American Home Shield 2010 Annual Report Download - page 89

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 7. Discontinued Operations (Continued)
The table below summarizes the activity during the year ended December 31, 2010 for the remaining liabilities from operations that were discontinued in
years prior to 2010. The remaining obligations primarily relate to long-term self-insurance claims. The Company believes that the remaining reserves continue
to be adequate and reasonable.
(In thousands)
Balance at
Dec. 31, 2009
Cash Payments
or Other
Expense/
(Income)
Balance at
Dec. 31, 2010
Remaining liabilities of discontinued operations:
ARS/AMS $ 2,921 $ (3,254) $ 552 $ 219
LandCare Construction 722 (84) 18 656
LandCare utility line clearing business 911 (140) — 771
Certified Systems, Inc. and other 2,149 (245) 1 1,905
InStar 248 (56) (43) 149
Total liabilities of discontinued operations $ 6,951 $ (3,779) $ 528 $ 3,700
Note 8. Restructuring and Merger Related Charges
The Company incurred restructuring and Merger related charges of $12.2 million ($7.5 million, net of tax), $26.9 million ($16.6 million, net of tax) and
$12.5 million ($7.5 million, net of tax) for the years ended December 31, 2010, 2009 and 2008, respectively. Restructuring and Merger related charges were
comprised of the following:
Year Ended Dec. 31,
(In thousands) 2010 2009 2008
TruGreen LawnCare reorganization and restructuring(1) $ 6,922 $ 8,717 $ —
Information technology outsourcing(2) — 9,861 3,504
Terminix branch optimization(3) 2,352 3,219 —
Merger related charges(4) 1,208 2,321 1,249
Other(5) 1,744 2,758 7,742
Total restructuring and Merger related charges $ 12,226 $ 26,876 $ 12,495
Represents restructuring charges related to a reorganization of field leadership and a restructuring of branch operations.
For the years ended December 31, 2010 and 2009, these costs included consulting fees of $4.7 million and $6.3 million,
respectively and severance, lease termination and other costs of $2.2 million and $2.4 million, respectively.
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.
(1)
(2)
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