American Home Shield 2015 Annual Report Download - page 68

50
Investing Activities
Net cash used for investing activities from continuing operations was $98 million for the year ended December 31, 2015
compared to $56 million for the year ended December 31, 2014 and $70 million for the year ended December 31, 2013.
Capital expenditures increased to $40 million in 2015 from $35 million in 2014 and $39 million in 2013 and included
recurring capital needs and information technology projects. We anticipate capital expenditures for the full year 2016 will range from
$50 million to $60 million, reflecting recurring capital needs and the continuation of investments in information systems and
productivity enhancing technology. We expect to fulfill our ongoing vehicle fleet needs through vehicle capital leases. We have no
additional material capital commitments at this time.
Proceeds from the sale of equipment and other assets was $14 million in 2015, primarily driven by the branch conversions.
The branches were sold for a total purchase price of $17 million for which we received cash of $13 million and provided financing of
$4 million. We expect to continue the branch conversions in 2016.
Cash payments for acquisitions totaled $92 million in 2015, compared with $58 million in 2014 and $32 million in 2013.
Consideration paid for tuck-in acquisitions consisted of cash payments and debt payable to sellers. We expect to continue our tuck-in
acquisition program at Terminix and to periodically evaluate other strategic acquisitions.
Cash flows provided from purchases, sales and maturities of securities, net, in 2015 and 2014 were $26 million and $40
million, respectively, and were driven by the maturity and sale of marketable securities at American Home Shield. There were no cash
flows from purchases, sales and maturities of securities, net, in 2013.
Cash flows used for notes receivable, net, in 2015 and 2014 were $6 million and were a result of increased financing
provided by SMAC to our franchisees and retail customers of our operating units. There were no cash flows from notes receivable,
net, in 2013.
Financing Activities
Net cash used for financing activities from continuing operations was $319 million for the year ended December 31, 2015
compared to $277 million for the year ended December 31, 2014 and $78 million for the year ended December 31, 2013.
During 2015, we borrowed an incremental $583 million, made scheduled principal payments on long-term debt of $45
million and redeemed $390 million and $488 million in aggregate principal amount of our 8% 2020 Notes and 7% 2020 Notes,
respectively, at a redemption price of 106.0% and 105.25%, respectively, of the principal amounts using available cash and the April
and August Incremental Term Loans. Additionally, we paid $2 million in original issue discount, paid $5 million in debt issuance
costs, recognized $13 million in excess tax benefits from the exercise of stock options and vesting of RSUs and received $16 million
from the issuance of common stock.
On July 1, 2014, we completed the initial public offering of 41,285,000 shares of our common stock at a price of $17.00 per
share, and we terminated the then-existing agreements governing our Old Term Facilities and the then-existing revolving credit
facility and entered into the Credit Facilities. The net proceeds and use of proceeds in connection with the offering and related
refinancing, which are included in financing activities from continuing operations during 2014, are as follows:
(In millions)
N
et proceeds from the initial public offering $663
Borrowings under the Term Loan Facility 1,825
Repayment of the Old Term Facilities (2,187)
Partial redemption of 8% 2020 Notes (210)
Partial redemption of 7% 2020 Notes (263)
Original issue discount paid in connection with the Term Loan Facility (18)
Debt issuance costs paid in connection with the Term Loan Facility (24)
N
et cash used for financing activities in connection with the initial public offering $ (214)
In addition to the aforementioned financing activities in connection with our initial public offering, during 2014, we made
scheduled principal payments on long-term debt of $38 million and contributed $35 million to New TruGreen in connection with the
TruGreen Spin-off. Additionally, during 2014, we paid $6 million for the purchase of common stock and RSUs and received $16
million from the issuance of common stock.
During 2013, we made scheduled principal payments on long-term debt of $49 million, including the payment of the
amounts outstanding under the former accounts receivable securitization facility, and made payments on other long-term financing
obligations of $4 million. During 2013, we borrowed an incremental $1 million, paid $12 million in original issue discount and paid
debt issuance costs of $6 million. Additionally, during 2013, we paid $16 million for the repurchase of common stock and RSUs and
received payments totaling $8 million from the issuance of common stock.
66 2015 Annual Report