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32
(i) Represents the consulting agreement termination fees described in Note 10 to the consolidated financial statements. We
exclude these amounts from Adjusted EBITDA because we believe doing so is useful to investors in aiding period-to-
period comparability.
(j) Represents our loss in connection with the spin-off of TruGreen in 2014 and the disposition of our commercial
landscaping business in 2011. See Note 7 to the consolidated financial statements for further discussion of the spin-off of
TruGreen. We exclude these amounts from Adjusted EBITDA because these charges are not part of our ongoing
operations and we believe doing so is useful to investors in aiding period-to-period comparability.
(k) Represents the loss on extinguishment of debt described in Note 12 to the consolidated financial statements. We believe
excluding this expense from Adjusted EBITDA is useful to investors in aiding period-to-period comparability.
(l) For 2015, primarily represents secondary offering expenses and legal and environmental expenses. We exclude these
amounts from Adjusted EBITDA because we believe doing so is useful to investors in aiding period-to-period
comparability.
For 2013 and 2012, represents certain administrative expenses. We excluded these expenses from the calculation of
Adjusted EBITDA in order to present Adjusted EBITDA on a basis consistent with Adjusted EBITDA as reported in
periods prior to our initial public offering, which is familiar to holders of our indebtedness.
(6) Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue.
(7) Free Cash Flow is not a measurement of our financial performance or liquidity under GAAP and does not purport to be an
alternative to net cash provided from operating activities from continuing operations or any other performance or liquidity
measures derived in accordance with GAAP.
Management believes Free Cash Flow is useful as a supplemental measure of our liquidity. Management uses Free Cash
Flow to facilitate company-to-company cash flow comparisons by removing potential differences caused by variations in
capital structures (affecting payments made or received in connection with debt issuances and debt retirements), as well as
payments for consulting agreement termination fees and excess tax benefits from stock-based compensation, which may vary
from company to company for reasons unrelated to operating performance.
Free Cash Flow means (i) net cash provided from operating activities from continuing operations before: call premium paid
on retirement of debt; premium received on issuance of debt; cash paid for consulting agreement termination fees; and excess
tax benefits from stock-based compensation; (ii) less property additions.
Free Cash Flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analyzing
our results as reported under GAAP. Some of these limitations are:
Free Cash Flow does not reflect payments made or received in connection with debt issuances and debt retirements;
Free Cash Flow does not reflect cash payments for consulting agreement termination fees;
Free Cash Flow does not reflect excess tax benefits from stock-based compensation; and
Other companies in our industries may calculate Free Cash Flow or similarly titled non-GAAP financial measures
differently, limiting is usefulness as a comparative measure.
The following table reconciles net cash provided from operating activities from continuing operations, which we consider to
be the most directly comparable GAAP measure, to Free Cash Flow using data derived from our consolidated financial
statements for the periods indicated:
Year Ended December 31,
(In millions) 2015 2014 2013 2012 2011
Net Cash Provided from Operating Activities from
Continuing Operations $ 336 $ 253 $ 208 $ 104 $ 74
Call premium paid on retirement of debt 49 35 — 43 —
Premium received on issuance of debt — — — (3) —
Cash paid for consulting agreement termination fees — 21 — — —
Excess tax benefits from stock-based compensation 13 — — — —
Property additions (40) (35) (39) (44) (52)
Free Cash Flow $ 358 $ 274 $ 169 $ 100 $ 22
48 2015 Annual Report