American Home Shield 2011 Annual Report Download - page 53

Table of Contents
Financial Position and Liquidity
Cash Flows from Operating Activities from Continuing Operations
Net cash provided from operating activities from continuing operations increased $72.5 million to $295.0 million for the year ended December 31, 2011
compared to $222.5 million for the year ended December 31, 2010.
Net cash provided from operating activities in 2011 was comprised of $334.4 million in earnings adjusted for non-cash charges, offset, in part, by
$7.5 million in cash payments related to restructuring charges and a $31.9 million increase in cash required for working capital. For the year ended
December 31, 2011 working capital requirements were adversely impacted by a reduction in reserve levels under certain self-insurance programs and
unrecognized tax benefits.
Net cash provided from operating activities in 2010 was comprised of $253.8 million in earnings adjusted for non-cash charges, offset, in part, by $10.8
in cash payments related to restructuring charges and a $20.5 million increase in cash required for working capital. For the year ended December 31, 2010
working capital requirements were adversely impacted by growth in accounts receivable balances, due in part to unfavorable collection trends partially
attributable to increases in revenue in service lines with longer than average collection terms. Also adversely impacting working capital requirements was a
reduction in reserve levels under certain self-insurance programs. Working capital requirements were favorably impacted by a change in the timing of
payments to our vendors and increased accruals for incentive compensation.
Cash Flows from Investing Activities from Continuing Operations
Net cash used for investing activities from continuing operations was $135.2 million for the year ended December 31, 2011 compared to $175.1 million
for the year ended December 31, 2010.
Capital expenditures decreased to $96.5 million for the year ended December 31, 2011 from $134.2 million for the year ended December 31, 2010 and
included vehicle purchases of $48.5 million, recurring capital needs and information technology projects. The Company anticipates that capital expenditures,
excluding vehicle fleet purchases, for the full year 2012 will range from $85.0 million to $95.0 million, reflecting recurring needs and the continuation of
investments in information systems and productivity enhancing operating systems. Although the Company has been purchasing vehicles in recent years, we
expect to fulfill our ongoing vehicle fleet needs through vehicle capital leases; therefore, the Company's capital requirement for fleet vehicles for the full year
2012 is not expected to exceed $5.0 million. The Company has no additional material capital commitments at this time.
Proceeds from sales of equipment and other assets increased to $4.6 million for the year ended December 31, 2011 from $1.4 million for the year ended
December 31, 2010 and included $2.2 million of proceeds from the sale of Merry Maids company-owned branches to existing and new franchisees. The
Company may sell additional Merry Maids company-owned branches to existing or new franchisees in the future.
Cash payments for acquisitions for the year ended December 31, 2011 totaled $44.4 million, compared with $57.9 million for the year ended
December 31, 2010. Consideration paid for tuck-in acquisitions consisted of cash payments and debt payable to sellers. The Company expects to continue its
tuck-in acquisition program at Terminix, TruGreen and Merry Maids.
Cash flows from notes receivable, financial investments and securities decreased to $3.0 million for the year ended December 31, 2011 from
$20.4 million for the year ended December 31, 2010. The cash flows from notes receivable, financial investments and securities for the year ended
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