American Home Shield 2004 Annual Report Download - page 38

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36 ServiceMaster 2004 annual report
(In thousands, except per share data)
For years ended December 31, 2004 2003 2002
Operating Revenue $ 3,758,568 $ 3,568,586 $ 3,500,721
Operating Costs and Expenses:
Cost of services rendered and products sold 2,525,029 2,430,523 2,398,952
Selling and administrative expenses 890,954 817,719 760,934
Amortization expense 6,029 5,917 7,442
Charge (credit) for impaired assets and other items (1) —480,670 (2,000)
Total operating costs and expenses 3,422,012 3,734,829 3,165,328
Operating Income (Loss) 336,556 (166,243) 335,393
Non-operating Expense (Income)
Interest expense 60,708 65,255 92,901
Interest and investment income (15,469) (15,012) (6,431)
Minority interest and other expense, net 8,225 8,151 6,682
Income (Loss) from Continuing Operations before Income Taxes 283,092 (224,637) 242,241
Provision (benefit) for income taxes(2) (40,965) (2,662) 84,938
Income (Loss) from Continuing Operations (1, 2) 324,057 (221,975) 157,303
Income (loss) from discontinued operations, net of income taxes (2) 7, 170 (2,712) (309)
Net Income (Loss) $ 331,227 $ (224,687) $ 156,994
Basic Earnings (Loss) Per Share:
Income (loss) from continuing operations $ 1.12 $ (0.75) $ 0.52
Income (loss) from discontinued operations 0.02 (0.01) —
Basic Earnings (Loss) Per Share $ 1.14 $ (0.76) $ 0.52
Diluted Earnings (Loss) Per Share:(1, 2)
Income (loss) from continuing operations $ 1.08 $ (0.75) $ 0.51
Income (loss) from discontinued operations 0.02 (0.01) —
Diluted Earnings (Loss) Per Share $ 1.11 $ (0.76) $ 0.51
(1) In accordance with SFAS 142, the Company’s goodwill and intangible assets that are not amortized are subject to at least an annual assessment for impairment
by applying a fair-value based test. During the third quarter of 2003, the Company recorded a non-cash impairment charge associated with goodwill and intan-
gible assets at its American Residential Services, American Mechanical Services and TruGreen LandCare business units of $481 million pre-tax ($383 million
after-tax). The impact on diluted earnings per share of this charge was $1.30. See the “Goodwill and Intangible Assets” note in the Notes to Consolidated Finan-
cial Statements.
(2) In January 2005, the Company announced that it had reached a comprehensive agreement with the Internal Revenue Service regarding its examina-
tion of the Company’s federal income taxes through the year 2002. As a result of this agreement, the Company recorded a non-cash reduction in its
fourth quarter and full year 2004 tax provision, thereby increasing net income by approximately $159 million. Approximately $150 million related to contin-
uing operations ($.49 per diluted share) and $9 million related to discontinued operations ($.03 per diluted share). See the “Income Taxes” note in the Notes to
the Consolidated Financial Statements.
See accompanying Notes to the Consolidated Financial Statements.
consolidated statements of operations