American Home Shield 2009 Annual Report Download - page 94

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 3. Purchase Accounting (Continued)
The following table summarizes the estimated useful lives of the finite lived intangible assets and the amortization expense recorded in the years ended
December 31, 2009 and 2008:
Amortization Expense
Year Ended Dec. 31,
Estimated
Useful Lives
(In thousands) 2009 2008
Trade names(1) 5 to 10 years $ 2,720 $ 2,720
Customer relationships(2) 1 to 8 years 143,119 145,049
Franchise agreements(2) 23 to 25 years 10,148 11,147
Backlog 6 months — 8,787
Sub-contractor and realtor network 7 to 10 years 1,252 1,252
Favorable lease commitments 5 years 2,223 2,247
Software 7 years 2,424 2,424
$ 161,886 $ 173,626
Trade names with indefinite lives amounted to $2,380.1 million and $2,408.1 million at December 31, 2009 and 2008,
respectively. Trade names with finite lives amounted to $7.0 million and $9.7 million, net of accumulated amortization,
at December 31, 2009 and 2008, respectively.
Customer relationships and franchise agreements are amortized in proportion to the amount and timing of cash flows
expected to be received over the anticipated period of the customer relationship or duration of the franchise agreement.
(1)
(2)
Note 4. Business Segment Reporting
The business of the Company is conducted through six reportable segments: TruGreen LawnCare, TruGreen LandCare, Terminix, American Home
Shield, ServiceMaster Clean and Other Operations and Headquarters.
In accordance with accounting standards for segments, the Company's reportable segments are strategic business units that offer different services. The
TruGreen LawnCare segment provides residential and commercial lawn care services. The TruGreen LandCare segment provides landscaping services
primarily to commercial customers. The Terminix segment provides termite and pest control services to residential and commercial customers. The American
Home Shield segment provides home service contracts to consumers that cover HVAC, plumbing and other home systems and appliances. The ServiceMaster
Clean segment provides residential and commercial disaster restoration and cleaning services primarily under the ServiceMaster and ServiceMaster Clean
brand names, on-site furniture repair and restoration services primarily under the Furniture Medic brand name and home inspection services primarily under
the AmeriSpec brand name. The Other Operations and Headquarters segment includes the franchised and Company-owned operations of Merry Maids, which
provides house cleaning services. The Other Operations and Headquarters segment also includes the Company's headquarters operations, which provide
various technology, marketing, finance, legal and other support services to the business units.
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