American Home Shield 2010 Annual Report Download - page 45

Table of Contents
Restructuring and Merger Related Charges
The Company incurred restructuring and Merger related charges of $26.9 million and $12.5 million for the years ended December 31, 2009 and 2008,
respectively. Restructuring and Merger related charges were comprised of the following:
Year Ended Dec. 31,
(In thousands) 2009 2008
TruGreen LawnCare reorganization and restructuring(1) $ 8,717 $ —
Information technology outsourcing(2) 9,861 3,504
Terminix branch optimization(3) 3,219 —
Merger related charges(4) 2,321 1,249
Other(5) 2,758 7,742
Total restructuring and Merger related charges $ 26,876 $ 12,495
Represents restructuring charges related to a reorganization of field leadership and a restructuring of branch operations.
For the year ended December 31, 2009, these costs included consulting fees of $6.3 million and severance, lease
termination and other costs of $2.4 million.
On December 11, 2008, the Company entered into an agreement with IBM pursuant to which IBM provides
information technology operations and applications development services to the Company. These services were phased
in during the first half of 2009. For the years ended December 31, 2009 and 2008, these costs included transition fees
paid to IBM of $7.6 million and $0.3 million, respectively, employee retention and severance costs of $1.3 million and
$0.4 million, respectively, and consulting and other costs of $1.0 million and $2.8 million, respectively.
Represents restructuring charges related to a branch optimization project. For the year ended December 31, 2009, these
costs included lease termination costs of $2.9 million and severance costs of $0.3 million.
Includes severance, retention, legal fees and other costs associated with the Merger.
For the years ended December 31, 2009 and 2008 these costs related to previous restructuring initiatives and included
adjustments to lease termination reserves of $0.4 million and $1.8 million, respectively, employee retention and
severance costs of $0.6 million and $1.5 million, respectively, and consulting and other costs of $1.8 million and
$4.4 million, respectively.
(1)
(2)
(3)
(4)
(5)
Impairment of Trade Names
During the fourth quarters of 2009 and 2008, the Company recorded non-cash impairment charges of $28.0 million and $60.1 million, respectively, to
reduce the carrying value of trade names as a result of its annual impairment testing of goodwill and indefinite-lived intangible assets. See Note 1 to the
Consolidated Financial Statements for further details.
Segment Review (Year ended December 31, 2009 compared with the year ended December 31, 2008)
The following business segment reviews should be read in conjunction with the required footnote disclosures presented in the Notes to the Consolidated
Financial Statements. This
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