Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 30, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SERVICEMASTER GLOBAL HOLDINGS INC | |
Entity Central Index Key | 1,428,875 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 135,028,557 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | serv |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Operations and Comprehensive Income [Abstract] | ||||
Revenue | $ 797 | $ 758 | $ 2,246 | $ 2,113 |
Cost of services rendered and products sold | 419 | 400 | 1,180 | 1,104 |
Selling and administrative expenses | 199 | 185 | 592 | 546 |
Amortization expense | 7 | 8 | 20 | 24 |
401(k) Plan corrective contribution | (4) | (3) | 1 | |
Fumigation related matters | 1 | 2 | 92 | |
Insurance reserve adjustment | 23 | |||
Impairment of software and other related costs | 2 | 1 | ||
Restructuring charges | 21 | 8 | 24 | 13 |
Gain on sale of Merry Maids branches | (2) | |||
Interest expense | 38 | 39 | 113 | 115 |
Interest and net investment income | (1) | (1) | (3) | (5) |
Loss on extinguishment of debt | 3 | 6 | ||
Income from Continuing Operations before Income Taxes | 114 | 116 | 313 | 200 |
Provision for income taxes | 34 | 46 | 109 | 76 |
Income from Continuing Operations | 80 | 70 | 204 | 124 |
Income from discontinued operations, net of income taxes | 1 | |||
Net Income | 80 | 70 | 204 | 124 |
Total Comprehensive Income | $ 83 | $ 71 | $ 208 | $ 126 |
Weighted-average common shares outstanding - Basic | 134.3 | 135.1 | 134.2 | 135.4 |
Weighted-average common shares outstanding - Diluted | 135.2 | 137.1 | 135.4 | 137.5 |
Basic Earnings Per Share: | ||||
Income from Continuing Operations (in dollars per share) | $ 0.60 | $ 0.52 | $ 1.52 | $ 0.92 |
Net Income (in dollars per share) | 0.60 | 0.52 | 1.52 | 0.91 |
Diluted Earnings Per Share: | ||||
Income from Continuing Operations (in dollars per share) | 0.59 | 0.51 | 1.50 | 0.90 |
Net Income (in dollars per share) | $ 0.59 | $ 0.51 | $ 1.51 | $ 0.90 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Position - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 456,000,000 | $ 291,000,000 |
Marketable securities | 14,000,000 | 25,000,000 |
Receivables, less allowances of $23 and $22, respectively | 619,000,000 | 536,000,000 |
Inventories | 42,000,000 | 43,000,000 |
Prepaid expenses and other assets | 88,000,000 | 70,000,000 |
Deferred customer acquisition costs | 40,000,000 | 34,000,000 |
Total Current Assets | 1,259,000,000 | 998,000,000 |
Other Assets: | ||
Property and equipment, net | 221,000,000 | 210,000,000 |
Goodwill | 2,255,000,000 | 2,247,000,000 |
Intangible assets, primarily trade names, service marks and trademarks, net | 1,698,000,000 | 1,708,000,000 |
Restricted cash | 89,000,000 | 95,000,000 |
Notes receivable | 40,000,000 | 37,000,000 |
Long-term marketable securities | 19,000,000 | 19,000,000 |
Other assets | 66,000,000 | 71,000,000 |
Total Assets | 5,647,000,000 | 5,386,000,000 |
Current Liabilities: | ||
Accounts payable | 123,000,000 | 112,000,000 |
Accrued liabilities: | ||
Payroll and related expenses | 56,000,000 | 54,000,000 |
Self-insured claims and related expenses | 127,000,000 | 111,000,000 |
Accrued interest payable | 18,000,000 | 16,000,000 |
Other | 92,000,000 | 60,000,000 |
Deferred revenue | 666,000,000 | 629,000,000 |
Current portion of long-term debt | 146,000,000 | 59,000,000 |
Total Current Liabilities | 1,227,000,000 | 1,042,000,000 |
Long-Term Debt | 2,654,000,000 | 2,772,000,000 |
Other Long-Term Liabilities: | ||
Deferred taxes | 745,000,000 | 719,000,000 |
Other long-term obligations, primarily self-insured claims | 168,000,000 | 167,000,000 |
Total Other Long-Term Liabilities | 913,000,000 | 886,000,000 |
Commitments and Contingencies (Note 4) | ||
Shareholders' Equity: | ||
Common stock $0.01 par value (authorized 2,000,000,000 shares with 146,540,700 shares issued and 135,020,815 outstanding at September 30, 2017 and 144,339,338 shares issued and 135,030,283 outstanding at December 31, 2016) | 2,000,000 | 2,000,000 |
Additional paid-in capital | 2,317,000,000 | 2,274,000,000 |
Accumulated deficit | (1,201,000,000) | (1,405,000,000) |
Accumulated other comprehensive income (loss) | 1,000,000 | (3,000,000) |
Less common stock held in treasury, at cost (11,519,885 shares at September 30, 2017 and 9,309,055 shares at December 31, 2016) | (267,000,000) | (182,000,000) |
Total Shareholders' Equity | 852,000,000 | 686,000,000 |
Total Liabilities and Shareholders' Equity | $ 5,647,000,000 | $ 5,386,000,000 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Statements of Financial Position [Abstract] | ||
Allowance for receivables (in dollars) | $ 23 | $ 22 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 146,540,700 | 144,339,338 |
Common stock, shares outstanding (in shares) | 135,020,815 | 135,030,283 |
Treasury stock (in shares) | 11,519,885 | 9,309,055 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Cash Flows [Abstract] | ||
Cash and Cash Equivalents and Restricted Cash at Beginning of Period | $ 386 | $ 296 |
Cash Flows from Operating Activities from Continuing Operations: | ||
Net Income | 204 | 124 |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Income from discontinued operations, net of income taxes | (1) | |
Depreciation expense | 56 | 43 |
Amortization expense | 20 | 24 |
Amortization of debt issuance costs | 4 | 3 |
401(k) Plan corrective contribution | (3) | 1 |
Fumigation related matters | 2 | 92 |
Payments on fumigation related matters | (2) | (90) |
Insurance reserve adjustment | 23 | |
Impairment of software and other related costs | 2 | 1 |
Gain on sale of Merry Maids branches | (2) | |
Loss on extinguishment of debt | 6 | |
Deferred income tax provision | 27 | 12 |
Stock-based compensation expense | 10 | 10 |
Gain on sales of marketable securities | (3) | |
Restructuring charges | 24 | 13 |
Cash payments related to restructuring charges | (8) | (7) |
Other | 14 | 5 |
Change in working capital, net of acquisitions: | ||
Receivables | (81) | (81) |
Inventories and other current assets | (8) | (9) |
Accounts payable | 13 | 18 |
Deferred revenue | 35 | 40 |
Accrued liabilities | 17 | (5) |
Accrued interest payable | 3 | (6) |
Current income taxes | 3 | 6 |
Net Cash Provided from Operating Activities from Continuing Operations | 340 | 215 |
Cash Flows from Investing Activities from Continuing Operations: | ||
Property additions | (50) | (45) |
Government grant fundings for property additions | 2 | |
Sale of equipment and other assets | 4 | 7 |
Business acquisitions, net of cash acquired | (12) | (86) |
Purchases of available-for-sale securities | (9) | (6) |
Sales and maturities of available-for-sale securities | 23 | 48 |
Origination of notes receivable | (80) | (78) |
Collections on notes receivable | 76 | 73 |
Other investments | (1) | (3) |
Net Cash Used for Investing Activities from Continuing Operations | (48) | (90) |
Cash Flows from Financing Activities from Continuing Operations: | ||
Payments of debt | (78) | (50) |
Call premium paid on retirement of debt | (1) | |
Repurchase of common stock | (85) | (52) |
Issuance of common stock | 27 | 6 |
Net Cash Used for Financing Activities from Continuing Operations | (136) | (97) |
Cash Flows from Discontinued Operations: | ||
Cash provided from operating activities | 1 | |
Net Cash Provided from Discontinued Operations | 1 | |
Effect of Exchange Rate Changes on Cash | 1 | |
Cash Increase During the Period | 159 | 28 |
Cash and Cash Equivalents and Restricted Cash at End of Period | $ 545 | $ 325 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation ServiceMaster Global Holdings, Inc. and its majority-owned subsidiary partnerships, limited liability companies and corporations (collectively, “ServiceMaster,” the “ Company,” “we,” “us, and “our”) is a leading provider of essential residential and commercial services. The Company’s services include termite and pest control, home warranties, disaster restoration, janitorial, residential cleaning, cabinet and wood furniture repair and home inspection. The Company provides these services through an extensive service network of company-owned, franchised and licensed locations operating primarily under the following leading brands: Terminix, American Home Shield, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. All consolidated Company subsidiaries are wholly-owned. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The Company recommends that the quarterly unaudited condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 201 6 , as filed with the SEC (the “201 6 Form 10-K”). The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for any interim period are not indicative of the results that might be achieved for a full year. American Home Shield Spin-off On July 26, 2017, the Company announced that it intends to separate its American Home Shield business from the Company’s Terminix and Franchise Services Group businesses by means of a s pinoff of the American Home Shield business to Company shareholders, resulting in two public ly traded companies. The spin-off would create two independent companies , each with an enhanced strategic focus, simplified operating structure, distinct investment identity and strong financial profile. The transaction is expected to be completed in the third quarter of 2018, subject to satisfaction of customary conditions, including the effectiveness of a Registration Statement on Form 10 to be filed with the SEC , receipt of a favorable ruling from the IRS concerning certain tax matters and final approval by the Company’s board of directors, and it is intended to qualify as a tax-free distribution to the Company’s shareholders for U.S. federal income tax purposes. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the Company’s 2016 Form 10-K. There have been no material changes to the significant accounting policies for the three and nine months ended September 30, 2017. Newly Issued Accounting Standards In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item in order to align financial reporting of hedge relationships with economic results. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. It is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods with early adoption permitted. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” to provide a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This model supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” Entities have the option of using either a full retrospective or modified approach to adopt the guidance. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company will adopt the new revenue guidance effective January 1, 2018 using the modified retrospective transition method. While the Company is finalizing its assessment of the impacts of the new standard, the Company currently believes the most significant impact relates to the Company’s accounting for customer acquisition costs, including the amortization period for such costs, and advertising costs, specifically as it relates to direct response advertising, which under ASU 2014-09 the Company will no longer defer. The Company is also finalizing its assessment of the impacts related to the accounting for contract assets separate from accounts receivable. Currently, when a customer elects to pay for their home warranty contract on a monthly basis, accounts receivable and deferred revenue are recorded based on the total amount due from the customer. The accounts receivable balance is reduced as amounts are paid, and the deferred revenue is amortized over the life of the contract. Under the new revenue guidance, we expect only the portion of the contract that is due in the current month to be recorded within accounts receivable. The remaining portion of the contract will be separately recorded as a contract asset. In addition, under the new guidance, the contract asset will be presented net of the contract liability currently recorded as deferred revenue. The Company does not expect adoption of the new revenue standard to have a material impact on its co nsolidated financial statements except for the aforementioned reclassification of contract liabilities currently recorded as deferred revenue. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” to change how entities measure certain equity investments, to require the disclosure of changes in the fair value of financial liabilities measured under the fair value option that are attributable to a company’s own credit, and to change certain other disclosure requirements. The changes in ASU 2016-01 specifically require that the changes in fair value of all investments in equity securities be recognized in net income. The amendments in ASU 2016-01 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and will be adopted prospectively. Upon adoption, changes in fair value of the Company’s available-for-sale securities, which are currently recognized in other comprehensive income, will be recognized in net income. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which is the final standard on accounting for leases. While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The most significant change for lessees is the requirement under the new guidance to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases. Entities are required to use a modified retrospective approach to adopt the guidance. The amendments in ASU 2016-02 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company’s consolidated financial statements and currently expects that most of the operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption of ASU 2016-02, which will increase the amount of total assets and total liabilities that is reported relative to such amounts prior to adoption. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 3. Restructuring Charges The Company incurred restructuring charges of $21 million ( $14 million, net of tax) and $8 million ( $5 million, net of tax) in the three months ended September 30, 2017 and 2016, respectively, and $24 million ( $16 million, net of tax) and $13 million ( $8 million, net of tax) in the nine months ended September 30, 2017 and 2016, respectively. Restructuring charges were comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Terminix (1) $ — $ 4 $ 1 $ 7 American Home Shield (2) — 1 — 1 Corporate (3) 11 2 12 4 American Home Shield spin-off (4) 7 — 7 — Headquarters relocation (5) 3 2 4 2 Total restructuring charges $ 21 $ 8 $ 24 $ 13 ___________________________________ (1) For the nine months ended September 30, 2017, these charges included $1 million of severance and other costs. For the three and nine months ended September 30, 2016, these charges included $1 million of severance costs and $3 million of stock-based compensation expense due to the modification of non-vested stock options and RSUs as part of the severance agreement with the former president of Terminix. The nine month period ending September 30, 2016 includes $3 million related to lease terminations and severance costs driven by Terminix’s branch optimization program. (2) For the three and nine months ended September 30, 2016, these charges included $1 million related to the termination of an agreement pursuant to the decision to consolidate the stand-alone operations of Home Security of America, Inc. acquired in February 2014 with those of American Home Shield. (3) For the three and nine months ended September 30, 2017, these charges included $4 million of severance costs and $5 million of stock-based compensation expense due to the modification of non-vested stock options as part of the severance agreement with the former Chief Executive Officer of the Company. Additionally, for the three and nine months ended September 30, 2017, includes severance costs of $1 million and $2 million, respectively, related to an initiative to enhance capabilities and reduce costs in the Company’s headquarters functions that provide Company-wide administrative services for our operations. For the three months ended September 30, 2016, includes professional fees of $2 million, and for the nine months ended September 30, 2016, includes professional fees of $2 million and accelerated depreciation of $1 million related to the early termination of a long-term human resources outsourcing agreement. Additionally, the nine months ended September 30, 2016 includes severance and other costs of $1 million related to an initiative to enhance capabilities and reduce costs in the Company’s headquarters functions that provide Company-wide administrative services for our operations. (4) For the three and nine months ended September 30, 2017, includes professional fees and other costs of $7 million related to the planned s pin - off of the American Home Shield business to Company shareholders . The Company expects that it will incur additional costs in order to effect the separation of American Home Shield but is currently unable to estimate the aggregate amount or timing of such charges or the anticipated related cash outlays. (5) For the three and nine months ended September 30, 2017, these charges included redundant rent expense, accelerated depreciation and other charges of $3 million and $4 million, respectively, related to the relocation of our headquarters. For the three and nine months ended September 30, 2016, these charges included impairment charges of $1 million and professional fees and other costs of $1 million related to the relocation of our headquarters. The pretax charges discussed above are reported in Restructuring charges in the unaudited condensed consolidated statements of operations and comprehensive income (loss). A reconciliation of the beginning and ending balances of accrued restructuring charges, which are included in Accrued liabilities — Other on the unaudited condensed consolidated statements of financial position, is presented as follows: Accrued Restructuring (In millions) Charges Balance as of December 31, 2016 $ 3 Costs incurred 24 Costs paid or otherwise settled (17) Balance as of September 30, 2017 $ 9 The company expects substantially all of its accrued restructuring charges to be paid within one year. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 4 . Commitments and Contingencies The Company carries insurance policies on insurable risks at levels that it believes to be appropriate, including workers’ compensation, automobile and general liability risks. The Company purchases insurance policies from third-party insurance carriers, which typically incorporate significant deductibles or self-insured retentions. The Company is responsible for all claims that fall below the retention limits, exceed our coverage limits or are otherwise not covered by our insurance policies. In determining the Company’s accrual for self-insured claims, the Company uses historical claims experience to establish both the current year accrual and the underlying provision for future losses. This actuarially determined provision and related accrual include known claims, as well as incurred but not reported claims. The Company adjusts its estimate of accrued self-insured claims when required to reflect changes based on factors such as changes in health care costs, accident frequency and claim severity. A reconciliation of beginning and ending accrued self-insured claims, which are included in Accrued liabilities—Self-insured claims and related expenses and Other long-term obligations, primarily self-insured claims on the condensed consolidated statements of financial position, net of insurance recoverables, which are included in Prepaid expenses and other assets and Other assets on the condensed consolidated statements of financial position, is presented as follows: Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2016 $ 120 Provision for self-insured claims 27 Cash payments (30) Balance as of September 30, 2017 $ 118 Balance as of December 31, 2015 $ 114 Provision for self-insured claims (1) 50 Cash payments (34) Balance as of September 30, 2016 $ 129 ___________________________________ (1) Includes a charge of $23 m illion recorded in the nine months ended September 30, 2016 for an adjustment to the Company’s accrued self-insured claims related to automobile, general liability and workers’ compensation risks. The adjustment was based on the Company’s detailed annual assessment of this actuarially determined accrual, which the Company completes in the second quarter of each year. This adjustment related to coverage periods of 2015 and prior. Accruals for home warranty claims in the American Home Shield business are made based on the Company’s claims experience and actuarial projections. Termite damage claim accruals in the Terminix business are recorded based on both the historical rates of claims incurred within a contract year and the cost per claim. Current activity could differ causing a change in estimates. The Company has certain liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues for these liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified. In 2008, the Company amended its Profit Sharing and Retirement Plan, a tax qualified 401(k) defined contribution plan available to substantially all of its employees (the “401(k) Plan”), to implement a qualified automatic contribution arrangement (“QACA”) under the safe harbor provisions of the Internal Revenue Code of 1986, as amended (the “Code”). QACA plans, in general, require automatic enrollment of employees into the retirement plan absent an affirmative election that such employees do not wish to participate. Although the Company implemented processes to auto-enroll new hires after adopting the QACA plan in 2008, it discovered that it did not auto-enroll then existing employees who were not participating in the 401(k) Plan. In response, the Company implemented an auto-enrollment process for affected active employees and submitted to the Internal Revenue Service (the “IRS”) a voluntary correction proposal (the “VCP”) to remedy the issue for prior years. Through December 31, 2016, the Company had recorded charges of $25 million in the consolidated statement of operations and comprehensive income. On October 3, 2017, the Company and the IRS agreed on the terms of the VCP submitted by the Company. The VCP will require the Company to contribute approximately $22 million to 401(k) accounts for impacted current and former employees. The Company expects the cash contribution to occur before December 31, 2017. In the third quarter of 2017, the Company recorded an adjustment within the condensed consolidated statement of operations and comprehensive income to reflect the final settlement. In addition to the matter discussed above and the fumigation related matters discussed below, in the ordinary course of conducting business activities, the Company and its subsidiaries become involved in judicial, administrative and regulatory proceedings involving both private parties and governmental authorities. These proceedings include insured and uninsured matters that are brought on an individual, collective, representative and class action basis, or other proceedings involving regulatory, employment, general and commercial liability, automobile liability, wage and hour, environmental and other matters. The Company has entered into settlement agreements in certain cases, including with respect to putative collective and class actions, which are subject to court or other approvals. If one or more of the Company’s settlements are not finally approved, the Company could have additional or different exposure, which could be material. Subject to the paragraphs below, the Company does not expect any of these proceedings to have a material effect on its reputation, business, financial position, results of operations or cash flows; however, the Company can give no assurance that the results of any such proceedings will not materially affect its reputation, business, financial position, results of operations and cash flows . F umigation Related Matters On July 21, 2016, Terminix International USVI, LLC (“TMX USVI”) and The Terminix International Company Limited Partnership (“TMX LP”), each an indirect, wholly-owned subsidiary of the Company, entered into a superseding Plea Agreement (the “Superseding Plea Agreement”) in connection with the investigation initiated by the United States Department of Justice Environmental Crimes Section (the “DOJ”) into allegations that a local Terminix branch used methyl bromide as a fumigant at a resort in St. John, U.S. Virgin Islands. The Superseding Plea Agreement was intended to resolve four misdemeanor charges of violations of the Federal Insecticide, Fungicide, and Rodenticide Act related to improper applications of methyl bromide. Those charges were set forth in an Information, dated March 29, 2016, in the matter styled United States of America v. The Terminix International Company Limited Partnership and Terminix International USVI, LLC. At a hearing held on August 25, 2016, the United States District Court of the U.S. Virgin Islands (the “District Court”) rejected the Superseding Plea Agreement. On August 31, 2016, the DOJ requested that the charges be dismissed, reserving its right to re-file the charges, in light of ongoing discussions to resolve the matter. The District Court granted that request, and the March 29, 2016 Information was dismissed. On January 20, 2017, TMX USVI and TMX LP entered into a new Plea Agreement (the “New Plea Agreement”) with the DOJ, which has been filed with the District Court, and replaces the Superseding Plea Agreement. At a hearing on March 23, 2017, TMX USVI and TMX LP pled guilty to four misdemeanor charges of violations of the Federal Insecticide, Fungicide, and Rodenticide Act related to improper applications of methyl bromide, as set forth in a new Information filed on January 20, 2017 with the District Court that is substantially similar to the March 29, 2016 Information. Under the terms of the New Plea Agreement, the parties agreed and jointly recommended to the District Court that (i) TMX USVI and TMX LP each pay a fine of $4 million (total of $8 million); (ii) TMX USVI pay $1 million to the EPA for costs incurred by the EPA for the response and clean-up of the affected units at the resort in St. John; (iii) TMX USVI make a community service payment of $1 million to the National Fish and Wildlife Foundation for the purpose of engaging a third party to provide training to pesticide applicators in the U.S. Virgin Islands; and (iv) both TMX USVI and TMX LP serve a three -year probation period, subject to the special conditions of probation under the New Plea Agreement. The total financial terms of the recommended sentence under the New Plea Agreement are equivalent in total amount to the financial terms under the Superseding Plea Agreement. Unlike the Superseding Plea Agreement, however, the New Plea Agreement is non-binding on the District Court. The sentencing hearing before the District Court previously scheduled for September 21 , 2017 , has been rescheduled for November 20, 2017, due to hurricane activity in the Caribbean . It is possible that at that hearing the District Court could use its discretion to impose fines or other terms different than those in the New Plea Agreement. If approved by the District Court, and upon compliance with the terms and conditions of the New Plea Agreement, the New Plea Agreement will resolve the federal criminal consequences associated with the DOJ investigation. The New Plea Agreement does not bind any other federal, state or local authority; however, the EPA has indicated that it does not intend to initiate any administrative enforcement action or refer the matter to the DOJ for any civil enforcement action if the New Plea Agreement is approved by the District Court. The Company has previously recorded within Fumigation related matters in the condensed consolidated statement of operations and comprehensive income total charges of $10 million in connection with the aforementioned criminal matter. On December 16, 2016, the U.S. Virgin Islands Department of Justice filed a civil complaint in the Superior Court of the Virgin Islands related to the aforementioned fumigation incident in a matter styled Government of the United States Virgin Islands v. The ServiceMaster Company, LLC, The Terminix International Company Limited Partnership, and Terminix International USVI, LLC. The amount and extent of any further potential penalties, fines, sanctions, costs and damages that the federal or other governmental authorities may yet impose, investigation or other costs and reputational harm, as well as the impact of any additional civil, criminal or other claims or judicial, administrative or regulatory proceedings resulting from or related to the U.S. Virgin Islands matter, which could be material, is not currently known, and any such further penalties, fines, sanctions, costs or damages would not be covered under the Company’s general liability insurance policies. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 5 . Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently if circumstances indicate a potential impairment. The Company’s annual assessment date is October 1. There were no goodwill or trade name impairment charges recorded in the thre e and nine months ended September 30, 2017 and 2016 . There were no accumulated impairment losses recorded as of September 30, 2017 . The table below summarizes the goodwill balances for continuing operations by reportable segment: American Franchise (In millions) Terminix Home Shield Services Group Total Balance as of December 31, 2016 $ 1,601 $ 471 $ 175 $ 2,247 Acquisitions 1 4 — 5 Impact of foreign exchange rates 2 — — 2 Balance as of September 30, 2017 $ 1,604 $ 476 $ 176 $ 2,255 The table below summarizes the other intangible asset balances for continuing operations: As of September 30, 2017 As of December 31, 2016 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 1,608 $ — $ 1,608 $ 1,608 $ — $ 1,608 Customer relationships 589 (551) 38 594 (538) 56 Franchise agreements 88 (69) 19 88 (67) 21 Other 81 (48) 33 65 (42) 23 Total $ 2,366 $ (668) $ 1,698 $ 2,356 $ (647) $ 1,708 ___________________________________ (1) Not subject to amortization. For the existing intangible assets, the Company anticipates amortization expense for the remainder of 2017 and each of the next five years of $ 6 m illion, $ 21 million, $ 16 million, $12 million, $9 million and $ 6 million, respectively . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 6 . Stock-Based Compensation For the three months ended September 30, 2017 and 2016 , the Company recognized stock-based compensation expense o f $1 million ( $1 million, net of tax) and $ 3 million ( $2 million, net of tax), respectively. For the nine months ended September 30, 2017 and 2016 , the Company recognized stock-based compensation expense o f $10 million ( $6 million, net of tax) and $ 10 million ( $ 6 million, net of tax), respectively. These charges are recorded within Selling and administrative expenses in the condensed consolidated statements of operations and comprehensive income. Additionally, for the three and nine months ended September 30, 2017, the Company recognized $5 million of stock-based compensation expense due to the modification of non-vested stock options as part of the severance agreement with the former Chief Executive Officer of the Company, which has been included in Restructuring charges in the condensed consolidated statements of operations and comprehensive income. As of September 30 , 2017 there was $ 31 million of total unrecognized co mpensation costs related to non- vested stock options , restricted stock units (“RSUs”) and performance shares granted under the Amended and Restated ServiceMaster Global Holdings , Inc. Stock Incentive Plan (“MSIP”) and the Amended and Restated ServiceMaster Global Holdings, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) and discounts associated with the ServiceMaster Global Holdings, Inc. Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”). These remaining costs are expected to be recognized over a weighted-average period o f 2. 10 years. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2017 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | N ote 7. Comprehensive Income (Loss) Comprehensive income , which primarily includes net income (loss), unrealized gain (loss) on marketable securities, unrealized gain (loss) on derivative instruments and the effect of foreign currency translation gain (loss), is disclosed in the condensed consolidated statements of operations and comprehensive income. The following tables summarize the activity in accumulated other comprehensive income (loss), net of the related tax effects. Unrealized Gains (Losses) Unrealized on Available Foreign Gains (Losses) -for-Sale Currency (In millions) on Derivatives Securities Translation Total Balance as of December 31, 2016 $ 12 $ 1 $ (15) $ (3) Other comprehensive income (loss) before reclassifications: Pre-tax amount (9) 3 4 (2) Tax benefit (3) 1 — (2) After-tax amount (5) 2 4 — Amounts reclassified from accumulated other comprehensive income (loss) (1) 3 — — 3 Net current period other comprehensive income (2) 2 4 3 Balance as of September 30, 2017 $ 10 $ 2 $ (11) $ 1 Balance as of December 31, 2015 $ (7) $ 2 $ (15) $ (21) Other comprehensive income (loss) before reclassifications: Pre-tax amount (4) — 2 (2) Tax benefit (1) — — (1) After-tax amount (3) (1) 2 (2) Amounts reclassified from accumulated other comprehensive income (loss) (1) 5 (2) — 3 Net current period other comprehensive income (loss) 2 (3) 2 2 Balance as of September 30, 2016 $ (5) $ — $ (13) $ (19) ___________________________________ (1) Amounts are net of tax. See reclassifications out of accumulated other comprehensive income (loss) below for further details. Reclassifications out of accumulated other comprehensive income (loss) included the following components for the periods indicated. Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) Three Months Ended Nine Months Ended Condensed Consolidated Statements of September 30, September 30, Operations and Comprehensive Income (In millions) 2017 2016 2017 2016 Location Losses on derivatives: Fuel swap contracts $ 1 $ (1) $ 2 $ (3) Cost of services rendered and products sold Interest rate swap contracts (2) (2) (7) (5) Interest expense Net losses on derivatives (1) (2) (5) (8) Impact of income taxes — 1 2 3 Provision for income taxes Total reclassifications related to derivatives $ (1) $ (2) $ (3) $ (5) Gains on available-for-sale securities $ — $ — $ — $ 3 Interest and net investment income Impact of income taxes — — — (1) Provision for income taxes Total reclassifications related to securities $ — $ — $ — $ 2 Total reclassifications for the period $ — $ (2) $ (3) $ (3) |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 8 . Supplemental Cash Flow Information Supplemental information relating to the condensed consolidated statements of cash flows is presented in the following table: Nine Months Ended September 30, (In millions) 2017 2016 Cash paid for or (received from): Interest expense $ 97 $ 112 Interest and dividend income (1) (2) Income taxes, net of refunds 78 58 As of September 30, 2017, December 31, 2016 and September 30, 2016, Cash and cash equivalents of $456 million, $291 million and $230 million, respectively, and Restricted cash of $89 million, $95 million and $95 million, respectively, as presented on the condensed consolidated statements of financial position represent the amounts comprising Cash and cash equivalents and restricted cash of $545 million, $386 million, and $325 million, respectively, on the condensed consolidated statement of cash flows. There was no restricted cash balance as of December 31, 2015. The Company acquired $30 million and $ 50 million of property and equipment through capital leases and other non-cash financing transactions in the nine months ended September 30, 2017 and 2016 , respectively, which have been excluded from the condensed consolidated statements of cash flows as non-cash investing and financing activities. In the nine months ended September 30, 2016 , the Company converted certain company-owned Merry Maids branches to franchises for a total purchase price of $9 million. In the nine months ended September 30, 2016 , the Company received cash of $6 million and provided financing of $2 million. These financed amounts have been excluded from the condensed consolidated statements of cash flows as non-cash investing activities. |
Cash and Marketable Securities
Cash and Marketable Securities | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Marketable Securities [Abstract] | |
Cash and Marketable Securities | Note 9 . Cash and Marketable Securities Cash, money market funds and certificates of deposits with maturities of three months or less when purchased are included in Cash and cash equivalents on the condensed consolidated statements of financial position. As of September 30, 2017 and December 31, 2016 , the Company’s investments consisted primarily of treasury bills (“ Debt securities”) and common equity securities (“Equity securities”). The amortized cost, fair value and gross unrealized gains and losses of the Company’s short- and long-term investments in Debt and Equity securities are as follows: Gross Gross Amortized Unrealized Unrealized Fair (In millions) Cost Gains Losses Value Available-for-sale securities, September 30, 2017: Debt securities $ 15 $ — $ — $ 15 Equity securities 15 4 — 19 Total securities $ 30 $ 4 $ — $ 33 Available-for-sale securities, December 31, 2016: Debt securities $ 27 $ — $ — $ 27 Equity securities 15 1 — 17 Total securities $ 43 $ 1 $ — $ 44 There were no unrealized losses which had been in a loss position for more than one year as of September 30, 2017 and December 31, 2016. Gains and losses on sales of investments, as determined on a specific identification basis, are included in investment income in the period they are realized. The Company periodically reviews its portfolio of investments to determine whether there has been an other than temporary decline in the value of the investments from factors such as deterioration in the financial condition of the issuer or the market(s) in which the issuer competes . The table below summarizes proceeds, gross realized gains and gross realized losses resulting from sales of available-for-sale securities. There were no impairment charges due to other than temporary declines in the value of certain investments for the three and nine months ended September 30, 2017 and 2016. Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Proceeds from sale of securities $ 11 $ — $ 11 $ 42 Gross realized gains, pre-tax — — — 4 Gross realized gains, net of tax — — — 2 Gross realized (losses), pre-tax — — — — Gross realized (losses), net of tax — — — — |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 10 . Long-Term Debt Long-term debt is summarized in the following table: As of As of September 30, December 31, (In millions) 2017 2016 Senior secured term loan facility maturing in 2023 (1) $ 1,618 $ 1,628 Revolving credit facility maturing in 2021 — — 5.125% notes maturing in 2024 (2) 738 737 7.10% notes maturing in 2018 (3) 79 77 7.45% notes maturing in 2027 (3) 169 167 7.25% notes maturing in 2038 (3) 42 65 Vehicle capital leases (4) 94 87 Other 61 71 Less current portion (146) (59) Total long-term debt $ 2,654 $ 2,772 ___________________________________ (1) As of September 30, 2017 and December 31, 2016, presented net of $16 million and $ 18 million, respectively, in unamortized debt issuance costs and $4 million and $ 4 million, respectively, in unamortized original issue discount paid. (2) As of September 30, 2017 and December 31, 2016, presented net of $12 and $ 13 million, respectively, in unamortized debt issuance costs. (3) As of September 30, 2017 and December 31, 2016, collectively presented net of $38 million and $ 48 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. (4) The Company has entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows the Company to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are capital leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. Repurchase of Notes On September 18, 2017, the Company purchased $13 million in aggregate principal amount of its 7.25% notes maturing in 2038 at a price of 105% of the principal amount using available cash. On May 11, 2017, the Company purchased $17 million in aggregate principal amount of its 7.25% notes maturing in 2038 at a price of 97% of the principal amount using available cash. The repurchased notes were delivered to the trustee for cancellation. In connection with these partial repurchases, the Company recorded a loss on extinguishment of debt of $ 3 million and $6 million in the three and nine months ended September 30, 2017, respectively. Interest Rate Swaps Interest rate swap agreements in effect as of September 30, 2017 are as follows: Trade Date Effective Date Expiration Date Notional Amount Fixed Rate (1) Floating Rate November 7, 2016 November 8, 2016 November 30, 2023 $650,000 1.493 % One month LIBOR ___________________________________ (1) Before the application of the applicable borrowing margin. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | Note 11 . Acquisitions Acquisitions have been accounted for using the acquisition method and, accordingly, the results of operations of the acquired businesses have been included in the condensed consolidated financial statements since their dates of acquisition. The assets and liabilities of these businesses were recorded in the financial statements at their estimated fair values as of the acquisition dates. During the nine months ended September 30, 2017, the Company completed two pest control acquisitions and purchased a ServiceMaster Clean master distributor within the Franchise Services Group. The total purchase price for these acquisitions was $ 15 million. The Company recorded goodwill of $1 million and other intangibles, primarily reacquired rights, of $13 million related to these acquisitions. On November 30, 2016 , the Company acquired Landmark Home Warranty, LLC (“Landmark”) for a total purchase price of $39 million. The Company recorded goodwill of $37 million and other intangibles, primarily customer relationships, of $13 million related to this acquisition. During the nine months ended September 30, 2017, the Company finalized its assessment of the fair value of the assets acquired and liabilities assumed. The Company updated its preliminary allocation and reclassified $4 million from other intangibles, primarily customer relationships, to goodwill. During the nine months ended September 30, 2016, the Company completed several pest control and termite acquisitions. The total purchase price for these acquisitions was $43 million. The Company recorded goodwill of $ 34 million and other intangibles of $ 6 million related to these acquisitions. On June 27, 2016 , the Company acquired OneGuard Home Warranties (“OneGuard”) for a total purchase price of $6 1 million. The Company recorded goodwill of $57 million and other intangibles of $15 million related to the OneGuard acquisition. Supplemental cash flow information regarding the Company’s acquisitions is as follows: Nine Months Ended September 30, (In millions) 2017 2016 Assets acquired $ 15 $ 123 Liabilities assumed (1) (19) Net assets acquired $ 15 $ 104 Net cash paid $ 12 $ 86 Seller financed debt 3 18 Purchase price $ 15 $ 104 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | N ote 12 . Income Taxes As of September 30, 2017 and December 31, 2016, the Company had $ 14 million and $13 million, respectively, of tax benefits primarily reflected in state tax returns that have not been recognized for financial reporting purposes (“unrecognized tax benefits”). Based on information currently available, it is reasonably possible that over the next 12 month period unrecognized tax benefits may decrease by $2 million as the result of settlements of ongoing audits, statute of limitation expirations or final settlements of uncertain tax positions in multiple jurisdictions. As required by Accounting Standard Codification (“ASC”) 740, “Income Taxes,” the Company computes interim period income taxes by applying an anticipated annual effective tax rate to the Company’s year-to-date income or loss from continuing operations before income taxes, except for significant unusual or infrequently occurring items. The Company’s estimated tax rate is adjusted each quarter in accordance with ASC 740. T he effective tax rate on income from continuing operations was 29.6 percent and 3 9.8 percent for the three months ended September 30, 2017 and 2016, respectively. The effective tax rate on income from continuing operations for the three months ended September 30, 2017 was primarily affected by excess tax benefits for share-based awards. T he effective tax rate on income from continuing operations was 35.0 percent and 3 7.9 percent for the nine months ended September 30, 2017 and 2016, respectively. The effective tax rate on income from continuing operations for the nine months ended September 30, 2017 and September 30, 2016 were primarily affected by excess tax benefits for share-based awards. |
Business Segment Reporting
Business Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Business Segment Reporting [Abstract] | |
Business Segment Reporting | Note 13 . Business Segment Reporting The business of the Company is conducted through three reportable segments: Terminix, American Home Shield and Franchise Services Group. In accordance with accounting standards for segments, the Company’s reportable segments are strategic business units that offer different services. The Terminix segment provides termite and pest control services to residential and commercial customers and distributes pest control products. The American Home Shield segment provides home warranties for household systems and appliances. The Franchise Services Group segment provides residential and commercial disaster restoration, janitorial and cleaning services through franchises primarily under the ServiceMaster, ServiceMaster Restore and ServiceMaster Clean brand names, home cleaning services through franchises primarily under the Merry Maids brand name, cabinet and wood furniture repair primarily under the Furniture Medic brand name and home inspection services primarily under the AmeriSpec brand name. Corporate includes SMAC , the Company’s financing subsidiary exclusively dedicated to providing financing to its franchisees and retail customers of its operating units, and the Company’s headquarters operations (substantially all of which costs are allocated to the Company’s reportable segments), wh ich provide various technology, marketing , finance, legal and other support services to the reportabl e segments. The composition of the Company’s reportable segments is consistent with that used by the Company’s chief operating decision maker (the “CODM”) to evaluate performance and allocate resources. Information regarding the accounting policies used by the Company is described in the Company’s 2016 Form 10-K . The Company derives substantially all of its revenue from customers and franchisees in the United States with approximately two percent generated in foreign markets. Operating expenses of the business units consist primarily of direct costs and indirect costs allocated from Co rporate . The Company uses Reportable Segment Adjusted EBITDA as its measure of segment profitability. Accordingly, the CODM evaluates performance and allocates resources based primarily on Reportable Segment Adjusted EBITDA. Reportable Segment Adjusted EBITDA is defined as net income before: unalloca ted corporate expenses; income from discontinued operations, net of income taxes; provision for income taxes; interest expense; depreciation and amortization expense; 401(k) Plan corrective contribution; fumigation related matters; insurance reserve adjustment; non-cash stock-based compensation expense; restructuring charges; gain on sale of Merry Maids branches; non-cash impairment of software and other related costs; and loss on extinguishment of debt . The Company’s definition of Reportable Segment Adjusted EBITDA may not be calculated or comparable to similarly titled measures of other companies. The Company believe s Reportable Segment Adjusted EBITDA is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by variations in capital structures, taxation, the age and book depreciation of facilities and equipment, restruct uring initiatives and equity-based, long-term incentive plans. Information for continuing operations for each reportable segment and Corporate is presented below: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Revenue: Terminix $ 395 $ 396 $ 1,188 $ 1,174 American Home Shield 346 309 899 786 Franchise Services Group 55 51 157 151 Reportable Segment Revenue $ 797 $ 757 $ 2,245 $ 2,111 Corporate — 1 1 2 Total Revenue $ 797 $ 758 $ 2,246 $ 2,113 Reportable Segment Adjusted EBITDA: (1) Terminix $ 82 $ 92 $ 269 $ 299 American Home Shield 96 79 209 170 Franchise Services Group 22 21 65 58 Reportable Segment Adjusted EBITDA $ 200 $ 192 $ 543 $ 526 ___________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Net Income $ 80 $ 70 $ 204 $ 124 Unallocated corporate expenses — — — 3 Depreciation and amortization expense 26 24 77 68 401(k) Plan corrective contribution (4) — (3) 1 Fumigation related matters — 1 2 92 Insurance reserve adjustment — — — 23 Non-cash stock-based compensation expense 1 3 10 10 Restructuring charges 21 8 24 13 Gain on sale of Merry Maids branches — — — (2) Non-cash impairment of software and other related costs — — 2 1 Income from discontinued operations, net of income taxes — — (1) — Provision for income taxes 34 46 109 76 Loss on extinguishment of debt 3 — 6 — Interest expense 38 39 113 115 Reportable Segment Adjusted EBITDA $ 200 $ 192 $ 543 $ 526 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14 . Related Party Transactions TruGreen Spin-off In connection with the TruGreen spin-off on January 14, 2014, the Company entered into a transition services agreement with Tru Green Holding Corporation (“ TruGreen”) pursuant to which the Company provide s TruGreen with specified communications, public relations, finance and accounting, tax, treasury, internal audit, human resources operations and benefits, risk management and insurance, supply management, real estate management, marketing, facilities, information technology and other support services. The charges for the transition services are designed to allow the Company to fully recover the direct costs of providing the services, plus specified margins and any out-of-pocket costs and expenses. The services provided under the transition services agreement terminated at various specified times on or prior to December 31, 2016, except certain information technology services, which the Company has entered into an amendment to the transition services agreement with TruGreen to extend through June 30, 2018. TruGreen may terminate the extended transition services agreement for convenience upon 90 days written notice . Under this transition services agreement, the Company recorded fees from TruGreen of $1 million in the nine months ended September 30, 2017, and $ 2 million and $ 6 million in the three and nine months ended September 30, 2016, respectively , which is included as a reduction in Selling and administrative expenses in the condensed consolidated statement of operations and comprehensive income. As of September 30, 2017, all amounts owed by TruGreen under this agreement have been paid. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 15 . Fair Value Measurements The period-end carrying amounts of cash and cash equivalents, receivables, restricted cash, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. The period-end carrying amounts of long-term notes receivable approximate fair value as the effective interest rates for these instruments are comparable to period-end market rates. The period-end carrying amounts of short- and long-term marketable securities also approximate fair value, with unrealized gains and losses reported net of tax as a component of accumulated other comprehensive income (loss) on the condensed consolidated statements of financial position, or, for certain unrealized losses, reported in interest and net investment income in the condensed consolidated statements of operations and comprehensive income if the decline in value is other than temporary. The carrying amount of total debt was $2,800 million and $ 2,831 million and the estimated fair value was $2,911 million and $2, 930 million as of September 30, 2017 and December 31, 2016 , respectively. The fair value of the Company’s debt is estimated based on available market prices for the same or similar instruments which are considered significant other observable inputs (Level 2) within the fair value hierarchy. The fair values presented reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in this report are based on information available to the Company as of September 30, 2017 and December 31, 2016 . The Company has estimated the fair value of its financial instruments measured at fair value on a recurring basis using the market and income approaches. For investments in marketable securities, deferred compensation trust assets and derivative contracts, which are carried at their fair values, the Company’s fair value estimates incorporate quoted market prices, other observable inputs (for example, forward interest rates) and unobservable inputs (for example, forward commodity prices) at the balance sheet date. Interest rate swap contracts are valued using forward interest rate curves obtained from third-party market data providers. The fair value of each contract is the sum of the expected future settlements between the contract counterparties, discounted to present value. The expected future settlements are determined by comparing the contract interest rate to the expected forward interest rate as of each settlement date and applying the difference between the two rates to the notional amount of debt in the interest rate swap contracts. Fuel swap contracts are valued using forward fuel price curves obtained from third-party market data providers. The fair value of each contract is the sum of the expected future settlements between the contract counterparties, discounted to present value. The expected future settlements are determined by comparing the contract fuel price to the expected forward fuel price as of each settlement date and applying the difference between the contract and expected prices to the notional gallons in the fuel swap contracts. The Company regularly reviews the forward price curves obtained from third-party market data providers and related changes in fair value for reasonableness utilizing information available to the Company from other published sources. The Company has not changed its valuation techniques for measuring the fair value of any financial assets and liabilities during the year. Transfers between levels, if any, are recognized at the end of the reporting period. There were no significant transfers betwee n levels during each of the nine month periods ended September 30, 2017 and 2016 . The carrying amount and estimated fair value of the Company’s financial instruments that are recorded at fair value on a recurring basis for the periods presented are as follows: Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Active Observable Unobservable Statement of Financial Carrying Markets Inputs Inputs (In millions) Position Location Value (Level 1) (Level 2) (Level 3) As of September 30, 2017: Financial Assets: Deferred compensation trust Long-term marketable securities $ 8 $ 8 $ — $ — Investments in marketable securities Marketable securities and Long-term marketable securities 25 24 1 — Fuel swap contracts Prepaid expenses and other assets 1 — — 1 Interest rate swap contract Other assets 19 — 19 — Total financial assets $ 53 $ 32 $ 20 $ 1 Financial Liabilities: Fuel swap contracts Other accrued liabilities $ — $ — $ — $ — Interest rate swap contract Other accrued liabilities 1 — 1 — Total financial liabilities $ 1 $ — $ 1 $ — As of December 31, 2016: Financial Assets: Deferred compensation trust Long-term marketable securities $ 8 $ 8 $ — $ — Investments in marketable securities Marketable securities and Long-term marketable securities 36 33 3 — Fuel swap contracts Prepaid expenses and other assets and Other assets 5 — — 5 Interest rate swap contract Other assets 27 — 27 — Total financial assets $ 75 $ 40 $ 30 $ 5 Financial Liabilities: Interest rate swap contract Other accrued liabilities and Other long-term obligations $ 4 $ — $ 4 $ — Total financial liabilities $ 4 $ — $ 4 $ — A reconciliation of the beginning and ending fair values of financial instruments valued using significant unobservable inputs (Level 3) on a recurring basis is presented as follows: Fuel Swap Contract Assets (In millions) (Liabilities) Location of Gain (Loss) included in Earnings Balance as of December 31, 2016 $ 5 Total (losses) gains (realized and unrealized) Included in earnings 2 Cost of services rendered and products sold Included in other comprehensive income (4) Settlements (2) Balance as of September 30, 2017 $ 1 Balance as of December 31, 2015 $ (4) Total (losses) gains (realized and unrealized) Included in earnings (3) Cost of services rendered and products sold Included in other comprehensive income 5 Settlements 3 Balance as of September 30, 2016 $ 1 The following tables present information relating to the significant unobservable inputs of the Company’s Level 3 financial instruments: Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of September 30, 2017: Fuel swap contracts $ 1 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $2.29 - $2.66 $ 2.46 As of December 31, 2016: Fuel swap contracts $ 5 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $2.31 - $2.85 $ 2.55 ___________________________________ (1) Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. The Company uses derivative financial instruments to manage risks associated with changes in fuel prices and interest rates. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. In designating its derivative financial instruments as hedging instruments under accounting standards for derivative instruments, the Company formally documents the relationship between the hedging instrument and the hedged item, as well as the risk management objective and strategy for the use of the hedging instrument. This documentation includes linking the derivatives to forecasted transactions. The Company assesses at the time a derivative contract is entered into, and at least quarterly thereafter, whether the derivative item is effective in offsetting the projected changes in cash flows of the associated forecasted transactions. All of the Company’s designated hedging instruments are classified as cash flow hedges. The Company has historically hedged a significant portion of its annual fuel consumption. The Company has also historically hedged the interest payments on a portion of its variable rate debt through the use of interest rate swap agreements. All of the Company’s fuel swap contracts and interest rate swap contracts are classified as cash flow hedges, and, as such, the hedging instruments are recorded on the condensed consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of changes in the fair value attributable to the hedged risks recorded in accumulated other comprehensive income (loss). Any change in the fair value of the hedging instrument resulting from ineffectiveness, as defined by accounting standards, is recognized in current period earnings. Cash flows related to fuel and interest rate derivatives are classified as operating activities in the condensed consolidated statements of cash flows. Ineffective portions of derivative instruments designated in accordance with accounting standards as cash flow hedge relationships we re insignificant during the nine months ended September 30, 2017 . As of September 30, 2017 , the Company had fuel swap contracts to pay fixed prices for fuel with an aggregate notional amount of $30 million, maturing through 2018. Under the terms of its fuel swap contracts, the Company is required to post collateral in the event that the fair value of the contracts exceeds a certain agreed upon liability level and in other circumstances required by the counterparty. As of September 30, 2017 , the Company had posted $2 million in letters of credit as collateral under its fuel hedging program, which were issued under the Revolving Credit Facility. The effective portion of the gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments is recorded in accumulated other comprehensive income (loss). These amounts are reclassified into earnings in the same period or periods during which the hedged forecasted debt interest settlement or the fuel settlem ent affects earnings. See Note 7 to the condensed consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in accumulated other comprehensive income (loss) and for the amounts reclassified out of accumulated other comprehensive income (loss) and into earnings. The amount expected to be reclassified into earnings during the next 12 months includes unrealized gains and losses related to open fuel hedges and interest rate swaps. Specifically, as the underlying forecasted transactions occur during the next 12 months, the hedging gains and losses in accumulated other comprehensive income (loss) expected to be recognized in earnings is a loss of $2 million , net of tax, as of September 30, 2017 . The amounts that are ultimately reclassified into earnings will be based on actual fuel prices and interest rates at the time the positions are settled and may differ materially from the amount noted above. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 16 . Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued. The d ilutive effect of stock options, RSUs and performance shares are reflected in diluted net income per share by applying the treasury stock method. A reconciliation of the amounts included in the computation of basic earnings per share from continuing operations and diluted earnings per share from continuing operations is as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2017 2016 2017 2016 Income from continuing operations $ 80 $ 70 $ 204 $ 124 Weighted-average common shares outstanding 134.3 135.1 134.2 135.4 Effect of dilutive securities: RSUs 0.2 0.2 0.1 0.2 Stock options (1) 0.7 1.8 1.2 1.9 Weighted-average common shares outstanding—assuming dilution 135.2 137.1 135.4 137.5 Basic earnings per share from continuing operations $ 0.60 $ 0.52 $ 1.52 $ 0.92 Diluted earnings per share from continuing operations $ 0.59 $ 0.51 $ 1.50 $ 0.90 ___________________________________ (1) Options to purchase 1. 0 million and 0.9 million shares for the three months ended September 30, 2017 and 2016, respectively, and 1. 0 million and 0.9 million shares for the nine months ended September 30, 2017 and 2016, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Significant Accounting Polici22
Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2017 | |
Significant Accounting Policies [Abstract] | |
Newly Issued Accounting Standards | Newly Issued Accounting Standards In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item in order to align financial reporting of hedge relationships with economic results. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. It is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods with early adoption permitted. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” to provide a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This model supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” Entities have the option of using either a full retrospective or modified approach to adopt the guidance. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company will adopt the new revenue guidance effective January 1, 2018 using the modified retrospective transition method. While the Company is finalizing its assessment of the impacts of the new standard, the Company currently believes the most significant impact relates to the Company’s accounting for customer acquisition costs, including the amortization period for such costs, and advertising costs, specifically as it relates to direct response advertising, which under ASU 2014-09 the Company will no longer defer. The Company is also finalizing its assessment of the impacts related to the accounting for contract assets separate from accounts receivable. Currently, when a customer elects to pay for their home warranty contract on a monthly basis, accounts receivable and deferred revenue are recorded based on the total amount due from the customer. The accounts receivable balance is reduced as amounts are paid, and the deferred revenue is amortized over the life of the contract. Under the new revenue guidance, we expect only the portion of the contract that is due in the current month to be recorded within accounts receivable. The remaining portion of the contract will be separately recorded as a contract asset. In addition, under the new guidance, the contract asset will be presented net of the contract liability currently recorded as deferred revenue. The Company does not expect adoption of the new revenue standard to have a material impact on its co nsolidated financial statements except for the aforementioned reclassification of contract liabilities currently recorded as deferred revenue. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” to change how entities measure certain equity investments, to require the disclosure of changes in the fair value of financial liabilities measured under the fair value option that are attributable to a company’s own credit, and to change certain other disclosure requirements. The changes in ASU 2016-01 specifically require that the changes in fair value of all investments in equity securities be recognized in net income. The amendments in ASU 2016-01 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and will be adopted prospectively. Upon adoption, changes in fair value of the Company’s available-for-sale securities, which are currently recognized in other comprehensive income, will be recognized in net income. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which is the final standard on accounting for leases. While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The most significant change for lessees is the requirement under the new guidance to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases. Entities are required to use a modified retrospective approach to adopt the guidance. The amendments in ASU 2016-02 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company’s consolidated financial statements and currently expects that most of the operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption of ASU 2016-02, which will increase the amount of total assets and total liabilities that is reported relative to such amounts prior to adoption. |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Charges [Abstract] | |
Schedule Of Restructuring Charges | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Terminix (1) $ — $ 4 $ 1 $ 7 American Home Shield (2) — 1 — 1 Corporate (3) 11 2 12 4 American Home Shield spin-off (4) 7 — 7 — Headquarters relocation (5) 3 2 4 2 Total restructuring charges $ 21 $ 8 $ 24 $ 13 ___________________________________ (1) For the nine months ended September 30, 2017, these charges included $1 million of severance and other costs. For the three and nine months ended September 30, 2016, these charges included $1 million of severance costs and $3 million of stock-based compensation expense due to the modification of non-vested stock options and RSUs as part of the severance agreement with the former president of Terminix. The nine month period ending September 30, 2016 includes $3 million related to lease terminations and severance costs driven by Terminix’s branch optimization program. (2) For the three and nine months ended September 30, 2016, these charges included $1 million related to the termination of an agreement pursuant to the decision to consolidate the stand-alone operations of Home Security of America, Inc. acquired in February 2014 with those of American Home Shield. (3) For the three and nine months ended September 30, 2017, these charges included $4 million of severance costs and $5 million of stock-based compensation expense due to the modification of non-vested stock options as part of the severance agreement with the former Chief Executive Officer of the Company. Additionally, for the three and nine months ended September 30, 2017, includes severance costs of $1 million and $2 million, respectively, related to an initiative to enhance capabilities and reduce costs in the Company’s headquarters functions that provide Company-wide administrative services for our operations. For the three months ended September 30, 2016, includes professional fees of $2 million, and for the nine months ended September 30, 2016, includes professional fees of $2 million and accelerated depreciation of $1 million related to the early termination of a long-term human resources outsourcing agreement. Additionally, the nine months ended September 30, 2016 includes severance and other costs of $1 million related to an initiative to enhance capabilities and reduce costs in the Company’s headquarters functions that provide Company-wide administrative services for our operations. (4) For the three and nine months ended September 30, 2017, includes professional fees and other costs of $7 million related to the planned s pin - off of the American Home Shield business to Company shareholders . The Company expects that it will incur additional costs in order to effect the separation of American Home Shield but is currently unable to estimate the aggregate amount or timing of such charges or the anticipated related cash outlays. (5) For the three and nine months ended September 30, 2017, these charges included redundant rent expense, accelerated depreciation and other charges of $3 million and $4 million, respectively, related to the relocation of our headquarters. For the three and nine months ended September 30, 2016, these charges included impairment charges of $1 million and professional fees and other costs of $1 million related to the relocation of our headquarters. |
Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges | Accrued Restructuring (In millions) Charges Balance as of December 31, 2016 $ 3 Costs incurred 24 Costs paid or otherwise settled (17) Balance as of September 30, 2017 $ 9 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Self-Insured Claims, Net [Member] | |
Commitments and Contingencies [Line Items] | |
Schedule Of Reconciliation Of Beginning And Ending Accrued Self-Insured Claims | Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2016 $ 120 Provision for self-insured claims 27 Cash payments (30) Balance as of September 30, 2017 $ 118 Balance as of December 31, 2015 $ 114 Provision for self-insured claims (1) 50 Cash payments (34) Balance as of September 30, 2016 $ 129 ___________________________________ (1) Includes a charge of $23 m illion recorded in the nine months ended September 30, 2016 for an adjustment to the Company’s accrued self-insured claims related to automobile, general liability and workers’ compensation risks. The adjustment was based on the Company’s detailed annual assessment of this actuarially determined accrual, which the Company completes in the second quarter of each year. This adjustment related to coverage periods of 2015 and prior. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters | American Franchise (In millions) Terminix Home Shield Services Group Total Balance as of December 31, 2016 $ 1,601 $ 471 $ 175 $ 2,247 Acquisitions 1 4 — 5 Impact of foreign exchange rates 2 — — 2 Balance as of September 30, 2017 $ 1,604 $ 476 $ 176 $ 2,255 |
Schedule Of Other Intangible Asset Balances For Continuing Operations | As of September 30, 2017 As of December 31, 2016 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 1,608 $ — $ 1,608 $ 1,608 $ — $ 1,608 Customer relationships 589 (551) 38 594 (538) 56 Franchise agreements 88 (69) 19 88 (67) 21 Other 81 (48) 33 65 (42) 23 Total $ 2,366 $ (668) $ 1,698 $ 2,356 $ (647) $ 1,708 ___________________________________ (1) Not subject to amortization. |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Comprehensive Income (Loss) [Abstract] | |
Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects | Unrealized Gains (Losses) Unrealized on Available Foreign Gains (Losses) -for-Sale Currency (In millions) on Derivatives Securities Translation Total Balance as of December 31, 2016 $ 12 $ 1 $ (15) $ (3) Other comprehensive income (loss) before reclassifications: Pre-tax amount (9) 3 4 (2) Tax benefit (3) 1 — (2) After-tax amount (5) 2 4 — Amounts reclassified from accumulated other comprehensive income (loss) (1) 3 — — 3 Net current period other comprehensive income (2) 2 4 3 Balance as of September 30, 2017 $ 10 $ 2 $ (11) $ 1 Balance as of December 31, 2015 $ (7) $ 2 $ (15) $ (21) Other comprehensive income (loss) before reclassifications: Pre-tax amount (4) — 2 (2) Tax benefit (1) — — (1) After-tax amount (3) (1) 2 (2) Amounts reclassified from accumulated other comprehensive income (loss) (1) 5 (2) — 3 Net current period other comprehensive income (loss) 2 (3) 2 2 Balance as of September 30, 2016 $ (5) $ — $ (13) $ (19) ___________________________________ (1) Amounts are net of tax. See reclassifications out of accumulated other comprehensive income (loss) below for further details. |
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) Three Months Ended Nine Months Ended Condensed Consolidated Statements of September 30, September 30, Operations and Comprehensive Income (In millions) 2017 2016 2017 2016 Location Losses on derivatives: Fuel swap contracts $ 1 $ (1) $ 2 $ (3) Cost of services rendered and products sold Interest rate swap contracts (2) (2) (7) (5) Interest expense Net losses on derivatives (1) (2) (5) (8) Impact of income taxes — 1 2 3 Provision for income taxes Total reclassifications related to derivatives $ (1) $ (2) $ (3) $ (5) Gains on available-for-sale securities $ — $ — $ — $ 3 Interest and net investment income Impact of income taxes — — — (1) Provision for income taxes Total reclassifications related to securities $ — $ — $ — $ 2 Total reclassifications for the period $ — $ (2) $ (3) $ (3) |
Supplemental Cash Flow Inform27
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows | Nine Months Ended September 30, (In millions) 2017 2016 Cash paid for or (received from): Interest expense $ 97 $ 112 Interest and dividend income (1) (2) Income taxes, net of refunds 78 58 |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Marketable Securities [Abstract] | |
Schedule Of Amortized Cost, Fair Value And Gross Unrealized Gains And Losses Of The Company's Short- And Long-Term Investments In Debt And Equity Securities | Gross Gross Amortized Unrealized Unrealized Fair (In millions) Cost Gains Losses Value Available-for-sale securities, September 30, 2017: Debt securities $ 15 $ — $ — $ 15 Equity securities 15 4 — 19 Total securities $ 30 $ 4 $ — $ 33 Available-for-sale securities, December 31, 2016: Debt securities $ 27 $ — $ — $ 27 Equity securities 15 1 — 17 Total securities $ 43 $ 1 $ — $ 44 |
Schedule Of Proceeds And Gross Realized Gains Resulting From Sales Of Available-For-Sale Securities And Gross Realized Losses Or Impairment Charges Due To Other Than Temporary Declines In The Value Of Certain Investments | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Proceeds from sale of securities $ 11 $ — $ 11 $ 42 Gross realized gains, pre-tax — — — 4 Gross realized gains, net of tax — — — 2 Gross realized (losses), pre-tax — — — — Gross realized (losses), net of tax — — — — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | As of As of September 30, December 31, (In millions) 2017 2016 Senior secured term loan facility maturing in 2023 (1) $ 1,618 $ 1,628 Revolving credit facility maturing in 2021 — — 5.125% notes maturing in 2024 (2) 738 737 7.10% notes maturing in 2018 (3) 79 77 7.45% notes maturing in 2027 (3) 169 167 7.25% notes maturing in 2038 (3) 42 65 Vehicle capital leases (4) 94 87 Other 61 71 Less current portion (146) (59) Total long-term debt $ 2,654 $ 2,772 ___________________________________ (1) As of September 30, 2017 and December 31, 2016, presented net of $16 million and $ 18 million, respectively, in unamortized debt issuance costs and $4 million and $ 4 million, respectively, in unamortized original issue discount paid. (2) As of September 30, 2017 and December 31, 2016, presented net of $12 and $ 13 million, respectively, in unamortized debt issuance costs. (3) As of September 30, 2017 and December 31, 2016, collectively presented net of $38 million and $ 48 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. (4) The Company has entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows the Company to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are capital leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. |
Schedule of Interest Rate Swap Agreements | Trade Date Effective Date Expiration Date Notional Amount Fixed Rate (1) Floating Rate November 7, 2016 November 8, 2016 November 30, 2023 $650,000 1.493 % One month LIBOR ___________________________________ (1) Before the application of the applicable borrowing margin. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions [Abstract] | |
Schedule Of Supplemental Cash Flow Information Regarding Acquisitions | Nine Months Ended September 30, (In millions) 2017 2016 Assets acquired $ 15 $ 123 Liabilities assumed (1) (19) Net assets acquired $ 15 $ 104 Net cash paid $ 12 $ 86 Seller financed debt 3 18 Purchase price $ 15 $ 104 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Segment Reporting [Abstract] | |
Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Revenue: Terminix $ 395 $ 396 $ 1,188 $ 1,174 American Home Shield 346 309 899 786 Franchise Services Group 55 51 157 151 Reportable Segment Revenue $ 797 $ 757 $ 2,245 $ 2,111 Corporate — 1 1 2 Total Revenue $ 797 $ 758 $ 2,246 $ 2,113 Reportable Segment Adjusted EBITDA: (1) Terminix $ 82 $ 92 $ 269 $ 299 American Home Shield 96 79 209 170 Franchise Services Group 22 21 65 58 Reportable Segment Adjusted EBITDA $ 200 $ 192 $ 543 $ 526 ___________________________________ Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: |
Schedule Of Reconciliation Of Reportable Segment Adjusted EBITDA To Net Income (Loss) | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Net Income $ 80 $ 70 $ 204 $ 124 Unallocated corporate expenses — — — 3 Depreciation and amortization expense 26 24 77 68 401(k) Plan corrective contribution (4) — (3) 1 Fumigation related matters — 1 2 92 Insurance reserve adjustment — — — 23 Non-cash stock-based compensation expense 1 3 10 10 Restructuring charges 21 8 24 13 Gain on sale of Merry Maids branches — — — (2) Non-cash impairment of software and other related costs — — 2 1 Income from discontinued operations, net of income taxes — — (1) — Provision for income taxes 34 46 109 76 Loss on extinguishment of debt 3 — 6 — Interest expense 38 39 113 115 Reportable Segment Adjusted EBITDA $ 200 $ 192 $ 543 $ 526 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Schedule Of The Carrying Amount And Estimated Fair Value Of The Company's Financial Instruments That Are Recorded At Fair Value On A Recurring Basis | Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Active Observable Unobservable Statement of Financial Carrying Markets Inputs Inputs (In millions) Position Location Value (Level 1) (Level 2) (Level 3) As of September 30, 2017: Financial Assets: Deferred compensation trust Long-term marketable securities $ 8 $ 8 $ — $ — Investments in marketable securities Marketable securities and Long-term marketable securities 25 24 1 — Fuel swap contracts Prepaid expenses and other assets 1 — — 1 Interest rate swap contract Other assets 19 — 19 — Total financial assets $ 53 $ 32 $ 20 $ 1 Financial Liabilities: Fuel swap contracts Other accrued liabilities $ — $ — $ — $ — Interest rate swap contract Other accrued liabilities 1 — 1 — Total financial liabilities $ 1 $ — $ 1 $ — As of December 31, 2016: Financial Assets: Deferred compensation trust Long-term marketable securities $ 8 $ 8 $ — $ — Investments in marketable securities Marketable securities and Long-term marketable securities 36 33 3 — Fuel swap contracts Prepaid expenses and other assets and Other assets 5 — — 5 Interest rate swap contract Other assets 27 — 27 — Total financial assets $ 75 $ 40 $ 30 $ 5 Financial Liabilities: Interest rate swap contract Other accrued liabilities and Other long-term obligations $ 4 $ — $ 4 $ — Total financial liabilities $ 4 $ — $ 4 $ — |
Schedule Of Reconciliation Of The Beginning And Ending Fair Values Of Financial Instruments Valued Using Significant Unobservable Inputs (Level 3) On A Recurring Basis | Fuel Swap Contract Assets (In millions) (Liabilities) Location of Gain (Loss) included in Earnings Balance as of December 31, 2016 $ 5 Total (losses) gains (realized and unrealized) Included in earnings 2 Cost of services rendered and products sold Included in other comprehensive income (4) Settlements (2) Balance as of September 30, 2017 $ 1 Balance as of December 31, 2015 $ (4) Total (losses) gains (realized and unrealized) Included in earnings (3) Cost of services rendered and products sold Included in other comprehensive income 5 Settlements 3 Balance as of September 30, 2016 $ 1 |
Schedule Of Level 3 Financial Instruments | Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of September 30, 2017: Fuel swap contracts $ 1 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $2.29 - $2.66 $ 2.46 As of December 31, 2016: Fuel swap contracts $ 5 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $2.31 - $2.85 $ 2.55 ___________________________________ (1) Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule Of Reconciliation Of The Amounts Included In The Computation Of Basic Earnings Per Share From Continuing Operations And Diluted Earnings Per Share From Continuing Operations | Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2017 2016 2017 2016 Income from continuing operations $ 80 $ 70 $ 204 $ 124 Weighted-average common shares outstanding 134.3 135.1 134.2 135.4 Effect of dilutive securities: RSUs 0.2 0.2 0.1 0.2 Stock options (1) 0.7 1.8 1.2 1.9 Weighted-average common shares outstanding—assuming dilution 135.2 137.1 135.4 137.5 Basic earnings per share from continuing operations $ 0.60 $ 0.52 $ 1.52 $ 0.92 Diluted earnings per share from continuing operations $ 0.59 $ 0.51 $ 1.50 $ 0.90 ___________________________________ (1) Options to purchase 1. 0 million and 0.9 million shares for the three months ended September 30, 2017 and 2016, respectively, and 1. 0 million and 0.9 million shares for the nine months ended September 30, 2017 and 2016, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | Sep. 30, 2017entity |
American Home Shield And Terminix and Franchise Services Group, Separation [Member] | |
Number Of Independent, Publicly Traded Companies | 2 |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Charges [Abstract] | ||||
Restructuring charges | $ 21 | $ 8 | $ 24 | $ 13 |
Restructuring charges, net of tax | $ 14 | $ 5 | $ 16 | $ 8 |
Restructuring Charges (Schedule
Restructuring Charges (Schedule Of Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 21 | $ 8 | $ 24 | $ 13 | |
Share-based Compensation | 1 | 3 | 10 | 10 | |
Terminix [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | [1] | 4 | 1 | 7 | |
Severance costs | 1 | 1 | |||
Share-based Compensation | 3 | 3 | |||
Severance and other restructuring costs | 1 | ||||
Lease termination costs | 3 | ||||
American Home Shield [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | [2] | 1 | 1 | ||
Gain (Loss) on Contract Termination | 1 | 1 | |||
Corporate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | [3] | 11 | 2 | 12 | 4 |
Professional fees | 2 | 2 | |||
Accelerated depreciation | 1 | ||||
Severance costs | 4 | 4 | |||
Share-based Compensation | 5 | 5 | |||
Severance and other restructuring costs | 1 | ||||
Initiative To Enhance Capabilities And Reduce Costs In Headquarters Functions [Member] | Corporate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs | 1 | 2 | |||
American Home Shield Spin-off [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | [4] | 7 | 7 | ||
Professional fees, employee retention costs and other costs | 7 | 7 | |||
Headquarters Relocation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | [5] | 3 | 2 | 4 | 2 |
Impairment charges | 1 | 1 | |||
Professional fees | $ 1 | $ 1 | |||
Redundant Rent Expense, Accelerated Depreciation And Other Charges | $ 3 | $ 4 | |||
[1] | For the nine months ended September 30, 2017, these charges included $1 million of severance and other costs. For the three and nine months ended September 30, 2016, these charges included $1 million of severance costs and $3 million of stock-based compensation expense due to the modification of non-vested stock options and RSUs as part of the severance agreement with the former president of Terminix. The nine month period ending September 30, 2016 includes $3 million related to lease terminations and severance costs driven by Terminix's branch optimization program. | ||||
[2] | For the three and nine months ended September 30, 2016, these charges included $1 million related to the termination of an agreement pursuant to the decision to consolidate the stand-alone operations of Home Security of America, Inc. acquired in February 2014 with those of American Home Shield. | ||||
[3] | For the three and nine months ended September 30, 2017, these charges included $4 million of severance costs and $5 million of stock-based compensation expense due to the modification of non-vested stock options as part of the severance agreement with the former Chief Executive Officer of the Company. Additionally, for the three and nine months ended September 30, 2017, includes severance costs of $1 million and $2 million, respectively, related to an initiative to enhance capabilities and reduce costs in the Company's headquarters functions that provide Company-wide administrative services for our operations. For the three months ended September 30, 2016, includes professional fees of $2 million, and for the nine months ended September 30, 2016, includes professional fees of $2 million and accelerated depreciation of $1 million related to the early termination of a long-term human resources outsourcing agreement. Additionally, the nine months ended September 30, 2016 includes severance and other costs of $1 million related to an initiative to enhance capabilities and reduce costs in the Company's headquarters functions that provide Company-wide administrative services for our operations. | ||||
[4] | For the three and nine months ended September 30, 2017, includes professional fees and other costs of $7 million related to the planned spin-off of the American Home Shield business to Company shareholders. The Company expects that it will incur additional costs in order to effect the separation of American Home Shield but is currently unable to estimate the aggregate amount or timing of such charges or the anticipated related cash outlays. | ||||
[5] | For the three and nine months ended September 30, 2017, these charges included redundant rent expense, accelerated depreciation and other charges of $3 million and $4 million, respectively, related to the relocation of our headquarters. For the three and nine months ended September 30, 2016, these charges included impairment charges of $1 million and professional fees and other costs of $1 million related to the relocation of our headquarters. |
Restructuring Charges (Schedu37
Restructuring Charges (Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of the beginning and ending balances of accrued restructuring charges | ||||
Balance at the beginning of the period | $ 3 | |||
Costs incurred | $ 21 | $ 8 | 24 | $ 13 |
Costs paid or otherwise settled | (17) | |||
Balance at the end of the period | $ 9 | $ 9 |
Commitments and Contingencies38
Commitments and Contingencies (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | |||||
401(k) Plan corrective contribution | $ (4) | $ (3) | $ 1 | ||
Voluntary Correction Proposal, 401(k), Recorded Charges | $ 25 | ||||
Number of misdemeanor charges | item | 4 | ||||
Gain (Loss) Related to Litigation Settlement | $ (1) | $ (2) | $ (92) | ||
Maximum [Member] | |||||
Loss Contingencies [Line Items] | |||||
401(k) Plan corrective contribution | 22 | ||||
Terminix International USVI, LLC (“TMX USVI”) [Member] | New Plea Agreement [Member] | |||||
Loss Contingencies [Line Items] | |||||
Fines and penalties | 4 | 4 | |||
Terminix International USVI, LLC (“TMX USVI”) [Member] | New Plea Agreement [Member] | National Fish and Wildlife Foundation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Fines and penalties | 1 | 1 | |||
Terminix International USVI, LLC (“TMX USVI”) [Member] | New Plea Agreement [Member] | Environmental Protection Agency (the “EPA”) [Member] | |||||
Loss Contingencies [Line Items] | |||||
Fines and penalties | 1 | 1 | |||
The Terminix International Company Limited Partnership (“TMX LP”) [Member] | New Plea Agreement [Member] | |||||
Loss Contingencies [Line Items] | |||||
Fines and penalties | 4 | 4 | |||
TMX USVI and TMX LP [Member] | New Plea Agreement [Member] | |||||
Loss Contingencies [Line Items] | |||||
Fines and penalties | $ 8 | $ 8 | |||
Probation period | 3 years | ||||
Gain (Loss) Related to Litigation Settlement | $ 10 |
Commitments and Contingencies39
Commitments and Contingencies (Schedule Of Reconciliation Of Beginning And Ending Accrued Self-Insured Claims) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Commitments and Contingencies [Line Items] | |||
Increase (Decrease) in Self Insurance Reserve | $ 23 | ||
Accrued Self-Insured Claims, Net [Member] | |||
Commitments and Contingencies [Line Items] | |||
Balance at the beginning of the period | $ 120 | 114 | |
Provision for self-insured claims | 27 | 50 | [1] |
Cash payments | (30) | (34) | |
Balance at the end of the period | $ 118 | $ 129 | |
[1] | Includes a charge of $23 million recorded in the nine months ended September 30, 2016 for an adjustment to the Company's accrued self-insured claims related to automobile, general liability and workers' compensation risks. The adjustment was based on the Company's detailed annual assessment of this actuarially determined accrual, which the Company completes in the second quarter of each year. This adjustment related to coverage periods of 2015 and prior. |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Accumulated impairment losses recorded in continuing operations | $ 0 | $ 0 | ||
Amortization expense | 7 | $ 8 | 20 | $ 24 |
Amortization expense, for the remainder of 2017 | 6 | 6 | ||
Amortization expense, 2018 | 21 | 21 | ||
Amortization expense, 2019 | 16 | 16 | ||
Amortization expense, 2020 | 12 | 12 | ||
Amortization expense, 2021 | 9 | 9 | ||
Amortization expense, Thereafter | 6 | 6 | ||
Trade Names [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill and trade name impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets (Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill balances by segment for continuing operations | |
Balance at the beginning of the period | $ 2,247 |
Acquisitions | 5 |
Impact of foreign exchange rates | 2 |
Balance at the end of the period | 2,255 |
Terminix [Member] | |
Goodwill balances by segment for continuing operations | |
Balance at the beginning of the period | 1,601 |
Acquisitions | 1 |
Impact of foreign exchange rates | 2 |
Balance at the end of the period | 1,604 |
American Home Shield [Member] | |
Goodwill balances by segment for continuing operations | |
Balance at the beginning of the period | 471 |
Acquisitions | 4 |
Balance at the end of the period | 476 |
Franchise Services Group [Member] | |
Goodwill balances by segment for continuing operations | |
Balance at the beginning of the period | 175 |
Balance at the end of the period | $ 176 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets (Schedule Of Other Intangible Asset Balances For Continuing Operations) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | |
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Intangible Assets Gross, Excluding Goodwill | $ 2,366 | $ 2,356 | |
Accumulated Amortization | (668) | (647) | |
Intangible Assets Net, Excluding Goodwill | 1,698 | 1,708 | |
Customer Relationships [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Intangible Assets Gross, Excluding Goodwill | 589 | 594 | |
Accumulated Amortization | (551) | (538) | |
Intangible Assets Net, Excluding Goodwill | 38 | 56 | |
Franchise Agreements [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Intangible Assets Gross, Excluding Goodwill | 88 | 88 | |
Accumulated Amortization | (69) | (67) | |
Intangible Assets Net, Excluding Goodwill | 19 | 21 | |
Other [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Intangible Assets Gross, Excluding Goodwill | 81 | 65 | |
Accumulated Amortization | (48) | (42) | |
Intangible Assets Net, Excluding Goodwill | 33 | 23 | |
Trade Names [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Intangible Assets Gross, Excluding Goodwill | [1] | 1,608 | 1,608 |
Intangible Assets Net, Excluding Goodwill | [1] | $ 1,608 | $ 1,608 |
[1] | Not subject to amortization. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock-Based Compensation [Line Items] | ||||
Stock-based compensation expense | $ 1 | $ 3 | $ 10 | $ 10 |
Stock-based compensation expense, net of tax | 1 | $ 2 | 6 | $ 6 |
Total unrecognized compensation costs related to non-vested stock options and restricted share units | 31 | $ 31 | ||
Weighted-average period of recognition of stock-based compensation cost | 2 years 1 month 6 days | |||
Modified Non-vested Stock Options [Member] | Former Chief Executive Officer [Member] | Employee Severance [Member] | ||||
Stock-Based Compensation [Line Items] | ||||
Stock-based compensation expense | $ 5 | $ 5 |
Comprehensive Income (Loss) (Su
Comprehensive Income (Loss) (Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | $ (3) | $ (21) | |
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | (2) | (2) | |
Tax benefit | (2) | (1) | |
After-tax amount | (2) | ||
Amounts reclassified from accumulated other comprehensive Income (loss) | [1] | 3 | 3 |
Net current period other comprehensive income (loss) | 3 | 2 | |
Balance at the end of period | 1 | (19) | |
Unrealized Gains (Losses) on Derivatives [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | 12 | (7) | |
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | (9) | (4) | |
Tax benefit | (3) | (1) | |
After-tax amount | (5) | (3) | |
Amounts reclassified from accumulated other comprehensive Income (loss) | [1] | 3 | 5 |
Net current period other comprehensive income (loss) | (2) | 2 | |
Balance at the end of period | 10 | (5) | |
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | 1 | 2 | |
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | 3 | ||
Tax benefit | 1 | ||
After-tax amount | 2 | (1) | |
Amounts reclassified from accumulated other comprehensive Income (loss) | [1] | (2) | |
Net current period other comprehensive income (loss) | 2 | (3) | |
Balance at the end of period | 2 | ||
Foreign Currency Translation [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | (15) | (15) | |
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | 4 | 2 | |
After-tax amount | 4 | 2 | |
Net current period other comprehensive income (loss) | 4 | 2 | |
Balance at the end of period | $ (11) | $ (13) | |
[1] | Amounts are net of tax. See reclassifications out of accumulated other comprehensive income (loss) below for further details. |
Comprehensive Income (Loss) (Sc
Comprehensive Income (Loss) (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of services rendered and products sold | $ (419) | $ (400) | $ (1,180) | $ (1,104) |
Interest expense | (38) | (39) | (113) | (115) |
Interest and net investment income | 1 | 1 | 3 | 5 |
Income from Continuing Operations before Income Taxes | 114 | 116 | 313 | 200 |
Provision for income taxes | (34) | (46) | (109) | (76) |
Net Income | 80 | 70 | 204 | 124 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net Income | (2) | (3) | (3) | |
Unrealized Gains (Losses) on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income from Continuing Operations before Income Taxes | (1) | (2) | (5) | (8) |
Provision for income taxes | 1 | 2 | 3 | |
Net Income | (1) | (2) | (3) | (5) |
Unrealized Gains (Losses) on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | Fuel Swap Contracts [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of services rendered and products sold | 1 | (1) | 2 | (3) |
Unrealized Gains (Losses) on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | Interest Rate Swap Contracts [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | $ (2) | (2) | $ (7) | (5) |
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and net investment income | 3 | |||
Provision for income taxes | (1) | |||
Net Income | $ 2 |
Supplemental Cash Flow Inform46
Supplemental Cash Flow Information (Narrative) (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash paid for or (received from): | ||||
Cash and cash equivalents | $ 456,000,000 | $ 230,000,000 | $ 291,000,000 | |
Restricted cash | 89,000,000 | 95,000,000 | 95,000,000 | $ 0 |
Cash and Cash Equivalents Including Restricted Cash, at Carrying Value | 545,000,000 | 325,000,000 | $ 386,000,000 | $ 296,000,000 |
Capital lease and other non-cash financing transactions | 30,000,000 | 50,000,000 | ||
Cash received for franchise | $ 4,000,000 | 7,000,000 | ||
Merry Maids [Member] | ||||
Cash paid for or (received from): | ||||
Total purchase price for conversion of certain company-owned Merry Maids branches to franchises | 9,000,000 | |||
Cash received for franchise | 6,000,000 | |||
Financing provided for franchise | $ 2,000,000 |
Supplemental Cash Flow Inform47
Supplemental Cash Flow Information (Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash paid for or (received from): | ||
Interest expense | $ 97 | $ 112 |
Interest and dividend income | (1) | (2) |
Income taxes, net of refunds | $ 78 | $ 58 |
Cash and Marketable Securitie48
Cash and Marketable Securities (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Cash and Marketable Securities [Abstract] | |||||
Portion of unrealized losses in loss position for more than one year | $ 0 | $ 0 | $ 0 | ||
Impairment charges due to other than temporary declines in the value of certain investments | $ 0 | $ 0 | $ 0 | $ 0 |
Cash and Marketable Securitie49
Cash and Marketable Securities (Schedule Of Amortized Cost, Fair Value And Gross Unrealized Gains And Losses Of The Company's Short- And Long-Term Investments In Debt And Equity Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost of securities | $ 30 | $ 43 |
Gross unrealized gains of securities | 4 | 1 |
Fair value of securities | 33 | 44 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost of debt securities | 15 | 27 |
Fair value of debt securities | 15 | 27 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost of equity securities | 15 | 15 |
Gross unrealized gains of equity securities | 4 | 1 |
Fair value of equity securities | $ 19 | $ 17 |
Cash and Marketable Securitie50
Cash and Marketable Securities (Schedule Of Proceeds And Gross Realized Gains Resulting From Sales Of Available-For-Sale Securities And Gross Realized Losses)(Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Cash and Marketable Securities [Abstract] | |||
Proceeds from sale of securities | $ 11 | $ 11 | $ 42 |
Gross realized gains, pre-tax | 4 | ||
Gross realized gains, net of tax | $ 2 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | |||
Loss on extinguishment of debt | $ 3 | $ 6 | |
7.25% Notes Maturing In 2038 [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 7.25% | 7.25% | |
Repayment of principal amount | $ 13 | $ 17 | $ 13 |
Loss on extinguishment of debt | $ 3 | $ 6 | |
Redemption percentage | 97.00% | 105.00% |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | ||
Long-term debt [Line Items] | |||
Less current portion | $ (146) | $ (59) | |
Total long-term debt | 2,654 | 2,772 | |
Vehicle Capital Leases [Member] | |||
Long-term debt [Line Items] | |||
Vehicle capital leases | [1] | $ 94 | 87 |
Borrowing margin (as a percent) | 2.45% | ||
Variable rate basis | one-month LIBOR | ||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [2] | $ 1,618 | 1,628 |
Unamortized debt issuance costs | 16 | 18 | |
Unamortized original issue discount | 4 | 4 | |
Revolving Credit Facility Maturing In 2021 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [2],[3] | ||
5.125% Notes Maturing In 2024 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [3] | $ 738 | 737 |
Interest rate (as a percent) | 5.125% | ||
Unamortized debt issuance costs | $ 12 | 13 | |
7.10% Notes Maturing In 2018 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [4] | $ 79 | 77 |
Interest rate (as a percent) | 7.10% | ||
7.45% Notes Maturing In 2027 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [4] | $ 169 | 167 |
Interest rate (as a percent) | 7.45% | ||
7.25% Notes Maturing In 2038 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [4] | $ 42 | 65 |
Interest rate (as a percent) | 7.25% | ||
7.10% Notes, 7.45% Notes, 7.25% Notes Collectively [Member] | |||
Long-term debt [Line Items] | |||
Unamortized fair value adjustments related to purchase accounting | $ 38 | 48 | |
Other [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [1] | $ 61 | $ 71 |
[1] | The Company has entered into a fleet management services agreement (the "Fleet Agreement") which, among other things, allows the Company to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are capital leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent.Repurchase of Notes | ||
[2] | As of September 30, 2017 and December 31, 2016, presented net of $16 million and $18 million, respectively, in unamortized debt issuance costs and $4 million and $4 million, respectively, in unamortized original issue discount paid. | ||
[3] | As of September 30, 2017 and December 31, 2016, presented net of $12 and $13 million, respectively, in unamortized debt issuance costs. | ||
[4] | As of September 30, 2017 and December 31, 2016, collectively presented net of $38 million and $48 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. |
Long-Term Debt (Schedule of Int
Long-Term Debt (Schedule of Interest Rate Swap Agreements) (Details) - Interest Rate Swap Contracts [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($) | ||
Derivative, Trade Date | Nov. 7, 2016 | |
Derivative, Effective Date | Nov. 8, 2016 | |
Derivative, Expiration Date | Nov. 30, 2023 | |
Notional amount | $ 650,000 | |
Fixed Rate (as a percent) | 1.493% | [1] |
Floating Rate | One month LIBOR | |
[1] | Before the application of the applicable borrowing margin. |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017USD ($)entity | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Acquisitions [Line Items] | |||
Net purchase price | $ 15 | $ 104 | |
Goodwill | $ 2,255 | $ 2,247 | |
Landmark [Member] | |||
Acquisitions [Line Items] | |||
Business Acquisition, Effective Date of Acquisition | Nov. 30, 2016 | ||
Net purchase price | $ 39 | ||
Goodwill | 37 | ||
Other intangibles related to acquisitions | 13 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles | $ 4 | ||
OneGuard Home Warranties [Member] | |||
Acquisitions [Line Items] | |||
Business Acquisition, Effective Date of Acquisition | Jun. 27, 2016 | ||
Net purchase price | $ 61 | ||
Goodwill | 57 | ||
Other intangibles related to acquisitions | $ 15 | ||
Pest control, termite and franchise acquisitions [Member] | |||
Acquisitions [Line Items] | |||
Number of Businesses Acquired | entity | 2 | ||
Net purchase price | $ 15 | 43 | |
Goodwill | 1 | 34 | |
Other intangibles related to acquisitions | $ 13 | $ 6 |
Acquisitions (Schedule Of Suppl
Acquisitions (Schedule Of Supplemental Cash Flow Information Regarding Acquisitions) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental cash flow information regarding acquisitions | ||
Assets acquired | $ 15 | $ 123 |
Liabilities assumed | (1) | (19) |
Net assets acquired | 15 | 104 |
Net cash paid | 12 | 86 |
Seller financed debt | 3 | 18 |
Purchase price | $ 15 | $ 104 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||||
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 14 | $ 14 | $ 13 | ||
Estimated reduction in unrecognized tax benefits during the next 12 months | $ 2 | $ 2 | |||
Effective tax rate on income from continuing operations (as a percent) | 29.60% | 39.80% | 35.00% | 37.90% |
Business Segment Reporting (Nar
Business Segment Reporting (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Business Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Maximum percentage of revenue from customers and franchisees generated in foreign market | 2.00% |
Business Segment Reporting (Sch
Business Segment Reporting (Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 797 | $ 758 | $ 2,246 | $ 2,113 | |
Adjusted EBITDA | 200 | 192 | 543 | 526 | |
Depreciation & Amortization Expense | 26 | 24 | 77 | 68 | |
Capital Expenditures | 50 | 45 | |||
Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 797 | 757 | 2,245 | 2,111 | |
Adjusted EBITDA | [1] | 200 | 192 | 543 | 526 |
Terminix [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 395 | 396 | 1,188 | 1,174 | |
Adjusted EBITDA | [1] | 82 | 92 | 269 | 299 |
American Home Shield [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 346 | 309 | 899 | 786 | |
Adjusted EBITDA | [1] | 96 | 79 | 209 | 170 |
Franchise Services Group [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 55 | 51 | 157 | 151 | |
Adjusted EBITDA | [1] | $ 22 | 21 | 65 | 58 |
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1 | $ 1 | 2 | ||
Adjusted EBITDA | $ 3 | ||||
[1] | Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: Three Months EndedNine Months EndedSeptember 30,September 30,(In millions)2017201620172016Net Income$ 80$ 70$ 204$ 124Unallocated corporate expenses - - - 3Depreciation and amortization expense 26 24 77 68401(k) Plan corrective contribution (4) - (3) 1Fumigation related matters - 1 2 92Insurance reserve adjustment - - - 23Non-cash stock-based compensation expense 1 3 10 10Restructuring charges 21 8 24 13Gain on sale of Merry Maids branches - - - (2)Non-cash impairment of software and other related costs - - 2 1Income from discontinued operations, net of income taxes - - (1) -Provision for income taxes 34 46 109 76Loss on extinguishment of debt 3 - 6 -Interest expense 38 39 113 115Reportable Segment Adjusted EBITDA $ 200$ 192$ 543$ 526 |
Business Segment Reporting (S59
Business Segment Reporting (Schedule Of Reconciliation Of Reportable Segment Adjusted EBITDA To Net Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||
Net Income | $ 80 | $ 70 | $ 204 | $ 124 | |
Depreciation and amortization expense | 26 | 24 | 77 | 68 | |
401(k) Plan corrective contribution | (4) | (3) | 1 | ||
Fumigation related matters | 1 | 2 | 92 | ||
Insurance reserve adjustment | 23 | ||||
Non-cash stock-based compensation expense | 1 | 3 | 10 | 10 | |
Restructuring charges | 21 | 8 | 24 | 13 | |
Gain on sale of Merry Maids branches | (2) | ||||
Non-cash impairment of software and other related costs | 2 | 1 | |||
Income from discontinued operations, net of income taxes | (1) | ||||
Provision for income taxes | 34 | 46 | 109 | 76 | |
Loss on extinguishment of debt | 3 | 6 | |||
Interest expense | 38 | 39 | 113 | 115 | |
Reportable Segment Adjusted EBITDA | 200 | 192 | 543 | 526 | |
Operating Segment [Member] | |||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||
Reportable Segment Adjusted EBITDA | [1] | 200 | 192 | 543 | 526 |
Terminix [Member] | Operating Segment [Member] | |||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||
Reportable Segment Adjusted EBITDA | [1] | 82 | 92 | 269 | 299 |
American Home Shield [Member] | Operating Segment [Member] | |||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||
Reportable Segment Adjusted EBITDA | [1] | 96 | 79 | 209 | 170 |
Franchise Services Group [Member] | Operating Segment [Member] | |||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||
Reportable Segment Adjusted EBITDA | [1] | $ 22 | $ 21 | $ 65 | 58 |
Corporate [Member] | |||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||
Reportable Segment Adjusted EBITDA | $ 3 | ||||
[1] | Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: Three Months EndedNine Months EndedSeptember 30,September 30,(In millions)2017201620172016Net Income$ 80$ 70$ 204$ 124Unallocated corporate expenses - - - 3Depreciation and amortization expense 26 24 77 68401(k) Plan corrective contribution (4) - (3) 1Fumigation related matters - 1 2 92Insurance reserve adjustment - - - 23Non-cash stock-based compensation expense 1 3 10 10Restructuring charges 21 8 24 13Gain on sale of Merry Maids branches - - - (2)Non-cash impairment of software and other related costs - - 2 1Income from discontinued operations, net of income taxes - - (1) -Provision for income taxes 34 46 109 76Loss on extinguishment of debt 3 - 6 -Interest expense 38 39 113 115Reportable Segment Adjusted EBITDA $ 200$ 192$ 543$ 526 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related party transactions | |||
Written notice period for termination of service agreement | 90 days | ||
New TruGreen's [Member] | |||
Related party transactions | |||
Fees due from New TruGreen | $ 2 | $ 1 | $ 6 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Letters of credit posted as collateral under fuel hedging program | $ 2,000,000 | |
Hedging gains and losses in accumulated other comprehensive income expected to be recognized in earnings, net of tax | 2,000,000 | |
Carrying Value [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Long Term Debt And Capital Lease Obligation | 2,800,000,000 | $ 2,831,000,000 |
Estimated Fair Value [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of total debt | 2,911,000,000 | $ 2,930,000,000 |
Fuel Swap Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Aggregate notional amount | 30,000,000 | |
Interest Rate Swap Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Aggregate notional amount | $ 650,000,000 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of The Carrying Amount And Estimated Fair Value Of The Company's Financial Instruments That Are Recorded At Fair Value On A Recurring Basis) (Details) - Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Quoted Price In Active Markets (Level 1) [Member] | ||
Financial Assets: | ||
Deferred compensation trust | $ 8 | $ 8 |
Investments in marketable securities | 24 | 33 |
Total financial assets | 32 | 40 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Assets: | ||
Investments in marketable securities | 1 | 3 |
Total financial assets | 20 | 30 |
Total financial liabilities | 1 | 4 |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 19 | 27 |
Derivative liability, Current | 1 | |
Total financial liabilities | 4 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Financial Assets: | ||
Total financial assets | 1 | 5 |
Significant Unobservable Inputs (Level 3) [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 1 | |
Total financial assets | 5 | |
Carrying Value [Member] | ||
Financial Assets: | ||
Deferred compensation trust | 8 | 8 |
Investments in marketable securities | 25 | 36 |
Total financial assets | 53 | 75 |
Total financial liabilities | 1 | 4 |
Carrying Value [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 1 | |
Total financial assets | 5 | |
Carrying Value [Member] | Interest Rate Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 19 | 27 |
Derivative liability, Current | $ 1 | |
Total financial liabilities | $ 4 |
Fair Value Measurements (Sche63
Fair Value Measurements (Schedule Of Reconciliation Of The Beginning And Ending Fair Values Of Financial Instruments Valued Using Significant Unobservable Inputs (Level 3) On A Recurring Basis) (Details) - Fuel Swap Contracts [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of the beginning and ending fair values of financial instruments valued using significant unobservable inputs (Level 3) | ||
Balance at the beginning of the period | $ 5 | $ (4) |
Total (losses) gains (realized and unrealized) | ||
Included in earnings | 2 | (3) |
Included in other comprehensive income | (4) | 5 |
Settlements | (2) | 3 |
Balance at the end of the period | $ 1 | $ 1 |
Fair Value Measurements (Sche64
Fair Value Measurements (Schedule Of Level 3 Financial Instruments) (Details) - Fuel Swap Contracts [Member] $ in Millions | Sep. 30, 2017USD ($)$ / gal | Dec. 31, 2016USD ($)$ / gal | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Information relating to the significant unobservable inputs of Level 3 financial instruments | ||||||
Fair value at the end of the period | $ | $ 1 | $ 5 | $ 1 | $ (4) | ||
Discounted Cash Flows [Member] | Minimum [Member] | ||||||
Information relating to the significant unobservable inputs of Level 3 financial instruments | ||||||
Forward Unleaded Price per Gallon (in dollars per gallon) | 2.29 | 2.31 | [1] | |||
Discounted Cash Flows [Member] | Maximum [Member] | ||||||
Information relating to the significant unobservable inputs of Level 3 financial instruments | ||||||
Forward Unleaded Price per Gallon (in dollars per gallon) | 2.66 | 2.85 | [1] | |||
Discounted Cash Flows [Member] | Weighted Average [Member] | ||||||
Information relating to the significant unobservable inputs of Level 3 financial instruments | ||||||
Forward Unleaded Price per Gallon (in dollars per gallon) | [1] | 2.46 | 2.55 | |||
[1] | Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. |
Earnings Per Share (Schedule Of
Earnings Per Share (Schedule Of Reconciliation Of The Amounts Included In The Computation Of Basic Earnings Per Share From Continuing Operations And Diluted Earnings Per Share From Continuing Operations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Income from continuing operations | $ 80 | $ 70 | $ 204 | $ 124 | |
Weighted average common shares outstanding | 134.3 | 135.1 | 134.2 | 135.4 | |
Effect of dilutive securities: | |||||
Weighted average common shares outstanding-assuming dilution | 135.2 | 137.1 | 135.4 | 137.5 | |
Basic earnings per share from continuing operations (in dollars per share) | $ 0.60 | $ 0.52 | $ 1.52 | $ 0.92 | |
Diluted earnings per share from continuing operations (in dollars per share) | $ 0.59 | $ 0.51 | $ 1.50 | $ 0.90 | |
RSUs [Member] | |||||
Effect of dilutive securities: | |||||
Dilutive securities | 0.2 | 0.2 | 0.1 | 0.2 | |
Stock Options [Member] | |||||
Effect of dilutive securities: | |||||
Dilutive securities | [1] | 0.7 | 1.8 | 1.2 | 1.9 |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1 | 0.9 | 1 | 0.9 | |
[1] | Options to purchase 1.0 million and 0.9 million shares for the three months ended September 30, 2017 and 2016, respectively, and 1.0 million and 0.9 million shares for the nine months ended September 30, 2017 and 2016, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |