American Home Shield 2004 Annual Report Download - page 51

2004 annual report ServiceMaster 49
Current Year
The net purchase price of the 2004 acquisitions was $59 million.
During the second quarter of 2004, the Company acquired the
assets of Greenspace Services Limited, Canada’s largest profes-
sional lawn care service company. In addition, the Company
acquired several small companies, primarily in the pest control
and lawn care businesses. The Company recorded goodwill of
approximately $52 million and other intangible assets of $10
million related to the 2004 acquisitions. The impact of these
acquisitions was not material to the Company’s Consolidated
Financial Statements.
Prior Years
During 2003, the Company acquired several small companies,
primarily in the lawn care business. The net purchase price of
these acquisitions was $38 million. The Company recorded
goodwill of $38 million and other intangible assets of $4 million
related to these acquisitions.
During 2002, the Company acquired several small companies,
primarily in the pest control and lawn care businesses. The
net purchase price of these acquisitions was $18 million. The
Company recorded goodwill of $12 million and other intangible
assets of $4 million related to these acquisitions.
Supplemental cash flow information regarding the Company’s
acquisitions is as follows:
(In thousands) 2004 2003 2002
Purchase price $ 66,841 $ 44,667 $ 18,850
Less liabilities
assumed (7,851) (6,315) (1,207)
Net purchase price $ 58,990 $ 38,352 $ 17,643
Net cash paid
for acquisitions $ 40,184 $ 28,875 $ 13,003
Value of shares issued 3,475 ——
Seller financed debt 15,331 9,477 4,640
Payment for
acquisitions $ 58,990 $ 38,352 $ 17,643
Dispositions
2003 Dispositions
During the third quarter of 2003, the Company sold substantial-
ly all of the assets and related operational obligations of Trees,
Inc., the utility line clearing operations of TruGreen LandCare,
to an independent subsidiary of Asplundh Subsidiary Holdings,
Inc., for approximately $20 million in cash. The impact of the
sale was not material to the Company’s Consolidated Financial
Statements for 2003.
2002 Dispositions
In October 2001, the Company’s Board of Directors approved a
series of strategic actions, which were the culmination of an
extensive portfolio review process. As part of this portfolio
review, the Company sold or exited certain non-strategic or
under-performing businesses in 2001 and 2002. During the
second quarter of 2002, the Company completed the sale of
its ownership interest in five assisted living facilities. These
properties were financed through an operating lease arrange-
ment, whereby the Company guaranteed a portion of the
residual value of the properties. In the fourth quarter of 2001, a
$13.5 million reserve was established representing the amount
by which the residual value guarantees exceeded the value of
bids to purchase the facilities at that time. The final sales price
was significantly greater than these bid levels and the Company
realized a gain of $3.6 million from the sale of the assisted living
properties in 2002, which is included in operating income from
continuing operations.
During the third quarter of 2002, the Company sold its remaining
Terminix operations in the United Kingdom. The sale was not
material to the Company’s operating results. Related to this sale,
the Company entered into a licensing agreement with the buyer
for the use of the Terminix trade name in the United Kingdom.
This agreement was valued at $6 million and accordingly, a like
amount was allocated from the purchase price. The entire
amount was recognized as income in the third quarter of 2002.
In the fourth quarter of 2002, the purchaser of the Company’s
European pest control and property services operations made a
claim for a purchase price adjustment (relating to the sale
completed in 2001), relating to an alleged breach of certain con-
ditions in the purchase agreement. In the course of responding
to that claim, the Company discovered that personnel of the
former operations had made unsupported monthly adjust-
ments to certain accounts. The Company subsequently agreed to
an adjustment to the purchase price consisting of an $8 million
cash payment and the cancellation of a previously reserved
note receivable of $7 million. An $8 million charge was recorded
in 2002.