American Home Shield 2009 Annual Report Download - page 37

Table of Contents
In addition, in August 2009, the Company entered into consulting agreements with Citigroup, BAS and JPMorgan, each of which is an Equity Sponsor
or an affiliate of an Equity Sponsor. Under the consulting agreements, Citigroup, BAS and JPMorgan each will provide the Company with on-going
consulting and management advisory services until June 30, 2016 or the earlier termination of the existing consulting agreement between the Company
and CD&R. The Company will pay annual management fees of $0.5 million, $0.5 million and $0.25 million to Citigroup, BAS and JPMorgan,
respectively. The Company recorded consulting fees related to these agreements of $1.25 million for the year ended December 31, 2009.
The following table presents reconciliations of operating income (loss), the most directly comparable financial measure under GAAP, to Adjusted
EBITDA and Comparable Operating Performance for the periods presented.
(in thousands)
TruGreen
LawnCare
TruGreen
LandCare Terminix
American
Home
Shield
ServiceMaster
Clean
Other
Operations
and
Headquarters Total
Successor Year
Ended Dec. 31,
2009
Operating income
(loss)(1) $ 58,568 $ 3,417 $172,447 $ 63,983 $ 48,604 $ (89,862)$257,157
Depreciation and
amortization
expense 87,527 11,462 63,129 41,657 8,213 14,290 226,278
EBITDA 146,095 14,879 235,576 105,640 56,817 (75,572) 483,435
Interest and net
investment
income(2) — — — 1,976 144 4,959 7,079
Residual value
guarantee
charge(3) 4,726 — — — 588 147 5,461
Non-cash trade
name impairment 21,400 1,400 — — — 5,200 28,000
Adjusted EBITDA 172,221 16,279 235,576 107,616 57,549 (65,266) 523,975
Non-cash option and
restricted stock
expense — — — — — 8,097 8,097
Non-cash credits
attributable to
purchase
accounting(4) (103) (651) (226) (219) — — (1,199)
Comparable
Operating
Performance $ 172,118 $ 15,628 $235,350 $ 107,397 $ 57,549 $ (57,169) 530,873
Memo: Items
included in
Comparable
Operating
Performance
Restructuring
charges and
Merger related
charges(5) $ 8,717 $ 194 $ 3,390 $ 147 $ — $ 14,428 $ 26,876
Management fee(6) $ — $ — $ — $ — $ — $ 7,500 $ 7,500
Memo: Items
excluded from
Comparable
Operating
Performance
Comparable
Operating
Performance of
InStar $ — $ — $ — $ — $ — $ (270)$ (270)
Comparable
Operating
Performance of all
other discontinued
operations — — — — — (1,541) (1,541)