American Home Shield 2011 Annual Report Download - page 7

Table of Contents
The Terminix business is seasonal in nature. The termite swarm season, which typically occurs in early spring, but varies in timing and intensity by
region depending on climate and other factors, leads to the highest demand for termite control services and, therefore, the highest level of revenues. Similarly,
increased pest activity in the warmer months generally leads to the highest demand for pest control services and, therefore, the highest level of revenues.
American Home Shield Segment
The American Home Shield segment provides home service contracts for household systems and appliances primarily under the American Home Shield
brand name. American Home Shield is a leading provider of home service contracts for household systems and appliances in the United States. It provides
residential customers with contracts to repair or replace electrical, plumbing, central heating and central air conditioning systems, water heaters and other
covered household systems and appliances and services those contracts through independent repair contractors. In 2011, 68 percent of the home service
contracts written by American Home Shield were derived from existing contract renewals, while 18 percent and 14 percent were derived from sales made in
conjunction with existing home resale transactions and direct-to-consumer sales, respectively. As of December 31, 2011, American Home Shield issued and
administered home service contracts in 49 states and the District of Columbia and had no international operations.
Weather conditions such as extreme temperatures can lead to an increase in service requests related to household systems and appliances, resulting in
higher claim costs and lower profitability, thereby adversely impacting results of operations and cash flows.
ServiceMaster Clean Segment
The ServiceMaster Clean segment provides residential and commercial disaster restoration and cleaning services primarily under the ServiceMaster and
ServiceMaster Clean brand names, on-site furniture repair and restoration services primarily under the Furniture Medic brand name and home inspection
services primarily under the AmeriSpec brand name. Of the ServiceMaster Clean segment's 2011 operating revenue, 52 percent was generated from domestic
royalty fees, while international (19 percent), product sales (12 percent), janitorial national accounts (9 percent), lead generation fees (3 percent), AmeriSpec
(2 percent), Furniture Medic (2 percent) and new license sales (1 percent) accounted for the remainder.
ServiceMaster Clean. ServiceMaster Clean is a leading franchisor in the residential and commercial disaster restoration and cleaning field in the
United States. As of December 31, 2011, ServiceMaster Clean provided these services in all 50 states and the District of Columbia through approximately
2,975 franchised outlets. ServiceMaster Clean also has operations in Canada and Honduras. As of December 31, 2011, ServiceMaster Clean, through
franchises, provided disaster restoration and cleaning services in Canada, the United Kingdom and Spain and had licensing arrangements whereby licensees
provided these services in India, Lebanon, Turkey, Saudi Arabia, Japan and Southeast Asia.
Furniture Medic. Furniture Medic is a leading provider of on-site furniture repair and restoration services in the United States serving residential
customers. As of December 31, 2011, Furniture Medic provided these services in 42 states and the District of Columbia through approximately 215 franchised
outlets. As of December 31, 2011, Furniture Medic also provided on-site furniture repair and restoration services through franchisees in Canada and the
United Kingdom and had licensing arrangements to provide these services in Turkey and Saudi Arabia.
AmeriSpec. AmeriSpec is a leading provider of home inspection services in the United States serving residential customers. As of December 31, 2011,
AmeriSpec provided these services in
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