American Home Shield 2007 Annual Report Download - page 48

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Consolidated Statements of Operations
(In thousands, except per share data)
For years ended December 31, 2006 2005 2004
Operating Revenue $ 3,429,145 $ 3,239,478 $ 3,068,068
Operating Costs and Expenses:
Cost of services rendered and products sold 2,145,123 2,011,978 1,919,220
Selling and administrative expenses 924,809 881,963 818,534
Amortization expense 11,243 5,454 6,006
Restructuring charges (1) 21,648 — —
Total operating costs and expenses 3,102,823 2,899,395 2,743,760
Operating Income 326,322 340,083 324,308
Non-operating Expense (Income)
Interest expense 61,395 56,999 60,708
Interest and investment income, net (25,942) (19,832) (15,469)
Minority interest and other expense, net 8,240 8,218 8,225
Income from Continuing Operations before Income Taxes (1) 282,629 294,698 270,844
Provision (benefit) for income taxes (1), (2), (3) 96,061 114,137 (45,779)
Income from Continuing Operations (1), (2), (3) 186,568 180,561 316,623
Income (loss) from discontinued operations, net of income taxes (3) (16,869) 18,364 14,604
Net Income $ 169,699 $ 198,925 $ 331,227
Basic Earnings Per Share:
Income from continuing operations $ 0.64 $ 0.62 $ 1.09
Income (loss) from discontinued operations (0.06) 0.06 0.05
Basic Earnings Per Share $ 0.59 $ 0.68 $ 1.14
Diluted Earnings Per Share:
Income from continuing operations (1), (2), (3) $ 0.64 $ 0.61 $ 1.06
Income (loss) from discontinued operations (3) (0.06) 0.06 0.05
Diluted Earnings Per Share $ 0.58 $ 0.67 $ 1.11
(1) The 2006 results include restructuring charges for severance, as well as costs associated with Project Accelerate, the
Company's initiative to improve the effectiveness and efficiency of its functional support areas, and accruals for employee
retention and severance to be paid in future periods that are related to the Company's decision to consolidate its corporate
headquarters into its operations support center in Memphis, Tennessee and close its current headquarters in Downers Grove,
Illinois. The restructuring charges totaled $21.6 million pretax, $6.9 million after-tax and $0.02 per diluted share. The after-
tax impact of the restructuring charges includes approximately $6 million of non-recurring net operating loss carryforward
benefits which became realizable to the Company as a result of its decision to consolidate its corporate headquarters in
Memphis.
(2) In the fourth quarter of 2006, the Company recorded a reduction in income tax expense of $7 million ($0.02 per diluted
share) resulting from the resolution of state tax items related to a prior non-recurring transaction.
(3) As a result of a comprehensive agreement with the Internal Revenue Service regarding its examination of the Company's
federal income taxes through the year 2002, 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 $9 million related to discontinued operations ($.03 per diluted share). See the "Income Taxes" note in the
Notes to the Consolidated Financial Statements.
See accompanying Notes to the Consolidated Financial Statements.
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