American Home Shield 2005 Annual Report Download - page 16

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SERVICEMASTER 2005 ANNUAL REPORT P.14
(In thousands, except per share data) 2005 2004 2003 2002 2001
Operating Results:
Operating revenue $ 3,239,478 $ 3,068,068 $ 2,895,028 $ 2,781,829 $ 2,656,634
Operating income (loss) (1) 340,083 324,308 110,655 315,357 (72,252)
Percentage of operating revenue 10.5% 10.6% 3.8% 11.3% (2.7%)
Non-operating expense 45,385 53,464 58,394 93,152 127,527
Provision (benefit) for income taxes (2) 114,137 (45,779) 54,716 76,949 (3,923)
Income (loss) from continuing operations (2) 180,561 316,623 (2,455) 145,256 (195,856)
Income (loss) from businesses held pending
sale and discontinued operations, net of income
taxes (1, 2, 3) 18,364 14,604 (222,232) 11,738 312,240
Net income (loss) $ 198,925 $ 331,227 $ (224,687) $ 156,994 $ 116,384
Earnings (loss) per share:
Basic $ 0.68 $ 1.14 $ (0.76) $ 0.52 $ 0.39
Diluted: (1, 2, 3)
Income (loss) from continuing operations $ 0.61 $ 1.06 $ (0.01) $ 0.47 $ (0.66)
Income (loss) from businesses held pending
sale and discontinued operations 0.06 0.05 (0.75) 0.04 1.05
Diluted earnings (loss) per share $ 0.67 $ 1.11 $ (0.76) $ 0.51 $ 0.39
Shares used to compute basic earnings per share 291,251 290,514 295,610 300,383 298,659
Shares used to compute diluted earnings per share 296,807 303,568 295,610 305,912 298,659
Shares outstanding, net of treasury shares 290,896 290,524 292,868 298,253 300,531
Cash dividends per share $ 0.44 $ 0.43 $ 0.42 $ 0.41 $ 0.40
Share price range:
High price $ 14.28 $ 13.87 $ 12.10 $ 15.50 $ 14.20
Low price $ 11.69 $ 10.65 $ 8.95 $ 8.89 $ 9.84
Financial Position:
Total assets (1) $ 3,028,870 $ 3,140,202 $ 2,956,426 $ 3,414,938 $ 3,621,245
Total liabilities 1,874,230 2,048,667 2,039,600 2,095,929 2,311,381
Total debt outstanding 658,150 805,088 819,271 835,475 1,155,193
Minority interest 100,000 100,000 100,309 100,309 102,677
Shareholders’ equity (1, 2) 1,054,640 991,535 816,517 1,218,700 1,207,187
(1) In accordance with SFAS 142, the Company’s goodwill and intangible assets that are not amortized are subject to at least an annual assessment for impairment by applying a fair-value
based test. In the third quarter of 2003, the Company recorded a non-cash impairment charge associated with the goodwill and intangible assets at its TruGreen LandCare business unit.
This charge, which is included in the results of continuing operations for 2003, totaled $189 million pre-tax, $156 million after-tax, and $0.53 per diluted share. Also in the third quarter of
2003, the Company recorded a non-cash impairment charge associated with the goodwill and intangible assets at its American Residential Services (ARS) and American Mechanical
Services (AMS) operations. The Company is currently holding these operations for sale, accordingly, the financial results for the ARS and AMS operations, as well as the impairment charge
related to these operations ($292 million pre-tax, $227 million after-tax), are classified within the financial statement caption “businesses held pending sale and discontinued operations” for all
periods. See the “Goodwill and Intangible Assets” note in the Notes to Consolidated Financial Statements. In the fourth quarter of 2001, the Company recorded in continuing operations a
pre-tax charge of $345 million ($279 million, after-tax) or $.94 per diluted share related primarily to goodwill and asset impairments as well as other items.
(2) In January 2005, the Company announced that it had reached a comprehensive agreement with the Internal Revenue Service regarding its examination of the Company’s federal income
taxes through the year 2002. As a result of this agreement, the Company recorded a non-cash reduction in its 2004 tax provision, thereby increasing net income by approximately $159 million.
Approximately $150 million related to continuing operations ($.49 per diluted share) and $9 million related to businesses held pending sale and discontinued operations ($.03 per diluted
share). See the “Income Taxes” note in the Notes to the Consolidated Financial Statements.
(3) The Company intends to sell its American Residential Services (ARS) and American Mechanical Services (AMS) companies so that it can concentrate resources on its main growth
companies. These operations were previously disclosed as the Company’s ARS/AMS segment. Because the Company intends to sell these companies, the results of these operations
are classified within the financial statement caption “businesses held pending sale and discontinued operations”in all periods. See the Management Discussion and Analysis of Financial
Position and Results of Operations for a discussion of the components of businesses held pending sale and discontinued operations.
Five-Year Financial Summary