American Home Shield 2006 Annual Report Download - page 17

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ITEM 6. SELECTED FINANCIAL DATA
Five-Year Financial Summary
(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.
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