American Home Shield 2010 Annual Report Download - page 55

Table of Contents
Goodwill increased from prior year levels as a result of tuck-in acquisitions at TruGreen LawnCare, Terminix and Merry Maids, offset, in part, by a
recorded goodwill impairment.
Intangibles decreased from prior year levels due to amortization expense and a recorded trade name impairment.
Other assets decreased from prior year levels, reflecting the return of the Company's investment in previously leased real estate facilities as further
discussed in "Liquidity."
Debt issue costs decreased from prior year levels due to amortization expense being recorded.
The increase in accounts payable reflects a change in the timing of payments to vendors.
Accrued payroll and related expenses increased from prior year levels, reflecting an increase in accruals for incentive compensation.
Accrued self-insurance claims and related expenses decreased from prior year levels, reflecting a reduction in required reserve levels under certain of our
self-insurance programs, offset, in part, by an increase in accruals for home service contract claims in the American Home Shield business.
Long-term debt decreased from prior year levels, reflecting the scheduled principal payments of long-term debt.
Non-current deferred tax liabilities decreased from the prior year as a result of an increase in the Company's net operating losses and amortization
expense for financial reporting purposes exceeding tax deductible amortization, partially offset by tax deductible depreciation exceeding depreciation expense
for financial reporting purposes.
Other long-term obligations, primarily self-insured claims, decreased from prior year levels, reflecting decreases in the fair value liability recorded for
interest rate swap contracts and reductions in required reserve levels under certain of our self-insurance programs.
Total shareholder's equity was $1,187.5 million at December 31, 2010 compared to $1,186.3 million at December 31, 2009.
Financial Position—Discontinued Operations
The assets and liabilities related to discontinued operations have been classified in a separate caption on the Consolidated Statements of Financial
Position.
As part of the InStar, American Residential Services and American Mechanical Services sale agreements, the Company guaranteed obligations to third
parties with respect to bonds (primarily performance and license type), operating leases for which the Company has been released as being the primary
obligor, real estate leased and operated by the buyers, and other guarantees of payment. At the present time, the Company does not believe it is probable that
the buyers will default on their obligations subject to guarantee. The fair value of the Company's obligations related to these guarantees is not significant and
no liability has been recorded.
Off-Balance Sheet Arrangements
The Company has off-balance sheet arrangements in the form of guarantees as discussed in Note 9 of the Consolidated Financial Statements.
Critical Accounting Policies and Estimates
The preparation of the Consolidated Financial Statements requires management to make certain estimates and assumptions required under GAAP which
may differ from actual results. The more significant areas requiring the use of management estimates relate to revenue recognition; the
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