Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ServiceMaster Global Holdings, Inc. | |
Entity Central Index Key | 0001428875 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 135,618,768 | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2019 | |
Security 12b Title | Common, par value $0.01 | |
Security Exchange Name | NYSE | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SERV | |
Entity File Number | 001-36507 | |
Entity Address, Address Line One | 150 Peabody Place | |
Entity Address, City or Town | Memphis | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 38103 | |
Entity Tax Identification Number | 20-8738320 | |
City Area Code | 901 | |
Local Phone Number | 597-1400 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Operations and Comprehensive Income [Abstract] | ||||
Revenue | $ 528 | $ 496 | $ 1,570 | $ 1,443 |
Cost of services rendered and products sold | 305 | 278 | 869 | 776 |
Selling and administrative expenses | 149 | 146 | 436 | 417 |
Amortization expense | 7 | 6 | 19 | 14 |
Acquisition-related costs | 8 | 1 | 12 | 2 |
Fumigation related matters | 1 | 1 | ||
Restructuring and other charges | 5 | 1 | 15 | 13 |
Realized (gain) on investment in frontdoor, inc. | (40) | |||
Interest expense | 19 | 33 | 64 | 107 |
Interest and net investment income | (1) | (3) | (5) | (4) |
Loss on extinguishment of debt | 10 | 6 | 10 | |
Income from Continuing Operations before Income Taxes | 35 | 25 | 193 | 107 |
Provision for income taxes | 9 | 7 | 39 | 32 |
Income from Continuing Operations | 26 | 18 | 155 | 74 |
Gain (loss) from discontinued operations, net of income taxes | 53 | (1) | 133 | |
Net Income | 25 | 71 | 154 | 207 |
Total Comprehensive Income | $ 18 | $ 74 | $ 141 | $ 224 |
Weighted-average common shares outstanding - Basic | 135.8 | 135.6 | 135.9 | 135.4 |
Weighted-average common shares outstanding - Diluted | 136.5 | 136 | 136.5 | 135.8 |
Basic Earnings Per Share: | ||||
Income from Continuing Operations (in dollars per share) | $ 0.19 | $ 0.13 | $ 1.14 | $ 0.55 |
Gain (loss) from discontinued operations, net of income taxes (in dollars per share) | 0.39 | 0.98 | ||
Net Income (in dollars per share) | 0.19 | 0.52 | 1.13 | 1.53 |
Diluted Earnings Per Share: | ||||
Income from Continuing Operations (in dollars per share) | 0.19 | 0.13 | 1.13 | 0.55 |
Gain (loss) from discontinued operations, net of income taxes (in dollars per share) | 0.39 | 0.98 | ||
Net Income (in dollars per share) | $ 0.19 | $ 0.52 | $ 1.13 | $ 1.52 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 140 | $ 224 |
Investment in frontdoor, inc. | 445 | |
Receivables, less allowances of $24 and $21, respectively | 214 | 186 |
Inventories | 45 | 45 |
Prepaid expenses and other assets | 72 | 61 |
Total Current Assets | 470 | 962 |
Other Assets: | ||
Property and equipment, net | 208 | 201 |
Operating lease right-of-use assets | 98 | |
Goodwill | 2,206 | 1,956 |
Intangible assets, primarily trade names, service marks and trademarks, net | 1,718 | 1,588 |
Restricted cash | 89 | 89 |
Notes receivable | 47 | 43 |
Long-term marketable securities | 19 | 21 |
Deferred customer acquisition costs | 103 | 77 |
Other assets | 60 | 87 |
Total Assets | 5,017 | 5,023 |
Current Liabilities: | ||
Accounts payable | 129 | 89 |
Accrued liabilities: | ||
Payroll and related expenses | 61 | 60 |
Self-insured claims and related expenses | 48 | 58 |
Accrued interest payable | 21 | 14 |
Other | 72 | 61 |
Deferred revenue | 99 | 95 |
Current portion of lease liability | 18 | |
Long-term lease liability | 56 | 49 |
Total Current Liabilities | 505 | 425 |
Long-Term Debt | 1,398 | 1,727 |
Other Long-Term Liabilities: | ||
Deferred taxes | 507 | 484 |
Other long-term obligations, primarily self-insured claims | 158 | 182 |
Long-term lease liability | 113 | |
Total Other Long-Term Liabilities | 778 | 666 |
Commitments and Contingencies (Note 6) | ||
Stockholders' Equity: | ||
Common stock $0.01 par value (authorized 2,000,000,000 shares with 147,841,177 shares issued and 135,705,232 outstanding at September 30, 2019 and 147,209,928 shares issued and 135,687,558 outstanding at December 31, 2018) | 2 | 2 |
Additional paid-in capital | 2,330 | 2,309 |
Retained Earnings | 313 | 156 |
Accumulated other comprehensive (loss) income | (8) | 5 |
Less common stock held in treasury, at cost (12,135,945 shares at September 30, 2019 and 11,552,370 shares at December 31, 2018) | (300) | (267) |
Total Stockholders' Equity | 2,337 | 2,204 |
Total Liabilities and Stockholders' Equity | $ 5,017 | $ 5,023 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Statements of Financial Position [Abstract] | ||
Allowance for receivables (in dollars) | $ 24 | $ 21 |
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) | 147,841,177 | 147,209,928 |
Common stock, shares outstanding (in shares) | 135,705,232 | 135,687,558 |
Treasury stock (in shares) | 12,135,945 | 11,552,370 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Stock [Member] | Total |
Balance, shares at Dec. 31, 2017 | 147,000,000 | |||||
Balance, value at Dec. 31, 2017 | $ 2 | $ 2,321 | $ (895) | $ 5 | $ (267) | $ 1,167 |
Treasury Stock, Shares at Dec. 31, 2017 | (12,000,000) | |||||
Net income | 40 | 40 | ||||
Other comprehensive income (loss), net of tax | 10 | 10 | ||||
Total Comprehensive Income | 40 | 10 | 50 | |||
Cumulative effect of accounting changes | 14 | 2 | 16 | |||
Exercise of stock options, value | 2 | 2 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Balance, shares at Mar. 31, 2018 | 147,000,000 | |||||
Balance at Mar. 31, 2018 | $ 2 | 2,328 | (841) | 17 | $ (267) | 1,239 |
Treasury Stock, Shares at Mar. 31, 2018 | (12,000,000) | |||||
Balance, shares at Dec. 31, 2017 | 147,000,000 | |||||
Balance, value at Dec. 31, 2017 | $ 2 | 2,321 | (895) | 5 | $ (267) | 1,167 |
Treasury Stock, Shares at Dec. 31, 2017 | (12,000,000) | |||||
Net income | 207 | |||||
Other comprehensive income (loss), net of tax | 16 | |||||
Total Comprehensive Income | 224 | |||||
Balance, shares at Sep. 30, 2018 | 147,000,000 | |||||
Balance at Sep. 30, 2018 | $ 2 | 2,339 | (674) | 23 | $ (267) | 1,423 |
Treasury Stock, Shares at Sep. 30, 2018 | (12,000,000) | |||||
Balance, shares at Mar. 31, 2018 | 147,000,000 | |||||
Balance, value at Mar. 31, 2018 | $ 2 | 2,328 | (841) | 17 | $ (267) | 1,239 |
Treasury Stock, Shares at Mar. 31, 2018 | (12,000,000) | |||||
Net income | 96 | 96 | ||||
Other comprehensive income (loss), net of tax | 3 | 3 | ||||
Total Comprehensive Income | 96 | 3 | 99 | |||
Exercise of stock options, value | 4 | 4 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Balance, shares at Jun. 30, 2018 | 147,000,000 | |||||
Balance at Jun. 30, 2018 | $ 2 | 2,336 | (745) | 20 | $ (267) | 1,346 |
Treasury Stock, Shares at Jun. 30, 2018 | (12,000,000) | |||||
Net income | 71 | 71 | ||||
Other comprehensive income (loss), net of tax | 3 | 3 | ||||
Total Comprehensive Income | 71 | 3 | 74 | |||
Stock-based employee compensation | 3 | 3 | ||||
Balance, shares at Sep. 30, 2018 | 147,000,000 | |||||
Balance at Sep. 30, 2018 | $ 2 | 2,339 | (674) | 23 | $ (267) | 1,423 |
Treasury Stock, Shares at Sep. 30, 2018 | (12,000,000) | |||||
Balance, shares at Dec. 31, 2018 | 147,000,000 | |||||
Balance, value at Dec. 31, 2018 | $ 2 | 2,309 | 156 | 5 | $ (267) | $ 2,204 |
Treasury Stock, Shares at Dec. 31, 2018 | (12,000,000) | (11,552,370) | ||||
Net income | 70 | $ 70 | ||||
Other comprehensive income (loss), net of tax | (2) | (2) | ||||
Total Comprehensive Income | 70 | (2) | 68 | |||
Exercise of stock options, value | 5 | 5 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Repurchase of common stock, value | $ (2) | (2) | ||||
Balance, shares at Mar. 31, 2019 | 148,000,000 | |||||
Balance at Mar. 31, 2019 | $ 2 | 2,318 | 226 | 3 | $ (269) | 2,280 |
Treasury Stock, Shares at Mar. 31, 2019 | (12,000,000) | |||||
Balance, shares at Dec. 31, 2018 | 147,000,000 | |||||
Balance, value at Dec. 31, 2018 | $ 2 | 2,309 | 156 | 5 | $ (267) | $ 2,204 |
Treasury Stock, Shares at Dec. 31, 2018 | (12,000,000) | (11,552,370) | ||||
Net income | $ 154 | |||||
Other comprehensive income (loss), net of tax | (13) | |||||
Total Comprehensive Income | 141 | |||||
Balance, shares at Sep. 30, 2019 | 148,000,000 | |||||
Balance at Sep. 30, 2019 | $ 2 | 2,330 | 313 | (8) | $ (300) | $ 2,337 |
Treasury Stock, Shares at Sep. 30, 2019 | (12,000,000) | (12,135,945) | ||||
Balance, shares at Mar. 31, 2019 | 148,000,000 | |||||
Balance, value at Mar. 31, 2019 | $ 2 | 2,318 | 226 | 3 | $ (269) | $ 2,280 |
Treasury Stock, Shares at Mar. 31, 2019 | (12,000,000) | |||||
Net income | 59 | 59 | ||||
Other comprehensive income (loss), net of tax | (4) | (4) | ||||
Total Comprehensive Income | 59 | (4) | 55 | |||
Exercise of stock options, value | 4 | 4 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Repurchase of common stock, value | $ (15) | (15) | ||||
Balance, shares at Jun. 30, 2019 | 148,000,000 | |||||
Balance at Jun. 30, 2019 | $ 2 | 2,326 | 285 | (1) | $ (283) | 2,329 |
Treasury Stock, Shares at Jun. 30, 2019 | (12,000,000) | |||||
Net income | 25 | 25 | ||||
Other comprehensive income (loss), net of tax | (7) | (7) | ||||
Total Comprehensive Income | 25 | (7) | 18 | |||
Cumulative effect of accounting changes | 3 | 3 | ||||
Exercise of stock options, value | 1 | 1 | ||||
Stock-based employee compensation | 3 | 3 | ||||
Repurchase of common stock, value | $ (16) | (16) | ||||
Balance, shares at Sep. 30, 2019 | 148,000,000 | |||||
Balance at Sep. 30, 2019 | $ 2 | $ 2,330 | $ 313 | $ (8) | $ (300) | $ 2,337 |
Treasury Stock, Shares at Sep. 30, 2019 | (12,000,000) | (12,135,945) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Cash Flows [Abstract] | ||
Cash and Cash Equivalents and Restricted Cash at Beginning of Period | $ 313 | $ 563 |
Cash Flows from Operating Activities from Continuing Operations: | ||
Net Income | 154 | 207 |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Loss (gain) from discontinued operations, net of income taxes | 1 | (133) |
Depreciation expense | 56 | 54 |
Amortization expense | 19 | 14 |
Amortization of debt issuance costs | 2 | 4 |
Amortization of lease right-of-use assets | 14 | |
Fumigation related matters | 1 | |
Payments on fumigation related matters | (2) | (1) |
Realized (gain) on investment in frontdoor, inc. | (40) | |
Loss on extinguishment of debt | 6 | 10 |
Deferred income tax provision | 12 | 21 |
Stock-based compensation expense | 12 | 10 |
Gain on sale of marketable securities | (1) | (1) |
Restructuring and other charges | 15 | 13 |
Payments for restructuring and other charges | (15) | (11) |
Other | (25) | (9) |
Change in working capital, net of acquisitions: | ||
Receivables | (14) | (6) |
Inventories and other current assets | (11) | (6) |
Accounts payable | 21 | 13 |
Deferred revenue | 1 | 2 |
Accrued liabilities | (3) | 3 |
Accrued interest payable | 7 | 4 |
Current income taxes | 3 | 16 |
Net Cash Provided from Operating Activities from Continuing Operations | 213 | 204 |
Cash Flows from Investing Activities from Continuing Operations: | ||
Property additions | (22) | (42) |
Government grant fundings for property additions | 7 | |
Sale of equipment and other assets | 1 | 1 |
Business acquisitions, net of cash acquired | (345) | (160) |
Sales and maturities of available-for-sale securities | 3 | |
Origination of notes receivable | (84) | (79) |
Collections on notes receivable | 95 | 74 |
Other investments | 1 | |
Net Cash Used for Investing Activities from Continuing Operations | (352) | (197) |
Cash Flows from Financing Activities from Continuing Operations: | ||
Borrowings of debt | 720 | 1,000 |
Payments of debt | (640) | (1,102) |
Repurchase of common stock | (33) | |
Issuance of common stock | 10 | 6 |
Net Cash Provided from (Used for) Financing Activities from Continuing Operations | 56 | (96) |
Cash Flows from Discontinued Operations: | ||
Cash (used for) provided from operating activities | (2) | 160 |
Cash used for investing activities | (1) | |
Cash used for financing activities | (24) | |
Net Cash (Used for) Provided from Discontinued Operations | (2) | 136 |
Cash (Decrease) Increase During the Period | (85) | 47 |
Cash and Cash Equivalents and Restricted Cash at End of Period | $ 228 | $ 610 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation ServiceMaster Global Holdings, Inc. and its majority-owned subsidiary partnerships, limited liability companies and corporations (collectively, “ServiceMaster,” the “Company,” “we,” “us” and “our”) is a leading provider of essential services to residential and commercial customers in the termite, pest control, cleaning and restoration markets, operating through an extensive service network of more than 8,000 company‑owned locations and franchise and license agreements. Our mission is to simplify and improve the quality of our customers’ lives by delivering services that help them protect and maintain their homes or businesses, typically their most highly valued assets. Our portfolio of well‑recognized brands includes AmeriSpec (home inspections), Copesan (commercial national accounts pest management), Furniture Medic (cabinet and furniture repair), Merry Maids (residential cleaning), Nomor (European pest control), ServiceMaster Clean (commercial cleaning), ServiceMaster Restore (restoration), Terminix (residential termite and pest control) and Terminix Commercial (commercial termite and pest control). All consolidated Company subsidiaries are wholly-owned. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements have been prepared by us in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). We recommend that the quarterly unaudited condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC (the “2018 Form 10-K”). The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results that might be achieved for any other interim period or for the full year. American Home Shield Spin-off On October 1, 2018, we completed the spin-off of our American Home Shield business. The separation was effectuated through a pro rata dividend (the “Distribution”) to our stockholders of approximately 80.2 % of the outstanding shares of common stock of frontdoor, inc. (“Frontdoor”), which was formed as a wholly owned subsidiary to hold our American Home Shield business. The Distribution was made to our stockholders of record as of the close of business on September 14, 2018 (the “Record Date”), and such stockholders received one share of Frontdoor common stock for every two shares of ServiceMaster common stock held as of the close of business on the Record Date. In March 2019, we exchanged all of the 19.8 % of the outstanding shares of common stock of Frontdoor we retained for certain of our outstanding indebtedness, which obligations were subsequently cancelled and discharged upon delivery to us. See Note 12 for further discussion regarding this transaction. The American Home Shield Segment is reported in this Quarterly Report on Form 10-Q in discontinued operations. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in our 2018 Form 10-K. There have been no material changes to the significant accounting policies for the three and nine months ended September 30, 2019, other than those described below. Adoption of New Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “ Leases (Topic 842) ” (codified within FASB Accounting Standards Codification (“ASC”) 842) which is the final standard on accounting for leases. In July 2018, the FASB issued ASU 2018-10 and ASU 2018-11, which amend ASU 2016-02 to provide companies an alternative transition method whereby it may elect to recognize and measure leases by applying the cumulative impact of adopting ASU 2016-02 to the opening retained earnings balance in the period of adoption, thereby removing the requirement that the financial statements of prior periods be restated. We utilized this alternative transition method. 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 this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. We adopted the new lease guidance effective January 1, 2019, and elected certain of the available practical expedients upon adoption. See Note 13 for further discussion of our lease assets and liabilities. The impacts of the adoption of this ASU on our condensed consolidated statements of financial position are as follows: As previously reported, Impact of adopting (In millions) December 31, 2018 ASC 842 January 1, 2019 Operating lease right-of-use assets $ — $ 107 $ 107 Finance lease assets, within Property and equipment, net 89 — 89 Total right-of-use assets $ 89 $ 107 $ 195 Other assets 87 — 86 Total assets $ 5,023 $ 106 $ 5,129 Current portion of long-term lease liability $ — $ 15 $ 15 Long-term lease liability — 120 120 Current finance lease liability, within Current portion of long-term debt 31 — 31 Long-term finance lease liability, within Long-term debt 60 — 60 Total lease liabilities $ 90 $ 135 $ 225 Accrued liabilities, Other 61 ( 1 ) 60 Other long-term obligations, primarily self-insured claims 182 ( 28 ) 155 Total liabilities $ 2,818 $ 106 $ 2,925 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 hedging 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. We adopted this ASU on January 1, 2019, and it did not have a significant impact on our financial condition or the results of our operations. In July 2018, the FASB issued ASU 2018-09, “ Codification Improvements. ” This ASU does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. We adopted this ASU on January 1, 2019, and it did not have a significant impact on our financial condition or the results of our operations. In August 2018, the FASB issued ASU 2018-15, “ Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract .” This ASU requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The amendments in ASU 2018-15 are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We early adopted this ASU on January 1, 2019, resulting in the capitalization of certain development costs of approximately $ 9 million as of September 30, 2019, primarily related to our implementation of Salesforce to replace legacy operating systems. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “ Disclosure Update and Simplification ,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule was effective on November 5, 2018, with relief provided for filings made shortly after the final rule’s effective date in SEC Question 105.09 of the Exchange Act Forms C&DIs. We adopted this final rule on November 5, 2018, and modified our disclosures as necessary, which included the presentation of a condensed consolidated statement of stockholders’ equity for the three and nine months ended September 30, 2019 and 2018. In October 2018, the FASB issued ASU No. 2018-16, “ Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes ,” which amends ASC 815, Derivatives and Hedging. This ASU adds the OIS rate based on SOFR to the list of permissible benchmark rates for hedge accounting purposes. We adopted the ASU on January 1, 2019, and it did not have a significant impact on our financial condition or the results of our operations. A ccounting Standards Issued But Not Yet Effective In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” This ASU requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. The amendments in ASU 2016-13 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, “ Codification Improvements to Topic 326, Financial Instruments — Credit Losses .” This ASU does not change the core principle of the guidance in ASU 2016-13; instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. This ASU will have the same effective date and transition requirements as ASU 2016-13. We are currently evaluating the impact the adoption of ASU 2016-13 and ASU 2018-19 will have on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement. ” This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amendments in ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for the removed disclosures and delayed adoption is permitted until fiscal 2021 for the new disclosures. We are currently evaluating the disclosure changes necessary to our consolidated financial statements. We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not expect the future adoption of any such pronouncements will have a material impact on our financial condition or the results of our operations. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2019 | |
Revenues[Abstract] | |
Revenues | Note 3. Revenues Effective January 1, 2018, we adopted ASC 606, “ Revenue from Contracts with Customers, ” using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. During the quarter ended September 30, 2019, we corrected our calculation of deferred tax assets related to the adoption of ASC 606. As a result, approximately $ 3 million was recognized in Retained earnings in the condensed consolidated statements of financial position. The following table presents our reportable segment revenues, disaggregated by revenue source. We disaggregate revenue from contracts with customers into major product lines. We have determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. On April 1, 2019, we divested the assets associated with our fumigation service line and now provide fumigation services to our customers through arrangements with independent third parties. Revenue related to fumigation completion services and the related renewals (the “Fumigation Services”) is shown in Fumigation below and prior period amounts related to the Fumigation Services have been reclassified from Termite and Home Services to Fumigation to conform to the current period presentation. Additionally, prior period revenue for Residential Pest Control and Commercial Pest Control has been reclassified to conform to the current period presentation of acquired branches as commercial or residential based on the current reporting structure at Terminix. As noted in the business segment reporting information in Note 16, our reportable segments are Terminix and ServiceMaster Brands. Terminix ServiceMaster Brands Corporate and Other Operations Total Three months ended Three months ended Three months ended Three months ended September 30, September 30, September 30, September 30, (In millions) 2019 2018 2019 2018 2019 2018 2019 2018 Major service line Residential Pest Control $ 189 $ 178 $ — $ — $ — $ — $ 189 $ 178 Commercial Pest Control 105 93 — — — — 105 93 Termite and Home Services 133 129 — — — — 133 129 Royalty Fees — — 32 31 — — 32 31 Commercial Cleaning and other National Accounts — — 18 17 — — 18 17 Sales of Products and Other 24 22 13 12 — — 37 34 Fumigation 11 14 — — — — 11 14 European Pest Control — — — — 4 — 4 — Total $ 461 $ 436 $ 63 $ 60 $ 4 $ — $ 528 $ 496 Terminix ServiceMaster Brands Corporate and Other Operations Total Nine months ended Nine months ended Nine months ended Nine months ended September 30, September 30, September 30, September 30, (In millions) 2019 2018 2019 2018 2019 2018 2019 2018 Major service line Residential Pest Control $ 535 $ 484 $ — $ — $ — $ — $ 535 $ 484 Commercial Pest Control 293 243 — — — — 293 243 Termite and Home Services 450 432 — — — — 450 432 Royalty Fees — — 101 99 — — 101 99 Commercial Cleaning and other National Accounts — — 54 48 — — 54 48 Sales of Products and Other 64 61 36 36 — — 100 97 Fumigation 33 40 — — — — 33 40 European Pest Control — — — — 4 — 4 — Corporate — — — — 1 1 1 1 Total $ 1,375 $ 1,259 $ 191 $ 183 $ 4 $ 1 $ 1,570 $ 1,443 Corporate and Other Operations Beginning in the quarter ended September 30, 2019, Corporate and Other Operations includes our pest control operations in Europe and our financing subsidiary. As of September 30, 2019, this includes our September 6, 2019 acquisition of Nomor, which provides pest control services throughout Sweden and Norway. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. Contracts with customers are generally for a period of one year or less and are generally renewable. We record a receivable related to revenue recognized on services once we have an unconditional right to invoice and receive payment in the future related to the services provided. All accounts receivables are recorded within Receivables, less allowances, on the condensed consolidated statements of financial position. The current portion of Notes receivable, which represents amounts financed for customers through our financing subsidiary, are included within Receivables, less allowances, on the condensed consolidated statement of financial position and totaled $ 45 million and $ 42 million as of September 30, 2019 and December 31, 2018, respectively. Deferred revenue represents a contract liability and is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable. For Terminix, amounts are recognized as revenue upon completion of services. Deferred revenue by reportable segment was as follows: As of As of (In millions) September 30, 2019 December 31, 2018 Terminix $ 96 $ 91 ServiceMaster Brands (1) 9 11 Total $ 105 $ 101 ___________________________________ (1) Includes approximately $ 6 million and $ 7 million of ServiceMaster Brands Deferred revenue included within Other long-term obligations, primarily self-insurance claims on the condensed consolidated statement of financial position as of September 30, 2019 and December 31, 2018, respectively. Changes in deferred revenue for the nine months ended September 30, 2019 and 2018 were as follows: (In millions) Deferred revenue Balance, December 31, 2018 $ 101 Deferral of revenue 106 Recognition of deferred revenue ( 102 ) Balance, September 30, 2019 $ 105 Balance, January 1, 2018 $ 101 Deferral of revenue 114 Recognition of deferred revenue ( 111 ) Balance, September 30, 2018 $ 104 There was approximately $ 12 million and $ 59 million of revenue recognized in the three and nine months ended September 30, 2019, respectively, that was included in the deferred revenue balance as of December 31, 2018. There was approximately $ 12 million and $ 61 million of revenue recognized in the three and nine months ended September 30, 2018, respectively, that was included in the deferred revenue balance as of January 1, 2018, the date we adopted ASC 606. |
Restructuring And Other Charges
Restructuring And Other Charges | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring And Other Charges [Abstract] | |
Restructuring And Other Charges | Note 4. Restructuring and Other Charges Restructuring Charges We incurred restructuring charges of $ 3 million ( $ 2 million, net of tax) and $ 1 million ($ 1 million, net of tax) in the three months ended September 30, 2019 and 2018, respectively. We incurred restructuring charges of $ 13 million ($ 10 million, net of tax) in each of the nine months ended September 30, 2019 and 2018 . Restructuring charges were comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Terminix (1) $ 1 $ — $ 4 $ 2 ServiceMaster Brands (2) — — 2 1 Corporate and Other Operations (3) 1 — 6 3 Global Service Center relocation (4) — — 1 8 Total restructuring charges $ 3 $ 1 $ 13 $ 13 ___________________________________ (1) For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 4 million, respectively, of severance and other costs. Severance and other costs of $ 1 million were unpaid and accrued as of September 30, 2019, which includes amounts previously accrued as of December 31, 2018. For the nine months ended September 30, 2018, restructuring charges included $ 2 million of severance and other costs. (2) For the nine months ended September 30, 2019, these charges included $ 2 million of severance costs, of which less than $ 1 million were unpaid as of September 30, 2019. For the nine months ended September 30, 2018, these charges included $ 1 million of severance and other costs. (3) 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 to support operations. For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 5 million, respectively, of professional fees, accelerated depreciation and other costs to enhance capabilities and align corporate functions with those required to support our strategic needs after the American Home Shield spin-off. For the nine months ended September 30, 2019 and 2018, these charges included $ 1 million and $ 3 million of severance and other costs. Corporate restructuring costs of $ 1 million were unpaid and accrued as of September 30, 2019, which includes amounts previously accrued as of December 31, 2018. (4) For the nine months ended September 30, 2019 and 2018, these charges included lease termination and other charges of $ 1 million and $ 8 million, respectively, related to the relocation. Global Service Center relocation costs of $ 1 million were unpaid and accrued as of September 30, 2019, which includes amounts previously accrued as of December 31, 2018. The pretax charges discussed above are reported in Restructuring charges in the unaudited condensed consolidated statements of operations and comprehensive income. A reconciliation of the beginning and ending balances of accrued restructuring charges, which are included in Accrued liabilities—Other on the unaudited condensed consolidated statements of financial position, is presented as follows: Accrued Restructuring (In millions) Charges Balance as of December 31, 2018 $ 7 Costs incurred 13 Costs paid or otherwise settled ( 17 ) Balance as of September 30, 2019 $ 3 Balance as of December 31, 2017 $ 6 Costs incurred 13 Costs paid or otherwise settled ( 11 ) Balance as of September 30, 2018 $ 8 We expect substantially all of our accrued restructuring charges to be paid by December 31, 2019. Other Charges Other charges represent professional fees incurred that are not closely associated with our ongoing operations. Other charges were $ 2 million ($ 1 million, net of tax) for the three and nine months ended September 30, 2019. We incurred no such other charges for the three and nine months ended September 30, 2018. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 5. Discontinued Operations American Home Shield Spin-off On October 1, 2018, we completed the spin-off of our American Home Shield business. The separation was effectuated through a Distribution to our stockholders of approximately 80.2 % of the outstanding shares of common stock of Frontdoor. The Distribution was made to our stockholders of record as of the close of business on September 14, 2018, and such stockholders received one share of Frontdoor common stock for every two shares of ServiceMaster common stock held as of the close of business on the Record Date. In March 2019, we exchanged all of the 19.8 % of the outstanding shares of common stock of Frontdoor we retained for certain of our outstanding indebtedness, which obligations were subsequently cancelled and discharged upon delivery to us. See Note 12 for further discussion regarding this transaction. The American Home Shield Segment is reported in this Quarterly Report on Form 10-Q in discontinued operations. In connection with the American Home Shield spin-off, the Company and Frontdoor entered into (1) a separation and distribution agreement containing key provisions relating to the separation of Frontdoor effectuated through the Distribution, as well as insurance coverage, non-competition, indemnification and other matters, (2) an employee matters agreement allocating liabilities and responsibilities relating to employee benefit plans and programs and other related matters and (3) a tax matters agreement governing the respective rights, responsibilities and obligations of the parties thereto with respect to taxes, including allocating liabilities for income taxes attributable to Frontdoor and its subsidiaries generally to the Company for tax periods (or portions thereof) ending on or before October 1, 2018, and generally to Frontdoor for tax periods (or portions thereof) beginning after that date. The charges for the transition services are designed to allow us 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 will terminate at various specified times, and in no event later than December 31, 2019. Frontdoor may terminate the transition services agreement (or certain services under the transition services agreement) for convenience upon 90 days written notice, in which case Frontdoor will be required to reimburse us for early termination costs. Under this transition services agreement, in the three and nine months ended September 30, 2019, we recorded approximately $ 1 million and $ 2 million, respectively, of fees from Frontdoor, which are included, net of costs incurred, in Selling and administrative expenses in the condensed consolidated statements of operations and comprehensive income. Less than $ 1 million and $ 1 million of payments were received during the three and nine months ended September 30, 2019, respectively. The Company and Frontdoor also entered into a sublease agreement for the space Frontdoor retained in our Global Service Center and Memphis customer care center after the spin-off. We recognized approximately $ 1 million and $ 2 million, respectively of rental income in the three and nine months ended September 30, 2019, respectively, and less than $ 1 million and $ 4 million of other cost reimbursements related to these sublease agreements during the three and nine months ended September 30, 2019, respectively, which were recorded as a reduction of Selling and administrative expenses on the condensed consolidated statements of operations and comprehensive income. Payments received under the sublease agreements for rental income and other cost reimbursements during the three and nine months ended September 30, 2019 totaled approximately $ 1 million and $ 6 million, respectively. Financial Information for Discontinued Operations Gain from discontinued operations, net of income taxes, for all periods presented includes the operating results of Frontdoor and previously sold businesses. Three Months Ended Nine Months Ended (In millions) September 30, 2018 September 30, 2018 Revenue $ 377 $ 979 Cost of services rendered and products sold 203 534 Operating expenses (1) 100 269 Interest and net investment income — ( 1 ) Income before income taxes 75 177 Provision for income taxes 22 45 Gain from discontinued operations, net of income taxes $ 53 $ 133 ___________________________________ (1) Includes spin-off transaction costs incurred of $ 8 million and $ 23 million for the three and nine months ended September 30, 2018. The following selected financial information of Frontdoor is included in the statements of cash flows as cash flows from discontinued operations: Nine Months Ended (In millions) September 30, 2018 Depreciation $ 8 Amortization 6 Capital expenditures ( 18 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 6. Commitments and Contingencies We carry insurance policies on insurable risks at levels that we believe to be appropriate, including workers’ compensation, automobile and general liability risks. We purchase insurance policies from third-party insurance carriers, which typically incorporate significant deductibles or self-insured retentions. We are 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 our accrual for self-insured claims, we use 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. We adjust our 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. In the normal course of business, we periodically enter into agreements that incorporate indemnification provisions. While the maximum amount to which we may be exposed under such agreements cannot be estimated, we do not expect these guarantees and indemnifications to have a material effect on our business, financial condition, results of operations or cash flows. A reconciliation of beginning and ending accrued self-insured claims, which are included in Accrued liabilities—Self-insured claims and related expenses and Other long-term obligations, primarily self-insured claims on the condensed consolidated statements of financial position, net of insurance recoverables, which are included in Prepaid expenses and other assets and Other assets on the condensed consolidated statements of financial position, is presented as follows: Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2018 $ 111 Provision for self-insured claims 26 Cash payments ( 28 ) Balance as of September 30, 2019 $ 108 Balance as of December 31, 2017 $ 115 Provision for self-insured claims 23 Cash payments ( 26 ) Balance as of September 30, 2018 $ 112 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. Termite damage claims can take years to resolve, and timing can be difficult to predict. Current activity could differ causing a change in estimates. We have certain liabilities with respect to existing or potential claims, lawsuits and other proceedings. We accrue 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. We also have certain liabilities with respect to litigated claims arising from alleged termite damage. We have experienced an increase in such asserted claims, principally related to Formosan termite activity in the Mobile, Alabama area. Due to the uncertainties involved, management is unable to predict the number or nature of possible future claims and proceedings or their outcomes. We investigate each claim as it arises and accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified. 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 a 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 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 fumigation matter, which could be material, is not currently known, and any such further penalties, fines, sanctions, costs or damages would not be covered under our general liability insurance policies. In addition to the matter 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, and which require compliance with the terms of the agreements. If one or more of our settlements are not finally approved and implemented, 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. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 7. Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets, primarily trade names, 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. Our annual assessment date is October 1. There were no impairment charges recorded in the three and nine months ended September 30, 2019 and 2018. There were no accumulated impairment losses recorded as of September 30, 2019. The table below summarizes the goodwill balances for continuing operations by reportable segment and Corporate and Other Operations: Corporate and ServiceMaster Other (In millions) Terminix Brands Operations (1) Total Balance as of December 31, 2018 $ 1,781 $ 175 $ — $ 1,956 Acquisitions 78 7 167 251 Impact of foreign exchange rates — — ( 2 ) ( 2 ) Balance as of September 30, 2019 $ 1,859 $ 182 $ 164 $ 2,206 ___________________________________ (1) Corporate and Other Operations includes goodwill related to pest control acquisitions in Europe completed during the nine months ended September 30, 2019. See Note 14 for further discussion of these acquisitions and purchase price allocations. The table below summarizes the other intangible asset balances for continuing operations: As of September 30, 2019 As of December 31, 2018 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 1,482 $ — $ 1,482 $ 1,482 $ — $ 1,482 Customer relationships 593 ( 418 ) 176 469 ( 406 ) 64 Franchise agreements 88 ( 75 ) 13 88 ( 73 ) 15 Other 86 ( 39 ) 47 62 ( 35 ) 27 Total $ 2,249 $ ( 531 ) $ 1,718 $ 2,101 $ ( 513 ) $ 1,588 ___________________________________ (1) Not subject to amortization. For the existing intangible assets, we anticipate amortization expense for the remainder of 2019 and each of the next five years of $ 6 million, $ 24 million , $ 22 million, $ 20 million, $ 17 million and $ 12 million, respectively. These amounts exclude the intangible assets acquired in connection with the European pest control acquisitions completed during the three months ended September 30, 2019, as intangible asset values and the related useful lives have not yet been finalized. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 8. Stock-Based Compensation For each of the three months ended September 30, 2019 and 2018, we recognized stock-based compensation expense of $ 3 million ($ 2 million, net of tax) and $ 2 million ($ 2 million, net of tax), respectively. For the nine months ended September 30, 2019 and 2018, we recognized stock-based compensation expense of $ 12 million ($ 9 million, net of tax) and $ 10 million ($ 7 million, net of tax), respectively. These charges are recorded within Selling and administrative expenses in the condensed consolidated statements of operations and comprehensive income. As of September 30, 2019, there was $ 29 million of total unrecognized compensation costs related to non-vested stock options, restricted stock units (“RSUs”) and performance share units granted under the Amended and Restated ServiceMaster Global Holdings, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”). These remaining costs are expected to be recognized over a weighted-average period of 2. 15 years. On February 24, 2015, our board of directors approved and recommended for approval by our stockholders the ServiceMaster Global Holdings, Inc. Employee Stock Purchase Plan (“Employee Stock Purchase Plan”), which became effective for offering periods commencing July 1, 2015. The Employee Stock Purchase Plan was intended to qualify for the favorable tax treatment under Section 423 of the Code. Under the plan, eligible employees of the Company may purchase common stock, subject to IRS limits, during pre-specified offering periods at a discount established by the Company not to exceed 10 percent of the then current fair market value. On April 27, 2015, our stockholders approved the Employee Stock Purchase Plan with a maximum of one million shares of common stock authorized for sale under the plan. On November 3, 2015, we filed a registration statement on Form S-8 under the Securities Act to register the one million shares of common stock that may be issued under the Employee Stock Purchase Plan and, as a result, all shares of common stock acquired under the Employee Stock Purchase Plan will be freely tradable under the Securities Act, unless purchased by our affiliates. Our Compensation Committee amended the Employee Stock Purchase Plan in February 2019 to allow for more frequent purchase periods and to change the allowed 10 percent discount to a company match of 10 percent of employee contributions. The authorized number of shares remaining in the Employee Stock Purchase Plan was not changed from 843,584 and the expiration date of the Employee Stock Purchase Plan was not changed from April 27, 2025 . As of September 30, 2019, there were 839,784 shares available for issuance under the Employee Stock Purchase Plan. Stock Options In February 2019, our board of directors approved an amended Employee Stock Option Agreement, whereby all options granted in 2019 and thereafter will generally vest in three equal annual installments (rather than four ), have a term of eight years (rather than 10 years) and remain subject to an employee’s continued employment. The three 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. On January 1, 2019, in connection with an acquisition, we granted 136,092 RSUs to an executive key to our urban markets strategy. All such RSUs cliff vest on the third anniversary of their grant and are subject to the executive’s continued employment. |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 30, 2019 | |
Comprehensive Income [Abstract] | |
Comprehensive Income | Note 9. Comprehensive Income Comprehensive income, which primarily includes net income, unrealized gain (loss) on derivative instruments and the effect of foreign currency translation, is included in the condensed consolidated statements of operations and comprehensive income. Unrealized gains on marketable securities of $ 3 million ($ 2 million, net of tax) were included in other comprehensive income prior to our adoption of ASU 2016-01 on January 1, 2018. Subsequent to the adoption, these unrealized gains have been reclassified to retained earnings. Additionally, stranded tax effects of approximately $ 4 million resulting from the corporate income tax rate change in U.S. Tax Reform were reclassified upon our adoption of ASU 2018-02 on January 1, 2018. The income tax effects remaining in Accumulated other comprehensive income will be released into earnings as the related pre-tax amounts are reclassified to earnings. During the nine months ended September 30, 2019, we terminated $ 479 million of our interest rate swap and received $ 12 million from the counterparty. The fair value of the terminated portion of the interest rate swap of $ 12 million was recorded within accumulated other comprehensive income on the condensed consolidated statements of financial position and is being amortized into interest expense over the original term of the agreement. The remaining unamortized balance at September 30, 2019 is $ 10 million. The following tables summarize the activity in accumulated other comprehensive income, net of the related tax effects. Unrealized Unrealized Gains (Losses) Gains on Available Foreign (Losses) on -for-Sale Currency (In millions) Derivatives Securities Translation Total Balance as of December 31, 2018 $ 20 $ — $ ( 15 ) $ 5 Other comprehensive income before reclassifications: Pre-tax amount ( 14 ) — ( 2 ) ( 16 ) Tax provision 7 — — 7 After-tax amount ( 7 ) — ( 2 ) ( 9 ) Amounts reclassified from accumulated other comprehensive income (1) ( 3 ) — — ( 3 ) Net current period other comprehensive income ( 10 ) — ( 2 ) ( 13 ) Balance as of September 30, 2019 $ 9 $ — $ ( 18 ) $ ( 8 ) Balance as of December 31, 2017 $ 16 $ 2 $ ( 12 ) $ 5 Reclassification of unrealized gain/loss on equity securities — ( 2 ) — ( 2 ) Reclassification of tax rate change 3 1 — 4 As revised, January 1, 2018 19 — ( 12 ) 7 Other comprehensive income before reclassifications: Pre-tax amount 25 — ( 1 ) 24 Tax benefit ( 7 ) — — ( 7 ) After-tax amount 18 — ( 1 ) 17 Amounts reclassified from accumulated other comprehensive income (1) ( 1 ) — — ( 1 ) Net current period other comprehensive income 17 — ( 1 ) 16 Balance as of September 30, 2018 $ 36 $ — $ ( 13 ) $ 23 ___________________________________ (1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive income included the following components for the periods indicated. Amounts Reclassified from Accumulated Other Comprehensive Income Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Gains (losses) on derivatives: Fuel swap contracts $ — $ 1 $ — $ 3 Interest rate swap contracts 1 1 4 — Net losses on derivatives 1 3 4 2 Impact of income taxes — ( 1 ) — ( 1 ) Total reclassifications for the period $ 1 $ 2 $ 3 $ 1 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 10. Supplemental Cash Flow Information Supplemental information relating to the condensed consolidated statements of cash flows is presented in the following table: Nine Months Ended September 30, (In millions) 2019 2018 Cash paid for or (received from): Interest expense (1) $ 55 $ 95 Interest and dividend income ( 2 ) ( 1 ) Income taxes, net of refunds 23 40 ___________________________________ (1) For the nine months ended September 30, 2019, excludes $ 12 million received in connection with our partial terminations of the interest rate swap. As of September 30, 2019 and December 31, 2018, Cash and cash equivalents of $ 140 million and $ 224 million, respectively, and Restricted cash of $ 89 million and $ 89 million, respectively, as presented on the condensed consolidated statements of financial position represent the amounts comprising Cash and cash equivalents and Restricted cash of $ 228 million and $ 313 million, respectively, on the condensed consolidated statement of cash flows. As of September 30, 2018 and December 31, 2017, Cash and cash equivalents of $ 216 million and $ 192 million, respectively, and Restricted cash of $ 89 million and $ 89 million, respectively, as presented on the condensed consolidated statements of financial position, and cash related to discontinued operations of $ 305 million and $ 282 million, respectively, represent the amounts comprising Cash and cash equivalents and restricted cash of $ 610 million and $ 563 million, respectively, on the condensed consolidated statement of cash flows. We acquired $ 39 million and $ 23 million of property and equipment through finance leases and other non-cash financing transactions in each of the nine months ended September 30, 2019 and 2018, respectively, which have been excluded from the condensed consolidated statements of cash flows as non-cash investing and financing activities. The proceeds from the Frontdoor debt issuances described in Note 12 were retained by the lender in satisfaction of the short-term credit facility and have been excluded from the condensed consolidated statements of cash flows as non-cash financing activities. The non-cash lease transactions resulting from our adoption of ASC 842 are described in Note 13. |
Cash and Marketable Securities
Cash and Marketable Securities | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Marketable Securities [Abstract] | |
Cash and Marketable Securities | Note 11. Cash and Marketable Securities Cash, money market funds and certificates of deposits with maturities of three months or less when purchased are included in Cash and cash equivalents on the condensed consolidated statements of financial position. As of September 30, 2019 and December 31, 2018, our marketable securities consisted primarily of a deferred compensation trust (“Debt securities”) and common equity securities (“Equity securities”). The amortized cost, fair value and gross realized and unrealized gains and losses of our short- and long-term investments in Debt and Equity securities are as follows: Gross Realized Gross Realized Amortized and Unrealized and Unrealized Fair (In millions) Cost Gains Losses Value September 30, 2019: Debt securities $ 4 $ — $ — $ 4 Equity securities 13 2 — 14 Total securities $ 17 $ 2 $ — $ 19 December 31, 2018: Debt securities $ 4 $ — $ — $ 4 Equity securities 15 1 — 16 Total securities $ 19 $ 1 $ — $ 21 We account for Equity securities at fair value with adjustments to fair value recognized in Interest and net investment income in the condensed consolidated statements of operations and comprehensive income. For the nine months ended September 30, 2019, approximately $ 1 million of unrealized gains were recognized within Interest and net investment income in the condensed consolidated statements of operations and comprehensive income. There were no unrealized gains or losses recognized for the three months ended September 30, 2019. For the nine months ended September 30, 2018, approximately $ 1 million of unrealized losses were recorded within Interest and net investment income in the condensed consolidated statements of operations and comprehensive income. There were no unrealized gains or losses recognized for the three months ended September 30, 2018. We periodically review our Debt securities to determine whether there has been an other than temporary decline in value. There were no impairment charges due to declines in the value of these investments for the three and nine months ended September 30, 2019 and 2018. Additionally, we hold minority interests in several strategic investments that do not have readily determinable fair values and are recorded at cost and are remeasured upon the occurrence of observable price changes or impairments. We account for these investments at fair value with adjustments to fair value recognized in our condensed consolidated statements of operations within Interest and net investment income. The investments are included within Other Assets on the condensed consolidated statements of financial position. At September 30, 2019, the carrying amount of these investments was $ 4 million. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 12. Long-Term Debt Long-term debt is summarized in the following table: As of As of September 30, December 31, (In millions) 2019 2018 Senior secured term loan facility maturing in 2023 (1) $ 170 $ 637 Revolving credit facility maturing in 2021 120 — 5.125 % notes maturing in 2024 (2) 742 740 7.45 % notes maturing in 2027 (3) 166 172 7.25 % notes maturing in 2038 (3) 40 42 Vehicle finance leases (4) 100 90 Other (5) 116 94 Less current portion ( 56 ) ( 49 ) Total long-term debt $ 1,398 $ 1,727 __________________________________ (1) As of September 30, 2019 and December 31, 2018, presented net of $ 1 million and $ 5 million, respectively, in unamortized debt issuance costs. As of December 31, 2018, presented net of $ 1 million in unamortized original issue discount paid. (2) As of September 30, 2019 and December 31, 2018, presented net of $ 8 million and $ 10 million, respectively, in unamortized debt issuance costs. (3) As of September 30, 2019 and December 31, 2018, collectively presented net of $ 29 million and $ 33 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. (4) We have entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows us to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are finance leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. (5) As of September 30, 2019 and December 31, 2018, includes approximately $ 105 million and $ 82 million, respectively, of future payments in connection with our acquisitions as further described in Note 14. Borrowing under the Revolving Credit Facility On September 5, 2019, we borrowed an aggregate principal amount of $ 120 million under our revolving credit facility to finance our acquisition of Nomor Holding AB. Extinguishment of Debt and Repurchase of Notes On March 12, 2019, we borrowed an aggregate principal amount of $ 600 million under a short-term credit facility to effectuate a debt-for-equity exchange of our Frontdoor retained shares. The proceeds of this short-term credit facility were used to repay $ 468 million aggregate principal amount of term loans outstanding under our senior secured term loan facility in March and April of 2019. Such prepayments resulted in a loss on extinguishment of debt of $ 4 million for the nine months ended September 30 , 2019. On March 27, 2019, we completed a non-cash debt-for-equity exchange in which we exchanged the 16.7 million retained shares of Frontdoor common stock (proceeds of $ 486 million, net), plus used $ 114 million of proceeds from the short-term credit facility, to extinguish $ 600 million of our indebtedness under the short-term credit facility. The sale of the Frontdoor common stock resulted in a realized gain of $ 40 million, which was recorded within Realized (gain) on investment in frontdoor, inc. on the condensed consolidated statements of operations and comprehensive income for the nine months ended September 30 , 2019. In March 2019, we purchased approximately $ 7 million in aggregate principal amount of our 7.45 % notes maturing in 2027 at a price of 105.5 % and $ 3 million in aggregate principal amount of our 7.25 % notes maturing in 2038 at a price of 99.5 % using available cash. The repurchased notes were delivered to the trustee for cancellation. In connection with these partial repurchases, we recorded a loss on extinguishment of debt of $ 2 million in the nine months ended September 30 , 2019. In April 2019, we purchased $ 1 million in aggregate principal amount of our 7.45 % notes maturing in 2027 at a price of 105.5 %. The proceeds from and the use of proceeds in connection with the debt-for-equity exchange are as follows: (in millions) Proceeds from the short-term credit facility $ 600 Proceeds from the Frontdoor common shares retained, net of $ 16 million of fees paid 486 Total proceeds $ 1,086 Repayment of the term loan facility, including loss on extinguishment of debt of $ 4 million $ ( 472 ) Debt-for-equity exchange using net proceeds from the Frontdoor common shares retained ( 486 ) Repurchase of 2027 and 2038 notes, including loss on extinguishment of debt of $ 2 million ( 12 ) Interest and other payments ( 1 ) Use of cash to retire short-term credit facility ( 114 ) Total uses $ ( 1,086 ) In connection with the prepayments on our senior secured term loan facility, we terminated $ 479 million of our interest rate swap agreement, receiving $ 12 million in connection with the terminations. The fair value of the terminated portions of the agreement of $ 12 million is recorded within accumulated other comprehensive income on the condensed consolidated statements of financial position and will be amortized into interest expense over the original term of the agreement. Interest Rate Swaps On November 7, 2016, we 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, we will pay a fixed rate of interest of 1.493 percent on the $ 650 million notional amount, and we 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 percent, plus the incremental borrowing margin of 2.50 percent. The changes in our interest rate swap agreement, as well as the cumulative interest rate swap outstanding, are as follows: Notional (In millions) Amount Fixed Rate (1) Interest rate swap agreement in effect as of December 31, 2018 $ 650 1.493 % Terminated ( 441 ) Interest rate swap agreement in effect as of March 31, 2019 209 1.493 % Terminated ( 38 ) Interest rate swap agreement in effect as of June 30, 2019 and September 30, 2019 $ 171 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 17, our interest rate swap agreement is classified as a cash flow hedge, and, as such, is recorded on the condensed consolidated statements of financial position as either an asset or liability at fair value, with changes in fair value attributable to the hedged risks recorded in accumulated other comprehensive income. On October 15, 2019, we terminated the remaining $ 171 million of our interest rate swap in advance of our debt refinancing. Refinancing of Indebtedness On November 5, 2019, the Company closed on an amended $ 600 million Term Loan B due 2026, as well as a $ 400 million revolving credit agreement due 2024. The proceeds of the transaction were used to repay approximately $ 171 million of debt outstanding under its previous Term Loan B due 2023, $ 120 million outstanding under its previous revolving credit agreement due 2021, as well as $ 150 million from a recent short-term borrowing entered on October 4, 2019. Concurrently with the refinancing, we entered into a seven year interest rate swap agreement with a notional amount of $ 550 million. During the term on the agreement, the effective interest rate on $ 550 million of the new Term Loan B is fixed at a rate of 1.615 percent, plus the incremental borrowing margin of 1.75 percent. 2018 In connection with the spin-off of the American Home Shield Segment, the Company borrowed an aggregate principal amount of $ 1 billion under a short-term credit facility on August 1, 2018, the proceeds of which were used to prepay $ 982 million aggregate principal amount of term loans outstanding under the Company’s senior secured term loan facility. Such prepayment resulted in a loss on extinguishment of debt of $ 10 million for the three and nine months ended September 30, 2018. On August 16, 2018, Frontdoor incurred in favor of the Company $ 350 million aggregate principal of 6.75 % Senior Notes due 2026 and a $ 650 million senior secured term loan facility, and obtained a $ 250 million senior secured revolving credit facility. The Company then transferred and assigned its rights and obligations in respect of Frontdoor’s senior notes and senior secured term loan facility to the lender under such short-term credit facility through a debt-for-debt exchange to satisfy the Company’s obligations thereunder. On October 1, 2018, in connection with the spin-off of the American Home Shield business, Frontdoor’s senior secured term loan facility and senior notes were included in the transfer of assets and liabilities to Frontdoor, reducing the Company’s total long-term debt by approximately $ 1 billion. In the nine months ended September 30, 2018, concurrent with the repayment of $ 982 million of our term loan facility, we de-designated $ 7 million of our $ 650 million interest rate swap. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 13. Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Current portion of lease liability and Long-term lease liability on the condensed consolidated statements of financial position. Finance leases are included in Property and equipment, net; Current portion of long-term debt and Long-term debt on the condensed consolidated statements of financial position. We lease a variety of facilities, principally in the United States, for branch and service center operations and for office, storage, customer care centers and data processing space. These leases are classified as operating leases. Our facilities leases have remaining lease terms of less than one year to 23 years, some of which may include options to extend the leases for up to 15 years, and some of which may include options to terminate the leases within one year . These lease agreements contain lease and non-lease components. Non-lease components include items such as common area maintenance. For facility leases, we account for the lease and non-lease components as a single lease component. Additionally, our Fleet Agreement allows us to obtain fleet vehicles through a leasing program. These leases are classified as finance leases. Our vehicle leases have remaining lease terms of less than one year to eight years . For vehicle leases, we account for the lease and non-lease components separately. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments, including fixed non-lease components, over the lease term at commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments and fixed non-lease components is recognized on a straight-line basis over the lease term. As of September 30, 2019, assets recorded under finance leases were $ 219 million and accumulated depreciation associated with finance leases was $ 121 million. The components of lease expense were as follows: Three months ended Nine months ended (In millions) September 30, 2019 September 30, 2019 Finance lease cost Depreciation of finance lease ROU assets $ 9 $ 25 Interest on finance lease liabilities 1 4 Operating lease cost 7 20 Variable lease cost 1 3 Sublease income ( 1 ) ( 2 ) Total lease cost $ 17 $ 49 Supplemental cash flow information and other information for leases was as follows: Nine months ended (In millions) September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 18 Operating cash flows for finance leases 4 Financing cash flows for finance leases 25 ROU assets obtained in exchange for lease obligations: Operating leases 8 Finance leases 39 Weighted Average Remaining Lease Term (in years): Operating leases 10.70 Finance leases 3.44 Weighted Average Discount Rate: Operating leases 5.54 % Finance leases 3.84 % As of September 30, 2019, there was $ 35 million and $ 65 million of finance leases included within Current portion of long-term debt and Long-term debt, respectively, on the condensed consolidated statements of financial position. Future minimum lease payments under non-cancellable leases as of September 30, 2019 were as follows: (In millions) Operating Leases Finance Leases Year ended December 31, 2019 (excluding the nine months ended September 30, 2019) $ 6 $ 10 2020 26 36 2021 21 28 2022 19 18 2023 15 11 Thereafter 95 4 Total future minimum lease payments 181 107 Less imputed interest ( 50 ) ( 8 ) Total $ 131 $ 100 Following is a summary of the future minimum lease payments due under capital and operating leases with terms of more than one year at December 31, 2018: (In millions) Operating Leases Capital Leases Year ended December 31, Less than 1 Yr $ 17 $ 31 1 - 3 Yrs 36 46 3 - 5 Yrs 25 14 More than 5 Yrs 67 1 Total future minimum lease payments $ 146 $ 92 As of September 30, 2019, we have additional vehicle finance leases that have not yet commenced of $ 6 million. These leases are scheduled to commence in 2019 with lease terms generally of five years . Practical Expedients We adopted the new standard using the modified retrospective approach and applied the transition approach as of the beginning of the period of adoption. We adopted the package of practical expedients and therefore did not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases. We elected to make the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. We elected to not separate lease and non-lease components for real estate operating leases. We did not elect the hindsight practical expedient. Impact of ASC 842 on the Condensed Consolidated Financial Statements Changes to the condensed consolidated statements of financial position include the recognition of an operating lease right-of-use asset, a current portion of lease liability and long-term lease liability. Changes to the condensed consolidated statements of cash flows include the presentation of ROU asset amortization. The adoption of ASC 842 did not have a significant impact on the Company’s condensed consolidated statements of operations and comprehensive income. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | Note 14. Acquisitions Acquisitions have been accounted for as business combinations using the acquisition method and, accordingly, the results of operations of the acquired businesses have been included in the condensed consolidated financial statements since their dates of acquisition. Asset acquisitions have been accounted for under ASU 2017-01. The assets and liabilities of these businesses were recorded in the financial statements at their estimated fair values as of the acquisition dates. During the nine months ended September 30, 2019, we completed 30 acquisitions, including 27 pest control acquisitions, the reacquisition of two ServiceMaster Brands franchisees and a ServiceMaster Brands tuck-in. Of these, 27 were accounted for as business combinations and three as asset acquisitions. We funded approximately $ 345 million at closing for these acquisitions using available cash on hand and borrowings under our revolving credit facility. Another $ 14 million of deferred purchase price is due to the sellers between one year and five years from the acquisition dates. On September 6, 2019, we acquired Nomor, a leading provider of pest control services in Sweden and Norway, for approximately 2 billion Swedish krona (approximately $ 207 million). This strategic acquisition launches our expansion into the European pest control market. Cash acquired in the acquisition was approximately $ 9 million. We funded the acquisition using cash on hand and proceeds from a $ 120 million borrowing under our revolving credit facility. Nomor contributed approximately $ 4 million of revenue and $ 1 million of Adjusted EBITDA since the date of acquisition through September 30, 2019. We granted 87,920 of performance shares to Nomor executives in connection with this acquisition. The grant had a grant date fair value of $ 56.87 per share, which represented the then current fair value of our common stock at the grant date. These performance shares are scheduled to vest on December 31, 2022, based on the achievement of three year cumulative Adjusted EPS and revenue targets 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. Nomor is included in the condensed consolidated statements of financial position based on an allocation of the purchase price. Given the timing and complexity of this acquisition, the presentation of Nomor in our financial statements, including the allocation of the purchase price, is preliminary and will likely change in future periods, perhaps significantly, as fair value estimates of the assets acquired and liabilities assumed are refined during the measurement period. Specifically, we are still evaluating working capital balances, the intangible and tangible assets acquired, deferred revenue balances, as well as the appropriate useful lives to assign to all assets, including intangibles. The majority of this purchase price allocated to goodwill is not expected to be deductible for income tax purposes. We recognized approximately $ 4 million as Acquisition-related costs on the condensed consolidated statements of operations and comprehensive income related to our acquisition of Nomor in the three and nine months ended September 30, 2019. We will complete the purchase price allocation no later than the third quarter of 2020. A preliminary purchase price allocation is as follows (in millions): Current assets (1) $ 19 Property and equipment 6 Goodwill (2) 152 Identifiable intangible assets (3) 94 Current liabilities (4) ( 21 ) Long-term liabilities (2) ( 44 ) Total purchase price $ 207 ___________________________________ (1) Primarily trade receivables and cash . (2) Includes $ 20 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets. (3) Primarily customer lists. (4) Primarily advanced collections from customers . The following unaudited pro forma consolidated financial information presents the combined operations of ServiceMaster and Nomor for the three and nine months ended September 30, 2019 and 2018, as if the acquisition had occurred at the beginning of 2018 (in millions, except per share data): (Unaudited) Three months ended Nine months ended September 30, September 30, (In millions) 2019 2018 2019 2018 Consolidated revenue $ 537 $ 508 $ 1,605 $ 1,480 Consolidated net income $ 29 $ 71 $ 160 $ 205 Basic earnings per share $ 0.22 $ 0.53 $ 1.18 $ 1.51 Diluted earnings per share $ 0.21 $ 0.52 $ 1.17 $ 1.51 ASC 805, “ Business Combinations ,” establishes guidelines regarding the presentation of the unaudited pro forma information. Therefore, this unaudited pro forma information is not intended to represent, nor do we believe it is indicative of, the consolidated results of operations of ServiceMaster that would have been reported had the acquisition been completed at the beginning of 2018. This unaudited pro forma information does not give effect to the anticipated business and tax synergies of the acquisition and is not representative or indicative of the anticipated future consolidated results of operations of ServiceMaster. The unaudited pro forma consolidated financial information reflects our historical financial information and the historical results of Nomor, after the conversion of Nomor’s accounting methods from local reporting standards to U.S. generally accepted accounting principles and adjusted to reflect the acquisition had it been completed as of the beginning of 2018. The most significant adjustments made to the pro forma financial information are the inclusion of $ 4 million of acquisition-related costs as if incurred in the first quarter of 2018, estimated quarterly interest expense of approximately $ 1 million related to financing obtained for the transaction and the estimated tax impact related to these pro forma adjustments. The unaudited pro forma financial information includes various assumptions, including those related to the preliminary purchase price allocation, that may be impacted upon the finalization of the purchase price allocation. The tax impact of these adjustments was calculated based on Nomor’s statutory rate. As a result of all other acquisitions completed during the nine months ended September 30, 2019, we recorded preliminary values of $ 99 million of goodwill, $ 56 million of other intangible assets, primarily customer relationships, and $ 11 million of other assets, primarily trade receivables and fixed assets. Given the timing and complexity of some of the acquisitions, their presentation in our financial statements, including the allocation of the purchase price, is preliminary and will likely change in future periods. Specifically, we are still evaluating working capital balances, the intangible and tangible assets acquired and the appropriate useful lives to assign to all assets. We will complete the purchase price allocations for these acquisitions no later than the third quarter of 2020, and in no instance more than one year from the date of acquisition. On September 30, 2019, we also completed seven minority investments in pest control companies that are accounted for under the equity method and presented in Other assets on the condensed consolidated statements of financial position. During the nine months ended September 30, 2018, we completed the acquisition of Copesan and six additional pest control acquisitions which have been accounted for as business combinations and purchased a ServiceMaster Restore master distributor within ServiceMaster Brands which has been accounted for as an asset acquisition in accordance with ASU 2017-01. We funded $ 161 million at closing for these acquisitions using available cash on hand. An additional $ 42 million of deferred purchase price and up to $ 14 million of earnouts contingent on the successful achievement of projected revenue and earnings targets are due to the sellers between one year and five years from the acquisition dates. During the nine months ended September 30, 2019, $ 4 million was paid related to these earnouts. In connection with these acquisitions, we recorded $ 145 million of goodwill and $ 72 of other intangibles, primarily customer lists and reacquired rights. As of September 30, 2019, the purchase price allocations for these acquisitions have been finalized. Supplemental cash flow information regarding the acquisitions is as follows: Nine Months Ended September 30, (In millions) 2019 2018 Assets acquired $ 431 $ 241 Liabilities assumed (1) ( 72 ) ( 27 ) Net assets acquired $ 359 $ 214 Net cash paid $ 345 $ 160 Seller financed debt 11 42 Contingent earnout 4 12 Purchase price $ 359 $ 214 ___________________________________ (1) Includes $ 21 million and $ 11 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets for the nine months ended September 30, 2019 and 2018, respectively. Subsequent to September 30, 2019, we acquired two commercial pest control companies for approximately $ 140 million. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 15. Income Taxes As required by ASC 740, “Income Taxes,” we compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from continuing operations before income taxes, except for significant unusual or infrequently occurring items. Our estimated tax rate is adjusted each quarter in accordance with ASC 740. The effective tax rate on income from continuing operations was 26.5 percent and 28.1 percent for the three months ended September 30, 2019 and 2018, respectively. The effective tax rate on income from continuing operations was 20.0 percent and 30.3 percent for the nine months ended September 30, 2019 and 2018, respectively. The effective tax rate on income from continuing operations for the nine months ended September 30, 2019, was primarily affected by the disposition of the Frontdoor retained shares in a non-taxable debt-for-equity exchange that was recorded discretely in the three months ended March 31, 2019. As of both September 30, 2019 and December 31, 2018, we had $ 15 million of tax benefits primarily reflected in US Federal and state tax returns that have not been recognized for financial reporting purposes (“unrecognized tax benefits”). Based on information currently available, it is reasonably possible that over the next 12 month period unrecognized tax benefits may decrease by $ 2 million as the result of settlements of ongoing audits, statute of limitation expirations or final settlements of uncertain tax positions in multiple jurisdictions. Our policy is to recognize interest income, interest expense and penalties related to our tax positions within the tax provision. |
Business Segment Reporting
Business Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Business Segment Reporting [Abstract] | |
Business Segment Reporting | Note 16. Business Segment Reporting Our business is conducted through two reportable segments: Terminix and ServiceMaster Brands. In accordance with accounting standards for segments, our 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 primarily under the Terminix, Terminix Commercial and Copesan brand names. The ServiceMaster Brands segment provides residential and commercial disaster restoration and commercial 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 furniture repair primarily under the Furniture Medic brand name and home inspection services primarily under the AmeriSpec brand name. Corporate and Other Operations includes our European pest control operations, primarily under our Nomor brand, our financing subsidiary exclusively dedicated to providing financing to our franchisees and retail customers of our operating units and our headquarters operations (substantially all of which costs are allocated to our reportable segments), which provide various technology, marketing, finance, legal and other support services to the reportable segments. The composition of our reportable segments is consistent with that used by our chief operating decision maker (the “CODM”) to evaluate performance and allocate resources. Information regarding the accounting policies used by us are described in our 2018 Form 10-K. We derive substantially all of our revenue from customers and franchisees in the United States with approximately three percent generated in foreign markets. Operating expenses of the business units consist primarily of direct costs and indirect costs allocated from Corporate. We use Reportable Segment Adjusted EBITDA as our 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; European pest control; costs historically allocated to American Home Shield; (gain) loss from discontinued operations, net of income taxes; provision for income taxes; interest expense; depreciation and amortization expense; acquisition-related costs; fumigation related matters; non-cash stock-based compensation expense; restructuring and other charges; loss on extinguishment of debt; and realized (gain) on investment in frontdoor, inc. European pest control includes the results of our pest control operations in Europe that are recorded within Corporate and Other Operations. Our definition of Reportable Segment Adjusted EBITDA may not be calculated or comparable to similarly titled measures of other companies. We believe 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 and equity-based, long-term incentive plans. Information for continuing operations for each reportable segment and Corporate and Other Operations is presented below: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Revenue: Terminix $ 461 $ 436 $ 1,375 $ 1,259 ServiceMaster Brands 63 60 191 183 Reportable Segment Revenue $ 524 $ 496 $ 1,566 $ 1,442 Corporate and Other Operations 4 — 4 1 Total Revenue $ 528 $ 496 $ 1,570 $ 1,443 Reportable Segment Adjusted EBITDA: (1) Terminix $ 72 $ 81 $ 261 $ 277 ServiceMaster Brands 22 21 70 67 Reportable Segment Adjusted EBITDA $ 95 $ 102 $ 330 $ 344 ___________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Net Income $ 25 $ 71 $ 154 $ 207 Unallocated corporate expenses ( 2 ) ( 4 ) ( 6 ) ( 6 ) European pest control ( 1 ) — ( 1 ) — Costs historically allocated to American Home Shield — 11 — 33 Depreciation and amortization expense 26 24 74 68 Acquisition-related costs 8 1 12 2 Fumigation related matters — 1 — 1 Non-cash stock-based compensation expense 3 2 12 10 Restructuring and other charges 5 1 15 13 Realized (gain) on investment in frontdoor, inc. — — ( 40 ) — (Gain) loss from discontinued operations, net of income taxes — ( 53 ) 1 ( 133 ) Provision for income taxes 9 7 39 32 Loss on extinguishment of debt — 10 6 10 Interest expense 19 33 64 107 Reportable Segment Adjusted EBITDA $ 95 $ 102 $ 330 $ 344 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
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 in interest and net investment income in the condensed consolidated statements of operations and comprehensive income. The carrying amount of total debt was $ 1,454 million and $ 1,776 million, and the estimated fair value was $ 1,553 million and $ 1,791 million as of September 30, 2019 and December 31, 2018, respectively. The fair value of our 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 us as of September 30, 2019 and December 31, 2018. We have estimated the fair value of our 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, our 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. We regularly review the forward price curves obtained from third-party market data providers and related changes in fair value for reasonableness utilizing information available to us from other published sources. We have not changed our 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 the nine month periods ended September 30, 2019 and 2018. The carrying amount and estimated fair value of our financial instruments that are recorded at fair value on a recurring basis for the periods presented are as follows: Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Active Observable Unobservable Statement of Financial Carrying Markets Inputs Inputs (In millions) Position Location Value (Level 1) (Level 2) (Level 3) As of September 30, 2019: Financial Assets: Deferred compensation trust Long-term marketable securities $ 13 $ 13 $ — $ — Investments in marketable securities Long-term marketable securities 6 6 — — Total financial assets $ 19 $ 19 $ — $ — Financial Liabilities: Fuel swap contracts Other accrued liabilities $ 1 $ — $ — $ 1 Interest rate swap contract Other accrued liabilities 1 — 1 — Total financial liabilities $ 2 $ — $ 1 $ 1 As of December 31, 2018: Financial Assets: Deferred compensation trust Long-term marketable securities $ 13 $ 13 $ — $ — Investment in Frontdoor Investment in frontdoor, inc. 445 — 445 — Investments in marketable securities Long-term marketable securities 8 8 — — Interest rate swap contract Other assets 30 — 30 — Total financial assets $ 496 $ 21 $ 475 $ — Financial Liabilities: Fuel swap contracts Other accrued liabilities $ 4 $ — $ — $ 4 Total financial liabilities $ 4 $ — $ — $ 4 A reconciliation of the beginning and ending fair values of financial instruments valued using significant unobservable inputs (Level 3) on a recurring basis is presented as follows: Fuel Swap Contract Assets (In millions) (Liabilities) Location of Gain (Loss) included in Earnings Balance as of December 31, 2018 $ ( 4 ) Total gains (losses) (realized and unrealized) Included in earnings — Cost of services rendered and products sold Included in other comprehensive income 2 Settlements — Balance as of September 30, 2019 $ ( 1 ) Balance as of December 31, 2017 $ 3 Total gains (losses) (realized and unrealized) Included in earnings 3 Cost of services rendered and products sold Included in other comprehensive income 1 Settlements ( 3 ) Balance as of September 30, 2018 $ 4 The following tables present information relating to the significant unobservable inputs of our Level 3 financial instruments: Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of September 30, 2019: Fuel swap contracts $ ( 1 ) Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.24 - $ 2.60 $ 2.44 As of December 31, 2018: Fuel swap contracts $ ( 4 ) Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.09 - $ 2.43 $ 2.26 ___________________________________ (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. We use derivative financial instruments to manage risks associated with changes in fuel prices and interest rates. We do not hold or issue derivative financial instruments for trading or speculative purposes. In designating our derivative financial instruments as hedging instruments under accounting standards for derivative instruments, we formally document 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. We assess 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 our designated hedging instruments are classified as cash flow hedges. We have historically hedged a significant portion of our annual fuel consumption. We have also historically hedged the interest payments on a portion of our variable rate debt through the use of interest rate swap agreements. All of our fuel swap contracts and interest rate swap contracts are classified as cash flow hedges, and, as such, the hedging instruments are recorded on the condensed consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of changes in the fair value attributable to the hedged risks recorded in accumulated other comprehensive income. Cash flows related to fuel and interest rate derivatives are classified as operating activities in the condensed consolidated statements of cash flows. As of September 30, 2019, we had fuel swap contracts to pay fixed prices for fuel with an aggregate notional amount of $ 30 million, maturing through 2020. Under the terms of our fuel swap contracts, we are required to post collateral in the event that the fair value of the contracts exceeds a certain agreed upon liability level and in other circumstances required by the counterparty. As of September 30, 2019, we had posted $ 2 million in letters of credit as collateral under our fuel hedging program, which were issued under the Revolving Credit Facility. The effective portion of the gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments is recorded in accumulated other comprehensive income. These amounts are reclassified into earnings in the same period or periods during which the hedged forecasted debt interest settlement or the fuel settlement affects earnings. See Note 9 to the condensed consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in accumulated other comprehensive income and for the amounts reclassified out of accumulated 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 $ 2 million, net of tax, as of September 30, 2019 . The amounts that are ultimately reclassified into earnings will be based on actual fuel prices and interest rates at the time the positions are settled and may differ materially from the amount noted above. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
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 share units are reflected in diluted earnings per share by applying the treasury stock method. A reconciliation of the amounts included in the computation of basic earnings per share from continuing operations and diluted earnings per share from continuing operations is as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2019 2018 2019 2018 Income from continuing operations $ 26 $ 18 $ 155 $ 74 Weighted-average common shares outstanding 135.8 135.6 135.9 135.4 Effect of dilutive securities: RSUs 0.3 0.2 0.3 0.2 Stock options (1) 0.3 0.2 0.3 0.2 Weighted-average common shares outstanding—assuming dilution 136.5 136.0 136.5 135.8 Basic earnings per share from continuing operations $ 0.19 $ 0.13 $ 1.14 $ 0.55 Diluted earnings per share from continuing operations $ 0.19 $ 0.13 $ 1.13 $ 0.55 ___________________________________ (1) Options to purchase 0.5 million shares for the three months ended September 30, 2018, and 0.5 million and 0.4 million shares for the nine months ended September 30, 2019 and 2018, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies [Abstract] | |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “ Leases (Topic 842) ” (codified within FASB Accounting Standards Codification (“ASC”) 842) which is the final standard on accounting for leases. In July 2018, the FASB issued ASU 2018-10 and ASU 2018-11, which amend ASU 2016-02 to provide companies an alternative transition method whereby it may elect to recognize and measure leases by applying the cumulative impact of adopting ASU 2016-02 to the opening retained earnings balance in the period of adoption, thereby removing the requirement that the financial statements of prior periods be restated. We utilized this alternative transition method. 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 this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. We adopted the new lease guidance effective January 1, 2019, and elected certain of the available practical expedients upon adoption. See Note 13 for further discussion of our lease assets and liabilities. The impacts of the adoption of this ASU on our condensed consolidated statements of financial position are as follows: As previously reported, Impact of adopting (In millions) December 31, 2018 ASC 842 January 1, 2019 Operating lease right-of-use assets $ — $ 107 $ 107 Finance lease assets, within Property and equipment, net 89 — 89 Total right-of-use assets $ 89 $ 107 $ 195 Other assets 87 — 86 Total assets $ 5,023 $ 106 $ 5,129 Current portion of long-term lease liability $ — $ 15 $ 15 Long-term lease liability — 120 120 Current finance lease liability, within Current portion of long-term debt 31 — 31 Long-term finance lease liability, within Long-term debt 60 — 60 Total lease liabilities $ 90 $ 135 $ 225 Accrued liabilities, Other 61 ( 1 ) 60 Other long-term obligations, primarily self-insured claims 182 ( 28 ) 155 Total liabilities $ 2,818 $ 106 $ 2,925 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 hedging 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. We adopted this ASU on January 1, 2019, and it did not have a significant impact on our financial condition or the results of our operations. In July 2018, the FASB issued ASU 2018-09, “ Codification Improvements. ” This ASU does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. We adopted this ASU on January 1, 2019, and it did not have a significant impact on our financial condition or the results of our operations. In August 2018, the FASB issued ASU 2018-15, “ Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract .” This ASU requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The amendments in ASU 2018-15 are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We early adopted this ASU on January 1, 2019, resulting in the capitalization of certain development costs of approximately $ 9 million as of September 30, 2019, primarily related to our implementation of Salesforce to replace legacy operating systems. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “ Disclosure Update and Simplification ,” amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule was effective on November 5, 2018, with relief provided for filings made shortly after the final rule’s effective date in SEC Question 105.09 of the Exchange Act Forms C&DIs. We adopted this final rule on November 5, 2018, and modified our disclosures as necessary, which included the presentation of a condensed consolidated statement of stockholders’ equity for the three and nine months ended September 30, 2019 and 2018. In October 2018, the FASB issued ASU No. 2018-16, “ Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes ,” which amends ASC 815, Derivatives and Hedging. This ASU adds the OIS rate based on SOFR to the list of permissible benchmark rates for hedge accounting purposes. We adopted the ASU on January 1, 2019, and it did not have a significant impact on our financial condition or the results of our operations. |
Accounting Standards Issued But Not Yet Effective | A ccounting Standards Issued But Not Yet Effective In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” This ASU requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. The amendments in ASU 2016-13 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, “ Codification Improvements to Topic 326, Financial Instruments — Credit Losses .” This ASU does not change the core principle of the guidance in ASU 2016-13; instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. This ASU will have the same effective date and transition requirements as ASU 2016-13. We are currently evaluating the impact the adoption of ASU 2016-13 and ASU 2018-19 will have on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement. ” This ASU modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amendments in ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for the removed disclosures and delayed adoption is permitted until fiscal 2021 for the new disclosures. We are currently evaluating the disclosure changes necessary to our consolidated financial statements. We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not expect the future adoption of any such pronouncements will have a material impact on our financial condition or the results of our operations. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies [Abstract] | |
Impacts Of Adoption Of ASU On Condensed Consolidated Statements Of Financial Position | As previously reported, Impact of adopting (In millions) December 31, 2018 ASC 842 January 1, 2019 Operating lease right-of-use assets $ — $ 107 $ 107 Finance lease assets, within Property and equipment, net 89 — 89 Total right-of-use assets $ 89 $ 107 $ 195 Other assets 87 — 86 Total assets $ 5,023 $ 106 $ 5,129 Current portion of long-term lease liability $ — $ 15 $ 15 Long-term lease liability — 120 120 Current finance lease liability, within Current portion of long-term debt 31 — 31 Long-term finance lease liability, within Long-term debt 60 — 60 Total lease liabilities $ 90 $ 135 $ 225 Accrued liabilities, Other 61 ( 1 ) 60 Other long-term obligations, primarily self-insured claims 182 ( 28 ) 155 Total liabilities $ 2,818 $ 106 $ 2,925 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenues[Abstract] | |
Disaggregation of Revenue | Terminix ServiceMaster Brands Corporate and Other Operations Total Three months ended Three months ended Three months ended Three months ended September 30, September 30, September 30, September 30, (In millions) 2019 2018 2019 2018 2019 2018 2019 2018 Major service line Residential Pest Control $ 189 $ 178 $ — $ — $ — $ — $ 189 $ 178 Commercial Pest Control 105 93 — — — — 105 93 Termite and Home Services 133 129 — — — — 133 129 Royalty Fees — — 32 31 — — 32 31 Commercial Cleaning and other National Accounts — — 18 17 — — 18 17 Sales of Products and Other 24 22 13 12 — — 37 34 Fumigation 11 14 — — — — 11 14 European Pest Control — — — — 4 — 4 — Total $ 461 $ 436 $ 63 $ 60 $ 4 $ — $ 528 $ 496 Terminix ServiceMaster Brands Corporate and Other Operations Total Nine months ended Nine months ended Nine months ended Nine months ended September 30, September 30, September 30, September 30, (In millions) 2019 2018 2019 2018 2019 2018 2019 2018 Major service line Residential Pest Control $ 535 $ 484 $ — $ — $ — $ — $ 535 $ 484 Commercial Pest Control 293 243 — — — — 293 243 Termite and Home Services 450 432 — — — — 450 432 Royalty Fees — — 101 99 — — 101 99 Commercial Cleaning and other National Accounts — — 54 48 — — 54 48 Sales of Products and Other 64 61 36 36 — — 100 97 Fumigation 33 40 — — — — 33 40 European Pest Control — — — — 4 — 4 — Corporate — — — — 1 1 1 1 Total $ 1,375 $ 1,259 $ 191 $ 183 $ 4 $ 1 $ 1,570 $ 1,443 |
Deferred Revenue By Segment | As of As of (In millions) September 30, 2019 December 31, 2018 Terminix $ 96 $ 91 ServiceMaster Brands (1) 9 11 Total $ 105 $ 101 ___________________________________ (1) Includes approximately $ 6 million and $ 7 million of ServiceMaster Brands Deferred revenue included within Other long-term obligations, primarily self-insurance claims on the condensed consolidated statement of financial position as of September 30, 2019 and December 31, 2018, respectively. |
Movement In Deferred Revenue | (In millions) Deferred revenue Balance, December 31, 2018 $ 101 Deferral of revenue 106 Recognition of deferred revenue ( 102 ) Balance, September 30, 2019 $ 105 Balance, January 1, 2018 $ 101 Deferral of revenue 114 Recognition of deferred revenue ( 111 ) Balance, September 30, 2018 $ 104 |
Restructuring And Other Charg_2
Restructuring And Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring And Other Charges [Abstract] | |
Schedule Of Restructuring Charges | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Terminix (1) $ 1 $ — $ 4 $ 2 ServiceMaster Brands (2) — — 2 1 Corporate and Other Operations (3) 1 — 6 3 Global Service Center relocation (4) — — 1 8 Total restructuring charges $ 3 $ 1 $ 13 $ 13 ___________________________________ (1) For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 4 million, respectively, of severance and other costs. Severance and other costs of $ 1 million were unpaid and accrued as of September 30, 2019, which includes amounts previously accrued as of December 31, 2018. For the nine months ended September 30, 2018, restructuring charges included $ 2 million of severance and other costs. (2) For the nine months ended September 30, 2019, these charges included $ 2 million of severance costs, of which less than $ 1 million were unpaid as of September 30, 2019. For the nine months ended September 30, 2018, these charges included $ 1 million of severance and other costs. (3) 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 to support operations. For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 5 million, respectively, of professional fees, accelerated depreciation and other costs to enhance capabilities and align corporate functions with those required to support our strategic needs after the American Home Shield spin-off. For the nine months ended September 30, 2019 and 2018, these charges included $ 1 million and $ 3 million of severance and other costs. Corporate restructuring costs of $ 1 million were unpaid and accrued as of September 30, 2019, which includes amounts previously accrued as of December 31, 2018. (4) For the nine months ended September 30, 2019 and 2018, these charges included lease termination and other charges of $ 1 million and $ 8 million, respectively, related to the relocation. Global Service Center relocation costs of $ 1 million were unpaid and accrued as of September 30, 2019, which includes amounts previously accrued as of December 31, 2018. |
Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges | Accrued Restructuring (In millions) Charges Balance as of December 31, 2018 $ 7 Costs incurred 13 Costs paid or otherwise settled ( 17 ) Balance as of September 30, 2019 $ 3 Balance as of December 31, 2017 $ 6 Costs incurred 13 Costs paid or otherwise settled ( 11 ) Balance as of September 30, 2018 $ 8 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations [Abstract] | |
Schedule Of Operating Results Of Discontinued Operations | Three Months Ended Nine Months Ended (In millions) September 30, 2018 September 30, 2018 Revenue $ 377 $ 979 Cost of services rendered and products sold 203 534 Operating expenses (1) 100 269 Interest and net investment income — ( 1 ) Income before income taxes 75 177 Provision for income taxes 22 45 Gain from discontinued operations, net of income taxes $ 53 $ 133 ___________________________________ (1) Includes spin-off transaction costs incurred of $ 8 million and $ 23 million for the three and nine months ended September 30, 2018. |
Schedule Of Cash Flows Of Discontinued Operations | Nine Months Ended (In millions) September 30, 2018 Depreciation $ 8 Amortization 6 Capital expenditures ( 18 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Schedule Of Reconciliation Of Beginning And Ending Accrued Self-Insured Claims | Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2018 $ 111 Provision for self-insured claims 26 Cash payments ( 28 ) Balance as of September 30, 2019 $ 108 Balance as of December 31, 2017 $ 115 Provision for self-insured claims 23 Cash payments ( 26 ) Balance as of September 30, 2018 $ 112 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters | Corporate and ServiceMaster Other (In millions) Terminix Brands Operations (1) Total Balance as of December 31, 2018 $ 1,781 $ 175 $ — $ 1,956 Acquisitions 78 7 167 251 Impact of foreign exchange rates — — ( 2 ) ( 2 ) Balance as of September 30, 2019 $ 1,859 $ 182 $ 164 $ 2,206 ___________________________________ (1) Corporate and Other Operations includes goodwill related to pest control acquisitions in Europe completed during the nine months ended September 30, 2019. See Note 14 for further discussion of these acquisitions and purchase price allocations. |
Schedule Of Other Intangible Asset Balances For Continuing Operations | As of September 30, 2019 As of December 31, 2018 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 1,482 $ — $ 1,482 $ 1,482 $ — $ 1,482 Customer relationships 593 ( 418 ) 176 469 ( 406 ) 64 Franchise agreements 88 ( 75 ) 13 88 ( 73 ) 15 Other 86 ( 39 ) 47 62 ( 35 ) 27 Total $ 2,249 $ ( 531 ) $ 1,718 $ 2,101 $ ( 513 ) $ 1,588 ___________________________________ (1) Not subject to amortization. |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Comprehensive Income [Abstract] | |
Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects | Unrealized Unrealized Gains (Losses) Gains on Available Foreign (Losses) on -for-Sale Currency (In millions) Derivatives Securities Translation Total Balance as of December 31, 2018 $ 20 $ — $ ( 15 ) $ 5 Other comprehensive income before reclassifications: Pre-tax amount ( 14 ) — ( 2 ) ( 16 ) Tax provision 7 — — 7 After-tax amount ( 7 ) — ( 2 ) ( 9 ) Amounts reclassified from accumulated other comprehensive income (1) ( 3 ) — — ( 3 ) Net current period other comprehensive income ( 10 ) — ( 2 ) ( 13 ) Balance as of September 30, 2019 $ 9 $ — $ ( 18 ) $ ( 8 ) Balance as of December 31, 2017 $ 16 $ 2 $ ( 12 ) $ 5 Reclassification of unrealized gain/loss on equity securities — ( 2 ) — ( 2 ) Reclassification of tax rate change 3 1 — 4 As revised, January 1, 2018 19 — ( 12 ) 7 Other comprehensive income before reclassifications: Pre-tax amount 25 — ( 1 ) 24 Tax benefit ( 7 ) — — ( 7 ) After-tax amount 18 — ( 1 ) 17 Amounts reclassified from accumulated other comprehensive income (1) ( 1 ) — — ( 1 ) Net current period other comprehensive income 17 — ( 1 ) 16 Balance as of September 30, 2018 $ 36 $ — $ ( 13 ) $ 23 ___________________________________ (1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive income included the following components for the periods indicated. |
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) | Amounts Reclassified from Accumulated Other Comprehensive Income Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Gains (losses) on derivatives: Fuel swap contracts $ — $ 1 $ — $ 3 Interest rate swap contracts 1 1 4 — Net losses on derivatives 1 3 4 2 Impact of income taxes — ( 1 ) — ( 1 ) Total reclassifications for the period $ 1 $ 2 $ 3 $ 1 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows | Nine Months Ended September 30, (In millions) 2019 2018 Cash paid for or (received from): Interest expense (1) $ 55 $ 95 Interest and dividend income ( 2 ) ( 1 ) Income taxes, net of refunds 23 40 ___________________________________ (1) For the nine months ended September 30, 2019, excludes $ 12 million received in connection with our partial terminations of the interest rate swap. |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 Realized Gross Realized Amortized and Unrealized and Unrealized Fair (In millions) Cost Gains Losses Value September 30, 2019: Debt securities $ 4 $ — $ — $ 4 Equity securities 13 2 — 14 Total securities $ 17 $ 2 $ — $ 19 December 31, 2018: Debt securities $ 4 $ — $ — $ 4 Equity securities 15 1 — 16 Total securities $ 19 $ 1 $ — $ 21 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | As of As of September 30, December 31, (In millions) 2019 2018 Senior secured term loan facility maturing in 2023 (1) $ 170 $ 637 Revolving credit facility maturing in 2021 120 — 5.125 % notes maturing in 2024 (2) 742 740 7.45 % notes maturing in 2027 (3) 166 172 7.25 % notes maturing in 2038 (3) 40 42 Vehicle finance leases (4) 100 90 Other (5) 116 94 Less current portion ( 56 ) ( 49 ) Total long-term debt $ 1,398 $ 1,727 __________________________________ (1) As of September 30, 2019 and December 31, 2018, presented net of $ 1 million and $ 5 million, respectively, in unamortized debt issuance costs. As of December 31, 2018, presented net of $ 1 million in unamortized original issue discount paid. (2) As of September 30, 2019 and December 31, 2018, presented net of $ 8 million and $ 10 million, respectively, in unamortized debt issuance costs. (3) As of September 30, 2019 and December 31, 2018, collectively presented net of $ 29 million and $ 33 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. (4) We have entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows us to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are finance leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. (5) As of September 30, 2019 and December 31, 2018, includes approximately $ 105 million and $ 82 million, respectively, of future payments in connection with our acquisitions as further described in Note 14. |
Summary Of Proceeds And Use Related To Debt-For-Equity Exchange | (in millions) Proceeds from the short-term credit facility $ 600 Proceeds from the Frontdoor common shares retained, net of $ 16 million of fees paid 486 Total proceeds $ 1,086 Repayment of the term loan facility, including loss on extinguishment of debt of $ 4 million $ ( 472 ) Debt-for-equity exchange using net proceeds from the Frontdoor common shares retained ( 486 ) Repurchase of 2027 and 2038 notes, including loss on extinguishment of debt of $ 2 million ( 12 ) Interest and other payments ( 1 ) Use of cash to retire short-term credit facility ( 114 ) Total uses $ ( 1,086 ) |
Schedule of Interest Rate Swap Agreements | Notional (In millions) Amount Fixed Rate (1) Interest rate swap agreement in effect as of December 31, 2018 $ 650 1.493 % Terminated ( 441 ) Interest rate swap agreement in effect as of March 31, 2019 209 1.493 % Terminated ( 38 ) Interest rate swap agreement in effect as of June 30, 2019 and September 30, 2019 $ 171 1.493 % ___________________________________ (1) Before the application of the applicable borrowing margin. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components Of Lease Expense | Three months ended Nine months ended (In millions) September 30, 2019 September 30, 2019 Finance lease cost Depreciation of finance lease ROU assets $ 9 $ 25 Interest on finance lease liabilities 1 4 Operating lease cost 7 20 Variable lease cost 1 3 Sublease income ( 1 ) ( 2 ) Total lease cost $ 17 $ 49 |
Supplemental Cash Flow Information And Other Information For Leases | Nine months ended (In millions) September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 18 Operating cash flows for finance leases 4 Financing cash flows for finance leases 25 ROU assets obtained in exchange for lease obligations: Operating leases 8 Finance leases 39 Weighted Average Remaining Lease Term (in years): Operating leases 10.70 Finance leases 3.44 Weighted Average Discount Rate: Operating leases 5.54 % Finance leases 3.84 % |
Future Minimum Lease Payments Under Non-Cancellable Leases | (In millions) Operating Leases Finance Leases Year ended December 31, 2019 (excluding the nine months ended September 30, 2019) $ 6 $ 10 2020 26 36 2021 21 28 2022 19 18 2023 15 11 Thereafter 95 4 Total future minimum lease payments 181 107 Less imputed interest ( 50 ) ( 8 ) Total $ 131 $ 100 |
Future Minimum Lease Payments Due Under Capital And Operating Leases | (In millions) Operating Leases Capital Leases Year ended December 31, Less than 1 Yr $ 17 $ 31 1 - 3 Yrs 36 46 3 - 5 Yrs 25 14 More than 5 Yrs 67 1 Total future minimum lease payments $ 146 $ 92 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions [Abstract] | |
Preliminary Purchase Price Allocation | Current assets (1) $ 19 Property and equipment 6 Goodwill (2) 152 Identifiable intangible assets (3) 94 Current liabilities (4) ( 21 ) Long-term liabilities (2) ( 44 ) Total purchase price $ 207 ___________________________________ (1) Primarily trade receivables and cash . (2) Includes $ 20 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets. (3) Primarily customer lists. (4) Primarily advanced collections from customers . |
Summary Of Pro Forma Consolidated Financial Information | (Unaudited) Three months ended Nine months ended September 30, September 30, (In millions) 2019 2018 2019 2018 Consolidated revenue $ 537 $ 508 $ 1,605 $ 1,480 Consolidated net income $ 29 $ 71 $ 160 $ 205 Basic earnings per share $ 0.22 $ 0.53 $ 1.18 $ 1.51 Diluted earnings per share $ 0.21 $ 0.52 $ 1.17 $ 1.51 |
Schedule Of Supplemental Cash Flow Information Regarding Acquisitions | Supplemental cash flow information regarding the acquisitions is as follows: Nine Months Ended September 30, (In millions) 2019 2018 Assets acquired $ 431 $ 241 Liabilities assumed (1) ( 72 ) ( 27 ) Net assets acquired $ 359 $ 214 Net cash paid $ 345 $ 160 Seller financed debt 11 42 Contingent earnout 4 12 Purchase price $ 359 $ 214 ___________________________________ (1) Includes $ 21 million and $ 11 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets for the nine months ended September 30, 2019 and 2018, respectively. |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Segment Reporting [Abstract] | |
Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Revenue: Terminix $ 461 $ 436 $ 1,375 $ 1,259 ServiceMaster Brands 63 60 191 183 Reportable Segment Revenue $ 524 $ 496 $ 1,566 $ 1,442 Corporate and Other Operations 4 — 4 1 Total Revenue $ 528 $ 496 $ 1,570 $ 1,443 Reportable Segment Adjusted EBITDA: (1) Terminix $ 72 $ 81 $ 261 $ 277 ServiceMaster Brands 22 21 70 67 Reportable Segment Adjusted EBITDA $ 95 $ 102 $ 330 $ 344 ___________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: |
Schedule Of Reconciliation Of Net Income (Loss) To Reportable Segment Adjusted EBITDA | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2019 2018 2019 2018 Net Income $ 25 $ 71 $ 154 $ 207 Unallocated corporate expenses ( 2 ) ( 4 ) ( 6 ) ( 6 ) European pest control ( 1 ) — ( 1 ) — Costs historically allocated to American Home Shield — 11 — 33 Depreciation and amortization expense 26 24 74 68 Acquisition-related costs 8 1 12 2 Fumigation related matters — 1 — 1 Non-cash stock-based compensation expense 3 2 12 10 Restructuring and other charges 5 1 15 13 Realized (gain) on investment in frontdoor, inc. — — ( 40 ) — (Gain) loss from discontinued operations, net of income taxes — ( 53 ) 1 ( 133 ) Provision for income taxes 9 7 39 32 Loss on extinguishment of debt — 10 6 10 Interest expense 19 33 64 107 Reportable Segment Adjusted EBITDA $ 95 $ 102 $ 330 $ 344 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements [Abstract] | |
Schedule Of The Carrying Amount And Estimated Fair Value Of The Company's Financial Instruments That Are Recorded At Fair Value On A Recurring Basis | Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Active Observable Unobservable Statement of Financial Carrying Markets Inputs Inputs (In millions) Position Location Value (Level 1) (Level 2) (Level 3) As of September 30, 2019: Financial Assets: Deferred compensation trust Long-term marketable securities $ 13 $ 13 $ — $ — Investments in marketable securities Long-term marketable securities 6 6 — — Total financial assets $ 19 $ 19 $ — $ — Financial Liabilities: Fuel swap contracts Other accrued liabilities $ 1 $ — $ — $ 1 Interest rate swap contract Other accrued liabilities 1 — 1 — Total financial liabilities $ 2 $ — $ 1 $ 1 As of December 31, 2018: Financial Assets: Deferred compensation trust Long-term marketable securities $ 13 $ 13 $ — $ — Investment in Frontdoor Investment in frontdoor, inc. 445 — 445 — Investments in marketable securities Long-term marketable securities 8 8 — — Interest rate swap contract Other assets 30 — 30 — Total financial assets $ 496 $ 21 $ 475 $ — Financial Liabilities: Fuel swap contracts Other accrued liabilities $ 4 $ — $ — $ 4 Total financial liabilities $ 4 $ — $ — $ 4 |
Schedule Of Reconciliation Of The Beginning And Ending Fair Values Of Financial Instruments Valued Using Significant Unobservable Inputs (Level 3) On A Recurring Basis | Fuel Swap Contract Assets (In millions) (Liabilities) Location of Gain (Loss) included in Earnings Balance as of December 31, 2018 $ ( 4 ) Total gains (losses) (realized and unrealized) Included in earnings — Cost of services rendered and products sold Included in other comprehensive income 2 Settlements — Balance as of September 30, 2019 $ ( 1 ) Balance as of December 31, 2017 $ 3 Total gains (losses) (realized and unrealized) Included in earnings 3 Cost of services rendered and products sold Included in other comprehensive income 1 Settlements ( 3 ) Balance as of September 30, 2018 $ 4 |
Schedule Of Level 3 Financial Instruments | Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of September 30, 2019: Fuel swap contracts $ ( 1 ) Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.24 - $ 2.60 $ 2.44 As of December 31, 2018: Fuel swap contracts $ ( 4 ) Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.09 - $ 2.43 $ 2.26 ___________________________________ (1) Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule Of Reconciliation Of The Amounts Included In The Computation Of Basic Earnings Per Share From Continuing Operations And Diluted Earnings Per Share From Continuing Operations | Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2019 2018 2019 2018 Income from continuing operations $ 26 $ 18 $ 155 $ 74 Weighted-average common shares outstanding 135.8 135.6 135.9 135.4 Effect of dilutive securities: RSUs 0.3 0.2 0.3 0.2 Stock options (1) 0.3 0.2 0.3 0.2 Weighted-average common shares outstanding—assuming dilution 136.5 136.0 136.5 135.8 Basic earnings per share from continuing operations $ 0.19 $ 0.13 $ 1.14 $ 0.55 Diluted earnings per share from continuing operations $ 0.19 $ 0.13 $ 1.13 $ 0.55 ___________________________________ (1) Options to purchase 0.5 million shares for the three months ended September 30, 2018, and 0.5 million and 0.4 million shares for the nine months ended September 30, 2019 and 2018, 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) - item | Oct. 01, 2018 | Mar. 31, 2019 | Sep. 30, 2019 |
Basis Of Presentation [Line Items] | |||
Number of shares of common stock shares received from spinoff company | 1 | ||
Number of shares of Parent common stock exchanged for shares of Spinoff Company | 2 | ||
Minimum [Member] | |||
Basis Of Presentation [Line Items] | |||
Number of company-owned locations and franchise and license agreements | 8,000 | ||
Frontdoor, inc. [Member] | |||
Basis Of Presentation [Line Items] | |||
Pro rata dividend to the Company's stockholders, percent of outstanding shares of common stock | 80.20% | ||
Percentage of outstanding common share exchanged | 19.80% | 19.80% |
Significant Accounting Polici_4
Significant Accounting Policies (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Accounting Standards Update 2018-15 [Member] | |
Capitalization of certain development costs | $ 9 |
Significant Accounting Polici_5
Significant Accounting Policies (Impacts Of Adoption Of ASU On Condensed Consolidated Statements Of Financial Position) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 98 | ||
Total assets | 5,017 | $ 5,023 | |
Current portion of long-term lease liability | 18 | ||
Long-term lease liability | 113 | ||
Current finance lease liability, within Current portion of long-term debt | 56 | 49 | |
Other long-term obligations, primarily self-insured claims | $ 158 | 182 | |
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 107 | ||
Finance lease assets, within Property and equipment, net | 89 | ||
Total right-of-use assets | 195 | ||
Other assets | 86 | ||
Total assets | 5,129 | ||
Current portion of long-term lease liability | 15 | ||
Long-term lease liability | 120 | ||
Current finance lease liability, within Current portion of long-term debt | 31 | ||
Long-term finance lease liability, within Long-term debt | 60 | ||
Total lease liabilities | 225 | ||
Accrued liabilities, Other | 60 | ||
Other long-term obligations, primarily self-insured claims | 155 | ||
Total liabilities | 2,925 | ||
Accounting Standards Update 2016-02 [Member] | Previously Reported [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finance lease assets, within Property and equipment, net | 89 | ||
Total right-of-use assets | 89 | ||
Other assets | 87 | ||
Total assets | 5,023 | ||
Current finance lease liability, within Current portion of long-term debt | 31 | ||
Long-term finance lease liability, within Long-term debt | 60 | ||
Total lease liabilities | 90 | ||
Accrued liabilities, Other | 61 | ||
Other long-term obligations, primarily self-insured claims | 182 | ||
Total liabilities | $ 2,818 | ||
Accounting Standards Update 2016-02 [Member] | Restatement Adjustment [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | 107 | ||
Total right-of-use assets | 107 | ||
Total assets | 106 | ||
Current portion of long-term lease liability | 15 | ||
Long-term lease liability | 120 | ||
Total lease liabilities | 135 | ||
Accrued liabilities, Other | (1) | ||
Other long-term obligations, primarily self-insured claims | (28) | ||
Total liabilities | $ 106 |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||
Retained Earnings | $ 313 | $ 313 | $ 156 | ||
Notes receivable, net of allowances | 45 | 45 | $ 42 | ||
Revenue recognized | 12 | $ 12 | $ 59 | $ 61 | |
Contract with customer asset term | 1 year | ||||
Impact of adopting ASC 606 [Member] | Scenario, Adjustment [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Retained Earnings | $ 3 | $ 3 |
Revenues (Disaggregation of Rev
Revenues (Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | $ 528 | $ 496 | $ 1,570 | $ 1,443 |
Corporate Non-Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 1 | 1 | ||
Residential Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 189 | 178 | 535 | 484 |
Commercial Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 105 | 93 | 293 | 243 |
Termite and Home Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 133 | 129 | 450 | 432 |
Royalty Fees [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 32 | 31 | 101 | 99 |
Commercial Clearing And Other National Accounts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 18 | 17 | 54 | 48 |
Sales of Products and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 37 | 34 | 100 | 97 |
Fumigation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 11 | 14 | 33 | 40 |
European Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 4 | 4 | ||
Terminix [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 461 | 436 | 1,375 | 1,259 |
Terminix [Member] | Residential Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 189 | 178 | 535 | 484 |
Terminix [Member] | Commercial Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 105 | 93 | 293 | 243 |
Terminix [Member] | Termite and Home Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 133 | 129 | 450 | 432 |
Terminix [Member] | Sales of Products and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 24 | 22 | 64 | 61 |
Terminix [Member] | Fumigation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 11 | 14 | 33 | 40 |
ServiceMaster Brands [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 63 | 60 | 191 | 183 |
ServiceMaster Brands [Member] | Royalty Fees [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 32 | 31 | 101 | 99 |
ServiceMaster Brands [Member] | Commercial Clearing And Other National Accounts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 18 | 17 | 54 | 48 |
ServiceMaster Brands [Member] | Sales of Products and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 13 | $ 12 | 36 | 36 |
Corporate [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 4 | 4 | 1 | |
Corporate [Member] | Corporate Non-Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 1 | $ 1 | ||
Corporate [Member] | European Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | $ 4 | $ 4 |
Revenues (Deferred Revenue By S
Revenues (Deferred Revenue By Segment) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||||
Deferred revenue | $ 105 | $ 101 | $ 104 | $ 101 |
Terminix [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Deferred revenue | 96 | 91 | ||
ServiceMaster Brands [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Deferred revenue | 9 | 11 | ||
ServiceMaster Brands [Member] | Royalty Arrangement [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Deferred revenue | $ 6 | $ 7 |
Revenues (Movement In Deferred
Revenues (Movement In Deferred Revenue) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues[Abstract] | ||
Balance at beginning of period | $ 101 | $ 101 |
Deferral of revenue | 106 | 114 |
Recognition of deferred revenue | (102) | (111) |
Balance at end of period | $ 105 | $ 104 |
Restructuring And Other Charg_3
Restructuring And Other Charges (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 5 | $ 1 | $ 15 | $ 13 |
Professional fees | 2 | 0 | 2 | 0 |
Professional fees, net of tax | 1 | 1 | ||
Restructuring Charges, Not Including Professional Fees [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 3 | 1 | 13 | 13 |
Restructuring charges, net of tax | $ 2 | $ 1 | $ 10 | $ 10 |
Restructuring And Other Charg_4
Restructuring And Other Charges (Schedule Of Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 5 | $ 1 | $ 15 | $ 13 |
Stock-based compensation expense | 3 | 2 | 12 | 10 |
Terminix [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 1 | 4 | 2 | |
Severance and other restructuring costs | 1 | 2 | 4 | 2 |
Unpaid and accrued costs | 1 | 1 | ||
ServiceMaster Brands [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 2 | 1 | ||
Severance and other restructuring costs | 2 | 1 | ||
Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 1 | 6 | 3 | |
Other costs | 1 | 5 | ||
Severance and other restructuring costs | 1 | 3 | ||
Unpaid and accrued costs | 1 | 1 | ||
Global Service Center Relocation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 1 | 8 | ||
Redundant rent expense, accelerated depreciation and other charges | 1 | 8 | ||
Unpaid and accrued costs | 1 | 1 | ||
Restructuring Charges, Not Including Professional Fees [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 3 | $ 1 | 13 | $ 13 |
Maximum [Member] | ServiceMaster Brands [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Unpaid and accrued costs | $ 1 | $ 1 |
Restructuring And Other Charg_5
Restructuring And Other Charges (Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Costs incurred | $ 5 | $ 1 | $ 15 | $ 13 |
Restructuring Charges, Not Including Professional Fees [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance at the beginning of the period | 7 | 6 | ||
Costs incurred | 3 | 1 | 13 | 13 |
Costs paid or otherwise settled | (17) | (11) | ||
Balance at the end of the period | $ 3 | $ 8 | $ 3 | $ 8 |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - USD ($) $ in Millions | Oct. 01, 2018 | Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 |
Details of assets and liabilities and operating results of discontinued operations | ||||
Number of shares of common stock shares received from spinoff company | 1 | |||
Number of shares of Parent common stock exchanged for shares of Spinoff Company | 2 | |||
Sublease Income | $ 1 | $ 2 | ||
Frontdoor, inc. [Member] | ||||
Details of assets and liabilities and operating results of discontinued operations | ||||
Pro rata dividend to the Company's stockholders, percent of outstanding shares of common stock | 80.20% | |||
Percentage of outstanding common share exchanged | 19.80% | 19.80% | ||
Transition Service Agreement, Fees Recorded During Period | 1 | $ 2 | ||
Rental income | 1 | 2 | ||
Sublease Income | 1 | $ 6 | ||
Written notice period for termination of service agreement | 90 days | |||
Payments received from spin-off entity | $ 1 | |||
Proceeds from related party | $ 4 | |||
Maximum [Member] | Frontdoor, inc. [Member] | ||||
Details of assets and liabilities and operating results of discontinued operations | ||||
Payments received from spin-off entity | 1 | |||
Proceeds from related party | $ 1 |
Discontinued Operations (Schedu
Discontinued Operations (Schedule Of Operating Results Of Discontinued Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating results of discontinued operations | ||||
Revenue | $ 377 | $ 979 | ||
Cost of services rendered and products sold | 203 | 534 | ||
Operating expenses | 100 | 269 | ||
Interest and net investment income | (1) | |||
Income before income taxes | 75 | 177 | ||
Provision for income taxes | 22 | 45 | ||
Gain from discontinued operations, net of income taxes | 53 | $ (1) | 133 | |
Spin-off transaction costs incurred | $ 8 | $ 23 |
Discontinued Operations (Sche_2
Discontinued Operations (Schedule Of Cash Flows Of Discontinued Operations) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Discontinued Operations [Abstract] | |
Depreciation | $ 8 |
Amortization | 6 |
Capital expenditures | $ (18) |
Commitments and Contingencies_2
Commitments and Contingencies (Schedule Of Reconciliation Of Beginning And Ending Accrued Self-Insured Claims) (Details) - Accrued Self-Insured Claims, Net [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies [Line Items] | ||
Balance at the beginning of the period | $ 111 | $ 115 |
Provision for self-insured claims | 26 | 23 |
Cash payments | (28) | (26) |
Balance at the end of the period | $ 108 | $ 112 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Accumulated impairment losses recorded in continuing operations | $ 0 | $ 0 | ||
Amortization expense, for the remainder of 2019 | 6 | 6 | ||
Amortization expense, 2020 | 24 | 24 | ||
Amortization expense, 2021 | 22 | 22 | ||
Amortization expense, 2022 | 20 | 20 | ||
Amortization expense, 2023 | 17 | 17 | ||
Amortization expense, Thereafter | 12 | 12 | ||
Trade Names [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill and trade name impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters) (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2019USD ($) | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | $ 1,956 | |
Acquisitions | 251 | |
Impact of foreign exchange rates | (2) | |
Balance at the end of the period | 2,206 | |
Terminix [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 1,781 | |
Acquisitions | 78 | |
Impact of foreign exchange rates | 0 | |
Balance at the end of the period | 1,859 | |
ServiceMaster Brands [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 175 | |
Acquisitions | 7 | |
Impact of foreign exchange rates | 0 | |
Balance at the end of the period | 182 | |
Corporate [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 0 | [1] |
Acquisitions | 167 | [1] |
Impact of foreign exchange rates | (2) | [1] |
Balance at the end of the period | $ 164 | [1] |
[1] | Corporate and Other Operations includes goodwill related to pest control acquisitions in Europe completed during the nine months ended September 30, 2019. See Note 14 for further discussion of these acquisitions and purchase price allocations. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedule Of Other Intangible Asset Balances For Continuing Operations) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | |
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | $ 2,249 | $ 2,101 | |
Accumulated Amortization | (531) | (513) | |
Net | 1,718 | 1,588 | |
Customer Relationships [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 593 | 469 | |
Accumulated Amortization | (418) | (406) | |
Net | 176 | 64 | |
Franchise Agreements [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 88 | 88 | |
Accumulated Amortization | (75) | (73) | |
Net | 13 | 15 | |
Other [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 86 | 62 | |
Accumulated Amortization | (39) | (35) | |
Net | 47 | 27 | |
Trade Names [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | [1] | 1,482 | 1,482 |
Net | [1] | $ 1,482 | $ 1,482 |
[1] | Not subject to amortization. |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) $ in Millions | Jan. 01, 2019shares | Feb. 24, 2015 | Feb. 28, 2019itemshares | Jan. 31, 2019item | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Apr. 27, 2015shares |
Stock-Based Compensation [Line Items] | |||||||||
Stock-based compensation expense | $ | $ 3 | $ 2 | $ 12 | $ 10 | |||||
Stock-based compensation expense, net of tax | $ | 2 | $ 2 | 9 | $ 7 | |||||
Total unrecognized compensation costs related to non-vested stock options and restricted share units | $ | $ 29 | $ 29 | |||||||
Weighted-average period of recognition of stock-based compensation cost | 2 years 1 month 24 days | ||||||||
Percent of current fair market value, discount eligible employees may purchase common stock | 10.00% | ||||||||
Employee Stock Purchase Plan, maximum number of shares of common stock authorized for sale | 1,000,000 | ||||||||
Employee stock plan, shares remaining in ESPP | 843,584 | ||||||||
Number of shares of available for issuance | 839,784 | 839,784 | |||||||
Expiration date for ESPP | Apr. 27, 2025 | ||||||||
Stock Options [Member] | |||||||||
Stock-Based Compensation [Line Items] | |||||||||
Term of stock options | 8 years | 10 years | |||||||
Vesting period | 3 years | ||||||||
Number of equal annual vesting installments | item | 3 | 4 | |||||||
RSUs [Member] | |||||||||
Stock-Based Compensation [Line Items] | |||||||||
Grants (in shares) | 136,092 | ||||||||
Maximum [Member] | |||||||||
Stock-Based Compensation [Line Items] | |||||||||
Percent of current fair market value, discount eligible employees may purchase common stock | 10.00% |
Comprehensive Income (Narrative
Comprehensive Income (Narrative) (Details) - USD ($) $ in Millions | Mar. 27, 2019 | Jan. 01, 2018 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 |
Derivative [Line Items] | |||||
Unrealized gain on marketable securities | $ 3 | ||||
Unrealized gain on marketable securities, net of tax | 2 | ||||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 4 | ||||
Interest Rate Swap Contracts [Member] | |||||
Derivative [Line Items] | |||||
Derivative Notional Amount Agreement Terminated | $ 479 | $ 38 | $ 441 | 479 | |
Derivative, Fair Value, Net | 12 | ||||
Interest rate swap, remaining unamortized amount | $ 10 |
Comprehensive Income (Summary O
Comprehensive Income (Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects) (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Balance at the beginning of period | $ 5 | $ 5 | $ 5 | $ 5 | $ 5 | |||||
Reclassification of unrealized gain/loss on equity securities | (2) | |||||||||
Reclassification of tax rate change | 4 | |||||||||
Other comprehensive income before reclassifications: | ||||||||||
Pre-tax amount | (16) | 24 | ||||||||
Tax provision (benefit) | 7 | (7) | ||||||||
After-tax amount | (9) | 17 | ||||||||
Amounts reclassified from accumulated other comprehensive income | [1] | (3) | (1) | |||||||
Net current period other comprehensive income | $ (7) | $ (4) | (2) | $ 3 | $ 3 | 10 | (13) | 16 | ||
Balance at the end of period | 7 | (8) | 23 | (8) | 23 | |||||
Unrealized Gains (Losses) on Derivatives [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Balance at the beginning of period | 16 | 20 | 16 | 20 | 16 | |||||
Reclassification of tax rate change | 3 | |||||||||
Other comprehensive income before reclassifications: | ||||||||||
Pre-tax amount | (14) | 25 | ||||||||
Tax provision (benefit) | 7 | (7) | ||||||||
After-tax amount | (7) | 18 | ||||||||
Amounts reclassified from accumulated other comprehensive income | [1] | (3) | (1) | |||||||
Net current period other comprehensive income | (10) | 17 | ||||||||
Balance at the end of period | 19 | 9 | 36 | 9 | 36 | |||||
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Balance at the beginning of period | 2 | 2 | 2 | |||||||
Reclassification of unrealized gain/loss on equity securities | (2) | |||||||||
Reclassification of tax rate change | 1 | |||||||||
Foreign Currency Translation [Member] | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Balance at the beginning of period | (12) | $ (15) | $ (12) | (15) | (12) | |||||
Other comprehensive income before reclassifications: | ||||||||||
Pre-tax amount | (2) | (1) | ||||||||
After-tax amount | (2) | (1) | ||||||||
Net current period other comprehensive income | (2) | (1) | ||||||||
Balance at the end of period | $ (12) | $ (18) | $ (13) | $ (18) | $ (13) | |||||
[1] | Amounts are net of tax. Reclassifications out of accumulated other comprehensive income included the following components for the periods indicated. |
Comprehensive Income (Schedule
Comprehensive Income (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Provision for income taxes | $ (9) | $ (7) | $ (39) | $ (32) | ||||
Net Income | 25 | $ 59 | $ 70 | 71 | $ 96 | $ 40 | 154 | 207 |
Unrealized Gains (Losses) on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net losses on derivatives | 1 | 3 | 4 | 2 | ||||
Provision for income taxes | (1) | (1) | ||||||
Net Income | 1 | 2 | 3 | 1 | ||||
Unrealized Gains (Losses) on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income [Member] | Fuel Swap Contracts [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Gains (losses) on derivatives: | 1 | $ 3 | ||||||
Unrealized Gains (Losses) on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income [Member] | Interest Rate Swap Contracts [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Gains (losses) on derivatives: | $ 1 | $ 1 | $ 4 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash paid for or (received from): | ||||
Cash and cash equivalents | $ 140 | $ 216 | $ 224 | $ 192 |
Restricted cash | 89 | 89 | 89 | 89 |
Cash related to discontinued operations | 305 | 282 | ||
Cash and Cash Equivalents Including Restricted Cash, at Carrying Value | 228 | 610 | $ 313 | $ 563 |
Finance leases and other non-cash financing transactions | $ 39 | $ 23 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information (Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash paid for or (received from): | ||
Interest expense | $ 55 | $ 95 |
Interest and dividend income | (2) | (1) |
Income taxes, net of refunds | 23 | $ 40 |
Interest rate swap agreement termination fee | $ 12 |
Cash and Marketable Securitie_2
Cash and Marketable Securities (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash and Marketable Securities [Abstract] | ||||
Impairment charges due to other than temporary declines in the value of certain investments | $ 0 | $ 0 | $ 0 | $ 0 |
Equity Securities, Unrealized Gain (Loss) | 0 | $ 0 | ||
Equity Securities, FV-NI, Unrealized Gain | 1,000,000 | |||
Equity Securities, FV-NI, Unrealized Loss | $ 1,000,000 | |||
Minority interests in several strategic investments | $ 4,000,000 | $ 4,000,000 |
Cash and Marketable Securitie_3
Cash and Marketable Securities (Schedule Of Amortized Cost, Fair Value And Gross Unrealized Gains And Losses Of The Company's Short- And Long-Term Investments In Debt And Equity Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost of securities | $ 17 | $ 19 |
Gross Realized and Unrealized Gains | 2 | 1 |
Fair value of securities | 19 | 21 |
Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost of debt securities | 4 | 4 |
Fair value of debt securities | 4 | 4 |
Equity Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost of equity securities | 13 | 15 |
Gross Realized and Unrealized Gains | 2 | 1 |
Fair value of equity securities | $ 14 | $ 16 |
Long-Term Debt (Revolving Credi
Long-Term Debt (Revolving Credit Facility, Extinguishment of Debt and Repurchase of Notes Narrative) (Details) - USD ($) shares in Millions | Oct. 15, 2019 | Mar. 27, 2019 | Mar. 12, 2019 | Oct. 01, 2018 | Aug. 01, 2018 | Apr. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 05, 2019 | Aug. 16, 2018 |
Debt Instrument [Line Items] | |||||||||||||||
Loss on extinguishment of debt | $ 10,000,000 | $ 6,000,000 | $ 10,000,000 | ||||||||||||
Amount borrowed | 720,000,000 | 1,000,000,000 | |||||||||||||
Gain (Loss) on Investments | 40,000,000 | ||||||||||||||
Proceeds From Spin-Off Entity Common Shares Retained, Net | 486,000,000 | ||||||||||||||
Use Of Cash To Retire Short-Term Credit Facility | 114,000,000 | ||||||||||||||
Interest Rate Swap Contracts [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Derivative Notional Amount Agreement Terminated | $ 479,000,000 | $ 38,000,000 | $ 441,000,000 | 479,000,000 | |||||||||||
Amount Received From Termination Of Interest Rate Swap Agreement | $ 12,000,000 | ||||||||||||||
Short-term Credit Facility [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Loss on extinguishment of debt | 4,000,000 | ||||||||||||||
Amount borrowed | $ 600,000,000 | ||||||||||||||
Repayment of debt | $ 468,000,000 | ||||||||||||||
Revolving Credit Facility Maturing In 2021 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount of debt instrument | $ 120,000,000 | ||||||||||||||
Spin-off [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Cost of debt purchased | $ 1,000,000,000 | ||||||||||||||
Spin-off [Member] | Short-term Credit Facility [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Amount borrowed | $ 1,000,000,000 | ||||||||||||||
Spin-off [Member] | Frontdoor Term Loan Facility [Member] | Revolving Credit Facility [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount of debt instrument | $ 650,000,000 | ||||||||||||||
Spin-off [Member] | Revolving Credit Facility Maturing In 2023 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowings | $ 250,000,000 | ||||||||||||||
Secured Debt [Member] | Senior Secured Term Loan Facility Maturing In 2023 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Loss on extinguishment of debt | $ 4,000,000 | ||||||||||||||
Secured Debt [Member] | Spin-off [Member] | Senior Secured Term Loan Facility Maturing In 2023 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayment of principal amount | 982,000,000 | ||||||||||||||
Loss on extinguishment of debt | $ 10,000,000 | $ 10,000,000 | |||||||||||||
Secured Debt [Member] | Spin-off [Member] | Revolving Credit Facility Maturing In 2023 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repayment of principal amount | $ 982,000,000 | ||||||||||||||
Loans Payable [Member] | 7.25% Notes Maturing In 2038 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 7.25% | 7.25% | 7.25% | 7.25% | |||||||||||
Redemption percentage | 99.50% | ||||||||||||||
Face amount of debt instrument | $ 3,000,000 | $ 3,000,000 | |||||||||||||
Loans Payable [Member] | 7.45% Notes Maturing In 2027 [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 7.45% | 7.45% | 7.45% | 7.45% | 7.45% | ||||||||||
Repayment of principal amount | $ 1,000,000 | ||||||||||||||
Redemption percentage | 105.50% | 105.50% | |||||||||||||
Face amount of debt instrument | $ 7,000,000 | $ 7,000,000 | |||||||||||||
Loans Payable [Member] | Notes 7.45%, And 7.25% Collectively [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Loss on extinguishment of debt | $ 2,000,000 | $ 2,000,000 | |||||||||||||
Loans Payable [Member] | Spin-off [Member] | Frontdoor Notes [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 6.75% | ||||||||||||||
Face amount of debt instrument | $ 350,000,000 | ||||||||||||||
Frontdoor, inc. [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 16.7 | ||||||||||||||
Cost of debt purchased | $ 600,000,000 | ||||||||||||||
Gain (Loss) on Investments | $ 40,000,000 | ||||||||||||||
Proceeds From Spin-Off Entity Common Shares Retained, Net | 486,000,000 | ||||||||||||||
Use Of Cash To Retire Short-Term Credit Facility | $ 114,000,000 | ||||||||||||||
Subsequent Event [Member] | Interest Rate Swap Contracts [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Derivative Notional Amount Agreement Terminated | $ 171,000,000 |
Long-Term Debt (Interest Rate S
Long-Term Debt (Interest Rate Swap And Refinancing of Indebtedness Narrative) (Details) - USD ($) | Nov. 05, 2019 | Oct. 15, 2019 | Mar. 27, 2019 | Mar. 12, 2019 | Oct. 01, 2018 | Aug. 01, 2018 | Nov. 07, 2016 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Aug. 16, 2018 | |||
Derivative [Line Items] | |||||||||||||||||
Borrowings of debt | $ 720,000,000 | $ 1,000,000,000 | |||||||||||||||
Loss on extinguishment of debt | $ 10,000,000 | 6,000,000 | 10,000,000 | ||||||||||||||
Short-term Credit Facility [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Borrowings of debt | $ 600,000,000 | ||||||||||||||||
Loss on extinguishment of debt | 4,000,000 | ||||||||||||||||
Spin-off [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Debt amount refinanced | $ 1,000,000,000 | ||||||||||||||||
Amount de-designated from interest rate swap | 7,000,000 | ||||||||||||||||
Spin-off [Member] | Short-term Credit Facility [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Borrowings of debt | $ 1,000,000,000 | ||||||||||||||||
Subsequent Event [Member] | Senior Secured Term Loan Facility Maturing In 2023 [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Debt amount refinanced | $ 171,000,000 | ||||||||||||||||
Subsequent Event [Member] | Revolving Credit Facility Maturing In 2021 [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Debt amount refinanced | 120,000,000 | ||||||||||||||||
Subsequent Event [Member] | Short-term Debt [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Debt amount refinanced | 150,000,000 | ||||||||||||||||
Term Loan B Due 2026 [Member] | Subsequent Event [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Face amount of debt instrument | 600,000,000 | ||||||||||||||||
Revolving Credit Facility Due 2024 [Member] | Subsequent Event [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Face amount of debt instrument | $ 400,000,000 | ||||||||||||||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | Secured Debt [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Loss on extinguishment of debt | 4,000,000 | ||||||||||||||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | Spin-off [Member] | Secured Debt [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Repayment of principal amount | 982,000,000 | ||||||||||||||||
Loss on extinguishment of debt | $ 10,000,000 | $ 10,000,000 | |||||||||||||||
Frontdoor Notes [Member] | Spin-off [Member] | Loans Payable [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Face amount of debt instrument | $ 350,000,000 | ||||||||||||||||
Interest rate (as a percent) | 6.75% | ||||||||||||||||
Frontdoor Term Loan Facility [Member] | Spin-off [Member] | Revolving Credit Facility [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Face amount of debt instrument | $ 650,000,000 | ||||||||||||||||
Revolving Credit Facility Maturing In 2023 [Member] | Spin-off [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Maximum borrowing capacity | $ 250,000,000 | ||||||||||||||||
Revolving Credit Facility Maturing In 2023 [Member] | Spin-off [Member] | Secured Debt [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Repayment of principal amount | $ 982,000,000 | ||||||||||||||||
Interest Rate Swap Contracts [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Derivative, Term of Contract | 7 years | ||||||||||||||||
Derivative, Notional Amount | $ 650,000,000 | $ 171,000,000 | $ 209,000,000 | $ 171,000,000 | $ 650,000,000 | ||||||||||||
Derivative, Average Fixed Interest Rate | 1.493% | 1.493% | [1] | 1.493% | [1] | 1.493% | 1.493% | [1] | |||||||||
Derivative, Basis Spread on Variable Rate | 2.50% | ||||||||||||||||
Floating Rate | one-month LIBOR | ||||||||||||||||
Derivative, Floor Interest Rate | 0.00% | ||||||||||||||||
Derivative terminated | $ 479,000,000 | $ 38,000,000 | $ 441,000,000 | $ 479,000,000 | |||||||||||||
Interest Rate Swap Contracts [Member] | Subsequent Event [Member] | |||||||||||||||||
Derivative [Line Items] | |||||||||||||||||
Derivative, Term of Contract | 7 years | ||||||||||||||||
Derivative, Notional Amount | $ 550,000,000 | ||||||||||||||||
Derivative, Basis Spread on Variable Rate | 1.75% | ||||||||||||||||
Derivative terminated | $ 171,000,000 | ||||||||||||||||
Derivative, Fixed Interest Rate | 1.615% | ||||||||||||||||
[1] | Before the application of the applicable borrowing margin. |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | ||||
Sep. 30, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||
Long-term debt [Line Items] | |||||
Less current portion | $ (56) | $ (49) | |||
Total long-term debt | 1,398 | 1,727 | |||
Vehicle Finance Leases [Member] | |||||
Long-term debt [Line Items] | |||||
Vehicle finance leases | [1] | $ 100 | 90 | ||
Borrowing margin (as a percent) | 2.45% | ||||
Variable rate basis | one-month LIBOR | ||||
Senior Secured Term Loan Facility Maturing In 2023 [Member] | Secured Debt [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [2] | $ 170 | 637 | ||
Unamortized debt issuance costs | 1 | 5 | |||
Unamortized original issue discount | 1 | ||||
Revolving Credit Facility Maturing In 2021 [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | 120 | ||||
5.125% Notes Maturing In 2024 [Member] | Loans Payable [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [3] | $ 742 | 740 | ||
Interest rate (as a percent) | 5.125% | ||||
Unamortized debt issuance costs | $ 8 | 10 | |||
7.45% Notes Maturing In 2027 [Member] | Loans Payable [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [4] | $ 166 | 172 | ||
Interest rate (as a percent) | 7.45% | 7.45% | 7.45% | ||
7.25% Notes Maturing In 2038 [Member] | Loans Payable [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [4] | $ 40 | 42 | ||
Interest rate (as a percent) | 7.25% | 7.25% | |||
Notes 7.45%, And 7.25% Collectively [Member] | Loans Payable [Member] | |||||
Long-term debt [Line Items] | |||||
Unamortized fair value adjustments related to purchase accounting | $ 29 | 33 | |||
Other [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [5] | 116 | 94 | ||
Copesan Services, Inc. (“Copesan”) [Member] | Other [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | $ 105 | $ 82 | |||
[1] | We have entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows us to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are finance leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. | ||||
[2] | As of September 30, 2019 and December 31, 2018, presented net of $ 1 million and $ 5 million, respectively, in unamortized debt issuance costs. As of December 31, 2018, presented net of $ 1 million in unamortized original issue discount paid. | ||||
[3] | As of September 30, 2019 and December 31, 2018, presented net of $ 8 million and $ 10 million, respectively, in unamortized debt issuance costs. | ||||
[4] | As of September 30, 2019 and December 31, 2018, collectively presented net of $ 29 million and $ 33 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. | ||||
[5] | As of September 30, 2019 and December 31, 2018, includes approximately $ 105 million and $ 82 million, respectively, of future payments in connection with our acquisitions as further described in Note 14. |
Long-Term Debt (Summary Of Proc
Long-Term Debt (Summary Of Proceeds And Use Related To Debt-For-Equity Exchange) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Proceeds from the short-term credit facility | $ 600 | |||
Proceeds from the Frontdoor common shares retained, net of $16 million of fees paid | 486 | |||
Total proceeds | 1,086 | |||
Repayment of the term loan facility, including loss on extinguishment of debt of $4 million | (472) | |||
Debt-for-equity exchange using net proceeds from the Frontdoor common shares retained | (486) | |||
Repurchase of 2027 and 2038 notes, including loss on extinguishment of debt of $2 million | (12) | |||
Interest and other payments | (1) | |||
Use of cash to retire short-term credit facility | (114) | |||
Total uses | (1,086) | |||
Fee paid | 16 | |||
Loss on extinguishment of debt | $ (10) | (6) | $ (10) | |
Loans Payable [Member] | Notes 7.45%, And 7.25% Collectively [Member] | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ (2) | (2) | ||
Secured Debt [Member] | Senior Secured Term Loan Facility Maturing In 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ (4) |
Long-Term Debt (Schedule of Int
Long-Term Debt (Schedule of Interest Rate Swap Agreements) (Details) - Interest Rate Swap Contracts [Member] - USD ($) $ in Millions | Mar. 27, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | [1] | Nov. 07, 2016 | ||
Derivative [Line Items] | |||||||||
Balance at the beginning of the period | $ 209 | $ 650 | $ 650 | ||||||
Terminated | $ (479) | (38) | (441) | (479) | |||||
Balance at the end of the period | $ 171 | $ 209 | $ 171 | ||||||
Weighted Average Fixed Rate (as a percent) | 1.493% | [1] | 1.493% | [1] | 1.493% | 1.493% | 1.493% | ||
[1] | Before the application of the applicable borrowing margin. |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Line Items] | |
Finance Leases | $ 100 |
Finance Lease, lease not yet commenced, amount | $ 6 |
Finance Lease, lease not yet commenced, term of contract | 5 years |
Assets [Member] | |
Leases [Line Items] | |
Assets recorded under finance leases | $ 219 |
Accumulated Depreciation [Member] | |
Leases [Line Items] | |
Assets recorded under finance leases | 121 |
Current Portion Of Long-Term Debt [Member] | |
Leases [Line Items] | |
Finance Leases | 35 |
Long-term Debt [Member] | |
Leases [Line Items] | |
Finance Leases | $ 65 |
Variety Of Facilities [Member] | |
Leases [Line Items] | |
Option To Extend Lease Term | 15 years |
Lease, Option to Terminate | 1 year |
Maximum [Member] | Variety Of Facilities [Member] | |
Leases [Line Items] | |
Remaining Lease Term | 23 years |
Maximum [Member] | Vehicle Leases [Member] | |
Leases [Line Items] | |
Remaining Lease Term | 8 years |
Minimum [Member] | Variety Of Facilities [Member] | |
Leases [Line Items] | |
Remaining Lease Term | 1 year |
Minimum [Member] | Vehicle Leases [Member] | |
Leases [Line Items] | |
Remaining Lease Term | 1 year |
Leases (Components Of Lease Exp
Leases (Components Of Lease Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Depreciation of finance lease ROU assets | $ 9 | $ 25 |
Interest on finance lease liabilities | 1 | 4 |
Operating lease cost | 7 | 20 |
Variable lease cost | 1 | 3 |
Sublease income | (1) | (2) |
Total lease cost | $ 17 | $ 49 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information And Other Information For Leases) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 18 |
Operating cash flows for finance leases | 4 |
Financing cash flows for finance leases | 25 |
ROU assets obtained in exchange for lease obligations: Operating leases | 8 |
ROU assets obtained in exchange for lease obligations: Finance leases | $ 39 |
Weighted Average Remaining Lease Term (in years): Operating leases | 10 years 8 months 12 days |
Weighted Average Remaining Lease Term (in years): Finance leases | 3 years 5 months 8 days |
Weighted Average Discount Rate: Operating leases | 5.54% |
Weighted Average Discount Rate: Finance leases | 3.84% |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments Under Non-Cancellable Leases) (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating Leases, 2019 (excluding the nine months ended September 30, 2019) | $ 6 |
Operating Leases, 2020 | 26 |
Operating Leases, 2021 | 21 |
Operating Leases, 2022 | 19 |
Operating Leases, 2023 | 15 |
Operating Leases, Thereafter | 95 |
Operating Leases, Total future minimum lease payments | 181 |
Operating Leases, Less imputed interest | (50) |
Operating Leases, Total | 131 |
Finance Leases, 2019 (excluding the nine months ended September 30, 2019) | 10 |
Finance Leases, 2020 | 36 |
Finance Leases, 2021 | 28 |
Finance Leases, 2022 | 18 |
Finance Leases, 2023 | 11 |
Finance Leases, Thereafter | 4 |
Finance Leases, Total future minimum lease payments | 107 |
Finance Leases, Less imputed interest | (8) |
Finance Leases, Total | $ 100 |
Leases (Future Minimum Lease _2
Leases (Future Minimum Lease Payments Due Under Capital And Operating Leases) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
Operating Leases, Less than 1 Yr | $ 17 |
Operating Leases, 1 - 3 Yrs | 36 |
Operating Leases, 3 - 5 Yrs | 25 |
Operatingl Leases, More than 5 Yrs | 67 |
Operating Leases, Total future minimum lease payments | 146 |
Capital Leases, Less than 1 Yr | 31 |
Capital Leases, 1 - 3 Yrs | 46 |
Capital Leases, 3 - 5 Yrs | 14 |
Capital Leases, More than 5 Yrs | 1 |
Capital Leases, Total future minimum lease payments | $ 92 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ / shares in Units, kr in Billions | Sep. 06, 2019SEK (kr) | Sep. 06, 2019USD ($)$ / shares | Nov. 04, 2019USD ($)item | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($)item | Dec. 31, 2018USD ($) | |
Acquisitions [Line Items] | |||||||||||
Number of Businesses Acquired | item | 30 | ||||||||||
Number of minority investments completed | item | 7 | ||||||||||
Net purchase price | $ 359,000,000 | $ 214,000,000 | |||||||||
Net cash paid | 345,000,000 | 160,000,000 | |||||||||
Goodwill | $ 2,206,000,000 | $ 2,206,000,000 | 2,206,000,000 | $ 1,956,000,000 | |||||||
Proceeds from revolving credit facility | 600,000,000 | ||||||||||
Payments for Previous Acquisition | 4,000,000 | ||||||||||
Contingent consideration | 14,000,000 | 14,000,000 | 14,000,000 | ||||||||
Interest expense | 19,000,000 | $ 33,000,000 | 64,000,000 | 107,000,000 | |||||||
Customer Relationships [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Other intangibles related to acquisitions | 56,000,000 | 56,000,000 | 56,000,000 | ||||||||
Customer Lists [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Other intangibles related to acquisitions | 72,000,000 | $ 72,000,000 | |||||||||
Other [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Other intangibles related to acquisitions | 11,000,000 | 11,000,000 | $ 11,000,000 | ||||||||
Pest Acquisitions [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Number of Businesses Acquired | item | 27 | 6 | |||||||||
ServiceMaster Brands Franchisees [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Number of Businesses Acquired | item | 2 | ||||||||||
Copesan And Four Pest Control Acquisitions [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Net purchase price | $ 161,000,000 | ||||||||||
Goodwill | 145,000,000 | 145,000,000 | |||||||||
Copesan And Four Pest Control Acquisitions [Member] | Deferred Purchase Price [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Net purchase price, fair value | 42,000,000 | 42,000,000 | |||||||||
Copesan And Four Pest Control Acquisitions [Member] | Earnout [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Net purchase price, fair value | $ 14,000,000 | $ 14,000,000 | |||||||||
30 Acquisitions [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Goodwill | 99,000,000 | $ 99,000,000 | $ 99,000,000 | ||||||||
Asset Acquisitions [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Number of Businesses Acquired | item | 3 | ||||||||||
Nomor [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Cash Acquired from Acquisition | $ 9,000,000 | ||||||||||
Net cash paid | kr 2 | 207,000,000 | |||||||||
Goodwill | [1] | 152,000,000 | |||||||||
Proceeds from revolving credit facility | 120,000,000 | ||||||||||
Revenue since acquisition | 4,000,000 | ||||||||||
Adjusted EBITDA since acquisition | $ 1,000,000 | ||||||||||
Other intangibles related to acquisitions | [2] | 94,000,000 | |||||||||
Acquisition related costs | 4,000,000 | $ 4,000,000 | |||||||||
Interest expense | $ 1,000,000 | ||||||||||
Minimum [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Contingent consideration, term | 1 year | 1 year | |||||||||
Maximum [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Contingent consideration, term | 5 years | 5 years | |||||||||
Period from acquisition, purchase price allocation will be completed | 1 year | ||||||||||
Performance Based Shares [Member] | Nomor [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Granted shares related to acquisition | $ 87,920 | ||||||||||
Grant date fair value | $ / shares | $ 56.87 | ||||||||||
Vesting period | 3 years | ||||||||||
Subsequent Event [Member] | Commercial Pest Control Companies [Member] | |||||||||||
Acquisitions [Line Items] | |||||||||||
Number of Businesses Acquired | item | 2 | ||||||||||
Net cash paid | $ 140,000,000 | ||||||||||
[1] | Includes $ 20 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets. | ||||||||||
[2] | Primarily customer lists. |
Acquisitions (Preliminary Purch
Acquisitions (Preliminary Purchase Price Allocation) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 06, 2019 | Dec. 31, 2018 | Sep. 06, 2016 | |
Goodwill | $ 2,206 | $ 1,956 | |||
Nomor [Member] | |||||
Current assets | [1] | $ 19 | |||
Property and equipment | 6 | ||||
Goodwill | [2] | 152 | |||
Intangible intangible assets | [3] | 94 | |||
Current liabilities | [4] | (21) | |||
Long-term liabilities | [2] | (44) | |||
Total purchase price | $ 207 | ||||
Deferred tax liabilities, tax differences in intangible assets | $ 20 | ||||
[1] | Primarily trade receivables and cash | ||||
[2] | Includes $ 20 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets. | ||||
[3] | Primarily customer lists. | ||||
[4] | Primarily advanced collections from customers |
Acquisitions (Summary Of Pro Fo
Acquisitions (Summary Of Pro Forma Consolidated Financial Information) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Acquisitions [Abstract] | ||||
Consolidated revenue | $ 537 | $ 508 | $ 1,605 | $ 1,480 |
Consolidated net income | $ 29 | $ 71 | $ 160 | $ 205 |
Basic earnings per share | $ 0.22 | $ 0.53 | $ 1.18 | $ 1.51 |
Diluted earnings per share | $ 0.21 | $ 0.52 | $ 1.17 | $ 1.51 |
Acquisitions (Schedule Of Suppl
Acquisitions (Schedule Of Supplemental Cash Flow Information Regarding Acquisitions) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
Supplemental cash flow information regarding acquisitions | |||
Assets acquired | $ 431 | $ 241 | |
Liabilities assumed | [1] | (72) | (27) |
Net assets acquired | 359 | 214 | |
Net cash paid | 345 | 160 | |
Seller financed debt | 11 | 42 | |
Contingent earnout | 4 | 12 | |
Purchase price | 359 | 214 | |
Deferred tax liabilities | $ 21 | $ 11 | |
[1] | Includes $ 21 million and $ 11 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets for the nine months ended September 30, 2019 and 2018, respectively. |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Income Taxes [Abstract] | |||||
Effective Income Tax Rate Reconciliation, Percent | 26.50% | 28.10% | 20.00% | 30.30% | |
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 15 | $ 15 | $ 15 | ||
Unrecognized tax benefits, reasonably possible decrease within the next 12 months | $ 2 | $ 2 |
Business Segment Reporting (Nar
Business Segment Reporting (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2019segment | |
Business Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Maximum percentage of revenue from customers and franchisees generated in foreign market | 3.00% |
Business Segment Reporting (Sch
Business Segment Reporting (Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 528 | $ 496 | $ 1,570 | $ 1,443 | |
Reportable Segment Adjusted EBITDA | 95 | 102 | 330 | 344 | |
Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 524 | 496 | 1,566 | 1,442 | |
Reportable Segment Adjusted EBITDA | [1] | 95 | 102 | 330 | 344 |
Terminix [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 461 | 436 | 1,375 | 1,259 | |
Terminix [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 461 | 436 | 1,375 | 1,259 | |
Reportable Segment Adjusted EBITDA | [1] | 72 | 81 | 261 | 277 |
ServiceMaster Brands [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 63 | 60 | 191 | 183 | |
ServiceMaster Brands [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 63 | 60 | 191 | 183 | |
Reportable Segment Adjusted EBITDA | [1] | 22 | $ 21 | 70 | 67 |
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 4 | $ 4 | $ 1 | ||
[1] | Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: |
Business Segment Reporting (S_2
Business Segment Reporting (Schedule Of Reconciliation Of Net Income (Loss) To Reportable Segment Adjusted EBITDA) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Net Income | $ 25 | $ 59 | $ 70 | $ 71 | $ 96 | $ 40 | $ 154 | $ 207 | |
Depreciation and amortization expense | 26 | 24 | 74 | 68 | |||||
Acquisition-related costs | 8 | 1 | 12 | 2 | |||||
Fumigation related matters | 1 | 1 | |||||||
Non-cash stock-based compensation expense | 3 | 2 | 12 | 10 | |||||
Restructuring and other charges | 5 | 1 | 15 | 13 | |||||
Realized (gain) on investment in frontdoor, inc. | (40) | ||||||||
(Gain) loss from discontinued operations, net of income taxes | (53) | 1 | (133) | ||||||
Provision for income taxes | 9 | 7 | 39 | 32 | |||||
Loss on extinguishment of debt | 10 | 6 | 10 | ||||||
Interest expense | 19 | 33 | 64 | 107 | |||||
Reportable Segment Adjusted EBITDA | 95 | 102 | 330 | 344 | |||||
European Pest Control [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Costs historically allocated to American Home Shield | (1) | (1) | |||||||
Operating Segment [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Reportable Segment Adjusted EBITDA | [1] | 95 | 102 | 330 | 344 | ||||
Terminix [Member] | Operating Segment [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Reportable Segment Adjusted EBITDA | [1] | 72 | 81 | 261 | 277 | ||||
American Home Shield [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Costs historically allocated to American Home Shield | 11 | 33 | |||||||
Corporate [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Net Income | $ (2) | $ (4) | $ (6) | $ (6) | |||||
[1] | Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA: |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Letters of credit posted as collateral under fuel hedging program | $ 2 | |
Hedging gains and losses in accumulated other comprehensive income expected to be recognized in earnings, net of tax | 2 | |
Carrying Value [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Long Term Debt And Capital Lease Obligation | 1,454 | $ 1,776 |
Estimated Fair Value [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of total debt | 1,553 | $ 1,791 |
Fuel Swap Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Aggregate notional amount | $ 30 |
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) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Quoted Price In Active Markets (Level 1) [Member] | ||
Financial Assets: | ||
Deferred compensation trust | $ 13 | $ 13 |
Investments | 6 | |
Total financial assets | 19 | 21 |
Quoted Price In Active Markets (Level 1) [Member] | Investment In Marketable Securities [Member] | ||
Financial Assets: | ||
Investments | 8 | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Assets: | ||
Derivative asset, Current | 30 | |
Total financial assets | 475 | |
Total financial liabilities | 1 | |
Significant Other Observable Inputs (Level 2) [Member] | Investment In Frontdoor, Inc. [Member] | ||
Financial Assets: | ||
Investments | 445 | |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative contracts | 1 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Financial Assets: | ||
Total financial liabilities | 1 | 4 |
Significant Unobservable Inputs (Level 3) [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative contracts | 1 | 4 |
Carrying Value [Member] | ||
Financial Assets: | ||
Deferred compensation trust | 13 | 13 |
Investments | 6 | |
Derivative asset, Current | 30 | |
Total financial assets | 19 | 496 |
Total financial liabilities | 2 | 4 |
Carrying Value [Member] | Investment In Frontdoor, Inc. [Member] | ||
Financial Assets: | ||
Investments | 445 | |
Carrying Value [Member] | Investment In Marketable Securities [Member] | ||
Financial Assets: | ||
Investments | 8 | |
Carrying Value [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative contracts | 1 | $ 4 |
Carrying Value [Member] | Interest Rate Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative contracts | $ 1 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule Of Reconciliation Of The Beginning And Ending Fair Values Of Financial Instruments Valued Using Significant Unobservable Inputs (Level 3) On A Recurring Basis) (Details) - Fuel Swap Contracts [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
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 | $ (4) | $ 3 |
Total gains (losses) (realized and unrealized) | ||
Included in earnings | 3 | |
Included in other comprehensive income | 2 | 1 |
Settlements | (3) | |
Balance at the end of the period | $ (1) | $ 4 |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule Of Level 3 Financial Instruments) (Details) - Fuel Swap Contracts [Member] $ in Millions | Sep. 30, 2019USD ($)$ / gal | Dec. 31, 2018USD ($)$ / gal | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Information relating to the significant unobservable inputs of Level 3 financial instruments | |||||
Fair value | $ | $ (1) | $ (4) | $ 4 | $ 3 | |
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) | [1] | 2.24 | 2.09 | ||
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) | [1] | 2.60 | 2.43 | ||
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) | 2.44 | 2.26 | |||
[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 (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Income from continuing operations | $ 26 | $ 18 | $ 155 | $ 74 | |
Weighted-average common shares outstanding | 135.8 | 135.6 | 135.9 | 135.4 | |
Effect of dilutive securities: | |||||
Weighted-average common shares outstanding-assuming dilution | 136.5 | 136 | 136.5 | 135.8 | |
Basic earnings per share from continuing operations (in dollars per share) | $ 0.19 | $ 0.13 | $ 1.14 | $ 0.55 | |
Diluted earnings per share from continuing operations (in dollars per share) | $ 0.19 | $ 0.13 | $ 1.13 | $ 0.55 | |
RSUs [Member] | |||||
Effect of dilutive securities: | |||||
Dilutive securities | 0.3 | 0.2 | 0.3 | 0.2 | |
Stock Options [Member] | |||||
Effect of dilutive securities: | |||||
Dilutive securities | [1] | 0.3 | 0.2 | 0.3 | 0.2 |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0.5 | 0.5 | 0.4 | ||
[1] | Options to purchase 0.5 million shares for the three months ended September 30, 2018, and 0.5 million and 0.4 million shares for the nine months ended September 30, 2019 and 2018, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |