American Home Shield 2010 Annual Report Download - page 40

Table of Contents
compared to 2009. The increase in revenue reflects improved price realization. Customer counts were comparable to 2009, reflecting a 3.8 percent decline in
new unit sales, offset by a 230 basis point improvement in the customer retention rate. American Home Shield's sales in the real estate channel were
negatively impacted by softness in the home resale market, offset, in part, by growth in consumer sales and renewals.
American Home Shield's Comparable Operating Performance increased $3.0 million for the year ended December 31, 2010 compared to 2009. In
addition to the favorable impact of increased revenue, American Home Shield's Comparable Operating Performance reflects a $4.3 million increase in interest
and net investment income from the American Home Shield investment portfolio (primarily reflecting reductions in impairments of securities), offset, in part,
by an 8.3 percent increase in contract claims costs driven by an increase in the number of seasonal contract claims.
ServiceMaster Clean Segment
The ServiceMaster Clean segment, which provides residential and commercial disaster restoration and cleaning services through franchises 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, reported a 5.2 percent increase in revenue, a 9.9 percent increase in operating
income and a 7.2 percent increase in Comparable Operating Performance for the year ended December 31, 2010 compared to 2009. Trends in revenue reflect
an increase in national janitorial accounts, product sales to franchisees and other revenues.
ServiceMaster Clean's Comparable Operating Performance increased $4.3 million for the year ended December 31, 2010 compared to 2009. In addition
to the favorable impact of increased revenue, ServiceMaster Clean's Comparable Operating Performance reflects reduced overhead spending.
Other Operations and Headquarters Segment
This segment includes the operations of Merry Maids, SMAC and the Company's headquarters functions. The segment reported comparable revenue, a
2.7 percent increase in operating loss and a 10.5 percent decrease in Comparable Operating Performance for the year ended December 31, 2010 compared to
2009. The Merry Maids operations reported comparable revenue, a 100.3 percent increase in operating income and a 15.2 percent increase in Comparable
Operating Performance for the year ended December 31, 2010 compared to 2009.
The segment's Comparable Operating Performance declined $9.6 million for the year ended December 31, 2010 compared to 2009, which includes key
executive separation charges of $5.5 million recorded in 2010, increased provisions for incentive compensation in 2010, due primarily to the reversal, in 2009,
of a $4.4 million reserve for cash awards related to a long-term incentive plan as certain performance measures under the plan were not achieved, and
increases in spending in the Company's headquarters functions to enhance capabilities in our centers of excellence and on initiatives designed to improve the
performance of our operating segments. These items were offset, in part, by a $13.3 million decrease in restructuring and Merger related charges and a
$2.7 million improvement in Merry Maids' Comparable Operating Performance, primarily reflecting increased labor efficiencies and reduced legal provisions.
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