Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | frontdoor, inc. | |
Entity Central Index Key | 0001727263 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 84,633,516 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ftdr | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated and Combined Statements of Operations and Comprehensive Income [Abstract] | ||
Revenue | $ 271 | $ 247 |
Cost of services rendered | 143 | 134 |
Gross Profit | 128 | 113 |
Selling and administrative expenses | 89 | 81 |
Depreciation and amortization expense | 6 | 4 |
Restructuring charges | 0 | 2 |
Spin-off charges | 1 | 7 |
Interest expense | 16 | 0 |
Interest income from affiliate | 0 | (1) |
Interest and net investment income | (1) | (1) |
Income before Income Taxes | 18 | 18 |
Provision for income taxes | 5 | 5 |
Net Income | 13 | 13 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||
Net unrealized loss on derivative instruments | (5) | 0 |
Total Comprehensive Income | $ 8 | $ 13 |
Earnings per Share: | ||
Basic | $ 0.15 | $ 0.16 |
Diluted | $ 0.15 | $ 0.16 |
Weighted-average Common Shares Outstanding: | ||
Basic | 84.6 | 84.5 |
Diluted | 84.7 | 84.5 |
Condensed Consolidated and Co_2
Condensed Consolidated and Combined Statements of Financial Position - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 341 | $ 296 |
Marketable securities | 7 | 9 |
Receivables, less allowance of $2 in each period | 8 | 12 |
Prepaid expenses and other assets | 13 | 13 |
Total Current Assets | 369 | 330 |
Other Assets: | ||
Property and equipment, net | 48 | 47 |
Goodwill | 476 | 476 |
Intangible assets, net | 156 | 158 |
Operating lease right-of-use assets | 18 | 0 |
Deferred customer acquisition costs | 20 | 21 |
Other assets | 12 | 10 |
Total Assets | 1,097 | 1,041 |
Current Liabilities: | ||
Accounts payable | 48 | 41 |
Accrued liabilities: | ||
Payroll and related expenses | 8 | 10 |
Home service plan claims | 61 | 67 |
Interest payable | 4 | 9 |
Other | 28 | 26 |
Deferred revenue | 219 | 185 |
Current portion of long-term debt | 7 | 7 |
Total Current Liabilities | 374 | 345 |
Long-Term Debt | 976 | 977 |
Other Long-Term Liabilities: | ||
Deferred taxes | 38 | 39 |
Operating lease liabilities | 21 | 0 |
Other long-term obligations | 22 | 24 |
Total Other Long-Term Liabilities | 80 | 63 |
Commitments and Contingencies (Note 9) | ||
Shareholders' Equity: | ||
Common stock, $.01 par value; 2,000,000,000 shares authorized; 84,617,424 shares issued and outstanding at March 31, 2019 and 84,545,152 shares issued and outstanding at December 31, 2018. | 1 | 1 |
Additional paid-in capital | 3 | 1 |
Accumulated deficit | (323) | (336) |
Accumulated other comprehensive loss | (14) | (9) |
Total Deficit | (334) | (344) |
Total Liabilities and Shareholders' Equity | $ 1,097 | $ 1,041 |
Condensed Consolidated and Co_3
Condensed Consolidated and Combined Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Condensed Consolidated and Combined 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) | 84,617,424 | 84,545,152 |
Common stock, shares outstanding (in shares) | 84,617,424 | 84,545,152 |
Condensed Consolidated and Co_4
Condensed Consolidated and Combined Statements of Changes in (Deficit) Equity - USD ($) $ 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, 2017 | $ 661 | |||||
Net income | 13 | $ 13 | ||||
Stock-based employee compensation | 1 | |||||
Net transfers to Parent | (34) | |||||
Other comprehensive loss, net of tax | 0 | |||||
Balance at end of period at Mar. 31, 2018 | $ 642 | 642 | ||||
Balance at beginning of period at Dec. 31, 2018 | $ 1 | $ 1 | $ (336) | $ (9) | (344) | |
Net income | 13 | 13 | ||||
Stock-based employee compensation | 2 | |||||
Other comprehensive loss, net of tax | (5) | (5) | ||||
Balance at end of period at Mar. 31, 2019 | $ 1 | $ 3 | $ (323) | $ (14) | $ (334) |
Condensed Consolidated and Co_5
Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated and Combined Statements of Cash Flows [Abstract] | ||
Cash and Cash Equivalents at Beginning of Period | $ 296 | $ 282 |
Cash Flows from Operating Activities: | ||
Net Income | 13 | 13 |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Depreciation and amortization expense | 6 | 4 |
Deferred income tax provision | 0 | 3 |
Stock-based compensation expense | 2 | 1 |
Restructuring charges | 0 | 2 |
Payments for restructuring charges | 0 | (3) |
Spin-off charges | 1 | 7 |
Payments for spin-off charges | (1) | (3) |
Other | 1 | 0 |
Change in working capital, net of acquisitions: | ||
Receivables | 4 | 7 |
Prepaid expenses and other current assets | 1 | 1 |
Accounts payable | 8 | (2) |
Deferred revenue | 34 | 35 |
Accrued liabilities | (10) | (17) |
Accrued interest payable | (6) | 0 |
Current income taxes | (1) | 0 |
Net Cash Provided from Operating Activities | 52 | 49 |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (4) | (5) |
Purchases of available-for-sale securities | 0 | (9) |
Sales and maturities of available-for-sale securities | 3 | 10 |
Other investing activities | (3) | 0 |
Net Cash Used for Investing Activities | (5) | (5) |
Cash Flows from Financing Activities: | ||
Payments of debt and capital lease obligations | (2) | 0 |
Net transfers to Parent | 0 | (37) |
Net Cash Used for Financing Activities | (2) | (37) |
Cash Increase During the Period | 45 | 8 |
Cash and Cash Equivalents at End of Period | $ 341 | $ 290 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation References in this Quarterly Report on Form 10-Q to “Frontdoor,” “we,” “our,” or “us” refer to frontdoor, inc. and all of its subsidiaries. Frontdoor is a Delaware corporation with its principal executive offices in Memphis, Tennessee. Certain amounts presented in the tables in this report are subject to rounding adjustments and, as a result, the totals in such tables may not sum. 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. We serve customers across all 50 states and the District of Columbia. On October 1, 2018, ServiceMaster completed the spin-off of its businesses operated under the American Home Shield, HSA, OneGuard and Landmark brand names (the “Separated Business”) into a stand-alone publicly traded company (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 % 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 10 to the accompanying condensed 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. 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 condensed 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 condensed 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. The accompanying condensed 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 condensed 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; information 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 10 to the accompanying condensed 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 condensed consolidated and combined financial statements for additional information. We recommend that the accompanying condensed consolidated and combined financial statements be read in conjunction with the audited consolidated and combined financial statements and the notes thereto included in our 2018 Form 10-K. The accompanying condensed consolidated and combined financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for any interim period are not indicative of the results that might be achieved for a full year. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Our significant accounting policies are described in Note 2 to the audited consolidated and combined financial statements included in our 2018 Form 10-K. There have been no material changes to the significant accounting policies for the three months ended March 31, 2019, other than the adoption of ASC 842, which became effective January 1, 2019. Leases We determine if an arrangement is a lease at inception. We recognize a right-of-use (“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 condensed consolidated and combined financial statements for information related to our leases. Adoption of New Accounting Standards In February 201 6, the FASB issued ASU 2016-02, which is the final standard on accounting for leases. While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The most significant change for lessees is the requirement under the new guidance to recognize 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 12 months or less. This standard had a material impact on our condensed consolidated statements of financial position but did not have an impact on our condensed consolidated and combined statements of operations and comprehensive income or condensed consolidated and combined statements of cash flows. The most significant impact was the recognition of ROU assets and lease liabilities of approximately $ 24 million for operating leases, while our accounting for finance leases remained unchanged. Accounting Standards Issued but Not Yet Effective We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not expect the future adoption of any such pronouncements to have a material impact on our financial condition or results of operations. |
Revenue
Revenue | 3 Months Ended |
Mar. 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. We regularly review our estimates of claims costs and adjust the 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: ___ Three Months Ended March 31, (In millions) 2019 2018 Renewals $ 182 $ 162 Real estate 54 53 Direct-to-consumer 33 31 Other 1 1 Total $ 271 $ 247 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 commissions, and recognize the expense on a straight-line basis, as adjusted to match the timing of revenue recognition, over the expected customer relationship period. As of March 31, 2019 and December 31, 2018, deferred customer acquisition costs were $ 20 million and $ 21 million, respectively. For each of the three months ended March 31, 2019 and 2018, amortization of these deferred acquisition costs was $ 4 million. There was no impairment loss 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 receivables are recorded within Receivables, less allowances, in the accompanying condensed consolidated statements of financial position. Additionally, when revenue is recognized on monthly-pay customers before being billed, a contract asset is created. 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 $ 219 million and $ 185 million as of March 31, 2019 and December 31, 2018, respectively, and as of March 31, 2019, includes a net contract liability of $ 40 million related to the recognition of monthly pay-customer revenue on an other-than-straight-line basis to match the timing of cost recognition. Changes in deferred revenue for the three months ended March 31, 2019, were as follows: (In millions) Deferred revenue Balance, December 31, 2018 $ 185 Deferral of revenue 116 Recognition of deferred revenue ( 82 ) Balance, March 31, 2019 $ 219 There was approximately $ 70 million of revenue recognized in the three months ended March 31, 2019 that was included in the deferred revenue balance as of December 31, 2018. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 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. The balance of goodwill was $ 476 million as of March 31, 2019 and December 31, 2018. There were no goodwill or trade name impairment charges recorded in the three months ended March 31, 2019 and 2018. There were no accumulated impairment losses recorded as of March 31, 2019 and December 31, 2018. The table below summarizes the other intangible asset balances: As of March 31, 2019 As of December 31, 2018 (In millions) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trade name (1) $ 140 $ — $ 140 $ 140 $ — $ 140 Customer relationships 173 ( 166 ) 6 173 ( 165 ) 7 Other 32 ( 23 ) 9 32 ( 22 ) 10 Total $ 345 $ ( 189 ) $ 156 $ 345 $ ( 187 ) $ 158 ___________________________________ (1) Not subject to amortization. Amortization expense was $ 2 million for each of the three months ended March 31, 2019 and 2018. The following table outlines expected amortization expense for existing intangible assets for the remainder of 2019 and future years: (In millions) 2019 (remainder) $ 4 2020 5 2021 4 2022 1 2023 1 Total $ 15 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 5. Leases We have operating and finance leases for corporate offices, call centers and vehicles. Our leases have remaining lease terms of one year to 16 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. The weighted average remaining lease term and weighted average discount rate is as follows: As of March 31, 2019 Weighted average remaining lease term (years): Operating leases 11 Finance leases 3 Weighted average discount rate: Operating leases 6.2 % Finance leases 5.3 % We recognized operating lease expense, including allocated corporate rent for the period prior to the Spin-off, of $ 1 million for each of the three months ended March 31, 2019 and 2018. These expenses are included in Selling and administrative expenses in the accompanying condensed consolidated and combined statements of operations and comprehensive income. Relating to our finance leases, we recognized amortization of ROU assets and interest on lease liabilities totaling less than $ 1 million for each of the three months ended March 31, 2019 and 2018. These expenses are included in Depreciation and amortization expense and Interest expense in the accompanying condensed consolidated and combined statements of operations and comprehensive income. Cash flows from operating activities related to operating leases and finance leases for each of the three months ended March 31, 2019 and 2018 were $ 1 million and less than $ 1 million, respectively, and are reflected in the accompanying condensed consolidated and combined statements of cash flows. Cash flows from financing activities related to finance leases of less than $ 1 million for each of the three months ended March 31, 2019 and 2018 are reflected in the accompanying condensed consolidated and combined statements of cash flows. 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 condensed 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 leases is as follows: (In millions) As of March 31, 2019 Operating leases: Operating lease right-of-use assets $ 23 Less lease incentives ( 5 ) Operating lease right-of-use assets, net $ 18 Other accrued liabilities $ 2 Operating lease liabilities 21 Total operating lease liabilities $ 23 Finance leases: Property and equipment, net $ 1 Current portion of long-term debt $ — Long-term debt 1 Total finance lease liabilities $ 1 The following table presents maturities of our lease liabilities as of March 31, 2019. Operating Finance (In millions) Leases Leases 2019 (remainder) $ 3 $ — 2020 4 — 2021 4 — 2022 3 — 2023 3 — 2024 2 — Thereafter 13 — Total lease payments 32 1 Less imputed interest ( 9 ) — Total $ 23 $ 1 As previously disclosed, based on leases in place as of December 31, 2018, future long-term noncancelable operating lease payments were approximately $ 4 million in 2019, $ 4 million in 2020, $ 4 million in 2021, $ 3 million in 2022, $ 3 million in 2023 and $ 12 million in 2024 and thereafter. These amounts exclude the impact of lease incentives of $ 5 million. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 6. Income Taxes As previously discussed, although we were historically included in consolidated income tax returns of ServiceMaster, our income taxes 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. As required by ASC 740, we compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items. Our estimated tax rate is adjusted each quarter in accordance with ASC 740. The effective tax rate on income was 26.9 percent and 26.6 percent for the three months ended March 31, 2019 and 2018, respectively. We are subject to taxation in the United States and various states. Pursuant to the terms of the Tax Matters Agreement, we are not subject to federal examination by the Internal Revenue Service 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 2014. All of our income before income taxes for the three months ended March 31, 2019 and 2018 was generated in the United States. Our policy is to recognize potential interest and penalties related to our tax positions within the tax provision. Total interest and penalties included in the accompanying condensed consolidated and combined statements of operations and comprehensive income are immaterial. |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 7. Restructuring Charges We incurred restructuring charges of less than $ 1 million (less than $ 1 million, net of tax) and $ 2 million ($ 2 million, net of tax) for the three months ended March 31, 2019 and 2018, respectively. For the three months ended March 31, 2019, restructuring charges comprised severance costs. For the three months ended March 31, 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. The pre-tax charges discussed above are reported in “Restructuring charges” in the accompanying condensed 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 in the accompanying condensed consolidated statements of financial position, is presented as follows: (In millions) Accrued Restructuring Charges Balance as of December 31, 2018 $ — Costs incurred — Costs paid or otherwise settled — Balance as of March 31, 2019 $ — Balance as of December 31, 2017 $ 2 Costs incurred 2 Costs paid or otherwise settled ( 3 ) Balance as of March 31, 2018 $ 2 |
Spin-Off Charges
Spin-Off Charges | 3 Months Ended |
Mar. 31, 2019 | |
Spin-Off Charges [Abstract] | |
Spin-Off Charges | Note 8. Spin-off Charges We incurred Spin-off charges of $ 1 million ($ 1 million, net of tax) and $ 7 million ($ 6 million, net of tax) for the three months ended March 31, 2019 and 2018, respectively. These charges include nonrecurring costs incurred to evaluate, plan and execute the Spin-off. For the three months ended March 31, 2019, Spin-off charges were primarily comprised of third-party consulting fees. For the three months ended March 31, 2018, Spin-off charges primarily comprised $ 6 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 condensed 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 condensed consolidated statements of financial position, is presented as follows: (In millions) Accrued Spin-off Charges Balance as of December 31, 2018 $ — Costs incurred 1 Costs paid or otherwise settled ( 1 ) Balance as of March 31, 2019 $ — Balance as of December 31, 2017 $ 1 Costs incurred (1) 6 Costs paid or otherwise settled ( 3 ) Balance as of March 31, 2018 $ 3 ___________________________________ (1) An additional $ 2 million of Spin-off charges were pre-paid in 2017 and subsequently expensed during the three months ended March 31, 2018. For each of the three months ended March 31, 2019 and 2018, we incurred incremental capital expenditures required to effect the Spin-off of $ 2 million, principally reflecting costs to replicate information technology systems historically shared with ServiceMaster. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 9. Commitments and Contingencies Accruals for home service plan claims are made based on claims experience and actuarial projections. Accruals are established based on estimates of the ultimate cost to settle claims. Home service plan claims take about 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. Our actuary performs 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 and adjust the estimates when appropriate. We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly 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 | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10. 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 condensed 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 condensed consolidated and combined financial statements; however, the expenses reflected in the accompanying condensed 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 condensed consolidated and combined financial statements may not be indicative of related expenses that we could incur in the future. Corporate expenses The accompanying condensed 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 condensed 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. For the three months ended March 31, 2018, directly charged corporate expenses of $ 4 million and allocated corporate expenses of $ 12 million are included in Selling and administrative expenses in the accompanying condensed consolidated and combined statements of operations. 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. For the three months ended March 31, 2018, the royalty fee was less than $ 1 million. 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 condensed consolidated and combined statements of operations and comprehensive income in the amount of $ 2 million for the three months ended March 31, 2018. 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 condensed consolidated and combined statements of operations and comprehensive income in the amount of $ 1 million for the three months ended March 31, 2018. 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 information 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. Stockholder 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 for the three months ended March 31, 2019 was less than $ 1 million. At March 31, 2019, the Transition Services Agreement was substantially complete, and less than $ 1 million was due to ServiceMaster for services performed under this agreement. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 11. Stock-Based Compensation We recognized stock-based compensation expense of $ 2 million ($ 1 million, net of tax) and $ 1 million ($ 1 million, net of tax) for the three months ended March 31, 2019 and 2018, respectively. These charges are included in Selling and administrative expenses in the accompanying condensed consolidated and combined statements of operations and comprehensive income. As of March 31, 2019, there was $ 22 million of total unrecognized compensation costs related to unvested stock options, restricted stock units (“RSUs”) and performance shares granted under the Omnibus Plan. These remaining costs are expected to be recognized over a weighted-average period of 3.61 years. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 12. Long-Term Debt Long-term debt is summarized in the following table: As of March 31, December 31, (In millions) 2019 2018 Term Loan Facility maturing in 2025 (1) $ 638 $ 639 Revolving Credit Facility maturing in 2023 — — 2026 Notes (2) 344 344 Other 1 1 Less current portion ( 7 ) ( 7 ) Total long-term debt $ 976 $ 977 ___________________________________ (1) As of March 31, 2019 and December 31, 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 March 31, 2019 and December 31, 2018, presented net of $ 6 million in unamortized debt issuance costs. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 13. Supplemental Cash Flow Information Supplemental information relating to the accompanying condensed consolidated and combined statements of cash flows is presented in the following table: Three Months Ended March 31, (In millions) 2019 2018 Cash paid for or (received from): Interest expense $ 21 $ — Income tax payments, net of refunds (1) 6 — Interest and dividend income ( 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 | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Marketable Securities [Abstract] | |
Cash and Marketable Securities | Note 14. 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 condensed consolidated statements of financial position. As of March 31, 2019 and December 31, 2018, marketable securities primarily consisted of treasury bills with maturities of less than one year and are classified as available-for-sale securities. The amortized cost, fair value and gross unrealized gains and losses of our short-term investments are as follows: Gross Gross Amortized Unrealized Unrealized Fair (In millions) Cost Gains Losses Value Available-for-sale securities, March 31, 2019 Debt securities $ 7 $ — $ — $ 7 Available-for-sale securities, December 31, 2018 Debt securities $ 9 $ — $ — $ 9 There were no unrealized losses which had been in a loss position for more than one year as of March 31, 2019 and December 31, 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 three months ended March 31, 2019 and 2018, there were no gross realized gains or losses resulting from sales of available-for-sale securities. The table below summarizes proceeds and maturities for the periods indicated. Three Months Ended March 31, (In millions) 2019 2018 Proceeds from sale of securities $ — $ 1 Maturities of securities 3 9 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 three months ended March 31, 2019 and 2018. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | Note 15. 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 condensed consolidated and combined statements of operations and comprehensive income and condensed consolidated and combined statements of changes in equity. The following tables summarize the activity in AOCI, net of the related tax effects. Unrealized Gains (Losses) Unrealized on Available Loss -for-Sale (In millions) on Derivatives Securities Total Balance as of December 31, 2018 $ ( 9 ) $ — $ ( 9 ) Other comprehensive income (loss) before reclassifications: Pre-tax amount ( 7 ) — ( 6 ) Tax provision (benefit) ( 1 ) — ( 1 ) After-tax amount ( 5 ) — ( 5 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) — — — Net current period other comprehensive income (loss) ( 5 ) — ( 5 ) Balance as of March 31, 2019 $ ( 14 ) $ — $ ( 14 ) Balance as of December 31, 2017 $ — $ — $ — Net current period other comprehensive income (loss) — — — Balance as of March 31, 2018 $ — $ — $ — ___________________________________ (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 March 31, Consolidated and Combined Statements of (In millions) 2019 2018 Operations and Comprehensive Income Location Loss on interest rate swap contract $ ( 1 ) $ — Interest expense Impact of income taxes — — Provision for income taxes Total reclassifications related to derivatives $ — $ — Total reclassifications for the period $ — $ — |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | Note 16. 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 condensed consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of changes in the fair value attributable to the hedged risks recorded in 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 condensed 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 15 to the accompanying condensed 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 $ 2 million, net of tax, as of March 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 Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurement [Abstract] | |
Fair Value Measurement | Note 17. 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 condensed 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 condensed consolidated and combined statements of operations and comprehensive income. There were no other-than-temporary declines in value for the periods ended March 31, 2019 and 2018. The carrying amount of total debt was $ 983 million and $ 984 million, and the estimated fair value was $ 1,002 million and $ 958 million as of March 31, 2019 and December 31, 2018, respectively. The fair value of our debt is estimated based on available market prices for the same or similar instruments 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 March 31, 2019 and December 31, 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 three months ended March 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 March 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 $ 2 — $ 2 $ — Other long-term obligations 16 — 16 — Total financial liabilities $ 18 $ — $ 18 $ — 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
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 18. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding 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 and performance shares 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: Three Months Ended March 31, (In millions, except per share data) 2019 2018 Net Income $ 13 $ 13 Weighted-average common shares outstanding (1) 84.6 84.5 Effect of dilutive securities: RSUs 0.1 — Stock options (2) — — Weighted-average common shares outstanding - assuming dilution 84.7 84.5 Basic earnings per share $ 0.15 $ 0.16 Diluted earnings per share $ 0.15 $ 0.16 ___________________________________ (1) For the three months ended March 31, 2018, 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 0.2 million shares for the three months ended March 31, 2019 were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Leases | Leases We determine if an arrangement is a lease at inception. We recognize a right-of-use (“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 condensed consolidated and combined financial statements for information related to our leases. |
Newly Issued Accounting Standards | Adoption of New Accounting Standards In February 201 6, the FASB issued ASU 2016-02, which is the final standard on accounting for leases. While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The most significant change for lessees is the requirement under the new guidance to recognize 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 12 months or less. This standard had a material impact on our condensed consolidated statements of financial position but did not have an impact on our condensed consolidated and combined statements of operations and comprehensive income or condensed consolidated and combined statements of cash flows. The most significant impact was the recognition of ROU assets and lease liabilities of approximately $ 24 million for operating leases, while our accounting for finance leases remained unchanged. |
Accounting Standards Issued But Not Yet Effective | Accounting Standards Issued but Not Yet Effective We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not expect the future adoption of any such pronouncements to have a material impact on our financial condition or results of operations. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue [Abstract] | |
Disaggregation of Revenue | ___ Three Months Ended March 31, (In millions) 2019 2018 Renewals $ 182 $ 162 Real estate 54 53 Direct-to-consumer 33 31 Other 1 1 Total $ 271 $ 247 |
Movement In Deferred Revenue | (In millions) Deferred revenue Balance, December 31, 2018 $ 185 Deferral of revenue 116 Recognition of deferred revenue ( 82 ) Balance, March 31, 2019 $ 219 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule Of Other Intangible Asset Balances For Continuing Operations | As of March 31, 2019 As of December 31, 2018 (In millions) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trade name (1) $ 140 $ — $ 140 $ 140 $ — $ 140 Customer relationships 173 ( 166 ) 6 173 ( 165 ) 7 Other 32 ( 23 ) 9 32 ( 22 ) 10 Total $ 345 $ ( 189 ) $ 156 $ 345 $ ( 187 ) $ 158 ___________________________________ (1) Not subject to amortization. |
Schedule Of Expected Amortization Expense For Intangible Assets | (In millions) 2019 (remainder) $ 4 2020 5 2021 4 2022 1 2023 1 Total $ 15 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Weighted Average Remainig Lease Term And Discount Rate | As of March 31, 2019 Weighted average remaining lease term (years): Operating leases 11 Finance leases 3 Weighted average discount rate: Operating leases 6.2 % Finance leases 5.3 % |
Supplemental Balance Sheet Information Related To Leases | (In millions) As of March 31, 2019 Operating leases: Operating lease right-of-use assets $ 23 Less lease incentives ( 5 ) Operating lease right-of-use assets, net $ 18 Other accrued liabilities $ 2 Operating lease liabilities 21 Total operating lease liabilities $ 23 Finance leases: Property and equipment, net $ 1 Current portion of long-term debt $ — Long-term debt 1 Total finance lease liabilities $ 1 |
Maturities Of Lease Liabilities | Operating Finance (In millions) Leases Leases 2019 (remainder) $ 3 $ — 2020 4 — 2021 4 — 2022 3 — 2023 3 — 2024 2 — Thereafter 13 — Total lease payments 32 1 Less imputed interest ( 9 ) — Total $ 23 $ 1 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 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, 2018 $ — Costs incurred — Costs paid or otherwise settled — Balance as of March 31, 2019 $ — Balance as of December 31, 2017 $ 2 Costs incurred 2 Costs paid or otherwise settled ( 3 ) Balance as of March 31, 2018 $ 2 |
Spin-Off Charges (Tables)
Spin-Off Charges (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Spin-Off Charges [Abstract] | |
Reconciliation Of Accrued Spin-off Charges | (In millions) Accrued Spin-off Charges Balance as of December 31, 2018 $ — Costs incurred 1 Costs paid or otherwise settled ( 1 ) Balance as of March 31, 2019 $ — Balance as of December 31, 2017 $ 1 Costs incurred (1) 6 Costs paid or otherwise settled ( 3 ) Balance as of March 31, 2018 $ 3 ___________________________________ (1) An additional $ 2 million of Spin-off charges were pre-paid in 2017 and subsequently expensed during the three months ended March 31, 2018. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | As of March 31, December 31, (In millions) 2019 2018 Term Loan Facility maturing in 2025 (1) $ 638 $ 639 Revolving Credit Facility maturing in 2023 — — 2026 Notes (2) 344 344 Other 1 1 Less current portion ( 7 ) ( 7 ) Total long-term debt $ 976 $ 977 ___________________________________ (1) As of March 31, 2019 and December 31, 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 March 31, 2019 and December 31, 2018, presented net of $ 6 million in unamortized debt issuance costs. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule Of Supplemental Information Relating To The Accompanying Condensed Consolidated Statements Of Cash Flows | Three Months Ended March 31, (In millions) 2019 2018 Cash paid for or (received from): Interest expense $ 21 $ — Income tax payments, net of refunds (1) 6 — Interest and dividend income ( 1 ) — |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Marketable Securities [Abstract] | |
Schedule Of Amortized Cost, Fair Value And Gross Unrealized Gains And Losses Of The Company's Short- And Long-Term Investments | Gross Gross Amortized Unrealized Unrealized Fair (In millions) Cost Gains Losses Value Available-for-sale securities, March 31, 2019 Debt securities $ 7 $ — $ — $ 7 Available-for-sale securities, December 31, 2018 Debt securities $ 9 $ — $ — $ 9 |
Schedule Of Proceeds From Sale Of Securities, Maturities Of Available-for-sale Securities And Gross Realized (Gains) Losses | Three Months Ended March 31, (In millions) 2019 2018 Proceeds from sale of securities $ — $ 1 Maturities of securities 3 9 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss) [Abstract] | |
Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects | Unrealized Gains (Losses) Unrealized on Available Loss -for-Sale (In millions) on Derivatives Securities Total Balance as of December 31, 2018 $ ( 9 ) $ — $ ( 9 ) Other comprehensive income (loss) before reclassifications: Pre-tax amount ( 7 ) — ( 6 ) Tax provision (benefit) ( 1 ) — ( 1 ) After-tax amount ( 5 ) — ( 5 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) — — — Net current period other comprehensive income (loss) ( 5 ) — ( 5 ) Balance as of March 31, 2019 $ ( 14 ) $ — $ ( 14 ) Balance as of December 31, 2017 $ — $ — $ — Net current period other comprehensive income (loss) — — — Balance as of March 31, 2018 $ — $ — $ — |
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) | Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) As of March 31, Consolidated and Combined Statements of (In millions) 2019 2018 Operations and Comprehensive Income Location Loss on interest rate swap contract $ ( 1 ) $ — Interest expense Impact of income taxes — — Provision for income taxes Total reclassifications related to derivatives $ — $ — Total reclassifications for the period $ — $ — |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurement [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 March 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 $ 2 — $ 2 $ — Other long-term obligations 16 — 16 — Total financial liabilities $ 18 $ — $ 18 $ — 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) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule Of Basic And Diluted Earnings Per Share | Three Months Ended March 31, (In millions, except per share data) 2019 2018 Net Income $ 13 $ 13 Weighted-average common shares outstanding (1) 84.6 84.5 Effect of dilutive securities: RSUs 0.1 — Stock options (2) — — Weighted-average common shares outstanding - assuming dilution 84.7 84.5 Basic earnings per share $ 0.15 $ 0.16 Diluted earnings per share $ 0.15 $ 0.16 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | Mar. 20, 2019shares | Oct. 01, 2018 | Mar. 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_3
Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 18,000,000 | $ 0 | |
Operating lease liabilities | $ 23,000,000 | ||
Minimum [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Recognition requirements lease term | 12 months | ||
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 0 | ||
Operating lease right-of-use assets | 24,000,000 | ||
Operating lease liabilities | $ 24,000,000 | ||
Accounting Standards Update 2016-02 [Member] | Maximum [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Recognition requirements lease term | 12 months |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Revenue [Abstract] | ||
Capitalized Contract Cost, Net | $ 20 | $ 21 |
Capitalized Contract Cost, Amortization | 4 | |
Capitalized Contract Cost, Impairment Loss | 0 | |
Deferred revenue | 219 | $ 185 |
Contract With Customer Asset (Liability), Net | 40 | |
Revenue recognized | $ 70 |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reportable segment revenues | $ 271 | $ 247 |
Renewals [Member] | ||
Reportable segment revenues | 182 | 162 |
Real Estate [Member] | ||
Reportable segment revenues | 54 | 53 |
Direct To Consumer [Member] | ||
Reportable segment revenues | 33 | 31 |
Service, Other [Member] | ||
Reportable segment revenues | $ 1 | $ 1 |
Revenue (Movement In Deferred R
Revenue (Movement In Deferred Revenue) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Revenue [Abstract] | |
Balance at beginning of period | $ 185 |
Deferral of revenue | 116 |
Recognition of deferred revenue | (82) |
Balance at end of period | $ 219 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 476,000,000 | $ 476,000,000 | |
Goodwill impairment charges | 0 | $ 0 | |
Accumulated impairment loss | 0 | $ 0 | |
Amortization expense | 2,000,000 | 2,000,000 | |
Trade names [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible asset impairment charges | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Schedule Of Other Intangible Asset Balances For Continuing Operations) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | ||
Gross | $ 345 | $ 345 |
Accumulated Amortization | (189) | (187) |
Net | 156 | 158 |
Customer relationships [Member] | ||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | ||
Gross | 173 | 173 |
Accumulated Amortization | (166) | (165) |
Net | 6 | 7 |
Other [Member] | ||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | ||
Gross | 32 | 32 |
Accumulated Amortization | (23) | (22) |
Net | 9 | 10 |
Trade names [Member] | ||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | ||
Gross | 140 | 140 |
Accumulated Amortization | ||
Net | $ 140 | $ 140 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedule Of Expected Amortization Expense For Intangible Assets) (Details) $ in Millions | Mar. 31, 2019USD ($) |
Goodwill and Intangible Assets [Abstract] | |
2019 (remainder) | $ 4 |
2020 | 5 |
2021 | 4 |
2022 | 1 |
2023 | 1 |
Total | $ 15 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 1 | $ 1 | ||
Operating Lease, Liability | 23 | |||
Operating Lease, Right-of-Use Asset | 18 | $ 0 | ||
Operating cash flows from operating leases | $ 1 | 1 | ||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 4 | |||
Operating Leases, Future Minimum Payments, Due in Two Years | 4 | |||
Operating Leases, Future Minimum Payments, Due in Three Years | 4 | |||
Operating Leases, Future Minimum Payments, Due in Four Years | 3 | |||
Operating Leases, Future Minimum Payments, Due in Five Years | 3 | |||
Operating Leases, Future Minimum Payments, Due Thereafter | 12 | |||
Operating Leases, Lease Incentives | $ 5 | |||
Maximum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Leases, Remaining Lease Term Years | 16 years | |||
Leases, Renewal Term | 5 years | |||
Finance Lease, Right-of-Use Asset, Amortization | $ 1 | 1 | ||
Operating cash flows from finance leases | 1 | 1 | ||
Financing cash flows from finance leases | $ 1 | $ 1 | ||
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) | Mar. 31, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term: Operating leases | 11 years |
Weighted average remaining lease term: Finance leases | 3 years |
Weighted average discount rate: Operating leases | 6.20% |
Weighted average discount rate: Finance leases | 5.30% |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related To Lease) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Operating lease right-of-use assets | $ 23 | |
Less lease incentives | (5) | |
Operating lease right-of-use asset, net | 18 | $ 0 |
Other accrued liabilities | (2) | |
Operating lease liabilities | (21) | 0 |
Total operating lease liabilities | (23) | |
Property and equipment, net | 48 | $ 47 |
Current portion of long-term debt | 0 | |
Long-term debt | 1 | |
Total finance lease liabilities | 1 | |
Finance Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 1 |
Leases (Maturities Of Lease Lia
Leases (Maturities Of Lease Liabilities) (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Operating Leases, 2019 (remainder) | $ 3 |
Operating Leases, 2020 | 4 |
Operating Leases, 2021 | 4 |
Operating Leases, 2022 | 3 |
Operating Leases, 2023 | 3 |
Operating Leases, 2024 | 2 |
Operating Leases, Thereafter | 13 |
Operating Leases, Total lease payments | 32 |
Operating Lease, Less imputed interest | (9) |
Total | 23 |
Finance Leases, 2019 (remainder) | 0 |
Finance Leases, 2020 | 0 |
Finance Leases, 2021 | 0 |
Finance Leases, 2022 | 0 |
Finance Leases, 2023 | 0 |
Finance Leases, 2024 | 0 |
Finance Leases, Thereafter | 0 |
Finance Leases, Total lease payments | 1 |
Finance Lease, Less imputed interest | 0 |
Total | $ 1 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes [Abstract] | ||
Effective tax rate on income from continuing operations (as a percent) | 26.90% | 26.60% |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 0 | $ 2 |
Restructuring charges, net of tax | 2 | |
Other costs | 2 | |
Severance Costs | $ 1 | |
Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1 | |
Restructuring charges, net of tax | $ 1 |
Restructuring Charges (Schedule
Restructuring Charges (Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reconciliation of the beginning and ending balances of accrued restructuring charges | ||
Balance at the beginning of the period | $ 0 | $ 2 |
Costs incurred | 0 | 2 |
Costs paid or otherwise settled | 0 | (3) |
Balance at the end of the period | $ 0 | $ 2 |
Spin-Off Charges (Narrative) (D
Spin-Off Charges (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring charges | $ 0 | $ 2 |
Restructuring charges, net of tax | 2 | |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | ||
Restructuring charges | 1 | 7 |
Restructuring charges, net of tax | 1 | 6 |
Spin-off [Member] | ||
Restructuring charges | 1 | 6 |
Incremental capital expenditures required to effect the spin-off | $ 2 | 2 |
Spin-off [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | Third-Party Consulting Fees [Member] | ||
Restructuring charges | 6 | |
Spin-off [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | Other Incremental Costs [Member] | ||
Restructuring charges | $ 1 |
Spin-Off Charges (Reconciliatio
Spin-Off Charges (Reconciliation Of Accrued Spin-off Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring and Related Cost [Abstract] | ||
Balance at the beginning of the period | $ 0 | $ 2 |
Costs incurred | 0 | 2 |
Costs paid or otherwise settled | 0 | (3) |
Balance at the end of the period | 0 | 2 |
Spin-off [Member] | ||
Restructuring and Related Cost [Abstract] | ||
Balance at the beginning of the period | 0 | 1 |
Costs incurred | 1 | 6 |
Costs paid or otherwise settled | (1) | (3) |
Balance at the end of the period | $ 0 | 3 |
Prepaid Spin-off charges | $ 2 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Related party transactions | ||
Related Party Costs | $ 1 | |
Due to related party | $ 1 | |
Directly Charged Corporate Expenses [Member] | ||
Related party transactions | ||
Corporate expenses | $ 4 | |
Allocated Corporate Expenses [Member] | ||
Related party transactions | ||
Corporate expenses | 12 | |
Health Insurance Coverage Premiums [Member] | ||
Related party transactions | ||
Insurance expense | 2 | |
Risk Management Insurance Policies [Member] | ||
Related party transactions | ||
Insurance expense | $ 1 | |
ServiceMaster [Member] | ||
Related party transactions | ||
Royalty fee as a percent of customer revenues | 0.175% | |
Maximum [Member] | ServiceMaster [Member] | ||
Related party transactions | ||
Royalty expense | $ 1 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | ||
Stock-based compensation expense | $ 2 | $ 1 |
Stock-based compensation expense, net of tax | 1 | $ 1 |
Total unrecognized compensation costs related to non-vested stock options, restricted share units and performance shares | $ 22 | |
Weighted-average period of recognition of stock-based compensation cost | 3 years 7 months 9 days |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Long-term debt [Line Items] | ||
Less current portion | $ (7) | $ (7) |
Total long-term debt | 976 | 977 |
Term Loan Facility Maturing In 2025 [Member] | Secured Debt [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | 638 | 639 |
Unamortized debt issuance costs | 7 | 8 |
Unamortized original issue discount | 1 | 2 |
Revolving Credit Facility Maturing In 2023 [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | 0 | 0 |
2026 Notes [Member] | Loans Payable [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | 344 | 344 |
Unamortized debt issuance costs | 6 | 6 |
Other [Member] | ||
Long-term debt [Line Items] | ||
Long-term debt | $ 1 | $ 1 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Schedule Of Supplemental Information Relating To The Accompanying Condensed Consolidated Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash paid for or (received from): | ||
Interest expense | $ 21 | $ 0 |
Income tax payments, net of refunds | 6 | 0 |
Interest and dividend income | $ (1) | $ 0 |
Cash and Marketable Securitie_2
Cash and Marketable Securities (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash and Marketable Securities [Abstract] | |||
Marketable Securities, Realized Gain (Loss) | $ 0 | $ 0 | |
Impairment charges due to declines in the vale of debt securities | 0 | $ 0 | |
Unrealized losses on marketable securities | $ 0 | $ 0 |
Cash and Marketable Securitie_3
Cash and Marketable Securities (Schedule Of Amortized Cost, Fair Value And Gross Unrealized Gains And Losses Of The Company's Short- And Long-Term Investments) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Cash and Marketable Securities [Abstract] | ||
Amortized cost of debt securities | $ 7 | $ 9 |
Gross unrealized gains on debt securities | 0 | 0 |
Gross unrealized losses on debt securities | 0 | 0 |
Fair value of debt securities | $ 7 | $ 9 |
Cash and Marketable Securitie_4
Cash and Marketable Securities (Schedule Of Proceeds From Sale Of Securities, Maturities Of Available-for-sale Securities And Gross Realized (Gains) Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash and Marketable Securities [Abstract] | ||
Proceeds from sale of securities | $ 0 | $ 1 |
Maturities of securities | $ 3 | $ 9 |
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 | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at the beginning of period | $ (9) | $ 0 |
Other comprehensive income before reclassifications: | ||
Pre-tax amount | (6) | |
Tax provision (benefit) | (1) | |
After-tax amount | (5) | |
Amounts reclassified from accumulated other comprehensive income (loss) | ||
Net current period other comprehensive income (loss) | (5) | 0 |
Balance at the end of period | (14) | 0 |
Unrealized Losses on Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at the beginning of period | (9) | 0 |
Other comprehensive income before reclassifications: | ||
Pre-tax amount | (7) | |
Tax provision (benefit) | (1) | |
After-tax amount | (5) | |
Amounts reclassified from accumulated other comprehensive income (loss) | ||
Net current period other comprehensive income (loss) | (5) | 0 |
Balance at the end of period | (14) | 0 |
Unrealized Gains (Losses) on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at the beginning of period | 0 | 0 |
Other comprehensive income before reclassifications: | ||
Pre-tax amount | 0 | |
Tax provision (benefit) | 0 | |
After-tax amount | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss) | ||
Net current period other comprehensive income (loss) | 0 | 0 |
Balance at the end of period | $ 0 | $ 0 |
Comprehensive Income (Loss) (Sc
Comprehensive Income (Loss) (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense | $ (16) | $ 0 |
Provision for income taxes | (5) | (5) |
Net Income | 13 | 13 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net Income | 0 | 0 |
Unrealized Losses on Derivatives | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense | (1) | 0 |
Provision for income taxes | 0 | 0 |
Net Income | $ 0 | $ 0 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Derivative Financial Instruments [Abstract] | |
Hedging loss in accumulated other comprehensive income expected to be recognized in earnings, net of tax | $ 2 |
Fair Value Measurement (Narrati
Fair Value Measurement (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Measurement [Abstract] | ||
Carrying amount of total debt | $ 983 | $ 984 |
Fair value of total debt | $ 1,002 | $ 958 |
Fair Value Measurement (Schedul
Fair Value Measurement (Schedule Of The Carrying Amount And Estimated Fair Value Of The Company's Financial Instruments That Are Recorded At Fair Value On A Recurring Basis) (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | $ 7 | $ 9 |
Total financial assets | 7 | 9 |
Total financial liabilities | 18 | 12 |
Carrying Value | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 2 | 2 |
Carrying Value | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 16 | 10 |
Estimated Fair Value | Quoted Price In Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 7 | 9 |
Total financial assets | 7 | 9 |
Total financial liabilities | 0 | 0 |
Estimated Fair Value | Quoted Price In Active Markets (Level 1) | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 0 | 0 |
Estimated Fair Value | Quoted Price In Active Markets (Level 1) | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 0 | 0 |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 0 | 0 |
Total financial assets | 0 | 0 |
Total financial liabilities | 18 | 12 |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 2 | 2 |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 16 | 10 |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 0 | 0 |
Total financial assets | 0 | 0 |
Total financial liabilities | 0 | 0 |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | 0 | 0 |
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts | $ 0 | $ 0 |
Earnings Per Share (Schedule Of
Earnings Per Share (Schedule Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Net income | $ 13 | $ 13 | |
Weighted-average common shares outstanding | 84,600,000 | 84,500,000 | |
Weighted average common shares outstanding-assuming dilution | 84,700,000 | 84,500,000 | |
Basic earnings per share (in dollars per share) | $ 0.15 | $ 0.16 | |
Diluted earnings per share (in dollars per share) | $ 0.15 | $ 0.16 | |
Shares of common stock outstanding | 84,617,424 | 84,515,619 | 84,545,152 |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 200,000 | ||
RSU [Member] | |||
Effect of dilutive securities | 100,000 | 0 | |
Stock options [Member] | |||
Effect of dilutive securities | 0 | 0 |