American Home Shield 2008 Annual Report Download - page 115

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Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 20. Stock-Based Compensation (Continued)
During the Predecessor period from January 1, 2007 to July 24, 2007 and the year ended December 31, 2006, the Company recognized total pre-tax share
grant and restricted stock compensation expense of approximately $1.7 million and $4.1 million, respectively, and the Company recognized related tax
benefits of $0.7 million and $1.6 million, respectively.
The Company did not issue stock options, stock appreciation rights, share grants, restricted stock awards or restricted stock unit awards during the
Predecessor period from January 1, 2007 to July 24, 2007. Due to provisions in the Share Plan that allowed for the cash settlement of equity awards upon a
change in control of the Company, the Company recorded a charge of $46 million pre-tax for the reclassification of the awards from equity awards to liability
awards. Additionally, the Merger resulted in the accelerated vesting of previously unvested equity awards, for which the Company recorded a charge of
$12 million pre-tax. These charges were not included in the statements of operations of the Predecessor or Successor, rather they were reflected as a cost of
the Merger.
Note 21. Fair Value of Financial Instruments
The Company has estimated the fair value of its financial instruments measured at fair value on a recurring basis using the market and income
approaches. For investments in marketable securities, deferred compensation trust assets and derivative contracts, which are carried at their fair values, the
Company's fair value estimates incorporate quoted market prices, other observable inputs (for example, interest rates) and unobservable inputs (for example,
forward commodity prices) at the balance sheet date.
The carrying amount and estimated fair value of certain of the Company's financial instruments for the periods presented are as follows:
As of December 31, 2008 As of December 31, 2007
Estimated Fair Value Measurements
(In thousands)
Carrying
Value
Quoted
Prices In
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Carrying
Value
Estimated
Fair Value
Financial Assets
Deferred compensation trust assets $ 9,901 $ 9,901 $ — $ — $ 35,100 $ 35,100
Investments in marketable securities 123,161 49,909 73,252 — 232,655 232,655
Total financial assets $133,062 $ 59,810 $ 73,252 $ — $ 267,755 $ 267,755
Financial Liabilities
Fuel swap contracts $ 24,924 $ — $ — $ 24,924 $ — $ —
Interest rate swap contracts 59,852 — 59,852 — 16,557 16,557
Total financial liabilities $ 84,776 $ — $ 59,852 $ 24,924 $ 16,557 $ 16,557
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