American Home Shield 2015 Annual Report Download - page 63

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45
Adjusted EBITDA
The following table provides a summary of changes in the segment’s Adjusted EBITDA:
(In millions)
Year Ended December 31, 2013 $ 78
Impact of change in revenue 3
Other (3)
Year Ended December 31, 2014 $ 78
Im
p
act of chan
g
e in revenue
(
5
)
Sale of Merry Maids branches (2)
Sales and marketing costs 3
Cost reduction initiatives 3
Year Ended December 31, 2015 $ 77
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
The impact of the decrease in revenue on Adjusted EBITDA was driven by the decrease in royalty fees, revenue from
company-owned Merry Maids branches and sales of products, offset, in part, by the increase in relatively low margin revenue from
janitorial national accounts.
We realized a reduction in Adjusted EBITDA of $2 million as a result of the branch conversions.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
The impact of the increase in revenue on Adjusted EBITDA was driven by the increase in royalty fees and relatively low
margin revenue from janitorial national accounts.
Corporate
Adjusted EBITDA for Corporate for the year ended December 31, 2015 was comparable to December 31, 2014. Corporate
reported a $31 million increase in Adjusted EBITDA for the year ended December 31, 2014 compared to the year ended December
31, 2013.
Adjusted EBITDA
The following table provides a summary of changes in Corporate’s Adjusted EBITDA:
(In millions)
Year Ended December 31, 2013 $ (39)
Insurance program (9)
Key executive transition charges 2
Cost reduction initiatives 36
Other 1
Year Ended December 31, 2014 $ (9)
Insurance
p
ro
g
ram 4
Other (4)
Year Ended December 31, 2015 $ (9)
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
The decrease in expense related to our automobile, general liability and workers’ compensation insurance program was
driven by the impact of increased reserves of $9 million and $13 million recorded in 2015 and 2014, respectively, driven by
unfavorable claims trends. The unfavorable claims trends for 2015 were impacted by a charge of $3 million in connection with civil
claims related to an incident at a resort in St. John in the U.S. Virgin Islands. The charge of $3 million is an amount equal to our
insurance deductible under our general liability insurance program.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
The increase in expense related to our automobile, general liability and workers’ compensation insurance program was driven
by adverse claims trends. The cost reduction initiatives were primarily driven by the transfer of employees to New TruGreen in
combination with fees received under the transition services agreement with New TruGreen.
2015 Annual Report 61