American Home Shield 2002 Annual Report Download - page 6

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Financial Highlights
(In thousands, except per share data)
(Restated 4)
As of and for the years ended December 31 2002 2001 Change
Operating Results
Operating revenue $ 3,589,089 $3,561,445 1%
Operating income (loss) (1) 341,336 (23,177)
Income (loss) from continuing operations 170,098 (164,464)
Income (loss) from discontinued operations (2) (3,875) 284,270
Extraordinary loss (3) (9,229) (3,422)
Net income $ 156,994 $ 116,384
Diluted earnings per share:
Income (loss) from continuing operations $ 0.56 $ (0.55)
Discontinued operations, net (2) (0.01) 0.95
Extraordinary loss, net (3) (0.03) (0.01)
Diluted earnings per share $ 0.52 $0.39
Cash dividends per share $ 0.41 $0.40 3%
Financial Position
Total assets $ 3,414,938 $3,621,245
Total debt 835,475 1,155,193
Shareholders’ equity 1,218,700 1,207,187
Cash Flows
Cash from operations $ 381,049 $ 362,933 5%
Share Price Range
(Traded on the New York Stock Exchange under the symbol SVM)
High price for the year $ 15.50 $ 14.20
Low price for the year 8.89 9.84
Closing price as of December 31, 11.10 13.80
(1) The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”, which eliminates the amortization
of goodwill and intangible assets with indefinite lives beginning in 2002. Had the provisions of SFAS 142 been applied to 2001, amortization expense would have
been reduced by $60 million ($42 million, after-tax), or $0.14 per diluted share.
In the fourth quarter of 2001, the Company recorded a pretax charge of $345 million ($279 million, after-tax), related primarily to goodwill and asset impairments
and other items. The impact on diluted earnings per share of this charge was $0.94.
(2) In the fourth quarter of 2001, the Company’s Board of Directors approved a series of actions related to the strategic review of its portfolio of businesses that
commenced earlier in 2001. These actions included the sale in November 2001 of the Company’s Management Services business as well as the decision to exit certain
non-strategic and under-performing businesses including TruGreen LandCare Construction, Certified Systems, Inc. and certain Terminix operations in Europe.
During the third quarter of 2002, the Company sold its remaining European Terminix operations. These operations are classified as “Discontinued Operations”
for all periods presented.
(3) In 2002 and 2001, the Company repurchased a portion of its public debt securities and in 2001 the Company prepaid some of its longer-term debt. The net impact
of these transactions was extraordinary losses of $9 million ($15 million pretax) and $3 million ($6 million pretax) in 2002 and 2001, respectively. The Company
intends to adopt SFAS 145 beginning in fiscal 2003. Adoption of this Statement in 2003 will result in the reclassification of the extraordinary losses into income
from continuing operations.
(4) See the “Restatement” section in the Notes to the Consolidated Financial Statements for the basis of the restatement and the financial statement impact.