American Home Shield 2009 Annual Report Download - page 91

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 2. Acquisition of ServiceMaster (Continued)
In connection with the Transactions, ServiceMaster retired certain of its existing indebtedness, including the 2009 Notes. On the Closing Date, the 2009
Notes were called for redemption and they were redeemed on August 29, 2007. Additionally, the Company utilized a portion of the proceeds from the Term
Facilities to repay at maturity the 2007 Notes.
The Interim Loan Facility matured on July 24, 2008. On the maturity date, outstanding amounts under the Interim Loan Facility were converted on a one-
to-one basis into the Permanent Notes. The Permanent Notes were issued pursuant to a refinancing indenture. In connection with the issuance of the
Permanent Notes, ServiceMaster entered into the Registration Rights Agreement, pursuant to which ServiceMaster filed with the SEC a registration statement
with respect to the resale of the Permanent Notes, which was declared effective on January 16, 2009. ServiceMaster deregistered the Permanent Notes in
accordance with the terms of the Registration Rights Agreement, and the effectiveness of the registration statement was terminated on November 19, 2009.
See Note 14 for a description of the Company's indebtedness.
Upon consummation of the Merger, ServiceMaster de-listed its shares of common stock from the New York Stock Exchange (the "NYSE") and
deregistered under Section 12 of the Securities Exchange Act of 1934. The last day of trading of ServiceMaster common stock on the NYSE was July 24,
2007.
The Company incurred certain costs related to the Merger that are presented as "Merger related charges" in the Consolidated Statements of Operations
and are recorded in the Other Operations and Headquarters business segment. For the years ended December 31, 2009 and 2008, the Successor period from
July 25, 2007 to December 31, 2007 and the Predecessor period from January 1, 2007 to July 24, 2007, the Company recorded Merger related costs of
$2.3 million ($1.5 million, net of tax), $1.2 million ($0.6 million, net of tax), $0.8 million ($0.1 million, net of tax) and $41.4 million ($34.7 million, net of
tax), respectively. The Merger related costs include investment banking, accounting, legal fees, legal settlements, change in control severance and other costs
associated with the Merger.
Note 3. Purchase Accounting
The Company accounted for the Merger in accordance with accounting standards for business combinations, which require the cost of the Merger to be
allocated to the assets and liabilities of the Company based on fair value. The Merger and the allocation of the purchase price have been recorded as of
July 25, 2007.
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