American Home Shield 2015 Annual Report Download - page 101

Table of Contents
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Note 15. Supplemental Cash Flow Information
Supplemental information relating to the consolidated statements of cash flows is presented in the following table:
Year Ended December 31,
(In millions) 2015 2014 2013
Cash paid for or (received from):
Interest expense $ 178 $ 220 $ 232
Interest and dividend income (3) (3) (5)
Income taxes, net of refunds 44 12 9
The Company acquired $27 million, $17 million and $26 million of property and equipment through capital leases and other
non-cash financing transactions in the years ended December 31, 2015, 2014 and 2013, respectively, which have been excluded from
the consolidated statements of cash flows as non-cash investing and financing activities.
In the years ended December 31, 2015 and 2014, the Company converted certain company-owned Merry Maids branches to
franchises for a total purchase price of $17 million and $2 million, respectively. In the year ended December 31, 2015, the Company
received cash of $13 million and provided financing of $4 million. In the year ended December 31, 2014, the Company provided
financing of $2 million. These financed amounts have been excluded from the consolidated statements of cash flows as non-cash
investing activities.
Note 16. Capital Stock
The Company is authorized to issue 2,000,000,000 shares of common stock. As of December 31, 2015, there were
143,170,897 shares of common stock issued and 135,511,176 shares of common stock outstanding. The Company has no other classes
of equity securities issued or outstanding.
In connection with equity offerings to certain executive officers and key employees as discussed further in Note 17 to the
consolidated financial statements, the Company sold 504,560 DSUs at a purchase price of $11.43 per DSU. DSUs represent a right to
receive a share of common stock in the future. In 2008, the Company issued 504,560 shares of common stock to a rabbi trust to be
held for future distribution related to the DSUs. The shares held by the rabbi trust are presented in treasury stock on the consolidated
statements of financial position and the consolidated statements of shareholders’ equity. As of December 31, 2015, there are 11,357
DSUs outstanding, which have not yet been converted to common stock.
Note 17. Stock-Based Compensation
In connection with the Company’s initial public offering, the Company’s board of directors and stockholders have adopted
the Omnibus Incentive Plan. Prior to the Company’s initial public offering, the Company’s board of directors and stockholders had
adopted the MSIP. Upon adoption of the Omnibus Incentive Plan, the Company froze the MSIP and will make no further grants
thereunder. However, awards previously granted under the MSIP are unaffected by the termination of the MSIP. The Omnibus
Incentive Plan provides for awards in the form of stock options, stock purchase rights, restricted stock, RSUs, performance shares,
performance units, stock appreciation rights, dividend equivalents, DSUs and other stock-based awards. The MSIP provided for the
sale of shares and DSUs of the Company’s stock to the Company’s executives, officers and other employees and to the Company’s
directors as well as the grant of RSUs, performance-based RSUs and options to purchase the Company’s shares to those individuals.
DSUs represent a right to receive a share of common stock in the future. The Company’s Compensation Committee selects the
Company’s executive officers, employees and directors eligible to participate in the MSIP and the Omnibus Incentive Plan and
determines the specific number of shares to be offered or options to be granted to an individual.
On February 24, 2015, the Company’s board of directors approved and recommended for approval by the Company’s
stockholders the Employee Stock Purchase Plan, which became effective for offering periods commencing July 1, 2015. The
Employee Stock Purchase Plan is intended to qualify for the favorable tax treatment under the Code. Under the plan, eligible
employees of the Company may purchase common stock, subject to Internal Revenue Service limits, during pre-specified offering
periods at a discount established by the Company not to exceed ten percent of the then-current fair market value. On April 27, 2015,
the Company’s stockholders approved the Employee Stock Purchase Plan with a maximum of one million shares of common stock
authorized for sale under the plan. Under the Employee Stock Purchase Plan, the Company sold 34,302 shares in 2015 at a weighted-
average grant-date fair value of the purchase rights of $3.97.
A maximum of 16,396,667 shares of the Company’s stock is authorized for issuance under the MSIP, the Omnibus Incentive
Plan, and the Employee Stock Purchase Plan, of which, as of December 31, 2015, 8,409,133 shares remain available for future grants.
The Company currently intends to satisfy any need for the Company’s shares of common stock associated with the settlement of
DSUs, vesting of RSUs, exercise of options or purchase of shares issued under the Omnibus Incentive Plan, MSIP or Employee Stock
Purchase Plan through new shares available for issuance or any shares repurchased, forfeited or surrendered from participants in the
MSIP and the Omnibus Incentive Plan.
All option grants under the Omnibus Incentive Plan and the MSIP have been, and the Company expects that all future option
grants will be, non-qualified options with a per-share exercise price no less than the fair market value of one share of the Company’s
stock on the grant date. Any stock options granted will generally have a term of ten years, and vesting will be subject to an employee’s
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