American Home Shield 2015 Annual Report Download - page 59

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41
Net Income (Loss)
Net income (loss) was $160 million, $(57) million and $(507) million for the years ended December 31, 2015, 2014 and
2013, respectively. The $217 million improvement for the year ended December 31, 2015 compared to the year ended December 31,
2014 was primarily driven by a $186 million improvement in income from continuing operations before income taxes and a $98
million reduction in loss from discontinued operations, net of income taxes, offset, in part, by a $67 million increase in provision for
income taxes. The $450 million improvement for the year ended December 31, 2014 compared to the year ended December 31, 2013
was primarily driven by a $449 million reduction in loss from discontinued operations.
Segment Review
The following business segment reviews should be read in conjunction with the required footnote disclosures presented in the
notes to the consolidated financial statements included in this report.
Revenue and Adjusted EBITDA by reportable segment and for Corporate are as follows:
Year Ended December 31, Increase (Decrease)
(In millions) 2015 2014 2013 2015 vs. 2014 2014 vs. 2013
Revenue:
Terminix $ 1,444 $ 1,370 $ 1,309 5 % 5 %
American Home Shield 917 828 740 11 % 12 %
Franchise Services Group 232 253 236 (8) % 7 %
Corporate 2 7 8 (64) % (13) %
Total Revenue: $ 2,594 $ 2,457 $ 2,293 6 % 7 %
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usted EBITDA:(1)
Terminix $ 347 $ 309 $ 266 12 % 16 %
American Home Shield 205 179 145 15 % 23 %
Franchise Services Group 77 78 78 (1) % — %
Reportable Segment Adjusted EBITDA $ 630 $ 566 $ 489 11 % 16 %
Corporate(2) (9) (9) (39) — % (77) %
Total Adjusted EBITDA $ 622 $ 557 $ 450 12 % 24 %
___________________________________
(1) For our definition of Adjusted EBITDA and a reconciliation to net income (loss), see “—Selected Historical Financial Data.”
(2) Represents unallocated corporate expenses.
The table below presents selected operating metrics related to renewable customer counts and customer retention for our
Terminix and American Home Shield segments.
As of December 31,
2015(1) 2014(2) 2013
Terminix
Growth (Reduction) in Pest Control Customers 3 % (1) % (2) %
Pest Control Customer Retention Rate 79 % 79 % 79 %
Reduction in Termite and Other Services Customers (2) % (2) % (2) %
Termite and Other Services Customer Retention Rate 85 % 85 % 85 %
American Home Shield
Growth in Home Warranties 7 % 15 % — %
Customer Retention Rate 75 % 75 % 74 %
___________________________________
(1) As of December 31, 2015, excluding the Alterra accounts acquired on November 10, 2015, there was a reduction in pest
control customers of three percent, and, excluding all Alterra accounts, the pest control customer retention rate was 79
percent.
(2) As of December 31, 2014, excluding the HSA accounts acquired on February 28, 2014, the growth in home warranties was
five percent, and, excluding all HSA accounts, the customer retention rate for our American Home Shield segment was 76
percent.
Terminix Segment
The Terminix segment, which provides termite and pest control services to residential and commercial customers and
distributes pest control products, reported a five percent increase in revenue and a 12 percent increase in Adjusted EBITDA for the
year ended December 31, 2015 compared to the year ended December 31, 2014. The Terminix segment reported a five percent
increase in revenue and a 16 percent increase in Adjusted EBITDA for the year ended December 31, 2014 compared to the year ended
2015 Annual Report 57