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Table of Contents
75
impairment tests at October 1, 2013, June 30, 2013 and October 1, 2012 were the same and in line with historical U.S. gross domestic
product growth rates. The discount rates used in the October 1, 2013 and June 30, 2013 impairment tests were the same, but were 100
bps lower than the discount rate used in the October 1, 2012 impairment test for the TruGreen trade name. The decrease in the
discount rate from 2012 is primarily attributable to changes in market conditions which indicated an improved outlook for the U.S.
financial markets and a higher risk tolerance for investors since the last analysis.
Financial Information for Discontinued Operations
Loss from discontinued operations, net of income taxes, for all periods presented includes the operating results of the
previously sold businesses.
The operating results of discontinued operations are as follows:
Year Ended December 31,
(In millions) 2015 2014 2013
Revenue $ — $ 6 $ 896
Cost of services rendered and products sold — 12 686
Selling and administrative expenses 3 14 232
Amortization — — 5
Goodwill and trade name impairment(1) — 139 673
Restructuring charges — 3 15
Interest expense — — 2
Interest income — — (1)
Loss before income taxes(1) (3) (161) (716)
Benefit for income taxes(1) (1) (61) (167)
Loss from discontinued operations, net of income taxes(1) $ (2) $ (100) $ (549)
___________________________________
(1) During the years ended December 31, 2014 and 2013, the Company recorded pre-tax non-cash impairment charges of $139
million ($84 million, net of tax) and $673 million ($521 million, net of tax), respectively, associated with the goodwill and
trade name at its former TruGreen business, which is reported in Loss from discontinued operations, net of income taxes in
the consolidated statements of operations and comprehensive income (loss).
The table below summarizes the activity during the year ended December 31 2015, for the remaining liabilities of previously
sold businesses.
Liabilities of
Discontinued
(In millions) Operations
Balance as of December 31, 2014 $ 9
Costs incurred 2
Costs paid or otherwise settled (11)
Balance as of December 31, 2015 $ —
Note 8. Restructuring Charges
The Company incurred restructuring charges of $5 million ($3 million, net of tax), $11 million ($7 million, net of tax) and $6
million ($4 million, net of tax) for the years ended December 31, 2015, 2014 and 2013, respectively. Restructuring charges were
comprised of the following:
Year Ended December 31,
(In millions) 2015 2014 2013
Terminix branch optimization(1) $ 3 $ 2 $ 2
Franchise Services Group reorganization(2) 1 3 —
Corporate(3) 1 6 4
Total restructuring charges $ 5 $ 11 $ 6
___________________________________
(1) These charges included severance costs of $2 million, $2 million and $1 million for the years ended December 31, 2015,
2014 and 2013, respectively, and lease termination costs of $1 million for the years ended December 31, 2015 and 2013.
(2) Represents severance costs.
(3) Represents restructuring charges related to an initiative to enhance capabilities and reduce costs in the Company’s
headquarters functions that provide company-wide administrative services for its operations. For the years ended December
2015 Annual Report 91