American Home Shield 2015 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2015 American Home Shield annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

31
The following table sets forth Adjusted EBITDA for each of our reportable segments and Corporate and reconciles total
Adjusted EBITDA to Net Income (Loss) for the periods presented, which we consider to be the most directly comparable
GAAP financial measure:
Year Ended December 31,
(In millions) 2015 2014 2013 2012 2011
Adjusted EBITDA:
Terminix $ 347 $ 309 $ 266 $ 266 $ 249
American Home Shield 205 179 145 117 107
Franchise Services Group 77 78 78 70 75
Reportable Segment Adjusted EBITDA $ 630 $ 566 $ 489 $ 453 $ 431
Corporate(a) (9) (9) (39) (40) (34)
Total Adjusted EBITDA $ 622 $ 557 $ 450 $ 413 $ 397
De
p
reciation and amortization ex
p
ense
(
84
)
(
100
)
(
99
)
(
100
)
(
121
)
401(k) Plan corrective contribution(b) (23) — — — —
Non-cash stock-based compensation expense(c) (10) (8) (4) (7) (8)
Restructuring charges(d) (5) (11) (6) (15) (7)
Gain on sale of Merry Maids branches(e) 7 1 — — —
Non-cash impairment of software and other related costs(f) — (47) — — —
Non-cash impairment of property and equipment(g) — — — (9) —
Management and consulting fees(h) — (4) (7) (7) (8)
Consulting agreement termination fees(i) — (21) — — —
(Loss) income from discontinued operations, net of income taxes(j) (2) (100) (549) (696) 53
(Provision) benefit for income taxes (107) (40) (43) 8 6
Loss on extinguishment of debt(k) (58) (65) — (55) —
Interest expense (167) (219) (247) (245) (266)
Other non-operating expenses(l) (12) — (2) (1) —
N
et Income (Loss) $ 160 $ (57) $ (507) $ (714) $ 46
__________________________________
(a) Represents unallocated corporate expenses.
(b) Represents costs related to the 401(k) Plan described in Note 11 to the consolidated financial statements. We exclude
these charges from Adjusted EBITDA because we believe they do not reflect our on-going operations and because we
believe doing so is useful to investors in aiding period-to-period comparability.
(c) Represents the non-cash expense of our equity-based compensation. We exclude this expense from Adjusted EBITDA
primarily because it is a non-cash expense and because it is not used by management to assess ongoing operational
performance. We believe excluding this expense from Adjusted EBITDA is useful to investors in aiding period-to-period
comparability.
(d) Represents restructuring charges related primarily to the impact of a branch optimization project at Terminix, a
reorganization of leadership at Franchise Services Group and an initiative to enhance capabilities and reduce costs in our
headquarters functions. We exclude these restructuring charges from Adjusted EBITDA because we believe they do not
reflect our ongoing operations and because we believe doing so is useful to investors in aiding period-to-period
comparability.
(e) Represents the gain associated with the conversion of certain company-owned Merry Maids branches to franchises in
2014 and 2015 (the “branch conversions”).
(f) Represents the impairment of software and other related costs described in Note 2 to the consolidated financial
statements. We exclude non-cash impairments from Adjusted EBITDA because we believe doing so is useful to
investors in aiding period-to-period comparability.
(g) Represents a $3 million impairment of licensed intellectual property and a $1 million impairment of abandoned real
estate at Terminix, and a $4 million impairment of certain internally developed software at Merry Maids recorded in
2012. We exclude non-cash impairments of property and equipment from Adjusted EBITDA because we believe doing
so is useful to investors in aiding period-to-period comparability.
(h) Represents the amounts paid to certain of our Equity Sponsors under the consulting agreements described in Note 10 to
the consolidated financial statements. We exclude these amounts from Adjusted EBITDA primarily because they are not
reflective of ongoing operating results and because they are not used by management to assess ongoing operational
performance. In addition, we have excluded these amounts from Adjusted EBITDA because the consulting agreements
terminated in connection with our initial public offering.
2015 Annual Report 47