American Home Shield 2011 Annual Report Download - page 5

Table of Contents
PART I
ITEM 1. BUSINESS
The following discussion of our business contains "forward-looking statements," as discussed in Part II, Item 7 below. Our business, operations and
financial condition are subject to various risks as set forth in Part I, Item 1A below. The following information should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of Operations, the Consolidated Financial Statements and related notes and the
Risk Factors included elsewhere in this Annual Report on Form 10-K.
COMPANY
The ServiceMaster Company ("ServiceMaster," the "Company," "we," "us" or "our") is a national company serving both residential and commercial
customers. Our services include lawn care, termite and pest control, home service contracts, cleaning and disaster restoration, house cleaning, furniture repair
and home inspection. As of December 31, 2011, we provided these services through a network of approximately 6,900 company-owned, franchised and
licensed locations operating primarily under the following leading brands: TruGreen, Terminix, American Home Shield, ServiceMaster Clean, Merry Maids,
Furniture Medic and AmeriSpec. Approximately 98 percent of our 2011 operating revenue was generated by sales in the United States. Incorporated in
Delaware in 1991, ServiceMaster is the successor to various entities dating back to 1947.
ServiceMaster is organized into five principal reportable segments: TruGreen, Terminix, American Home Shield, ServiceMaster Clean, and Other
Operations and Headquarters. The financial information for each operating segment for 2011, 2010 and 2009 is contained in Note 3 to the Consolidated
Financial Statements in this Annual Report on Form 10-K. During 2011, we employed an average of approximately 21,000 company associates, and our
franchise network independently employed over 31,000 additional people.
In the first quarter of 2011, we concluded that TruGreen LandCare, a commercial landscape maintenance business, did not fit within our long-term
strategic plans and committed to a plan to sell the business. On April 21, 2011, we entered into a purchase agreement to sell the TruGreen LandCare business,
and the disposition was completed effective as of April 30, 2011. The financial results, as well as the assets and liabilities, of the TruGreen LandCare business
are reported in discontinued operations for all periods presented in this Annual Report on Form 10-K.
On July 24, 2007 (the "Closing Date"), ServiceMaster was acquired pursuant to a merger transaction (the "Merger"), and, immediately following the
completion of the Merger, all of the outstanding common stock of ServiceMaster Global Holdings, Inc. ("Holdings"), the ultimate parent company of
ServiceMaster, was owned by investment funds sponsored by, or affiliated with, Clayton, Dubilier & Rice, Inc. (now operated as Clayton, Dubilier &
Rice, LLC, "CD&R"), Citigroup Private Equity LP (together with its affiliate, Citigroup Alternative Investments LLC, "Citigroup"), BAS Capital Funding
Corporation ("BAS") and J.P. Morgan Ventures Corporation (now known as JPMorgan Chase Funding Inc., "JPMorgan"). On September 30, 2010, Citigroup
transferred the management responsibility for certain investment funds that own shares of common stock of Holdings to StepStone Group LLC ("StepStone"
and collectively with CD&R, Citigroup, BAS and JPMorgan, the "Equity Sponsors") and its proprietary interests in such investment funds to Lexington
Partners Advisors LP. As of December 22, 2011, Holdings purchased from BAS 7.5 million shares of capital stock of Holdings. Affiliates of BAS continue to
hold 10 million shares of Holdings. For information with respect to the ownership of common stock of Holdings by Equity Sponsors and related funds, see
Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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