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42
December 31, 2013. Acquisitions contributed approximately $30 million in revenue in the year ended December 31, 2015, of which
the Alterra acquisition contributed approximately $8 million.
Revenue
Revenue by service line is as follows:
Year Ended December 31, % of Revenue
(In millions) 2015 2014 2013 2015
Pest Control $ 812 $ 758 $ 731 56 %
Termite and Other Services 559 542 508 39 %
Other 73 70 70 5 %
Total revenue $ 1,444 $ 1,370 $ 1,309 100 %
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Pest control revenue increased seven percent compared to 2014, reflecting improved price realization, a favorable product
mix, the impact of the Alterra acquisition on November 10, 2015 and growth in mosquito and bed bug services.
Termite revenue, including the wildlife exclusion, crawl space encapsulation and attic insulation products, which are
managed as a component of our termite line of business, increased three percent compared to 2014. In 2015, termite renewal revenue
comprised 50 percent of total termite revenue, while the remainder consisted of termite new unit revenue. The increase in termite
revenue reflects growth of new products (wildlife exclusion and crawlspace encapsulation), increased sales of attic insulation and
improved price realization, offset, in part, by a decrease in traditional termite sales. Termite activity is unpredictable in its nature.
Factors that can impact termite activity include conducive weather conditions and consumer awareness of termite swarms.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Pest control revenue increased four percent compared to 2013, reflecting improved price realization, a favorable product mix
and the introduction of a new mosquito service, offset, in part by a decrease in new unit sales.
Termite revenue, including the wildlife exclusion, crawl space encapsulation and attic insulation products which are managed
as a component of our termite line of business, increased seven percent compared to 2013. In 2014, termite renewal revenue
comprised 52 percent of total termite revenue, while the remainder consisted of termite new unit revenue. The increase in termite
revenue reflects introductions of new products (wildlife exclusion and crawlspace encapsulation), increased sales of attic insulation
and improved price realization, offset, in part, by a decrease in traditional termite sales.
Adjusted EBITDA
The following table provides a summary of changes in the segment’s Adjusted EBITDA:
(In millions)
Year Ended December 31, 2013 $ 266
Impact of change in revenue 39
Damage claims (5)
Legal 5
Sales costs (5)
Cost reduction initiatives 3
Key executive transition charges 3
Other 3
Year Ended December 31, 2014 $ 309
Im
p
act of chan
g
e in revenue 38
Fuel prices 5
Sales costs (11)
Incentive compensation 4
Cost reduction initiatives 3
Other (1)
Year Ended December 31, 2015 $ 347
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
We realized lower fuel costs as a result of lower fuel prices in 2015. The increase in sales costs was primarily driven by
investments to grow and train our sales force and higher commissions attributable to the growth in new products and pest control
revenue.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
58 2015 Annual Report