Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | frontdoor, inc. | ||
Entity Central Index Key | 0001727263 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Incorporation, State or Country Code | DE | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 85,338,911 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 3.7 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | FTDR | ||
Security Exchange Name | NASDAQ | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Address, Address Line One | 150 Peabody Place | ||
Entity Address, City or Town | Memphis | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 38103 | ||
Entity File Number | 001-38617 | ||
Entity Tax Identification Number | 82-3871179 | ||
City Area Code | 901 | ||
Local Phone Number | 701-5002 | ||
Documents Incorporated by Reference [Text Block] | Documents incorporated by reference: Portions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the registrant’s 2020 annual meeting of stockholders (the “Proxy Statement”) are incorporated by reference into Part III hereof. Such Proxy Statement will be filed within 120 days of the registrant’s fiscal year ended December 31, 2019. |
Consolidated and Combined State
Consolidated and Combined Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidated and Combined Statements of Operations and Comprehensive Income [Abstract] | ||||
Revenue | $ 1,365 | $ 1,258 | $ 1,157 | |
Cost of services rendered | 687 | 686 | 589 | |
Gross Profit | 678 | 572 | 567 | |
Selling and administrative expenses | 392 | 338 | 312 | |
Depreciation and amortization expense | 24 | 21 | 17 | |
Restructuring charges | 1 | 3 | 7 | |
Spin-off charges | 1 | 24 | 13 | |
Affiliate royalty expense | 1 | 2 | ||
Interest expense | 62 | 23 | 1 | |
Interest income from affiliate | (2) | (3) | ||
Interest and net investment income | (6) | (2) | (2) | |
Income before Income Taxes | 204 | 166 | 220 | |
Provision for income taxes | 51 | 42 | 60 | |
Net Income | 153 | 125 | 160 | |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||||
Net unrealized loss on derivative instruments | (12) | (9) | ||
Total Comprehensive Income | $ 141 | $ 116 | $ 160 | |
Earnings per Share: | ||||
Basic | $ 1.81 | $ 1.47 | $ 1.90 | |
Diluted | $ 1.80 | $ 1.47 | $ 1.90 | |
Weighted-average Common Shares Outstanding: | ||||
Basic | [1] | 84.7 | 84.5 | 84.5 |
Diluted | 84.9 | 84.7 | 84.5 | |
[1] | For periods prior to the Spin-off, earnings per share was calculated based on the 84,515,619 shares of Frontdoor stock that were outstanding at the date of distribution. |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 428 | $ 296 |
Marketable securities | 7 | 9 |
Receivables, less allowance of $2 | 11 | 12 |
Prepaid expenses and other assets | 16 | 13 |
Total Current Assets | 461 | 330 |
Other Assets: | ||
Property and equipment, net | 51 | 47 |
Goodwill | 501 | 476 |
Intangible assets, net | 191 | 158 |
Operating lease right-of-use assets | 17 | |
Deferred customer acquisition costs | 18 | 21 |
Other assets | 11 | 10 |
Total Assets | 1,250 | 1,041 |
Current Liabilities: | ||
Accounts payable | 48 | 41 |
Accrued liabilities: | ||
Payroll and related expenses | 17 | 10 |
Home service plan claims | 66 | 67 |
Interest payable | 9 | 9 |
Other | 29 | 26 |
Deferred revenue | 188 | 185 |
Current portion of long-term debt | 7 | 7 |
Total Current Liabilities | 364 | 345 |
Long-Term Debt | 973 | 977 |
Other Long-Term Liabilities: | ||
Deferred taxes | 45 | 39 |
Operating lease liabilities | 20 | |
Other long-term obligations | 27 | 24 |
Total Other Long-Term Liabilities | 92 | 63 |
Shareholders' Equity: | ||
Common stock, $.01 par value; 2,000,000,000 shares authorized; 85,309,260 shares issued and outstanding at December 31, 2019 and 84,545,152 shares issued and outstanding at December 31, 2018 | 1 | 1 |
Additional paid-in capital | 29 | 1 |
Accumulated deficit | (188) | (336) |
Accumulated other comprehensive loss | (21) | (9) |
Total Deficit | (179) | (344) |
Total Liabilities and Shareholders' Equity | $ 1,250 | $ 1,041 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Statements of Financial Position [Abstract] | ||
Allowance for receivables (in dollars) | $ 2 | $ 2 |
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) | 85,309,260 | 84,545,152 |
Common stock, shares outstanding (in shares) | 85,309,260 | 84,545,152 |
Consolidated and Combined Sta_2
Consolidated and Combined Statements of Changes in (Deficit) Equity - USD ($) shares in Millions, $ in Millions | Net Parent Investment [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at beginning of period at Dec. 31, 2016 | $ 560 | $ 560 | ||||
Net income | 160 | 160 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Net transfers to Parent | (63) | (63) | ||||
Balance at end of period at Dec. 31, 2017 | 661 | 661 | ||||
Net income | 108 | $ 17 | 125 | |||
Change in equity related to Spin-off | 352 | (352) | ||||
Stock-based employee compensation | 3 | $ 1 | 4 | |||
Adoption of ASC 606 | 2 | 2 | ||||
Net transfers to Parent | (127) | (127) | ||||
Non-cash distribution to Parent | $ (1,000) | (1,000) | ||||
Issuance of common stock at Spin-off, value | $ 1 | |||||
Issuance of common stock at Spin-off | (1) | |||||
Issuance of common stock at Spin-off, shares | 85 | |||||
Other comprehensive loss, net of tax | $ (9) | (9) | ||||
Balance at end of period at Dec. 31, 2018 | $ 1 | 1 | (336) | (9) | (344) | |
Balance, shares at Dec. 31, 2018 | 85 | |||||
Net income | 153 | 153 | ||||
Change in equity related to Spin-off | (4) | (4) | ||||
Stock-based employee compensation | 9 | 9 | ||||
Issuance of shares to acquire Streem | 19 | 19 | ||||
Taxes paid related to net share settlement of equity awards | (1) | (1) | ||||
Other comprehensive loss, net of tax | (12) | (12) | ||||
Balance at end of period at Dec. 31, 2019 | $ 1 | $ 29 | $ (188) | $ (21) | $ (179) | |
Balance, shares at Dec. 31, 2019 | 85 |
Consolidated and Combined Sta_3
Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidated and Combined Statements of Cash Flows [Abstract] | ||||
Cash and Cash Equivalents at Beginning of Period | $ 296 | $ 282 | $ 168 | |
Cash Flows from Operating Activities: | ||||
Net Income | 153 | 125 | 160 | |
Adjustments to reconcile net income to net cash provided from operating activities: | ||||
Depreciation and amortization expense | 24 | 21 | 17 | |
Deferred income tax provision | (1) | 7 | (19) | |
Stock-based compensation expense | 9 | 4 | 4 | |
Restructuring charges | 1 | 3 | 7 | |
Payments for restructuring charges | (1) | (5) | (5) | |
Spin-off charges | 1 | 24 | 13 | |
Payments for spin-off charges | (1) | (23) | (13) | |
Other | 4 | 1 | ||
Change in working capital, net of acquisitions: | ||||
Receivables | 1 | 4 | (33) | |
Prepaid expenses and other current assets | 2 | (1) | 5 | |
Accounts payable | 7 | 8 | 5 | |
Deferred revenue | 3 | 1 | 44 | |
Accrued liabilities | (1) | 7 | 9 | |
Accrued interest payable | 9 | |||
Current income taxes | (1) | 4 | ||
Net Cash Provided from Operating Activities | 200 | 189 | 194 | |
Cash Flows from Investing Activities: | ||||
Purchases of property and equipment | (22) | (27) | (15) | |
Business acquisitions, net of cash acquired | [1] | (38) | ||
Purchases of available-for-sale securities | (7) | (15) | (44) | |
Sales and maturities of available-for-sale securities | 9 | 32 | 48 | |
Other investing activities | (4) | |||
Net Cash Used for Investing Activities | (61) | (10) | (11) | |
Cash Flows from Financing Activities: | ||||
Payments of debt and finance lease obligations | (7) | (10) | (5) | |
Net transfers to Parent | (137) | (63) | ||
Discount paid on issuance of debt | (2) | |||
Debt issuance costs paid | (16) | |||
Net Cash Used for Financing Activities | (7) | (165) | (68) | |
Cash Increase During the Period | 132 | 14 | 114 | |
Cash and Cash Equivalents at End of Period | $ 428 | $ 296 | $ 282 | |
[1] | Amounts presented net of $ 1 million of cash acquired. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation We are the largest provider of home service plans in the United States, as measured by revenue, and operate under the American Home Shield, HSA, OneGuard and Landmark brands. Our customizable home service plans help customers protect and maintain their homes, typically their most valuable asset, from costly and unplanned breakdowns of essential home systems and appliances. Our home service plans cover the repair or replacement of major components of up to 21 household systems and appliances, including electrical, plumbing, central HVAC systems, water heaters, refrigerators, dishwashers and ranges/ovens/cooktops. In 2019, we launched our new on-demand home services business under the brand name Candu, and we acquired Streem, a technology startup that uses augmented reality, computer vision and machine learning to help home service professionals more quickly and accurately diagnose breakdowns and complete repairs. We serve customers across all 50 states and the District of Columbia. On October 1, 2018, ServiceMaster completed the Spin-off. Frontdoor was formed as a wholly-owned subsidiary of ServiceMaster on January 2, 2018 for the purpose of holding the Separated Business in connection with the Spin-off. During 2018, ServiceMaster contributed the Separated Business to Frontdoor. The Spin-off was completed by a pro rata distribution to ServiceMaster’s stockholders of approximately 80.2 percent of our common stock. Each holder of ServiceMaster common stock received one share of our common stock for every two shares of ServiceMaster common stock held at the close of business on September 14, 2018, the record date of the distribution. The Spin-off was completed pursuant to a separation and distribution agreement and other agreements with ServiceMaster related to the Spin-off, including a transition services agreement, a tax matters agreement, an employee matters agreement and a stockholder and registration rights agreement. See Note 11 to the accompanying consolidated and combined financial statements for information related to these agreements. On March 20, 2019, ServiceMaster agreed to transfer its remaining 16,734,092 shares of Frontdoor stock to a financial institution pursuant to an exchange agreement. Subsequent to that date, the financial institution conducted a secondary offering of those shares. The transfer was completed on March 27, 2019, resulting in the full separation of Frontdoor from ServiceMaster and the disposal of ServiceMaster's entire ownership and voting interest in Frontdoor. Prior to the Spin-off, we did not operate as a separate company, and stand-alone financial statements were not historically prepared. The accompanying consolidated and combined financial statements reflect the combined operations of the Separated Business for periods prior to the completion of the Spin-off and reflect our consolidated operations for the period after the completion of the Spin-off. These consolidated and combined financial statements reflect our financial position, results of operations and cash flows in conformity with U.S. GAAP. Our financial position, results of operations and cash flows may not be indicative of our condition had we been a separate stand-alone entity during the periods presented, nor are the results stated herein necessarily indicative of our financial position, results of operations and cash flows had we operated as a separate, independent company during the periods presented. For periods prior to the Spin-off, the accompanying consolidated and combined financial statements include all revenues, costs, assets and liabilities directly attributable to us. ServiceMaster’s debt and corresponding interest expense were not allocated to us for periods prior to the Spin-off since we were not the obligor of the debt. The accompanying consolidated and combined statements of operations and comprehensive income include allocations of certain costs from ServiceMaster incurred on our behalf. Such corporate-level costs were allocated to us using methods based on proportionate formulas such as revenue, headcount and others. Such corporate costs include costs pertaining to: accounting and finance, legal, human resources, technology, insurance, marketing, tax services, procurement services and other costs. We consider the expense allocation methodology and results to be reasonable for all periods presented. However, these allocations may not be indicative of the actual level of expense that we would have incurred if we had operated as a separate stand-alone, publicly traded company during the periods presented nor are these costs necessarily indicative of costs we may incur in the future. See Note 11 to the accompanying consolidated and combined financial statements for information regarding allocations from ServiceMaster. Prior to the Spin-off, current and deferred income taxes and related tax expense were determined based on our stand-alone results by applying ASC 740 as if we were a separate taxpayer, following the separate return methodology. Our portion of current income taxes payable was deemed to have been remitted to ServiceMaster in the period the related tax expense was recorded. Our portion of current income taxes receivable was deemed to have been remitted to us by ServiceMaster in the period to which the receivable applies only to the extent that we could have recognized a refund of such taxes on a stand-alone basis under the law of the relevant taxing jurisdiction. See Note 6 to the accompanying consolidated and combined financial statements for additional information. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Basis of Consolidation and Combination Our financial statements include amounts and disclosures related to the stand-alone financial statements and accounting records of Frontdoor for periods after the completion of the Spin-off (“consolidated”) in combination with amounts and disclosures that have been derived for our business from the consolidated financial statements and accounting records of ServiceMaster for the periods prior to the completion of the Spin-off (“combined”). Any references to our financial statements, financial data and operating data refer to our accompanying consolidated and combined financial statements unless otherwise noted. All intercompany transactions have been eliminated. Use of Estimates The preparation of the consolidated and combined financial statements requires management to make certain estimates and assumptions required under U.S. GAAP that may differ from actual results. The more significant areas requiring the use of management estimates relate to revenue recognition; accruals for home service plans; accruals for income tax liabilities as well as deferred tax accounts; the deferral and amortization of customer acquisition costs; stock-based compensation; useful lives for depreciation and amortization expense; the valuation of marketable securities; and the valuation of tangible and intangible assets. Revenue Home service plan contracts are typically one year in duration. Home service plan claims costs are expensed as incurred. We recognize revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of our obligations under the contracts and are representative of the relative value provided to the customer. We regularly review our estimates of claims costs and adjust our estimates when appropriate. Revenues are presented net of sales taxes collected and remitted to government taxing authorities on the consolidated and combined statements of operations and comprehensive income. 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. We invoice our monthly-pay customers on a straight-line basis over the contract term. As a result, a contract asset is created when revenue is recognized on monthly-pay customers before being billed. 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. Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts. Deferred Customer Acquisition Costs Customer acquisition costs, which are incremental and direct costs of obtaining a customer and primarily include sales commissions, are deferred and amortized over the expected customer relationship period in proportion to revenue recognized. Deferred customer acquisition costs were $ 18 million and $ 21 million as of December 31, 2019 and 2018, respectively. Property and Equipment, Intangible Assets and Goodwill Property and equipment consist of the following: As of Estimated December 31, Useful Lives (In millions) 2019 2018 (Years) Buildings and improvements $ 25 $ 20 10 - 40 Technology and communications 94 78 3 - 7 Office equipment, furniture and fixtures, and vehicles 10 8 5 - 7 128 107 Less accumulated depreciation ( 77 ) ( 59 ) Net property and equipment $ 51 $ 47 Depreciation of property and equipment, including depreciation of assets held under finance leases was $ 18 million, $ 12 million and $ 9 million for the years ended December 31, 2019, 2018 and 2017, respectively. Fixed assets and intangible assets with finite lives are depreciated and amortized on a straight-line basis over their estimated useful lives. These lives are based on our previous experience for similar assets, potential market obsolescence and other industry and business data. As required by accounting standards for the impairment or disposal of long-lived assets, our fixed assets and finite-lived intangible assets are tested for recoverability whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment loss would be recognized equal to the difference between the carrying amount and the fair value of the asset. Changes in the estimated useful lives or in the asset values could cause us to adjust its book value or future expense accordingly. As required under accounting standards for goodwill and other intangibles, goodwill is not subject to amortization, and intangible assets with indefinite useful lives are not amortized until their useful lives are determined to no longer be indefinite. Goodwill and intangible assets that are not subject to amortization are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently if circumstances indicate a potential impairment. Goodwill and indefinite-lived intangible assets, primarily our trade names, are assessed annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. Leases We determine if an arrangement is a lease at inception. We recognize an ROU asset and lease liability for all leases with terms of 12 months or more. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As most of 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 lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset is recorded net of lease incentives. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for separately for our real estate leases. See Note 5 to the accompanying consolidated and combined financial statements for information related to our leases. Restricted Net Assets There are third-party restrictions on the ability of certain of our subsidiaries to transfer funds to us. These restrictions are related to our regulatory requirements. The payments of ordinary and extraordinary dividends by our subsidiaries are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain such subsidiaries to maintain minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can make to us. As of December 31, 2019, the total net assets subject to these third-party restrictions was $ 168 million. Financial Instruments and Credit Risk We hedge the interest payments on a portion of our variable rate debt through the use of interest rate swap agreements. We have classified our interest rate swap contract as a cash flow hedge, and, as such, the hedging instruments are recorded on the consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of changes in the fair value attributable to the hedged risks recorded in AOCI. The effect of derivative financial instrument transactions could have a material impact on our financial statements. We do not hold or issue derivative financial instruments for trading or speculative purposes. Financial instruments, which potentially subject us to financial and credit risk, consist principally of investments and receivables. Investments consist primarily of publicly traded debt and certificates of deposit. We periodically review our portfolio of investments to determine whether there has been an other than temporary decline in the value of the investments from factors such as deterioration in the financial condition of the issuer or the market(s) in which the issuer competes. The majority of our receivables have little concentration of credit risk due to the large number of customers with relatively small balances and their dispersion across geographical areas. We maintain an allowance for losses based upon the expected collectability of receivables. See Note 19 to the accompanying consolidated and combined financial statements for information relating to the fair value of financial instruments. Stock-Based Compensation Stock-based compensation expense for stock options is estimated at the grant date based on an award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense over the requisite service period. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for future grants may differ materially from that recorded in the current period related to options granted to date. In addition, we estimate the expected forfeiture rate and only recognizes expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly. See Note 12 to the accompanying consolidated and combined financial statements for more details. Income Taxes Frontdoor and its subsidiaries file a consolidated U.S. federal income tax return. State and local returns are filed both on a separate company basis and on a combined unitary basis with Frontdoor. Current and deferred income taxes are provided for on a separate company basis. We account for income taxes using an asset and liability approach for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be realized. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax return. We recognize potential interest and penalties related to its uncertain tax positions in income tax expense. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. 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, performance shares and restricted stock awards are reflected in diluted earnings per share by applying the treasury stock method. For periods prior to the Spin-off, earnings per share was calculated based on the 84,515,619 shares of Frontdoor stock that were outstanding at the date of distribution. There were no Frontdoor equity awards outstanding prior to the Spin-off. Segment Reporting A public company is required to report annual and interim financial and descriptive information about its reportable operating segments. We operate our business under six brand names that primarily engage in the activity of providing home service plans to our customers. Our chief operating decision maker, who is our Chief Executive Officer, regularly evaluates financial information on a consolidated basis in deciding how to allocate resources and in assessing performance. As such, we operate as one operating segment, which is comprised of our six brands, and we have one reportable segment. Newly Issued Accounting Standards Adoption of New Accounting Standards In February 201 6, the FASB issued ASU 2016-02, which was amended in parts by subsequent accounting standards updates (collectively ASC 842) and is the final standard on accounting for leases. While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The most significant change for lessees is the requirement under the new guidance to recognize ROU assets and lease liabilities for all leases. The lease liability represents the lessee’s obligation to make lease payments arising from a lease and is measured as the present value of the lease payments. The ROU asset represents the lessee’s right to use a specified asset for the lease term and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. We adopted ASC 842 effective January 1, 2019. We utilized the permitted alternative transition method, which removed the requirement that the financial statements of prior periods be restated. There was no cumulative effect adjustment recorded to beginning equity as a result of our adoption of this standard. We also elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward our historical lease classification, our assessment on whether expired or existing contracts were or contained a lease and our initial direct costs for any leases that existed prior to adoption of the new standard. In addition, we have elected the practical expedients that allow us, by class of underlying asset, to not separate lease and non-lease components and to not recognize ROU assets and lease liabilities for leases with lease terms of less than 12 months. As a result of the adoption of this standard, we recognized ROU assets and lease liabilities of approximately $ 24 million for operating leases, while our accounting for finance leases remained unchanged. This standard did not have an impact on our consolidated and combined statements of operations and comprehensive income or consolidated and combined statements of cash flows. Accounting Standards Issued but Not Yet Effective In June 2016, the FASB issued ASU 2016-13, which requires earlier recognition of credit losses while also providing additional transparency about credit risk. Further, the new credit loss model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This standard is effective for us on January 1, 2020 and will not have an impact on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard is effective for us on January 1, 2020 and will have an immaterial impact on our consolidated financial statements and related disclosures. We will apply the guidance prospectively to implementation costs incurred related to cloud computing arrangements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue [Abstract] | |
Revenue | Note 3. Revenue We enter into yearly service plan agreements with our customers. We have one performance obligation, which is to provide for the repair or replacement of essential home systems and appliances, as applicable per the contract. We recognize revenue at the agreed upon contractual amount over time using the input method in proportion to the costs expected to be incurred in performing services under the contracts. Those costs bear a direct relationship to the fulfillment of our obligations under the contracts and are representative of the relative value provided to the customer. As the costs to fulfill the obligations of the home service plans are incurred on an other-than-straight-line basis, we utilize historical evidence to estimate the expected claims expense and related timing of such costs. This adjustment to the straight-line revenue creates a contract asset or contract liability, as described under the heading “Contract balances” below. We regularly review our estimates of claims costs and adjust our estimates when appropriate. We derive all of our revenue from customers in the United States. We disaggregate revenue from contracts with customers into major customer acquisition channels. We 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. Revenue by major customer acquisition channel is as follows: ___ Year Ended December 31, (In millions) 2019 2018 2016 Renewals $ 926 $ 835 $ 759 Real estate (1) 263 262 249 Direct-to-consumer (1) 167 156 144 Other 8 6 5 Total $ 1,365 $ 1,258 $ 1,157 _____________________________ (1) First year revenue only. Renewals Revenue from all customer renewals, whether initiated via the real estate or direct-to-consumer channel, are classified as renewals above. Customer payments for renewals are received either at the commencement of the renewal period or in installments over the contract period. Real estate Real estate home service plans are sold through annual contracts in connection with a real estate sale, and payments are typically paid in full at closing. First-year revenue from the real estate channel is classified as real estate above. Direct- to-consumer Direct-to-consumer home service plans are sold through annual contracts when customers request a service plan in response to marketing efforts or when third-party resellers make a sale. Customer payments are received either at the commencement of the contract or in installments over the contract period. First-year revenue from the direct-to-consumer channel is classified as direct-to-consumer above. Costs to obtain a contract with a customer We capitalize the incremental costs of obtaining a contract with a customer, primarily sales commissions, and recognize the expense, using the input method in proportion to the costs expected to be incurred in performing services under the contract, over the expected customer relationship period. As of December 31, 2019 and 2018, deferred customer acquisition costs were $ 18 million and $ 21 million, respectively. Amortization of these deferred acquisition costs was $ 20 million and $ 22 million for the years ended December 31, 2019 and 2018, respectively. There were no impairment losses in relation to these capitalized costs. Contract balances Timing of revenue recognition may differ from the timing of invoicing to customers. Contracts with customers, including contracts resulting from customer renewals, are generally for a period of one year. 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 receivable are recorded within Receivables, less allowances, in the accompanying consolidated statements of financial position. We invoice our monthly-pay customers on a straight-line basis over the contract term. As a result, a contract asset is created when revenue is recognized on monthly-pay customers before being billed. 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. Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts. Deferred revenue was $ 188 million and $ 185 million as of December 31, 2019 and 2018, respectively. Changes in deferred revenue for the year ended December 31, 2019 were as follows: (In millions) Deferred Revenue Balance as of January 1, 2019 $ 185 Deferral of revenue 404 Recognition of deferred revenue ( 401 ) Balance as of December 31, 2019 $ 188 There was approximately $ 182 million of revenue recognized in the year ended December 31, 2019 that was included in the deferred revenue balance as of January 1, 2019. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 4. Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently if circumstances indicate a potential impairment. An assessment for impairment is performed on October 1 of every year. There were no goodwill or trade name impairment charges recorded during the years ended December 31, 2019, 2018 and 2017. There were no accumulated impairment losses recorded as of December 31, 2019 and 2018. The table below summarizes the changes in our goodwill balance for the years ended December 31, 2019 and 2018: (In millions) Total Balance as of December 31, 2017 $ 476 Acquisitions — Balance as of December 31, 2018 476 Acquisitions (1) 25 Balance as of December 31, 2019 $ 501 ___________________________________ (1) Acquired goodwill primarily relates to the acquisition of Streem. See Note 7 to the accompanying consolidated and combined financial statements for information related to our acquisitions during 2019. The table below summarizes the other intangible asset balances: 0 As of December 31, 2019 2018 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 141 $ — $ 141 $ 140 $ — $ 140 Customer relationships 173 ( 168 ) 5 173 ( 165 ) 7 Developed technology 34 ( 1 ) 33 — — — Other 37 ( 25 ) 12 32 ( 22 ) 10 Total $ 385 $ ( 193 ) $ 191 $ 345 $ ( 187 ) $ 158 ___________________________________ (1) Not subject to amortization. Amortization expense of $ 6 million , $ 8 million and $ 8 million was recorded in the years ended December 31, 2019, 2018 and 2017, respectively. The following table outlines expected amortization expense for existing intangible assets for the next five years: (In millions) 2020 $ 12 2021 10 2022 7 2023 6 2024 5 Total $ 40 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 5. Leases We have operating leases primarily for corporate offices and call centers and finance leases for vehicles. Our leases have remaining lease terms of one year to 1 5 years, some of which include options to extend the leases for up to five years . Renewal options that are reasonably certain to be exercised are included in the lease term. An incremental borrowing rate is used in determining the present value of lease payments unless an implicit rate is readily determinable. Incremental borrowing rates are determined based on our secured borrowing rating and the lease term. Disclosures related to finance lease obligations are immaterial and, as such, are not included in the discussion below. The weighted-average remaining lease term and weighted-average discount rate is as follows: (In millions) As of December 31, 2019 Weighted-average remaining lease term (years): Operating leases 10 Weighted-average discount rate: Operating leases 6.1 % We recognized operating lease expense, including allocated corporate rent for periods prior to the Spin-off, of $ 4 million, $ 4 million and $ 5 million for the years ended years ended December 31, 2019, 2018 and 2017, respectively. These expenses are included in Selling and administrative expenses in the accompanying consolidated and combined statements of operations and comprehensive income. Supplemental cash flow information related to operating leases is as follows: Twelve Months Ended (In millions) December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 4 Leased assets obtained in exchange for new lease liabilities 1 As a result of our adoption of ASC 842, we recognized ROU assets and lease liabilities of approximately $ 24 million for operating leases as of January 1, 2019. These amounts are excluded from the accompanying consolidated and combined statements of cash flows as non-cash operating activities. Our accounting for finance leases remained unchanged. Supplemental balance sheet information related to operating leases is as follows: (In millions) As of December 31, 2019 Operating lease right-of-use assets $ 23 Less lease incentives ( 6 ) Operating lease right-of-use assets, net $ 17 Other accrued liabilities $ 3 Operating lease liabilities 20 Total operating lease liabilities $ 23 The following table presents maturities of our operating lease liabilities as of December 31, 2019. Operating (In millions) Leases 2020 $ 4 2021 4 2022 4 2023 3 2024 2 Thereafter 13 Total lease payments 31 Less imputed interest ( 8 ) Total $ 23 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 6. Income Taxes On December 22, 2017, U.S. Tax Reform was signed into law. U.S. Tax Reform included numerous changes to existing tax law, including a reduction in the federal corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018. Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of U.S. Tax Reform. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, we have completed our analysis based on legislative updates relating to U.S. Tax Reform currently available. We recorded an initial income tax benefit of $ 20 million at December 31, 2017 due to a net reduction in deferred tax liabilities resulting from the effect of remeasurement of certain deferred tax assets and liabilities based on enacted tax rates. Our accounting for U.S. Tax Reform was finalized during the fourth quarter of 2018, resulting in an immaterial adjustment to the initial income tax benefit recorded. As discussed above, although we were historically included in the consolidated income tax returns of ServiceMaster, our income taxes for periods prior to the Spin-off were computed and are reported herein under the “separate return method.” Use of the separate return method may result in differences when the sum of the amounts allocated to stand-alone provisions are compared with amounts presented in financial statements. In that event, the related deferred tax assets and liabilities could be significantly different from those presented herein. Certain tax attributes, e.g., net operating loss carryforwards, which were reflected in ServiceMaster’s consolidated financial statements may or may not exist at the stand-alone Frontdoor level. During the year ended December 31, 2019, we recorded a $ 4 million adjustment to the deferred tax assets and liabilities allocated during the Spin-off to reflect the actual current and deferred tax positions resulting from the Spin-off. The adjustment is reflected as a change in equity related to the Spin-off in the consolidated and combined statements of changes in equity . As of December 31, 2017, we had $ 4 million of tax benefits primarily reflected in federal and state tax returns that have not been recognized for financial reporting purposes (“unrecognized tax benefits”). Based on the terms of the tax matters agreement entered into with ServiceMaster in connection with the Spin-off, the liability for these unrecognized tax benefits is not attributed to Frontdoor after the Spin-off. As of December 31, 2018, we had no unrecognized tax benefits. As of December 31, 2019, we had $ 2 million of unrecognized tax benefits, all of which would impact the effective tax rate if recognized. The table below summarizes the changes in gross unrecognized tax benefits for the years ended December 31, 2019 and 2018: (In millions) Total Balance as of December 31, 2017 $ 4 Increases in tax positions for current year 2 Decrease due to Spin-off ( 6 ) Balance as of December 31, 2018 — Increases in tax positions for prior years 1 Increases in tax positions for current year 2 Balance as of December 31, 2019 $ 2 We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Interest and penalties accrued and recognized as income tax expense are less than $ 1 million for the year ended December 31, 2019. Based on information currently available, it is reasonably possible that over the next 12-month period unrecognized tax benefits may increase by $ 2 million. We are subject to taxation in the United States, various states and foreign jurisdictions. Pursuant to the terms of the tax matters agreement entered into with ServiceMaster in connection with the Spin-off, we are not subject to federal examination by the IRS or examination by state taxing authorities where a unitary or combined state income tax return is filed for the years prior to 2018. We are not subject to state and local income tax examinations by tax authorities in jurisdictions where separate income tax returns are filed for the years prior to 2015. All of our income before income taxes for the years ended December 31, 2019, 2018 and 2017 was generated in the United States. The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate is as follows: Year Ended December 31, 2019 2018 2017 Tax at U.S. federal statutory rate 21.0 % 21.0 % 35.0 % State and local income taxes, net of U.S. federal benefit 2.5 2.5 1.5 Other permanent items — ( 0.5 ) 1.1 Excess tax benefits from stock-based compensation 0.2 ( 0.1 ) ( 2.5 ) Transaction costs 0.2 1.2 — Uncertain tax positions 1.0 1.0 1.0 U.S. Tax Reform rate change (1) — — ( 8.9 ) Effective rate 24.9 % 25.1 % 27.2 % ___________________________________ (1) Deferred income taxes on our balance sheet at December 31, 2017 were remeasured for the change in the U.S. income tax rate through income tax expense (see discussion on U.S. Tax Reform). This one-time beneficial rate change adjustment for $ 20 million includes $ 1 million in state income tax expense. Income tax expense is as follows: Year Ended December 31, (In millions) 2019 2018 2017 Current: U.S. federal $ 42 $ 29 $ 71 State and local 9 6 7 52 35 78 Deferred: U.S. federal ( 1 ) 7 ( 20 ) State and local — — 1 ( 1 ) 7 ( 19 ) Provision for income taxes $ 51 $ 42 $ 60 Deferred income tax expense results from timing differences in the recognition of income and expense for income tax and financial reporting purposes. Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. At December 31, 2019 and 2018, the valuation allowance for deferred tax assets was $ 1 million. Significant components of our deferred tax balances are as follows: As of December 31, (In millions) 2019 2018 Long-term deferred tax assets (liabilities): Intangible assets (1) $ ( 46 ) $ ( 34 ) Property and equipment ( 7 ) ( 6 ) Prepaid expenses and deferred customer acquisition costs ( 7 ) ( 6 ) Lease asset ( 4 ) — Accrued liabilities 4 2 Other long-term obligations 2 1 Tenant improvements — 1 Lease liability 6 — Deferred interest expense 6 4 Net operating loss and tax credit carryforwards (2) 2 — Less valuation allowance ( 1 ) ( 1 ) Net Long-term deferred tax liability $ ( 45 ) $ ( 39 ) ___________________________________ (1) The deferred tax liability relates primarily to the difference in the tax versus book basis of intangible assets. We had $ 44 million and $ 42 million of deferred tax liability included in this net deferred tax liability as of December 31, 2019 and 2018, respectively, that will not actually be paid unless certain of our business units are sold. (2) Represents federal loss carryovers that have an indefinite life and state loss carryovers that expire on or before 2039. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | Note 7. Acquisitions Business combinations have been accounted for using the acquisition method, and, accordingly, the results of operations of the acquired businesses have been included in the accompanying consolidated and combined financial statements since their dates of acquisition. The assets and liabilities of these businesses were recorded in the financial statements at their estimated fair values as of the acquisition dates. On December 4, 2019, we acquired Streem for a total purchase price of $ 55 million, which consisted of $ 36 million in cash and $ 19 million in fair value of Frontdoor restricted stock awards. We recorded goodwill of $ 24 million and other intangible assets of $ 37 million, primarily developed technology and patents, which was partially offset by a deferred tax liability of $ 7 million. As of December 31, 2019, the purchase price allocation for this acquisition has not been finalized. In particular, we are still evaluating the fair value of certain intangible assets. As we finalize the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period in 2020. Additionally, during the year ended December 31, 2019, we acquired a business for a total purchase price of $ 3 million, which represents ongoing strategic investments in our business. We recorded goodwill of $ 1 million and developed technology of $ 2 million related to this acquisition. The financial results of these acquired businesses were not material, individually or in the aggregate, to our results of operations, and, therefore, pro forma financial information has not been presented. No acquisitions occurred during the years ended December 31, 2018 or 2017. Supplemental cash flow information regarding our acquisitions is as follows: Year Ended December 31, (In millions) 2019 Assets acquired (1) $ 65 Liabilities assumed ( 8 ) Net assets acquired $ 57 Net cash paid (1) $ 38 Issuance of shares 19 Purchase price $ 57 ___________________________________ (1) Amounts presented net of $ 1 million of cash acquired. |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 8. Restructuring Charges We incurred restructuring charges of $ 1 million ($ 1 million, net of tax), $ 3 million ($ 2 million, net of tax) and $ 7 million ($ 4 million, net of tax) for the years ended December 31, 2019, 2018 and 2017, respectively. In 2019, restructuring charges comprised severance costs and non-personnel charges, primarily related to the decision to consolidate the operations of Landmark with those of OneGuard, which is expected to be completed in the first quarter of 2020. We expect to incur charges through the first quarter of 2020 of approximately $ 3 million related to this restructuring, primarily consisting of lease termination costs. In 2018, restructuring charges comprised $ 2 million of non-personnel charges primarily related to the relocation to our corporate headquarters and $ 1 million of severance costs, which primarily represent an allocation of severance costs related to actions taken to enhance capabilities and reduce costs in ServiceMaster’s corporate functions that provided company-wide administrative services to support operations. In 2017, restructuring charges comprised $ 5 million of severance costs which primarily represent an allocation of severance costs and stock-based compensation expense as part of the severance agreement with ServiceMaster's former CEO and CFO, and allocations of $ 1 million of lease termination costs and $ 1 million of asset write-off and other costs related to the relocation to our corporate headquarters. The pre-tax charges discussed above are reported in “Restructuring charges” in the accompanying consolidated and combined 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 accompanying consolidated statements of financial position, is presented as follows: (In millions) Accrued Restructuring Charges Balance as of December 31, 2017 $ 2 Costs incurred 3 Costs paid or otherwise settled ( 5 ) Balance as of December 31, 2018 $ — Costs incurred 1 Costs paid or otherwise settled ( 1 ) Balance as of December 31, 2019 $ — |
Spin-Off Charges
Spin-Off Charges | 12 Months Ended |
Dec. 31, 2019 | |
Spin-Off Charges [Abstract] | |
Spin-Off Charges | Note 9. Spin-off Charges We incurred Spin-off charges of $ 1 million ($ 1 million, net of tax), $ 24 million ($ 19 million, net of tax), and $ 13 million ($ 9 million, net of tax) the years ended December 31, 2019, 2018 and 2017, respectively. These charges include nonrecurring costs incurred to evaluate, plan and execute the Spin-off. In 2019, Spin-off charges were primarily comprised of third-party consulting fees. In 2018, Spin-off charges primarily comprised $ 19 million of third-party consulting fees and $ 5 million of other incremental costs directly related to the Spin-off process. In 2017, Spin-off charges primarily comprised $ 12 million of third-party consulting fees and $ 1 million of other incremental costs directly related to the Spin-off process. The pre-tax charges discussed above are reported in “Spin-off charges” in the accompanying consolidated and combined statements of operations and comprehensive income. A reconciliation of the beginning and ending balances of accrued Spin-off charges, which are included in "Accrued liabilities—other" on the accompanying consolidated statements of financial position, is presented as follows: (In millions) Accrued Spin-off Charges Balance as of December 31, 2017 $ 1 Costs incurred (1) 22 Costs paid or otherwise settled ( 23 ) Balance as of December 31, 2018 $ — Costs incurred 1 Costs paid or otherwise settled ( 1 ) Balance as of December 31, 2019 $ — ___________________________________ (1) An additional $ 2 million of Spin-off charges were pre-paid in 2017 and subsequently expensed in 2018. During 2019 and 2018, we incurred incremental capital expenditures required to effect the Spin-off of $ 2 million and $ 15 million, respectively, principally reflecting costs to replicate technology systems historically shared with ServiceMaster. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Accruals for home service plan claims are made using internal actuarial projections, which are based on current claims and historical claims experience. Accruals are established based on estimates of the ultimate cost to settle claims. Home service plan claims take approximately three months to settle, on average, and substantially all claims are settled within six months of incurrence. The amount of time required to settle a claim can vary based on a number of factors, including whether a replacement is ultimately required. In addition to our estimates, we engage a third-party actuary to perform an accrual analysis utilizing generally accepted actuarial methods that incorporate cumulative historical claims experience and information provided by us. We regularly review our estimates of claims costs along with the third-party analysis and adjust our estimates when appropriate. We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these judgmental accruals. 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. Due to the nature of our business activities, we are at times subject to pending and threatened legal and regulatory actions that arise out of the ordinary course of business. In the opinion of management, based in part upon advice of legal counsel, the disposition of any such matters is not expected, individually or in the aggregate, to have a material adverse effect on our results of operations, financial condition or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that our results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11. Related Party Transactions ServiceMaster was a related party to Frontdoor prior to the Spin-off. The significant transactions and balances with ServiceMaster prior to the Spin-off and the agreements between Frontdoor and ServiceMaster as of and subsequent to the Spin-off are described below. Separation from ServiceMaster Prior to the Spin-off, we were managed and operated in the normal course of business by ServiceMaster along with other businesses . Accordingly, certain shared costs were allocated to us and are reflected as expenses in the accompanying consolidated and combined financial statements. Our management considers the expenses included and the allocation methodologies used to be reasonable and appropriate reflections of the historical ServiceMaster expenses attributable to us for purposes of the accompanying consolidated and combined financial statements; however, the expenses reflected in the accompanying consolidated and combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if we historically operated as a separate, stand-alone entity. In addition, the expenses reflected in the accompanying consolidated and combined financial statements may not be indicative of related expenses that we could incur in the future. Corporate expenses The accompanying consolidated and combined financial statements include transactions with ServiceMaster for services (such as executive functions, information systems, accounting and finance, human resources, legal and general corporate expenses) that were provided to us by the centralized ServiceMaster organization. Corporate-level items also include personnel-related expenses of corporate employees (such as salaries, insurance coverage, stock-based compensation costs, etc.). Throughout the period covered by the accompanying consolidated and combined financial statements, the costs of such functions, services and items were directly charged or allocated to us using methods management believes are reasonable. The methods for allocating functions, services and items to us were based on proportional allocation bases which include revenue, headcount and others. All such costs were deemed to have been incurred and settled in the period in which the costs were recorded. Directly charged corporate expenses are included in Selling and administrative expenses in the accompanying consolidated and combined statements of operations and comprehensive income in the amounts of $ 14 million and $ 13 million for the years ended December 31, 2018 and 2017, respectively. Allocated corporate expenses are also included in Selling and administrative expenses in the accompanying consolidated and combined statements of operations and comprehensive income in the amounts of $ 35 million and $ 47 million for the years ended December 31, 2018 and 2017, respectively. ServiceMaster trade and service marks We had a trademark license agreement with ServiceMaster in which we were charged a royalty fee for the use of ServiceMaster-owned trade and service marks. The royalty fee was 0.175 percent of our customer revenues for the period. The royalty fee is included within Affiliate royalty expense in the accompanying consolidated and combined statements of operations and comprehensive income in the amounts $ 1 million and $ 2 million for the years ended December 31, 2018 and 2017, respectively. The trademark license agreement with ServiceMaster was terminated in connection with the Spin-off. Health insurance coverage Our employees participated in a self-insured health insurance program administered by ServiceMaster through June 30, 2018. We paid premiums to ServiceMaster for this coverage, which were based on the number of our employees in the medical plan. These premiums are reflected in the accompanying consolidated and combined statements of operations and comprehensive income in the amounts of $ 6 million and $ 8 million for the years ended December 31, 2018 and 2017, respectively. In addition to these costs, a portion of medical insurance costs for corporate employees were allocated to us through the corporate expense allocation discussed under the heading “Corporate expenses” above. Risk management Prior to the Spin-off, ServiceMaster carried insurance policies on insurable risks related to our business at levels which it believed to be appropriate, including workers’ compensation, automobile and general liability risks. These insurance policies were purchased from third-party insurance carriers, which typically incorporated significant deductibles or self-insured retentions. We paid a premium to ServiceMaster in exchange for the coverage provided. Expenses related to coverage provided by ServiceMaster and changes in ultimate losses relating to self-insured programs are reflected in the accompanying consolidated and combined statements of operations and comprehensive income in the amounts of $ 2 million and $ 3 million for the years ended December 31, 2018 and 2017, respectively. Our coverage under these self-insured programs was terminated in connection with the Spin-off. Agreements with ServiceMaster In connection with the Spin-off, we entered into various agreements with ServiceMaster to provide a framework for our relationship with ServiceMaster after the Spin-off, including the following agreements: Separation and Distribution Agreement. This agreement identifies the assets to be transferred, the liabilities to be assumed and the contracts to be assigned to each of Frontdoor and ServiceMaster as part of the Spin-off and provides for when and how these transfers, assumptions and assignments will occur. Transition Services Agreement. Pursuant to this agreement, ServiceMaster and Frontdoor will provide certain services to one another on an interim, transitional basis. The services to be provided include certain technology services, finance and accounting services and human resource and employee benefits services. The agreed-upon charges for such services are generally intended to allow the providing company to recover all costs and expenses of providing such services. Tax Matters Agreement. This agreement governs the respective rights, responsibilities and obligations of ServiceMaster and Frontdoor after the Spin-off with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Spin-off and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, tax elections, the control of audits and other tax proceedings and assistance and cooperation in respect of tax matters. Employee Matters Agreement. This agreement allocates liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs and other related matters. The agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company. Stockholders and Registration Rights Agreement. Pursuant to this agreement, Frontdoor agrees that, upon the request of ServiceMaster , Frontdoor will use its reasonable best efforts to effect the registration under applicable federal and state securities laws of any shares of Frontdoor common stock retained by ServiceMaster. The total amount of expenses incurred by Frontdoor under the transition services agreement with ServiceMaster following the Spin-off was less than $ 1 million and $ 1 million for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019, there were no amounts due to ServiceMaster for services performed under the transition services agreement. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 12. Stock-Based Compensation Stock-based compensation expense in prior years and until separation on October 1, 2018 was allocated to Frontdoor based on the awards and terms previously granted to our employees and included an allocation of ServiceMaster's corporate and shared functional employee expenses. Adopted at separation, the Omnibus Plan permits the grant to certain employees, consultants, or non-employee directors of Frontdoor different forms of awards, including stock options, RSUs, performance shares and deferred share equivalents. The Omnibus Plan has 14,500,000 shares reserved for grants, including awards converted at the Spin-off (described below). Our Compensation Committee determines the long-term incentive mix of our employees, including stock options, RSUs and performance shares, and may authorize new grants annually. As of December 31, 2019, 13,136,678 shares remain available for future grants. In accordance with the employee matters agreement between Frontdoor and ServiceMaster, certain of our executives and employees were entitled to receive equity compensation awards of Frontdoor in replacement of previously outstanding awards granted under various ServiceMaster stock incentive plans prior to the separation. In connection with the Spin-off, these awards were converted into new Frontdoor equity awards using a formula designed to preserve the intrinsic value of the awards immediately prior to the Spin-off. At the date of conversion, total intrinsic value of the converted options was $ 4 million. In addition, Frontdoor and ServiceMaster employees who held ServiceMaster RSUs on the record date had the option to elect to receive both Frontdoor and ServiceMaster RSUs for the number of whole shares, rounded down, of Frontdoor common stock that they would have received as a shareholder of ServiceMaster at the date of separation. The terms and conditions of the Frontdoor awards were replicated and, as necessary, adjusted to ensure the vesting schedule and economic value of the awards was unchanged by the conversion. A summary of the activity related to unvested Frontdoor RSUs held by Frontdoor and ServiceMaster employees from the Spin-off date through December 31, 2019 is as follows: Frontdoor Awards Distributed in Spin-Off Frontdoor Employees ServiceMaster Employees Total Unvested RSUs at Spin-off date 143,697 106,317 250,014 Vested ( 7,200 ) ( 17,188 ) ( 24,388 ) Forfeited ( 4,136 ) — ( 4,136 ) Unvested RSUs at December 31, 2018 132,361 89,129 221,490 Vested ( 61,496 ) ( 39,443 ) ( 100,939 ) Forfeited ( 3,502 ) ( 24,596 ) ( 28,098 ) Unvested RSUs at December 31, 2019 67,363 25,090 92,453 Stock Options Stock options are exercisable based on the terms outlined in the applicable award agreement. Stock options generally vest over a period of four years . The fair value related to stock options granted was determined using the Black-Scholes option pricing model with the assumptions noted in the following table. A historical daily measurement of volatility is determined based on our and our peer companies’ average volatility. The risk-free interest rate is determined by reference to the outstanding U.S. Treasury note with a term equal to the expected life of the option granted. The expected life represents the period of time that options are expected to be outstanding and was calculated using the simplified approach due to our lack of historical experience upon which to estimate the expected lives of the options. Year Ended December 31, Assumption 2019 Expected volatility 49.3 % Expected dividend yield 0.0 % Expected life (in years) 6.1 Risk-free interest rate 2.25 % We granted options to purchase 338,923 shares of our common stock during the year ended December 31, 2019 at a weighted-average exercise price of $ 34.48 per share. We did no t issue any stock options under the Omnibus Plan during the year ended December 31, 2018 other than the options converted at the Spin-off. The weighted-average grant-date fair value of the options granted during 2019 was $ 17.05 . During the year ended December 31, 2019, we applied a forfeiture assumption of 15 percent per annum in the recognition of the expense related to these options, with the exception of the options held by our CEO for which we applied a forfeiture rate of zero . The total intrinsic value of options exercised was less than $ 1 million for the year ended December 31, 2019. A summary of option activity under the Omnibus Plan as of December 31, 2019 and changes during the year then ended is presented below: Weighted Avg. Aggregate Remaining Weighted Avg. Intrinsic Contractual Stock Exercise Value Term Options Price (in millions) (in years) Outstanding at December 31, 2018 373,387 $ 30.06 $ 1 8.04 Granted to employees 338,923 $ 34.48 Exercised ( 8,000 ) $ 8.41 Forfeited ( 12,108 ) $ 34.48 Expired ( 6,725 ) $ 24.39 Outstanding at December 31, 2019 685,477 $ 32.48 $ 10 8.15 Exercisable at December 31, 2019 176,180 $ 26.20 $ 4 6.32 RSUs RSUs are exercisable based on the terms outlined in the applicable award agreement. The RSUs generally vest over a period of three years . The fair value of RSUs is determined using the closing market price of our common stock on the date of grant. We granted 260,237 and 29,178 RSUs during the years ended December 31, 2019 and 2018, respectively, with weighted-average grant date fair values of $ 35.64 per unit for 2019 and $ 29.13 per unit for 2018. During the year ended December 31, 2019, we applied a forfeiture assumption of 15 percent per annum in the recognition of the expense related to these RSUs, with the exception of the awards held by our CEO for which we applied a forfeiture rate of zero . The total fair value of RSUs vested during the years ended December 31, 2019 and 2018 was $ 4 million and less than $ 1 million, respectively. A summary of RSU activity under the Omnibus Plan as of December 31, 2019 and changes during the year then ended is presented below: Weighted Avg. Grant Date RSUs Fair Value Outstanding at December 31, 2018 161,539 $ 39.27 Granted to employees 260,237 $ 35.64 Vested ( 88,200 ) $ 37.81 Forfeited ( 10,582 ) $ 36.80 Outstanding at December 31, 2019 322,994 $ 36.96 Performance Shares For our performance-based shares, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of both performance and market conditions. The performance condition is based on our revenue target. The market condition is based on our weighted-average market capitalization target. The fair value of the performance-based shares, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. Performance shares granted during 2019 vest approximately five years from the initial grant date. All performance awards are subject to earlier vesting in full under certain conditions. During the year ended December 31, 2019, we applied a forfeiture assumption of 15 percent per annum in the recognition of the expense related to these performance shares, with the exception of the awards held by our CEO for which we applied a forfeiture rate of zero . A summary of performance share activity under the Omnibus Plan as of December 31, 2019 and changes during the year then ended is presented below: Weighted Avg. Performance Grant Date Shares Fair Value Total outstanding, December 31, 2018 — $ — Granted to employees 149,654 $ 30.01 Total outstanding, December 31, 2019 149,654 $ 30.01 Restricted Stock Awards In connection with the acquisition of Streem, we issued 575,370 restricted stock awards to certain employees of Streem that were not part of the Omnibus Plan. These awards are subject to time-vesting, certain performance milestone-vesting restrictions, continued employment and transfer restrictions. At the grant date, 387,463 shares were immediately vested and are subject to transfer restrictions. The fair value of these vested shares has been allocated to the acquisition purchase price. See Note 7 to the accompanying consolidated and combined financial statements for further information on the purchase price allocation. The remaining unvested restricted stock awards, which were allocated to future services, generally vest over a period of three years . At December 31, 2019, 187,907 shares of these restricted stock awards were unvested. ESPP On March 21, 2019, our board of directors approved and recommended for approval by our stockholders the ESPP, which was approved by our stockholders on April 29, 2019 and became effective for offering periods commencing July 1, 2019. The ESPP is intended to qualify for 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 Frontdoor not to exceed 15 percent of the then current fair market value. A maximum of 1,250,000 shares of our common stock are authorized for sale under the plan. During the year ended December 31, 2019, we issued 11,077 shares under the ESPP. There were 1,238,923 shares available for issuance under the ESPP as of December 31, 2019 Stock-based compensation expense We recognized stock-based compensation expense of $ 9 million ($ 7 million, net of tax), $ 4 million ($ 3 million, net of tax) and $ 4 million ($ 3 million, net of tax) for the years ended December 31, 2019, 2018 and 2017, respectively. These charges are included in Selling and administrative expenses in the accompanying consolidated and combined statements of operations and comprehensive income. As of December 31, 2019, there was $ 24 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, RSUs, performance shares and restricted stock awards. These remaining costs are expected to be recognized over a weighted-average period of 2.67 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 13. Employee Benefit Plans We currently maintain a defined contribution plan for the benefit of our employees, the American Home Shield 401k Plan. Prior to the Spin-off, our employees participated in ServiceMaster's Profit Sharing and Retirement Plan (“PSRP”). Following the Spin-off, the rights and obligations of these plans were transferred from ServiceMaster pursuant to the employee matters agreement. Discretionary contributions made on behalf of our employees, including those made to the ServiceMaster PSRP for periods prior to the Spin-off, were $ 3 million, $ 3 million and $ 2 million for the years ended December 31, 2019, 2018 and 2017, respectively. In addition to these costs, a portion of ServiceMaster's discretionary contributions to the ServiceMaster PSRP for corporate employees were allocated to us through the allocation of corporate expenses. These charges are recorded within Selling and administrative expenses in the accompanying consolidated and combined statements of operations and comprehensive income. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 14. Long-Term Debt Long-term debt is summarized in the following table: As of December 31, (In millions) 2019 2018 Term Loan Facility maturing in 2025 (1) $ 634 $ 639 Revolving Credit Facility maturing in 2023 — — 2026 Notes (2) 345 344 Other 1 1 Less current portion ( 7 ) ( 7 ) Total long-term debt $ 973 977 ___________________________________ (1) As of December 31, 2019 and 2018, presented net of $ 7 million and $ 8 million, respectively, in unamortized debt issuance costs and $ 1 million and $ 2 million, respectively, in unamortized original issue discount paid. (2) As of December 31, 2019 and 2018, presented net of $ 5 million and $ 6 million, respectively, in unamortized debt issuance costs. On August 16, 2018, in connection with the Spin-off, we engaged in a series of financing transactions pursuant to which we incurred long-term debt consisting of the $ 650 million Term Loan Facility and $ 350 million of 2026 Notes. The proceeds of the debt were attributed directly to SVM and as such is reflected as a non-cash distribution in these financial statements. Credit Facilities On August 16, 2018, we entered into the Credit Agreement, providing for the $ 650 million Term Loan Facility maturing August 16, 2025 and the $ 250 million Revolving Credit Facility, which terminates on August 16, 2023 . The interest rates applicable to the Term Loan Facility and the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at our option, (i) an adjusted LIBOR plus a margin of 2.50 percent per annum or (ii) an alternate base rate plus a margin of 1.50 percent per annum. The obligations under the Credit Agreement are guaranteed by certain subsidiaries (collectively, the “Guarantors”) and are secured by substantially all of the tangible and intangible assets of Frontdoor and the Guarantors, subject to certain customary exceptions. The Revolving Credit Facility provides for senior secured revolving loans and stand-by and other letters of credit. The Revolving Credit Facility limits outstanding letters of credit to $ 25 million. As of December 31, 2019, there were no letters of credit outstanding, and there was $ 250 million of available borrowing capacity under the Revolving Credit Facility. The Credit Agreement contains customary affirmative and negative covenants, including limitations on the incurrence of indebtedness, liens, ability to engage in certain fundamental transactions, make certain dispositions, make certain restricted payments and engage in transactions with affiliates. The Credit Agreement also contains a financial covenant requiring the maintenance of a Consolidated First Lien Leverage Ratio, as defined in the Credit Agreement, of not greater than 3.50 to 1.00 at the end of each fiscal quarter for which the amount of obligations outstanding under the Revolving Credit Facility (subject to certain exceptions, as set forth in the Credit Agreement) exceeds 30 percent of the aggregate amount of Revolving Commitments, as defined in the Credit Agreement. We believe this covenant is the only significant restrictive covenant in the Credit Agreement. As of December 31, 2019, we were in compliance with the financial covenants under the Credit Agreement that were in effect on such date. On October 24, 2018, we entered into an interest rate swap agreement effective October 31, 2018 that expires on August 16, 2025. The notional amount of the agreement was $ 350 million. Under the terms of the agreement, we will pay a fixed rate of interest of 3.0865 percent on the $ 350 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 of the agreement, the effective interest rate on $ 350 million of the Term Loan Facility is fixed at a rate of 3.0865 percent, plus the incremental borrowing margin of 2.50 percent. See Note 18 to the accompanying consolidated and combined financial statements for additional information. 2026 Notes On August 16, 2018, Frontdoor issued $ 350 million of 2026 Notes in a transaction that was exempt from registration under the Securities Act. The 2026 Notes will mature on August 15, 2026 and bear interest at a rate of 6.750 percent per annum. The 2026 Notes are jointly and severally guaranteed on a senior unsecured basis by the Guarantors. The 2026 Notes are governed by the Indenture. Pursuant to the Indenture, we are able to redeem the 2026 Notes, in whole or in part, at any time and from time to time prior to August 15, 2021 at a redemption price equal to 100 percent of the principal amount thereof plus the applicable “make whole” premium, plus accrued and unpaid interest, if any, to, but not including, the redemption date. Also pursuant to the Indenture, we are able to redeem the 2026 Notes, in whole or in part, at any time and from time to time on and after August 15, 2021 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the relevant date of redemption. In addition, we are able to redeem up to 40 percent of the 2026 Notes, at any time and from time to time prior to August 15, 2021, in an amount not to exceed the net cash proceeds of one or more equity offerings, at a redemption price set forth in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. If we experience a Change of Control Triggering Event, as defined in the Indenture, we must offer to purchase all of the 2026 Notes (unless otherwise redeemed) at a price equal to 101 percent of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date. The Indenture contains covenants that, among other things, limit the ability of Frontdoor and its restricted subsidiaries, as described in the Indenture, to: issue, assume, guarantee or incur additional indebtedness; pay dividends or make distributions or purchase or otherwise acquire or retire for value capital stock or subordinated obligations; issue certain preferred stock or similar equity securities; make loans and investments; create restrictions on the ability of Frontdoor’s restricted subsidiaries to make payments or distributions to Frontdoor; enter into certain transactions with affiliates; sell or otherwise dispose of assets, including capital stock of subsidiaries; incur liens; and, in the case of Frontdoor, merge, consolidate or convey, transfer or lease all of substantially all of the assets of Frontdoor and its restricted subsidiaries taken as a whole. Most of these covenants will be suspended during any period in which the 2026 Notes have investment grade ratings from both Moody’s Investors Service, Inc. (or its successors) and Standard & Poor’s Ratings Services (or its successors). As of December 31, 2019, we were in compliance with the covenants under the Indenture that were in effect on such date. The 2026 Notes are unsecured obligations and rank equally in right of payment with all of our other existing and future senior unsecured indebtedness. The subsidiary guarantees of the 2026 Notes are senior unsecured obligations of the Guarantors and rank equally in right of payment with all of the existing and future senior unsecured indebtedness of our non-guarantor subsidiaries. The 2026 Notes are effectively junior to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. Scheduled Long-term Debt Payments As of December 31, 2019, future scheduled long‑term debt payments are $ 7 million for each of the years ending December 31, 2020, 2021, 2022, 2023 and 2024, respectively. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 15. Supplemental Cash Flow Information Supplemental information relating to the accompanying consolidated and combined statements of cash flows is presented in the following table: As of December 31, (In millions) 2019 2018 2017 Cash paid for or (received from): Interest expense $ 59 $ 13 $ — Income tax payments, net of refunds (1) 52 — — Interest and dividend income ( 6 ) ( 1 ) — ___________________________________ (1) Prior to the Spin-off, all income tax payments and refunds were paid and received by ServiceMaster on our behalf. On August 16, 2018, in connection with the Spin-off, we incurred long-term debt consisting of the $ 650 million Term Loan Facility and $ 350 million of 2026 Notes as partial consideration for the contribution of the Separated Business to us. We did not receive any cash proceeds as a result of these transactions, and they are not reflected in the accompanying consolidated and combined statements of cash flows. |
Cash and Marketable Securities
Cash and Marketable Securities | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Marketable Securities [Abstract] | |
Cash and Marketable Securities | Note 16. Cash and Marketable Securities Cash, money market funds and certificates of deposit with maturities of three months or less when purchased are included in Cash and cash equivalents in the accompanying consolidated statements of financial position. As of December 31, 2019 and 2018, marketable securities primarily consisted of treasury bills with maturities of less than one year and are classified as available-for-sale securities. As of December 31, 2019 and 2018, the amortized cost of our short-term investments was $ 7 million and $ 9 million, respectively, and the estimated fair value of these investments was $ 7 million and $ 9 million, respectively. There were no unrealized losses which had been in a loss position for more than one year as of December 31, 2019 and 2018. Gains and losses on sales of investments, as determined on a specific identification basis, are included in investment income in the period they are realized. For the years ended December 31, 2019, 2018 and 2017, there were no gross realized gains or gross realized losses resulting from the sales of available-for-sale securities. The table below summarizes proceeds and maturities of available-for-sale securities. Year Ended December 31, (In millions) 2019 2018 2017 Proceeds from sale of securities $ — $ 17 $ 12 Maturities of securities 9 15 36 We periodically review our portfolio of investments to determine whether there has been an other than temporary decline in the value of the investments from factors such as deterioration in the financial condition of the issuer or the market(s) in which the issuer competes. There were no impairment charges due to declines in the value of these investments for the years ended December 31, 2019, 2018, and 2017. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2019 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | Note 17. Comprehensive Income (Loss) Comprehensive income (loss), which includes net income (loss), unrealized gain (loss) on derivative instruments and unrealized gain (loss) on marketable securities is disclosed in the accompanying consolidated and combined statements of operations and comprehensive income and consolidated and combined statements of changes in equity. The following tables summarize the activity in AOCI, net of the related tax effects. Accumulated Unrealized Other Loss Comprehensive (In millions) on Derivatives Loss Balance as of December 31, 2017 $ — $ — Other comprehensive income (loss) before reclassifications: Pre-tax amount ( 12 ) ( 12 ) Tax provision (benefit) ( 3 ) ( 3 ) After-tax amount ( 10 ) ( 10 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) — — Net current period other comprehensive loss ( 9 ) ( 9 ) Balance as of December 31, 2018 $ ( 9 ) $ ( 9 ) Other comprehensive income (loss) before reclassifications: Pre-tax amount ( 18 ) ( 18 ) Tax provision (benefit) ( 4 ) ( 4 ) After-tax amount ( 14 ) ( 14 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 2 2 Net current period other comprehensive loss ( 12 ) ( 12 ) Balance as of December 31, 2019 $ ( 21 ) $ ( 21 ) ___________________________________ (1) Amounts are net of tax. See reclassifications out of AOCI below for further details. Reclassifications out of AOCI included the following components for the periods indicated. Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) As of December 31, Consolidated and Combined Statements of (In millions) 2019 2018 2017 Operations and Comprehensive Income Location Loss on interest rate swap contract $ ( 3 ) $ — $ — Interest expense Impact of income taxes 1 — — Provision for income taxes Total reclassifications related to derivatives $ ( 2 ) $ — $ — Gains (losses) on available-for-sale securities $ — $ — $ — Interest and net investment income Impact of income taxes — — — Provision for income taxes Total reclassifications related to securities $ — $ — $ — Total reclassifications for the period $ ( 2 ) $ — $ — |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | Note 18. Derivative Financial Instruments We currently use a derivative financial instrument to manage risks associated with changes in interest rates. We do not hold or issue derivative financial instruments for trading or speculative purposes. In designating 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 cash flows of the associated forecasted transaction. We hedge the interest payments on a portion of our variable rate debt through the use of an interest rate swap agreement. Our interest rate swap contract is classified as a cash flow hedge, and, as such, it is recorded on the accompanying 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 AOCI. Any change in the fair value of the hedging instrument resulting from ineffectiveness, as defined by accounting standards, is recognized in current period earnings. Cash flows related to the interest rate swap contract are classified as operating activities in the accompanying consolidated and combined statements of cash flows. The effective portion of the gain or loss on our interest rate swap contract is recorded in AOCI. These amounts are reclassified into earnings in the same period or periods during which the hedged forecasted debt interest settlement affects earnings. See Note 17 to the accompanying consolidated and combined financial statements for the effective portion of the gain or loss on derivative instruments recorded in AOCI and for the amounts reclassified out of AOCI and into earnings. As the underlying forecasted transactions occur during the next 12 months, the unrealized hedging loss in AOCI expected to be recognized in earnings is $ 4 million, net of tax, as of December 31, 2019. The amounts that are ultimately reclassified into earnings will be based on actual interest rates at the time the positions are settled and may differ materially from the amount noted above. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 19. Fair Value Measurements We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. The valuation techniques require inputs that the business categorizes using a three-level hierarchy, from highest to lowest level of observable inputs, as follows: unadjusted quoted prices for identical assets or liabilities in active markets ("Level 1"); direct or indirect observable inputs, including quoted prices or other market data, for similar assets or liabilities in active markets or identical assets or liabilities in less active markets ("Level 2"); and unobservable inputs that require significant judgment for which there is little or no market data ("Level 3"). When multiple input levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement, even though we may have also utilized significant inputs that are more readily observable. The period-end carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. The period-end carrying amount of short-term marketable securities also approximates fair value and consists of available-for-sale debt securities. Unrealized gains and losses are reported net of tax as a component of AOCI in the accompanying consolidated statements of financial position. Any unrealized losses where the decline in value is other than temporary are reported in Interest and net investment income in the accompanying consolidated and combined statements of operations and comprehensive income. There were no other-than-temporary declines in value for the years ended December 31, 2019 and 2018. The carrying amount of total debt was $ 980 million and $ 984 million, and the estimated fair value was $ 1,031 million and $ 958 million as of December 31, 2019 and 2018, respectively. The fair value of our debt is estimated based on available market prices for the same or similar instruments that 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 December 31, 2019 and 2018. We value our interest rate swap contract using a forward interest rate curve obtained from a third-party market data provider. The fair value of the 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 contract. We did not change 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 transfers between levels during each of the years ended December 31, 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 (In millions) Statement of Financial Position Location Carrying Value Quoted Prices In Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2019: Financial Assets: Investments in marketable securities Marketable securities $ 7 $ 7 $ — $ — Total financial assets $ 7 $ 7 $ — $ — Financial Liabilities: Interest rate swap contract Other accrued liabilities $ 5 $ — $ 5 $ — Other long-term obligations 22 — 22 — Total financial liabilities $ 27 $ — $ 27 $ — As of December 31, 2018: Financial Assets: Investments in marketable securities Marketable securities $ 9 $ 9 $ — $ — Total financial assets $ 9 $ 9 $ — $ — Financial Liabilities: Interest rate swap contract Other accrued liabilities $ 2 $ — $ 2 $ — Other long-term obligations 10 — 10 — Total financial liabilities $ 12 $ — $ 12 $ — |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2019 | |
Capital Stock [Abstract] | |
Capital Stock | Note 20. Capital Stock We are authorized to issue 2,000,000,000 shares of common stock. As of December 31, 2019 and 2018, there were 85,309,260 and 84,545,152 shares of common stock issued and outstanding, respectively. We have no other classes of equity securities issued or outstanding. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 21. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. 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 , performance shares and restricted stock awards are reflected in diluted net income per share by applying the treasury stock method. There were no Frontdoor equity awards outstanding prior to the Spin-off. Basic and diluted earnings per share are calculated as follows: Year Ended December 31, (In millions, except per share data) 2019 2018 2017 Net Income $ 153 $ 125 $ 160 Weighted-average common shares outstanding (1) 84.7 84.5 84.5 Effect of dilutive securities: RSUs 0.1 0.1 — Stock options (2) 0.1 — — Weighted-average common shares outstanding - assuming dilution 84.9 84.7 84.5 Basic earnings per share $ 1.81 $ 1.47 $ 1.90 Diluted earnings per share $ 1.80 $ 1.47 $ 1.90 ___________________________________ (1) For periods prior to the Spin-off, earnings per share was calculated based on the 84,515,619 shares of Frontdoor stock that were outstanding at the date of distribution. (2) Options to purchase 0.4 million and 0.1 million shares for the years ended December 31, 2019 and 2018, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Schedule I frontdoor, inc (Pare
Schedule I frontdoor, inc (Parent Company Only) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule I frontdoor, inc. (Parent Company Only) [Abstract] | |
Schedule I frontdoor, inc. (Parent Company Only) | SCHEDULE I frontdoor, inc. (Parent Company Only) Condensed Statements of Comprehensive Income (In millions) Year Ended December 31, 2019 2018 Revenue $ — $ — Interest expense 62 22 Interest and net investment income ( 1 ) — Loss before Income Taxes ( 61 ) ( 22 ) Income tax benefit ( 4 ) ( 5 ) Net Loss from Operations ( 58 ) ( 18 ) Equity in earnings of subsidiaries (net of tax) 211 34 Net Income $ 153 $ 17 Total Comprehensive Income $ 141 $ 8 frontdoor, inc. (Parent Company Only) Condensed Balance Sheets (In millions) As of December 31, 2019 2018 Assets: Current Assets: Cash and cash equivalents $ 132 $ 55 Other current assets — 3 Total Current Assets 132 58 Other Assets: Investments in subsidiaries 785 601 Deferred taxes 6 3 Other assets 5 1 Total Assets $ 929 $ 663 Liabilities and Equity: Current Liabilities: Accrued liabilities: Interest payable $ 9 $ 9 Other 11 2 Current portion of long-term debt 7 7 Total Current Liabilities 27 18 Long-Term Debt 972 977 Due to Subsidiaries 87 2 Other Long-Term Liabilities: Other long-term obligations 22 10 Total Other Long-Term Liabilities 22 10 Equity ( 179 ) ( 344 ) Total Liabilities and Equity $ 929 $ 663 frontdoor, inc. (Parent Company Only) Condensed Statements of Cash Flows (In millions) Year Ended December 31, 2019 2018 Cash and Cash Equivalents at Beginning of Period $ 55 $ — Net Cash Provided from Operating Activities 38 159 Cash Flows from Investing Activities Business acquisitions, net of cash acquired ( 35 ) — Other investing activities ( 4 ) — Net Cash Used for Investing Activities ( 39 ) — Cash Flows from Financing Activities Payments of debt ( 7 ) ( 2 ) Net transfers to Parent Company 85 4 Contribution from ServiceMaster — 81 Dividend paid to ServiceMaster — ( 169 ) Discount paid on issuance of debt — ( 2 ) Debt issuance costs paid — ( 16 ) Net Cash Provided from (Used for) Financing Activities 78 ( 104 ) Cash Increase During the Period 77 55 Cash and Cash Equivalents at End of Period $ 132 $ 55 Notes to Condensed Parent Company Only Financial Statements Note 1. Basis of Presentation The condensed financial statements of frontdoor, inc. (“Parent Company”), are required as a result of the restricted net assets of the Parent Company’s consolidated subsidiaries exceeding 25 percent of the Parent Company’s consolidated net assets as of December 31, 2019. All consolidated subsidiaries of the Parent Company are wholly owned. The primary source of income for the Parent Company is equity in its subsidiaries’ earnings. Pursuant to rules and regulations of the SEC, the unconsolidated condensed financial statements of the Parent Company do not reflect all of the information and notes normally included with financial statements prepared in accordance with GAAP. Therefore, these condensed financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in this Annual Report on Form 10-K. The Parent Company has accounted for its subsidiaries under the equity method in the unconsolidated condensed financial statements. Note 2. Long-Term Debt On August 16, 2018, in connection with the Spin-off, the Parent Company engaged in a series of financing transactions pursuant to which we incurred long-term debt consisting of the $ 650 million Term Loan Facility and $ 350 million of 2026 Notes. The proceeds of the debt were attributed directly to SVM and as such is reflected as a non-cash distribution in these financial statements. On October 24, 2018, the Parent Company entered into an interest rate swap agreement effective October 31, 2018 that expires on August 16, 2025. The notional amount of the agreement was $ 350 million. For further information on the Parent Company’s August 2018 financing transactions, see Note 14 to the audited consolidated and combined financial statements of frontdoor, inc. included in Item 8 of this Annual Report on Form 10-K. Note 3. Acquisitions On December 4, 2019, the Parent Company acquired Streem for a total purchase price of $ 55 million, which consisted of $ 36 million in cash and $ 19 million in fair value of Frontdoor restricted stock awards. For further information on the Parent Company’s acquisition of Streem, see Note 7 to the audited consolidated and combined financial statements of frontdoor, inc. included in Item 8 of this Annual Report on Form 10-K. |
Schedule II Valuation And Quali
Schedule II Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Schedule II Valuation And Qualifying Accounts [Abstract] | |
Schedule II Valuation And Qualifying Accounts | SCHEDULE II frontdoor, inc. Valuation and Qualifying Accounts (In millions) Additions Balance at Charged to Balance at Beginning of Costs and End of Period Expenses Deductions (1) Period As of and for the year ending December 31, 2019 Allowance for doubtful accounts Accounts receivable $ 2 $ 16 $ 15 $ 2 Income tax valuation allowance 1 1 — 2 As of and for the year ending December 31, 2018 Allowance for doubtful accounts Accounts receivable $ 1 $ 12 $ 12 $ 2 Income tax valuation allowance — 1 — 1 As of and for the year ending December 31, 2017 Allowance for doubtful accounts Accounts receivable $ 2 $ 11 $ 11 $ 1 Income tax valuation allowance — — — — ___________________________________ (1) Deductions in the allowance for doubtful accounts for accounts receivable reflect write-offs of uncollectible accounts. Deductions for the income tax valuation allowance in 2019, 2018 and 2017 are primarily attributable to the reduction of net operating loss carryforwards and other deferred tax assets related to the uncertainty of future taxable income in certain jurisdictions. |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Basis Of Consolidation And Combination | Basis of Consolidation and Combination Our financial statements include amounts and disclosures related to the stand-alone financial statements and accounting records of Frontdoor for periods after the completion of the Spin-off (“consolidated”) in combination with amounts and disclosures that have been derived for our business from the consolidated financial statements and accounting records of ServiceMaster for the periods prior to the completion of the Spin-off (“combined”). Any references to our financial statements, financial data and operating data refer to our accompanying consolidated and combined financial statements unless otherwise noted. All intercompany transactions have been eliminated. |
Use Of Estimates | Use of Estimates The preparation of the consolidated and combined financial statements requires management to make certain estimates and assumptions required under U.S. GAAP that may differ from actual results. The more significant areas requiring the use of management estimates relate to revenue recognition; accruals for home service plans; accruals for income tax liabilities as well as deferred tax accounts; the deferral and amortization of customer acquisition costs; stock-based compensation; useful lives for depreciation and amortization expense; the valuation of marketable securities; and the valuation of tangible and intangible assets. |
Revenue | Revenue Home service plan contracts are typically one year in duration. Home service plan claims costs are expensed as incurred. We recognize revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of our obligations under the contracts and are representative of the relative value provided to the customer. We regularly review our estimates of claims costs and adjust our estimates when appropriate. Revenues are presented net of sales taxes collected and remitted to government taxing authorities on the consolidated and combined statements of operations and comprehensive income. 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. We invoice our monthly-pay customers on a straight-line basis over the contract term. As a result, a contract asset is created when revenue is recognized on monthly-pay customers before being billed. 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. Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts. |
Deferred Customer Acquisition Costs | Deferred Customer Acquisition Costs Customer acquisition costs, which are incremental and direct costs of obtaining a customer and primarily include sales commissions, are deferred and amortized over the expected customer relationship period in proportion to revenue recognized. Deferred customer acquisition costs were $ 18 million and $ 21 million as of December 31, 2019 and 2018, respectively. |
Property And Equipment, Intangible Assets And Goodwill | Property and Equipment, Intangible Assets and Goodwill Property and equipment consist of the following: As of Estimated December 31, Useful Lives (In millions) 2019 2018 (Years) Buildings and improvements $ 25 $ 20 10 - 40 Technology and communications 94 78 3 - 7 Office equipment, furniture and fixtures, and vehicles 10 8 5 - 7 128 107 Less accumulated depreciation ( 77 ) ( 59 ) Net property and equipment $ 51 $ 47 Depreciation of property and equipment, including depreciation of assets held under finance leases was $ 18 million, $ 12 million and $ 9 million for the years ended December 31, 2019, 2018 and 2017, respectively. Fixed assets and intangible assets with finite lives are depreciated and amortized on a straight-line basis over their estimated useful lives. These lives are based on our previous experience for similar assets, potential market obsolescence and other industry and business data. As required by accounting standards for the impairment or disposal of long-lived assets, our fixed assets and finite-lived intangible assets are tested for recoverability whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment loss would be recognized equal to the difference between the carrying amount and the fair value of the asset. Changes in the estimated useful lives or in the asset values could cause us to adjust its book value or future expense accordingly. As required under accounting standards for goodwill and other intangibles, goodwill is not subject to amortization, and intangible assets with indefinite useful lives are not amortized until their useful lives are determined to no longer be indefinite. Goodwill and intangible assets that are not subject to amortization are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently if circumstances indicate a potential impairment. Goodwill and indefinite-lived intangible assets, primarily our trade names, are assessed annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. |
Leases | Leases We determine if an arrangement is a lease at inception. We recognize an ROU asset and lease liability for all leases with terms of 12 months or more. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As most of 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 lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset is recorded net of lease incentives. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for separately for our real estate leases. See Note 5 to the accompanying consolidated and combined financial statements for information related to our leases. |
Restricted Net Assets | Restricted Net Assets There are third-party restrictions on the ability of certain of our subsidiaries to transfer funds to us. These restrictions are related to our regulatory requirements. The payments of ordinary and extraordinary dividends by our subsidiaries are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain such subsidiaries to maintain minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can make to us. As of December 31, 2019, the total net assets subject to these third-party restrictions was $ 168 million. |
Financial Instruments And Credit Risk | Financial Instruments and Credit Risk We hedge the interest payments on a portion of our variable rate debt through the use of interest rate swap agreements. We have classified our interest rate swap contract as a cash flow hedge, and, as such, the hedging instruments are recorded on the consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of changes in the fair value attributable to the hedged risks recorded in AOCI. The effect of derivative financial instrument transactions could have a material impact on our financial statements. We do not hold or issue derivative financial instruments for trading or speculative purposes. Financial instruments, which potentially subject us to financial and credit risk, consist principally of investments and receivables. Investments consist primarily of publicly traded debt and certificates of deposit. We periodically review our portfolio of investments to determine whether there has been an other than temporary decline in the value of the investments from factors such as deterioration in the financial condition of the issuer or the market(s) in which the issuer competes. The majority of our receivables have little concentration of credit risk due to the large number of customers with relatively small balances and their dispersion across geographical areas. We maintain an allowance for losses based upon the expected collectability of receivables. See Note 19 to the accompanying consolidated and combined financial statements for information relating to the fair value of financial instruments. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for stock options is estimated at the grant date based on an award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense over the requisite service period. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for future grants may differ materially from that recorded in the current period related to options granted to date. In addition, we estimate the expected forfeiture rate and only recognizes expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly. See Note 12 to the accompanying consolidated and combined financial statements for more details. |
Income Taxes | Income Taxes Frontdoor and its subsidiaries file a consolidated U.S. federal income tax return. State and local returns are filed both on a separate company basis and on a combined unitary basis with Frontdoor. Current and deferred income taxes are provided for on a separate company basis. We account for income taxes using an asset and liability approach for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Valuation allowances are established when necessary to reduce deferred income tax assets to the amounts expected to be realized. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in its tax return. We recognize potential interest and penalties related to its uncertain tax positions in income tax expense. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. 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, performance shares and restricted stock awards are reflected in diluted earnings per share by applying the treasury stock method. For periods prior to the Spin-off, earnings per share was calculated based on the 84,515,619 shares of Frontdoor stock that were outstanding at the date of distribution. There were no Frontdoor equity awards outstanding prior to the Spin-off. |
Segment Reporting | Segment Reporting A public company is required to report annual and interim financial and descriptive information about its reportable operating segments. We operate our business under six brand names that primarily engage in the activity of providing home service plans to our customers. Our chief operating decision maker, who is our Chief Executive Officer, regularly evaluates financial information on a consolidated basis in deciding how to allocate resources and in assessing performance. As such, we operate as one operating segment, which is comprised of our six brands, and we have one reportable segment. |
Newly Issued Accounting Standards | Newly Issued Accounting Standards Adoption of New Accounting Standards In February 201 6, the FASB issued ASU 2016-02, which was amended in parts by subsequent accounting standards updates (collectively ASC 842) and is the final standard on accounting for leases. While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The most significant change for lessees is the requirement under the new guidance to recognize ROU assets and lease liabilities for all leases. The lease liability represents the lessee’s obligation to make lease payments arising from a lease and is measured as the present value of the lease payments. The ROU asset represents the lessee’s right to use a specified asset for the lease term and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. We adopted ASC 842 effective January 1, 2019. We utilized the permitted alternative transition method, which removed the requirement that the financial statements of prior periods be restated. There was no cumulative effect adjustment recorded to beginning equity as a result of our adoption of this standard. We also elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward our historical lease classification, our assessment on whether expired or existing contracts were or contained a lease and our initial direct costs for any leases that existed prior to adoption of the new standard. In addition, we have elected the practical expedients that allow us, by class of underlying asset, to not separate lease and non-lease components and to not recognize ROU assets and lease liabilities for leases with lease terms of less than 12 months. As a result of the adoption of this standard, we recognized ROU assets and lease liabilities of approximately $ 24 million for operating leases, while our accounting for finance leases remained unchanged. This standard did not have an impact on our consolidated and combined statements of operations and comprehensive income or consolidated and combined statements of cash flows. Accounting Standards Issued but Not Yet Effective In June 2016, the FASB issued ASU 2016-13, which requires earlier recognition of credit losses while also providing additional transparency about credit risk. Further, the new credit loss model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This standard is effective for us on January 1, 2020 and will not have an impact on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard is effective for us on January 1, 2020 and will have an immaterial impact on our consolidated financial statements and related disclosures. We will apply the guidance prospectively to implementation costs incurred related to cloud computing arrangements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Schedule Of Property And Equipment | As of Estimated December 31, Useful Lives (In millions) 2019 2018 (Years) Buildings and improvements $ 25 $ 20 10 - 40 Technology and communications 94 78 3 - 7 Office equipment, furniture and fixtures, and vehicles 10 8 5 - 7 128 107 Less accumulated depreciation ( 77 ) ( 59 ) Net property and equipment $ 51 $ 47 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue [Abstract] | |
Disaggregation of Revenue From Contracts With Customers | Year Ended December 31, (In millions) 2019 2018 2016 Renewals $ 926 $ 835 $ 759 Real estate (1) 263 262 249 Direct-to-consumer (1) 167 156 144 Other 8 6 5 Total $ 1,365 $ 1,258 $ 1,157 _____________________________ (1) First year revenue only. |
Movement In Deferred Revenue | (In millions) Deferred Revenue Balance as of January 1, 2019 $ 185 Deferral of revenue 404 Recognition of deferred revenue ( 401 ) Balance as of December 31, 2019 $ 188 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters | (In millions) Total Balance as of December 31, 2017 $ 476 Acquisitions — Balance as of December 31, 2018 476 Acquisitions (1) 25 Balance as of December 31, 2019 $ 501 ___________________________________ (1) Acquired goodwill primarily relates to the acquisition of Streem. See Note 7 to the accompanying consolidated and combined financial statements for information related to our acquisitions during 2019. |
Schedule Of Other Intangible Asset Balances For Continuing Operations | The table below summarizes the other intangible asset balances: 0 As of December 31, 2019 2018 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 141 $ — $ 141 $ 140 $ — $ 140 Customer relationships 173 ( 168 ) 5 173 ( 165 ) 7 Developed technology 34 ( 1 ) 33 — — — Other 37 ( 25 ) 12 32 ( 22 ) 10 Total $ 385 $ ( 193 ) $ 191 $ 345 $ ( 187 ) $ 158 ___________________________________ (1) Not subject to amortization. |
Schedule Of Expected Amortization Expense For Intangible Assets | (In millions) 2020 $ 12 2021 10 2022 7 2023 6 2024 5 Total $ 40 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Weighted Average Remainig Lease Term And Discount Rate | (In millions) As of December 31, 2019 Weighted-average remaining lease term (years): Operating leases 10 Weighted-average discount rate: Operating leases 6.1 % |
Supplemental Cash Flow Related To Leases | Twelve Months Ended (In millions) December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 4 Leased assets obtained in exchange for new lease liabilities 1 |
Supplemental Balance Sheet Information Related To Leases | (In millions) As of December 31, 2019 Operating lease right-of-use assets $ 23 Less lease incentives ( 6 ) Operating lease right-of-use assets, net $ 17 Other accrued liabilities $ 3 Operating lease liabilities 20 Total operating lease liabilities $ 23 |
Maturities Of Lease Liabilities | Operating (In millions) Leases 2020 $ 4 2021 4 2022 4 2023 3 2024 2 Thereafter 13 Total lease payments 31 Less imputed interest ( 8 ) Total $ 23 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Reconciliation Of Unrecognized Tax Benefits | (In millions) Total Balance as of December 31, 2017 $ 4 Increases in tax positions for current year 2 Decrease due to Spin-off ( 6 ) Balance as of December 31, 2018 — Increases in tax positions for prior years 1 Increases in tax positions for current year 2 Balance as of December 31, 2019 $ 2 |
Reconciliation Of Effective Income Tax Rate | Year Ended December 31, 2019 2018 2017 Tax at U.S. federal statutory rate 21.0 % 21.0 % 35.0 % State and local income taxes, net of U.S. federal benefit 2.5 2.5 1.5 Other permanent items — ( 0.5 ) 1.1 Excess tax benefits from stock-based compensation 0.2 ( 0.1 ) ( 2.5 ) Transaction costs 0.2 1.2 — Uncertain tax positions 1.0 1.0 1.0 U.S. Tax Reform rate change (1) — — ( 8.9 ) Effective rate 24.9 % 25.1 % 27.2 % ___________________________________ (1) Deferred income taxes on our balance sheet at December 31, 2017 were remeasured for the change in the U.S. income tax rate through income tax expense (see discussion on U.S. Tax Reform). This one-time beneficial rate change adjustment for $ 20 million includes $ 1 million in state income tax expense. |
Income Tax Expense From Continuing Operations | Year Ended December 31, (In millions) 2019 2018 2017 Current: U.S. federal $ 42 $ 29 $ 71 State and local 9 6 7 52 35 78 Deferred: U.S. federal ( 1 ) 7 ( 20 ) State and local — — 1 ( 1 ) 7 ( 19 ) Provision for income taxes $ 51 $ 42 $ 60 |
Deferred Tax Balances | As of December 31, (In millions) 2019 2018 Long-term deferred tax assets (liabilities): Intangible assets (1) $ ( 46 ) $ ( 34 ) Property and equipment ( 7 ) ( 6 ) Prepaid expenses and deferred customer acquisition costs ( 7 ) ( 6 ) Lease asset ( 4 ) — Accrued liabilities 4 2 Other long-term obligations 2 1 Tenant improvements — 1 Lease liability 6 — Deferred interest expense 6 4 Net operating loss and tax credit carryforwards (2) 2 — Less valuation allowance ( 1 ) ( 1 ) Net Long-term deferred tax liability $ ( 45 ) $ ( 39 ) ___________________________________ (1) The deferred tax liability relates primarily to the difference in the tax versus book basis of intangible assets. We had $ 44 million and $ 42 million of deferred tax liability included in this net deferred tax liability as of December 31, 2019 and 2018, respectively, that will not actually be paid unless certain of our business units are sold. (2) Represents federal loss carryovers that have an indefinite life and state loss carryovers that expire on or before 2039. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions [Abstract] | |
Supplemental Cash Flow Information Regarding Acquisitions | Year Ended December 31, (In millions) 2019 Assets acquired (1) $ 65 Liabilities assumed ( 8 ) Net assets acquired $ 57 Net cash paid (1) $ 38 Issuance of shares 19 Purchase price $ 57 ___________________________________ (1) Amounts presented net of $ 1 million of cash acquired. |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring Charges [Abstract] | |
Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges | (In millions) Accrued Restructuring Charges Balance as of December 31, 2017 $ 2 Costs incurred 3 Costs paid or otherwise settled ( 5 ) Balance as of December 31, 2018 $ — Costs incurred 1 Costs paid or otherwise settled ( 1 ) Balance as of December 31, 2019 $ — |
Spin-Off Charges (Tables)
Spin-Off Charges (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Spin-Off Charges [Abstract] | |
Reconciliation Of Accrued Spin-off Charges | (In millions) Accrued Spin-off Charges Balance as of December 31, 2017 $ 1 Costs incurred (1) 22 Costs paid or otherwise settled ( 23 ) Balance as of December 31, 2018 $ — Costs incurred 1 Costs paid or otherwise settled ( 1 ) Balance as of December 31, 2019 $ — ___________________________________ (1) An additional $ 2 million of Spin-off charges were pre-paid in 2017 and subsequently expensed in 2018. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule Of Assumptions Used To Estimate Value Of Each Option Award | Year Ended December 31, Assumption 2019 Expected volatility 49.3 % Expected dividend yield 0.0 % Expected life (in years) 6.1 Risk-free interest rate 2.25 % |
Summary Of Option Activity | Weighted Avg. Aggregate Remaining Weighted Avg. Intrinsic Contractual Stock Exercise Value Term Options Price (in millions) (in years) Outstanding at December 31, 2018 373,387 $ 30.06 $ 1 8.04 Granted to employees 338,923 $ 34.48 Exercised ( 8,000 ) $ 8.41 Forfeited ( 12,108 ) $ 34.48 Expired ( 6,725 ) $ 24.39 Outstanding at December 31, 2019 685,477 $ 32.48 $ 10 8.15 Exercisable at December 31, 2019 176,180 $ 26.20 $ 4 6.32 |
Summary Of RSU Activity Under The MSIP | Weighted Avg. Grant Date RSUs Fair Value Outstanding at December 31, 2018 161,539 $ 39.27 Granted to employees 260,237 $ 35.64 Vested ( 88,200 ) $ 37.81 Forfeited ( 10,582 ) $ 36.80 Outstanding at December 31, 2019 322,994 $ 36.96 |
Summary Of Performance Share Activity Under The Omnibus Incentive Plan | Weighted Avg. Performance Grant Date Shares Fair Value Total outstanding, December 31, 2018 — $ — Granted to employees 149,654 $ 30.01 Total outstanding, December 31, 2019 149,654 $ 30.01 |
Spin-Off RSU [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary Of Restricted Stock Awards Activity | Frontdoor Awards Distributed in Spin-Off Frontdoor Employees ServiceMaster Employees Total Unvested RSUs at Spin-off date 143,697 106,317 250,014 Vested ( 7,200 ) ( 17,188 ) ( 24,388 ) Forfeited ( 4,136 ) — ( 4,136 ) Unvested RSUs at December 31, 2018 132,361 89,129 221,490 Vested ( 61,496 ) ( 39,443 ) ( 100,939 ) Forfeited ( 3,502 ) ( 24,596 ) ( 28,098 ) Unvested RSUs at December 31, 2019 67,363 25,090 92,453 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | As of December 31, (In millions) 2019 2018 Term Loan Facility maturing in 2025 (1) $ 634 $ 639 Revolving Credit Facility maturing in 2023 — — 2026 Notes (2) 345 344 Other 1 1 Less current portion ( 7 ) ( 7 ) Total long-term debt $ 973 977 ___________________________________ (1) As of December 31, 2019 and 2018, presented net of $ 7 million and $ 8 million, respectively, in unamortized debt issuance costs and $ 1 million and $ 2 million, respectively, in unamortized original issue discount paid. (2) As of December 31, 2019 and 2018, presented net of $ 5 million and $ 6 million, respectively, in unamortized debt issuance costs. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule Of Supplemental Information Relating To The Accompanying Condensed Consolidated Statements Of Cash Flows | Supplemental information relating to the accompanying consolidated and combined statements of cash flows is presented in the following table: As of December 31, (In millions) 2019 2018 2017 Cash paid for or (received from): Interest expense $ 59 $ 13 $ — Income tax payments, net of refunds (1) 52 — — Interest and dividend income ( 6 ) ( 1 ) — ___________________________________ (1) Prior to the Spin-off, all income tax payments and refunds were paid and received by ServiceMaster on our behalf. |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Marketable Securities [Abstract] | |
Summary Of Proceeds And Maturities Of Available-for-sale Securities | Year Ended December 31, (In millions) 2019 2018 2017 Proceeds from sale of securities $ — $ 17 $ 12 Maturities of securities 9 15 36 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Comprehensive Income (Loss) [Abstract] | |
Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects | Accumulated Unrealized Other Loss Comprehensive (In millions) on Derivatives Loss Balance as of December 31, 2017 $ — $ — Other comprehensive income (loss) before reclassifications: Pre-tax amount ( 12 ) ( 12 ) Tax provision (benefit) ( 3 ) ( 3 ) After-tax amount ( 10 ) ( 10 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) — — Net current period other comprehensive loss ( 9 ) ( 9 ) Balance as of December 31, 2018 $ ( 9 ) $ ( 9 ) Other comprehensive income (loss) before reclassifications: Pre-tax amount ( 18 ) ( 18 ) Tax provision (benefit) ( 4 ) ( 4 ) After-tax amount ( 14 ) ( 14 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 2 2 Net current period other comprehensive loss ( 12 ) ( 12 ) Balance as of December 31, 2019 $ ( 21 ) $ ( 21 ) ___________________________________ (1) Amounts are net of tax. See reclassifications out of AOCI below for further details. |
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) As of December 31, Consolidated and Combined Statements of (In millions) 2019 2018 2017 Operations and Comprehensive Income Location Loss on interest rate swap contract $ ( 3 ) $ — $ — Interest expense Impact of income taxes 1 — — Provision for income taxes Total reclassifications related to derivatives $ ( 2 ) $ — $ — Gains (losses) on available-for-sale securities $ — $ — $ — Interest and net investment income Impact of income taxes — — — Provision for income taxes Total reclassifications related to securities $ — $ — $ — Total reclassifications for the period $ ( 2 ) $ — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 (In millions) Statement of Financial Position Location Carrying Value Quoted Prices In Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2019: Financial Assets: Investments in marketable securities Marketable securities $ 7 $ 7 $ — $ — Total financial assets $ 7 $ 7 $ — $ — Financial Liabilities: Interest rate swap contract Other accrued liabilities $ 5 $ — $ 5 $ — Other long-term obligations 22 — 22 — Total financial liabilities $ 27 $ — $ 27 $ — As of December 31, 2018: Financial Assets: Investments in marketable securities Marketable securities $ 9 $ 9 $ — $ — Total financial assets $ 9 $ 9 $ — $ — Financial Liabilities: Interest rate swap contract Other accrued liabilities $ 2 $ — $ 2 $ — Other long-term obligations 10 — 10 — Total financial liabilities $ 12 $ — $ 12 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule Of Basic And Diluted Earnings Per Share | Year Ended December 31, (In millions, except per share data) 2019 2018 2017 Net Income $ 153 $ 125 $ 160 Weighted-average common shares outstanding (1) 84.7 84.5 84.5 Effect of dilutive securities: RSUs 0.1 0.1 — Stock options (2) 0.1 — — Weighted-average common shares outstanding - assuming dilution 84.9 84.7 84.5 Basic earnings per share $ 1.81 $ 1.47 $ 1.90 Diluted earnings per share $ 1.80 $ 1.47 $ 1.90 ___________________________________ (1) For periods prior to the Spin-off, earnings per share was calculated based on the 84,515,619 shares of Frontdoor stock that were outstanding at the date of distribution. (2) Options to purchase 0.4 million and 0.1 million shares for the years ended December 31, 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) | Mar. 20, 2019shares | Oct. 01, 2018 | Dec. 31, 2019itemstate |
Basis of Presentation [Abstract] | |||
Number of systems or appliances covered under service plans | item | 21 | ||
Number of States in which Entity Operates | state | 50 | ||
Common stock, percentage held by stockholders | 80.20% | ||
Number Of Common Stock Received, From Spin-Off Transaction, Conversion | 1 | ||
Number Of Common Stock From Previous Parent Company Held, Spin Off Transaction, Conversion | 2 | ||
Number of shares transferred to financial institution, pursuant to exchange agreement | shares | 16,734,092 |
Significant Accounting Polici_4
Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)segmentshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Jan. 01, 2019USD ($) | Oct. 01, 2018shares | |
Significant Accounting Policies [Line Items] | |||||
Home service plans, typical term | 1 year | ||||
Recognition requirements lease term | 12 months | ||||
Deferred customer acquisition costs | $ 18,000,000 | $ 21,000,000 | |||
Depreciation of property and equipment, including depreciation of assets held under finance leases | $ 18,000,000 | $ 12,000,000 | $ 9,000,000 | ||
Shares of common stock outstanding | shares | 85,309,260 | 84,545,152 | 84,515,619 | ||
Number of Operating Segments | segment | 1 | ||||
Number of Reportable Segments | segment | 1 | ||||
Amount of Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries | $ 168,000,000 | ||||
Operating Lease, Liability | 23,000,000 | ||||
Operating Lease, Right-of-Use Asset | $ 17,000,000 | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 0 | ||||
Operating Lease, Liability | 24,000,000 | ||||
Operating Lease, Right-of-Use Asset | $ 24,000,000 |
Significant Accounting Polici_5
Significant Accounting Policies (Schedule Of Property And Equipment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 128 | $ 107 |
Less accumulated depreciation | (77) | (59) |
Net property and equipment | 51 | 47 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 25 | 20 |
Buildings and Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10 years | |
Buildings and Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 40 years | |
Technology and Communications [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 94 | 78 |
Technology and Communications [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Technology and Communications [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years | |
Office Equipment, Furniture and Fixtures, and Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 10 | $ 8 |
Office Equipment, Furniture and Fixtures, and Vehicles [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Office Equipment, Furniture and Fixtures, and Vehicles [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue [Abstract] | ||
Capitalized Contract Cost, Net | $ 18 | $ 21 |
Capitalized Contract Cost, Amortization | 20 | 22 |
Capitalized Contract Cost, Impairment Loss | 0 | 0 |
Deferred revenue | 188 | $ 185 |
Revenue recognized | $ 182 |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue From Contracts With Customers) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | $ 1,365 | $ 1,258 | $ 1,157 | |
Renewals [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 926 | 835 | 759 | |
Real Estate [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | [1] | 263 | 262 | 249 |
Direct To Consumer [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | [1] | 167 | 156 | 144 |
Service, Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | $ 8 | $ 6 | $ 5 | |
[1] | First year revenue only. |
Revenue (Movement In Deferred R
Revenue (Movement In Deferred Revenue) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Revenue [Abstract] | |
Balance as of January 1, 2019 | $ 185 |
Deferral of revenue | 404 |
Recognition of deferred revenue | (401) |
Balance as of December 31, 2019 | $ 188 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 |
Accumulated impairment loss | 0 | 0 | |
Amortization expense | 6 | 8 | 8 |
Trade names [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible asset impairment charges | $ 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) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Goodwill balances by segment for continuing operations | |||
Balance at the beginning of the period | $ 476 | $ 476 | |
Acquisitions | 25 | [1] | |
Balance at the end of the period | $ 501 | $ 476 | |
[1] | Acquired goodwill primarily relates to the acquisition of Streem. See Note 7 to the accompanying consolidated and combined financial statements for information related to our acquisitions during 2019. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedule Of Other Intangible Asset Balances For Continuing Operations) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | $ 385 | $ 345 | |
Accumulated Amortization | (193) | (187) | |
Net | 191 | 158 | |
Customer relationships [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 173 | 173 | |
Accumulated Amortization | (168) | (165) | |
Net | 5 | 7 | |
Developed Technology [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 34 | ||
Accumulated Amortization | (1) | ||
Net | 33 | ||
Other [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 37 | 32 | |
Accumulated Amortization | (25) | (22) | |
Net | 12 | 10 | |
Trade names [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | [1] | 141 | 140 |
Net | [1] | $ 141 | $ 140 |
[1] | Not subject to amortization. |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Schedule Of Expected Amortization Expense For Intangible Assets) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets [Abstract] | |
2020 | $ 12 |
2021 | 10 |
2022 | 7 |
2023 | 6 |
2024 | 5 |
Total | $ 40 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Leases, Renewal Term | 5 years | |||
Operating lease expense | $ 4 | $ 4 | $ 5 | |
Operating Lease, Liability | 23 | |||
Operating Lease, Right-of-Use Asset | $ 17 | |||
Maximum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Leases, Remaining Lease Term Years | 15 years | |||
Minimum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Leases, Remaining Lease Term Years | 1 year | |||
Accounting Standards Update 2016-02 [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Liability | $ 24 | |||
Operating Lease, Right-of-Use Asset | $ 24 |
Leases (Weighted Average Remain
Leases (Weighted Average Remainig Lease Term And Discount Rate) (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term: Operating leases | 10 years |
Weighted average discount rate: Operating leases | 6.10% |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Related To Leases) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 4 |
Leased assets obtained in exchange for new lease liabilities | $ 1 |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related To Lease) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating lease right-of-use assets | $ 23 |
Less lease incentives | (6) |
Operating lease right-of-use asset, net | 17 |
Other accrued liabilities | 3 |
Operating lease liabilities | 20 |
Total operating lease liabilities | $ 23 |
Leases (Maturities Of Lease Lia
Leases (Maturities Of Lease Liabilities) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 4 |
2021 | 4 |
2022 | 4 |
2023 | 3 |
2024 | 2 |
Thereafter | 13 |
Total lease payments | 31 |
Less imputed interest | (8) |
Total | $ 23 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 35.00% |
Net reduction of total deferred tax liabilities | $ 20 | ||
Unrecognized tax benefits | $ 2 | $ 0 | $ 4 |
Unrecognized tax benefits that would impact effective tax rate if recognized | 2 | ||
Deferred tax assets and liabilities, adjustment from spin-off | 4 | ||
Amount of increase reasonably possible in the next twelve months for the unrecognized tax benefit | 2 | ||
Valuation allowance for deferred tax assets | 1 | $ 1 | |
Maximum [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Accrued interest and penalties | $ 1 |
Income Taxes (Reconciliation Of
Income Taxes (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ||
Gross unrecognized tax benefits at beginning of period | $ 0 | $ 4 |
Increases in tax positions for prior years | 1 | |
Increases in tax positions for current year | 2 | 2 |
Decrease due to Spin-off | (6) | |
Gross unrecognized tax benefits at end of period | $ 2 | $ 0 |
Income Taxes (Reconciliation _2
Income Taxes (Reconciliation Of Effective Income Tax Rate) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Reconciliation of income tax computed at the U.S. federal statutory tax rate to the entity's effective income tax rate for continuing operations | ||||
Tax at U.S. federal statutory rate (as a percent) | 21.00% | 21.00% | 35.00% | |
State and local income taxes, net of U.S. federal benefit (as a percent) | 2.50% | 2.50% | 1.50% | |
Other permanent items | (0.50%) | 1.10% | ||
Excess tax benefits from stock-based compensation (as a percent) | 0.20% | (0.10%) | (2.50%) | |
Transaction costs (as a percent) | 0.20% | 1.20% | ||
Uncertain tax positions (as a percent) | 1.00% | 1.00% | 1.00% | |
U.S. Tax Reform rate change (as a percent) | [1] | (8.90%) | ||
Effective rate (as a percent) | 24.90% | 25.10% | 27.20% | |
Net reduction of total deferred tax liabilities | $ 20 | |||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | $ 1 | |||
[1] | Deferred income taxes on our balance sheet at December 31, 2017 were remeasured for the change in the U.S. income tax rate through income tax expense (see discussion on U.S. Tax Reform). This one-time beneficial rate change adjustment for $ 20 million includes $ 1 million in state income tax expense. |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense From Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
U.S. federal | $ 42 | $ 29 | $ 71 |
State and local | 9 | 6 | 7 |
Total current | 52 | 35 | 78 |
Deferred: | |||
U.S. federal | (1) | 7 | (20) |
State and local | 1 | ||
Total deferred | (1) | 7 | (19) |
Provision for income taxes | $ 51 | $ 42 | $ 60 |
Income Taxes (Deferred Tax Bala
Income Taxes (Deferred Tax Balances) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Long-term deferred tax assets (liabilities): | |||
Intangible assets | [1] | $ (46) | $ (34) |
Property and equipment | (7) | (6) | |
Prepaid expenses and deferred customer acquisition costs | (7) | (6) | |
Lease asset | (4) | ||
Accrued liabilities | 4 | 2 | |
Other long-term obligations | 2 | 1 | |
Tenant improvements | 1 | ||
Lease liability | 6 | ||
Deferred interest expense | 6 | 4 | |
Net operating loss and tax credit carryforwards | [2] | 2 | |
Less valuation allowance | (1) | (1) | |
Net Long-term deferred tax liability | (45) | (39) | |
Deferred tax liability related primarily to the difference in the tax versus book basis of intangible assets | $ 44 | $ 42 | |
[1] | The deferred tax liability relates primarily to the difference in the tax versus book basis of intangible assets. We had $ 44 million and $ 42 million of deferred tax liability included in this net deferred tax liability as of December 31, 2019 and 2018, respectively, that will not actually be paid unless certain of our business units are sold. | ||
[2] | Represents federal loss carryovers that have an indefinite life and state loss carryovers that expire on or before 2039. |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ in Millions | Dec. 04, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Net purchase price | $ 57 | |||
Goodwill | 501 | $ 476 | $ 476 | |
Replacement equity awards | 19 | |||
Streem [Member] | ||||
Business Acquisition [Line Items] | ||||
Net purchase price | $ 55 | |||
Goodwill | 24 | |||
Other intangibles related to acquisitions | 37 | |||
Other intangible assets recorded, amount offset by deferred tax liability | 7 | |||
Net cash paid | 36 | |||
Replacement equity awards | $ 19 | |||
Additional Business Acquired [Member] | ||||
Business Acquisition [Line Items] | ||||
Net purchase price | 3 | |||
Goodwill | 1 | |||
Other intangibles related to acquisitions | $ 2 |
Acquisitions (Supplemental Cash
Acquisitions (Supplemental Cash Flow Information Regarding Acquisitions) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Acquisitions [Abstract] | ||
Assets acquired | $ 65 | [1] |
Liabilities assumed | (8) | |
Net assets acquired | 57 | |
Net cash paid | 38 | [1] |
Issuance of shares | 19 | |
Purchase price | 57 | |
Cash acquired from acquisition | $ 1 | |
[1] | Amounts presented net of $ 1 million of cash acquired. |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 1 | $ 3 | $ 7 | |
Restructuring charges, net of tax | $ 1 | 2 | 4 | |
Other costs | 2 | 1 | ||
Severance Costs | $ 1 | 5 | ||
Impairment charges | $ 1 | |||
Scenario, Forecast [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 3 |
Restructuring Charges (Schedule
Restructuring Charges (Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the beginning and ending balances of accrued restructuring charges | |||
Balance at the beginning of the period | $ 2 | ||
Costs incurred | $ 1 | 3 | $ 7 |
Costs paid or otherwise settled | $ (1) | $ (5) | |
Balance at the end of the period | $ 2 |
Spin-Off Charges (Narrative) (D
Spin-Off Charges (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring charges | $ 1 | $ 3 | $ 7 |
Restructuring charges, net of tax | 1 | 2 | 4 |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring charges | 1 | 24 | 13 |
Restructuring charges, net of tax | 1 | 19 | 9 |
Incremental capital expenditures required to effect the spin-off | $ 2 | 15 | |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | Third-Party Consulting Fees [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring charges | 19 | 12 | |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | Other Incremental Costs [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring charges | $ 5 | $ 1 |
Spin-Off Charges (Reconciliatio
Spin-Off Charges (Reconciliation Of Accrued Spin-off Charges) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Restructuring and Related Cost [Abstract] | ||||
Balance at the beginning of the period | $ 2 | |||
Costs incurred | $ 1 | 3 | $ 7 | |
Costs paid or otherwise settled | (1) | (5) | (5) | |
Balance at the end of the period | 2 | |||
Prepaid Spin-off charges | 2 | |||
Spin-off [Member] | ||||
Restructuring and Related Cost [Abstract] | ||||
Balance at the beginning of the period | 1 | |||
Costs incurred | 1 | 22 | [1] | |
Costs paid or otherwise settled | $ (1) | $ (23) | ||
Balance at the end of the period | $ 1 | |||
[1] | An additional $ 2 million of Spin-off charges were pre-paid in 2017 and subsequently expensed in 2018. |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Home service plan claims settlement, term | 6 months |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Home service plan claims settlement, term | 3 months |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Line Items] | |||
Royalty expense | $ 1 | $ 2 | |
Related Party Costs | 1 | ||
Directly Charged Corporate Expenses [Member] | |||
Related Party Transactions [Line Items] | |||
Corporate expenses | 14 | 13 | |
Allocated Corporate Expenses [Member] | |||
Related Party Transactions [Line Items] | |||
Corporate expenses | 35 | 47 | |
Health Insurance Coverage Premiums [Member] | |||
Related Party Transactions [Line Items] | |||
Insurance expense | 6 | 8 | |
Risk Management Insurance Policies [Member] | |||
Related Party Transactions [Line Items] | |||
Insurance expense | $ 2 | 3 | |
ServiceMaster [Member] | |||
Related Party Transactions [Line Items] | |||
Royalty fee as a percent of customer revenues | 0.175% | ||
Royalty expense | $ 1 | $ 2 | |
Due to related party | $ 0 | ||
Maximum [Member] | |||
Related Party Transactions [Line Items] | |||
Related Party Costs | $ 1 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 21, 2019 | Oct. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock-Based Compensation [Line Items] | ||||||
Number of shares of common stock authorized | 14,500,000 | |||||
Number of shares of common stock remaining for future grant | 13,136,678 | |||||
Converted, Aggregate Intrinsic Value | 4,000,000 | |||||
Stock-based compensation expense | $ 9 | $ 4 | $ 4 | |||
Stock-based compensation expense, net of tax | 7 | $ 3 | $ 3 | |||
Total unrecognized compensation costs related to non-vested stock options, restricted share units and performance shares | $ 24 | |||||
Weighted-average period of recognition of stock-based compensation cost | 2 years 8 months 1 day | |||||
Employee Stock Purchase Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Number of shares of common stock authorized | 1,250,000 | |||||
Number of shares of common stock remaining for future grant | 1,238,923 | |||||
Maximum Percentage Of Current Fair Market Value Eligible Employees May Purchase | 15.00% | |||||
Stock Issued During Period, Shares, New Issues | 11,077 | |||||
Stock options [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Vesting period | 4 years | |||||
Stock options [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Grants (in shares) | 338,923 | 0 | ||||
Granted to employees (in dollars per share) | $ 34.48 | |||||
Weighted-average grant-date fair value (in dollars per share) | $ 17.05 | |||||
Forfeiture rate (as a percent) | 15.00% | |||||
Stock options [Member] | Omnibus Incentive Plan [Member] | Chief Executive Officer [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 0.00% | |||||
RSU [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Vested (in shares) | 24,388 | 100,939 | ||||
Unvested (in shares) | 250,014 | 221,490 | 92,453 | 221,490 | ||
Vesting period | 3 years | |||||
RSU [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 15.00% | |||||
Total intrinsic value of stock options exercised | $ 4 | |||||
Granted to employees (in shares) | 260,237 | 29,178 | ||||
Granted to employees (in dollars per share) | $ 35.64 | $ 29.13 | ||||
Vested (in shares) | 88,200 | |||||
Unvested (in shares) | 161,539 | 322,994 | 161,539 | |||
RSU [Member] | Omnibus Incentive Plan [Member] | Chief Executive Officer [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 0.00% | |||||
Performance Shares [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Granted to employees (in shares) | 149,654 | |||||
Granted to employees (in dollars per share) | $ 30.01 | |||||
Unvested (in shares) | 149,654 | |||||
Performance Shares [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 15.00% | |||||
Vesting period | 5 years | |||||
Performance Shares [Member] | Omnibus Incentive Plan [Member] | Chief Executive Officer [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 0.00% | |||||
Restricted Stock [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Granted to employees (in shares) | 575,370 | |||||
Vested (in shares) | 387,463 | |||||
Unvested (in shares) | 187,907 | |||||
Vesting period | 3 years | |||||
Common Stock [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 85,000,000 | |||||
Maximum [Member] | Stock options [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Total intrinsic value of stock options exercised | $ 1 | |||||
Maximum [Member] | RSU [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Total intrinsic value of stock options exercised | $ 1 |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary Of Restricted Stock Awards Activity) (Details) - RSU [Member] - shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
RSUs | ||
Total outstanding at the beginning of the period (in shares) | 250,014 | 221,490 |
Vested (in shares) | (24,388) | (100,939) |
Forfeited (in shares) | (4,136) | (28,098) |
Total outstanding at the end of the period (in shares) | 221,490 | 92,453 |
Frontdoor Employees [Member] | ||
RSUs | ||
Total outstanding at the beginning of the period (in shares) | 143,697 | 132,361 |
Vested (in shares) | (7,200) | (61,496) |
Forfeited (in shares) | (4,136) | (3,502) |
Total outstanding at the end of the period (in shares) | 132,361 | 67,363 |
ServiceMaster Employees [Member] | ||
RSUs | ||
Total outstanding at the beginning of the period (in shares) | 106,317 | 89,129 |
Vested (in shares) | (17,188) | (39,443) |
Forfeited (in shares) | (24,596) | |
Total outstanding at the end of the period (in shares) | 89,129 | 25,090 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule Of Assumptions Used To Estimate Value Of Each Option Award) (Details) - Stock options [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Assumptions used to estimate value of each option award | |
Expected volatility (as a percent) | 49.30% |
Expected dividend yield (as a percent) | 0.00% |
Expected life | 6 years 1 month 6 days |
Risk-free interest rate (as a percent) | 2.25% |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary Of Option Activity) (Details) - Omnibus Incentive Plan [Member] - Stock options [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | ||
Total outstanding at the beginning of the period (in shares) | 373,387 | |
Granted to employees (in shares) | 338,923 | 0 |
Exercised (in shares) | (8,000) | |
Forfeited (in shares) | (12,108) | |
Expired (in shares) | (6,725) | |
Total outstanding at the end of the period (in shares) | 685,477 | 373,387 |
Total exercisable at the end of the period (in shares) | 176,180 | |
Weighted Average Exercise Price | ||
Total outstanding at the beginning of the period (in dollars per share) | $ 30.06 | |
Granted to employees (in dollars per share) | 34.48 | |
Exercised (in dollars per share) | 8.41 | |
Forfeited (in dollars per share) | 34.48 | |
Expired (in dollars per share) | 24.39 | |
Total outstanding at the end of the period (in dollars per share) | 32.48 | $ 30.06 |
Total exercisable at the end of the period (in dollars per share) | $ 26.20 | |
Total Outstanding, End of Period | $ 10 | $ 1 |
Total exercisable, End of Period | $ 4 | |
Weighted Average Remaining Contractual Term | ||
Total outstanding at the end of the period | 8 years 1 month 24 days | 8 years 14 days |
Total exercisable at the end of the period | 6 years 3 months 25 days |
Stock-Based Compensation (Sum_3
Stock-Based Compensation (Summary Of RSU/Performance Activity) (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
RSU [Member] | |||
RSUs | |||
Total outstanding at the beginning of the period (in shares) | 250,014 | 221,490 | |
Vested (in shares) | (24,388) | (100,939) | |
Forfeited (in shares) | (4,136) | (28,098) | |
Total outstanding at the end of the period (in shares) | 221,490 | 92,453 | 221,490 |
Performance Shares [Member] | |||
RSUs | |||
Total outstanding at the beginning of the period (in shares) | |||
Granted to employees (in shares) | 149,654 | ||
Total outstanding at the end of the period (in shares) | 149,654 | ||
Weighted Average Grant Date Fair Value | |||
Granted to employees (in dollars per share) | $ 30.01 | ||
Total outstanding at the end of the period (in dollars per share) | $ 30.01 | ||
Omnibus Incentive Plan [Member] | RSU [Member] | |||
RSUs | |||
Total outstanding at the beginning of the period (in shares) | 161,539 | ||
Granted to employees (in shares) | 260,237 | 29,178 | |
Vested (in shares) | (88,200) | ||
Forfeited (in shares) | (10,582) | ||
Total outstanding at the end of the period (in shares) | 161,539 | 322,994 | 161,539 |
Weighted Average Grant Date Fair Value | |||
Total outstanding at the beginning of the period (in dollars per share) | $ 39.27 | ||
Granted to employees (in dollars per share) | 35.64 | $ 29.13 | |
Vested (in dollars per share) | 37.81 | ||
Forfeited (in dollars per share) | 36.80 | ||
Total outstanding at the end of the period (in dollars per share) | $ 39.27 | $ 36.96 | $ 39.27 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Benefit Plans [Abstract] | |||
Discretionary contributions to qualified profit sharing and non qualified deferred compensation plan | $ 3 | $ 3 | $ 2 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($) | Aug. 16, 2018USD ($) | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 250,000,000 | |
Credit Facilities [Member] | Alternative Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing margin (as a percent) | 1.50% | |
Credit Facilities [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing margin (as a percent) | 2.50% | |
Term Loan Facility Maturing In 2025 [Member] | Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Face amount of debt instrument | 650,000,000 | |
Facility maturity date | Aug. 16, 2025 | |
Revolving Credit Facility Maturing In 2023 [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Facility maturity date | Aug. 16, 2023 | |
Maximum borrowing capacity | $ 250,000,000 | |
Consolidated First Lien Leverage Ratio | 3.50 | |
Threshold percentage included in financial covenant | 30.00% | |
Revolving Credit Facility Maturing In 2023 [Member] | Standby Letters of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 25,000,000 | |
2026 Notes [Member] | Loans Payable [Member] | ||
Debt Instrument [Line Items] | ||
Face amount of debt instrument | $ 350,000,000 | |
Facility maturity date | Aug. 15, 2026 | |
Fixed interest rate per annum | 6.75% | |
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 100.00% | |
Debt Instrument, Redemption Price, Percentage | 40.00% | |
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed, If Triggering Event Occurs | 101.00% | |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Five | $ 7,000,000 | |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Four | 7,000,000 | |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Three | 7,000,000 | |
Long-term Debt and Capital Lease Obligations, Maturities, Repayments of Principal in Year Two | 7,000,000 | |
Long-term Debt and Capital Lease Obligations, Repayments of Principal in Next Twelve Months | 7,000,000 | |
Interest rate swap contracts [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 350,000,000 | |
Weighted Average Fixed Rate (as a percent) | 3.0865% | |
Derivative, Basis Spread on Variable Rate | 2.50% | |
Interest rate swap contracts [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Fixed Rate (as a percent) | 0.00% |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Long-term debt [Line Items] | |||
Less current portion | $ (7) | $ (7) | |
Total long-term debt | 973 | 977 | |
Term Loan Facility Maturing In 2025 [Member] | Secured Debt [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [1] | 634 | 639 |
Unamortized debt issuance costs | 7 | 8 | |
Unamortized original issue discount | 1 | 2 | |
2026 Notes [Member] | Loans Payable [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [2] | 345 | 344 |
Unamortized debt issuance costs | 5 | 6 | |
Other [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | $ 1 | $ 1 | |
[1] | As of December 31, 2019 and 2018, presented net of $ 7 million and $ 8 million, respectively, in unamortized debt issuance costs and $ 1 million and $ 2 million, respectively, in unamortized original issue discount paid. | ||
[2] | As of December 31, 2019 and 2018, presented net of $ 5 million and $ 6 million, respectively, in unamortized debt issuance costs. |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Narrative) (Details) | Aug. 16, 2018USD ($) |
Loans Payable [Member] | 2026 Notes [Member] | |
Cash paid for or (received from): | |
Face amount of debt instrument | $ 350,000,000 |
Secured Debt [Member] | Term Loan Facility Maturing In 2025 [Member] | |
Cash paid for or (received from): | |
Face amount of debt instrument | $ 650,000,000 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information (Schedule Of Supplemental Information Relating To The Accompanying Condensed Consolidated Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash paid for or (received from): | ||||
Interest expense | $ 59 | $ 13 | ||
Income tax payments, net of refunds | [1] | 52 | ||
Interest and dividend income | $ (6) | $ (1) | ||
[1] | Prior to the Spin-off, all income tax payments and refunds were paid and received by ServiceMaster on our behalf. |
Cash and Marketable Securitie_2
Cash and Marketable Securities (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash and Marketable Securities [Abstract] | |||
Amortized cost of securities | $ 7,000,000 | $ 9,000,000 | |
Fair value of securities | 7,000,000 | 9,000,000 | |
Marketable Securities, Realized Gain (Loss) | 0 | 0 | |
Impairment charges due to declines in the vale of debt securities | 0 | 0 | $ 0 |
Unrealized losses on marketable securities | $ 0 | $ 0 |
Cash and Marketable Securitie_3
Cash and Marketable Securities (Summary Of Proceeds And Maturities Of Available-for-sale Securities) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash and Marketable Securities [Abstract] | |||
Proceeds from sale of securities | $ 17 | $ 12 | |
Maturities of securities | $ 9 | $ 15 | $ 36 |
Comprehensive Income (Loss) (Su
Comprehensive Income (Loss) (Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | $ (9) | ||
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | (18) | $ (12) | |
Tax provision (benefit) | (4) | (3) | |
After-tax amount | (14) | (10) | |
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | 2 | |
Net current period other comprehensive income (loss) | (12) | (9) | |
Balance at the end of period | (21) | (9) | |
Unrealized Loss on Derivatives [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at the beginning of period | (9) | ||
Other comprehensive income (loss) before reclassifications: | |||
Pre-tax amount | (18) | (12) | |
Tax provision (benefit) | (4) | (3) | |
After-tax amount | (14) | (10) | |
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | 2 | |
Net current period other comprehensive income (loss) | (12) | (9) | |
Balance at the end of period | $ (21) | $ (9) | |
[1] | Amounts are net of tax. See reclassifications out of AOCI below for further details. |
Comprehensive Income (Loss) (Sc
Comprehensive Income (Loss) (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | $ (62) | $ (23) | $ (1) |
Interest and net investment income | 6 | 2 | 2 |
Provision for income taxes | (51) | (42) | (60) |
Net Income | 153 | $ 125 | $ 160 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Net Income | (2) | ||
Unrealized Loss on Derivatives [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | (3) | ||
Provision for income taxes | 1 | ||
Net Income | $ (2) |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Derivative Financial Instruments [Abstract] | |
Unrealized hedging loss | $ 4 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | ||
Carrying amount of total debt | $ 980 | $ 984 |
Fair value of total debt | 1,031 | 958 |
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | 0 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | $ 0 | $ 0 |
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 | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 7 | $ 9 |
Total financial liabilities | 27 | 12 |
Carrying Value [Member] | Investment In Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 7 | 9 |
Carrying Value [Member] | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 5 | 2 |
Carrying Value [Member] | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 22 | 10 |
Estimated Fair Value [Member] | Quoted Price In Active Markets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 7 | 9 |
Estimated Fair Value [Member] | Quoted Price In Active Markets (Level 1) [Member] | Investment In Marketable Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 7 | 9 |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 27 | 12 |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 5 | 2 |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | $ 22 | $ 10 |
Capital Stock (Details)
Capital Stock (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 01, 2018 |
Capital Stock [Abstract] | |||
Common stock registered for offering and sale | 2,000,000,000 | 2,000,000,000 | |
Common stock, shares issued (in shares) | 85,309,260 | 84,545,152 | |
Shares of common stock outstanding | 85,309,260 | 84,545,152 | 84,515,619 |
Earnings Per Share (Schedule Of
Earnings Per Share (Schedule Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 01, 2018 | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income | $ 153 | $ 125 | $ 160 | ||
Weighted-average common shares outstanding | [1] | 84,700,000 | 84,500,000 | 84,500,000 | |
Weighted average common shares outstanding - assuming dilution | 84,900,000 | 84,700,000 | 84,500,000 | ||
Basic earnings per share (in dollars per share) | $ 1.81 | $ 1.47 | $ 1.90 | ||
Diluted earnings per share (in dollars per share) | $ 1.80 | $ 1.47 | $ 1.90 | ||
Shares of common stock outstanding | 85,309,260 | 84,545,152 | 84,515,619 | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 400,000 | 100,000 | |||
RSU [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Effect of dilutive securities | 100,000 | 100,000 | |||
Stock options [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Effect of dilutive securities | [2] | 100,000 | |||
[1] | For periods prior to the Spin-off, earnings per share was calculated based on the 84,515,619 shares of Frontdoor stock that were outstanding at the date of distribution. | ||||
[2] | Options to purchase 0.4 million and 0.1 million shares for the years ended December 31, 2019 and 2018, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Schedule I frontdoor, inc Paren
Schedule I frontdoor, inc Parent Company Only (Condensed Statements of Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Income Statements, Captions [Line Items] | |||
Revenue | $ 1,365 | $ 1,258 | $ 1,157 |
Interest expense | 62 | 23 | 1 |
Interest and net investment income | (6) | (2) | (2) |
Income before Income Taxes | 204 | 166 | 220 |
Income tax benefit | 51 | 42 | 60 |
Net Income | 153 | 125 | 160 |
Total Comprehensive Income | 141 | 116 | $ 160 |
Parent Company [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Revenue | |||
Interest expense | 62 | 22 | |
Interest and net investment income | (1) | ||
Income before Income Taxes | (61) | (22) | |
Income tax benefit | (4) | (5) | |
Net Loss from Operations | (58) | (18) | |
Equity in earnings of subsidiaries (net of tax) | 211 | 34 | |
Net Income | 153 | 17 | |
Total Comprehensive Income | $ 141 | $ 8 |
Schedule I frontdoor, inc Par_2
Schedule I frontdoor, inc Parent Company Only (Condensed Balance Sheets) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 428 | $ 296 | $ 282 | $ 168 |
Total Current Assets | 461 | 330 | ||
Other assets | 11 | 10 | ||
Total Assets | 1,250 | 1,041 | ||
Interest payable | 9 | 9 | ||
Other | 29 | 26 | ||
Current portion of long-term debt | 7 | 7 | ||
Total Current Liabilities | 364 | 345 | ||
Long-Term Debt | 973 | 977 | ||
Other long-term obligations | 27 | 24 | ||
Total Other Long-Term Liabilities | 92 | 63 | ||
Stockholders' equity | (179) | (344) | 661 | $ 560 |
Total Liabilities and Shareholders' Equity | 1,250 | 1,041 | ||
Parent Company [Member] | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 132 | 55 | ||
Other current assets | 3 | |||
Total Current Assets | 132 | 58 | ||
Investments in subsidiaries | 785 | 601 | ||
Deferred taxes | 6 | 3 | ||
Other assets | 5 | 1 | ||
Total Assets | 929 | 663 | ||
Interest payable | 9 | 9 | ||
Other | 11 | 2 | ||
Current portion of long-term debt | 7 | 7 | ||
Total Current Liabilities | 27 | 18 | ||
Long-Term Debt | 972 | 977 | ||
Due to Subsidiaries | 87 | 2 | ||
Other long-term obligations | 22 | 10 | ||
Total Other Long-Term Liabilities | 22 | 10 | ||
Stockholders' equity | (179) | (344) | ||
Total Liabilities and Shareholders' Equity | $ 929 | $ 663 |
Schedule I frontdoor, inc Par_3
Schedule I frontdoor, inc Parent Company Only (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Cash and Cash Equivalents at Beginning of Period | $ 296 | $ 282 | $ 168 | |
Net Cash Provided from Operating Activities | 200 | 189 | 194 | |
Business acquisitions, net of cash acquired | [1] | (38) | ||
Other investing activities | (4) | |||
Net Cash Used for Investing Activities | (61) | (10) | (11) | |
Dividend paid to ServiceMaster | (137) | (63) | ||
Discount paid on issuance of debt | (2) | |||
Debt issuance costs paid | (16) | |||
Net Cash Used for Financing Activities | (7) | (165) | (68) | |
Cash Increase During the Period | 132 | 14 | 114 | |
Cash and Cash Equivalents at End of Period | 428 | 296 | 282 | |
Parent Company [Member] | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Cash and Cash Equivalents at Beginning of Period | 55 | |||
Net Cash Provided from Operating Activities | 38 | 159 | ||
Business acquisitions, net of cash acquired | (35) | |||
Other investing activities | (4) | |||
Net Cash Used for Investing Activities | (39) | |||
Payments of debt | (7) | (2) | ||
Net transfers to Parent Company | 85 | 4 | ||
Contribution from ServiceMaster | 81 | |||
Dividend paid to ServiceMaster | (169) | |||
Discount paid on issuance of debt | (2) | |||
Debt issuance costs paid | (16) | |||
Net Cash Used for Financing Activities | 78 | (104) | ||
Cash Increase During the Period | 77 | 55 | ||
Cash and Cash Equivalents at End of Period | $ 132 | $ 55 | ||
[1] | Amounts presented net of $ 1 million of cash acquired. |
Schedule I frontdoor, inc Par_4
Schedule I frontdoor, inc Parent Company Only (Notes To Parent Only) (Details) - USD ($) | Dec. 04, 2019 | Dec. 31, 2019 | Oct. 24, 2018 | Aug. 16, 2018 |
Condensed Financial Statements, Captions [Line Items] | ||||
Net purchase price | $ 57,000,000 | |||
Replacement equity awards | $ 19,000,000 | |||
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Threshold For Restricted Net Assets Of Subsidiaries | 25.00% | |||
Aggregate notional amount | $ 350,000,000 | |||
Term Loan Facility Maturing In 2025 [Member] | Secured Debt [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Face amount of debt instrument | $ 650,000,000 | |||
2026 Notes [Member] | Loans Payable [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Face amount of debt instrument | $ 350,000,000 | |||
Streem [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net purchase price | $ 55,000,000 | |||
Net cash paid | 36,000,000 | |||
Replacement equity awards | 19,000,000 | |||
Streem [Member] | Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net purchase price | 55,000,000 | |||
Net cash paid | 36,000,000 | |||
Replacement equity awards | $ 19,000,000 |
Schedule II Valuation And Qua_2
Schedule II Valuation And Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Allowance for doubtful accounts, Accounts receivable [Member] | ||||
Allowance for doubtful accounts | ||||
Balance at Beginning of Period | $ 2 | $ 1 | $ 2 | |
Additions Charged to Costs and Expenses | 16 | 12 | 11 | |
Deductions | [1] | 15 | 12 | 11 |
Balance at End of Period | 2 | 2 | $ 1 | |
Income tax valuation allowance [Member] | ||||
Allowance for doubtful accounts | ||||
Balance at Beginning of Period | 1 | |||
Additions Charged to Costs and Expenses | 1 | 1 | ||
Balance at End of Period | $ 2 | $ 1 | ||
[1] | Deductions in the allowance for doubtful accounts for accounts receivable reflect write-offs of uncollectible accounts. Deductions for the income tax valuation allowance in 2019, 2018 and 2017 are primarily attributable to the reduction of net operating loss carryforwards and other deferred tax assets related to the uncertainty of future taxable income in certain jurisdictions. |