American Home Shield 2011 Annual Report Download - page 33

Table of Contents
include lease termination and other costs related to the closing of the Santa Rosa call center; employee retention, severance and other costs related to the Company's
consolidation of its corporate headquarters into its operations support center in Memphis, Tennessee and the closing of its headquarters in Downers Grove, Illinois;
consulting, severance and other costs related to prior initiatives; and Merger charges related to the purchase of ServiceMaster by a group of investors led by CD&R.
In 2011, 2009 and 2008, the Company recorded pre-tax non-cash impairment charges of $36.7 million, $26.6 million and $58.7 million, respectively, to reduce the
carrying value of trade names as a result of the Company's annual impairment testing of goodwill and indefinite-lived intangible assets. These charges are included in
the results of continuing operations. There were no similar impairment charges included in continuing operations in 2010. See Note 1 to the Consolidated Financial
Statements for further details.
The 2009 results include a $46.1 million ($29.6 million, net of tax) gain on extinguishment of debt related to the completion of open market purchases of
$89.0 million in face value of the Company's 2015 Notes.
In the third and fourth quarters of 2009, the Company recorded a reduction in income tax expense of $12.1 million and $3.1 million, respectively, related to changes
in state tax rates used to measure deferred taxes. In the fourth quarter of 2008, the Company recorded a reduction in income tax benefit of $8.3 million resulting
from the establishment of a valuation allowance related to certain deferred tax assets for which the realization in future years is not more likely than not.
In 2011, in conjunction with the decision to dispose of TruGreen LandCare, a pre-tax non-cash impairment charge of $34.2 million was recorded to reduce the
carrying value of TruGreen LandCare's assets to their estimated fair value less cost to sell in accordance with applicable accounting standards. Upon completion of
the sale of TruGreen LandCare in 2011, the Company recorded a pre-tax loss on sale of $6.2 million. In 2010, 2009 and 2008, the Company recorded pre-tax non-
cash impairment charges associated with the goodwill and trade name at its TruGreen LandCare business in the amount of $46.9 million, $1.4 million and
$1.4 million, respectively. These charges are classified within the financial statement caption "(loss) income from discontinued operations, net of income taxes."
The Company recorded pre-tax non-cash impairment charges of $6.3 million and $18.1 million for the year ended December 31, 2008 and the Successor period
from July 25, 2007 to December 31, 2007, respectively, related to the long-lived assets (other than goodwill) at its InStar business in connection with the decision to
sell the InStar business. In the fourth quarter of 2007, the Company also recorded a pre-tax non-cash impairment charge associated with the goodwill at its InStar
business in the amount of $12.9 million. These charges are classified within the financial statement caption "(loss) income from discontinued operations, net of
income taxes."
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