in the U.S. or other nations.
While inflation and supply chain pressures have eased in recent months, further increases in, or sustained elevation of, inflation rates or disruptions to our supply chain will adversely affect our financial performance.
Further increases in, or sustained elevation of, inflation rates or disruptions to our supply chain will adversely affect our financial performance.
The loss of, or a substantial decrease in the availability of, supplies and products from our suppliers or the loss of key supplier arrangements could adversely impact our business, financial position, results of operations and cash flows.
The loss of, or a substantial decrease in the availability of, supplies and products from our suppliers or the loss of key supplier arrangements could adversely impact our business, financial position, results of operations and cash flows. Natural disasters, terrorist attacks, global health emergencies and other external events could adversely affect our business.
Risks Related to Ownership of Our Common Stock Future sales, or the perception of future sales, of equity securities by us or our affiliates, could cause the market price for our common stock to decline. Our employees, directors, officers and affiliates, including KKR BrightView Aggregator L.P.
Risks Related to Ownership of Our Common Stock Future sales, or the perception of future sales, of equity securities by us or our affiliates, could cause the market price for our common stock to decline.
General Risk Factors Natural disasters, terrorist attacks and other external events could adversely affect our business. Natural disasters, terrorist attacks and other adverse external events could materially damage our facilities or disrupt our operations, or damage the facilities or disrupt the operations of our customers or suppliers.
Natural disasters, terrorist attacks, global health emergencies and other adverse external events could materially damage our facilities or disrupt our operations, or damage the facilities or disrupt the operations of our customers or suppliers.
However, use of E-Verify does not guarantee that we will successfully identify all applicants who are ineligible for employment. Although we use E-Verify and require all new employees to provide us with government-specified documentation evidencing their employment eligibility, some of our employees may, without our knowledge, be unauthorized workers.
Although we use E-Verify and require all new employees to provide us with government-specified documentation evidencing their employment eligibility, some of our employees may, without our knowledge, be unauthorized workers.
If interest rates continue to increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, our ability to refinance some or all of our existing indebtedness may be impacted and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. 24 Table of Contents We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.
If interest rates continue to increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain 24 Table of Contents the same, our ability to refinance some or all of our existing indebtedness may be impacted and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
The holders of Series A Preferred Stock may have different interests from the holders of our common stock and could vote their shares in a manner deemed adverse to the holders of our common stock. Future issuances of preferred stock or the future designation of additional series of preferred stock could also adversely affect holders of our common stock.
The holders of Series A Preferred Stock may have different interests to those of the holders of our common stock and could vote their shares in a manner deemed adverse to the holders of our common stock.
The process of integrating an acquired business may create unforeseen difficulties and expenses, including the diversion of management’s attention or resources away from our operations; the inability to retain employees, customers and suppliers; difficulties implementing our strategy at the acquired business; the assumption of actual or contingent liabilities (including those relating to the environment); failure to effectively and timely adopt and adhere to our internal control processes, accounting systems and other policies; write-offs or impairment charges relating to goodwill and other intangible assets; unanticipated liabilities relating to acquired businesses; and potential expenses associated with litigation with sellers of such businesses.
The process of integrating an acquired business may create unforeseen difficulties and expenses, including the diversion of management’s attention or resources away from our operations; the inability to retain employees, customers and suppliers; difficulties implementing our strategy at the acquired business; the assumption of actual or contingent liabilities (including those relating to the environment); failure to effectively and timely adopt and adhere to our internal control processes, accounting systems and other policies; write-offs or impairment charges relating to goodwill and other intangible assets; unanticipated liabilities relating to acquired businesses; and potential expenses associated with litigation with sellers of such businesses. 18 Table of Contents If management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, we may not be able to realize anticipated benefits and revenue opportunities resulting from acquisitions and our business could suffer.
In addition, with anti-ESG sentiment gaining momentum in some of our markets, we could experience reduced revenue and reputational harm if we are targeted by groups or influential individuals who disagree with our public positions on social or environmental issues.
In addition, with anti-ESG sentiment present in some of our markets, we could experience reduced revenue and reputational harm if we are targeted by groups or influential individuals who disagree with our public positions on social or environmental issues. We may be unable to satisfactorily meet evolving standards, regulations and disclosure requirements related to ESG.
In connection with our acquisitions, we generally require that key management and former principals of the businesses we acquire enter into non-competition agreements in our favor. Enforceability of these non-competition agreements varies from state to state, and may depend on the relevant facts and circumstances.
In connection with our acquisitions, we generally require that key management and former principals of the businesses we acquire enter into non-competition agreements in our favor.
The severity and length of time that a downturn in economic and financial market conditions may persist, as well as the timing, strength and sustainability of any recovery from such downturn, are unknown and are beyond our control. For example, the U.S. experienced significantly heightened inflationary pressures in 2022, which have continued into 2023.
The severity and length of time that a downturn in economic and financial market conditions may persist, as well as the timing, strength and sustainability of any recovery from such downturn, are unknown and are beyond our control.
Such matters can affect the willingness or ability of investors to make an investment in our Company, as well as our ability to meet regulatory requirements, including proposed rules related to greenhouse gas emissions.
Furthermore, there continues to be a lack of consistent proposed climate change and ESG-related legislation, which creates regulatory and economic uncertainty. Such matters can affect the willingness or ability of investors to make an investment in our Company, as well as our ability to meet regulatory requirements, including proposed rules related to greenhouse gas emissions.
Such changes may impede our ability to provide services or make it difficult for us to anticipate customer demand. The uncertainties caused by weather conditions could negatively impact our ability to execute on our business strategy, which in turn could harm our business, financial condition, and results of operations.
The uncertainties caused by weather conditions could negatively impact our ability to execute on our business strategy, which in turn could harm our business, financial condition, and results of operations.
In the future, if we identify a control deficiency that rises to the level of a material weakness in our internal controls over financial reporting, this material weakness may adversely affect our ability to record, process, summarize and report financial information timely and accurately.
Our independent registered public accounting firm is also required to issue an attestation report on effectiveness of our internal controls in each annual report on Form 10-K. 30 Table of Contents In the future, if we identify a control deficiency that rises to the level of a material weakness in our internal controls over financial reporting, this material weakness may adversely affect our ability to record, process, summarize and report financial information timely and accurately.
As of September 30, 2023, these stockholders held approximately 51,757,843 shares of our common stock and 500,000 shares of our Series A Preferred Stock, which represents, in the aggregate, approximately 71.6% of the combined voting power of our outstanding shares of preferred stock and common stock.
As of September 30, 2024, the Affiliated Investors held approximately 33,133,123 shares of our common stock and 500,000 shares of our Series A Preferred Stock, which represents, in the aggregate, approximately 58.7% of the combined voting power of our outstanding shares of preferred stock and common stock.
Droughts could cause shortage in the water supply and governments may impose limitations on water usage, which may change customer demand for landscape maintenance and irrigation services.
Droughts could cause shortages in the water supply and governments may impose limitations on water usage, which may change customer demand for landscape maintenance and irrigation services. There is a risk that demand for our services will change in ways that we are unable to predict.
Our employment and working capital needs generally correspond with the increased demand for our services in the spring and summer months and employment levels and operating costs are generally at their highest during such months. Consequently, our results of operations and financial position can vary from year-to-year, as well as from quarter-to-quarter.
Due to the seasonal nature of the services we provide, we also experience seasonality in our employment and working capital needs. Our employment and working capital needs generally correspond with the increased demand for our services in the spring and summer months and employment levels and operating costs are generally at their highest during such months.
In addition, we may incur certain costs as we pursue our growth, operational and management initiatives, and we may not meet anticipated implementation timetables or stay within budgeted costs.
In addition, we may incur certain costs as we pursue our growth, operational and management initiatives, and we may not meet anticipated implementation timetables or stay within budgeted costs. As these initiatives are undertaken, we may not fully achieve our expected efficiency improvements or growth rates, or these initiatives could adversely impact our customer retention, supplier relationships or operations.
If new debt is added to our current debt levels, the related risks that we now face could intensify. 25 Table of Contents If the financial institutions that are part of the syndicate of our Revolving Credit Facility fail to extend credit under our facility or reduce the borrowing base under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.
If the financial institutions that are part of the syndicate of our Revolving Credit Facility fail to extend credit under our facility or reduce the borrowing base under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected. We have access to capital through our Revolving Credit Facility, which is governed by the Credit Agreement.
The amount of these required contributions may be material. 20 Table of Contents Our business could be adversely affected by a failure to properly verify the employment eligibility of our employees. We use the U.S. government’s “E-Verify” program to verify employment eligibility for all new employees throughout our company.
Our business could be adversely affected by a failure to properly verify the employment eligibility of our employees. We use the U.S. government’s “E-Verify” program to verify employment eligibility for all new employees throughout our company. However, use of E-Verify does not guarantee that we will successfully identify all applicants who are ineligible for employment.
Any inability by us to negotiate collective bargaining arrangements could result in strikes or other work stoppages disrupting our operations, and new union contracts could increase operating and labor costs. If these labor organizing activities were successful, it could further increase labor costs, decrease operating efficiency and productivity in the future, or otherwise disrupt or negatively impact our operations.
Any inability by us to negotiate collective bargaining arrangements could result in strikes or other work stoppages disrupting 20 Table of Contents our operations, and new union contracts could increase operating and labor costs.
In our Development Services segment, we typically experience lower activity levels during the winter months. Such seasonality causes our results of operations to vary from quarter to quarter. Due to the seasonal nature of the services we provide, we also experience seasonality in our employment and working capital needs.
The lower level of activity in seasonal markets during our first and second fiscal quarters is partially offset by revenue from our snow removal services. In our Development Services segment, we typically experience lower activity levels during the winter months. Such seasonality causes our results of operations to vary from quarter to quarter.
If we are unable to successfully integrate the new Chief Executive Officer into our leadership team, our operations and financial conditions may be adversely affected. The failure to retain our executive officers and other key personnel or a failure to provide adequate succession plans could have an adverse impact.
Since the beginning of calendar year 2022, we have hired a new Chief Executive Officer and Chief Financial Officer, among other leadership changes. The failure to retain our executive officers and other key personnel or a failure to provide adequate succession plans could have an adverse impact.
There is a risk that demand for our services will change in ways that we are unable to predict. 18 Table of Contents Climate change may increase in the frequency, duration and severity of extreme weather events and make weather patterns change or more difficult to predict.
Climate change may increase in the frequency, duration and severity of extreme weather events and make weather patterns change or more difficult to predict. Such changes may impede our ability to provide services or make it difficult for us to anticipate customer demand.
The regions that we service averaged 2,208.9 inches of annual snowfall in calendar year 2022, 2,600.0 inches of annual snowfall in calendar year 2021, and 3,020.4 inches of annual snowfall in calendar year 2020. In the past ten- and thirty-year periods, the regions that we service have averaged 2,889.6 inches and 2,971.4 inches of annual snowfall, respectively .
The regions that we service averaged 1,695 inches of annual snowfall in calendar year 2023, 1,913 inches of annual snowfall in calendar year 2023, and 2,049 inches of annual snowfall in calendar year 2022. In the past ten-, fifteen- and thirty-year periods, the regions that we service have averaged 2,456 inches, 2,702 inches, and 2,687 inches of annual snowfall, respectively.
(“KKR”) and Birch-OR Equity Holdings, LLC and Birch Equity Holdings, LP (together, “One Rock” and, collectively with KKR, the “Affiliated Investors”), hold substantial amounts of shares of our common stock and all of our outstanding Series A Convertible Preferred Stock (the “Series A Preferred Stock”), which is convertible into shares of our common stock.
Our employees, directors, officers and affiliates, including KKR and One Rock, hold substantial amounts of shares of our common stock and all of our outstanding Series A Convertible Preferred Stock (the “Series A Preferred Stock”), which is convertible into shares of our common stock.
Since then, our common stock has been relatively thinly traded and at times been subject to price volatility. Recently, from October 1, 2022 to September 30, 2023, the closing price of our common stock on the New York Stock Exchange ranged from $5.17 to $9.17 per share.
Our common stock has traded on the New York Stock Exchange, under the symbol “BV,” since June 2018. Since then, our common stock has been relatively thinly traded and at times been subject to price volatility.
Our stock price may change significantly, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result. Our common stock has traded on the New York Stock Exchange, under the symbol “BV,” since June 2018.
Any failure, or perceived failure, to meet evolving regulations and industry standards could have an adverse effect on our business, results of operations, financial condition, or stock price. 29 Table of Contents Our stock price may change significantly, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSegment (1) Owned Facilities Leased Facilities Maintenance Services 33 232 Development Services 3 18 Total 36 250 (1) 21 facilities are shared between our segments and each is counted once, in the Maintenance Services segment, to avoid double counting.
Biggest changeSegment (1) Owned Facilities Leased Facilities Maintenance Services 31 219 Development Services 3 14 Corporate - 1 Total 34 234 (1) 25 facilities are shared between our Maintenance Services and Development Services segments and each facility is counted once, in the Maintenance Services segment, to avoid double counting.
Our branches are strategically located to optimize route efficiency, market coverage and branch overhead. The following chart identifies the number of owned and leased facilities, other than our headquarters listed above, used by each of our operating segments as of September 30, 2023.
Our branches are strategically located to optimize route efficiency, market coverage and branch overhead. The following chart identifies the number of owned and leased facilities, other than our headquarters listed above, used by each of our operating segments as of September 30, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information set forth in Note 14 “Commitments and Contingencies” to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data,” is incorporated herein by reference. 30 Table of Contents Item 4. Mine Safe ty Disclosures Not applicable. PART II
Biggest changeItem 3. Legal Proceedings The information set forth in Note 14 "Commitments and Contingencies" to our consolidated financial statements under Part II, Item 8, “Financial Statements and Supplementary Data,” is incorporated herein by reference. Item 4. Mine Safe ty Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCompany Repurchases of Equity Securities None. 31 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Biggest changeStock Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act. 33 Table of Contents The graph below presents the Company’s cumulative total stockholder returns relative to the performance of the Russell 2000 (“R2000”) Index and the Russell 2500 Waste & Disposal Services (“R2500 Services”) Index from September 30, 2019 through September 30, 2024.
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. Item 6. Removed and Reserved
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. Item 6. [Reserved ]
As of September 30, 2023 there were 282 holders of record of our common stock. This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers, and other financial institutions. Dividend Policy We do not intend to pay cash dividends on our common stock in the foreseeable future.
As of September 30, 2024 there were 241 holders of record of our common stock. This stockholder figure does not include a substantially greater number of holders whose shares are held of record by banks, brokers, and other financial institutions. Common Share Dividend Policy We do not intend to pay cash dividends on our common stock in the foreseeable future.
We did not declare or pay dividends to the holders of our common stock in the fiscal year ended September 30, 2023. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities in fiscal year 2023 that have not been previously reported on a Current Report on Form 8-K or Quarterly Report on Form 10-Q.
We did not declare or pay dividends to the holders of our common stock in the fiscal year ended September 30, 2024. Unregistered Sales of Equity Securities None. Company Repurchases of Equity Securities None.
Removed
The graph below presents the Company’s cumulative total stockholder returns relative to the performance of the Russell 2000 (“R2000”) Index and the Russell 2500 Waste & Disposal Services (“R2500 Services”) Index from September 30, 2018 through September 30, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWhen facts and circumstances change (including a resolution of an issue or statute of limitations expiration), these reserves are adjusted through the provision for income taxes in the period of change. 47 Table of Contents Recently Issued Accounting Pronouncements Measurement of Credit Losses 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 .
Biggest changeWhen facts and circumstances change (including a resolution of an issue or statute of limitations expiration), these reserves are adjusted through the provision for income taxes in the period of change.
Acquisitions In addition to our organic growth, we have grown, and expect to continue to grow, our business through acquisitions in an effort to better service our existing customers and to attract new customers.
Acquisitions In addition to our organic growth, we have grown, and expect to continue to grow, our business through acquisitions in an effort to better service our existing customers and attract new customers.
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.
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.
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 our recurring fixed fee landscape maintenance and snow removal services are recorded under the series guidance.
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 our recurring fixed fee landscape maintenance and snow removal services are recorded under the series guidance.
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.
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.
The Credit Agreement Amendment (i) amends the definition of “Permitted Holders” to include Birch Equity Holdings, LP, a Delaware limited partnership, Birch-OR Equity Holdings, LLC, a Delaware limited liability company and One Rock Capital Partners, LLC and (ii) provides for a 1.00% prepayment premium for voluntary prepayments made in connection with repricing transactions or amendments made where the primary purpose of which is to decrease the effective yield, and which shall be applicable until six months after entering into the Credit Agreement Amendment.
The Seventh Credit Agreement Amendment (i) amends the definition of “Permitted Holders” to include Birch Equity Holdings, LP, a Delaware limited partnership, Birch-OR Equity Holdings, LLC, a Delaware limited liability company and One Rock Capital Partners, LLC and (ii) provides for a 1.00% prepayment premium for voluntary prepayments made in connection with repricing transactions or amendments made where the primary purpose of which is to decrease the effective yield, and which shall be applicable until six months after entering into the Seventh Credit Agreement Amendment.
As a result of the repayment of the amounts outstanding under the Company's Amended Credit Agreement, the Company recorded a loss on debt extinguishment of $12.6 million due to accelerated amortization of deferred financing fees and original issue discount included in the Other expense (income) line of the Consolidated Statements of Operations for the year ended September 30, 2022.
As a result of the repayment of the amounts outstanding under the Company's Credit Agreement, the Company recorded a loss on debt extinguishment of $12.6 million due to accelerated amortization of deferred financing fees and original issue discount included in the Other expense (income) line of the Consolidated Statements of Operations for the year ended September 30, 2022.
Risk Factors” and the “Special Note Regarding Forward-Looking Statements” sections of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. 32 Table of Contents Overview Our Company We are the largest provider of commercial landscaping services in the United States, with revenues approximately 5 times those of our next largest commercial landscaping competitor.
Risk Factors” and the “Special Note Regarding Forward-Looking Statements” sections of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. 34 Table of Contents Overview Our Company We are the largest provider of commercial landscaping services in the United States, with revenues approximately 5 times those of our next largest commercial landscaping competitor.
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 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.
See Note 9 “Long-term Debt” to our audited consolidated financial statements included in Part II. Item 8 of this Form 10-K for further information, including the timing of principal and interest payments associated with the Company’s long term debt. The Company has operating and finance leases for branch and administrative offices, vehicles, certain machinery and equipment, and furniture.
See Note 9 "Long-term Debt" to our audited consolidated financial statements included in Part II. Item 8 of this Form 10-K for further information, including the timing of principal and interest payments associated with the Company’s long term debt. The Company has operating and finance leases for branch and administrative offices, vehicles, certain machinery and equipment, and furniture.
We believe the quality of our work is also well-regarded by our end-customers, some of whom directly request that their general contractors utilize our services when outsourcing their landscape development projects. 33 Table of Contents Components of Our Revenues and Expenses Net Service Revenues Maintenance Services Our Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services.
We believe the quality of our work is also well-regarded by our end-customers, some of whom directly request that their general contractors utilize our services when outsourcing their landscape development projects. 35 Table of Contents Components of Our Revenues and Expenses Net Service Revenues Maintenance Services Our Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services.
Goodwill is allocated to, and evaluated for impairment at our three identified reporting units. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount.
Goodwill is allocated to, and evaluated for impairment at our two identified reporting units. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount.
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.
The Company excludes Business integration costs from the non-GAAP 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.
The loss on debt extinguishment is included in the Other expense (income) line of the Consolidated Statements of Operations for the year ended September 30, 2023. On August 31, 2023, the Company entered into Amendment No. 7 to the Credit Agreement (the “Credit Agreement Amendment”).
The loss on debt extinguishment is included in the Other (income) expense line of the Consolidated Statements of Operations for the year ended September 30, 2023. On August 31, 2023, the Company entered into Amendment No. 7 to the Credit Agreement (the “Seventh Credit Agreement Amendment”).
Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which removes specified exceptions and adds requirements to simplify the accounting for income taxes. The Company adopted the guidance in the first quarter of fiscal 2022.
Recently Issued Accounting Pronouncements Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which removes specified exceptions and adds requirements to simplify the accounting for income taxes. The Company adopted the guidance in the first quarter of fiscal 2022.
We can incur such additional secured or other unsecured indebtedness under the Credit Agreement if certain specified conditions are met. Our liquidity requirements are significant primarily due to debt service requirements. See Note 9 “Long-term Debt” to our audited consolidated financial statements included elsewhere in Part II. Item 8 of this Form 10-K.
We can incur such additional secured or other unsecured indebtedness under the Credit Agreement if certain specified conditions are met. Our liquidity requirements are significant primarily due to debt service requirements. See Note 9 "Long-term Debt" to our audited consolidated financial statements included elsewhere in Part II. Item 8 of this Form 10-K.
Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. 35 Table of Contents Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are provided in addition to, and should not be considered as alternatives to, net (loss) income or any other performance measure derived in accordance with GAAP.
Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. 37 Table of Contents Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted EPS are provided in addition to, and should not be considered as alternatives to, net (loss) income or any other performance measure derived in accordance with GAAP.
Segment Results for the Fiscal Years Ended September 30, 2023 and 2022 The following tables present Net Service Revenues, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin for each of our segments. Changes in Segment Adjusted EBITDA Margin are shown in basis points, or bps.
Segment Results for the Fiscal Years Ended September 30, 2024 and September 30, 2023 The following tables present Net Service Revenues, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin for each of our segments. Changes in Segment Adjusted EBITDA Margin are shown in basis points, or bps.
Also see Note 2 “Summary of Significant Accounting Policies” to our audited consolidated financial statements included elsewhere in this Form 10-K, which discusses the significant accounting policies that we have selected from acceptable alternatives. Acquisitions From time to time we enter into strategic acquisitions in an effort to better service existing customers and to attain new customers.
Also see Note 2 "Summary of Significant Accounting Policies" to our audited consolidated financial statements included elsewhere in this Form 10-K, which discusses the significant accounting policies that we have selected from acceptable alternatives. Acquisitions From time to time we enter into strategic acquisitions in an effort to better service existing customers and to attain new customers.
As of September 30, 2023 , September 30, 2022, and September 30, 2021, we were in compliance with all of our debt covenants and no event of default had occurred or was ongoing.
As of September 30, 2024 , September 30, 2023, and September 30, 2022, we were in compliance with all of our debt covenants and no event of default had occurred or was ongoing.
Subsequent to the IPO, the estimation of our stock price is no longer necessary as we rely on the market price to determine the market value of our common stock. We use a Monte Carlo simulation to estimate the fair value of performance stock units subject to a market condition that are granted to employees.
Subsequent to the IPO, the estimation of our stock price is no longer necessary as we rely on the market price to determine the market value of our common stock. 49 Table of Contents We use a Monte Carlo simulation to estimate the fair value of performance stock units subject to a market condition that are granted to employees.
The value of residual goodwill is not amortized, but is tested at least annually for impairment as described in the following note. Goodwill Goodwill represents the excess of the purchase price over the fair values of the underlying net assets acquired in an acquisition.
The value of residual goodwill is not amortized, but is tested at least annually for impairment as described in the following note. 47 Table of Contents Goodwill Goodwill represents the excess of the purchase price over the fair values of the underlying net assets acquired in an acquisition.
For additional information related to the assumptions used, see Note 13 “Equity Based Compensation” to our audited consolidated financial statements included elsewhere in Part II. Item 8 of this Form 10-K. Income Taxes The determination of our provision for income taxes requires management’s judgment in the use of estimates and the interpretation and application of complex tax laws.
For additional information related to the assumptions used, see Note 13 "Equity-Based Compensation" to our audited consolidated financial statements included elsewhere in Part II. Item 8 of this Form 10-K. Income Taxes The determination of our provision for income taxes requires management’s judgment in the use of estimates and the interpretation and application of complex tax laws.
Since the Maintenance reporting unit fair value did not substantially exceed the carrying value we may be at risk for an impairment loss in the future if forecasted trends assumed in the fair value calculation are not realized. As of September 30, 2023, there was $1,797.6 million of goodwill recorded related to the Maintenance reporting unit.
Since the Maintenance reporting unit fair value did not substantially exceed the carrying value we may be at risk for an impairment loss in the future if forecasted trends assumed in the fair value calculation are not realized. As of September 30, 2024, there was $1,797.7 million of goodwill recorded related to the Maintenance reporting unit.
We may elect not to perform the 45 Table of Contents qualitative assessment for some or all reporting units and perform the quantitative impairment test. The quantitative goodwill impairment test requires us to compare the carrying value of the reporting unit’s net assets to the fair value of the reporting unit.
We may elect not to perform the qualitative assessment for some or all reporting units and perform the quantitative impairment test. The quantitative goodwill impairment test requires us to compare the carrying value of the reporting unit’s net assets to the fair value of the reporting unit.
The discussion around results of operations for the fiscal year ended September 30, 2022 and a comparison of our results for the fiscal years ended September 30, 2022 and 2021 is included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for fiscal year ended September 30, 2022, filed with the SEC on November 17, 2022 and is incorporated by reference herein ( Fiscal Year Ended September 30, 2022 10-K ).
The discussion around results of operations for the fiscal year ended September 30, 2023 and a comparison of our results for the fiscal years ended September 30, 2023 and 2022 is included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for fiscal year ended September 30, 2023, filed with the SEC on November 16, 2023 and is incorporated by reference herein ( Fiscal Year Ended September 30, 2023 10-K ).
(e) Represents losses on the extinguishment of debt related to Amendments No. 7 and No. 6 to the Credit Agreement, in the fiscal years ended September 30, 2023 and 2022, respectively, and includes accelerated amortization of deferred financing fees and original issue discount as well as fees paid to lenders and third parties.
(e) Represents losses on the extinguishment of debt related to Amendments No. 8 and No. 7 to the Credit Agreement, in the fiscal years ended September 30, 2024 and 2023 respectively, and includes accelerated amortization of deferred financing fees and original issue discount as well as fees paid to lenders and third parties.
For additional information on our material indebtedness, including our First Lien Term Loans, Series B Term Loans and Revolving Credit Facility and our outstanding borrowings under the Receivables Financing Agreement, see Note 9 “Long-term Debt” in our audited consolidated financial statements included elsewhere in this Form 10-K.
For additional information on our material indebtedness, including our First Lien Term Loans, Series B Term Loans and Revolving Credit Facility and our outstanding borrowings under the Receivables Financing Agreement, see Note 9 "Long-term Debt" in our audited consolidated financial statements included elsewhere in this Form 10-K.
The Company used the net proceeds from the Series B Term Loan to repay all amounts outstanding under the Company’s Amended Credit Agreement.
The Company used the net proceeds from the Series B Term Loan to repay all amounts then outstanding under the Company’s Credit Agreement.
See Note 7 “Intangible Assets, Goodwill and Acquisitions” to our audited consolidat ed financial statements included in Part II. Item 8 of this Form 10-K for additional information. Long-lived Assets (Excluding Goodwill) Long-lived assets with finite lives are depreciated and amortized generally on a straight-line basis over their estimated useful lives.
See Note 7 "Intangible Assets, Goodwill, Acquisitions, and Divestitures" to our audited consolidat ed financial statements included in Part II. Item 8 of this Form 10-K for additional information. Long-lived Assets (Excluding Goodwill) Long-lived assets with finite lives are depreciated and amortized generally on a straight-line basis over their estimated useful lives.
Selling, General and Administrative Expense Selling, general and administrative expense consists of costs incurred related to compensation and benefits for management, sales and administrative personnel, equity-based compensation, branch and office rent and facility operating costs, depreciation expense related to branch and office locations, as well as professional fees, software costs, goodwill impairment, gains and losses on divestitures, and other miscellaneous expenses.
Selling, General and Administrative Expense Selling, general and administrative expense consists of costs incurred related to compensation and benefits for management, sales and administrative personnel, equity-based compensation, branch and office rent and facility operating costs, depreciation expense related to branch and office locations, as well as professional fees, software costs, goodwill impairment, and other miscellaneous expenses.
Our Segments We report our results of operations through two reportable segments: Maintenance Services and Development Services. We serve a geographically diverse set of customers through our strategically located network of branches in 36 U.S. states and, through our qualified service partner network, we are able to efficiently provide nationwide coverage in all 50 U.S. states.
Our Segments We report our results of operations through two reportable segments: Maintenance Services and Development Services. We serve a geographically diverse set of customers through our strategically located network of branches in 36 U.S. states and, through our qualified service partner network, we are able to efficiently provide nationwide coverage across the United States.
Our effective tax rate differs from the statutory U.S. income tax rate due to the effect of state and local income taxes, tax credits and certain nondeductible expenses.
Income Tax Expense Income tax expense includes U.S. federal, state and local income taxes. Our effective tax rate differs from the statutory U.S. income tax rate due to the effect of state and local income taxes, tax credits and certain nondeductible expenses.
This section of this Form 10-K generally discusses the fiscal years ended September 30, 2023 and 2022 items and year to year comparisons between the fiscal years ended September 30, 2023 and 2022.
This section of this Form 10-K generally discusses the fiscal years ended September 30, 2024 and 2023 and year to year comparisons between the fiscal years ended September 30, 2024 and 2023.
In addition, we believe that Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Weighted Average Number of Common Shares Outstanding and Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Weighted Average Number of Common Shares Outstanding and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity.
In addition, we believe that Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted EPS and Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted EPS and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity.
Management uses Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Weighted Average Number of Common Shares Outstanding and Free Cash Flow to supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures.
Management uses Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted EPS and Free Cash Flow to supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures.
We define Adjusted Weighted Average Number of Common Shares Outstanding as the weighted average number of common shares outstanding used in the calculation of basic earnings per share plus shares of common stock related to the Series A Preferred Stock on an as-converted basis, assumed to be converted for the entire period.
We define Adjusted Earnings per Share as Adjusted Net Income divided by the (i) weighted average number of common shares outstanding used in the calculation of basic earnings per share plus (ii) shares of common stock related to the Series A Preferred Stock on an as-converted basis, assumed to be converted for the entire period.
We believe Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Weighted Average Number of Common Shares Outstanding are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuations from period to period do not necessarily correspond to changes in the operations of our business.
We believe Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted EPS are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuations from period to period do not necessarily correspond to changes in the operations of our business.
As a result of the voluntary repayment of the amount outstanding under the Amendment Agreement, the Company recorded a loss on debt extinguishment of $8.3 million due to accelerated amortization of deferred financing fees and original issue discount as well as fees paid to lenders and third parties.
As a result of this voluntary repayment, the Company recorded a loss on debt extinguishment of $8.3 million due to accelerated amortization of deferred financing fees and original issue discount as well as fees paid to lenders and third parties.
We believe that the adjustments applied in presenting Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Weighted Average Number of Common Shares Outstanding are appropriate to provide additional information to investors about certain material non-cash or non-recurring items that we do not expect to continue at the same level in the future.
We believe that the adjustments applied in presenting Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS are appropriate to provide additional information to investors about certain material non-cash or non-recurring items that we do not expect to continue at the same level in the future.
The increase in Free Cash Flow was due to an increase in net cash provided by operating activities coupled with a decrease in cash used for capital expenditures, each as described above.
The increase in Free Cash Flow was due to an increase in net cash provided by operating activities offset by an increase in cash used for capital expenditures, each as described above.
The weighted average interest rate on the amounts borrowed under the Receivables Financing Agreement was 6.3% and 2.4% for the years ended September 30, 2023 and September 30, 2022, respectively.
The weighted average interest rate on the amounts borrowed under the Receivables Financing Agreement was 6.7% and 6.3% for the years ended September 30, 2024 and September 30, 2023, respectively.
All amounts outstanding under the Receivables Financing Agreement are collateralized by substantially all of the accounts receivable and unbilled revenue of the Company. During the year ended September 30, 2023, the Company borrowed $549.5 million against the capacity and voluntarily repaid $554.5 million.
All amounts outstanding under the Receivables Financing Agreement are collateralized by substantially all of the accounts receivable and unbilled revenue of the Company. During the year ended September 30, 2024, the Company borrowed $0.5 million against the capacity and voluntarily repaid $87.3 million.
The right to invoice practical expedient, defined within Note 4 “Revenue” to our audited consolidated financial statements, 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.
The right to invoice practical expedient, defined within Note 2 "Summary of Significant Accounting Policies" to our audited consolidated financial statements, 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.
The Company determined fair values of each of the reporting units using a combination of the income and market multiple approaches. The estimates used in each approach include significant management assumptions, including long-term future growth rates, operating margins, discount rates and future economic and market conditions.
The Company determined fair values of each of the reporting units using a combination of the income and market multiple approaches. The estimates used in each approach include significant management assumptions, including valuation multiples of selected guideline public companies, long-term future growth rates, operating margins, and discount rates.
The right to invoice practical expedient, defined within Note 4 “Revenue” to our audited consolidated financial statements, 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.
The right to invoice practical expedient, defined within Note 2 "Summary of Significant Accounting Policies" to our audited consolidated financial statements, 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.
Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Weighted Average Number of Common Shares Outstanding and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted EPS and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.
Receivables financing agreement On April 28, 2017, the Company, through a wholly-owned subsidiary, entered into a receivables financing agreement. On June 22, 2022, the Company entered into the Third Amendment to the Receivables Financing Agreement (the “Third Amendment”) which extended the term through June 22, 2025 and increased the borrowing capacity to $275.0 million.
On June 22, 2022, the Company entered into the Third Amendment to the Receivables Financing Agreement (the “Third Amendment”) which extended the term through June 22, 2025 and increased the borrowing capacity to $275.0 million.
The Series B Term Loan matures on April 22, 2029 and bears interest at a rate per annum of a secured overnight financing rate (“Term SOFR”), plus a margin of either 3.25% or 3.00% or a base rate (“ABR”) plus a margin of either 2.25% or 2.00%, subject to SOFR and ABR floors of 0.50% and 1.50%, respectively, with the margin on the Series B Term Loan determined based on the Company’s first lien net leverage ratio.
The Series B Term Loan matures on April 22, 2029 and bears interest at a rate per annum of a secured overnight financing rate (“Term SOFR”), plus a margin of 3.25% or a base rate (“ABR”) plus a margin of 2.25%, subject to SOFR and ABR floors of 0.50% and 1.50%, respectively.
Cash Flows Information about our cash flows, by category, is presented in our statements of cash flows and is summarized below: Fiscal Year Ended September 30, (In millions) 2023 2022 Operating activities $ 129.9 $ 106.9 Investing activities $ (61.4 ) $ (193.7 ) Financing activities $ (21.6 ) $ (16.8 ) Free Cash Flow (1) $ 80.2 $ 6.7 (1) See “Non-GAAP Financial Measures” above for a reconciliation to the most directly comparable GAAP measure.
Cash Flows Information about our cash flows, by category, is presented in our Consolidated Statements of Cash Flows and is summarized below: Year Ended September 30, (in millions) 2024 2023 Operating activities $ 205.6 $ 129.9 Investing activities $ (5.6 ) $ (61.4 ) Financing activities $ (126.6 ) $ (21.6 ) Free Cash Flow (1) $ 145.3 $ 80.2 (1) See “Non-GAAP Financial Measures” above for a reconciliation to the most directly comparable GAAP measure.
Net Service Revenues We perform landscape maintenance and enhancement services, development services, other landscape services and snow removal services. Revenue is recognized based upon the service provided and the contract terms and is reported net of discounts and applicable sales taxes. Maintenance Services Our Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services.
Revenue is recognized based upon the service provided and the contract terms and is reported net of discounts and applicable sales taxes. 48 Table of Contents Maintenance Services Our Maintenance Services revenues are generated primarily through landscape maintenance services and snow removal services.
Based on our most recent annual analysis as of July 1, 2023, the fair values for all three of our reporting units exceeded the carrying values, and therefore no indicators of impairment existed for those three reporting units; however, the fair value of the Maintenance reporting unit exceeded the carrying value by 4.7%.
Based on our most recent annual analysis as of July 1, 2024, the fair values for both of our reporting units exceeded the carrying values, and therefore no indicators of impairment existed for those reporting units; however, the fair value of the Maintenance reporting unit exceeded the carrying value by 9.6%.
We can increase the borrowing availability under the Credit Agreement or increase the term loans outstanding under the Credit Agreement by up to $303.0 million, in the aggregate, in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans under the Credit Agreement, or in the form of other indebtedness in lieu thereof, plus an additional amount so long as we do not exceed a specified first lien secured leverage ratio.
We can increase the borrowing availability under the Credit Agreement or increase the term loans outstanding under the Credit Agreement by up to the greater of (1) $303.0 million and (2) 100% of Consolidated EBITDA (as defined in the Credit Agreement) for the most recently ended four consecutive fiscal quarters, in the aggregate, in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans under the Credit Agreement, or in the form of other indebtedness in lieu thereof, plus an additional amount so long as we do not exceed a specified first lien secured leverage ratio.
September 30, (In millions) 2023 2022 Cash and cash equivalents $ 67.0 $ 20.1 Short-term borrowings and current maturities of long-term debt $ — $ 12 Long-term debt $ 888.1 $ 1,330.7 Total debt $ 888.1 $ 1,342.7 41 Table of Contents The Company is party to the Credit Agreement, a five-year revolving credit facility that, pursuant to the Amendment Agreement, currently matures on April 22, 2027 (the “Revolving Credit Facility”) and, through a wholly-owned subsidiary, a receivables financing agreement dated April 28, 2017 (as amended, the “Receivables Financing Agreement”).
(in millions) September 30, 2024 September 30, 2023 Cash and cash equivalents $ 140.4 $ 67.0 Long-term debt $ 802.5 $ 888.1 Total debt $ 802.5 $ 888.1 43 Table of Contents The Company is party to the Credit Agreement, a five-year revolving credit facility that, pursuant to the Amendment Agreement, currently matures on April 22, 2027 (the “Revolving Credit Facility”) and, through a wholly-owned subsidiary, a receivables financing agreement dated April 28, 2017 (as amended, the “Receivables Financing Agreement”).
Risk Management and Insurance We carry general liability, auto liability, workers’ compensation and employee health care insurance policies. In addition, we carry other reasonable and customary insurance policies for a Company of our size and scope, as well as umbrella liability insurance policies to cover claims over the liability limits contained in the primary policies.
In addition, we carry other reasonable and customary insurance policies for a Company of our size and scope, as well as umbrella liability insurance policies to cover claims over the liability limits contained in the primary policies.
In addition to our GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Share (“Adjusted EPS”), Adjusted Weighted Average Number of Common Shares Outstanding, and Free Cash Flow.
In addition to our GAAP financial measures, we review various non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Earnings per Share (“Adjusted EPS”), and Free Cash Flow.
Adjusted EBITDA represents net (loss) income before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. Adjusted Net Income is defined as net (loss) income including interest and depreciation, and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions and the removal of the discrete tax items.
Adjusted Net Income is defined as net (loss) income including interest and depreciation, and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions and the removal of the discrete tax items.
Maintenance Services Segment Results Fiscal Year Ended September 30, Percent Change (In millions) 2023 2022 2023 vs. 2022 Net Service Revenues $ 2,066.5 $ 2,082.0 (0.7 )% Segment Adjusted EBITDA $ 277.9 $ 278.8 (0.3 )% Segment Adjusted EBITDA Margin 13.4 % 13.4 % - bps Maintenance Services Net Service Revenues Maintenance Services net service revenues for the fiscal year ended September 30, 2023 decreased by $15.5 million, or 0.7%, compared to the 2022 period.
Maintenance Services Segment Results Year Ended September 30, Percent Change (in millions) 2024 2023 2024 vs. 2023 Net Service Revenues $ 1,964.0 $ 2,066.5 (5.0 )% Segment Adjusted EBITDA $ 279.7 $ 277.9 0.6 % Segment Adjusted EBITDA Margin 14.2 % 13.4 % 80 bps Maintenance Services Net Service Revenues Maintenance Services net service revenues for the fiscal year ended September 30, 2024 decreased by $102.5 million, or 5.0%, compared to the 2023 period.
The increase was driven by an increase in Development Services revenues of $59.2 million, partially offset by a decrease in Maintenance Services revenues of $15.5 million as discussed further below in Segment Results. Gross Profit Gross profit for the fiscal year ended September 30, 2023 increased $4.1 million, or 0.6%, to $678.9 million, from $674.8 million in the 2022 period.
The decrease was driven by a decrease in Maintenance Services revenues of $102.5 million, partially offset by an increase in Development Services revenues of $50.8 million as discussed further below in Segment Results. Gross Profit Gross profit for the fiscal year ended September 30, 2024 decreased $33.3 million, or 4.9%, to $645.6 million, from $678.9 million in the 2023 period.
The Revolving Credit Facility replaced the previous $260.0 revolving credit facility under the Credit Agreement. The Company had no outstanding balance under the Revolving Credit Facility as of September 30, 2023 and September 30, 2022. There were $33.5 million borrowings under the facility during the year ended September 30, 2023, of which, $33.5 million were repaid during the same period.
The Revolving Credit Facility replaced the previous $260.0 million revolving credit facility under the Credit Agreement. The Company had no outstanding balance under the Revolving Credit Facility as of September 30, 2024 and September 30, 2023. There were no borrowings or repayments under the facility during the year ended September 30, 2024.
Debt repayments for the Series B Term Loan totaled $459.0 million and $1,006.3 million for the fiscal years ended September 30, 2023 and September 30, 2022, respectively. In addition to scheduled payments, the Company is obligated to pay a percentage of excess cash flow, as defined in the Amended Credit Agreement, as payments to principal.
Debt repayments for the Series B Term Loan totaled $459.0 million for the fiscal year ended September 30, 2023. In addition to scheduled payments, the Company is obligated to pay a percentage of excess cash flow, as defined in the Credit Agreement, as payments to principal. The percentage varies with the ratio of the Company’s debt to its cash flow.
Fiscal Year Ended September 30, (in millions) 2023 2022 Tax impact of pre-tax income adjustments $ 34.1 $ 29.4 Discrete tax items (4.0 ) (0.2 ) Income tax adjustment $ 30.1 $ 29.2 (g) Represents severance and related costs including expenses incurred in connection with the Company’s CEO transition.
Year Ended September 30, (in millions) 2024 2023 Tax impact of pre-tax income adjustments $ 12.8 34.1 Discrete tax items (2.1 ) (4.0 ) Income tax adjustment $ 10.7 $ 30.1 (g) Represents severance and related costs incurred in connection with the Company's One BrightView initiative and CEO transition.
Fiscal Year Ended September 30, (in millions) 2023 2022 Adjusted EBITDA Net (loss) income $ (7.7 ) $ 14.0 Plus: Interest expense, net 97.4 53.3 Income tax expense 4.6 5.6 Depreciation expense 105.2 98.9 Amortization expense 44.5 51.5 Business transformation and integration costs (a) 23.7 21.5 Offering-related expenses (b) — 0.1 Equity-based compensation (c) 22.3 19.0 COVID-19 related expenses (d) 0.4 11.4 Debt extinguishment (e) 8.3 12.6 Adjusted EBITDA $ 298.7 $ 287.9 Adjusted Net Income Net (loss) income (7.7 ) 14.0 Plus: Amortization expense 44.5 51.5 Business transformation and integration costs (a) 23.7 21.5 Offering-related expenses (b) — 0.1 Equity-based compensation (c) 22.3 19.0 COVID-19 related expenses (d) 0.4 11.4 Debt extinguishment (e) 8.3 12.6 Income tax adjustment (f) (30.1 ) (29.2 ) Adjusted Net Income $ 61.4 $ 100.9 Free Cash Flow Cash flows from operating activities $ 129.9 $ 106.9 Minus: Capital expenditures 71.3 107.3 Plus: Proceeds from sale of property and equipment 21.6 7.1 Free Cash Flow $ 80.2 $ 6.7 (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.
Year Ended September 30, (in millions) 2024 2023 Adjusted EBITDA Net income (loss) $ 66.4 $ (7.7 ) Plus: Interest expense, net 62.4 97.4 Income tax expense 30.1 4.6 Depreciation expense 108.4 105.2 Amortization expense 35.8 44.5 Business transformation and integration costs (a) 44.1 23.7 Gain on divestiture (b) (43.6 ) — Equity-based compensation (c) 20.5 22.3 COVID-19 related expenses (d) — 0.4 Debt extinguishment (e) 0.6 8.3 Adjusted EBITDA $ 324.7 $ 298.7 Adjusted Net Income Net income (loss) $ 66.4 $ (7.7 ) Plus: Amortization expense 35.8 44.5 Business transformation and integration costs (a) 44.1 23.7 Gain on divestiture (b) (43.6 ) — Equity-based compensation (c) 20.5 22.3 COVID-19 related expenses (d) — 0.4 Debt extinguishment (e) 0.6 8.3 Income tax adjustment (f) (10.7 ) (30.1 ) Adjusted Net Income $ 113.1 $ 61.4 Free Cash Flow Cash flows provided by operating activities $ 205.6 $ 129.9 Minus: Capital expenditures 78.4 71.3 Plus: Proceeds from sale of property and equipment 18.1 21.6 Free Cash Flow $ 145.3 $ 80.2 (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.
The Company adopted the guidance in the first quarter of fiscal 2023. The adoption of ASU No. 2021-08 did not have a material impact on the Company’s consolidated financial statements and disclosures.
The Company adopted the guidance in the first quarter of fiscal 2023. The adoption of ASU No. 2021-08 did not have a material impact on the Company’s consolidated financial statements and disclosures. Segment Reporting In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.
The excess cash flow calculation did not result in any required payment due for the periods ended September 30, 2023, September 30, 2022, and September 30, 2021. 43 Table of Contents Revolving credit facility The Company has a five-year $300 million revolving credit facility that matures on April 22, 2027 and bears interest at a rate per annum of Term SOFR plus a margin ranging from 2.00% to 2.50%, or ABR plus a margin ranging from 1.00 to 1.50%, subject to SOFR and ABR floors of 0.00% and 1.00%, respectively, with the margin on the Revolving Credit Facility determined based on the Company’s first lien net leverage ratio.
Revolving credit facility The Company has a five-year $300 million revolving credit facility that matures on April 22, 2027 and bears interest at a rate per annum of Term SOFR plus a margin ranging from 2.00% to 2.50%, or ABR plus a margin ranging from 1.00 to 1.50%, subject to SOFR and ABR floors of 0.00% and 1.00%, respectively, with the margin on the Revolving Credit Facility determined based on the Company’s first lien net leverage ratio.
Adjusted Net Income Adjusted Net Income for the fiscal year ended September 30, 2023 decreased $39.5 million to $61.4 million, from $100.9 million in the 2022 period due to the changes noted above. Segment Results We classify our business into two segments: Maintenance Services and Development Services.
Adjusted Net Income Adjusted Net Income for the fiscal year ended September 30, 2024 increased $51.7 million to $113.1 million, from $61.4 million in the 2023 period due to the changes noted above. 40 Table of Contents Segment Results We classify our business into two segments: Maintenance Services and Development Services.
These acquisitions have allowed us to execute our “strong-on-strong” acquisition strategy in which we focus on increasing our density and leadership positions in existing local markets, entering into attractive new geographic markets and expanding our portfolio of landscape enhancement services and improving technical capabilities in specialized services.
These acquisitions focused on increasing our density and leadership positions in existing local markets, entering into attractive new geographic markets and expanding our portfolio of landscape enhancement services and improving technical capabilities in specialized services.
The corresponding intangible assets were originally recognized in connection with the KKR and ValleyCrest Acquisitions, as well as from subsequent acquisitions. Other Expense Other expense consists primarily of losses on debt extinguishment and gains and losses related to investments held in Rabbi Trust. Interest Expense Interest expense relates primarily to our long term debt.
The corresponding intangible assets were originally recognized in connection with the KKR and ValleyCrest Acquisitions, as well as from subsequent acquisitions. 36 Table of Contents Other (income) expense Other (income) expense consists primarily of investment gains related to investments held in Rabbi Trust.
Development Services Segment Results Fiscal Year Ended September 30, Percent Change (In millions) 2023 2022 2023 vs. 2022 Net Service Revenues $ 758.0 $ 698.8 8.5 % Segment Adjusted EBITDA $ 82.8 $ 73.7 12.3 % Segment Adjusted EBITDA Margin 10.9 % 10.5 % 40 bps Development Services Net Service Revenues Development Services net service revenues for the fiscal year ended September 30, 2023 increased $59.2 million, or 8.5%, compared to the 2022 period.
Development Services Segment Results Year Ended September 30, Percent Change (in millions) 2024 2023 2024 vs. 2023 Net Service Revenues $ 808.8 $ 758.0 6.7 % Segment Adjusted EBITDA $ 106.3 $ 82.8 28.4 % Segment Adjusted EBITDA Margin 13.1 % 10.9 % 220 bps Development Services Net Service Revenues Development Services net service revenues for the fiscal year ended September 30, 2024 increased $50.8 million, or 6.7%, compared to the 2023 period.
Income Tax Expense For the fiscal year ended September 30, 2023, income tax expense decreased $1.0 million, or 17.9%, to $4.6 million, compared to $5.6 million in the 2022 period.
Income Tax Expense For the fiscal year ended September 30, 2024, income tax expense increased $25.5 million, or 554.3%, to $30.1 million, compared to $4.6 million in the 2023 period.
Working Capital (In millions) September 30, 2023 September 30, 2022 Net Working Capital: Current assets $ 742.1 $ 677.1 Less: Current liabilities 466.7 488.4 Net working capital $ 275.4 $ 188.7 Net working capital is defined as current assets less current liabilities.
Working Capital (in millions) September 30, 2024 September 30, 2023 Net Working Capital: Current assets $ 780.1 $ 742.1 Less: Current liabilities 543.3 466.7 Net working capital $ 236.8 $ 275.4 Net working capital is defined as current assets less current liabilities.
Net (Loss) Income For the fiscal year ended September 30, 2023, net income decreased by $21.7 million, to a net loss of $7.7 million, from net income of $14.0 million in the 2022 period. The decrease in net income was primarily due to the changes noted above.
Net (Loss) Income For the fiscal year ended September 30, 2024, net income increased by $74.1 million, to a net income of $66.4 million, from net loss of $(7.7) million in the 2023 period. The increase in net income was primarily due to the changes noted above.
Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability. Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.
We evaluate the performance of our segments on Net Service Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Net Service Revenues). Segment Adjusted EBITDA is indicative of operational performance and ongoing profitability. Our management closely monitors Segment Adjusted EBITDA to evaluate past performance and identify actions required to improve profitability.
(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. Additionally, fiscal year 2022 includes refunds related to employee retention credits allowed under the CARES Act.
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.
Segment Adjusted EBITDA Margin increased 40 basis points, to 10.9% for the period from 10.5% in the 2022 period.
Segment Adjusted EBITDA Margin increased 220 basis points, to 13.1% for the period from 10.9% in the prior year.
Fiscal Year Ended September 30, (In millions) 2023 2022 Net service revenues $ 2,816.0 $ 2,774.6 Cost of services provided 2,137.1 2,099.8 Gross profit 678.9 674.8 Selling, general and administrative expense 533.4 534.9 Amortization expense 44.5 51.5 Income from operations 101.0 88.4 Other expense 6.7 15.5 Interest expense 97.4 53.3 (Loss) income before income taxes (3.1 ) 19.6 Income tax expense 4.6 5.6 Net (loss) income $ (7.7 ) $ 14.0 Less: dividends on Series A convertible preferred shares 3.2 — Net (loss) income attributable to common stockholders $ (10.9 ) $ 14.0 (Loss) earnings per share: Basic and diluted (loss) earnings per share $ (0.12 ) $ 0.14 Adjusted EBITDA (1) $ 298.7 $ 287.9 Adjusted Net Income (1) $ 61.4 $ 100.9 Cash flows from operating activities $ 129.9 $ 106.9 Free Cash Flow (1) $ 80.2 $ 6.7 (1) See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable GAAP measure.
Year Ended September 30, (in millions) 2024 2023 Net service revenues $ 2,767.1 $ 2,816.0 Cost of services provided 2,121.5 2,137.1 Gross profit 645.6 678.9 Selling, general and administrative expense 496.5 533.4 Gain on divestiture (43.6 ) - Amortization expense 35.8 44.5 Income from operations 156.9 101.0 Other (income) expense (2.0 ) 6.7 Interest expense, net 62.4 97.4 Income (loss) before income taxes 96.5 (3.1 ) Income tax expense 30.1 4.6 Net income (loss) $ 66.4 $ (7.7 ) Basic earnings (loss) per share $ 0.21 $ (0.12 ) Adjusted EBITDA (1) $ 324.7 $ 298.7 Adjusted Net Income (1) $ 113.1 $ 61.4 Cash flows from operating activities $ 205.6 $ 129.9 Free Cash Flow (1) $ 145.3 $ 80.2 (1) See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable GAAP measure.
Our corporate operations are not allocated to the segments and are not discussed separately as any results that had a significant impact on operating results are included in the consolidated results discussion above. 38 Table of Contents We evaluate the performance of our segments on Net Service Revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin (Segment Adjusted EBITDA as a percentage of Net Service Revenues).
Our corporate operations are not allocated to the segments and are not discussed separately as any results that had a significant impact on operating results are included in the consolidated results discussion above.
These purchase obligation amounts represent only those items for which we are contractually obligated as of September 30, 2023 . 44 Table of Contents Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Fees for enhancement services are typically billed as the services are performed. 46 Table of Contents Development Services 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.
Development Services 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−1 removed2 unchanged
Biggest changeSee Note 10 “Fair Value Measurements and Derivative Instruments” to our audited consolidated financial statements included elsewhere in this Form 10-K.
Biggest changeWe continue to monitor our exposure and the current pricing environment and may execute new fuel-based derivative instruments in the future. See Note 10 "Fair Value Measurements and Derivative Instruments" to our audited consolidated financial statements included elsewhere in this Form 10-K.
These outstanding interest rate contracts qualify and are designated as cash flow hedges of forecasted SOFR-based interest payments. At September 30, 2023, we were a fixed rate payer on fixed-floating interest rate swap and collar contracts that effectively fixed (swap) or limited (collar) the SOFR-based index used to determine the interest rates charged on our SOFR-based variable rate borrowings.
These outstanding interest rate contracts qualify and are designated as cash flow hedges of forecasted SOFR-based interest payments. At September 30, 2024, we were a fixed rate payer on fixed-floating interest rate swap and collar contracts that effectively fixed (swap) or limited (collar) the SOFR-based index used to determine the interest rates charged on our SOFR-based variable rate borrowings.
Substantially all of our outstanding variable rate debt was incurred under the Amended Credit Agreement and the Receivables Financing Agreement. Each of these loans bears interest based on SOFR plus a spread. 48 Table of Contents We use interest rate swap and collar contracts to offset our exposure to interest rate movements.
Substantially all of our outstanding variable rate debt was incurred under the Amended Credit Agreement and the Receivables Financing Agreement. Each of these loans bears interest based on SOFR plus a spread. We use interest rate swap and collar contracts to offset our exposure to interest rate movements.
Based on the debt outstanding and hedge contracts in place for the year ended September 30, 2023, a 100 basis point change in interest rates on our variable rate debt would result in a change to our fiscal 2023 interest expense by approximately $5.7 million inclusive of the impact from the active hedge contracts.
Based on the debt outstanding and hedge contracts in place for the year ended September 30, 2024, a 100 basis point change in interest rates on our variable rate debt would result in a change to our fiscal 2024 interest expense by approximately $2.7 million inclusive of the impact from the active hedge contracts.
See Note 10 “Fair Value Measurements and Derivative Instruments” to our audited consolidated financial statements included elsewhere in this Form 10-K.
See Note 10 "Fair Value Measurements and Derivative Instruments" to our audited consolidated financial statements included elsewhere in this Form 10-K.
We have historically targeted hedging between 30% and 50% of the principal amount outstanding under our Series B Term Loan. As of September 30, 2023, we had variable rate debt outstanding of $894.7 million at a weighted average interest rate of 7.5% for the year ended September 30, 2023, excluding the impact of our outstanding hedge agreements.
We have historically targeted hedging between 80% and 90% of the principal amount outstanding under our Series B Term Loan. As of September 30, 2024, we had variable rate debt outstanding of $809.0 million at a weighted average interest rate of 8.1% for the year ended September 30, 2024, excluding the impact of our outstanding hedge agreements.
We manage our exposure through the execution of a documented hedging strategy. We have historically entered into fuel swap contracts to mitigate the financial impact of fluctuations in fuel prices when appropriate. We did not have any open fuel-based derivative instruments during the year-ended September 30, 2023.
We manage our exposure through the execution of a documented hedging strategy. We have historically entered into fuel swap contracts to mitigate the financial impact of fluctuations in fuel prices when appropriate. We currently have open fuel-based derivative instruments. During the year ended September 30, 2024 we purchased approximately 21.1 million gallons of fuel.
Removed
During the year ended September 30, 2023 we purchased approximately 18.8 million gallons of fuel. A ten percent change in fuel prices would have resulted in a change of approximately $7.6 million in our annual fuel cost. We continue to monitor our exposure and the current pricing environment and may execute new fuel-based derivative instruments in the future.
Added
Based on the hedging contract in place during fiscal 2024, a ten percent change in fuel prices would have resulted in a change of approximately $6.2 million in our annual fuel cost inclusive of the impact from the active hedge contracts.

Other BV 10-K year-over-year comparisons