RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Within this investor presentation, ServiceMaster has provided certain non-GAAP
(Generally Accepted Accounting Principles) measures. ServiceMaster does not
intend for the information to be considered in isolation or as a substitute for
the related GAAP measures. ServiceMaster believes that these non-GAAP measures
provide an important perspective on the performance of ServiceMaster's
continuing operations.
A reconciliation of internal revenue growth to its most directly comparable
financial measure under GAAP for the years ended December 31 are as follows:
2004 2003 2002 2001 2000
---------- --------- --------- --------- ---------
Reported revenue growth 5.3% 1.9% 0.7% 3.9% 11.3%
Effect of acquisitions, net of
shut-down operations 0.3% 0.3% 0.5% 1.2% 8.7%
---------- --------- --------- --------- ---------
Internal revenue growth 5.0% 1.6% 0.2% 2.7% 2.6%
========== ========= ========= ========= =========
A reconciliation of income from continuing operations on a comparable basis,
before unusual items to its most directly comparable financial measure under
GAAP for the years ended December 31 are as follows:
2004 2003 2002
--------------------------------- -------------------------------- -----------------------------
DILUTED DILUTED DILUTED
EARNINGS EARNINGS EARNINGS
$ AMOUNT SHARES PER SHARE $ AMOUNT SHARES PER SHARE $ AMOUNT SHARES PER SHARE
-------- ------ --------- -------- ------ --------- -------- ------ ---------
Reported income from
continuing operations $ 324,057 303,568 $ 1.08 $ (221,975) 295,610 $ (0.75) $ 157,303 305,912 $ 0.51
IRS tax agreement (149,722) 303,568 (0.49)
Impairment charge 383,152 295,610 1.30
Premium paid on public
bond repurchase 9,229 305,912 0.03
---------- ---------- ----------- --------- ----------- ---------
Income from continuing operations
on a comparable basis, before
unusual items $ 174,335 295,568 $ 0.59 $161,177 299,528 $ 0.54 $ 166,532 305,912 $ 0.54
2001 2000 1999
--------------------------------- -------------------------------- -----------------------------
DILUTED DILUTED DILUTED
EARNINGS EARNINGS EARNINGS
$ AMOUNT SHARES PER SHARE $ AMOUNT SHARES PER SHARE $ AMOUNT SHARES PER SHARE
-------- ------ --------- -------- ------ --------- -------- ------ ---------
Reported income from
continuing operations $(172,219) 298,659 $ (0.58) $120,021 305,518 $ 0.39 $ 85,913 314,406 $ 0.27
Impairment charge 279,393 298,659 0.94 51,300 314,406 0.16
Premium paid on public
bond repurchase 3,422 303,244 0.01
Pro forma after-tax adjustments for:
Interest on proceeds from
businesses sold in 2001 19,991 303,244 0.07 22,531 305,518 0.07 18,970 314,406 0.06
Elimination of amortization expense
under SFAS 142 41,590 303,244 0.14 40,244 305,518 0.13 34,027 314,406 0.11
---------- ---------- ----------- --------- ----------- ---------
Income from continuing operations
on a comparable basis, before
unusual items $ 172,177 303,244 $ 0.57 $182,796 305,518 $ 0.60 $ 190,210 314,406 $ 0.60