American Home Shield 2011 Annual Report Download - page 39

Table of Contents
included adjustments to lease termination reserves of $0.3 million, employee retention and severance costs of $0.6 million and
consulting and other costs of $1.7 million.
Impairment of Trade Names
During the years ended December 31, 2011 and 2009, the Company recorded pre-tax non-cash impairment charges of $36.7 million and
$26.6 million, respectively, to reduce the carrying value of its trade names as a result of its annual impairment testing of indefinite-lived intangible
assets. There were no similar impairment charges recorded in continuing operations in 2010. See Note 1 to the Consolidated Financial Statements for
further details.
Key Performance Indicators
The table below presents selected operating metrics related to customer counts and customer retention for the three largest profit businesses in the
Company. These measures are presented on a rolling, twelve-month basis in order to avoid seasonal anomalies.
Key Performance
Indicators
as of December 31,
2011 2010 2009
TruGreen—
(Reduction) Growth in Full Program Accounts (5.3)% (1.7)% 0.7%
Customer Retention Rate 66.7% 66.0% 68.1%
Terminix—
Growth (Reduction) in Pest Control Customers 6.4% 3.6% (0.9)%
Pest Control Customer Retention Rate 80.6% 79.9% 78.5%
(Reduction) Growth in Termite Customers (1.0)% 0.3% (1.5)%
Termite Customer Retention Rate 86.1% 86.0% 85.7%
American Home Shield—
Growth in Home Service Contracts 1.6% 0.1% 0.1%
Customer Retention Rate(1) 75.1% 73.0% 72.2%
During the fourth quarter of 2011, the Company changed its calculation methodology of Customer Retention Rate for
American Home Shield to be consistent with the calculation methodology for TruGreen and Terminix. The Customer Retention
Rate for American Home Shield has been adjusted to reflect the 2011 calculation methodology for all periods presented.
(1)
Segment Review
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 disclosure provides a reconciliation of segment operating income to income from continuing operations before income taxes, with
net non-operating expenses as the only reconciling item.
The Company uses Adjusted EBITDA and Comparable Operating Performance to facilitate operating performance comparisons from period to period.
Adjusted EBITDA and Comparable Operating Performance are supplemental measures of the Company's performance that are not required by, or presented
in accordance with, accounting principles generally accepted in the United States of America ("GAAP"). Adjusted EBITDA and Comparable Operating
Performance are not measurements of the Company's financial performance under GAAP and should not be considered as alternatives to net income or any
other performance measures derived in accordance
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