Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SERVICEMASTER GLOBAL HOLDINGS INC | ||
Entity Central Index Key | 1,428,875 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 135,267,377 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 5,220 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Trading Symbol | serv |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Operations and Comprehensive Income [Abstract] | |||
Revenue | $ 2,912 | $ 2,746 | $ 2,594 |
Cost of services rendered and products sold | 1,552 | 1,448 | 1,375 |
Selling and administrative expenses | 773 | 711 | 666 |
Amortization expense | 27 | 33 | 38 |
401(k) Plan corrective contribution | (3) | 2 | 23 |
Fumigation related matters | 4 | 93 | 9 |
Insurance reserve adjustment | 23 | ||
Impairment of software and other related costs | 2 | 1 | |
Restructuring charges | 34 | 17 | 5 |
Gain on sale of Merry Maids branches | (2) | (7) | |
Interest expense | 150 | 153 | 167 |
Interest and net investment income | (4) | (6) | (9) |
Loss on extinguishment of debt | 6 | 32 | 58 |
Income from Continuing Operations before Income Taxes | 370 | 241 | 270 |
(Benefit) provision for income taxes | (139) | 85 | 107 |
Equity in losses of joint venture | (1) | ||
Income from Continuing Operations | 509 | 155 | 162 |
Gain (loss) from discontinued operations, net of income taxes | (1) | (2) | |
Net Income | 510 | 155 | 160 |
Other Comprehensive Income (Loss), Net of Income Taxes: | |||
Net unrealized gains (losses) on securities | 1 | (2) | (3) |
Net unrealized gains (losses) on derivative instruments | 4 | 20 | (2) |
Foreign currency translation gain (loss) | 3 | (8) | |
Other Comprehensive Income (Loss), Net of Income Taxes | 8 | 18 | (13) |
Total Comprehensive Income | $ 518 | $ 173 | $ 147 |
Weighted-average common shares outstanding - Basic | 134.4 | 135.3 | 135 |
Weighted-average common shares outstanding - Diluted | 135.4 | 137.3 | 136.6 |
Basic Earnings Per Share: | |||
Income from Continuing Operations (in dollars per share) | $ 3.79 | $ 1.15 | $ 1.20 |
Gain (loss) from discontinued operations, net of income taxes | (0.01) | ||
Net Income (in dollars per share) | 3.79 | 1.14 | 1.19 |
Diluted Earnings Per Share: | |||
Income from Continuing Operations (in dollars per share) | 3.76 | 1.13 | 1.19 |
Gain (loss) from discontinued operations, net of income taxes | (0.01) | ||
Net Income (in dollars per share) | $ 3.76 | $ 1.13 | $ 1.17 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 475 | $ 291 |
Marketable securities | 25 | 25 |
Receivables, less allowances of $23 and $22, respectively | 570 | 536 |
Inventories | 41 | 43 |
Prepaid expenses and other assets | 94 | 70 |
Deferred customer acquisition costs | 36 | 34 |
Total Current Assets | 1,242 | 998 |
Other Assets: | ||
Property and equipment, net | 237 | 210 |
Goodwill | 2,256 | 2,247 |
Intangible assets, primarily trade names, service marks and trademarks, net | 1,692 | 1,708 |
Restricted cash | 89 | 95 |
Notes receivable | 41 | 37 |
Long-term marketable securities | 22 | 19 |
Other assets | 68 | 71 |
Total Assets | 5,646 | 5,386 |
Current Liabilities: | ||
Accounts payable | 115 | 112 |
Accrued liabilities: | ||
Payroll and related expenses | 63 | 54 |
Self-insured claims and related expenses | 117 | 111 |
Accrued interest payable | 15 | 16 |
Other | 56 | 60 |
Deferred revenue | 663 | 629 |
Current portion of long-term debt | 144 | 59 |
Total Current Liabilities | 1,174 | 1,042 |
Long-Term Debt | 2,643 | 2,772 |
Other Long-Term Liabilities: | ||
Deferred taxes | 493 | 719 |
Other long-term obligations, primarily self-insured claims | 169 | 167 |
Total Other Long-Term Liabilities | 662 | 886 |
Commitments and Contingencies (Note 9) | ||
Shareholders' Equity: | ||
Common stock $0.01 par value (authorized 2,000,000,000 shares with 146,662,232 shares issued and 135,141,048 outstanding at December 31, 2017 and 144,339,338 shares issued and 135,030,283 outstanding at December 31, 2016) | 2 | 2 |
Additional paid-in capital | 2,321 | 2,274 |
Accumulated deficit | (895) | (1,405) |
Accumulated other comprehensive loss | 5 | (3) |
Less common stock held in treasury, at cost (11,521,184 shares at December 31, 2017 and 9,309,055 shares at December 31, 2016) | (267) | (182) |
Total Shareholders' Equity | 1,167 | 686 |
Total Liabilities and Shareholders' Equity | $ 5,646 | $ 5,386 |
Consolidated Statements of Fin4
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
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) | 146,662,232 | 144,339,338 |
Common stock, shares outstanding (in shares) | 135,141,048 | 135,030,283 |
Treasury stock (in shares) | 11,521,184 | 9,309,055 |
Consolidated Statements of Shar
Consolidated Statements of Shareholder's Equity - USD ($) $ in Millions | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Balance, shares at Dec. 31, 2014 | 142,000,000 | (8,000,000) | ||||
Balance, value at Dec. 31, 2014 | $ 2 | $ 2,207 | $ (1,720) | $ (8) | $ (122) | $ 359 |
Net income (loss) | 160 | 160 | ||||
Other comprehensive income (loss), net of tax | (13) | (13) | ||||
Total Comprehensive Income | 160 | (13) | $ 147 | |||
Issuance of common stock, shares | 80,711,763 | |||||
Issuance of common stock, value | 1 | $ 1 | ||||
Exercise of stock options, shares | 1,000,000 | |||||
Exercise of stock options, value | 15 | 15 | ||||
DSUs converted into common stock | (1) | 1 | ||||
Repurchase of common stock, value | $ (1) | (1) | ||||
Stock-based employee compensation | 10 | 10 | ||||
Excess tax benefits from stock-based compensation | 13 | 13 | ||||
Balance, shares at Dec. 31, 2015 | 143,000,000 | (8,000,000) | ||||
Balance at Dec. 31, 2015 | $ 2 | 2,245 | (1,560) | (21) | $ (122) | 545 |
Net income (loss) | 155 | 155 | ||||
Other comprehensive income (loss), net of tax | 18 | 18 | ||||
Total Comprehensive Income | 155 | 18 | 173 | |||
Issuance of common stock, value | 2 | 2 | ||||
Exercise of stock options, shares | 1,000,000 | |||||
Exercise of stock options, value | 10 | 10 | ||||
Repurchase of common stock, shares | (2,000,000) | |||||
Repurchase of common stock, value | $ (60) | (60) | ||||
Stock-based employee compensation | 16 | 16 | ||||
Balance, shares at Dec. 31, 2016 | 144,000,000 | (9,000,000) | ||||
Balance at Dec. 31, 2016 | $ 2 | 2,274 | (1,405) | (3) | $ (182) | 686 |
Net income (loss) | 510 | 510 | ||||
Other comprehensive income (loss), net of tax | 8 | 8 | ||||
Total Comprehensive Income | 510 | 8 | 518 | |||
Issuance of common stock, value | 2 | 2 | ||||
Exercise of stock options, shares | 2,000,000 | |||||
Exercise of stock options, value | 28 | 28 | ||||
Repurchase of common stock, shares | (2,000,000) | |||||
Repurchase of common stock, value | $ (85) | (85) | ||||
Stock-based employee compensation | 18 | 18 | ||||
Balance, shares at Dec. 31, 2017 | 147,000,000 | (12,000,000) | ||||
Balance at Dec. 31, 2017 | $ 2 | $ 2,321 | $ (895) | $ 5 | $ (267) | $ 1,167 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Cash Flows [Abstract] | |||
Cash and Cash Equivalents and Restricted Cash at Beginning of Period | $ 386 | $ 296 | $ 389 |
Cash Flows from Operating Activities from Continuing Operations: | |||
Net Income | 510 | 155 | 160 |
Adjustments to reconcile net income to net cash provided from operating activities: | |||
(Gain) loss from discontinued operations, net of income taxes | 1 | 2 | |
Equity in losses of joint venture | 1 | ||
Depreciation expense | 76 | 61 | 47 |
Amortization expense | 27 | 33 | 38 |
Amortization of debt issuance costs | 5 | 5 | 5 |
401(k) Plan corrective contribution | (3) | 2 | 23 |
Fumigation related matters | 4 | 93 | 9 |
Payments on fumigation related matters | (12) | (90) | (1) |
Insurance reserve adjustment | 23 | ||
Impairment of software and other related costs | 2 | 1 | |
Gain on sale of Merry Maids branches | (2) | (7) | |
Loss on extinguishment of debt | 6 | 32 | 58 |
Deferred income tax provision | (226) | 22 | 60 |
Stock-based compensation expense | 12 | 13 | 10 |
Gain on sales of marketable securities | (3) | (6) | |
Restructuring charges | 34 | 17 | 5 |
Cash payments related to restructuring charges | (19) | (10) | (7) |
Other | 9 | (3) | 8 |
Change in working capital, net of acquisitions: | |||
Receivables | (35) | (40) | (44) |
Inventories and other current assets | 4 | (6) | 5 |
Accounts payable | (1) | 7 | 18 |
Deferred revenue | 33 | 44 | 38 |
Accrued liabilities | 13 | (28) | 1 |
Accrued interest payable | (1) | 6 | (24) |
Current income taxes | (23) | (8) | 2 |
Net Cash Provided from Operating Activities from Continuing Operations | 413 | 325 | 398 |
Cash Flows from Investing Activities from Continuing Operations: | |||
Property additions | (77) | (56) | (40) |
Government grant fundings for property additions | 2 | ||
Sale of equipment and other assets | 4 | 8 | 14 |
Othe business acquisitions, net of cash acquired | (13) | (121) | (92) |
Purchases of available-for-sale securities | (46) | (6) | (6) |
Sales and maturities of available-for-sale securities | 48 | 49 | 32 |
Origination of notes receivable | (102) | (100) | (98) |
Collections on notes receivable | 100 | 97 | 92 |
Other investments | (1) | (3) | |
Net Cash Used for Investing Activities from Continuing Operations | (85) | (133) | (98) |
Cash Flows from Financing Activities from Continuing Operations: | |||
Borrowings of debt | 2,400 | 583 | |
Payments of debt | (97) | (2,417) | (923) |
Discount paid on issuance of debt | (4) | (2) | |
Debt issuance costs paid | (34) | (5) | |
Call premium paid on retirement of debt | (1) | (49) | |
Repurchase of common stock and RSU vesting | (85) | (60) | |
Issuance of common stock | 30 | 13 | 16 |
Net Cash Used for Financing Activities from Continuing Operations | (152) | (102) | (381) |
Cash Flows from Discontinued Operations: | |||
Cash used for operating activities | (11) | ||
Net Cash Used for Discontinued Operations | (11) | ||
Effect of Exchange Rate Changes on Cash | 1 | (2) | |
Cash Increase (Decrease) During the Period | 177 | 89 | (92) |
Cash and Cash Equivalents and Restricted Cash at End of Period | $ 563 | $ 386 | $ 296 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation ServiceMaster is a leading provider of essential residential and commercial services. The Company’s services include termite and pest control, home service plans , 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. During 2015, through secondary public offerings of the Company’s common stock, the selling stockholders completed the offering of an additional 80,711,763 shares of common stock. 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 spin - off of the American Home Shield business to Company stockhol ders, resulting in two publicly 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 filed with the SEC in January 201 8, 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 stockhol ders for U.S. federal income tax purposes. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Consolidation The consolidated financial statements of the Company include all of its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements requires management to make certain estimates and assumptions required under GAAP which may differ from actual results. The more significant areas requiring the use of management estimates relate to revenue recognition; the allowance for uncollectible receivables; accruals for self-insured retention limits related to medical, workers’ compensation, auto and general liability insurance claims; accruals for home warranties and termite damage claims; the possible outcome of outstanding litigation; accruals for income tax liabilities as well as deferred tax accounts; the deferral and amortization of customer acquisition costs; share based compensation; useful lives for depreciation and amortization expense; the valuation of marketable securities; and the valuation of tangible and intangible assets. In 2017, there were no changes in the significant areas that require estimates or in the underlying methodologies used in determining the amounts of these associated estimates. The allowance for receivables is developed based on several factors including overall customer credit quality, historical write-off experience and specific account analyses that project the ultimate collectability of the outstanding balances. As such, these factors may change over time causing the allowance level to vary. The Company carries insurance policies on insurable risks at levels which it believes to be appropriate, including workers’ compensation, auto 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. 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. The Company seeks to reduce the potential amount of loss arising from self-insured claims by insuring certain levels of risk. While insurance agreements are designed to limit the Company’s losses from large exposure and permit recovery of a portion of direct unpaid losses, insurance does not relieve the Company of its ultimate liability. Accordingly, the accruals for insured claims represent the Company’s total unpaid gross losses. Insurance recoverables, which are reported within Prepaid expenses and other assets and Other assets, relate to estimated insurance recoveries on the insured claims reserves. Accruals for home service plan 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. The Company records deferred income tax balances based on the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and income tax purposes. The Company records its deferred tax items based on the estimated value of the tax basis. The Company adjusts tax estimates when required to reflect changes based on factors such as changes in tax laws, relevant court decisions, results of tax authority reviews and statutes of limitations. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes potential interest and penalties related to its uncertain tax positions in income tax expense. Revenue Revenues from pest control services, as well as liquid and fumigation termite applications, are recognized as the services are provided. The Company eradicates termites through the use of non-baiting methods (e.g., fumigation or liquid treatments) and baiting systems. Termite services using baiting systems and termite inspection and protection contracts are frequently sold through annual contracts. Service costs for these contracts are expensed as incurred. The Company recognizes revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of the Company’s obligations under the contracts and are representative of the relative value provided to the customer (proportional performance method). The Company regularly reviews its estimates of direct costs for its termite bait contracts and termite inspection and protection contracts and adjusts the estimates when appropriate. Home service plan contracts are typically one year in duration. Home service plan claims costs are expensed as incurred. The Company recognizes revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of the Company’s obligations under the contracts and are representative of the relative value provided to the customer (proportional performance method). The Company regularly reviews its estimates of claims costs and adjusts the estimates when appropriate. The Company has franchise agreements in its Terminix, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec businesses. Franchise revenue (which in the aggregate represents approximately five percent of annual consolidated revenue from continuing operations) consists principally of continuing monthly fees based upon the franchisee’s customer-level revenue. Monthly fee revenue is recognized when the related customer-level revenue generating activity is performed by the franchisee and collectability is reasonably assured. Franchise revenue also includes initial fees resulting from the sale of a franchise or a license. These initial franchise or license fees are pre-established fixed amounts and are recognized as revenue when collectability is reasonably assured and all material services or conditions relating to the sale have been substantially performed. Total profits from the franchised operations were $ 87 million, $ 83 million, and $ 7 5 million for the years ended December 31, 2017, 2016 and 2015, respectively. The portion of total franchise fee income related to initial fees received from the sale of franchises was immaterial to the Company’s consolidated financial statements for all periods. Revenues are presented net of sales taxes collected and remitted to government taxing authorities on the consolidated statements of operations and comprehensive income. When a customer elects to pay for their home service plan 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 in proportion to the expected direct costs. Payments received for home service plan contracts are deferred and recognized in revenue over the life of the contract in proportion to the expected direct costs. The Company had $ 663 million and $ 629 million of deferred revenue as of December 31, 2017 and 2016, respectively. Deferred revenue consists primarily of payments received for annual contracts relating to home warranties, termite baiting, termite inspection and pest control services. Deferred Customer Acquisition Costs Customer acquisition costs, which are incremental and direct costs of obtaining a customer, are deferred and amortized over the life of the related contract in proportion to revenue recognized. These costs include sales commissions and direct selling costs which can be shown to have resulted in a successful sale. Deferred customer acquisition costs amounted to $ 36 million and $3 4 million as of December 31, 2017 and 2016, respectively. Advertising On an interim basis, certain advertising costs are deferred and recognized approximately in proportion to the revenue over the year and are not deferred beyond the calendar year-end. Certain other advertising costs are expensed when the advertising occurs. The cost of direct-response advertising at Terminix, consisting primarily of direct-mail and digital promotions, is capitalized and amortized over its expected period of future benefits. Deferred advertising costs are included in Prepaid expenses and other assets on the consolidated statements of financial position. Advertising expense for the years ended December 31, 2017, 2016 and 2015 was $ 122 million, $11 0 million and $1 13 million, respectively. Inventory Inventories are recorded at the lower of cost (primarily on a weighted-average cost basis) or market. The Company’s inventory primarily consists of finished goods to be used on the customers’ premises or sold to franchisees. Property and Equipment, Intangible Assets and Goodwill Property and equipment consist of the following: Estimated As of December 31, Useful Lives (In millions) 2017 2016 (Years) Land $ 5 $ 6 N/A Buildings and improvements 63 38 10 - 40 Technology and communications 255 230 3 - 7 Machinery, production equipment and vehicles 222 202 3 - 9 Office equipment, furniture and fixtures 19 20 5 - 7 564 496 Less accumulated depreciation (327) (286) Net property and equipment $ 237 $ 210 Depreciation of property and equipment, including depreciation of assets held under capital leases was $ 76 million, $ 61 million and $4 7 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company recorded impairment charges of $2 million and $1 million in the years ended December 31, 2017 and 2016, respectively, relating to its decisions to replace certain software. As of December 31, 2017 and 2016, goodwill was $2,256 million and $2,247 million, respectively, and intangible assets consisted primarily of indefinite-lived trade names in the amount of $1,608 million and other amortizing intangible assets in the amount of $84 million and $100 million, respectively. Fixed assets and intangible assets with finite lives are depreciated and amortized on a straight-line basis over their estimated useful lives. These lives are based on the Company’s previous experience for similar assets, potential market obsolescence and other industry and business data. As required by accounting standards for the impairment or disposal of long-lived assets, the Company’s fixed assets and finite-lived intangible assets are tested for recoverability whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment loss would be recognized equal to the difference between the carrying amount and the fair value of the asset. Changes in the estimated useful lives or in the asset values could cause the Company to adjust its book value or future expense accordingly. As required under accounting standards for goodwill and other intangibles, goodwill is not subject to amortization, and intangible assets with indefinite useful lives are not amortized until their useful lives are determined to no longer be indefinite. Goodwill and intangible assets that are not subject to amortization 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. Goodwill and indefinite-lived intangible assets, primarily the Company’s trade names, are assessed annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. The Company’s 2017, 2016, and 2015 annual impairment analyses, which were performed as of October 1 of each year, did no t result in any goodwill or trade name impairments to continuing operations. Restricted Cash Restricted cash consists of cash held in trust as collateral under the Company’s automobile, general liability and workers’ compensation insurance program. Restricted Net Assets There are third-party restrictions on the ability of certain of the Company’s subsidiaries to transfer funds to the Company. These restrictions are related to regulatory requirements at American Home Shield and to a subsidiary borrowing arrangement at SMAC. The payment of ordinary and extraordinary dividends by the Company’s home service plan and similar subsidiaries (through which the Company conducts its American Home Shield business) are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain such subsidiaries to maintain minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can pay to the Company. As of December 31, 2017, the total net assets subject to these third-party restrictions was $192 million. None of the Company’s subsidiaries are obligated to make funds available to the Company through the payment of dividends. Financial Instruments and Credit Risk The Company has entered into specific financial arrangements in the normal course of business to manage certain market risks, with a policy of matching positions and limiting the terms of contracts to relatively short durations. The effect of derivative financial instrument transactions could have a material impact on the Company’s financial statements. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. 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 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. Financial instruments, which potentially subject the Company to financial and credit risk, consist principally of investments and receivables. Investments consist primarily of publicly traded debt, certificates of deposit and common equity securities. 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 majority of the Company’s receivables and notes receivable have little concentration of credit risk due to the large number of customers with relatively small balances and their dispersion across geographical areas. The Company maintains an allowance for losses based upon the expected collectability of receivables. See Note 17 to the consolidated financial statements for information relating to the fair value of financial instruments. Stock-Based Compensation Stock-based compensation expense for stock options is estimated at the grant date based on an award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense over the requisite service period. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for future grants may differ materially from that recorded in the current period related to options granted to date. In addition, the Company estimates the expected forfeiture rate and only recognizes expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly. See Note 16 to the consolidated financial statements for more details. Income Taxes The Company and its subsidiaries file consolidated U.S. federal income tax returns. State and local returns are filed both on a separate company basis and on a combined unitary basis with the Company. Current and deferred income taxes are provided for on a separate company basis. The Company accounts for income taxes using an asset and liability approach for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be realized. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax return. The Company recognizes potential interest and penalties related to its uncertain tax positions in income tax expense. 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 dilutive effect of stock options, restricted stock units (“RSUs”) and performance shares are reflected in diluted earnings per share by applying the treasury stock method. See Note 18 to the consolidated financial statements for more details. Newly Issued Accounting Standards 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 should recognize 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. The Company will adopt the new revenue guidance effective January 1, 2018 using the modified retrospective transition method. The Company has completed its evaluation of the impact of ASU 2014-09. The most significant impact relates to the reclassification of approximately $390 million of accounts receivable to contract assets that will be presented net of approximately $390 million of contract liabilities currently recorded as deferred revenue. Currently, when a customer elects to pay for their home service plan 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, only the portion of the contract that is due in the current month will be recorded within accounts receivable. The adoption will not have a significant impact on revenue or net income. The amount of customer acquisition costs deferred and the amortization period for such costs will increase under ASU 2014-09, resulting in an increase in deferred customer acquisition costs recognized. Costs of obtaining a contract that would have been incurred regardless of whether the contract was obtained, such as direct mail and digital advertising, will be expensed as incurred. Initial fees from sales of franchises and licenses, currently recognized in the year of the sale, will now be recognized over the term of the franchise agreement. In addition, advertising expense, currently recorded net of contributions from franchisees to the Company’s advertising programs, will now be recognized with offsetting increases to both revenue and expense such that there will not be a significant, if any, impact on net income. We expect the adjustment to our opening balance of accumulated deficit to be approximately $ 20 million, net of tax, upon adoption. As necessary, we have implemented changes to our business processes, systems and controls to support recognition and disclosure of this ASU upon adoption on January 1, 2018. 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 Company is impacted as unrealized gains or losses on the Company’s available-for-sale securities are currently recognized in other comprehensive 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. 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. In August 2017, the FASB issued ASU 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 fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” allowing a reclassification from Accumulated Other Comprehensive Income (“AOCI”) to Retained Earnings for stranded tax effects resulting from the corporate income tax rate change in U.S. Tax Reform. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company currently expects to early adopt this guidance in the first quarter of 2018, and will reclassify approximately $4 million of unrealized losses from AOCI to Retained Earnings. |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Business Segment Reporting [Abstract] | |
Business Segment Reporting | Note 3. 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 service plans 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 corporate operations (substantially all of which costs are allocated to the Company’s reportable segments), which provide various technology, marketing, finance, legal and other support services to the reportable 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 Note 2 to the consolidated financial statements. 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 Corporate. Identifiable assets are those used in carrying out the operations of the business unit and include intangible assets directly related to its operations. 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: unallocated corporate expenses; (gain) loss from discontinued operations, net of income taxes; (benefit) provision for income taxes; loss on extinguishment of debt; 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 other non-operating expenses. The Company’s definition of Reportable Segment Adjusted EBITDA may not be calculated or comparable to similarly titled measures of other companies. The Company believes 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, restructuring initiatives, consulting agreements and equity-based, long-term incentive plans. During 2017, 2016 and 2015, no single customer exceeded 10 percent of global sales. Information for continuing operations for each reportable segment and Corporate is presented below: Year Ended December 31, (In millions) 2017 2016 2015 Revenue: Terminix $ 1,541 $ 1,524 $ 1,444 American Home Shield 1,157 1,020 917 Franchise Services Group 212 200 232 Reportable Segment Revenue $ 2,910 $ 2,744 $ 2,592 Corporate 2 2 2 Total Revenue $ 2,912 $ 2,746 $ 2,594 Reportable Segment Adjusted EBITDA: (1) Terminix $ 330 $ 371 $ 347 American Home Shield 260 220 205 Franchise Services Group 87 79 77 Reportable Segment Adjusted EBITDA $ 677 $ 670 $ 630 Identifiable Assets: Terminix $ 2,821 $ 2,820 $ 2,764 American Home Shield 1,441 1,312 1,137 Franchise Services Group 489 480 492 Reportable Segment Identifiable Assets $ 4,751 $ 4,612 $ 4,394 Corporate 895 774 705 Total Identifiable Assets $ 5,646 $ 5,386 $ 5,098 Depreciation & Amortization Expense: Terminix $ 58 $ 58 $ 59 American Home Shield 17 13 9 Franchise Services Group 7 7 8 Reportable Segment Depreciation & Amortization Expense $ 82 $ 78 $ 75 Corporate 21 16 9 Total Depreciation & Amortization Expense (2) $ 103 $ 94 $ 84 Capital Expenditures: Terminix $ 12 $ 11 $ 9 American Home Shield 9 10 7 Franchise Services Group 2 2 3 Reportable Segment Capital Expenditures $ 24 $ 22 $ 19 Corporate 53 33 21 Total Capital Expenditures $ 77 $ 56 $ 40 ________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: Year Ended December 31, (In millions) 2017 2016 2015 Net Income $ 510 $ 155 $ 160 Unallocated corporate expenses (1) 3 9 Depreciation and amortization expense 103 94 84 401(k) Plan corrective contribution (3) 2 23 Fumigation related matters 4 93 9 Insurance reserve adjustment — 23 — Non-cash stock-based compensation expense 12 13 10 Restructuring charges 34 17 5 Gain on sale of Merry Maids branches — (2) (7) Non-cash impairment of software and other related costs 2 1 — (Gain) loss from discontinued operations, net of income taxes — 1 2 Provision for income taxes (139) 85 107 Loss on extinguishment of debt 6 32 58 Interest expense 150 153 167 Other non-operating expenses — — 3 Reportable Segment Adjusted EBITDA $ 677 $ 670 $ 630 ___________________________________ (2) There are no adjustments necessary to reconcile total depreciation and amortization as presented in the business segment table to consolidated totals. Amortization of debt issue costs is not included in the business segment table. See Note 4 to the consolidated financial statements for information relating to segment goodwill. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 4. 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 continuing operations during the years ended December 31, 201 7 , 2016, and 2015 . There were no accumulated impairment losses recorded in continuing op erations as of December 31, 2017, 2016 and 2015 . 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, 2015 $ 1,567 $ 381 $ 182 $ 2,129 Acquisitions 34 90 — 124 Disposals — — (6) (6) Other (1) — — — — Balance as of December 31, 2016 $ 1,601 $ 471 $ 175 $ 2,247 Acquisitions 2 4 — 6 Disposals — — — — Other (1) 1 — — 2 Balance as of December 31, 2017 $ 1,605 $ 476 $ 176 $ 2,256 ___________________________________ (1) Reflects the impact of foreign exchange rates. The table below summarizes the other intangible asset balances for continuing operations: As of December 31, 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 (555) 34 594 (538) 56 Franchise agreements 88 (70) 18 88 (67) 21 Other 81 (49) 32 65 (42) 23 Total $ 2,366 $ (674) $ 1,692 $ 2,356 $ (647) $ 1,708 ___________________________________ (1) Not subject to amortization. Amortization expense of $27 million , $ 33 million and $ 38 million was recorded in t he years ended December 31, 2017, 2016 and 2015 , respectively. For the existing intangible assets, the Company anticipates amortization expense of $ 21 million , $16 million , $12 million , $9 million and $6 million in 2018, 2019, 2020 , 2021 and 2022 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 5. Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act, the tax reform bill (the "Act" or “U.S. Tax Reform”) was signed into law. The Act includes numerous changes in existing tax law, including a permanent reduction in the federal co rporate income tax rate from 35 percent to 21 percent , effective January 1, 2018. The adjustments to deferred tax assets and liabilities and the liability related to the transition tax are provisional amounts estimated based on information available as of December 31, 2017. As described below, we have made reasonable estimates. These amounts are subject to change as we obtain information necessary to complete the calculations. We will recognize any changes to the provisional amounts within (Benefit) Provision for Income Taxes on the Consolidated Statements of Operations and Comprehensive Income as we refine our estimates of our deferred tax assets and liabilities and our interpretations of the application of the Act. We expect to complete our analysis of the provisional items during the second half of 2018. The effects of other provisions of the Act are not expected to have a material impact on our consolidated financial statements. Corporate Tax Rate Change The Company is subject to the provisions of the Financial Accounting Standards Board ASC 740-10, Income Taxes, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. The Company remeasured deferred tax assets and liabilities based on the new U.S. tax rates at which they are expected to reverse in the future, which is generally 21 percent . The provisional amount recorded relating to the remeasurement of these deferred tax balances was a net reduction of total deferred tax liabilities of $271 million. We are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect these deferred tax balances or potentially give rise to changes in existing deferred tax amounts. Deferred Tax Analysis The Act changes the treatment of certain income and expense items for which the Company records deferred tax assets and liabilities. The Company has assessed its valuation of deferred tax assets and liabilities at December 31, 2017, as well as valuation allowance analyses affected by various aspects of the Act. The Company has recorded no provisional amounts related to valuation allowances and revaluation of deferred tax assets affected by various aspects of the Act. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the valuation of these balances. Transition Tax The Act imposes a Transition Tax on undistributed and previously untaxed post-1986 foreign earnings and profits, as determined in accordance with U.S. tax principles, of certain foreign owned corporations owned by U.S. stockhol ders. The Company recorded a provisional amount for the one-time transition tax liability for the deemed distribution of earnings from our foreign subsidiaries resulting in an increase in income tax expense of less than $1 million . The Company recorded a provisional transition tax amount because certain information related to the computations required to compute the transition tax, including the computation of previously undistributed earnings, is not readily available, and there is limited information from federal and state taxing authorities regarding the application and interpretation of the recently enacted legislation. Accordingly, we are still analyzing certain aspects of the transition tax calculations which could potentially affect the amount recorded. GILTI Because of the complexity of the new global intangible low-taxed income (“GILTI”) tax rules, we are continuing to evaluate this provision of the Act and the application of ASC 740. Under U.S. GAAP, we are allowed to make an accounting policy choice. Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. We are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments related to potential GILTI tax in our financial statements and have not made a policy decision regarding whether to record deferred taxes on GILTI. As of December 31, 2017, 2016 and 2015 , the Company has $14 million , $13 million and $16 million , respectively, of tax benefits primarily reflected in state tax returns that have not been recognized for financial reporting purposes (“unrecognized tax benefits”). At December 31, 2017 and 2016 , $13 million and $9 million , respectively, of unrecognized tax benefits would impact the effective tax rate if recognized. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: Year Ended December 31, (In millions) 2017 2016 2015 Gross unrecognized tax benefits at beginning of period $ 13 $ 16 $ 13 Increases in tax positions for prior years — — — Decrease in tax positions for prior years — (5) — Increases in tax positions for current year 3 3 3 Lapse in statute of limitations (1) (1) (1) Gross unrecognized tax benefits at end of period $ 14 $ 13 $ 16 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. The Company files consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities. For U.S. federal income tax purposes, the Company participates in the IRS’s Compliance Assurance Process whereby its U.S. federal income tax returns are reviewed by the IRS both prior to and after their filing. The U.S. federal income tax returns filed by the Company through the year ended December 31, 2014 have been audited by the IRS. The IRS commenced examinations of the Company’s U.S. federal income tax returns for 2015 in the first quarter of 2015. Three state tax authorities are in the process of auditing state income tax returns of various subsidiaries. The Company is no longer subject to state and local or foreign income tax examinations by tax authorities for years before 2008. The Company’s policy is to recognize potential interest and penalties related to its tax positions within the tax provision. Total interest and penalties included in the consolidated statements of income are imm aterial. As of December 31, 2017 and 2016 , the Company had accrued for the payment of interest and penalties of approximately $2 million . The components of income from continuing operations before income taxes are as follows: Year Ended December 31, (In millions) 2017 2016 2015 U.S. $ 365 $ 238 $ 266 Foreign 5 3 4 Income from Continuing Operations before Income Taxes $ 370 $ 241 $ 270 The reconciliation of income tax computed at the U.S. federal statutory tax rate to the Company’s effective income tax rate for continuing operations is as follows: Year Ended December 31, 2017 2016 2015 Tax at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of U.S. federal benefit 3.5 4.7 3.2 Tax credits (0.6) (0.9) (0.8) Other permanent items 1.3 1.5 2.4 U.S. Tax Reform rate change (1) (73.3) — — Remeasurement of prior year tax positions — (1.9) — Excess tax benefits from stock-based compensation (4.0) (3.0) — Other, including foreign rate differences and reserves 0.5 — — Effective rate (37.6) % 35.4 % 39.8 % (1) Deferred income taxes in the Company’s balance sheet at December 31, 2017, were remeasured for the change in the U.S. income tax rate through income tax expense (see discussion on U.S. Tax Reform). This one-time beneficial rate change adjustment for $271 million includes $11 million in state income tax expense. The effective tax rate for discontinued operations for t he years ended December 31, 2017, 2016 and 2015 was a tax benefit of 38.3 percent, 37.7 percent and 37.7 percent, respectively . Income tax expense from continuing operations is as follows: Year Ended December 31, (In millions ) 2017 2016 2015 Current: U.S. federal $ 71 $ 50 $ 33 Foreign 3 2 2 State and local 13 12 12 87 64 47 Deferred: U.S. federal (235) 17 59 Foreign 2 (2) — State and local 7 6 1 (226) 22 60 (Benefit) provision for income taxes $ (139) $ 85 $ 107 Deferred income tax expense results from timing differences in the recognition of income and expense for income tax and financial reporting purposes. Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. The deferred tax asset primarily reflects the impact of future tax deductions related to the Company’s accruals and certain net operating loss carryforwards. The deferred tax liability is primarily attributable to the basis differences related to intangible assets. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The valuation allowance for deferred ta x assets as of December 31, 2017 and 2016 was $11 million and $7 million, respectively. The net change in the total valuation allowance for the year ended December 31, 2017 was an increase of $4 million . Significant components of the Company’s deferred tax balances are as follows: As of December 31, (In millions) 2017 2016 Long-term deferred tax assets (liabilities): Intangible assets (1) $ (483) $ (727) Property and equipment (25) (34) Prepaid expenses and deferred customer acquisition costs (12) (18) Receivables allowances 9 13 Self-insured claims and related expenses 7 11 Accrued liabilities 14 28 Other long-term obligations (12) (19) Net operating loss and tax credit carryforwards 19 36 Less valuation allowance (11) (7) Net Long-term deferred tax liability $ (493) $ (717) ___________________________________ (1) The deferred tax liability relates primarily to the difference in the tax versus book basis of intangible assets. The Company had $507 million and $759 million of deferred tax liability included in this net deferred tax l iability as of December 31, 2017 and 2016 , respectively, that will not actually be paid unless certain business units of the Company are sold. As of December 31, 2017 , the Company had deferred tax assets, net of valuation allowances, of $ 8 million for federal and state net operating loss and capital loss carryforwards, which expire at various dates up to 203 7 . The Company also had deferred tax assets, net of valuation allowances, of less than $1 million for federal and state credit carryforwards which ex pire at various dates up to 2027 . The federal and state net operating loss carryforwards in the filed income tax returns included unrecognized tax benefits taken in prior years. The net operating losses for which a deferred tax asset is recognized for financial statement purposes in accordance with ASC 740 are presented net of these unrecognized tax benefits. We previously considered the earnings in our non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. Prior to the Transition Tax included in t he Act discussed herein, we had an excess amount for financial reporting over the tax basis in our foreign subsidiaries, including cumulative undistributed earnings of the Company’s foreign subsidiar ies of $60 million as of December 31, 2016 . While the Transition Tax resulted in all remaining undistributed foreign earnings being subject to U.S. tax, an actual repatriation from our non-U.S. subsidiaries could still be subject to additional foreign withholding taxes and U.S. state taxes. Included in our December 31, 2017 U.S. income tax provision is less than $1 million in Transition Tax. The amount of cash associated with indefinitely reinvested foreign earnings was approximately $29 million and $23 million as of December 31 , 2017 and 2016, respectively. We are currently analyzing our global working capital and cash requirements and the potential tax liabilities attributable to repatriation, but have yet to determine whether we plan to change our prior asse rtion and repatriate earnings. Accordingly, we have not recorded any deferred taxes attributable to our inves tment in foreign subsidiaries. We will record the tax effects of any change in our prior assertion in the period that we complete our analysis and are able to make a reasonable estimate, and disclose any unrecognized deferred tax liability for temporary differences related to our foreign investments, if practicable. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | Note 6. 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 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. 2017 During the year ended December 31, 2017, the Company completed four pest control acquisitions and purchased a ServiceMaster Clean master distributor within the Franchise Services Group. The total purchase price for these acquisitions was $16 million . The Company recorded goodwill of $2 million and other intangibles, primarily reacquired rights, of $13 million related to those acquisitions . The weighted-average useful life for each class of definite lived intangible asset associated with these acquisitions was approximately three years. Prior Years On June 27, 2016, the Company acquired OneGuard for a total purchase price of $61 million . The Company recorded goodwill of $57 million and other intangibles, primarily customer relationships, of $15 million related to this acquisition. On November 30, 2016, the Company acquired 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 year ended December 31, 201 7 , 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 . The weighted - average useful life for each class of definite lived intangible asset recorded for both the OneGuard and Landmark acquisitions was five years. During the year ended December 31, 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, primarily customer relationships, of $6 million related to these acquisitions. The weighted-average useful life for each class of definite lived intangible asset recorded for these acquisitions was five years . During the year ended December 31, 2015, the Company completed several pest control and termite acquisitions. The total purchase price for these acquisitions was $125 million . The Company recorded goodwill of $ 74 million and other intangibles, primarily customer relationships, of $ 46 million related to these acquisitions. The average useful life for each class of definite lived intangible asset recorded for these acquisitions ranged from one year to eight years. Supplemental cash flow information regarding the Company’s acquisitions is as follows: Year Ended December 31, (In millions) 2017 2016 2015 Assets acquired $ 17 $ 184 $ 126 Liabilities assumed (1) (40) — Net assets acquired $ 16 $ 144 $ 125 Net cash paid $ 13 $ 121 $ 92 Seller financed debt 3 23 33 Purchase price $ 16 $ 144 $ 125 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 7. Discontinued Operations TruGreen Spin-off On January 14, 2014, the Company completed the TruGreen Spin-off resulting in the spin-off of the assets and certain liabilities of the TruGreen Business through a tax-free, pro rata dividend to the Company’s stockholders. As a result of the completion of the TruGreen Spin-off, New TruGreen operates the TruGreen Business as a private independent company. In connection with the TruGreen Spin-off, the Company entered into a transition services agreement with New TruGreen pursuant to which the Company provides New 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, 2017, except certain information technology services which the Company has entered into an agreement with New TruGreen to extend through June 30, 2018. New TruGreen may terminate the extended transition services agreement for convenience upon 90 days written notice. Under this transition services agreement, in the years ended December 31, 2017, 2016 and 201 5 , the Company recorded $2 million, $ 9 million and $25 million, respectively, of fees from New TruGreen, which is included as a reduction, net of costs incurred, in Selling and administrative expenses in the consolidated statement of operations and comprehensive income. As of December 31, 201 7 , all amounts owed by New TruGreen under this agreement have been paid. Financial Information for Discontinued Operations Gain (l oss ) from discontinued operations, net of income taxes, for all periods presented includes the operating results of the previously sold businesses. The operating results of discontinued operations are as follows: Year Ended December 31, (In millions) 2017 2016 2015 Revenue $ — $ — $ — Cost of services rendered and products sold — — — Selling and administrative expenses $ (1) $ 1 $ 3 Income (loss) before income taxes 1 (1) (3) Benefit for income taxes — — (1) Gain (loss) from discontinued operations, net of income taxes $ — $ (1) $ (2) |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 8. Restructuring Charges The Company incurred restructuring charges of $ 34 million ( $24 million , net of tax), $ 17 million ( $ 11 million , net of tax) and $ 5 million ( $ 3 million , net of tax) for t he years ended December 31, 2017, 2016 and 2015 , respectively. Restructuring charges are comprised of the following: Year Ended December 31, (In millions) 2017 2016 2015 Terminix (1) $ 2 $ 7 $ 3 American Home Shield (2) — 2 — Franchise Services Group (3) 1 — 1 Corporate (4) 2 5 1 Leadership transition (5) 11 American Home Shield spin-off (6) 13 — — Global Service Center relocation (7) 5 3 — Total restructuring charges $ 34 $ 17 $ 5 ___________________________________ (1) For the years ended December 31, 2017, 2016 and 2015, these charges include $2 million, $4 million and $3 million, respectively, of lease termination and severance costs driven by Terminix’s branch optimization program. For the year ended December 31, 2016, these charges include $1 million of se verance 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. Of this amount, $1 million was unpaid and accrued as of December 31, 2017. (2) Represents lease termination and other costs driven by the decision to consolidate the stand-alone operations of HSA acquired in February 2014 with those of American Home Shield. Less than $1 million was unpaid and accrued as of Decemb er 31, 2017. (3) Represents severance and other costs related to the reorganization of the Franchise Services Group. Less than $1 million was unpaid and accrued as of Decemb er 31, 2017. (4) We have historically made changes on an ongoing basis to enhance capabilities and reduce costs in our corporate functions that provide company-wide administrative services for our operations. In 2017, we began taking actions to enhance capabilities and align our corporate functions with those required to support our strategic needs as two stand-alone companies in anticipation of the American Home Shield spin-off. For the years ended December 31, 201 7, 2016, and 2015, these charges include severance and other costs of $2 million, $ 2 million, and $ 1 million, respectively. For the year ended December 31, 2016, these charges include professional fees of $2 million and accelerated depreciation of $2 million related to the early termination of a long-term human resources outsourcing agreement. Of this amount, $1 million was unpaid and accrued as of December 31, 2017. (5) For the year ended December 31, 2017, these charges include $5 million of severance costs and $5 million of stock-based compensation expense as part of the severance agreements with the former CEO and CFO. Of this amount, $4 million was unpaid and accrued as of December 31, 2017. (6) Represents professional fees and other costs of $13 million related to the proposed spin-off of the American Home Shield business to Company stockholders . Of this amount, $1 million was unpaid and accrued as of December 31, 2017. (7) For the year ended December 31, 2017, these charges include accelerated d epreciation of $2 million, redundant rent expense of $2 million and a $1 million loss recorded on the sale of an asset related to the relocation of the Company’s corporate headquarters, which we refer to as our Global Service Center. For the year ended December 31, 2016 , r epresents impairment charges of $1 million and professional fees and other costs of $1 million related to the relocation of the Company’s Global Service Center. The pretax charges discussed above are reported in Restructuring charges in the consolidated statements of operations and comprehensive income . We expect to incur $35 million to $45 million of additional spin-off costs in restructuring charges in 2018. We expect to incur approximately $8 million of additional Global Service Center relocation charges in 2018, principally comprised of lease exit costs. A reconciliation of the beginning and ending balances of accrued restructuring charges, which are included in Accrued liabilities—Other on the consolidated statements of financial position, is presented as follows: Accrued Restructuring (In millions) Charges Balance as of December 31, 2015 $ 1 Costs incurred 17 Costs paid or otherwise settled (16) Balance as of December 31, 2016 3 Costs incurred 34 Costs paid or otherwise settled (29) Balance as of December 31, 2017 $ 8 The Company expects substantially all of its accrued restructuring charges to be paid within one year. Certain restructuring comparative figures in the Consolidated Statements of Cash Flows have been reclassified to conform to the current year presentation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 9. Commitments and Contingencies The Company leases certain property and equipment under various operating lease arrangements. Most of the property leases provide that the Company pay taxes, insurance and maintenance applicable to the leased premises. As leases for existing locations expire, the Company expects to renew the leases or substitute another location and lease. Rental expense for t he years ended December 31, 2017, 2016 and 2015 was $ 32 million , $ 29 million and $ 2 9 million , respectively. Based on leases in place as of December 31, 2017 , future long-term non-cancelable operating lease payments will be approximately $ 18 million in 2018, $ 14 million in 2019, $ 16 million in 2020, $ 1 3 million in 2021, $1 1 million in 2022 and $73 million in 2023, and thereafter. In the normal course of business, the Company periodically enters into agreements that incorporate indemnification provisions. While the maximum amount to which the Company may be exposed under such agreements cannot be estimated, the Company does not expect these guarantees and indemnifications to have a material effect on the Company’s business, financial condition, results of operations or cash flows. 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 consolidated statements of financial position, net of insurance recoverables, which are included in Prepaid expenses and other assets and Other assets on the consolidated statements of financial position, is presented as follows: Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2015 $ 114 Provision for self-insured claims (1) 58 Cash payments (51) Balance as of December 31, 2016 120 Provision for self-insured claims 36 Cash payments (42) Balance as of December 31, 2017 $ 115 ___________________________________ (1) Includes a charge of $23 million recorded in the year ended December 31, 2016 for an adjustment to the Company’s accrued self-insured claims related to automobile, general liability and workers’ compensation risks. The adjustment is 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 relates to coverage periods of 2015 and prior. Accruals for home service plan 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 addition to the matters 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 . Fumigation Related Matters On January 20, 2017, TMX USVI and TMX LP, each an indirect, wholly-owned subsidiary of the Company, entered into a revised Plea Agreement in connection with the investigation initiated by 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 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. At a hearing on November 20, 2017 , TMX USVI and TMX LP were sentenced for pleading guilty to four misdemeanor charges of violations of the Federal Insecticide, Fungicide, and Rodenticide Act related to improper applications of methyl bromide. Under the terms of sentencing handed down, TMX USVI and TMX LP each paid fines or costs of approximately $5 million (total of approximately $10 million). The court required TMX USVI and TMX LP to provide for training certification courses with respect to pesticide application and safety in the U.S. Virgin Islands over the next five years. As a result of the sentencing, we have recorded an additional $1 million in charges in the fourth quarter of 2017. The Company had previously recorded within Fumigation related matters in the consolidated statement of operations and comprehensive income total charges of $10 million in connection with the aforementioned criminal matter as of December 31, 2016. 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. In addition to the matters discussed above, in the ordinary course of conducting business activities, we and our 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. We have 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 our settlements are not finally approved, we could have additional or different exposure, which could be material. Subject to the paragraphs above, we do not expect any of these proceedings to have a material effect on our reputation, business, financial position, results of operations or cash flows; however, we can give no assurance that the results of any such proceedings will not materially affect our reputation, business, financial position, results of operations and cash flows. See Note 4 to the consolidated financial statement for more details. On September 15, 2015, a lawsuit was filed in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, styled Carl Robert McCaughey, et al. v. Terminix International Company Limited Partnership, Sunland Pest Control Services, Inc., et al . The lawsuit alleged that fumigation of a Florida family’s residence by Sunland, a subcontractor of TMX LP, resulted in serious injuries to one of the family’s children. Under the terms of the court approved settlement agreement, in addition to the amounts that the Company’s insurance carriers agreed to pay to the family pursuant to our general liability insurance policies, the Company paid $3 million, an amount equal to the Company’s insurance deductible under its general liability insurance policies. In the year ended December 31, 2016, the Company recorded within Cost of services rendered and products sold in the consolidated statement of operations and comprehensive income a charge of $3 million in connection with civil claims related to the Florida fumigation matter . |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 10 . Employee Benefit Plans Discretionary contributions to the Company’s 401(k) plan were made in the amount of $15 million , $15 million and $14 million for t he years ended December 31, 2017, 2016 and 2015 , respectively. 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. On October 3, 2017, the Company and the IRS agreed on the terms of the VCP submitted by the Company. The VCP required the Company to contribute approximately $22 million to 401(k) accounts for impacted current and former employees. The contribution occurred on November 13, 2017. The Company recorded within Selling and administrative expenses in the consolidated statement of operations and comprehensive income charges of $(3) million, $2 million and $23 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 11 . Long-Term Debt Long-term debt is summarized in the following table: As of December 31, (In millions) 2017 2016 Senior secured term loan facility maturing in 2023 (1) $ 1,615 $ 1,628 5.125% notes maturing in 2024 (2) 739 737 Revolving credit facility maturing in 2021 — — 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) 90 87 Other 54 71 Less current portion (144) (59) Total long-term debt $ 2,643 $ 2,772 ___________________________________ (1) As of December 31, 2017 and 2016, presented net of $16 million and $ 18 million, respectively, in unamortized debt issuance costs and $3 million and $4 million, respectively, in unamortized original issue discount paid as described below under “––Term Loan Facility.” (2) As of December 31, 2017 and 2016, presented net of $11 million and $13 million, respectively, in unamortized debt issuance costs as described below under “––2024 Notes.” (3) As of December 31, 201 7 and 201 6 , collectively presented net of $37 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 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 % . Term Loan Facility On April 1, 2015, the Company entered into a first amendment to the Old Term Loan Facility, which provides for incremental term loans in an aggregate principal amount of $175 million . On April 1, 2015, the Company used the net proceeds from the incremental term loans, together with cash on hand, to redeem the remaining outstanding $200 million in aggregate principal amount of the 8% 2020 Notes at a redemption price of 106.0% of the principal amount. In addition, $2 million of available cash was used to pay debt issuance costs in connection with the incremental term loans. On August 17, 2015, the Company entered into a second amendment to the Old Term Loan Facility, which provides for incremental term loans in an aggregate principal amount of $400 million . On August 17, 2015, the Company used the net proceeds from incremental term loans, together with cash on hand, to redeem the remaining outstanding $488 million in aggregate principal amount of the 7% 2020 Notes at a redemption price of 105.25% of the principal amount. In addition, $5 million of available cash was used to pay debt issuance costs of $3 million and original issue discount of $2 million in connection with the incremental term loans. On November 8, 2016, the Company entered into a $1,650 million Term Loan Facility maturing November 8, 2023. Borrowings under the Term Loan Facility, together with the 2024 Notes, were used to repay the remaining outstanding $2,356 million in aggregate principal amount of the Old Term Loan Facility. In connection with the repayment, the Company recorded a loss on extinguishment of debt of $32 million in the year ended December 31, 2016, which includes the write-off of $14 million of original issue discount and $18 million of debt issuance costs. In addition, $38 million of proceeds was used to pay debt issuance costs of $34 million and original issue discount of $4 million in connection with the Term Loan Facility, the Revolving Credit Facility and the 2024 Notes. The interest rates applicable to the term loans under the Term Loan Facility are based on a fluctuating rate of interest measured by reference to either, at The Company’s option, (i) an adjusted LIBOR (subject to a floor of zero percent) plus a margin of 2.50 % per annum or (ii) an alternate base rate (subject to a floor of 1.00% ) plus a margin of 1.50 % per annum. Voluntary prepayments of borrowings under the Term Loan Facility are permitted at any time, in minimum principal amounts, without premium or penalty. The Term Loan Facility and the guarantees thereof are secured by substantially all of the tangible and intangible assets of the Company and certain of its domestic subsidiaries, excluding certain subsidiaries subject to regulatory requirements in various states, including pledges of all the capital stock of all direct domestic subsidiaries (other than foreign subsidiary holding companies, which are deemed to be foreign subsidiaries) owned by the Company or any Guarantor and of up to 65% of the capital stock of each direct foreign subsidiary owned by the Company or any Guarantor. The Term Loan Facility security interests are subject to certain exceptions, including, but not limited to, exceptions for (i) equity interests, (ii) indebtedness or other obligations of subsidiaries, (iii) real estate or (iv) any other assets, if the granting of a security interest therein would require that any notes issued under the Company’s indenture dated as of August 15, 1997 be secured. The Term Loan Facility is secured on a pari passu basis with the security interests created in the same collateral securing the Revolving Credit Facility. The Company has historically entered into interest rate swap agreements. Under the terms of these agreements, the Company pays a fixed rate of interest on the stated notional amount and receives a floating rate of interest (based on one month LIBOR) on the stated notional amount. Therefore, during the term of the swap agreements, the effective interest rate on the portion of the term loans equal to the stated notional amount is fixed at the stated rate in the interest rate swap agreements plus the incremental borrowing margin. On November 8, 2016, in connection with the repayment of the Old Term Loan Facility, the Company terminated the then-existing interest rate swap agreements and paid $10 million in connection with the terminations. The fair value of the terminated agreements of $10 million is recorded within accumulated other comprehensive income (loss) on the consolidated statements of financial position and will be amortized into interest expense over the original term of the agreements. On November 7, 2016 the Company entered into a seven -year interest rate swap agreement effective November 8, 2016 . The notional amount of the agreement was $650 million . Under the terms of the agreement, the Company will pay a fixed rate of interest of 1.493 % on the $650 million notional amount, and the Company will receive a floating rate of interest (based on one-month LIBOR, subject to a floor of zero percent) on the notional amount. Therefore, during the term on the agreement, the effective interest rate on $650 million of the Term Loan Facility is fixed at a rate of 1.493% , plus the incremental borrowing margin of 2.50 % . The changes in interest rate swap agreements, as well as the cumulative interest rate swaps outstanding, are as follows: Weighted Notional Average Fixed (In millions) Amount Rate (1) Interest rate swap agreements in effect as of December 31, 2015 $ 700 1.867 % Terminated (700) Entered into effect 650 Interest rate swap agreements in effect as of December 31, 2016 650 1.493 % Terminated — Entered into effect — Interest rate swap agreements in effect as of December 31, 2017 $ 650 1.493 % ___________________________________ (1) Before the application of the applicable borrowing margin. In accordance with accounting standards for derivative instruments and hedging activities, and as further described in Note 1 7 to the consolidated financial statements, these interest rate swap agreements are classified as cash flow hedges, and, as such, the hedging instruments are recorded on the consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of the changes in fair value attributable to the hedged risks recorded in accumulated other comprehensive income (loss). Revolving Credit Facility On November 8, 2016, in connection with the Company’s refinancing, the Company terminated the Old Revolving Credit Facility and entered into a $300 million Revolving Credit Facility. The maturity date for the Revolving Credit Facility is November 8, 2021. The Revolving Credit Facility provides for senior secured revolving loans and stand ‑by and other letters of credit. The Revolving Credit Facility limits outstanding letters of credit to $225 million . As of December 31, 201 7 , there were $33 million of letters of credit outstanding and $267 million of available borrowing capacity under the Revolving Credit Facility. The Revolving Credit Facility and the guarantees thereof are secured by the same collateral securing the Term Loan Facility, on a pari passu basis with the security interests created in the same collateral securing the Term Loan Facility. The interest rates applicable to the loans under the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (i) an adjusted LIBOR plus a margin of 2.50 % per annum or (ii) an alternate base rate plus a margin of 1.50 % per annum. 2024 Notes On November 8, 2016, the Company sold $750 million of 2024 Notes. The 2024 Notes will mature on November 15, 2024 and bear interest at a rate of 5.125 % per annum. The 2024 Notes are jointly and severally guaranteed on a senior unsecured basis by the Company’s domestic subsidiaries that guarantee its indebtedness under the Credit Facilities (the “Guarantors”). The 2024 Notes are not guaranteed by any of the Company’s non ‑U.S. subsidiaries, any subsidiaries subject to regulation as an insurance, home service plan or similar company, or certain other subsidiaries (the “Non-Guarantors”). The 2024 Notes are our unsecured obligations and rank equally in right of payment with all of our other existing and future senior unsecured indebtedness. The subsidiary guarantees are senior unsecured obligations of the Guarantors and rank equally in right of payment with all of the existing and future senior unsecured indebtedness of our Non-Guarantors. The 2024 Notes are effectively junior to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. 2020 Notes On February 17, 2015, the Company redeemed $190 million in aggregate principal amount of its 8% 2020 Notes at a redemption price of 106.0% of the principal amount using available cash. In connection with the partial redemption, the Company recorded a loss on extinguishment of debt of $13 million in the year ended December 31, 2015, which includes a pre-payment premium of $11 million and the write-off of $2 million of debt issuance costs. On April 1, 2015, the Company used the net proceeds from additional borrowings under the Old Term Loan Facility, together with cash on hand, to redeem the remaining outstanding $200 million in aggregate principal amount of its 8% 2020 Notes at a redemption price of 106.0% of the principal amount. In connection with the redemption, the Company recorded a loss on extinguishment of debt of $14 million in the year ended December 31, 2015, which includes a pre-payment premium of $12 million and the write-off of $2 million of debt issuance costs. On August 17, 2015, the Company used the net proceeds from additional borrowings under the Old Term Loan Facility , together with cash on hand, to redeem the remaining outstanding $488 million in aggregate principal amount of the 7% 2020 Notes at a redemption price of 105.25% of the principal amount. In connection with the redemption, the Company recorded a loss on extinguishment of debt of $31 million in the year ended December 31, 2015, which includes a pre ‑payment premium of $25 million and the write ‑off of $6 million of debt issuance costs. 2038 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 104.625% 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 $6 million in the year ended December 31, 2017. Other The agreements governing the Term Loan Facility and the Revolving Credit Facility contain certain covenants that, among other things, limit or restrict the incurrence of additional indebtedness, liens, sales of assets, certain payments (including dividends) and transactions with affiliates, subject to certain exceptions. The Company was in compliance with the covenants under these agreements at December 31, 201 7 . As of December 31, 2017 , future scheduled long ‑term debt payments are $ 144 million , $65 million , $45 million , $31 million and $ 20 million for the years ended December 31, 201 8 , 201 9 , 20 20 , 202 1 and 202 2 , respectively. Certain of the Company’s assets, including vehicles, equipment and a customer care center facility, are leased under capital leases with $91 million in remaining lease obligations as of December 31, 201 7 . The long ‑term debt payments above include future capital lease payments of approximately $29 million in 201 8 , $24 million in 201 9 , $21 million in 20 20 , $13 million in 202 1 , and $3 million in 202 2 . |
Cash and Marketable Securities
Cash and Marketable Securities | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Marketable Securities [Abstract] | |
Cash and Marketable Securities | Note 12 . 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 consolidated statements of financial position. As of December 31, 201 7 and 2016 , the Company’s marketable securities 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, December 31, 2017: Debt securities $ 29 $ — $ — $ 29 Equity securities 15 3 — 18 Total securities $ 44 $ 3 $ — $ 47 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 December 31, 2017 and 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, maturities, 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 t he years ended December 31, 2017, 2016, and 2015. Year Ended December 31, (In millions) 2017 2016 2015 Proceeds from sale of securities $ 12 $ 42 $ 22 Maturities of securities 36 7 11 Gross realized gains, pre-tax — 4 7 Gross realized gains, net of tax — 2 4 Gross realized losses, pre-tax — — — Gross realized losses, net of tax — — — |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | Note 13 . Comprehensive Income (Loss) Comprehensive income (loss), which primarily includes net income (loss), unrealized gain on marketable securities, unrealized gain (loss) on derivative instruments and the effect of foreign currency translation loss is disclosed in the consolidated statements of operations and comprehensive income and the consolidated statements of shareholders’ equity. The following tables summarize the activity in accumulated other comprehensive income (loss), net of the related tax effects. Unrealized Gains on Foreign Unrealized Available Currency (Losses) Gains on -for-Sale Translation (In millions) Derivatives Securities (Loss) Gain Total Balance as of December 31, 2015 $ (7) $ 2 $ (15) $ (21) Other comprehensive income before reclassifications: Pre-tax amount 20 1 — 21 Tax provision 8 1 — 9 After-tax amount 13 — — 13 Amounts reclassified from accumulated other comprehensive income (loss) (1) 7 (2) — 5 Net current period other comprehensive income (loss) 20 (2) — 18 Balance as of December 31, 2016 $ 12 $ 1 $ (15) $ (3) Other comprehensive income before reclassifications: Pre-tax amount — 2 3 5 Tax provision — 1 — 1 After-tax amount — 1 3 4 Amounts reclassified from accumulated other comprehensive income (1) 4 — — 4 Net current period other comprehensive income 4 1 3 8 Balance as of December 31, 2017 $ 16 $ 2 $ (12) $ 5 ___________________________________ (1) Amounts are net of tax. See reclassifications out of accumul ated other comprehensive income below for further details. Reclassifications out of accumulated other comprehensive income included the following components for the periods indicated. Amounts Reclassified from Accumulated Other Comprehensive Income As of December 31, Consolidated Statements of Operations (In millions) 2017 2016 2015 and Comprehensive Income Location Gains (losses) on derivatives: Fuel swap contracts $ 3 $ (4) $ (5) Cost of services rendered and products sold Interest rate swap contracts (8) (7) (6) Interest expense Net losses on derivatives (6) (11) (11) Impact of income taxes 2 4 4 Provision for income taxes Total reclassifications related to derivatives $ (4) $ (7) $ (7) Gains on available-for-sale securities $ — $ 3 $ 7 Interest and net investment income Impact of income taxes — (1) (3) Provision for income taxes Total reclassifications related to securities $ — $ 2 $ 4 Total reclassifications for the period $ (4) $ (5) $ (3) |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 14 . Supplemental Cash Flow Information Supplemental information relating to the consolidated statements of cash flows is presented in the following table: Year Ended December 31, (In millions) 2017 2016 2015 Cash paid for or (received from): Interest expense (1) $ 134 $ 134 $ 178 Interest and dividend income (1) (2) (3) Income taxes, net of refunds 109 71 44 (1) For the year ended December 31, 2016, excludes $10 million paid in connection with the termination of interest rate swap agreements. As of December 31, 2017 and 2016 , C ash and cash equivalents of $ 475 million and $ 291 million, respectively, and Restricted cash of $ 89 million and $ 95 million, respectively, as presented on the consolidated statements of financial position represent the amounts comprising Cash and cash equivalents and restricted cash of $ 563 million and $ 386 million presented on the consolidated statements of cash flows. There were no restricted cash balances as of December 31, 2015 . The Company acquired $41 million , $ 61 million and $ 27 million of property and equipment through capital leases and other non-cash financing transactions in t he years ended December 31, 2017, 2016 and 201 5 , respectively, which have been excluded from the consolidated statements of cash flows as non-cash investing and financing activities. In the years ended December 31, 2016 and 2015 the Company converted certain company-owned Merry Maids branches to franchises for a total purchase price of $9 million and $17 million , respectively. In t he years ended December 31, 2016, and 2015 , the Company received cash of $6 million and $13 million , respectively, and provided financing of $2 million and $4 million , respectively. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock [Abstract] | |
Capital Stock | Note 15 . Capital Stock The Company is authorized to issue 2,000,000,000 shares of commo n stock. As of December 31, 2017 , there were 146,662,232 shares of common stock issued and 135,141,048 shares of common stock outstanding. The Company has no other classes of equity securities issued or outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 16 . Stock-Based Compensation In connection with the Company’s initial public offering, the Company’s board of directors and stockholders have adopted the Omnibus Incentive Plan. Prior to the Company’s initial public offering, the Company’s board of directors and stockholders had adopted the MSIP. Upon adoption of the Omnibus Incentive Plan, the Company froze the MSIP and will make no further grants thereunder. However, awards previously granted under the MSIP are unaffected by the termination of the MSIP. The Omnibus Incentive Plan provides for awards in the form of stock options, stock purchase rights, restricted stock, RSUs, performance shares, performance units, stock appreciation rights, dividend equivalents, DSUs and other stock-based awards. The MSIP provided for the sale of shares and DSUs of the Company’s stock to the Company’s executives, officers and other employees and to the Company’s directors as well as the grant of RSUs, performance-based RSUs and options to purchase the Company’s shares to those individuals. DSUs represent a right to receive a share of common stock in the future. The Company’s Compensation Committee selects the Company’s executive officers, employees and directors eligible to participate in the Omnibus Incentive Plan and determines the specific number of shares to be offered or options to be granted to an individual. On February 24, 2015, the Company’s board of directors approved and recommended for approval by the Company’s stockholders the Employee Stock Purchase Plan, which became effective for offering periods commencing July 1, 2015. The Employee Stock Purchase Plan is intended to qualify for the favorable tax treatment under the Code. Under the plan, eligible employees of the Company may purchase common stock, subject to Internal Revenue Service limits, during pre-specified offering periods at a discount established by the Company not to exceed ten percent of the then-current fair market value. On April 27, 2015, the Company’s stockholders approved the Employee Stock Purchase Plan with a maximum of one million shares of common stock authorized for sale under the plan. Under the Employee Stock Purchase Plan, the Company sold 52,051 shares in 2017, 70,063 shares in 2016 and 34,302 shares in 2015 . As a result of the American Home Shield s pin-off described in Note 1 to the consolidated financial statements, the Employee Stock Purchase Plan was suspended effective January 1, 2018. A maximum of 16,396,667 shares of the Company’s stock is authorized for issuance under the MSIP, the Omnibus Incentive Plan and the Employee Stock Purchase Plan, of which, as of December 31, 2017, 7,299,555 shares remain available for future grants. The Company currently intends to satisfy any need for the Company’s shares of common stock associated with the settlement of DSUs, vesting of RSUs, exercise of options or purchase of shares issued under the Omnibus Incentive Plan, MSIP or Employee Stock Purchase Plan through new shares available for issuance or any shares repurchased, forfeited or surrendered from participants in the MSIP and the Omnibus Incentive Plan. All option grants under the Omnibus Incentive Plan and the MSIP have been, and the Company expects that all future option grants will be, non-qualified options with a per-share exercise price no less than the fair market value of one share of the Company’s stock on the grant date. Any stock options granted will generally have a term of ten years and vesting will be subject to an employee’s continued employment. The Company’s Compensation Committee may accelerate the vesting of an option at any time. In addition, vesting of options will be accelerated if the Company experiences a change in control (as defined in the Omnibus Incentive Plan and the MSIP) unless options with substantially equivalent terms and economic value are substituted for existing options in place of accelerated vesting. Vesting of options granted under the Omnibus Incentive Plan and the MSIP will also be accelerated in the event of an employee’s death or disability (as defined in the Omnibus Incentive Plan and the MSIP). Upon termination for cause (as defined in the Omnibus Incentive Plan and the MSIP), all options held by an employee are immediately cancelled. Following a termination without cause, vested options will generally remain exercisable through the earlier of the expiration of their term or three months following termination of employment ( one year in the case of death, disability or retirement at normal retirement age). Unless sooner terminated by the Company’s board of directors, the Omnibus Incentive Plan will remain in effect until June 26, 2024. In 2017, 2016 and 2015 , the Company completed various equity offerings to certain of the Company’s executives, officers and employees pursuant to the Omnibus Incentive Plan. The shares sold and options granted in connection with these equity offerings are subject to and governed by the terms of the Omnibus Incentive Plan. No other shares of common stock were sold by the Company in 2017, 2016 or 2015. Stock Options The Company granted the Company’s executives, officers and employees options to purchase 747,761 ; 684,329 ; and 411,506 shares of th e Company’s common stock in 2017, 2016 and 2015 , respectively, at a weighted-average exercise price of $39.27 per share for options issued in 2017 , $39.54 per share for options issued in 2016 and $32.70 per share for options issued in 2015 . These options are subject to and governed by the terms of the MSIP and Omnibus Incentive Plan. The per share purchase price and exercise price was based on the determination by the Company’s Compensation Committee of the fair market value of the Company’s common stock as of the purchase/grant dates. All options granted to date generally will vest in four equal annual installments, subject to an employee’s continued employment. The four -year vesting period is the requisite service period over which compensation cost will be recognized on a straight-line basis for all grants. All options issued are accounted for as equity-classified awards. The value of each option award was estimated on the grant date using the Black-Scholes option valuation model that incorporates the assumptions noted in the following table. For options granted in 2017, 2016 and 2015, the expected volatility was based on historical and implied volatilities of the Company’s publicly traded stock. The expected life represents the period of time that options granted are expected to be outstanding and was calculated using the simplified method as outlined by the SEC in Staff Accounting Bulletins No. 107 and 110 as the Company does not have sufficient historical exercise to provide a reasonable basis upon which to estimate expected life due to the limited period of time the Company’s equity shares have been publicly traded. The risk-free interest rates were based on the U.S. Treasury securities with terms similar to the expected lives of the options as of the grant dates. Year Ended December 31, Assumption 2017 2016 2015 Expected volatility 27.7 % 32.3 % 34.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected life (in years) 6.3 6.3 6.3 Risk-free interest rate 1.83% - 2.29 % 1.25% - 1.46 % 1.50% - 1.83 % The weighted-average grant-date fair value of the options granted during 2017, 2016 and 2015 was $12.45 , $13.58 and $11.91 per option, respectively. During the year ended December 31, 2017 , the Company applied a forfeiture assumption of 18.34 percent per annum in the recognition of the expense related to these options, with the exception of the options held by the Company’s CEO for which the Company has applied a forfeiture rate of zero . The total intrinsic value of stock options exercised during t he years ended December 31, 2017, 2016 and 2015 , was $60 million , $20 million and $25 million , respectively. The total fair value of stock options vested during t he years ended December 31, 2017, 2016 and 2015 , was $6 million , $6 million and $5 million , respectively. A summary of option activity under the MSIP and Omnibus Incent ive Plan as of December 31, 2017 and changes during the year then ended is presented below: Weighted Avg. Aggregate Remaining Weighted Avg. Intrinsic Contractual Stock Exercise Value Term Options Price (in millions) (in years) Total outstanding, December 31, 2016 3,155,344 $ 18.96 $ 60 6.97 Granted to employees 747,761 $ 39.27 Exercised (2,050,978) $ 13.61 Forfeited (726,965) $ 30.38 Expired — $ — Total outstanding, December 31, 2017 1,125,162 $ 34.84 $ 18 8.15 Total exercisable, December 31, 2017 214,369 $ 25.97 $ 5 6.44 RSUs The Company granted the Company’s executives, officers and employees 416,604 ; 267,739 ; and 304,680 RSUs in 2017, 2016 and 2015 , respectively, with weighted-average grant date fair values of $40.51 per unit for 2017 , $39.15 per unit for 2016 and $32.55 per unit for 2015 , which was equivalent to the then current fair value of the Company’s common stock at the grant date. All RSUs out standing as of December 31, 2017 will vest in three equal annual installments, subject to an employee’s continued employment. Upon vesting, each RSU will be converted into one share of the Company’s common stock. The total fair value of RSUs vested during t he years ended December 31, 2017, 2016 and 2015 , was $7 million , $10 million and $7 million , respectively. A summary of RSU activity under the Omnibus Incent ive Plan as of December 31, 2017, and changes during the year then ended is presented below: Weighted Avg. Grant Date RSUs Fair Value Total outstanding, December 31, 2016 439,134 $ 35.63 Granted to employees 416,604 $ 40.51 Vested (184,151) $ 33.71 Forfeited (99,663) $ 38.77 Total outstanding, December 31, 2017 571,924 $ 39.26 Included within the summary of RSU activity above are 162,172 grants of performance RSUs to certain executives who are key to the American Home Shield spin-off transaction. All such performance RSUs are contingent upon the successful completion of the spin-off transaction and subject to the employee’s continued employment. For certain grants, all performance RSUs vest on the date of the spin-off. For the remainder of these grants, the performance RSUs vest one-half on the date of the spin-off and one-half one year subsequent to the date of the spin-off. Performance Shares The Company granted the Company’s executives 120,778 performa nce shares in 2017 with a weighted–average grant date fair value of $38.98 per share and 131,352 performance shares in 2016 with a weighted-average grant date fair value of $39.59 per share, which were equivalent to the then current fair value of the Company’s common stock at the grant date. The performance shares vest at the end of a three -year period based on the achievement of a cumulative adjusted EPS target established at the grant date and subject to an executive’s continued employment. As the performance shares contain a performance condition, stock-based compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the number of awards expected to vest. No performance shar es were granted in 2015 . A summary of performance share activity under the Omnibus Incent ive Plan as of December 31, 2017, and changes during the year then ended is presented below: Weighted Avg. Performance Grant Date Shares Fair Value Total outstanding, December 31, 2016 109,881 $ 39.59 Granted to executives 120,778 $ 38.98 Forfeited (136,731) $ 39.55 Total outstanding, December 31, 2017 93,928 $ 38.86 Stock-based compensation expense During t he years ended December 31, 2017, 2016 and 2015 , the Company recognized stock-based compensation expense of $12 million ( $7 million , net of tax), $13 million ( $8 million , net of tax) and $10 million ( $6 million , net of tax), respectively. These charges are recorded within Selling and administrative expenses in the consolidated statements of operations and comprehensive income. Additionally, during the year s ended December 31, 2017 and 2016 , the Company recognized $ 5 million and $3 million, respectively, of stock-based compensation expense due to the modification of non-vested stock options and RSUs as part of the severance agreements with the former CEO (2017) and president of Terminix (2016), which has been included in Restructuring charges in the consolidated statements of operations and comprehensive income. There were no award modifications in 2015. As of December 31, 2017 , there was $26 million of total unrecognized compensation costs related to non-vested stock options, RSUs and performance shares granted under the MSIP and Omnibus Incentive Plan. These remaining costs are expected to be recognized over a weighted-average period of 1.89 years. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 17 . 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 accumula ted other comprehensive income on the consolidated statements of financial position, or, for certain unrealized losses, reported in interest and net investment income in the consolidated statements of oper ations and comprehensive income if the decline in value is other than temporary. The carrying amount of total debt was $ 2,787 million and $ 2,831 million and the estimated fair value was $ 2,888 million and $2, 930 million as of December 31, 201 7 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 December 31, 201 7 and 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 between levels during each of t he years ended December 31, 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 December 31, 2017: Financial Assets: Deferred compensation trust assets Long-term marketable securities $ 12 $ 12 $ — $ — Investments in marketable securities Marketable securities and Long-term marketable securities 35 34 1 — Fuel swap contracts Prepaid expenses and other assets and Other assets 3 — — 3 Interest rate swap contracts Other assets 25 — 25 — Total financial assets $ 75 $ 46 $ 26 $ 3 Financial Liabilities: Interest rate swap contracts Other accrued liabilities and Other long-term obligations — — — — Total financial liabilities $ — $ — $ — $ — As of December 31, 2016: Financial Assets: Deferred compensation trust assets 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 contracts Other assets 27 — 27 — Total financial assets $ 75 $ 40 $ 30 $ 5 Financial Liabilities: Fuel swap contracts Other accrued liabilities $ — $ — $ — $ — Interest rate swap contracts 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 Loss included in Earnings Balance as of December 31, 2015 $ (4) Total (losses) gains (realized and unrealized) Included in earnings (4) Cost of services rendered and products sold Included in other comprehensive income 8 Settlements 4 Balance as of December 31, 2016 5 Total gains (losses) (realized and unrealized) Included in earnings 3 Cost of services rendered and products sold Included in other comprehensive income (2) Settlements (3) Balance as of December 31, 2017 $ 3 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 December 31, 2017: Fuel swap contracts $ 3 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $2.43 - $2.90 $ 2.66 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 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 accumu lated other comprehensive income . 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 consolidated statements of cash flows. Ineffective portions of derivative instruments designated in accordance with accounting standards as cash flow hedge relationships were insignificant during the 12 months ended December 31, 2017, 2016 and 2015. As of December 31, 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 count erparty. As of December 31, 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 o ther comprehensive income . These amounts are reclassified into earnings in the same period or periods during which the hedged forecasted debt interest settlement or the fuel settleme nt affects earnings. See Note 13 to the consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in accumulated other comprehensi ve income and for the amounts reclassified out of accumula ted other comprehensive income 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 expected to be recognized in earnings is a gain of $1 million , net of tax, as of December 31, 201 7 . 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 | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 18 . 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 dilutive 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: Year Ended December 31, (In millions, except per share data) 2017 2016 2015 Income from continuing operations $ 509 $ 155 $ 162 Weighted-average common shares outstanding 134.4 135.3 135.0 Effect of dilutive securities: RSUs 0.1 0.2 0.2 Stock options (1) 0.9 1.8 1.4 Weighted-average common shares outstanding - assuming dilution 135.4 137.3 136.6 Basic earnings per share from continuing operations $ 3.79 $ 1.15 $ 1.20 Diluted earnings per share from continuing operations $ 3.76 $ 1.13 $ 1.19 ___________________________________ (1) Options to purchase 0.8 million , 0. 9 million , and 0. 3 million shares for the ye ars ended December 31, 2017, 2016 and 2015 , respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Schedule II Valuation And Quali
Schedule II Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Schedule II Valuation And Qualifying Accounts [Abstract] | |
Schedule II Valuation And Qualifying Accounts | SCH EDULE II SERVICEMASTER GLOBAL HOLDINGS, INC. Valuation and Qualifying Accounts (In millions ) Additions Balance at Charged to Balance at Beginning of Costs and End of Period Expenses Deductions (1) Period As of and for the year ending December 31, 2017: Continuing Operations— Allowance for doubtful accounts Accounts receivable $ 21 $ 42 $ 40 $ 22 Notes receivable 2 — — 1 Income tax valuation allowance 7 4 — 11 As of and for the year ending December 31, 2016: Continuing Operations— Allowance for doubtful accounts Accounts receivable $ 21 $ 39 $ 39 $ 21 Notes receivable 2 — 1 2 Income tax valuation allowance 7 2 2 7 As of and for the year ending December 31, 2015: Continuing Operations— Allowance for doubtful accounts Accounts receivable $ 22 $ 35 $ 36 $ 21 Notes receivable 3 — 1 2 Income tax valuation allowance 7 1 2 7 ___________________________________ (1) Deductions in the allowance for doubtful accounts for accounts and notes receivable reflect write-offs of uncollectible accounts. Deductions for the income tax valuation allowance in 2017, 2016 and 2015 are primarily attributable to the reduction of net operating loss carryforwards and other deferred tax assets related to the uncertainty of future taxable income in certain jurisdictions. |
Significant Accounting Polici26
Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Consolidation | Consolidation The consolidated financial statements of the Company include all of its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use Of Estimates | Use of Estimates The preparation of the consolidated financial statements requires management to make certain estimates and assumptions required under GAAP which may differ from actual results. The more significant areas requiring the use of management estimates relate to revenue recognition; the allowance for uncollectible receivables; accruals for self-insured retention limits related to medical, workers’ compensation, auto and general liability insurance claims; accruals for home warranties and termite damage claims; the possible outcome of outstanding litigation; accruals for income tax liabilities as well as deferred tax accounts; the deferral and amortization of customer acquisition costs; share based compensation; useful lives for depreciation and amortization expense; the valuation of marketable securities; and the valuation of tangible and intangible assets. In 2017, there were no changes in the significant areas that require estimates or in the underlying methodologies used in determining the amounts of these associated estimates. The allowance for receivables is developed based on several factors including overall customer credit quality, historical write-off experience and specific account analyses that project the ultimate collectability of the outstanding balances. As such, these factors may change over time causing the allowance level to vary. |
Commitments And Contingencies | The Company carries insurance policies on insurable risks at levels which it believes to be appropriate, including workers’ compensation, auto 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. 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. The Company seeks to reduce the potential amount of loss arising from self-insured claims by insuring certain levels of risk. While insurance agreements are designed to limit the Company’s losses from large exposure and permit recovery of a portion of direct unpaid losses, insurance does not relieve the Company of its ultimate liability. Accordingly, the accruals for insured claims represent the Company’s total unpaid gross losses. Insurance recoverables, which are reported within Prepaid expenses and other assets and Other assets, relate to estimated insurance recoveries on the insured claims reserves. Accruals for home service plan 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. The Company records deferred income tax balances based on the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and income tax purposes. The Company records its deferred tax items based on the estimated value of the tax basis. The Company adjusts tax estimates when required to reflect changes based on factors such as changes in tax laws, relevant court decisions, results of tax authority reviews and statutes of limitations. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes potential interest and penalties related to its uncertain tax positions in income tax expense. |
Revenue | Revenue Revenues from pest control services, as well as liquid and fumigation termite applications, are recognized as the services are provided. The Company eradicates termites through the use of non-baiting methods (e.g., fumigation or liquid treatments) and baiting systems. Termite services using baiting systems and termite inspection and protection contracts are frequently sold through annual contracts. Service costs for these contracts are expensed as incurred. The Company recognizes revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of the Company’s obligations under the contracts and are representative of the relative value provided to the customer (proportional performance method). The Company regularly reviews its estimates of direct costs for its termite bait contracts and termite inspection and protection contracts and adjusts the estimates when appropriate. Home service plan contracts are typically one year in duration. Home service plan claims costs are expensed as incurred. The Company recognizes revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of the Company’s obligations under the contracts and are representative of the relative value provided to the customer (proportional performance method). The Company regularly reviews its estimates of claims costs and adjusts the estimates when appropriate. The Company has franchise agreements in its Terminix, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec businesses. Franchise revenue (which in the aggregate represents approximately five percent of annual consolidated revenue from continuing operations) consists principally of continuing monthly fees based upon the franchisee’s customer-level revenue. Monthly fee revenue is recognized when the related customer-level revenue generating activity is performed by the franchisee and collectability is reasonably assured. Franchise revenue also includes initial fees resulting from the sale of a franchise or a license. These initial franchise or license fees are pre-established fixed amounts and are recognized as revenue when collectability is reasonably assured and all material services or conditions relating to the sale have been substantially performed. Total profits from the franchised operations were $ 87 million, $ 83 million, and $ 7 5 million for the years ended December 31, 2017, 2016 and 2015, respectively. The portion of total franchise fee income related to initial fees received from the sale of franchises was immaterial to the Company’s consolidated financial statements for all periods. Revenues are presented net of sales taxes collected and remitted to government taxing authorities on the consolidated statements of operations and comprehensive income. When a customer elects to pay for their home service plan 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 in proportion to the expected direct costs. Payments received for home service plan contracts are deferred and recognized in revenue over the life of the contract in proportion to the expected direct costs. The Company had $ 663 million and $ 629 million of deferred revenue as of December 31, 2017 and 2016, respectively. Deferred revenue consists primarily of payments received for annual contracts relating to home warranties, termite baiting, termite inspection and pest control services. |
Deferred Customer Acquisition Costs | Deferred Customer Acquisition Costs Customer acquisition costs, which are incremental and direct costs of obtaining a customer, are deferred and amortized over the life of the related contract in proportion to revenue recognized. These costs include sales commissions and direct selling costs which can be shown to have resulted in a successful sale. Deferred customer acquisition costs amounted to $ 36 million and $3 4 million as of December 31, 2017 and 2016, respectively. |
Advertising | Advertising On an interim basis, certain advertising costs are deferred and recognized approximately in proportion to the revenue over the year and are not deferred beyond the calendar year-end. Certain other advertising costs are expensed when the advertising occurs. The cost of direct-response advertising at Terminix, consisting primarily of direct-mail and digital promotions, is capitalized and amortized over its expected period of future benefits. Deferred advertising costs are included in Prepaid expenses and other assets on the consolidated statements of financial position. Advertising expense for the years ended December 31, 2017, 2016 and 2015 was $ 122 million, $11 0 million and $1 13 million, respectively. |
Inventory | Inventory Inventories are recorded at the lower of cost (primarily on a weighted-average cost basis) or market. The Company’s inventory primarily consists of finished goods to be used on the customers’ premises or sold to franchisees. |
Property And Equipment, Intangible Assets And Goodwill | Property and Equipment, Intangible Assets and Goodwill Property and equipment consist of the following: Estimated As of December 31, Useful Lives (In millions) 2017 2016 (Years) Land $ 5 $ 6 N/A Buildings and improvements 63 38 10 - 40 Technology and communications 255 230 3 - 7 Machinery, production equipment and vehicles 222 202 3 - 9 Office equipment, furniture and fixtures 19 20 5 - 7 564 496 Less accumulated depreciation (327) (286) Net property and equipment $ 237 $ 210 Depreciation of property and equipment, including depreciation of assets held under capital leases was $ 76 million, $ 61 million and $4 7 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company recorded impairment charges of $2 million and $1 million in the years ended December 31, 2017 and 2016, respectively, relating to its decisions to replace certain software. As of December 31, 2017 and 2016, goodwill was $2,256 million and $2,247 million, respectively, and intangible assets consisted primarily of indefinite-lived trade names in the amount of $1,608 million and other amortizing intangible assets in the amount of $84 million and $100 million, respectively. Fixed assets and intangible assets with finite lives are depreciated and amortized on a straight-line basis over their estimated useful lives. These lives are based on the Company’s previous experience for similar assets, potential market obsolescence and other industry and business data. As required by accounting standards for the impairment or disposal of long-lived assets, the Company’s fixed assets and finite-lived intangible assets are tested for recoverability whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment loss would be recognized equal to the difference between the carrying amount and the fair value of the asset. Changes in the estimated useful lives or in the asset values could cause the Company to adjust its book value or future expense accordingly. As required under accounting standards for goodwill and other intangibles, goodwill is not subject to amortization, and intangible assets with indefinite useful lives are not amortized until their useful lives are determined to no longer be indefinite. Goodwill and intangible assets that are not subject to amortization 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. Goodwill and indefinite-lived intangible assets, primarily the Company’s trade names, are assessed annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. The Company’s 2017, 2016, and 2015 annual impairment analyses, which were performed as of October 1 of each year, did no t result in any goodwill or trade name impairments to continuing operations. |
Restricted Cash | Restricted Cash Restricted cash consists of cash held in trust as collateral under the Company’s automobile, general liability and workers’ compensation insurance program. |
Restricted Net Assets | Restricted Net Assets There are third-party restrictions on the ability of certain of the Company’s subsidiaries to transfer funds to the Company. These restrictions are related to regulatory requirements at American Home Shield and to a subsidiary borrowing arrangement at SMAC. The payment of ordinary and extraordinary dividends by the Company’s home service plan and similar subsidiaries (through which the Company conducts its American Home Shield business) are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain such subsidiaries to maintain minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can pay to the Company. As of December 31, 2017, the total net assets subject to these third-party restrictions was $192 million. None of the Company’s subsidiaries are obligated to make funds available to the Company through the payment of dividends. |
Financial Instruments And Credit Risk | Financial Instruments and Credit Risk The Company has entered into specific financial arrangements in the normal course of business to manage certain market risks, with a policy of matching positions and limiting the terms of contracts to relatively short durations. The effect of derivative financial instrument transactions could have a material impact on the Company’s financial statements. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. 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 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. Financial instruments, which potentially subject the Company to financial and credit risk, consist principally of investments and receivables. Investments consist primarily of publicly traded debt, certificates of deposit and common equity securities. 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 majority of the Company’s receivables and notes receivable have little concentration of credit risk due to the large number of customers with relatively small balances and their dispersion across geographical areas. The Company maintains an allowance for losses based upon the expected collectability of receivables. See Note 17 to the consolidated financial statements for information relating to the fair value of financial instruments. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for stock options is estimated at the grant date based on an award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense over the requisite service period. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for future grants may differ materially from that recorded in the current period related to options granted to date. In addition, the Company estimates the expected forfeiture rate and only recognizes expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly. See Note 16 to the consolidated financial statements for more details. |
Income Taxes | Income Taxes The Company and its subsidiaries file consolidated U.S. federal income tax returns. State and local returns are filed both on a separate company basis and on a combined unitary basis with the Company. Current and deferred income taxes are provided for on a separate company basis. The Company accounts for income taxes using an asset and liability approach for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be realized. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax return. The Company recognizes potential interest and penalties related to its uncertain tax positions in income tax expense. |
Earnings Per Share | 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 dilutive effect of stock options, restricted stock units (“RSUs”) and performance shares are reflected in diluted earnings per share by applying the treasury stock method. See Note 18 to the consolidated financial statements for more details. |
Newly Issued Accounting Standards | Newly Issued Accounting Standards 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 should recognize 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. The Company will adopt the new revenue guidance effective January 1, 2018 using the modified retrospective transition method. The Company has completed its evaluation of the impact of ASU 2014-09. The most significant impact relates to the reclassification of approximately $390 million of accounts receivable to contract assets that will be presented net of approximately $390 million of contract liabilities currently recorded as deferred revenue. Currently, when a customer elects to pay for their home service plan 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, only the portion of the contract that is due in the current month will be recorded within accounts receivable. The adoption will not have a significant impact on revenue or net income. The amount of customer acquisition costs deferred and the amortization period for such costs will increase under ASU 2014-09, resulting in an increase in deferred customer acquisition costs recognized. Costs of obtaining a contract that would have been incurred regardless of whether the contract was obtained, such as direct mail and digital advertising, will be expensed as incurred. Initial fees from sales of franchises and licenses, currently recognized in the year of the sale, will now be recognized over the term of the franchise agreement. In addition, advertising expense, currently recorded net of contributions from franchisees to the Company’s advertising programs, will now be recognized with offsetting increases to both revenue and expense such that there will not be a significant, if any, impact on net income. We expect the adjustment to our opening balance of accumulated deficit to be approximately $ 20 million, net of tax, upon adoption. As necessary, we have implemented changes to our business processes, systems and controls to support recognition and disclosure of this ASU upon adoption on January 1, 2018. 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 Company is impacted as unrealized gains or losses on the Company’s available-for-sale securities are currently recognized in other comprehensive 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. 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. In August 2017, the FASB issued ASU 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 fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” allowing a reclassification from Accumulated Other Comprehensive Income (“AOCI”) to Retained Earnings for stranded tax effects resulting from the corporate income tax rate change in U.S. Tax Reform. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company currently expects to early adopt this guidance in the first quarter of 2018, and will reclassify approximately $4 million of unrealized losses from AOCI to Retained Earnings. |
Significant Accounting Polici27
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Schedule Of Property And Equipment | Estimated As of December 31, Useful Lives (In millions) 2017 2016 (Years) Land $ 5 $ 6 N/A Buildings and improvements 63 38 10 - 40 Technology and communications 255 230 3 - 7 Machinery, production equipment and vehicles 222 202 3 - 9 Office equipment, furniture and fixtures 19 20 5 - 7 564 496 Less accumulated depreciation (327) (286) Net property and equipment $ 237 $ 210 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Segment Reporting [Abstract] | |
Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters | Year Ended December 31, (In millions) 2017 2016 2015 Revenue: Terminix $ 1,541 $ 1,524 $ 1,444 American Home Shield 1,157 1,020 917 Franchise Services Group 212 200 232 Reportable Segment Revenue $ 2,910 $ 2,744 $ 2,592 Corporate 2 2 2 Total Revenue $ 2,912 $ 2,746 $ 2,594 Reportable Segment Adjusted EBITDA: (1) Terminix $ 330 $ 371 $ 347 American Home Shield 260 220 205 Franchise Services Group 87 79 77 Reportable Segment Adjusted EBITDA $ 677 $ 670 $ 630 Identifiable Assets: Terminix $ 2,821 $ 2,820 $ 2,764 American Home Shield 1,441 1,312 1,137 Franchise Services Group 489 480 492 Reportable Segment Identifiable Assets $ 4,751 $ 4,612 $ 4,394 Corporate 895 774 705 Total Identifiable Assets $ 5,646 $ 5,386 $ 5,098 Depreciation & Amortization Expense: Terminix $ 58 $ 58 $ 59 American Home Shield 17 13 9 Franchise Services Group 7 7 8 Reportable Segment Depreciation & Amortization Expense $ 82 $ 78 $ 75 Corporate 21 16 9 Total Depreciation & Amortization Expense (2) $ 103 $ 94 $ 84 Capital Expenditures: Terminix $ 12 $ 11 $ 9 American Home Shield 9 10 7 Franchise Services Group 2 2 3 Reportable Segment Capital Expenditures $ 24 $ 22 $ 19 Corporate 53 33 21 Total Capital Expenditures $ 77 $ 56 $ 40 ________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: Year Ended December 31, (In millions) 2017 2016 2015 Net Income $ 510 $ 155 $ 160 Unallocated corporate expenses (1) 3 9 Depreciation and amortization expense 103 94 84 401(k) Plan corrective contribution (3) 2 23 Fumigation related matters 4 93 9 Insurance reserve adjustment — 23 — Non-cash stock-based compensation expense 12 13 10 Restructuring charges 34 17 5 Gain on sale of Merry Maids branches — (2) (7) Non-cash impairment of software and other related costs 2 1 — (Gain) loss from discontinued operations, net of income taxes — 1 2 Provision for income taxes (139) 85 107 Loss on extinguishment of debt 6 32 58 Interest expense 150 153 167 Other non-operating expenses — — 3 Reportable Segment Adjusted EBITDA $ 677 $ 670 $ 630 ___________________________________ (2) There are no adjustments necessary to reconcile total depreciation and amortization as presented in the business segment table to consolidated totals. Amortization of debt issue costs is not included in the business segment table. See Note 4 to the consolidated financial statements for information relating to segment goodwill. |
Schedule Of Reconciliation Of Net Income (Loss) To Reportable Segment Adjusted EBITDA | Year Ended December 31, (In millions) 2017 2016 2015 Net Income $ 510 $ 155 $ 160 Unallocated corporate expenses (1) 3 9 Depreciation and amortization expense 103 94 84 401(k) Plan corrective contribution (3) 2 23 Fumigation related matters 4 93 9 Insurance reserve adjustment — 23 — Non-cash stock-based compensation expense 12 13 10 Restructuring charges 34 17 5 Gain on sale of Merry Maids branches — (2) (7) Non-cash impairment of software and other related costs 2 1 — (Gain) loss from discontinued operations, net of income taxes — 1 2 Provision for income taxes (139) 85 107 Loss on extinguishment of debt 6 32 58 Interest expense 150 153 167 Other non-operating expenses — — 3 Reportable Segment Adjusted EBITDA $ 677 $ 670 $ 630 ___________________________________ (2) There are no adjustments necessary to reconcile total depreciation and amortization as presented in the business segment table to consolidated totals. Amortization of debt issue costs is not included in the business segment table. See Note 4 to the consolidated financial statements for information relating to segment goodwill. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 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, 2015 $ 1,567 $ 381 $ 182 $ 2,129 Acquisitions 34 90 — 124 Disposals — — (6) (6) Other (1) — — — — Balance as of December 31, 2016 $ 1,601 $ 471 $ 175 $ 2,247 Acquisitions 2 4 — 6 Disposals — — — — Other (1) 1 — — 2 Balance as of December 31, 2017 $ 1,605 $ 476 $ 176 $ 2,256 ___________________________________ (1) Reflects the impact of foreign exchange rates. |
Schedule Of Other Intangible Asset Balances For Continuing Operations | As of December 31, 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 (555) 34 594 (538) 56 Franchise agreements 88 (70) 18 88 (67) 21 Other 81 (49) 32 65 (42) 23 Total $ 2,366 $ (674) $ 1,692 $ 2,356 $ (647) $ 1,708 ___________________________________ (1) Not subject to amortization. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Reconciliation Of Unrecognized Tax Benefits | Year Ended December 31, (In millions) 2017 2016 2015 Gross unrecognized tax benefits at beginning of period $ 13 $ 16 $ 13 Increases in tax positions for prior years — — — Decrease in tax positions for prior years — (5) — Increases in tax positions for current year 3 3 3 Lapse in statute of limitations (1) (1) (1) Gross unrecognized tax benefits at end of period $ 14 $ 13 $ 16 |
Components Of Income (Loss) From Continuing Operations Before Income Taxes | Year Ended December 31, (In millions) 2017 2016 2015 U.S. $ 365 $ 238 $ 266 Foreign 5 3 4 Income from Continuing Operations before Income Taxes $ 370 $ 241 $ 270 |
Reconciliation Of Effective Income Tax Rate | Year Ended December 31, 2017 2016 2015 Tax at U.S. federal statutory rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of U.S. federal benefit 3.5 4.7 3.2 Tax credits (0.6) (0.9) (0.8) Other permanent items 1.3 1.5 2.4 U.S. Tax Reform rate change (1) (73.3) — — Remeasurement of prior year tax positions — (1.9) — Excess tax benefits from stock-based compensation (4.0) (3.0) — Other, including foreign rate differences and reserves 0.5 — — Effective rate (37.6) % 35.4 % 39.8 % (1) Deferred income taxes in the Company’s balance sheet at December 31, 2017, were remeasured for the change in the U.S. income tax rate through income tax expense (see discussion on U.S. Tax Reform). This one-time beneficial rate change adjustment for $271 million includes $11 million in state income tax expense. |
Income Tax Expense From Continuing Operations | Year Ended December 31, (In millions ) 2017 2016 2015 Current: U.S. federal $ 71 $ 50 $ 33 Foreign 3 2 2 State and local 13 12 12 87 64 47 Deferred: U.S. federal (235) 17 59 Foreign 2 (2) — State and local 7 6 1 (226) 22 60 (Benefit) provision for income taxes $ (139) $ 85 $ 107 |
Deferred Tax Balances | As of December 31, (In millions) 2017 2016 Long-term deferred tax assets (liabilities): Intangible assets (1) $ (483) $ (727) Property and equipment (25) (34) Prepaid expenses and deferred customer acquisition costs (12) (18) Receivables allowances 9 13 Self-insured claims and related expenses 7 11 Accrued liabilities 14 28 Other long-term obligations (12) (19) Net operating loss and tax credit carryforwards 19 36 Less valuation allowance (11) (7) Net Long-term deferred tax liability $ (493) $ (717) ___________________________________ (1) The deferred tax liability relates primarily to the difference in the tax versus book basis of intangible assets. The Company had $507 million and $759 million of deferred tax liability included in this net deferred tax l iability as of December 31, 2017 and 2016 , respectively, that will not actually be paid unless certain business units of the Company are sold. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Schedule Of Supplemental Cash Flow Information Regarding Acquisitions | Year Ended December 31, (In millions) 2017 2016 2015 Assets acquired $ 17 $ 184 $ 126 Liabilities assumed (1) (40) — Net assets acquired $ 16 $ 144 $ 125 Net cash paid $ 13 $ 121 $ 92 Seller financed debt 3 23 33 Purchase price $ 16 $ 144 $ 125 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations [Abstract] | |
Schedule Of Operating Results Of Discontinued Operations | Year Ended December 31, (In millions) 2017 2016 2015 Revenue $ — $ — $ — Cost of services rendered and products sold — — — Selling and administrative expenses $ (1) $ 1 $ 3 Income (loss) before income taxes 1 (1) (3) Benefit for income taxes — — (1) Gain (loss) from discontinued operations, net of income taxes $ — $ (1) $ (2) |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charges [Abstract] | |
Schedule Of Restructuring Charges | Year Ended December 31, (In millions) 2017 2016 2015 Terminix (1) $ 2 $ 7 $ 3 American Home Shield (2) — 2 — Franchise Services Group (3) 1 — 1 Corporate (4) 2 5 1 Leadership transition (5) 11 American Home Shield spin-off (6) 13 — — Global Service Center relocation (7) 5 3 — Total restructuring charges $ 34 $ 17 $ 5 ___________________________________ (1) For the years ended December 31, 2017, 2016 and 2015, these charges include $2 million, $4 million and $3 million, respectively, of lease termination and severance costs driven by Terminix’s branch optimization program. For the year ended December 31, 2016, these charges include $1 million of se verance 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. Of this amount, $1 million was unpaid and accrued as of December 31, 2017. (2) Represents lease termination and other costs driven by the decision to consolidate the stand-alone operations of HSA acquired in February 2014 with those of American Home Shield. Less than $1 million was unpaid and accrued as of Decemb er 31, 2017. (3) Represents severance and other costs related to the reorganization of the Franchise Services Group. Less than $1 million was unpaid and accrued as of Decemb er 31, 2017. (4) We have historically made changes on an ongoing basis to enhance capabilities and reduce costs in our corporate functions that provide company-wide administrative services for our operations. In 2017, we began taking actions to enhance capabilities and align our corporate functions with those required to support our strategic needs as two stand-alone companies in anticipation of the American Home Shield spin-off. For the years ended December 31, 201 7, 2016, and 2015, these charges include severance and other costs of $2 million, $ 2 million, and $ 1 million, respectively. For the year ended December 31, 2016, these charges include professional fees of $2 million and accelerated depreciation of $2 million related to the early termination of a long-term human resources outsourcing agreement. Of this amount, $1 million was unpaid and accrued as of December 31, 2017. (5) For the year ended December 31, 2017, these charges include $5 million of severance costs and $5 million of stock-based compensation expense as part of the severance agreements with the former CEO and CFO. Of this amount, $4 million was unpaid and accrued as of December 31, 2017. (6) Represents professional fees and other costs of $13 million related to the proposed spin-off of the American Home Shield business to Company stockholders . Of this amount, $1 million was unpaid and accrued as of December 31, 2017. (7) For the year ended December 31, 2017, these charges include accelerated d epreciation of $2 million, redundant rent expense of $2 million and a $1 million loss recorded on the sale of an asset related to the relocation of the Company’s corporate headquarters, which we refer to as our Global Service Center. For the year ended December 31, 2016 , r epresents impairment charges of $1 million and professional fees and other costs of $1 million related to the relocation of the Company’s Global Service Center. |
Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges | Accrued Restructuring (In millions) Charges Balance as of December 31, 2015 $ 1 Costs incurred 17 Costs paid or otherwise settled (16) Balance as of December 31, 2016 3 Costs incurred 34 Costs paid or otherwise settled (29) Balance as of December 31, 2017 $ 8 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 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, 2015 $ 114 Provision for self-insured claims (1) 58 Cash payments (51) Balance as of December 31, 2016 120 Provision for self-insured claims 36 Cash payments (42) Balance as of December 31, 2017 $ 115 ___________________________________ (1) Includes a charge of $23 million recorded in the year ended December 31, 2016 for an adjustment to the Company’s accrued self-insured claims related to automobile, general liability and workers’ compensation risks. The adjustment is 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 relates to coverage periods of 2015 and prior. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | As of December 31, (In millions) 2017 2016 Senior secured term loan facility maturing in 2023 (1) $ 1,615 $ 1,628 5.125% notes maturing in 2024 (2) 739 737 Revolving credit facility maturing in 2021 — — 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) 90 87 Other 54 71 Less current portion (144) (59) Total long-term debt $ 2,643 $ 2,772 ___________________________________ (1) As of December 31, 2017 and 2016, presented net of $16 million and $ 18 million, respectively, in unamortized debt issuance costs and $3 million and $4 million, respectively, in unamortized original issue discount paid as described below under “––Term Loan Facility.” (2) As of December 31, 2017 and 2016, presented net of $11 million and $13 million, respectively, in unamortized debt issuance costs as described below under “––2024 Notes.” (3) As of December 31, 201 7 and 201 6 , collectively presented net of $37 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 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 % . |
Schedule of Interest Rate Swap Agreements | Weighted Notional Average Fixed (In millions) Amount Rate (1) Interest rate swap agreements in effect as of December 31, 2015 $ 700 1.867 % Terminated (700) Entered into effect 650 Interest rate swap agreements in effect as of December 31, 2016 650 1.493 % Terminated — Entered into effect — Interest rate swap agreements in effect as of December 31, 2017 $ 650 1.493 % ___________________________________ (1) Before the application of the applicable borrowing margin. |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 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, December 31, 2017: Debt securities $ 29 $ — $ — $ 29 Equity securities 15 3 — 18 Total securities $ 44 $ 3 $ — $ 47 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 | Year Ended December 31, (In millions) 2017 2016 2015 Proceeds from sale of securities $ 12 $ 42 $ 22 Maturities of securities 36 7 11 Gross realized gains, pre-tax — 4 7 Gross realized gains, net of tax — 2 4 Gross realized losses, pre-tax — — — Gross realized losses, net of tax — — — |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Comprehensive Income (Loss) [Abstract] | |
Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects | Unrealized Gains on Foreign Unrealized Available Currency (Losses) Gains on -for-Sale Translation (In millions) Derivatives Securities (Loss) Gain Total Balance as of December 31, 2015 $ (7) $ 2 $ (15) $ (21) Other comprehensive income before reclassifications: Pre-tax amount 20 1 — 21 Tax provision 8 1 — 9 After-tax amount 13 — — 13 Amounts reclassified from accumulated other comprehensive income (loss) (1) 7 (2) — 5 Net current period other comprehensive income (loss) 20 (2) — 18 Balance as of December 31, 2016 $ 12 $ 1 $ (15) $ (3) Other comprehensive income before reclassifications: Pre-tax amount — 2 3 5 Tax provision — 1 — 1 After-tax amount — 1 3 4 Amounts reclassified from accumulated other comprehensive income (1) 4 — — 4 Net current period other comprehensive income 4 1 3 8 Balance as of December 31, 2017 $ 16 $ 2 $ (12) $ 5 ___________________________________ (1) Amounts are net of tax. See reclassifications out of accumul ated other comprehensive income below for further details. |
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) | Amounts Reclassified from Accumulated Other Comprehensive Income As of December 31, Consolidated Statements of Operations (In millions) 2017 2016 2015 and Comprehensive Income Location Gains (losses) on derivatives: Fuel swap contracts $ 3 $ (4) $ (5) Cost of services rendered and products sold Interest rate swap contracts (8) (7) (6) Interest expense Net losses on derivatives (6) (11) (11) Impact of income taxes 2 4 4 Provision for income taxes Total reclassifications related to derivatives $ (4) $ (7) $ (7) Gains on available-for-sale securities $ — $ 3 $ 7 Interest and net investment income Impact of income taxes — (1) (3) Provision for income taxes Total reclassifications related to securities $ — $ 2 $ 4 Total reclassifications for the period $ (4) $ (5) $ (3) |
Supplemental Cash Flow Inform38
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows | Year Ended December 31, (In millions) 2017 2016 2015 Cash paid for or (received from): Interest expense (1) $ 134 $ 134 $ 178 Interest and dividend income (1) (2) (3) Income taxes, net of refunds 109 71 44 (1) For the year ended December 31, 2016, excludes $10 million paid in connection with the termination of interest rate swap agreements. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Schedule Of Assumptions Used To Estimate Value Of Each Option Award | Year Ended December 31, Assumption 2017 2016 2015 Expected volatility 27.7 % 32.3 % 34.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected life (in years) 6.3 6.3 6.3 Risk-free interest rate 1.83% - 2.29 % 1.25% - 1.46 % 1.50% - 1.83 % |
Summary Of Option Activity Under The MSIP | Weighted Avg. Aggregate Remaining Weighted Avg. Intrinsic Contractual Stock Exercise Value Term Options Price (in millions) (in years) Total outstanding, December 31, 2016 3,155,344 $ 18.96 $ 60 6.97 Granted to employees 747,761 $ 39.27 Exercised (2,050,978) $ 13.61 Forfeited (726,965) $ 30.38 Expired — $ — Total outstanding, December 31, 2017 1,125,162 $ 34.84 $ 18 8.15 Total exercisable, December 31, 2017 214,369 $ 25.97 $ 5 6.44 |
Summary Of RSU Activity Under The MSIP | Weighted Avg. Grant Date RSUs Fair Value Total outstanding, December 31, 2016 439,134 $ 35.63 Granted to employees 416,604 $ 40.51 Vested (184,151) $ 33.71 Forfeited (99,663) $ 38.77 Total outstanding, December 31, 2017 571,924 $ 39.26 |
Summary Of Performance Share Activity Under The Omnibus Incentive Plan | Weighted Avg. Performance Grant Date Shares Fair Value Total outstanding, December 31, 2016 109,881 $ 39.59 Granted to executives 120,778 $ 38.98 Forfeited (136,731) $ 39.55 Total outstanding, December 31, 2017 93,928 $ 38.86 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2017: Financial Assets: Deferred compensation trust assets Long-term marketable securities $ 12 $ 12 $ — $ — Investments in marketable securities Marketable securities and Long-term marketable securities 35 34 1 — Fuel swap contracts Prepaid expenses and other assets and Other assets 3 — — 3 Interest rate swap contracts Other assets 25 — 25 — Total financial assets $ 75 $ 46 $ 26 $ 3 Financial Liabilities: Interest rate swap contracts Other accrued liabilities and Other long-term obligations — — — — Total financial liabilities $ — $ — $ — $ — As of December 31, 2016: Financial Assets: Deferred compensation trust assets 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 contracts Other assets 27 — 27 — Total financial assets $ 75 $ 40 $ 30 $ 5 Financial Liabilities: Fuel swap contracts Other accrued liabilities $ — $ — $ — $ — Interest rate swap contracts 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 Loss included in Earnings Balance as of December 31, 2015 $ (4) Total (losses) gains (realized and unrealized) Included in earnings (4) Cost of services rendered and products sold Included in other comprehensive income 8 Settlements 4 Balance as of December 31, 2016 5 Total gains (losses) (realized and unrealized) Included in earnings 3 Cost of services rendered and products sold Included in other comprehensive income (2) Settlements (3) Balance as of December 31, 2017 $ 3 |
Schedule Of Level 3 Financial Instruments | Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of December 31, 2017: Fuel swap contracts $ 3 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $2.43 - $2.90 $ 2.66 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) | 12 Months Ended |
Dec. 31, 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 | Year Ended December 31, (In millions, except per share data) 2017 2016 2015 Income from continuing operations $ 509 $ 155 $ 162 Weighted-average common shares outstanding 134.4 135.3 135.0 Effect of dilutive securities: RSUs 0.1 0.2 0.2 Stock options (1) 0.9 1.8 1.4 Weighted-average common shares outstanding - assuming dilution 135.4 137.3 136.6 Basic earnings per share from continuing operations $ 3.79 $ 1.15 $ 1.20 Diluted earnings per share from continuing operations $ 3.76 $ 1.13 $ 1.19 ___________________________________ Options to purchase 0.8 million , 0. 9 million , and 0. 3 million shares for the ye ars ended December 31, 2017, 2016 and 2015 , 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) | 12 Months Ended | |
Dec. 31, 2015shares | Dec. 31, 2017entity | |
Basis of Presentation [Abstract] | ||
Number of shares of Common Stock offered | shares | 80,711,763 | |
Number Of Independent, Publicly Traded Companies | entity | 2 |
Significant Accounting Polici43
Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||||
Home warranty contracts term | 1 year | |||
Franchise revenue as a percentage of consolidated revenue from continuing operations | 5.00% | |||
Total profits from the franchised operations | $ 87 | $ 83 | $ 75 | |
Deferred revenue | 663 | 629 | ||
Deferred customer acquisition costs | 36 | 34 | ||
Advertising expense | 122 | 110 | 113 | |
Depreciation of property and equipment, including depreciation of assets held under capital leases | 76 | 61 | 47 | |
Impairment charge | 2 | 1 | ||
Goodwill | 2,256 | 2,247 | 2,129 | |
Indefinite-lived trade names | 1,608 | 1,608 | ||
Other intangible assets | 84 | 100 | ||
Goodwill and trade name impairment | 0 | $ 0 | $ 0 | |
Equity Restrictions | 192 | |||
Accounting Standards Update 2014-09 [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Reclassification Of Accounts Receviable To Contract Assets | 390 | |||
Reclassification Of Contract Liabilities To Deferred Revenue | 390 | |||
Adjustment to equity | $ 20 | |||
Subsequent Event [Member] | Accounting Standards Update 2018-02 [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Adjustment to equity | $ 4 |
Significant Accounting Polici44
Significant Accounting Policies (Schedule Of Property And Equipment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 564 | $ 496 |
Less: accumulated depreciation | (327) | (286) |
Net Property and Equipment | 237 | 210 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | 5 | 6 |
Buildings And Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 63 | 38 |
Buildings And Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P10Y | |
Buildings And Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P40Y | |
Technology And Communications [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 255 | 230 |
Technology And Communications [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P3Y | |
Technology And Communications [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P7Y | |
Machinery, Production Equipment And Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 222 | 202 |
Machinery, Production Equipment And Vehicles [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P3Y | |
Machinery, Production Equipment And Vehicles [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P9Y | |
Office Equipment, Furniture And Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 19 | $ 20 |
Office Equipment, Furniture And Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P5Y | |
Office Equipment, Furniture And Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | P7Y |
Business Segment Reporting (Nar
Business Segment Reporting (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2017segmentcustomer | Dec. 31, 2016customer | Dec. 31, 2015customer | |
Business Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | ||
Maximum percentage of revenue from customers and franchisees generated in foreign market | 2.00% | ||
Number of customers exceeding 10 percent of global sales | customer | 0 | 0 | 0 |
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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 2,912 | $ 2,746 | $ 2,594 |
Adjusted EBITDA | 677 | 670 | 630 |
Identifiable Assets | 5,646 | 5,386 | 5,098 |
Depreciation & Amortization Expense | 103 | 94 | 84 |
Capital Expenditures | 77 | 56 | 40 |
Operating Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 2,910 | 2,744 | 2,592 |
Adjusted EBITDA | 677 | 670 | 630 |
Identifiable Assets | 4,751 | 4,612 | 4,394 |
Depreciation & Amortization Expense | 82 | 78 | 75 |
Capital Expenditures | 24 | 22 | 19 |
Terminix [Member] | Operating Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,541 | 1,524 | 1,444 |
Adjusted EBITDA | 330 | 371 | 347 |
Identifiable Assets | 2,821 | 2,820 | 2,764 |
Depreciation & Amortization Expense | 58 | 58 | 59 |
Capital Expenditures | 12 | 11 | 9 |
American Home Shield [Member] | Operating Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,157 | 1,020 | 917 |
Adjusted EBITDA | 260 | 220 | 205 |
Identifiable Assets | 1,441 | 1,312 | 1,137 |
Depreciation & Amortization Expense | 17 | 13 | 9 |
Capital Expenditures | 9 | 10 | 7 |
Franchise Services Group [Member] | Operating Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 212 | 200 | 232 |
Adjusted EBITDA | 87 | 79 | 77 |
Identifiable Assets | 489 | 480 | 492 |
Depreciation & Amortization Expense | 7 | 7 | 8 |
Capital Expenditures | 2 | 2 | 3 |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 2 | 2 | 2 |
Identifiable Assets | 895 | 774 | 705 |
Depreciation & Amortization Expense | 21 | 16 | 9 |
Capital Expenditures | $ 53 | $ 33 | $ 21 |
Business Segment Reporting (S47
Business Segment Reporting (Schedule Of Reconciliation Of Net Income (Loss) To Reportable Segment Adjusted EBITDA) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||
Net Income | $ 510 | $ 155 | $ 160 |
Depreciation and amortization expense | 103 | 94 | 84 |
401(k) Plan corrective contribution | (3) | 2 | 23 |
Fumigation related matters | 4 | 93 | 9 |
Insurance reserve adjustment | 23 | ||
Non-cash stock-based compensation expense | 12 | 13 | 10 |
Restructuring charges | 34 | 17 | 5 |
Gain on sale of Merry Maids branches | (2) | (7) | |
Non-cash impairment of software and other related costs | 2 | 1 | |
(Gain) loss from discontinued operations, net of income taxes | 1 | 2 | |
(Benefit) provision for income taxes | (139) | 85 | 107 |
Loss on extinguishment of debt | 6 | 32 | 58 |
Interest expense | 150 | 153 | 167 |
Other non-operating expenses | 3 | ||
Reportable Segment Adjusted EBITDA | 677 | 670 | 630 |
Operating Segment [Member] | |||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||
Depreciation and amortization expense | 82 | 78 | 75 |
Reportable Segment Adjusted EBITDA | 677 | 670 | 630 |
Terminix [Member] | Operating Segment [Member] | |||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||
Depreciation and amortization expense | 58 | 58 | 59 |
Reportable Segment Adjusted EBITDA | 330 | 371 | 347 |
American Home Shield [Member] | Operating Segment [Member] | |||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||
Depreciation and amortization expense | 17 | 13 | 9 |
Reportable Segment Adjusted EBITDA | 260 | 220 | 205 |
Franchise Services Group [Member] | Operating Segment [Member] | |||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||
Depreciation and amortization expense | 7 | 7 | 8 |
Reportable Segment Adjusted EBITDA | 87 | 79 | 77 |
Corporate [Member] | |||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||
Net Income | (1) | 3 | 9 |
Depreciation and amortization expense | $ 21 | $ 16 | $ 9 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets [Abstract] | |||
Goodwill and trade name impairment | $ 0 | $ 0 | $ 0 |
Accumulated impairment losses recorded in continuing operations | 0 | 0 | 0 |
Amortization expense | 27 | $ 33 | $ 38 |
Amortization expense, 2018 | 21 | ||
Amortization expense, 2019 | 16 | ||
Amortization expense, 2020 | 12 | ||
Amortization expense, 2021 | 9 | ||
Amortization expense, 2022 | $ 6 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets (Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | $ 2,247 | $ 2,129 |
Acquisitions | 6 | 124 |
Disposals | (6) | |
Other | 2 | |
Balance at the end of the period | 2,256 | 2,247 |
Terminix [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 1,601 | 1,567 |
Acquisitions | 2 | 34 |
Other | 1 | |
Balance at the end of the period | 1,605 | 1,601 |
American Home Shield [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 471 | 381 |
Acquisitions | 4 | 90 |
Balance at the end of the period | 476 | 471 |
Franchise Services Group [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 175 | 182 |
Disposals | (6) | |
Balance at the end of the period | $ 176 | $ 175 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets (Schedule Of Other Intangible Asset Balances For Continuing Operations) (Details) - USD ($) $ in Millions | Dec. 31, 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 | (674) | (647) |
Intangible Assets Net, Excluding Goodwill | 1,692 | 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 | (555) | (538) |
Intangible Assets Net, Excluding Goodwill | 34 | 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 | (70) | (67) |
Intangible Assets Net, Excluding Goodwill | 18 | 21 |
Other [Member] | ||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | ||
Intangible Assets Gross, Excluding Goodwill | 81 | 65 |
Accumulated Amortization | (49) | (42) |
Intangible Assets Net, Excluding Goodwill | 32 | 23 |
Trade Names [Member] | ||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | ||
Intangible Assets Gross, Excluding Goodwill | 1,608 | 1,608 |
Intangible Assets Net, Excluding Goodwill | $ 1,608 | $ 1,608 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | 35.00% | ||
Net reduction of total deferred tax liabilities | $ 271 | ||||
One-time transition tax liability for the deemed distribution of earnings from our foreign subsidiaries | 1 | ||||
Unrecognized tax benefits | 14 | $ 13 | $ 16 | $ 13 | |
Unrecognized tax benefits that would impact effective tax rate if recognized | 13 | 9 | |||
Unrecognized tax benefits, reasonably possible decrease within the next 12 months | $ 2 | ||||
Number of state tax authorities that are in the process of auditing state income tax returns of various subsidiaries | item | 3 | ||||
Accrued interest and penalties | $ 2 | $ 2 | |||
Effective tax rate on loss from discontinued operations (as a percent) | 38.30% | 37.70% | 37.70% | ||
Valuation allowance for deferred tax assets | $ 11 | $ 7 | |||
Increase in valuation allowance | 4 | ||||
Deferred tax assets, net of valuation allowance, for federal and state net operating loss and capital loss carryforwards | 8 | ||||
Deferred tax assets, net of valuation allowance, for federal and state credit carryforwards | 1 | ||||
Cumulative undistributed earnings of the Company’s foreign subsidiaries | 60 | ||||
Cash associated with indefinitely reinvested foreign earnings | $ 29 | $ 23 | |||
Scenario, Forecast [Member] | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Income Taxes (Reconciliation Of
Income Taxes (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | |||
Gross unrecognized tax benefits at beginning of period | $ 13 | $ 16 | $ 13 |
Decreases in tax positions for prior years | (5) | ||
Increases in tax positions for current year | 3 | 3 | 3 |
Lapse in statute of limitations | (1) | (1) | (1) |
Gross unrecognized tax benefits at end of period | $ 14 | $ 13 | $ 16 |
Income Taxes (Components Of Inc
Income Taxes (Components Of Income (Loss) From Continuing Operations Before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of (loss) income from continuing operations before income taxes | |||
U.S. | $ 365 | $ 238 | $ 266 |
Foreign | 5 | 3 | 4 |
Income from Continuing Operations before Income Taxes | $ 370 | $ 241 | $ 270 |
Income Taxes (Reconciliation 54
Income Taxes (Reconciliation Of Effective Income Tax Rate) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of income tax computed at the U.S. federal statutory tax rate to the entity's effective income tax rate for continuing operations | |||
Tax at U.S. federal statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
State and local income taxes, net of U.S. federal benefit (as a percent) | 3.50% | 4.70% | 3.20% |
Tax credits (as a percent) | (0.60%) | (0.90%) | (0.80%) |
Other permanent items (as a percent) | 1.30% | 1.50% | 2.40% |
U.S. Tax Reform rate change | (73.30%) | ||
Remeasurment of prior year tax positions | (1.90%) | ||
Excess tax benefits from stock-based compensation | (4.00%) | (3.00%) | |
Other, including foreign rate differences and reserves (as a percent) | 0.50% | ||
Effective rate (as a percent) | (37.60%) | 35.40% | 39.80% |
Net reduction of total deferred tax liabilities | $ 271 | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | $ 11 |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense From Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. federal | $ 71 | $ 50 | $ 33 |
Foreign | 3 | 2 | 2 |
State and local | 13 | 12 | 12 |
Total current | 87 | 64 | 47 |
Deferred: | |||
U.S. federal | (235) | 17 | 59 |
Foreign | 2 | (2) | |
State and local | 7 | 6 | 1 |
Total deferred | (226) | 22 | 60 |
(Benefit) provision for income taxes | $ (139) | $ 85 | $ 107 |
Income Taxes (Deferred Tax Bala
Income Taxes (Deferred Tax Balances) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term deferred tax assets (liabilities): | ||
Intangible assets | $ (483) | $ (727) |
Property and equipment | (25) | (34) |
Prepaid expenses and deferred customer acquisition costs | (12) | (18) |
Receivables allowances | 9 | 13 |
Self-insured claims and related expenses | 7 | 11 |
Accrued liabilities | 14 | 28 |
Other long-term obligations | (12) | (19) |
Net operating loss and tax credit carryforwards | 19 | 36 |
Less valuation allowance | (11) | (7) |
Net Long-term deferred tax liability | (493) | (717) |
Deferred tax liability related primarily to the difference in the tax versus book basis of intangible assets | $ 507 | $ 759 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)entity | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Acquisitions [Line Items] | |||
Net purchase price | $ 16 | $ 144 | $ 125 |
Goodwill | $ 2,256 | 2,247 | 2,129 |
Landmark [Member] | |||
Acquisitions [Line Items] | |||
Net purchase price | 39 | ||
Goodwill | 37 | ||
Relcassification from other intangibles to goodwill | 4 | ||
Other intangibles related to acquisitions | $ 13 | ||
OneGuard Home Warranties and Landmark [Member] | |||
Acquisitions [Line Items] | |||
Average useful life for each class of definite lived intangible asset recorded for acquisitions | 5 years | ||
OneGuard Home Warranties [Member] | |||
Acquisitions [Line Items] | |||
Net purchase price | $ 61 | ||
Goodwill | 57 | ||
Other intangibles related to acquisitions | $ 15 | ||
Average useful life for each class of definite lived intangible asset recorded for acquisitions | 5 years | ||
Pest control, termite and franchise acquisitions [Member] | |||
Acquisitions [Line Items] | |||
Number of Businesses Acquired | entity | 4 | ||
Net purchase price | $ 16 | $ 43 | 125 |
Goodwill | 2 | 34 | 74 |
Other intangibles related to acquisitions | $ 13 | $ 6 | $ 46 |
Average useful life for each class of definite lived intangible asset recorded for acquisitions | 3 years | ||
Minimum [Member] | Pest control, termite and franchise acquisitions [Member] | |||
Acquisitions [Line Items] | |||
Average useful life for each class of definite lived intangible asset recorded for acquisitions | 1 year | ||
Maximum [Member] | Pest control, termite and franchise acquisitions [Member] | |||
Acquisitions [Line Items] | |||
Average useful life for each class of definite lived intangible asset recorded for acquisitions | 8 years |
Acquisitions (Schedule Of Suppl
Acquisitions (Schedule Of Supplemental Cash Flow Information Regarding Acquisitions) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental cash flow information regarding acquisitions | |||
Assets acquired | $ 17 | $ 184 | $ 126 |
Liabilities assumed | (1) | (40) | |
Net assets acquired | 16 | 144 | 125 |
Net cash paid | 13 | 121 | 92 |
Seller financed debt | 3 | 23 | 33 |
Purchase price | $ 16 | $ 144 | $ 125 |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - TGLP [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details of assets and liabilities and operating results of discontinued operations | |||
Written notice period for termination of service agreement | 90 days | ||
Amount of fees which is included, net of costs incurred, in Selling and administrative expenses | $ 2 | $ 9 | $ 25 |
Discontinued Operations (Schedu
Discontinued Operations (Schedule Of Operating Results Of Discontinued Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating results of discontinued operations | |||
Gain (loss) from discontinued operations, net of income taxes | $ (1) | $ (2) | |
TruGreen [Member] | |||
Operating results of discontinued operations | |||
Selling and administrative expenses | $ (1) | 1 | 3 |
Income (loss) before income taxes | $ 1 | (1) | (3) |
Benefit for income taxes | (1) | ||
Gain (loss) from discontinued operations, net of income taxes | $ (1) | $ (2) |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2018 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 34 | $ 17 | $ 5 | ||
Restructuring charges, net of tax | 24 | 11 | $ 3 | ||
American Home Shield Spin-off [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 13 | ||||
Restructuring and Related Cost, Expected Cost Remaining | 1 | ||||
Global Service Center Relocation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | [1] | $ 5 | $ 3 | ||
Minimum [Member] | Scenario, Forecast [Member] | American Home Shield Spin-off [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost Remaining | $ 35 | ||||
Maximum [Member] | Scenario, Forecast [Member] | American Home Shield Spin-off [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost Remaining | 45 | ||||
Maximum [Member] | Scenario, Forecast [Member] | Global Service Center Relocation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost Remaining | $ 8 | ||||
[1] |
Restructuring Charges (Schedule
Restructuring Charges (Schedule Of Restructuring Charges) (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017USD ($)entity | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 34 | $ 17 | $ 5 | |
Number Of Independent, Publicly Traded Companies | entity | 2 | |||
Share-based Compensation | $ 12 | 13 | 10 | |
Terminix [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2 | 7 | 3 | |
Severance costs | 1 | |||
Lease termination costs | 2 | 4 | 3 | |
Restructuring and Related Cost, Expected Cost Remaining | 1 | |||
American Home Shield [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2 | |||
Franchise Services Group [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1 | 1 | ||
Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2 | 5 | 1 | |
Professional fees | 2 | |||
Accelerated depreciation | 2 | |||
Severance and other restructuring costs | 2 | 2 | $ 1 | |
Restructuring and Related Cost, Expected Cost Remaining | 1 | |||
Global Service Center Relocation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | [1] | 5 | 3 | |
Impairment charges | 1 | |||
Accelerated depreciation | 2 | |||
Professional fees, employee retention costs and other costs | 1 | |||
Redundant rent expense | 2 | |||
Loss on sale of asset related to the relocation of the Company's Global Service Center | 1 | |||
Maximum [Member] | American Home Shield [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Remaining | 1 | |||
Maximum [Member] | Franchise Services Group [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Remaining | 1 | |||
Leadership Transition [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 11 | |||
Severance costs | 5 | |||
Share-based Compensation | 5 | |||
Restructuring and Related Cost, Expected Cost Remaining | 4 | |||
Leadership Transition [Member] | Terminix [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Share-based Compensation | $ 3 | |||
American Home Shield Spin-off [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 13 | |||
Professional fees, employee retention costs and other costs | 13 | |||
Restructuring and Related Cost, Expected Cost Remaining | $ 1 | |||
[1] |
Restructuring Charges (Schedu63
Restructuring Charges (Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending balances of accrued restructuring charges | |||
Balance at the beginning of the period | $ 3 | $ 1 | |
Costs incurred | 34 | 17 | $ 5 |
Costs paid or otherwise settled | (29) | (16) | |
Balance at the end of the period | $ 8 | $ 3 | $ 1 |
Commitments and Contingencies64
Commitments and Contingencies (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | ||||
401(k) Plan corrective contribution | $ (3) | $ 2 | $ 23 | |
Rent expense | 32 | 29 | 29 | |
Future long-term non-cancelable operating lease payments in 2018 | $ 18 | 18 | ||
Future long-term non-cancelable operating lease payments in 2019 | 14 | 14 | ||
Future long-term non-cancelable operating lease payments in 2020 | 16 | 16 | ||
Future long-term non-cancelable operating lease payments in 2021 | 13 | 13 | ||
Future long-term non-cancelable operating lease payments in 2022 | 11 | 11 | ||
Future long-term non-cancelable operating lease payments in 2023 and thereafter | 73 | $ 73 | ||
Number of misdemeanor violations | item | 4 | |||
Gain (Loss) Related to Litigation Settlement | $ (4) | (93) | $ (9) | |
Florida Fumigation Matter [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | 3 | |||
Net charge related to unasserted civil claims | 3 | |||
Terminix International USVI, LLC (“TMX USVI”) [Member] | Plea Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Fines and penalties | 5 | 5 | ||
The Terminix International Company Limited Partnership (“TMX LP”) [Member] | Plea Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Fines and penalties | 5 | 5 | ||
TMX USVI and TMX LP [Member] | Plea Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Fines and penalties | 10 | $ 10 | ||
Training certification courses with respect to pesticide application and safety in the U.S. Virgin Islands | 5 years | |||
Gain (Loss) Related to Litigation Settlement | $ 1 | $ 10 |
Commitments and Contingencies65
Commitments and Contingencies (Schedule Of Reconciliation Of Beginning And Ending Accrued Self-Insured Claims) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 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 | 36 | 58 |
Cash payments | (42) | (51) |
Balance at the end of the period | $ 115 | $ 120 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Benefit Plans [Abstract] | |||
Discretionary contributions to qualified profit sharing and non qualified deferred compensation plan | $ 15 | $ 15 | $ 14 |
Deferred Compensation Arrangement with Individual, Estimate Of Correction Cost, Maximum | 22 | ||
401(k) Plan corrective contribution | $ (3) | $ 2 | $ 23 |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Long-term debt [Line Items] | ||
Less current portion | $ (144) | $ (59) |
Total long-term debt | 2,643 | 2,772 |
Vehicle Capital Leases [Member] | ||
Long-term debt [Line Items] | ||
Vehicle capital leases | $ 90 | 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 | $ 1,615 | 1,628 |
Unamortized debt issuance costs | 16 | 18 |
Unamortized original issue discount | 3 | $ 4 |
Senior Secured Term Loan Facility Maturing In 2023 [Member] | LIBOR [Member] | ||
Long-term debt [Line Items] | ||
Interest rate (as a percent) | 0.00% | |
Borrowing margin (as a percent) | 2.50% | |
Senior Secured Term Loan Facility Maturing In 2023 [Member] | Alternative Base Rate [Member] | ||
Long-term debt [Line Items] | ||
Interest rate (as a percent) | 1.00% | |
Borrowing margin (as a percent) | 1.50% | |
Revolving Credit Facility Maturing In 2021 [Member] | LIBOR [Member] | ||
Long-term debt [Line Items] | ||
Borrowing margin (as a percent) | 2.50% | |
Revolving Credit Facility Maturing In 2021 [Member] | Alternative Base Rate [Member] | ||
Long-term debt [Line Items] | ||
Borrowing margin (as a percent) | 1.50% | |
5.125% Notes Maturing In 2024 [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | $ 739 | $ 737 |
Interest rate (as a percent) | 5.125% | 5.125% |
Unamortized debt issuance costs | $ 11 | $ 13 |
7.10% Notes Maturing In 2018 [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | $ 79 | 77 |
Interest rate (as a percent) | 7.10% | |
7.45% Notes Maturing In 2027 [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | $ 169 | 167 |
Interest rate (as a percent) | 7.45% | |
7.25% Notes Maturing In 2038 [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | $ 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 | $ 37 | 48 |
Other [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | $ 54 | $ 71 |
Long-Term Debt (Term Loan Facil
Long-Term Debt (Term Loan Facility Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2015 | Feb. 28, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Long-term debt [Line Items] | ||||||
Debt issuance costs | $ 34,000,000 | $ 5,000,000 | ||||
Percentage of capital stock of direct foreign subsidiaries | 65.00% | |||||
Loss on extinguishment of debt | $ (6,000,000) | $ (32,000,000) | (58,000,000) | |||
Notional amount | $ 650,000,000 | 650,000,000 | $ 700,000,000 | |||
Interest rate swap agreement termination fee | $ 10,000,000 | |||||
Weighted Average Fixed Rate (as a percent) | [1] | 1.493% | 1.493% | 1.867% | ||
Interest rate swap agreements effective November 8, 2016 [Member] | ||||||
Long-term debt [Line Items] | ||||||
Derivative, floor interest rate | 0.00% | |||||
Borrowing margin (as a percent) | 2.50% | |||||
Term of agreement | 7 years | |||||
Derivative, inception date | Nov. 8, 2016 | |||||
Notional amount | $ 650,000,000 | |||||
Weighted Average Fixed Rate (as a percent) | 1.493% | |||||
Old Term Loan Facility [Member] | ||||||
Long-term debt [Line Items] | ||||||
Debt repaid in full | $ 2,356,000,000 | |||||
Loss on extinguishment of debt | 32,000,000 | |||||
7% 2020 Notes [Member] | ||||||
Long-term debt [Line Items] | ||||||
Repayment of principal amount | $ 488,000,000 | |||||
Redemption percentage | 105.25% | |||||
Write-off of debt issuance costs | $ 6,000,000 | |||||
Interest rate (as a percent) | 7.00% | |||||
Loss on extinguishment of debt | $ (31,000,000) | |||||
8% 2020 Notes [Member] | ||||||
Long-term debt [Line Items] | ||||||
Repayment of principal amount | $ 200,000,000 | $ 190,000,000 | $ 200,000,000 | |||
Redemption percentage | 106.00% | 106.00% | 106.00% | |||
Write-off of debt issuance costs | $ 2,000,000 | $ 2,000,000 | ||||
Interest rate (as a percent) | 8.00% | |||||
Loss on extinguishment of debt | $ (14,000,000) | $ (13,000,000) | ||||
April Incremental Term Loans [Member] | ||||||
Long-term debt [Line Items] | ||||||
Face amount of debt instrument | $ 175,000,000 | |||||
Debt issuance costs | 2,000,000 | |||||
August Incremental Term Loans [Member] | ||||||
Long-term debt [Line Items] | ||||||
Face amount of debt instrument | 400,000,000 | |||||
Debt issuance costs | 3,000,000 | |||||
Payment of debt issuance costs and original issue discount costs | 5,000,000 | |||||
Original debt issue discount | $ 2,000,000 | |||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | ||||||
Long-term debt [Line Items] | ||||||
Face amount of debt instrument | 1,650,000,000 | |||||
Write-off of original issue discount | 14,000,000 | |||||
Write-off of debt issuance costs | $ 18,000,000 | |||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | LIBOR [Member] | ||||||
Long-term debt [Line Items] | ||||||
Interest rate (as a percent) | 0.00% | |||||
Borrowing margin (as a percent) | 2.50% | |||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | Alternative Base Rate [Member] | ||||||
Long-term debt [Line Items] | ||||||
Interest rate (as a percent) | 1.00% | |||||
Borrowing margin (as a percent) | 1.50% | |||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | Interest rate swap agreements effective November 8, 2016 [Member] | ||||||
Long-term debt [Line Items] | ||||||
Face amount of debt instrument | $ 650,000,000 | |||||
Effective interest rate | 1.493% | |||||
Term Loan Facility, the Revolving Credit Facility and the 2024 Notes [Member] | ||||||
Long-term debt [Line Items] | ||||||
Debt issuance costs | $ 34,000,000 | |||||
Payment of debt issuance costs and original issue discount costs | 38,000,000 | |||||
Original debt issue discount | $ 4,000,000 | |||||
[1] | Before the application of the applicable borrowing margin. |
Long-Term Debt (Schedule of Int
Long-Term Debt (Schedule of Interest Rate Swap Agreements) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Long-Term Debt [Abstract] | ||||
Notional amount | $ 650,000,000 | $ 650,000,000 | $ 700,000,000 | |
Entered into effect | 650,000,000 | |||
Terminated | $ (700,000,000) | |||
Weighted Average Fixed Rate (as a percent) | [1] | 1.493% | 1.493% | 1.867% |
[1] | Before the application of the applicable borrowing margin. |
Long-Term Debt (Revolving Credi
Long-Term Debt (Revolving Credit Facility Narrative) (Details) - Revolving Credit Facility Maturing In 2021 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Long-term debt [Line Items] | ||
Maximum borrowings | $ 300,000,000 | |
Available borrowing capacity | $ 267,000,000 | |
LIBOR [Member] | ||
Long-term debt [Line Items] | ||
Borrowing margin (as a percent) | 2.50% | |
Alternative Base Rate [Member] | ||
Long-term debt [Line Items] | ||
Borrowing margin (as a percent) | 1.50% | |
Letter of Credit [Member] | ||
Long-term debt [Line Items] | ||
Maximum borrowings | $ 225,000,000 | |
Borrowings outstanding | $ 33,000,000 |
Long-Term Debt (2024, 2020 & 20
Long-Term Debt (2024, 2020 & 2038 Notes Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017 | May 31, 2017 | Apr. 30, 2015 | Feb. 28, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ 6,000,000 | $ 32,000,000 | $ 58,000,000 | ||||
5.125% Notes Maturing In 2024 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 5.125% | 5.125% | |||||
Face amount of debt instrument | $ 750,000,000 | ||||||
8% 2020 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 8.00% | ||||||
Repayment of principal amount | $ 200,000,000 | $ 190,000,000 | $ 200,000,000 | ||||
Loss on extinguishment of debt | 14,000,000 | 13,000,000 | |||||
Prepayment premium loss on extinguishment of debt | 12,000,000 | 11,000,000 | |||||
Write-off of debt issuance costs | $ 2,000,000 | $ 2,000,000 | |||||
Redemption percentage | 106.00% | 106.00% | 106.00% | ||||
7% 2020 Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 7.00% | ||||||
Repayment of principal amount | $ 488,000,000 | ||||||
Loss on extinguishment of debt | 31,000,000 | ||||||
Prepayment premium loss on extinguishment of debt | 25,000,000 | ||||||
Write-off of debt issuance costs | $ 6,000,000 | ||||||
Redemption percentage | 105.25% | ||||||
7.25% Notes Maturing In 2038 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (as a percent) | 7.25% | ||||||
Repayment of principal amount | $ 13,000,000 | $ 17,000,000 | |||||
Loss on extinguishment of debt | $ 6,000,000 | ||||||
Redemption percentage | 104.625% | 97.00% | |||||
Old Term Loan Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ (32,000,000) |
Long-Term Debt (Other Narrative
Long-Term Debt (Other Narrative) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Long-Term Debt [Abstract] | |
Future scheduled long term debt payments in 2018 | $ 144 |
Future scheduled long term debt payments in 2019 | 65 |
Future scheduled long term debt payments in 2020 | 45 |
Future scheduled long term debt payments in 2021 | 31 |
Future scheduled long term debt payments in 2022 | 20 |
Capital lease obligations | 91 |
Future capital lease payments in 2018 | 29 |
Future capital lease payments in 2019 | 24 |
Future capital lease payments in 2020 | 21 |
Future capital lease payments in 2021 | 13 |
Future capital lease payments in 2022 | $ 3 |
Cash and Marketable Securitie73
Cash and Marketable Securities (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and Marketable Securities [Abstract] | |||
Maximum maturity term of cash, money market funds and certificates of deposits | 3 months | ||
Portion of unrealized losses in loss position for more than one year | $ 0 | $ 0 | |
Impairment charges due to other than temporary declines in the value of certain investments | $ 0 | $ 0 | $ 0 |
Cash and Marketable Securitie74
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 | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 44 | $ 43 |
Gross Unrealized Gains | 3 | 1 |
Fair Value | 47 | 44 |
Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 29 | 27 |
Fair Value | 29 | 27 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 15 | 15 |
Gross Unrealized Gains | 3 | 1 |
Fair Value | $ 18 | $ 17 |
Cash and Marketable Securitie75
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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and Marketable Securities [Abstract] | |||
Proceeds from sale of securities | $ 12 | $ 42 | $ 22 |
Maturities of securities | $ 36 | 7 | 11 |
Gross realized gains, pre-tax | 4 | 7 | |
Gross realized gains, net of tax | $ 2 | $ 4 |
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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | $ (3) | $ (21) | |
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | 5 | 21 | |
Tax benefit | 1 | 9 | |
After-tax amount | 4 | 13 | |
Amounts reclassified from accumulated other comprehensive Income (loss) | 4 | 5 | |
Net current period other comprehensive income (loss) | 8 | 18 | $ (13) |
Balance at the end of period | 5 | (3) | (21) |
Unrealized (Losses) Gains 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 | 20 | ||
Tax benefit | 8 | ||
After-tax amount | 13 | ||
Amounts reclassified from accumulated other comprehensive Income (loss) | 4 | 7 | |
Net current period other comprehensive income (loss) | 4 | 20 | |
Balance at the end of period | 16 | 12 | (7) |
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 | 2 | 1 | |
Tax benefit | 1 | 1 | |
After-tax amount | 1 | ||
Amounts reclassified from accumulated other comprehensive Income (loss) | (2) | ||
Net current period other comprehensive income (loss) | 1 | (2) | |
Balance at the end of period | 2 | 1 | 2 |
Foreign Currency Translation (Loss) Gain [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 | 3 | ||
After-tax amount | 3 | ||
Net current period other comprehensive income (loss) | 3 | ||
Balance at the end of period | $ (12) | $ (15) | $ (15) |
Comprehensive Income (Loss) (Sc
Comprehensive Income (Loss) (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of services rendered and products sold | $ (1,552) | $ (1,448) | $ (1,375) |
Interest expense | (150) | (153) | (167) |
Interest and net investment income | 4 | 6 | 9 |
Income from Continuing Operations before Income Taxes | 370 | 241 | 270 |
Provision for income taxes | 139 | (85) | (107) |
Net Income | 510 | 155 | 160 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net Income | (4) | (5) | (3) |
Unrealized (Losses) Gains on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net losses on derivatives | (6) | (11) | (11) |
Provision for income taxes | 2 | 4 | 4 |
Net Income | (4) | (7) | (7) |
Unrealized (Losses) Gains 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 | 3 | (4) | (5) |
Unrealized (Losses) Gains 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 | $ (8) | (7) | (6) |
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 | 7 | |
Provision for income taxes | (1) | (3) | |
Net Income | $ 2 | $ 4 |
Supplemental Cash Flow Inform78
Supplemental Cash Flow Information (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash paid for or (received from): | ||||
Interest rate swap agreement termination fee | $ 10 | |||
Cash and cash equivalents | $ 475 | 291 | ||
Restricted cash | 89 | 95 | $ 0 | |
Cash and Cash Equivalents Including Restricted Cash, at Carrying Value | 563 | 386 | 296 | $ 389 |
Capital lease and other non-cash financing transactions | 41 | 61 | 27 | |
Cash received for franchise | $ 4 | 8 | 14 | |
Merry Maids [Member] | ||||
Cash paid for or (received from): | ||||
Total purchase price for conversion of certain company-owned Merry Maids branches to franchises | 9 | 17 | ||
Cash received for franchise | 6 | 13 | ||
Financing provided for franchise | $ 2 | $ 4 |
Supplemental Cash Flow Inform79
Supplemental Cash Flow Information (Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash paid for or (received from): | |||
Interest expense | $ 134 | $ 134 | $ 178 |
Interest and dividend income | (1) | (2) | (3) |
Income taxes, net of refunds | $ 109 | $ 71 | $ 44 |
Capital Stock (Details)
Capital Stock (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Stock [Abstract] | ||
Common stock registered for offering and sale | 2,000,000,000 | 2,000,000,000 |
Shares of common stock issued and held by CDRSVM Holdings, LLC | 146,662,232 | 144,339,338 |
Shares of common stock outstanding | 135,141,048 | 135,030,283 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)item$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Stock-Based Compensation [Line Items] | |||
Number of shares of common stock available for issuance | 16,396,667 | ||
Number of shares of common stock remaining for future grant | 7,299,555 | ||
Number of shares of entity's common stock based on the fair market value of which maximum per-share exercise price is determined | $ / shares | $ 1 | ||
Period for which vested options will remain exercisable following termination of employment without cause | 3 months | ||
Period for which vested options will remain exercisable following termination of employment without cause in case of death, disability or retirement at normal retirement age | 1 year | ||
Number of shares of Common Stock offered | 80,711,763 | ||
Stock-based compensation expense | $ | $ 12 | $ 13 | $ 10 |
Stock-based compensation expense, net of tax | $ | 7 | $ 8 | $ 6 |
Total unrecognized compensation costs related to non-vested stock options and restricted share units | $ | $ 26 | ||
Weighted-average period of recognition of stock-based compensation cost | 1 year 10 months 21 days | ||
MSIP and Omnibus Incentive Plan [Member] | |||
Stock-Based Compensation [Line Items] | |||
Number of shares of Common Stock offered | 0 | 0 | 0 |
Employee Stock Purchase Plan [Member] | |||
Stock-Based Compensation [Line Items] | |||
Discount established by the Company, maximum percent of the then-current fair market value | 10.00% | ||
Employee stock purchase plan, number of shares sold | 52,051 | 70,063 | 34,302 |
Number of shares of common stock available for issuance | 1,000,000 | ||
Stock Options [Member] | |||
Stock-Based Compensation [Line Items] | |||
Granted to employees (in shares) | 747,761 | 684,329 | 411,506 |
Granted to employees (in dollars per share) | $ / shares | $ 39.27 | $ 39.54 | $ 32.70 |
Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 12.45 | $ 13.58 | $ 11.91 |
Number of equal annual vesting installments | item | 4 | ||
Vesting period | 4 years | ||
Forfeiture rate (as a percent) | 18.34% | ||
Total intrinsic value of stock options exercised | $ | $ 60 | $ 20 | $ 25 |
Total fair value of stock options vested | $ | $ 6 | $ 6 | $ 5 |
Stock Options [Member] | MSIP and Omnibus Incentive Plan [Member] | |||
Stock-Based Compensation [Line Items] | |||
Granted to employees (in shares) | 747,761 | ||
Granted to employees (in dollars per share) | $ / shares | $ 39.27 | ||
Vesting period | 10 years | ||
Super performance options granted to CEO | |||
Stock-Based Compensation [Line Items] | |||
Forfeiture rate (as a percent) | 0.00% | ||
RSUs [Member] | |||
Stock-Based Compensation [Line Items] | |||
Number of equal annual vesting installments | item | 3 | ||
Granted to employees (in shares) | 416,604 | 267,739 | 304,680 |
Granted to employees (in dollars per share) | $ / shares | $ 40.51 | $ 39.15 | $ 32.55 |
Total fair value of RSUs vested | $ | $ 7 | $ 10 | $ 7 |
Number of shares of common stock into which each award will be converted upon vesting | 1 | ||
Performance Shares [Member] | |||
Stock-Based Compensation [Line Items] | |||
Vesting period | 3 years | ||
Granted to employees (in shares) | 120,778 | 131,352 | 0 |
Granted to employees (in dollars per share) | $ / shares | $ 38.98 | $ 39.59 | |
Non-vested Stock Options and RSUs (Part of Severance Agreement with Former President of Terminix [Member] | |||
Stock-Based Compensation [Line Items] | |||
Stock-based compensation expense | $ | $ 5 | $ 3 | |
American Home Shield Spin-off [Member] | RSUs [Member] | |||
Stock-Based Compensation [Line Items] | |||
Granted to employees (in shares) | 162,172 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule Of Assumptions Used To Estimate Value Of Each Option Award) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assumptions used to estimate value of each option award | |||
Expected volatility, minimum (as a percent) | 32.30% | 34.10% | |
Stock Options [Member] | |||
Assumptions used to estimate value of each option award | |||
Expected volatility (as a percent) | 27.70% | 32.30% | 34.10% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days |
Risk-free interest rate, minimum (as a percent) | 1.83% | 1.25% | 1.50% |
Risk-free interest rate, maximum (as a percent) | 2.29% | 1.46% | 1.83% |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary Of Option Activity Under The MSIP) (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options | |||
Granted to employees (in shares) | 747,761 | 684,329 | 411,506 |
Weighted Average Exercise Price | |||
Granted to employees (in dollars per share) | $ 39.27 | $ 39.54 | $ 32.70 |
MSIP and Omnibus Incentive Plan [Member] | |||
Stock Options | |||
Total outstanding at the beginning of the period (in shares) | 3,155,344 | ||
Granted to employees (in shares) | 747,761 | ||
Exercised (in shares) | (2,050,978) | ||
Forfeited (in shares) | (726,965) | ||
Total outstanding at the end of the period (in shares) | 1,125,162 | 3,155,344 | |
Total exercisable at the end of the period (in shares) | 214,369 | ||
Weighted Average Exercise Price | |||
Total outstanding at the beginning of the period (in dollars per share) | $ 18.96 | ||
Granted to employees (in dollars per share) | 39.27 | ||
Exercised (in dollars per share) | 13.61 | ||
Forfeited (in dollars per share) | 30.38 | ||
Total outstanding at the end of the period (in dollars per share) | 34.84 | $ 18.96 | |
Total exercisable at the end of the period (in dollars per share) | $ 25.97 | ||
Total Outstanding, Beginning of Period | $ 60 | ||
Total Outstanding, End of Period | 18 | $ 60 | |
Total exercisable, End of Period | $ 5 | ||
Weighted Average Remaining Contractual Term | |||
Total outstanding at the end of the period | 8 years 1 month 24 days | 6 years 11 months 19 days | |
Total exercisable at the end of the period | 6 years 5 months 9 days |
Stock-Based Compensation (Sum84
Stock-Based Compensation (Summary Of RSU Activity Under The MSIP) (Details) - RSUs [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RSUs | |||
Total outstanding at the beginning of the period (in shares) | 439,134 | ||
Granted to employees (in shares) | 416,604 | 267,739 | 304,680 |
Vested (in shares) | (184,151) | ||
Forfeited (in shares) | (99,663) | ||
Total outstanding at the end of the period (in shares) | 571,924 | 439,134 | |
Weighted Average Grant Date Fair Value | |||
Total outstanding at the beginning of the period (in dollars per share) | $ 35.63 | ||
Granted to employees (in dollars per share) | 40.51 | $ 39.15 | $ 32.55 |
Vested (in dollars per share) | 33.71 | ||
Forfeited (in dollars per share) | 38.77 | ||
Total outstanding at the end of the period (in dollars per share) | $ 39.26 | $ 35.63 |
Stock-Based Compensation (Sum85
Stock-Based Compensation (Summary Of Performance Share Activity Under The Omnibus Incentive Plan) (Details) - Performance Shares [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Performance Shares | |||
Total outstanding at the beginning of the period (in shares) | 109,881 | ||
Granted to executives (in shares) | 120,778 | 131,352 | 0 |
Forfeited (in shares) | (136,731) | ||
Total outstanding at the end of the period (in shares) | 93,928 | 109,881 | |
Weighted Average Grant Date Fair Value | |||
Total outstanding at the beginning of the period (in dollars per share) | $ 39.59 | ||
Granted to executives (in dollars per share) | 38.98 | $ 39.59 | |
Forfeited (in dollars per share) | 39.55 | ||
Total outstanding at the end of the period (in dollars per share) | $ 38.86 | $ 39.59 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Aggregate notional amount | $ 650,000,000 | $ 650,000,000 | $ 700,000,000 |
Hedging gains and losses in accumulated other comprehensive income expected to be recognized in earnings, net of tax | 1,000,000 | ||
Carrying Value [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total debt | 2,787,000,000 | 2,831,000,000 | |
Estimated Fair Value [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Fair value of total debt | 2,888,000,000 | $ 2,930,000,000 | |
Fuel Swap Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Aggregate notional amount | 30,000,000 | ||
Letters of credit posted as collateral under fuel hedging program | $ 2,000,000 |
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 | Dec. 31, 2017 | Dec. 31, 2016 |
Quoted Price In Active Markets (Level 1) [Member] | ||
Financial Assets: | ||
Deferred compensation trust | $ 12 | $ 8 |
Investments in marketable securities | 34 | 33 |
Total financial assets | 46 | 40 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Assets: | ||
Investments in marketable securities | 1 | 3 |
Total financial assets | 26 | 30 |
Total financial liabilities | 4 | |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Noncurrent | 25 | 27 |
Derivative liability, Noncurrent | 4 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Financial Assets: | ||
Total financial assets | 3 | 5 |
Significant Unobservable Inputs (Level 3) [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 3 | 5 |
Carrying Value [Member] | ||
Financial Assets: | ||
Deferred compensation trust | 12 | 8 |
Investments in marketable securities | 35 | 36 |
Total financial assets | 75 | 75 |
Total financial liabilities | 4 | |
Carrying Value [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 3 | 5 |
Carrying Value [Member] | Interest Rate Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, Noncurrent | $ 25 | 27 |
Derivative liability, Noncurrent | $ 4 |
Fair Value Measurements (Sche88
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 | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 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 | 3 | (4) |
Included in other comprehensive income | (2) | 8 |
Settlements | (3) | 4 |
Balance at the end of the period | $ 3 | $ 5 |
Fair Value Measurements (Sche89
Fair Value Measurements (Schedule Of Level 3 Financial Instruments) (Details) - Fuel Swap Contracts [Member] $ in Millions | Dec. 31, 2017USD ($)$ / gal | Dec. 31, 2016USD ($)$ / gal | Dec. 31, 2015USD ($) |
Information relating to the significant unobservable inputs of Level 3 financial instruments | |||
Fair value at the end of the period | $ | $ 3 | $ 5 | $ (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) | 2.43 | 2.31 | |
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) | 2.90 | 2.85 | |
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) | 2.66 | 2.55 |
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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income from continuing operations | $ 509 | $ 155 | $ 162 |
Weighted average common shares outstanding | 134.4 | 135.3 | 135 |
Effect of dilutive securities: | |||
Weighted average common shares outstanding-assuming dilution | 135.4 | 137.3 | 136.6 |
Basic earnings per share from continuing operations (in dollars per share) | $ 3.79 | $ 1.15 | $ 1.20 |
Diluted earnings per share from continuing operations (in dollars per share) | $ 3.76 | $ 1.13 | $ 1.19 |
RSUs [Member] | |||
Effect of dilutive securities: | |||
Dilutive securities | 0.1 | 0.2 | 0.2 |
Stock Options [Member] | |||
Effect of dilutive securities: | |||
Dilutive securities | 0.9 | 1.8 | 1.4 |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0.8 | 0.9 | 0.3 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) $ in Millions | Feb. 26, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||||||
Preliminary purchase price | $ 16 | $ 144 | $ 125 | |||
Subsequent Event [Member] | Copesan Services, Inc. [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Date of acquisition agreement | Feb. 26, 2018 | |||||
Preliminary purchase price | $ 150 | |||||
Payments to acquire businesses | $ 50 | $ 100 |
Schedule II Valuation And Qua92
Schedule II Valuation And Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance For Doubtful Accounts, Accounts Receivable [Member] | |||
Allowance for doubtful accounts | |||
Balance at Beginning of Period | $ 21 | $ 21 | $ 22 |
Additions Charged to Costs and Expenses | 42 | 39 | 35 |
Deductions | 40 | 39 | 36 |
Balance at End of Period | 22 | 21 | 21 |
Allowance For Doubtful Accounts, Notes Feceivable [Member] | |||
Allowance for doubtful accounts | |||
Balance at Beginning of Period | 2 | 2 | 3 |
Deductions | 1 | 1 | |
Balance at End of Period | 1 | 2 | 2 |
Income Tax Valuation Allowance [Member] | |||
Allowance for doubtful accounts | |||
Balance at Beginning of Period | 7 | 7 | 7 |
Additions Charged to Costs and Expenses | 4 | 2 | 1 |
Deductions | 2 | 2 | |
Balance at End of Period | $ 11 | $ 7 | $ 7 |