Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | Terminix Global Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-8738320 | |
Entity Address, Address Line One | 150 Peabody Place | |
Entity Address, City or Town | Memphis | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 38103 | |
City Area Code | 901 | |
Local Phone Number | 597-1400 | |
Entity Information, Former Legal or Registered Name | ServiceMaster Global Holdings, Inc. | |
Security 12b Title | Common, par value $0.01 | |
Trading Symbol | TMX | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 132,107,419 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity File Number | 001-36507 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0001428875 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Consolidated Statements of Operations and Comprehensive Income [Abstract] | ||||
Revenue | $ 512 | $ 465 | $ 1,502 | $ 1,378 |
Cost of services rendered and products sold | 299 | 278 | 876 | 790 |
Selling and administrative expenses | 140 | 137 | 423 | 398 |
Amortization expense | 9 | 6 | 26 | 16 |
Acquisition-related costs | (1) | 8 | 12 | |
Mobile Bay Formosan termite settlement | 49 | 49 | ||
Restructuring and other charges | 2 | 4 | 14 | 12 |
Realized (gain) on investment in frontdoor, inc. | (40) | |||
Interest expense | 22 | 19 | 67 | 64 |
Interest and net investment income | (1) | (1) | (2) | (4) |
Loss on extinguishment of debt | 1 | 1 | 6 | |
(Loss) Income from Continuing Operations before Income Taxes | (7) | 13 | 50 | 124 |
Provision for income taxes | 15 | 4 | 31 | 22 |
Equity in earnings of joint ventures | 1 | 2 | ||
(Loss) Income from Continuing Operations | (21) | 8 | 20 | 103 |
Net earnings from discontinued operations | 14 | 17 | 40 | 51 |
Net (Loss) Income | (7) | 25 | 61 | 154 |
Total Comprehensive Income | $ (16) | $ 18 | $ 3 | $ 141 |
Weighted-average common shares outstanding - Basic | 132 | 135.8 | 132.9 | 135.9 |
Weighted-average common shares outstanding - Diluted | 132 | 136.5 | 133.1 | 136.5 |
Basic Earnings Per Share: | ||||
(Loss) Income from Continuing Operations (in dollars per share) | $ (0.17) | $ 0.06 | $ 0.14 | $ 0.76 |
Net (Loss) Income (in dollars per share) | (0.06) | 0.19 | 0.44 | 1.13 |
Diluted Earnings Per Share: | ||||
(Loss) Income from Continuing Operations (in dollars per share) | (0.17) | 0.06 | 0.14 | 0.75 |
Net (Loss) Income (in dollars per share) | $ (0.06) | $ 0.19 | $ 0.44 | $ 1.13 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Current Assets: | |||
Cash and cash equivalents | $ 288 | $ 280 | |
Receivables, less allowances of $24 and $22, respectively | 214 | 178 | |
Inventories | 40 | 46 | |
Prepaid expenses and other assets | 73 | 81 | |
Current assets held for sale | 892 | 45 | |
Total Current Assets | 1,507 | 629 | |
Other Assets: | |||
Property and equipment, net | 181 | 204 | |
Operating lease right-of-use assets | 83 | 95 | |
Goodwill | 2,127 | 2,096 | |
Intangible assets, primarily trade names, service marks and trademarks, net | 1,113 | 1,169 | |
Restricted cash | 89 | 89 | |
Notes receivable | 32 | 32 | |
Long-term marketable securities | 13 | 13 | |
Deferred customer acquisition costs | 105 | 94 | |
Other assets | 76 | 68 | |
Long-term assets held for sale | 834 | ||
Total Assets | 5,326 | 5,322 | |
Current Liabilities: | |||
Accounts payable | 100 | 96 | |
Accrued liabilities: | |||
Payroll and related expenses | 92 | 54 | |
Self-insured claims and related expenses | 87 | 72 | |
Accrued interest payable | 17 | 16 | |
Other | 159 | 82 | |
Deferred revenue | 104 | 107 | |
Current portion of lease liability | 17 | 19 | |
Current portion of long-term debt | [1] | 100 | 69 |
Current liabilities held for sale | 62 | 42 | |
Total Current Liabilities | 740 | 557 | |
Long-Term Debt | 1,565 | 1,666 | |
Other Long-Term Liabilities: | |||
Deferred taxes | 480 | 499 | |
Other long-term obligations, primarily self-insured claims | 203 | 158 | |
Long-term lease liability | 99 | 110 | |
Long-term liabilities held for sale | 11 | ||
Total Other Long-Term Liabilities | 783 | 777 | |
Commitments and Contingencies (Note 6) | |||
Stockholders' Equity: | |||
Common stock $0.01 par value (authorized 2,000,000,000 shares with 148,256,197 shares issued and 132,043,971 outstanding at September 30, 2020 and 147,872,959 shares issued and 135,408,054 outstanding at December 31, 2019) | 2 | 2 | |
Additional paid-in capital | 2,352 | 2,334 | |
Retained Earnings | 351 | 291 | |
Accumulated other comprehensive (loss) income | (49) | 9 | |
Less common stock held in treasury, at cost (16,212,226 shares at September 30, 2020 and 12,464,905 shares at December 31, 2019) | (417) | (313) | |
Total Stockholders' Equity | 2,239 | 2,322 | |
Total Liabilities and Stockholders' Equity | $ 5,326 | $ 5,322 | |
[1] | The current portion of long-term debt consists of deferred purchase price and earnout payments on acquisitions and scheduled principal payments of long-term debt due within 12 months. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Condensed Consolidated Statements of Financial Position [Abstract] | ||
Allowance for receivables (in dollars) | $ 24 | $ 22 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 148,256,197 | 147,872,959 |
Common stock, shares outstanding (in shares) | 132,043,971 | 135,408,054 |
Treasury stock (in shares) | 16,212,226 | 12,464,905 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Shares [Member] | Total |
Balance, shares at Dec. 31, 2018 | 147,000,000 | |||||
Balance, value at Dec. 31, 2018 | $ 2 | $ 2,309 | $ 156 | $ 5 | $ (267) | $ 2,204 |
Treasury Stock, Shares at Dec. 31, 2018 | (12,000,000) | |||||
Net income (loss) | 70 | 70 | ||||
Other comprehensive income (loss), net of tax | (2) | (2) | ||||
Total Comprehensive Income | 70 | (2) | 68 | |||
Exercise of stock options, value | 5 | 5 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Repurchase of common stock | $ (2) | (2) | ||||
Balance, shares at Mar. 31, 2019 | 148,000,000 | |||||
Balance at Mar. 31, 2019 | $ 2 | 2,318 | 226 | 3 | $ (269) | 2,280 |
Treasury Stock, Shares at Mar. 31, 2019 | (12,000,000) | |||||
Balance, shares at Dec. 31, 2018 | 147,000,000 | |||||
Balance, value at Dec. 31, 2018 | $ 2 | 2,309 | 156 | 5 | $ (267) | 2,204 |
Treasury Stock, Shares at Dec. 31, 2018 | (12,000,000) | |||||
Net income (loss) | 154 | |||||
Other comprehensive income (loss), net of tax | (13) | |||||
Total Comprehensive Income | 141 | |||||
Balance, shares at Sep. 30, 2019 | 148,000,000 | |||||
Balance at Sep. 30, 2019 | $ 2 | 2,330 | 313 | (8) | $ (300) | 2,337 |
Treasury Stock, Shares at Sep. 30, 2019 | (12,000,000) | |||||
Balance, shares at Mar. 31, 2019 | 148,000,000 | |||||
Balance, value at Mar. 31, 2019 | $ 2 | 2,318 | 226 | 3 | $ (269) | 2,280 |
Treasury Stock, Shares at Mar. 31, 2019 | (12,000,000) | |||||
Net income (loss) | 59 | 59 | ||||
Other comprehensive income (loss), net of tax | (4) | (4) | ||||
Total Comprehensive Income | 59 | (4) | 55 | |||
Exercise of stock options, value | 4 | 4 | ||||
Stock-based employee compensation | 4 | 4 | ||||
Repurchase of common stock | $ (15) | (15) | ||||
Balance, shares at Jun. 30, 2019 | 148,000,000 | |||||
Balance at Jun. 30, 2019 | $ 2 | 2,326 | 285 | (1) | $ (283) | 2,329 |
Treasury Stock, Shares at Jun. 30, 2019 | (12,000,000) | |||||
Net income (loss) | 25 | 25 | ||||
Other comprehensive income (loss), net of tax | (7) | (7) | ||||
Total Comprehensive Income | 25 | (7) | 18 | |||
Issuance of common stock, value | 3 | |||||
Issuance of common stock, value | 3 | |||||
Exercise of stock options, value | 1 | 1 | ||||
Stock-based employee compensation | 3 | 3 | ||||
Repurchase of common stock | $ (16) | (16) | ||||
Balance, shares at Sep. 30, 2019 | 148,000,000 | |||||
Balance at Sep. 30, 2019 | $ 2 | 2,330 | 313 | (8) | $ (300) | 2,337 |
Treasury Stock, Shares at Sep. 30, 2019 | (12,000,000) | |||||
Balance, shares at Dec. 31, 2019 | 148,000,000 | |||||
Balance, value at Dec. 31, 2019 | $ 2 | 2,334 | 291 | 9 | $ (313) | $ 2,322 |
Treasury Stock, Shares at Dec. 31, 2019 | (12,000,000) | (12,464,905) | ||||
Net income (loss) | 14 | $ 14 | ||||
Other comprehensive income (loss), net of tax | (50) | (50) | ||||
Total Comprehensive Income | 14 | (50) | (36) | |||
Exercise of stock options, value | 2 | 2 | ||||
Stock-based employee compensation | 5 | 5 | ||||
Repurchase of common stock, shares | (4,000,000) | |||||
Repurchase of common stock | $ (103) | (103) | ||||
Balance, shares at Mar. 31, 2020 | 148,000,000 | |||||
Balance at Mar. 31, 2020 | $ 2 | 2,341 | 305 | (41) | $ (417) | 2,190 |
Treasury Stock, Shares at Mar. 31, 2020 | (16,000,000) | |||||
Balance, shares at Dec. 31, 2019 | 148,000,000 | |||||
Balance, value at Dec. 31, 2019 | $ 2 | 2,334 | 291 | 9 | $ (313) | $ 2,322 |
Treasury Stock, Shares at Dec. 31, 2019 | (12,000,000) | (12,464,905) | ||||
Net income (loss) | $ 61 | |||||
Other comprehensive income (loss), net of tax | (58) | |||||
Total Comprehensive Income | 3 | |||||
Balance, shares at Sep. 30, 2020 | 148,000,000 | |||||
Balance at Sep. 30, 2020 | $ 2 | 2,352 | 351 | (49) | $ (417) | $ 2,239 |
Treasury Stock, Shares at Sep. 30, 2020 | (16,000,000) | (16,212,226) | ||||
Balance, shares at Mar. 31, 2020 | 148,000,000 | |||||
Balance, value at Mar. 31, 2020 | $ 2 | 2,341 | 305 | (41) | $ (417) | $ 2,190 |
Treasury Stock, Shares at Mar. 31, 2020 | (16,000,000) | |||||
Net income (loss) | 53 | 53 | ||||
Other comprehensive income (loss), net of tax | 1 | 1 | ||||
Total Comprehensive Income | 53 | 1 | 54 | |||
Stock-based employee compensation | 6 | 6 | ||||
Balance, shares at Jun. 30, 2020 | 148,000,000 | |||||
Balance at Jun. 30, 2020 | $ 2 | 2,348 | 358 | (40) | $ (417) | 2,251 |
Treasury Stock, Shares at Jun. 30, 2020 | (16,000,000) | |||||
Net income (loss) | (7) | (7) | ||||
Other comprehensive income (loss), net of tax | (10) | (10) | ||||
Total Comprehensive Income | (7) | (10) | (16) | |||
Stock-based employee compensation | 4 | 4 | ||||
Balance, shares at Sep. 30, 2020 | 148,000,000 | |||||
Balance at Sep. 30, 2020 | $ 2 | $ 2,352 | $ 351 | $ (49) | $ (417) | $ 2,239 |
Treasury Stock, Shares at Sep. 30, 2020 | (16,000,000) | (16,212,226) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Consolidated Statements of Cash Flows [Abstract] | ||
Cash and Cash Equivalents and Restricted Cash at Beginning of Period | $ 368 | $ 313 |
Cash Flows from Operating Activities from Continuing Operations: | ||
Net Income | 61 | 154 |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Net earnings from discontinued operations | (40) | (51) |
Depreciation expense | 55 | 53 |
Amortization expense | 26 | 16 |
Amortization of debt issuance costs | 3 | 2 |
Amortization of lease right-of-use assets | 14 | 14 |
Mobile Bay Formosan termite settlement | 49 | |
Payments on fumigation related matters | (2) | |
Realized (gain) on investment in frontdoor, inc. | (40) | |
Loss on extinguishment of debt | 6 | |
Deferred income tax provision | 12 | |
Stock-based compensation expense | 13 | 10 |
Restructuring and other charges | 14 | 12 |
Payments for restructuring and other charges | (9) | (13) |
Acquisition-related costs | 12 | |
Payments for acquisition-related costs | (4) | (6) |
Other | (24) | (26) |
Change in working capital, net of acquisitions: | ||
Receivables | (44) | (13) |
Inventories and other current assets | (4) | (11) |
Accounts payable | 12 | 16 |
Deferred revenue | (1) | 4 |
Accrued liabilities | 52 | (7) |
Accrued interest payable | 1 | 7 |
Current income taxes | 39 | 3 |
Net Cash Provided from Operating Activities from Continuing Operations | 211 | 152 |
Cash Flows from Investing Activities from Continuing Operations: | ||
Property additions | (20) | (19) |
Sale of equipment and other assets | 6 | 1 |
Business acquisitions, net of cash acquired | (29) | (338) |
Origination of notes receivable | (26) | (81) |
Collections on notes receivable | 32 | 89 |
Net Cash Used for Investing Activities from Continuing Operations | (37) | (348) |
Cash Flows from Financing Activities from Continuing Operations: | ||
Borrowings of debt | 720 | |
Payments of debt | (103) | (639) |
Debt issuance costs paid | (2) | |
Repurchase of common stock | (103) | (33) |
Issuance of common stock | 4 | 10 |
Net Cash (Used For) Provided From Financing Activities from Continuing Operations | (205) | 57 |
Cash Flows from Discontinued Operations: | ||
Cash provided from operating activities | 43 | 59 |
Cash used for investing activities | (1) | (4) |
Cash used for financing activities | (1) | (1) |
Net Cash Provided from Discontinued Operations | 41 | 54 |
Effect of Exchange Rate Changes on Cash | (1) | |
Cash Increase During the Period | 9 | (85) |
Cash and Cash Equivalents and Restricted Cash at End of Period | $ 377 | $ 228 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | Note 1. Basis of Presentation Terminix Global Holdings, Inc. (formerly known as ServiceMaster Global Holdings, Inc.) and its majority-owned subsidiary partnerships, limited liability companies and corporations (collectively, “Terminix,” the “Company,” “we,” “us” and “our”) is a leading provider of essential services to residential and commercial customers in the termite and pest control markets. Our portfolio of well‑recognized brands includes Terminix (residential termite and pest control), Terminix Commercial (commercial termite and pest control), Copesan (commercial national accounts pest management), Assured Environments (commercial pest control), Gregory Pest Solutions (commercial pest control), McCloud Services (commercial pest control), Nomor (European pest control), Pelias (European pest control) and Terminix UK (European pest control). All consolidated Company subsidiaries are wholly-owned. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements have been prepared by us in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). We recommend that the quarterly unaudited condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC (the “2019 Form 10-K”). The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results that might be achieved for any other interim period or for the full year. Sale of ServiceMaster Brands On January 21, 2020, we announced we were exploring strategic alternatives related to ServiceMaster Brands, including the potential sale of the business. The divestiture group includes the assets and liabilities of the ServiceMaster Brands businesses, which is comprised of the Amerispec, Furniture Medic, Merry Maids, ServiceMaster Clean and ServiceMaster Restore brands, certain assets and liabilities of ServiceMaster Acceptance Corporation, our financing subsidiary that was historically reported as part of European Pest Control and Other , and the ServiceMaster trade name (the “ServiceMaster Brands Divestiture Group”). These operations were reported in our Annual Report on Form 10-K as part of continuing operations. Beginning with the quarterly report on Form 10-Q for the period ended March 31, 2020, the ServiceMaster Brands business was classified as held for sale and reported in discontinued operations for all periods presented. On October 1, 2020, we completed the sale of the ServiceMaster Brands Divestiture Group for $ 1,553 million to RW Purchaser LLC, an affiliate of investment funds managed by Roark Capital Management LLC (“Roark”). Recent Events The effects of COVID-19 and related actions to attempt to control its spread negatively impacted our business beginning in the last few weeks of March 2020. On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic, and governments around the world mandated, orders to slow the transmission of the virus. States in the United States, including Tennessee, where we are headquartered, declared states of emergency, and countries around the world, including the United States, took steps to restrict travel, instituted work from home policies, enacted temporary closures of businesses, issued quarantine orders and took other restrictive measures in response to the COVID-19 pandemic. Uncertainty with respect to the economic effects of the pandemic and the restrictive policies to mitigate its spread have introduced significant volatility in the financial markets. The exact timing and pace of recovery are uncertain. Certain markets have reopened while others remain closed or have closed again in an effort to control the spread of the virus. Although demand for our services improved through the third quarter, it remains marginally below prior year demand, particularly in our Terminix Commercial service line. Within the United States, our residential and commercial pest control businesses have been designated essential businesses by the U.S. Department of Homeland Security, which has allowed us to continue to serve our customers while ensuring the health and safety of our employees and our customers. We have also continued serving our customers in all of the international markets in which we operate. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in our 2019 Form 10-K. There have been no material changes to the significant accounting policies for the nine months ended September 30, 2020, other than those described below. Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions and reasonable and supportable forecasts. This ASU also requires enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. We adopted this ASU on January 1, 2020, and this adoption did not have a material impact on our financial condition or the results of our operations. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement. ” Under ASU 2018-13, entities are required to disclose the amount of total gains or losses for the period recognized in other comprehensive income that is attributable to fair value changes in assets and liabilities held as of the balance sheet date and categorized within Level 3 of the fair value hierarchy. Additionally, the ASU requires the disclosure of the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated for fair value measurements categorized within Level 3 of the fair value hierarchy. We adopted this ASU on January 1, 2020, and this adoption had no impact to our disclosures. S ee Note 16 for further discussion of our Level 3 investments. In March 2020, the FASB issued ASU 2020-03, “ Codification Improvements. ” This ASU does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2020. We adopted the updates, as applicable, in 2020, and this adoption did not have a material impact on our financial condition or the results of our operations. In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting .” The ASU provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting in response to the risk of cessation of the London Interbank Offered Rate (LIBOR). This amendment provides for optional expedients and exceptions for applying generally accepted accounting principles to contracts and hedging relationships that are affected by LIBOR and other reference rates. The ASU generally allows for a hedge accounting to continue if the hedge was highly effective or met other standards prior to reference rate reform. Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that exist as of March 12, 2020. The relief provided in this ASU is only available for a limited time, generally through December 31, 2022. Our debt agreement and interest rate swap that utilize LIBOR have not yet discontinued the use of LIBOR and, therefore, this ASU is not yet effective for us. To the extent our debt and interest rate swap arrangements change to another accepted rate, we will utilize the relief in this ASU to continue hedge accounting as we expect the remaining critical terms of our hedging relationship will still match. A ccounting Standards Issued But Not Yet Effective In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ,” which simplifies the accounting for income taxes by removing certain exceptions. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact the adoption of this ASU will have on our consolidated financial statements. We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not expect the future adoption of any such pronouncements will have a material impact on our financial condition or the results of our operations. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2020 | |
Revenues[Abstract] | |
Revenues | Note 3. Revenues The following tables present our reportable segment revenues from continuing operations, disaggregated by revenue source. We disaggregate revenue from contracts with customers into major product lines. We have determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. As noted in the business segment reporting information in Note 15, our reportable segment is Terminix. Revenue related to fumigation completion services and the related renewals (the “Fumigation Services”) is shown in Termite and Home Services below and prior period amounts related to the Fumigation Services have been reclassified from Fumigation to Termite and Home Services to conform to the current period presentation. Additionally, prior period revenue for Residential Pest Control and Commercial Pest Control has been reclassified to conform to the current period presentation. European Pest Control Terminix and Other Total Three months ended Three months ended Three months ended September 30, September 30, September 30, (In millions) 2020 2019 2020 2019 2020 2019 Major service line Residential Pest Control $ 193 $ 183 $ — $ — $ 193 $ 183 Commercial Pest Control 119 110 — — 119 110 Termite and Home Services 151 144 — — 151 144 Sales of Products and Other 28 24 — — 28 24 European Pest Control — — 21 4 21 4 Total $ 491 $ 461 $ 21 $ 4 $ 512 $ 465 European Pest Control Terminix and Other Total Nine months ended Nine Months ended Nine Months ended September 30, September 30, September 30, (In millions) 2020 2019 2020 2019 2020 2019 Major service line Residential Pest Control $ 534 $ 519 $ — $ — $ 534 $ 519 Commercial Pest Control 332 309 — — 332 309 Termite and Home Services 502 483 — — 502 483 Sales of Products and Other 78 64 — — 78 64 European Pest Control — — 56 4 56 4 Total $ 1,446 $ 1,375 $ 56 $ 4 $ 1,502 $ 1,378 Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. Contracts with customers are generally for a period of one year or less and are generally renewable. We record a receivable related to revenue recognized on services once we have an unconditional right to invoice and receive payment in the future related to the services provided. All accounts receivables are recorded within Receivables, less allowances, on the Condensed Consolidated Statements of Financial Position. The current portion of Notes receivable, which represents amounts financed for Terminix customers, are included within Receivables, less allowances, on the condensed consolidated statement of financial position and totaled $ 28 million and $ 38 million as of September 30, 2020 and December 31, 2019, respectively. Deferred revenue represents a contract liability and is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable. For Terminix, amounts are recognized as revenue upon completion of services. Changes in deferred revenue for the nine months ended September 30, 2020 and 2019 were as follows: (In millions) Deferred revenue Balance, December 31, 2019 $ 92 Deferral of revenue 89 Recognition of deferred revenue ( 89 ) Balance, September 30, 2020 $ 92 Balance, December 31, 2018 $ 91 Deferral of revenue 104 Recognition of deferred revenue ( 99 ) Balance, September 30, 2019 $ 96 Approximately $ 12 million and $ 15 million of deferred revenue is recognized in the Condensed Consolidated Statements of Financial Position in European Pest Control and Other as of September 30, 2020 and December 31, 2019, respectively. There was approximately $ 11 million and $ 51 million of revenue recognized in the three and nine months ended September 30, 2020, that was included in the deferred revenue balance as of December 31, 2019. There was approximately $ 11 million and $ 56 million of revenue recognized in the three and nine months ended September 30, 2019, that was included in the deferred revenue balance as of December 31, 2018. |
Restructuring And Other Charges
Restructuring And Other Charges | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring And Other Charges [Abstract] | |
Restructuring And Other Charges | Note 4. Restructuring and Other Charges We incurred restructuring charges of $ 2 million ( $ 2 million, net of tax) in each of the three months ended September 30, 2020 and 2019. We incurred restructuring charges of $ 14 million ($ 10 million, net of tax) and $ 10 million ($ 7 million, net of tax) in the nine months ended September 30, 2020 and 2019, respectively. Restructuring charges were comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Terminix (1) $ 2 $ 1 $ 6 $ 4 Corporate Functions (2) 1 1 8 5 Global Service Center relocation (3) — — — 1 Total restructuring charges $ 2 $ 2 $ 14 $ 10 ___________________________________ (1) For the three and nine months ended September 30, 2020, these charges included $ 1 million and $ 3 million of severance and other costs and $ 1 million and $ 3 million of impairment and other charges related to our call center right of use assets, which we exited during the second quarter. Severance and other costs of $ 2 million were unpaid and accrued as of September 30, 2020. For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 4 million, respectively, of severance and other costs. (2) We have historically made changes on an ongoing basis to enhance capabilities and reduce costs in our corporate functions that provide company-wide administrative services to support operations. Of the restructuring charges incurred by European Pest Control and Other, $ 2 million was unpaid and accrued as of September 30, 2020. For the three and nine months ended September 30, 2020 and 2019, these charges were comprised of the following : Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Severance $ — $ — $ 3 $ 1 Other costs (a) 1 — 5 4 Total Corporate Functions $ 1 $ 1 $ 8 $ 5 ___________________________________ (a) Represents costs incurred in connection with our CEO transition, charges associated with the marketing of our corporate aircraft for sale and accelerated depreciation on systems we are replacing with the implementation of our new customer experience platform. (3) For the nine months ended September 30, 2019, these charges included lease termination and other charges of $ 1 million related to our headquarter relocation. The pretax charges discussed above are reported in Restructuring and other charges in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. A reconciliation of the beginning and ending balances of accrued restructuring charges, which are included in Accrued liabilities—Other on the unaudited Condensed Consolidated Statements of Financial Position, is presented as follows: Accrued Restructuring (In millions) Charges Balance as of December 31, 2019 $ 1 Costs incurred 14 Costs paid or otherwise settled ( 12 ) Balance as of September 30, 2020 $ 4 Balance as of December 31, 2018 $ 7 Costs incurred 10 Costs paid or otherwise settled ( 16 ) Balance as of September 30, 2019 $ 1 We expect substantially all of our accrued restructuring charges to be paid by December 31, 2020. Other Charges Other charges represent professional fees incurred that are not closely associated with our ongoing operations. Other charges were $ 2 million ($ 1 million, net of tax) for the three and nine months ended September 30, 2019. No similar charges were incurred in the three and nine months ended September 30, 2020. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 5. Discontinued Operations In January 2020, we announced we were exploring strategic alternatives related to ServiceMaster Brands in order to focus on our core pest control and termite business. On October 1, 2020, we completed the sale of the ServiceMaster Brands Divestiture Group for $ 1,553 million, resulting in an estimated gain of approximately $ 400 million, net of taxes, which will be recorded in net earnings from discontinued operations. After applicable taxes and fees, we expect net proceeds of approximately $ 1,116 million. The ServiceMaster Brands Divestiture Group is classified as held for sale on the Condensed Consolidated Statements of Financial Position and as discontinued operations on the Condensed Consolidated Statements of Operations and Comprehensive Income and Condensed Consolidated Statements of Cash Flows for all periods presented. The net amount of assets and liabilities held for sale related to discontinued operations are required to be recorded at the lower of carrying value or fair value less costs to sell. In connection with the sale of the ServiceMaster Brands Divestiture Group, the Company and Roark entered into a transition services agreement whereby the Company will provide certain post-closing services to Roark and ServiceMaster Brands related to the business of ServiceMaster Brands. The charges for the transition services are designed to allow us to fully recover the direct costs of providing the services, plus specified margins and any out-of-pocket costs and expenses. The Company and Roark also entered into a sublease agreement whereby ServiceMaster Brands will sublease a portion of the Company’s headquarters in Memphis, Tennessee . The following table summarizes the comparative financial results of discontinued operations which are presented as Net earnings from discontinued operations on the Condensed Consolidated Statements of Operations and Comprehensive Income: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2020 2019 2020 2019 Revenue $ 71 $ 63 $ 198 $ 191 Cost of services rendered and products sold 32 27 93 79 Selling and administrative expenses 11 12 34 38 Amortization expense — 1 1 3 Restructuring and other charges (1) 9 1 18 3 Interest and net investment income — — — ( 1 ) Income before income taxes 18 22 53 69 Provision for income taxes 4 5 13 18 Net earnings from discontinued operations $ 14 $ 17 $ 40 $ 51 Weighted-average common shares outstanding - Basic 132.0 135.8 132.9 135.9 Weighted-average common shares outstanding - Diluted 132.0 136.5 133.1 136.5 Basic Earnings Per Share: Net earnings from discontinued operations $ 0.11 $ 0.13 $ 0.30 $ 0.38 Diluted Earnings Per Share: Net earnings from discontinued operations $ 0.11 $ 0.13 $ 0.30 $ 0.38 ___________________________________ (1) Includes $ 9 million and $ 18 million of professional fees and other costs incurred in connection with the strategic evaluation and ultimate sale in the three and nine months ended September 30, 2020, respectively. The total assets and liabilities held for sale related to discontinued operations are stated separately in the Condensed Consolidated Statements of Financial Position and comprised the following items: As of As of (In millions) September 30, 2020 December 31, 2019 Assets: Current Assets: Receivables, less allowances of $ 5 and $ 3 , respectively $ 47 $ 40 Inventories 6 2 Prepaid expenses and other assets 3 3 Total Current Assets 56 45 Other Assets: Property and equipment, net 12 8 Operating lease right-of-use assets 2 2 Goodwill 180 183 Intangible assets, primarily trade names, service marks and trademarks, net 626 622 Notes receivable 11 13 Deferred customer acquisition costs 1 1 Other assets 4 5 Total Assets $ 892 $ 879 Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable $ 11 $ 8 Accrued liabilities: Payroll and related expenses 4 5 Other 30 23 Deferred revenue 4 4 Current portion of lease liability 1 1 Current portion of long-term debt 2 1 Total Current Liabilities 51 42 Long-Term Debt 1 2 Other Long-Term Liabilities: Deferred taxes 2 1 Other long-term obligations 6 6 Long-term lease liability 1 2 Total Liabilities $ 62 $ 52 All assets and liabilities held for sale were classified as Current assets held for sale and Current liabilities held for sale as of September 30, 2020 in the Condensed Consolidated Statements of Financial Position . Certain assets and liabilities have been reclassified to assets and liabilities held for sale as of December 31, 2019, to conform to the current period presentation. The following selected financial information of ServiceMaster Brands is included in the Condensed Consolidated Statements of Cash Flows as cash flows from discontinued operations: Three Months Ended September 30, (In millions) 2020 2019 Depreciation $ — $ 1 Amortization — 1 Capital expenditures ( 1 ) ( 1 ) |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | Note 6. Commitments and Contingencies We carry insurance policies on insurable risks at levels that we believe to be appropriate, including workers’ compensation, automobile and general liability risks. We purchase insurance policies from third-party insurance carriers, which typically incorporate significant deductibles or self-insured retentions. We are responsible for all claims that fall below the retention limits, exceed our coverage limits or are otherwise not covered by our insurance policies. In determining our accrual for self-insured claims, we use historical claims experience to establish both the current year accrual and the underlying provision for future losses. This actuarially determined provision and related accrual include known claims, as well as incurred but not reported claims. We adjust our estimate of accrued self-insured claims when required to reflect changes based on factors such as changes in health care costs, accident frequency and claim severity. In the normal course of business, we periodically enter into agreements that incorporate indemnification provisions. While the maximum amount to which we may be exposed under such agreements cannot be estimated, we do not expect these guarantees and indemnifications to have a material effect on our business, financial condition, results of operations or cash flows. A reconciliation of beginning and ending accrued self-insured claims, which are included in Accrued liabilities—Self-insured claims and related expenses and Other long-term obligations, primarily self-insured claims on the Condensed Consolidated Statements of Financial Position, net of insurance recoverables, which are included in Prepaid expenses and other assets and Other assets on the Condensed Consolidated Statements of Financial Position, is presented as follows: Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2019 $ 111 Provision for self-insured claims 35 Cash payments ( 21 ) Balance as of September 30, 2020 $ 125 Balance as of December 31, 2018 $ 111 Provision for self-insured claims 26 Cash payments ( 28 ) Balance as of September 30, 2019 $ 108 Our Terminix business is subject to a significant number of damage claims related to termite activity in homes for which we provide termite control services, often accompanied by a termite damage warranty. Our termite damage warranty is a differentiator in the industry that has enabled us to become a market leader of this product line. Termite damage claims include circumstances when a customer notifies us that they have experienced damage to their property and we reach an agreement to remediate that damage (a “Non-litigated Claim”); and circumstances when we do not reach an agreement with a customer to remediate the damage and that customer initiates litigation or arbitration proceedings (a “Litigated Claim”). We accrue for these liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Current activity can differ, causing a change in estimates which could be material. During the fourth quarter of the year ended December 31, 2019, we recorded a change in estimate of our reserve for termite damages for Litigated Claims and Non-Litigated Claims in the amount of $ 53 million. A reconciliation of beginning and ending accrued Litigated Claims, which are included in Accrued liabilities—Other and Other long-term obligations, primarily self-insured claims on the Condensed Consolidated Statements of Financial Position, and Non-Litigated Claims, which are included in Accrued liabilities—Self-insured claims and related expenses on the Condensed Consolidated Statements of Financial Position, is presented as follows: Accrued Termite Damage (In millions) Claims Balance as of December 31, 2019 $ 80 Provision for termite damage claims 41 Cash payments ( 42 ) Balance as of September 30, 2020 $ 79 Balance as of December 31, 2018 $ 28 Provision for termite damage claims 28 Cash payments ( 31 ) Balance as of September 30, 2019 $ 25 In March 2019, Company representatives met with representatives of the Office of the Attorney General of the State of Alabama (the “AL AG”) and other Alabama state representatives to discuss termite renewal pricing changes we made in the Mobile Bay area in 2019 and explain the Company’s perspective that the price increases complied with the Alabama Deceptive Trade Practices Act (the “ADTPA”). Subsequently, in September 2019, we received a subpoena (the “AL Subpoena”) from the AL AG requesting documents and information under the ADTPA related to our Formosan termite business practices in the Mobile Bay area, largely focused on the termite renewal pricing changes we made in the Mobile Bay area in 2019. Although the AL Subpoena requested broader information than that related to termite renewal pricing changes, we determined based on our prior interactions and evaluation of the matter that any potential exposure was not material to the Company. Over the course of several months, the Company produced the documents and information requested by the AL Subpoena. In August 2020, the AL AG expressed for the first time their belief that the Company’s inspection and treatment practices may have violated the ADTPA, and that they anticipated imposing certain potential unquantified remedies. In an effort to better understand these matters raised by the AL AG, Company representatives met with the AL AG in September 2020, at which point the AL AG provided details regarding the scope of the alleged potential ADTPA violations and of the potential remedies and the potential economic scope of those remedies. Following the September 2020 meeting with the AL AG, the Company determined that the inquiry could be material to its operations and financial results. In October 2020, Company representatives again met with the AL AG and the AL AG verbally presented allegations of ADTPA violations related to the 2019 price increase and certain inspection and treatment practices, as well as a draft consent decree to resolve those allegations. Over the next two weeks, the Company and the AL AG engaged in intensive negotiations and, on November 4, 2020, the Company entered into the Consent Judgment and Settlement Agreement (the “Settlement”) with the AL AG. The Settlement provides for: immediate remediation measures to be provided directly to current and former customers in the Mobile Bay area, including refunds of certain price increases, rebates to certain former customers, the establishment of a $ 25 million consumer fund and a related receiver to oversee our compliance with these commitments and to act as an arbitrator for certain Non-litigated Claims; the reimbursement of certain investigative and monitoring costs incurred by the Attorney General’s office and the Department of Agriculture and Industries; and a university endowment intended to support termite and pest control research with an emphasis on Formosan termite research. The Company has also agreed to pay the state of Alabama $ 19 million. In the third quarter of 2020, the Company recorded a charge of $ 49 million and reduction of revenue of $ 3 million related to these immediate remediation measures. These charges represent our best estimate and may change based on a variety of factors, and these changes could be material to our financial results, including acceptance rates by current and former customers of the agreed remediation measures. Pursuant to the Settlement, we have also agreed to provide the opportunity to reinstate service for customers who canceled their services during certain specified timeframes as well as the retreatment of certain customer premises and a commitment to certain specified response and remediation timeframes for future termite damage claims. We do not expect the financial impact of these remedies to have a material impact on our prospective results of operations or cash flows. On December 16, 2016, the U.S. Virgin Islands Department of Justice filed a civil complaint in the Superior Court of the Virgin Islands related to a fumigation incident in a matter styled Government of the United States Virgin Islands v. The ServiceMaster Company, LLC, The Terminix International Company Limited Partnership, and Terminix International USVI, LLC. The amount and extent of any potential penalties, fines sanctions, costs and damages that the federal or other governmental authorities may yet impose, investigation or other costs and reputational harm, as well as the impact of any additional civil, criminal or other claims or judicial, administrative or regulatory proceedings resulting from or related to the U.S. Virgin Islands fumigation matter, which could be material, is not currently known or estimable, and any such further penalties, fines, sanctions, costs or damages would not be covered under our general liability insurance policies. In addition to the matters discussed above, in the ordinary course of conducting business activities, we and our subsidiaries become involved in judicial, administrative and regulatory proceedings involving both private parties and governmental authorities. We accrue for these liabilities when it is probable the future costs will be incurred and such costs can be reasonably estimated. Current activity can differ, causing a change in estimates which could be material. These proceedings include insured and uninsured matters that are brought on an individual, collective, representative and class action basis, or other proceedings involving regulatory, employment, general and commercial liability, automobile liability, wage and hour, environmental, shareholder and other matters. We have entered into settlement agreements in certain cases, including with respect to putative collective and class actions, which are subject to court or other approvals, and which require compliance with the terms of the agreements. If one or more of our settlements are not finally approved and implemented, we could have additional or different exposure, which could be material. Subject to the paragraphs above, we do not expect any of these proceedings to have a material effect on our reputation, business, financial position, results of operations or cash flows; however, we can give no assurance that the results of any such proceedings will not materially affect our reputation, business, financial position, results of operations and cash flows. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets [Abstract] | |
Goodwill And Intangible Assets | Note 7. Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets, primarily trade names, are not amortized and are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently if circumstances indicate a potential impairment. There were no impairment charges recorded in the three and nine months ended September 30, 2020 and 2019. There were no accumulated impairment losses recorded as of September 30, 2020. Customer relationships and Other intangible assets, which primarily includes trade names subject to amortization, are amortized over their respective useful lives. The table below summarizes the goodwill balances for continuing operations by reportable segment and European Pest Control and Other : European Pest (In millions) Terminix Control and Other (1) Total Balance as of December 31, 2019 $ 1,946 $ 150 $ 2,096 Acquisitions 10 — 10 Purchase accounting adjustments — 26 26 Impact of foreign exchange rates ( 1 ) ( 4 ) ( 5 ) Balance as of September 30, 2020 $ 1,956 $ 171 $ 2,127 ___________________________________ (1) European Pest Control and Other includes goodwill related to pest control operations in Europe. The table below summarizes the other intangible asset balances for continuing operations: As of September 30, 2020 As of December 31, 2019 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 888 $ — $ 888 $ 888 $ — $ 888 Customer relationships (2) 640 ( 443 ) 197 659 ( 423 ) 236 Other (3) 68 ( 41 ) 28 79 ( 34 ) 45 Total $ 1,596 $ ( 483 ) $ 1,113 $ 1,626 $ ( 457 ) $ 1,169 ___________________________________ (1) Not subject to amortization. (2) Includes purchase accounting adjustments subsequent to December 31, 2019, primarily related to our acquisition of Nomor, of approximately $ 17 million. (3) Includes purchase accounting adjustments subsequent to December 31, 2019, primarily related to our acquisition of Nomor, of approximately $ 9 million. For the existing intangible assets, we anticipate amortization expense for the remainder of 2020 and each of the next five years as follows: (In millions) 2020 2021 2022 2023 2024 2025 Amortization expense $ 8 $ 35 $ 33 $ 30 $ 22 $ 18 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 8. Stock-Based Compensation For each of the three months ended September 30, 2020 and 2019, we recognized stock-based compensation expense of $ 3 million ($ 3 million, net of tax) and $ 3 million ($ 2 million, net of tax), respectively. For the nine months ended September 30, 2020 and 2019, we recognized stock-based compensation expense of $ 13 million ($ 9 million, net of tax) and $ 10 million ($ 8 million, net of tax), respectively. These charges are recorded within Selling and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income. As of September 30, 2020, there were $ 39 million of total unrecognized compensation costs related to non-vested stock options, restricted stock units (“RSUs”) and performance share units granted under the Amended and Restated Terminix Global Holdings, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”). These remaining costs are expected to be recognized over a weighted-average period of 1.95 years. On February 24, 2015, our board of directors approved and recommended for approval by our stockholders the Terminix Global Holdings, Inc. Employee Stock Purchase Plan (“Employee Stock Purchase Plan”), which became effective for offering periods commencing July 1, 2015. The Employee Stock Purchase Plan was intended to qualify for the favorable tax treatment under Section 423 of the Code. Under the plan, eligible employees of the Company may purchase common stock, subject to IRS limits, during pre-specified offering periods at a discount established by the Company not to exceed 10 percent of the then current fair market value. On April 27, 2015, our stockholders approved the Employee Stock Purchase Plan with a maximum of one million shares of common stock authorized for sale under the plan. On November 3, 2015, we filed a registration statement on Form S-8 under the Securities Act to register the one million shares of common stock that may be issued under the Employee Stock Purchase Plan and, as a result, all shares of common stock acquired under the Employee Stock Purchase Plan will be freely tradable under the Securities Act, unless purchased by our affiliates. Our Compensation Committee amended the Employee Stock Purchase Plan in February 2019 to allow for more frequent purchase periods and to change the allowed 10 percent discount to a company match of 10 percent of employee contributions. The authorized number of shares remaining in the Employee Stock Purchase Plan was not changed from 843,584 and the expiration date of the Employee Stock Purchase Plan was not changed from April 27, 2025 . As of September 30, 2020 there were 790,543 shares available for issuance under the Employee Stock Purchase Plan. |
Comprehensive (Loss) Income
Comprehensive (Loss) Income | 9 Months Ended |
Sep. 30, 2020 | |
Comprehensive (Loss) Income [Abstract] | |
Comprehensive (Loss) Income | Note 9. Comprehensive (Loss) Income Comprehensive (loss) income, which primarily includes net income, unrealized gain (loss) on derivative instruments and the effect of foreign currency translation, is included in the Condensed Consolidated Statements of Operations and Comprehensive Income. During the nine months ended September 30, 2019, we terminated $ 479 million of our then-existing $ 650 million interest rate swap, receiving $ 12 million from the counterparty. We terminated the remaining $ 171 million of our then-existing $ 650 million interest rate swap later in 2019, receiving $ 1 million from the counterparty. The fair value of the terminated agreement of $ 12 million as of September 30, 2019, and $ 12 million as of December 31, 2019, is recorded within accumulated other comprehensive (loss) income on the Condensed Consolidated Statements of Financial Position and will be amortized into interest expense over the original term of the agreement. The remaining unamortized balance at September 30, 2020 is $ 7 million. The following tables summarize the activity in accumulated other comprehensive (loss) income, net of the related tax effects. Unrealized Gains Foreign (Losses) on Currency (In millions) Derivatives Translation Total Balance as of December 31, 2019 $ 13 $ ( 5 ) $ 9 Other comprehensive income before reclassifications: Pre-tax amount ( 66 ) ( 7 ) ( 73 ) Tax provision 12 — 12 After-tax amount ( 54 ) ( 7 ) ( 61 ) Amounts reclassified within accumulated other comprehensive (loss) income (1) 17 ( 17 ) — Amounts reclassified from accumulated other comprehensive (loss) income (2) 3 — 3 Net current period other comprehensive (loss) income ( 34 ) ( 24 ) ( 58 ) Balance as of September 30, 2020 $ ( 21 ) $ ( 29 ) $ ( 49 ) Balance as of December 31, 2018 $ 20 $ ( 15 ) $ 5 Other comprehensive income before reclassifications: Pre-tax amount ( 14 ) ( 2 ) ( 16 ) Tax benefit 7 — 7 After-tax amount ( 7 ) ( 2 ) ( 9 ) Amounts reclassified from accumulated other comprehensive (loss) income (2) ( 3 ) — ( 3 ) Net current period other comprehensive (loss) income ( 10 ) ( 2 ) ( 13 ) Balance as of September 30, 2019 $ 9 $ ( 18 ) $ ( 8 ) ___________________________________ (1) Represents unrealized gains (losses) on our cross currency swap and net investment hedge related to foreign currency exchange rate fluctuations. (2) Amounts are net of tax. Reclassifications out of accumulated other comprehensive (loss) income included the following components for the periods indicated . Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Gains (losses) on derivatives: Fuel swap contracts $ ( 1 ) $ — $ ( 3 ) $ — Interest rate swap contracts ( 1 ) 1 ( 2 ) 4 Net gains (losses) on derivatives ( 2 ) 1 ( 4 ) 4 Impact of income taxes 1 — 2 — Total reclassifications for the period $ ( 2 ) $ 1 $ ( 3 ) $ 3 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 10. Supplemental Cash Flow Information Supplemental information relating to the Condensed Consolidated Statements of Cash Flows is presented in the following table: Nine Months Ended September 30, (In millions) 2020 2019 Cash paid for or (received from): Interest expense (1) $ 57 $ 55 Interest and dividend income ( 1 ) ( 2 ) Income taxes, net of refunds 4 23 ___________________________________ (1) For the nine months ended September 30, 2019, excludes $ 12 million received in connection with our partial terminations of the then-existing interest rate swap. Cash and Cash Equivalents and Restricted Cash at Beginning of Period on the Condensed Consolidated Statements of Cash Flows consists of the following as presented on the Condensed Consolidated Statements of Financial Position: As of As of September 30, December 31 (In millions) 2020 2019 2019 2018 Cash and cash equivalents $ 288 $ 140 $ 280 $ 224 Restricted cash 89 89 89 89 Total Cash and cash equivalents and Restricted cash $ 377 $ 228 $ 368 $ 313 The non-cash lease transactions are described in Note 12. The proceeds from the frontdoor, inc. (“Frontdoor”) debt issuances described in Note 11 were retained by the lender in satisfaction of the short-term credit facility and have been excluded from the Condensed Consolidated Statements of Cash Flows as non-cash financing activities. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 11. Long-Term Debt Long-term debt is summarized in the following table: As of As of September 30, December 31, (In millions) 2020 2019 Senior secured term loan facility maturing in 2026 (1) $ 538 $ 593 Revolving credit facility maturing 2024 — — 5.125 % notes maturing in 2024 (2) 743 742 7.45 % notes maturing in 2027 (3) 169 167 7.25 % notes maturing in 2038 (3) 41 40 Vehicle finance leases (4) 93 95 Other (5) 82 98 Less current portion (6) ( 100 ) ( 69 ) Total long-term debt $ 1,565 $ 1,666 __________________________________ (1) As of September 30, 2020 and December 31, 2019, presented net of $ 7 million and $ 6 million in unamortized debt issuance costs, respectively, and $ 1 million of unamortized original issue discount in each period. On September 30, 2020, we made an advanced amortization payment of $ 51 million on the Term Loan B. See further discussion in Term Loan Facility below. (2) As of September 30, 2020 and December 31, 2019, presented net of $ 7 million and $ 8 million, respectively of unamortized debt issuance costs. (3) As of September 30, 2020 and December 31, 2019, collectively presented net of $ 26 million and $ 28 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. (4) We have entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows us to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are finance leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. (5) As of September 30, 2020 and December 31, 2019, includes approximately $ 81 million and $ 85 million, respectively, of future payments in connection with acquisitions. (6) The current portion of long-term debt consists of deferred purchase price and earnout payments on acquisitions and scheduled principal payments of long-term debt due within 12 months. Term Loan Facility On November 5, 2019, we closed on an amended $ 600 million Term Loan B due 2026, as well as a $ 400 million revolving credit agreement due 2024 (the “Amended Term Loan Facility”). On September 30, 2020, we amended our Term Loan B agreement to permit proceeds from the sale of the ServiceMaster Brands Divestiture Group to be used to retire subordinated debt or pay shareholder returns. In connection with the amendment, we made an advanced amortization payment of $ 51 million. The amendment was treated as a debt modification. We recorded $ 2 million in debt issuance costs related to the amendment. Such advanced amortization payment resulted in a loss on extinguishment of debt of $ 1 million for the three and nine months ended September 30, 2020. The interest rates applicable to the loans under the Amended Term Loan Facility are based on a fluctuating rate of interest measured by reference to either, at the borrower’s option, (i) an adjusted LIBOR plus 1.75 % per annum, or (ii) an alternate base rate (“ABR”) plus 0.75 % per annum. Voluntary prepayments of borrowings under the Amended Term Loan Facility are permitted at any time, in minimum principal amounts, without premium or penalty. The Term Loan Facility and the guarantees thereof are secured by substantially all of the tangible and intangible assets of the Company and certain of our domestic subsidiaries, excluding certain subsidiaries subject to regulatory requirements in various states, including pledges of all the capital stock of all direct domestic subsidiaries (other than foreign subsidiary holding companies, which are deemed to be foreign subsidiaries) owned by the Company or any Guarantor and of up to 65 % of the capital stock of each direct foreign subsidiary owned by the Company or any Guarantor. The Term Loan Facility security interests are subject to certain exceptions, including, but not limited to, exceptions for (i) equity interests, (ii) indebtedness or other obligations of subsidiaries, (iii) real estate or (iv) any other assets, if the granting of a security interest therein would require that the 7.45 % notes maturing in 2027 or 7.25 % notes maturing in 2038 be secured. The Term Loan Facility is secured on a pari passu basis with the security interests created in the same collateral securing our $ 400 million revolving credit facility due 2024 (“the Revolving Credit Facility”). Borrowing under the Revolving Credit Facility On September 5, 2019, we borrowed an aggregate principal amount of $ 120 million under our former revolving credit facility to finance our acquisition of Nomor Holding AB. On November 5, 2019, in connection with the Amended Term Loan Facility, we repaid the $ 120 million outstanding. Extinguishment of Debt and Repurchase of Notes On March 12, 2019, in connection with the spin-off of the American Home Shield segment, we borrowed an aggregate principal amount of $ 600 million under a short-term credit facility to effectuate a debt-for-equity exchange of our Frontdoor retained shares. The proceeds of this short-term credit facility were used to repay $ 468 million aggregate principal amount of term loans outstanding under our senior secured term loan facility in March and April of 2019. Such prepayments resulted in a loss on extinguishment of debt of $ 4 million for the nine months ended September 30, 2019 . On March 27, 2019, we completed a non-cash debt-for-equity exchange in which we exchanged the 16.7 million retained shares of Frontdoor common stock (proceeds of $ 486 million, net), plus used $ 114 million of proceeds from the short-term credit facility, to extinguish $ 600 million of our indebtedness under the short-term credit facility. The sale of the Frontdoor common stock resulted in a realized gain of $ 40 million, which was recorded within Realized (gain) on investment in frontdoor, inc. on the Condensed Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30 , 2019. In March 2019, we purchased approximately $ 7 million in aggregate principal amount of our 7.45 % notes maturing in 2027 at a price of 105.5 % and $ 3 million in aggregate principal amount of our 7.25 % notes maturing in 2038 at a price of 99.5 % using available cash. The repurchased notes were delivered to the trustee for cancellation. In connection with these partial repurchases, we recorded a loss on extinguishment of debt of $ 2 million in the nine months ended September 30, 2019. In April 2019, we purchased $ 1 million in aggregate principal amount of our 7.45 % notes maturing in 2027 at a price of 105.5 %. Interest Rate Swaps We have historically entered into interest rate swap agreements. Under the terms of these agreements, we pay a fixed rate of interest on the stated notional amount and receive a floating rate of interest (based on one month LIBOR) on the stated notional amount. Therefore, during the term of the swap agreements, the effective interest rate on the portion of the term loans equal to the stated notional amount is fixed at the stated rate in the interest rate swap agreements plus the incremental borrowing margin. On November 5, 2019, we entered into a seven year interest swap agreement effective November 5, 2019. The notional amount of the agreement is $ 550 million. Under the terms of the agreement, we will pay a fixed rate of interest of 1.615 % on the $ 550 million notional amount, and we will receive a floating rate of interest (based on one-month LIBOR, subject to a floor of zero percent) on the notional amount. Therefore, during the term of the agreement, the effective interest rate on $ 550 million of the new Term Loan B is fixed at a rate of 3.365 %. On September 30, 2020, in connection with the advanced amortization payment on our Term Loan Facility, we terminated $ 4 million of our interest rate swap. In connection with the repayments of our previous Term Loan B due 2023 in 2019, we terminated $ 479 million of our then existing $ 650 million interest rate swap agreement, receiving $ 12 million from the counterparty. The remaining $ 171 million interest rate swap was terminated in November 2019 upon the final repayment of our previous Term Loan B due 2023, with no proceeds from the counterparty. The fair value of the terminated agreement of $ 12 million was recorded within accumulated other comprehensive income on the Condensed Consolidated Statements of Financial Position and is being amortized into interest expense over the original term of the agreement. The changes in our interest rate swap agreement, as well as the cumulative interest rate swap outstanding, are as follows: Notional (In millions) Amount Fixed Rate (1) Interest rate swap agreement in effect as of December 31, 2018 $ 650 1.493 % Terminated ( 479 ) Entered into effect — Interest rate swap agreement in effect as of September 30, 2019 $ 171 1.493 % Terminated ( 171 ) Entered into effect 550 1.615 % Interest rate swap agreement in effect as of December 31, 2019 $ 550 1.615 % Terminated ( 4 ) Entered into effect — Interest rate swap agreement in effect as of September 30, 2020 $ 546 1.615 % ___________________________________ (1) Before the application of the applicable borrowing margin. In accordance with accounting standards for derivative instruments and hedging activities, and as further described in Note 16, our interest rate swap agreement is classified as a cash flow hedge, and, as such, is recorded on the Condensed Consolidated Statements of Financial Position as either an asset or liability at fair value, with changes in fair value attributable to the hedged risks recorded in accumulated other comprehensive income. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 12. Leases We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Current portion of lease liability and Long-term lease liability on the Condensed Consolidated Statements of Financial Position. Finance leases are included in Property and equipment, net; Current portion of long-term debt and Long-term debt on the Condensed Consolidated Statements of Financial Position. As of September 30, 2020 and December 31, 2019, assets recorded under finance leases were $ 235 million and $ 220 million, respectively, and accumulated depreciation associated with finance leases was $ 148 million and $ 127 million, respectively. The components of lease expense were as follows: Three months ended September 30, Nine months ended September 30, (In millions) 2020 2019 2020 2019 Finance lease cost Depreciation of finance lease ROU assets $ 10 $ 9 $ 29 $ 25 Interest on finance lease liabilities 1 1 2 4 Operating lease cost 6 6 19 19 Variable lease cost — 1 1 3 Sublease income ( 1 ) ( 1 ) ( 2 ) ( 2 ) Total lease cost $ 16 $ 17 $ 49 $ 48 Supplemental cash flow information and other information for leases was as follows: Nine months ended September 30, (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 21 $ 17 Operating cash flows for finance leases 2 4 Financing cash flows for finance leases 28 25 ROU assets obtained in exchange for lease obligations: Operating leases 3 7 Finance leases 23 39 As of September 30, 2020, there were $ 34 million and $ 58 million of finance leases included within Current portion of long-term debt and Long-term debt, respectively, on the Condensed Consolidated Statements of Financial Position. Future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: (In millions) Operating Leases Finance Leases Year ended December 31, 2020 (excluding the nine months ended September 30, 2020) $ 7 $ 10 2021 22 33 2022 19 23 2023 15 16 2024 11 8 Thereafter 85 4 Total future minimum lease payments 158 94 Less imputed interest ( 42 ) ( 3 ) Total $ 116 $ 92 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Acquisitions | Note 13. Acquisitions Acquisitions have been accounted for as business combinations using the acquisition method and, accordingly, the results of operations of the acquired businesses have been included in the condensed consolidated financial statements since their dates of acquisition. Asset acquisitions have been accounted for under ASU 2017-01. The assets and liabilities of these businesses were recorded in the financial statements at their estimated fair values as of the acquisition dates. During the nine months ended September 30 , 2020, our investment in acquisitions was $ 29 million, using available cash on hand, which included $ 12 million for nine tuck-in pest control acquisitions which have been accounted for as business combinations, as well as $ 18 million for final funding for two pest control acquisitions and minority interests completed in 2019 that were included in Accrued liabilities—Other on the Consolidated Statements of Financial Position as of December 31, 2019. Another $ 3 million of deferred purchase price on the 2020 acquisitions is due to the sellers between one year and three years from the acquisition dates. We recorded a preliminary value of $ 10 million of goodwill for the 2020 acquisitions. During the nine months ended September 30, 2020, we received $ 3 million from post-closing working capital adjustments related to acquisitions completed in 2019, and in the three months ended September 30, 2020, reversed $ 1 million of contingent consideration as the contingency was not met. During the nine months ended September 30, 2019, our investment in acquisitions was $ 338 million, using available cash on hand. We completed 27 pest control acquisitions, including the acquisition of Nomor, 24 of which were accounted for as business combinations. Three were accounted for as asset acquisitions. Excluding Nomor, which is described further below, we recorded approximately $ 224 million of goodwill, $ 35 million of trade names and $ 114 million of other intangibles, primarily customer lists, related to these acquisitions. Supplemental cash flow information regarding the acquisitions was as follows: Nine Months Ended September 30, (In millions) 2020 2019 Assets acquired $ 16 $ 402 Liabilities assumed — ( 51 ) Net assets acquired $ 16 $ 352 Net cash paid $ 11 $ 338 Seller financed debt 5 11 Contingent earnout — 4 Purchase price $ 16 $ 352 Nomor On September 6, 2019, we acquired Nomor, a leading provider of pest control services in Sweden and Norway, for approximately 2 billion Swedish krona (approximately $ 198 million using the September 6, 2019 exchange rate, net of approximately $ 9 million of cash acquired). This strategic acquisition launched our expansion into the European pest control market. We funded the acquisition using cash on hand and proceeds from a $ 120 million borrowing under our Revolving Credit Facility. Nomor is included in the Condensed Consolidated Statements of Financial Position based on an allocation of the purchase price. The final purchase price allocation was as follows (in millions): Current and other assets (1) $ 11 Property and equipment 6 Goodwill 153 Identifiable intangible assets (2) 66 Current liabilities (3) ( 20 ) Long-term liabilities (4) ( 19 ) Total purchase price $ 198 ___________________________________ (1) Primarily trade receivables and net of approximately $ 9 million of cash acquired . (2) Primarily customer lists. (3) Primarily advanced collections from customers. (4) Includes $ 15 million of deferred tax liabilities as a result of tax basis differences in intangible assets . The following pro forma consolidated financial information presents the combined operations of Terminix (formerly ServiceMaster Global Holdings, Inc.) and Nomor for the three and nine months ended September 30, 2019: (Unaudited) Three months ended Nine months ended (In millions, except per share data) September 30, 2019 September 30, 2019 Consolidated revenue $ 474 $ 1,414 Consolidated net income $ 29 $ 160 Basic earnings per share $ 0.22 $ 1.18 Diluted earnings per share $ 0.21 $ 1.17 ASC 805, “ Business Combinations ,” establishes guidelines regarding the presentation of unaudited pro forma information. Therefore, this unaudited pro forma information is not intended to represent, nor do we believe it is indicative of, the consolidated results of operations of Terminix that would have been reported had the acquisition been completed at the beginning of 2018. This unaudited pro forma information does not give effect to the anticipated business and tax synergies of the acquisition and is not representative or indicative of the anticipated future consolidated results of operations of Terminix. The most significant adjustments made to the pro forma financial information are the inclusion of $ 4 million of acquisition-related costs as if incurred in the first quarter of 2018, estimated quarterly interest expense of approximately $ 1 million related to financing obtained for the transaction and the estimated tax impact of these adjustments. The unaudited pro forma financial information includes various assumptions. The tax impact of these adjustments was calculated based on Nomor’s statutory rate. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note 14. Income Taxes As required by ASC 740, “Income Taxes,” we compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from continuing operations before income taxes, except for significant unusual or infrequently occurring items. Our estimated tax rate is adjusted each quarter in accordance with ASC 740. The effective tax rate was ( 231.3 ) percent and 34.8 percent for the three months ended September 30, 2020 and 2019, respectively. The effective tax rate on income from continuing operations was 61.8 percent and 17.4 percent for the nine months ended September 30, 2020 and 2019, respectively. The negative effective rate for the three months ended September 30, 2020 and the unusual high effective rate for the nine months ended September 30, 2020 is due to the Mobile Bay Formosan termite settlement. A significant portion of the settlement is considered non-deductible for income tax purposes. The effective tax rate on income from continuing operations for the nine months ended September 30, 2019, was primarily affected by the disposition of the Frontdoor retained shares in a non-taxable debt-for-equity exchange that was recorded discretely in the three months ended March 31, 2019. As of September 30, 2020 and December 31, 2019, we had $ 13 million and $ 14 million, respectively, of tax benefits primarily reflected in U.S. Federal and state tax returns that have not been recognized for financial reporting purposes (“unrecognized tax benefits”). Based on information currently available, it is reasonably possible that over the next 12 month period unrecognized tax benefits may decrease by $ 2 million as the result of settlements of ongoing audits, statute of limitation expirations or final settlements of uncertain tax positions in multiple jurisdictions. Our policy is to recognize interest income, interest expense and penalties related to our tax positions within the tax provision. |
Business Segment Reporting
Business Segment Reporting | 9 Months Ended |
Sep. 30, 2020 | |
Business Segment Reporting [Abstract] | |
Business Segment Reporting | Note 15. Business Segment Reporting Through January 2020, when we announced were exploring strategic alternatives related to the ServiceMaster Brands business that resulted in it being classified as held for sale, we conducted business through two reportable segments: Terminix and ServiceMaster Brands. We now have one reportable segment, Terminix. In accordance with accounting standards for segments, we identified Terminix as our reportable segment primarily based on the nature of the services it provides and the operating results that are regularly reviewed by our chief operating decision maker (the “CODM”) to evaluate performance and allocate resources. The Terminix segment provides termite and pest control services to residential and commercial customers and distributes pest control products , primarily under the Terminix, Terminix Commercial, Copesan, Assured Environments, Gregory Pest Solutions and McCloud Services brand names . European Pest Control and Other includes our European pest control operations, primarily under our Nomor, Pelias and Terminix UK brands, our captive insurance subsidiary, which provides automobile, workers' compensation and general liability coverage to our reportable segment, and our headquarters operations (substantially all of which costs are allocated to our reportable segment), which provides various technology, finance, legal and other support services to Terminix. Our European pest control operations meet the definition of an operating segment, but do not meet the quantitative thresholds to require them to be reported as a reportable segment. Information regarding the accounting policies used by us are described in our 2019 Form 10-K. We derive substantially all of our revenue from customers and franchisees in the United States with approximately five percent generated in foreign markets as of September 30, 2020. Operating expenses of Terminix consist primarily of direct costs and indirect costs allocated from Corporate. We use Reportable Segment Adjusted EBITDA as our measure of reportable segment profitability. Accordingly, the CODM evaluates performance and allocates resources based primarily on Reportable Segment Adjusted EBITDA. Reportable Segment Adjusted EBITDA is defined as net income before: unallocated corporate expenses; costs historically allocated to ServiceMaster Brands; European pest control; depreciation and amortization expense; acquisition-related costs; Mobile Bay Formosan termite settlement; non-cash stock-based compensation expense; restructuring and other charges; realized (gain) on investment in frontdoor, inc.; net earnings from discontinued operations; provision for income taxes; loss on extinguishment of debt; and interest expense. Our definition of Reportable Segment Adjusted EBITDA may not be calculated or comparable to similarly titled measures of other companies. We believe Reportable Segment Adjusted EBITDA enables management to better understand trends and financial performance related to operations and is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by variations in capital structures, taxation, the age and book depreciation of facilities and equipment, restructuring initiatives and equity-based, long-term incentive plans. Information for continuing operations for Terminix and European Pest Control and Other is presented below: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Revenue: Terminix $ 491 $ 461 $ 1,446 $ 1,375 European Pest Control and Other 21 4 56 4 Total Revenue $ 512 $ 465 $ 1,502 $ 1,378 Reportable Segment Adjusted EBITDA: (1) Terminix $ 98 $ 72 $ 280 $ 261 ___________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA : Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Net (Loss) Income $ ( 7 ) $ 25 $ 61 $ 154 Unallocated corporate expenses ( 1 ) ( 2 ) ( 1 ) ( 5 ) Costs historically allocated to ServiceMaster Brands 3 3 9 9 Equity in earnings of joint ventures 1 — 2 — European pest control ( 3 ) ( 1 ) ( 6 ) ( 1 ) Depreciation and amortization expense 27 23 81 68 Acquisition-related costs ( 1 ) 8 — 12 Mobile Bay Formosan termite settlement (a) 51 — 51 — Non-cash stock-based compensation expense 3 3 13 10 Restructuring and other charges 2 4 14 12 Realized (gain) on investment in frontdoor, inc. — — — ( 40 ) Net earnings from discontinued operations ( 14 ) ( 17 ) ( 40 ) ( 51 ) Provision for income taxes 15 4 31 22 Loss on extinguishment of debt 1 — 1 6 Interest expense 22 19 67 64 Reportable Segment Adjusted EBITDA $ 98 $ 72 $ 280 $ 261 ___________________________________ (a) Represents a charge of $ 49 million and the prior period portion of a reduction of revenue of $ 3 million and $ 2 million in the three and nine months ended September 30, 2020, respectively, related to the Mobile Bay Formosan termite settlement described in Note 6 to the condensed consolidated financial statements. We exclude these charges from Adjusted EBITDA because we believe they do not reflect our on-going operations and because we believe doing so is useful to investors in aiding period-to-period comparability. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 16. Fair Value Measurements The period-end carrying amounts of cash and cash equivalents, receivables, restricted cash, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. The period-end carrying amounts of long-term notes receivable approximate fair value as the effective interest rates for these instruments are comparable to period-end market rates. The period-end carrying amounts of short- and long-term marketable securities also approximate fair value, with unrealized gains and losses reported in interest and net investment income in the Condensed Consolidated Statements of Operations and Comprehensive Income. The carrying amount of total debt was $ 1,665 million and $ 1,735 million, and the estimated fair value was $ 1,739 million and $ 1,839 million as of September 30, 2020 and December 31, 2019, respectively. The fair value of our debt is estimated based on available market prices for the same or similar instruments which are considered significant other observable inputs (Level 2) within the fair value hierarchy. The fair values presented reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in this report are based on information available to us as of September 30, 2020 and December 31, 2019. We have estimated the fair value of our financial instruments measured at fair value on a recurring basis using the market and income approaches. For deferred compensation trust assets and derivative contracts, which are carried at their fair values, our fair value estimates incorporate quoted market prices, other observable inputs (for example, forward interest rates) and unobservable inputs (for example, forward commodity prices) at the balance sheet date. Interest rate swap contracts are valued using forward interest rate curves obtained from third-party market data providers. The fair value of each contract is the sum of the expected future settlements between the contract counterparties, discounted to present value. The expected future settlements are determined by comparing the contract interest rate to the expected forward interest rate as of each settlement date and applying the difference between the two rates to the notional amount of debt in the interest rate swap contracts. Fuel swap contracts are valued using forward fuel price curves obtained from third-party market data providers. The fair value of each contract is the sum of the expected future settlements between the contract counterparties, discounted to present value. The expected future settlements are determined by comparing the contract fuel price to the expected forward fuel price as of each settlement date and applying the difference between the contract and expected prices to the notional gallons in the fuel swap contracts. We regularly review the forward price curves obtained from third-party market data providers and related changes in fair value for reasonableness utilizing information available to us from other published sources. Effective March 3, 2020, we entered into a fixed-to-fixed cross-currency interest rate swap to hedge foreign currency risk associated with the fixed-rate Swedish krona denominated intercompany debt at Nomor. The five year interest rate swap matures March 31, 2025 and has a notional amount of 725 million Swedish krona, or approximately $ 74 million, and swaps interest payments of 3.5 percent Swedish krona for interest receipts of 4.147 percent U.S. dollar. This hedge was entered into to mitigate foreign currency risk inherent in Swedish krona denominated debt and is not for speculative trading purposes. This contract has been designated as a cash flow hedge of a fixed rate borrowing and is recorded at fair value. We also entered into a cross-currency swap agreement to hedge a portion of our net investment in Nomor against future volatility in the exchange rates between the Swedish krona and the U.S. dollar. The five year cross-currency swap has a fixed notional amount of 1.275 billion Swedish krona, or approximately $ 131 million, at an annual rate of zero percent and a maturity date of March 31, 2025 . At inception, the cross-currency swap was designated as a net investment hedge and is recorded at fair value. Changes in the fair value of these contracts are recorded within Other comprehensive (loss) income on the Condensed Consolidated Statements of Financial Position. Interest accruals and coupon payments are recognized directly in interest expense, thus reflecting a Swedish krona fixed rate. Upon discontinuation of the net investment hedge, the changes in spot value and any amounts excluded from the assessment of hedge effectiveness that have not been recognized in earnings will remain within CTA until the hedged net investment is sold, diluted, or liquidated. We have not changed our valuation techniques for measuring the fair value of any financial assets and liabilities during the year. Transfers between levels, if any, are recognized at the end of the reporting period. There were no significant transfers between levels during each of the nine month periods ended September 30, 2020 and 2019. 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 were as follows: Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Active Observable Unobservable Statement of Financial Carrying Markets Inputs Inputs (In millions) Position Location Value (Level 1) (Level 2) (Level 3) As of September 30, 2020: Financial Assets: Deferred compensation trust Long-term marketable securities $ 13 $ 13 $ — $ — Fuel swap contracts Prepaid expenses and other assets and Other assets 2 — — 2 Total financial assets $ 15 $ 13 $ — $ 2 Financial Liabilities: Cross-currency interest rate swap Other long-term obligations $ 7 $ — $ 7 $ — Net investment hedge Other long-term obligations 10 — 10 — Fuel swap contracts Accrued liabilities—Other and Other long-term obligations 2 — — 2 Interest rate swap contract Accrued liabilities—Other and Other long-term obligations 38 — 38 — Total financial liabilities $ 57 $ — $ 55 $ 2 As of December 31, 2019: Financial Assets: Deferred compensation trust assets Long-term marketable securities $ 13 $ 13 $ — $ — Fuel swap contracts Prepaid expenses and other assets and Other assets 1 — — 1 Interest rate swap contracts Other assets 5 — 5 — Total financial assets $ 19 $ 13 $ 5 $ 1 Financial Liabilities: Interest rate swap contracts Accrued liabilities—Other and Other long-term obligations $ 1 $ — $ 1 $ — Total financial liabilities $ 1 $ — $ 1 $ — A reconciliation of the beginning and ending fair values of financial instruments valued using significant unobservable inputs (Level 3) on a recurring basis is presented as follows: Fuel Swap Contract Assets (In millions) (Liabilities) Location of Gain (Loss) included in Earnings Balance as of December 31, 2019 $ 1 Total gains (losses) (realized and unrealized) Included in earnings 2 Cost of services rendered and products sold Included in other comprehensive income ( 2 ) Settlements — Balance as of September 30, 2020 $ — Balance as of December 31, 2018 $ ( 4 ) Total gains (losses) (realized and unrealized) Included in earnings — Cost of services rendered and products sold Included in other comprehensive income 2 Settlements — Balance as of September 30, 2019 $ ( 1 ) The following tables present information relating to the significant unobservable inputs of our Level 3 financial instruments: Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of September 30, 2020: Fuel swap contracts $ — Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.10 - $ 2.32 $ 2.20 As of December 31, 2019: Fuel swap contracts $ 1 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.37 - $ 2.80 $ 2.61 ___________________________________ (1) Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. As of September 30, 2020, we had fuel swap contracts to pay fixed prices for fuel with an aggregate notional amount of $ 28 million, maturing through 2021. Under the terms of our fuel swap contracts, we are required to post collateral in the event that the fair value of the contracts exceeds a certain agreed upon liability level and in other circumstances required by the counterparty. As of September 30, 2020, we had posted $ 2 million in letters of credit as collateral under our fuel hedging program, which were issued under the Revolving Credit Facility. The effective portion of the gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments is recorded in accumulated other comprehensive income. These amounts are reclassified into earnings in the same period or periods during which the hedged forecasted debt interest settlement or the fuel settlement affects earnings. See Note 9 to the condensed consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in accumulated other comprehensive income and for the amounts reclassified out of accumulated other comprehensive income and into earnings. The amount expected to be reclassified into earnings during the next 12 months includes unrealized gains and losses related to open fuel hedges and interest rate swaps. Specifically, as the underlying forecasted transactions occur during the next 12 months, the hedging gains and losses in accumulated other comprehensive income expected to be recognized in earnings is a loss of $ 5 million, net of tax, as of September 30, 2020 . The amounts that are ultimately reclassified into earnings will be based on actual fuel prices and interest rates at the time the positions are settled and may differ materially from the amount noted above. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 17. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued. The dilutive effect of stock options, RSUs and performance share units are reflected in diluted earnings per share by applying the treasury stock method. A reconciliation of the amounts included in the computation of basic earnings per share from continuing operations and diluted earnings per share from continuing operations is as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2020 2019 2020 2019 (Loss) income from continuing operations $ ( 21 ) $ 8 $ 20 $ 103 Weighted-average common shares outstanding 132.0 135.8 132.9 135.9 Effect of dilutive securities: RSUs (1) — 0.3 0.1 0.3 Stock options (1),(2) — 0.3 — 0.3 Weighted-average common shares outstanding—assuming dilution 132.0 136.5 133.1 136.5 Basic (loss) earnings per share from continuing operations $ ( 0.17 ) $ 0.06 $ 0.14 $ 0.76 Diluted (loss) earnings per share from continuing operations $ ( 0.17 ) $ 0.06 $ 0.14 $ 0.75 ___________________________________ (1) Securities are not included in the table in periods when antidilutive. For the three months ended September 30, 2020, weighted average potentially dilutive shares from RSUs of 0.2 million and weighted average potentially dilutive shares from stock options of 0.1 million were excluded from the dilutive (loss) earnings per share calculation due to the antidilutive effect such shares would have had on net loss per common share. (2) Options to purchase 1.4 million shares for the three months ended September 30, 2020, and 1.4 million and 0.5 million shares for the nine months ended September 30, 2020, and 2019, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. There were an insignificant amount of options that would have been anti-dilutive in the three months ended September 30, 2019. |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Abstract] | |
Adoption Of New Accounting Standards | Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions and reasonable and supportable forecasts. This ASU also requires enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. We adopted this ASU on January 1, 2020, and this adoption did not have a material impact on our financial condition or the results of our operations. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement. ” Under ASU 2018-13, entities are required to disclose the amount of total gains or losses for the period recognized in other comprehensive income that is attributable to fair value changes in assets and liabilities held as of the balance sheet date and categorized within Level 3 of the fair value hierarchy. Additionally, the ASU requires the disclosure of the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated for fair value measurements categorized within Level 3 of the fair value hierarchy. We adopted this ASU on January 1, 2020, and this adoption had no impact to our disclosures. S ee Note 16 for further discussion of our Level 3 investments. In March 2020, the FASB issued ASU 2020-03, “ Codification Improvements. ” This ASU does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2020. We adopted the updates, as applicable, in 2020, and this adoption did not have a material impact on our financial condition or the results of our operations. In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting .” The ASU provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting in response to the risk of cessation of the London Interbank Offered Rate (LIBOR). This amendment provides for optional expedients and exceptions for applying generally accepted accounting principles to contracts and hedging relationships that are affected by LIBOR and other reference rates. The ASU generally allows for a hedge accounting to continue if the hedge was highly effective or met other standards prior to reference rate reform. Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that exist as of March 12, 2020. The relief provided in this ASU is only available for a limited time, generally through December 31, 2022. Our debt agreement and interest rate swap that utilize LIBOR have not yet discontinued the use of LIBOR and, therefore, this ASU is not yet effective for us. To the extent our debt and interest rate swap arrangements change to another accepted rate, we will utilize the relief in this ASU to continue hedge accounting as we expect the remaining critical terms of our hedging relationship will still match. A ccounting Standards Issued But Not Yet Effective In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ,” which simplifies the accounting for income taxes by removing certain exceptions. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. We are currently evaluating the impact the adoption of this ASU will have on our consolidated financial statements. We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not expect the future adoption of any such pronouncements will have a material impact on our financial condition or the results of our operations. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenues[Abstract] | |
Disaggregation Of Revenue | European Pest Control Terminix and Other Total Three months ended Three months ended Three months ended September 30, September 30, September 30, (In millions) 2020 2019 2020 2019 2020 2019 Major service line Residential Pest Control $ 193 $ 183 $ — $ — $ 193 $ 183 Commercial Pest Control 119 110 — — 119 110 Termite and Home Services 151 144 — — 151 144 Sales of Products and Other 28 24 — — 28 24 European Pest Control — — 21 4 21 4 Total $ 491 $ 461 $ 21 $ 4 $ 512 $ 465 European Pest Control Terminix and Other Total Nine months ended Nine Months ended Nine Months ended September 30, September 30, September 30, (In millions) 2020 2019 2020 2019 2020 2019 Major service line Residential Pest Control $ 534 $ 519 $ — $ — $ 534 $ 519 Commercial Pest Control 332 309 — — 332 309 Termite and Home Services 502 483 — — 502 483 Sales of Products and Other 78 64 — — 78 64 European Pest Control — — 56 4 56 4 Total $ 1,446 $ 1,375 $ 56 $ 4 $ 1,502 $ 1,378 |
Movement In Deferred Revenue | (In millions) Deferred revenue Balance, December 31, 2019 $ 92 Deferral of revenue 89 Recognition of deferred revenue ( 89 ) Balance, September 30, 2020 $ 92 Balance, December 31, 2018 $ 91 Deferral of revenue 104 Recognition of deferred revenue ( 99 ) Balance, September 30, 2019 $ 96 |
Restructuring And Other Charg_2
Restructuring And Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring And Other Charges [Abstract] | |
Schedule Of Restructuring Charges | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Terminix (1) $ 2 $ 1 $ 6 $ 4 Corporate Functions (2) 1 1 8 5 Global Service Center relocation (3) — — — 1 Total restructuring charges $ 2 $ 2 $ 14 $ 10 ___________________________________ (1) For the three and nine months ended September 30, 2020, these charges included $ 1 million and $ 3 million of severance and other costs and $ 1 million and $ 3 million of impairment and other charges related to our call center right of use assets, which we exited during the second quarter. Severance and other costs of $ 2 million were unpaid and accrued as of September 30, 2020. For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 4 million, respectively, of severance and other costs. (2) We have historically made changes on an ongoing basis to enhance capabilities and reduce costs in our corporate functions that provide company-wide administrative services to support operations. Of the restructuring charges incurred by European Pest Control and Other, $ 2 million was unpaid and accrued as of September 30, 2020. For the three and nine months ended September 30, 2020 and 2019, these charges were comprised of the following : Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Severance $ — $ — $ 3 $ 1 Other costs (a) 1 — 5 4 Total Corporate Functions $ 1 $ 1 $ 8 $ 5 ___________________________________ (a) Represents costs incurred in connection with our CEO transition, charges associated with the marketing of our corporate aircraft for sale and accelerated depreciation on systems we are replacing with the implementation of our new customer experience platform. (3) For the nine months ended September 30, 2019, these charges included lease termination and other charges of $ 1 million related to our headquarter relocation. |
Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges | Accrued Restructuring (In millions) Charges Balance as of December 31, 2019 $ 1 Costs incurred 14 Costs paid or otherwise settled ( 12 ) Balance as of September 30, 2020 $ 4 Balance as of December 31, 2018 $ 7 Costs incurred 10 Costs paid or otherwise settled ( 16 ) Balance as of September 30, 2019 $ 1 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations [Abstract] | |
Schedule Of Operating Results Of Discontinued Operations | Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2020 2019 2020 2019 Revenue $ 71 $ 63 $ 198 $ 191 Cost of services rendered and products sold 32 27 93 79 Selling and administrative expenses 11 12 34 38 Amortization expense — 1 1 3 Restructuring and other charges (1) 9 1 18 3 Interest and net investment income — — — ( 1 ) Income before income taxes 18 22 53 69 Provision for income taxes 4 5 13 18 Net earnings from discontinued operations $ 14 $ 17 $ 40 $ 51 Weighted-average common shares outstanding - Basic 132.0 135.8 132.9 135.9 Weighted-average common shares outstanding - Diluted 132.0 136.5 133.1 136.5 Basic Earnings Per Share: Net earnings from discontinued operations $ 0.11 $ 0.13 $ 0.30 $ 0.38 Diluted Earnings Per Share: Net earnings from discontinued operations $ 0.11 $ 0.13 $ 0.30 $ 0.38 ___________________________________ (1) Includes $ 9 million and $ 18 million of professional fees and other costs incurred in connection with the strategic evaluation and ultimate sale in the three and nine months ended September 30, 2020, respectively. |
Schedule Of Assets And Liabilities Of Discontinued Operations | As of As of (In millions) September 30, 2020 December 31, 2019 Assets: Current Assets: Receivables, less allowances of $ 5 and $ 3 , respectively $ 47 $ 40 Inventories 6 2 Prepaid expenses and other assets 3 3 Total Current Assets 56 45 Other Assets: Property and equipment, net 12 8 Operating lease right-of-use assets 2 2 Goodwill 180 183 Intangible assets, primarily trade names, service marks and trademarks, net 626 622 Notes receivable 11 13 Deferred customer acquisition costs 1 1 Other assets 4 5 Total Assets $ 892 $ 879 Liabilities and Stockholders' Equity: Current Liabilities: Accounts payable $ 11 $ 8 Accrued liabilities: Payroll and related expenses 4 5 Other 30 23 Deferred revenue 4 4 Current portion of lease liability 1 1 Current portion of long-term debt 2 1 Total Current Liabilities 51 42 Long-Term Debt 1 2 Other Long-Term Liabilities: Deferred taxes 2 1 Other long-term obligations 6 6 Long-term lease liability 1 2 Total Liabilities $ 62 $ 52 |
Schedule Of Cash Flows Of Discontinued Operations | Three Months Ended September 30, (In millions) 2020 2019 Depreciation $ — $ 1 Amortization — 1 Capital expenditures ( 1 ) ( 1 ) |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Self-Insured Claims, Net [Member] | |
Commitments and Contingencies [Line Items] | |
Schedule Of Reconciliation Of Beginning And Ending Accrued Claims | Accrued Self-insured (In millions) Claims, Net Balance as of December 31, 2019 $ 111 Provision for self-insured claims 35 Cash payments ( 21 ) Balance as of September 30, 2020 $ 125 Balance as of December 31, 2018 $ 111 Provision for self-insured claims 26 Cash payments ( 28 ) Balance as of September 30, 2019 $ 108 |
Litigated Claims And Non-Litigated Claims [Member] | |
Commitments and Contingencies [Line Items] | |
Schedule Of Reconciliation Of Beginning And Ending Accrued Claims | Accrued Termite Damage (In millions) Claims Balance as of December 31, 2019 $ 80 Provision for termite damage claims 41 Cash payments ( 42 ) Balance as of September 30, 2020 $ 79 Balance as of December 31, 2018 $ 28 Provision for termite damage claims 28 Cash payments ( 31 ) Balance as of September 30, 2019 $ 25 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets [Abstract] | |
Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters | European Pest (In millions) Terminix Control and Other (1) Total Balance as of December 31, 2019 $ 1,946 $ 150 $ 2,096 Acquisitions 10 — 10 Purchase accounting adjustments — 26 26 Impact of foreign exchange rates ( 1 ) ( 4 ) ( 5 ) Balance as of September 30, 2020 $ 1,956 $ 171 $ 2,127 ___________________________________ (1) European Pest Control and Other includes goodwill related to pest control operations in Europe. |
Schedule Of Other Intangible Asset Balances For Continuing Operations | As of September 30, 2020 As of December 31, 2019 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 888 $ — $ 888 $ 888 $ — $ 888 Customer relationships (2) 640 ( 443 ) 197 659 ( 423 ) 236 Other (3) 68 ( 41 ) 28 79 ( 34 ) 45 Total $ 1,596 $ ( 483 ) $ 1,113 $ 1,626 $ ( 457 ) $ 1,169 ___________________________________ (1) Not subject to amortization. (2) Includes purchase accounting adjustments subsequent to December 31, 2019, primarily related to our acquisition of Nomor, of approximately $ 17 million. (3) Includes purchase accounting adjustments subsequent to December 31, 2019, primarily related to our acquisition of Nomor, of approximately $ 9 million. |
Schedule Of Anticipated Amortization Expense Of Intangible Assets | (In millions) 2020 2021 2022 2023 2024 2025 Amortization expense $ 8 $ 35 $ 33 $ 30 $ 22 $ 18 |
Comprehensive (Loss) Income (Ta
Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Comprehensive (Loss) Income [Abstract] | |
Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects | Unrealized Gains Foreign (Losses) on Currency (In millions) Derivatives Translation Total Balance as of December 31, 2019 $ 13 $ ( 5 ) $ 9 Other comprehensive income before reclassifications: Pre-tax amount ( 66 ) ( 7 ) ( 73 ) Tax provision 12 — 12 After-tax amount ( 54 ) ( 7 ) ( 61 ) Amounts reclassified within accumulated other comprehensive (loss) income (1) 17 ( 17 ) — Amounts reclassified from accumulated other comprehensive (loss) income (2) 3 — 3 Net current period other comprehensive (loss) income ( 34 ) ( 24 ) ( 58 ) Balance as of September 30, 2020 $ ( 21 ) $ ( 29 ) $ ( 49 ) Balance as of December 31, 2018 $ 20 $ ( 15 ) $ 5 Other comprehensive income before reclassifications: Pre-tax amount ( 14 ) ( 2 ) ( 16 ) Tax benefit 7 — 7 After-tax amount ( 7 ) ( 2 ) ( 9 ) Amounts reclassified from accumulated other comprehensive (loss) income (2) ( 3 ) — ( 3 ) Net current period other comprehensive (loss) income ( 10 ) ( 2 ) ( 13 ) Balance as of September 30, 2019 $ 9 $ ( 18 ) $ ( 8 ) ___________________________________ (1) Represents unrealized gains (losses) on our cross currency swap and net investment hedge related to foreign currency exchange rate fluctuations. (2) Amounts are net of tax. Reclassifications out of accumulated other comprehensive (loss) income included the following components for the periods indicated . |
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) | Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Gains (losses) on derivatives: Fuel swap contracts $ ( 1 ) $ — $ ( 3 ) $ — Interest rate swap contracts ( 1 ) 1 ( 2 ) 4 Net gains (losses) on derivatives ( 2 ) 1 ( 4 ) 4 Impact of income taxes 1 — 2 — Total reclassifications for the period $ ( 2 ) $ 1 $ ( 3 ) $ 3 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows | Nine Months Ended September 30, (In millions) 2020 2019 Cash paid for or (received from): Interest expense (1) $ 57 $ 55 Interest and dividend income ( 1 ) ( 2 ) Income taxes, net of refunds 4 23 ___________________________________ (1) For the nine months ended September 30, 2019, excludes $ 12 million received in connection with our partial terminations of the then-existing interest rate swap. |
Summary Of Cash And Cash Equivalents And Restricted Cash | As of As of September 30, December 31 (In millions) 2020 2019 2019 2018 Cash and cash equivalents $ 288 $ 140 $ 280 $ 224 Restricted cash 89 89 89 89 Total Cash and cash equivalents and Restricted cash $ 377 $ 228 $ 368 $ 313 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | As of As of September 30, December 31, (In millions) 2020 2019 Senior secured term loan facility maturing in 2026 (1) $ 538 $ 593 Revolving credit facility maturing 2024 — — 5.125 % notes maturing in 2024 (2) 743 742 7.45 % notes maturing in 2027 (3) 169 167 7.25 % notes maturing in 2038 (3) 41 40 Vehicle finance leases (4) 93 95 Other (5) 82 98 Less current portion (6) ( 100 ) ( 69 ) Total long-term debt $ 1,565 $ 1,666 __________________________________ (1) As of September 30, 2020 and December 31, 2019, presented net of $ 7 million and $ 6 million in unamortized debt issuance costs, respectively, and $ 1 million of unamortized original issue discount in each period. On September 30, 2020, we made an advanced amortization payment of $ 51 million on the Term Loan B. See further discussion in Term Loan Facility below. (2) As of September 30, 2020 and December 31, 2019, presented net of $ 7 million and $ 8 million, respectively of unamortized debt issuance costs. (3) As of September 30, 2020 and December 31, 2019, collectively presented net of $ 26 million and $ 28 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. (4) We have entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows us to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are finance leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. (5) As of September 30, 2020 and December 31, 2019, includes approximately $ 81 million and $ 85 million, respectively, of future payments in connection with acquisitions. (6) The current portion of long-term debt consists of deferred purchase price and earnout payments on acquisitions and scheduled principal payments of long-term debt due within 12 months. |
Schedule of Interest Rate Swap Agreements | Notional (In millions) Amount Fixed Rate (1) Interest rate swap agreement in effect as of December 31, 2018 $ 650 1.493 % Terminated ( 479 ) Entered into effect — Interest rate swap agreement in effect as of September 30, 2019 $ 171 1.493 % Terminated ( 171 ) Entered into effect 550 1.615 % Interest rate swap agreement in effect as of December 31, 2019 $ 550 1.615 % Terminated ( 4 ) Entered into effect — Interest rate swap agreement in effect as of September 30, 2020 $ 546 1.615 % ___________________________________ (1) Before the application of the applicable borrowing margin. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Components Of Lease Expense | Three months ended September 30, Nine months ended September 30, (In millions) 2020 2019 2020 2019 Finance lease cost Depreciation of finance lease ROU assets $ 10 $ 9 $ 29 $ 25 Interest on finance lease liabilities 1 1 2 4 Operating lease cost 6 6 19 19 Variable lease cost — 1 1 3 Sublease income ( 1 ) ( 1 ) ( 2 ) ( 2 ) Total lease cost $ 16 $ 17 $ 49 $ 48 |
Supplemental Cash Flow Information And Other Information For Leases | Nine months ended September 30, (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 21 $ 17 Operating cash flows for finance leases 2 4 Financing cash flows for finance leases 28 25 ROU assets obtained in exchange for lease obligations: Operating leases 3 7 Finance leases 23 39 |
Future Minimum Lease Payments Under Non-Cancellable Leases | (In millions) Operating Leases Finance Leases Year ended December 31, 2020 (excluding the nine months ended September 30, 2020) $ 7 $ 10 2021 22 33 2022 19 23 2023 15 16 2024 11 8 Thereafter 85 4 Total future minimum lease payments 158 94 Less imputed interest ( 42 ) ( 3 ) Total $ 116 $ 92 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Schedule Of Supplemental Cash Flow Information Regarding Acquisitions | Nine Months Ended September 30, (In millions) 2020 2019 Assets acquired $ 16 $ 402 Liabilities assumed — ( 51 ) Net assets acquired $ 16 $ 352 Net cash paid $ 11 $ 338 Seller financed debt 5 11 Contingent earnout — 4 Purchase price $ 16 $ 352 |
Preliminary Purchase Price Allocation | Current and other assets (1) $ 11 Property and equipment 6 Goodwill 153 Identifiable intangible assets (2) 66 Current liabilities (3) ( 20 ) Long-term liabilities (4) ( 19 ) Total purchase price $ 198 ___________________________________ (1) Primarily trade receivables and net of approximately $ 9 million of cash acquired . (2) Primarily customer lists. (3) Primarily advanced collections from customers. (4) Includes $ 15 million of deferred tax liabilities as a result of tax basis differences in intangible assets . |
Summary Of Pro Forma Consolidated Financial Information | (Unaudited) Three months ended Nine months ended (In millions, except per share data) September 30, 2019 September 30, 2019 Consolidated revenue $ 474 $ 1,414 Consolidated net income $ 29 $ 160 Basic earnings per share $ 0.22 $ 1.18 Diluted earnings per share $ 0.21 $ 1.17 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Segment Reporting [Abstract] | |
Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Revenue: Terminix $ 491 $ 461 $ 1,446 $ 1,375 European Pest Control and Other 21 4 56 4 Total Revenue $ 512 $ 465 $ 1,502 $ 1,378 Reportable Segment Adjusted EBITDA: (1) Terminix $ 98 $ 72 $ 280 $ 261 ___________________________________ (1) Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA : |
Schedule Of Reconciliation Of Net Income (Loss) To Reportable Segment Adjusted EBITDA | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2020 2019 2020 2019 Net (Loss) Income $ ( 7 ) $ 25 $ 61 $ 154 Unallocated corporate expenses ( 1 ) ( 2 ) ( 1 ) ( 5 ) Costs historically allocated to ServiceMaster Brands 3 3 9 9 Equity in earnings of joint ventures 1 — 2 — European pest control ( 3 ) ( 1 ) ( 6 ) ( 1 ) Depreciation and amortization expense 27 23 81 68 Acquisition-related costs ( 1 ) 8 — 12 Mobile Bay Formosan termite settlement (a) 51 — 51 — Non-cash stock-based compensation expense 3 3 13 10 Restructuring and other charges 2 4 14 12 Realized (gain) on investment in frontdoor, inc. — — — ( 40 ) Net earnings from discontinued operations ( 14 ) ( 17 ) ( 40 ) ( 51 ) Provision for income taxes 15 4 31 22 Loss on extinguishment of debt 1 — 1 6 Interest expense 22 19 67 64 Reportable Segment Adjusted EBITDA $ 98 $ 72 $ 280 $ 261 ___________________________________ (a) Represents a charge of $ 49 million and the prior period portion of a reduction of revenue of $ 3 million and $ 2 million in the three and nine months ended September 30, 2020, respectively, related to the Mobile Bay Formosan termite settlement described in Note 6 to the condensed consolidated financial statements. We exclude these charges from Adjusted EBITDA because we believe they do not reflect our on-going operations and because we believe doing so is useful to investors in aiding period-to-period comparability. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Schedule Of The Carrying Amount And Estimated Fair Value Of The Company's Financial Instruments That Are Recorded At Fair Value On A Recurring Basis | Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Active Observable Unobservable Statement of Financial Carrying Markets Inputs Inputs (In millions) Position Location Value (Level 1) (Level 2) (Level 3) As of September 30, 2020: Financial Assets: Deferred compensation trust Long-term marketable securities $ 13 $ 13 $ — $ — Fuel swap contracts Prepaid expenses and other assets and Other assets 2 — — 2 Total financial assets $ 15 $ 13 $ — $ 2 Financial Liabilities: Cross-currency interest rate swap Other long-term obligations $ 7 $ — $ 7 $ — Net investment hedge Other long-term obligations 10 — 10 — Fuel swap contracts Accrued liabilities—Other and Other long-term obligations 2 — — 2 Interest rate swap contract Accrued liabilities—Other and Other long-term obligations 38 — 38 — Total financial liabilities $ 57 $ — $ 55 $ 2 As of December 31, 2019: Financial Assets: Deferred compensation trust assets Long-term marketable securities $ 13 $ 13 $ — $ — Fuel swap contracts Prepaid expenses and other assets and Other assets 1 — — 1 Interest rate swap contracts Other assets 5 — 5 — Total financial assets $ 19 $ 13 $ 5 $ 1 Financial Liabilities: Interest rate swap contracts Accrued liabilities—Other and Other long-term obligations $ 1 $ — $ 1 $ — Total financial liabilities $ 1 $ — $ 1 $ — |
Schedule Of Reconciliation Of The Beginning And Ending Fair Values Of Financial Instruments Valued Using Significant Unobservable Inputs (Level 3) On A Recurring Basis | Fuel Swap Contract Assets (In millions) (Liabilities) Location of Gain (Loss) included in Earnings Balance as of December 31, 2019 $ 1 Total gains (losses) (realized and unrealized) Included in earnings 2 Cost of services rendered and products sold Included in other comprehensive income ( 2 ) Settlements — Balance as of September 30, 2020 $ — Balance as of December 31, 2018 $ ( 4 ) Total gains (losses) (realized and unrealized) Included in earnings — Cost of services rendered and products sold Included in other comprehensive income 2 Settlements — Balance as of September 30, 2019 $ ( 1 ) |
Schedule Of Level 3 Financial Instruments | Fair Value Valuation Weighted (in millions) Technique Unobservable Input Range Average As of September 30, 2020: Fuel swap contracts $ — Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.10 - $ 2.32 $ 2.20 As of December 31, 2019: Fuel swap contracts $ 1 Discounted Cash Flows Forward Unleaded Price per Gallon (1) $ 2.37 - $ 2.80 $ 2.61 ___________________________________ (1) Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule Of Reconciliation Of The Amounts Included In The Computation Of Basic Earnings Per Share From Continuing Operations And Diluted Earnings Per Share From Continuing Operations | Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2020 2019 2020 2019 (Loss) income from continuing operations $ ( 21 ) $ 8 $ 20 $ 103 Weighted-average common shares outstanding 132.0 135.8 132.9 135.9 Effect of dilutive securities: RSUs (1) — 0.3 0.1 0.3 Stock options (1),(2) — 0.3 — 0.3 Weighted-average common shares outstanding—assuming dilution 132.0 136.5 133.1 136.5 Basic (loss) earnings per share from continuing operations $ ( 0.17 ) $ 0.06 $ 0.14 $ 0.76 Diluted (loss) earnings per share from continuing operations $ ( 0.17 ) $ 0.06 $ 0.14 $ 0.75 ___________________________________ (1) Securities are not included in the table in periods when antidilutive. For the three months ended September 30, 2020, weighted average potentially dilutive shares from RSUs of 0.2 million and weighted average potentially dilutive shares from stock options of 0.1 million were excluded from the dilutive (loss) earnings per share calculation due to the antidilutive effect such shares would have had on net loss per common share. (2) Options to purchase 1.4 million shares for the three months ended September 30, 2020, and 1.4 million and 0.5 million shares for the nine months ended September 30, 2020, and 2019, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. There were an insignificant amount of options that would have been anti-dilutive in the three months ended September 30, 2019. |
Basis Of Presentation (Narrativ
Basis Of Presentation (Narrative) (Details) $ in Millions | Oct. 01, 2020USD ($) |
Subsequent Event [Member] | ServiceMaster Brands [Member] | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |
Basis Of Presentation [Line Items] | |
Sale of business, consideration received | $ 1,553 |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||||
Revenue recognized | $ 11 | $ 11 | $ 51 | $ 56 | ||
Contract with customer asset term | 1 year | |||||
Notes receivable, net of allowances | 28 | $ 28 | $ 38 | |||
Deferred revenue | 92 | $ 96 | 92 | $ 96 | 92 | $ 91 |
European Pest Control And Other [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Deferred revenue | $ 12 | $ 12 | $ 15 |
Revenues (Disaggregation Of Rev
Revenues (Disaggregation Of Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 512 | $ 465 | $ 1,502 | $ 1,378 |
Residential Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 193 | 183 | 534 | 519 |
Commercial Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 119 | 110 | 332 | 309 |
Termite and Home Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 151 | 144 | 502 | 483 |
Sales of Products and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 28 | 24 | 78 | 64 |
European Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 21 | 4 | 56 | 4 |
Terminix [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 491 | 461 | 1,446 | 1,375 |
Terminix [Member] | Residential Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 193 | 183 | 534 | 519 |
Terminix [Member] | Commercial Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 119 | 110 | 332 | 309 |
Terminix [Member] | Termite and Home Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 151 | 144 | 502 | 483 |
Terminix [Member] | Sales of Products and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 28 | 24 | 78 | 64 |
European Pest Control And Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 21 | 4 | 56 | 4 |
European Pest Control And Other [Member] | European Pest Control [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 21 | $ 4 | $ 56 | $ 4 |
Revenues (Movement In Deferred
Revenues (Movement In Deferred Revenue) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues[Abstract] | ||
Balance at beginning of period | $ 92 | $ 91 |
Deferral of revenue | 89 | 104 |
Recognition of deferred revenue | (89) | (99) |
Balance at end of period | $ 92 | $ 96 |
Restructuring And Other Charg_3
Restructuring And Other Charges (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 2,000,000 | $ 2,000,000 | $ 14,000,000 | $ 10,000,000 |
Restructuring charges, net of tax | 2,000,000 | 2,000,000 | 10,000,000 | 7,000,000 |
Professional fees | 0 | 2,000,000 | 0 | 2,000,000 |
Professional fees, net of tax | $ 0 | $ 1,000,000 | $ 0 | $ 1,000,000 |
Restructuring And Other Charg_4
Restructuring And Other Charges (Schedule Of Restructuring Charges) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 2,000,000 | $ 2,000,000 | $ 14,000,000 | $ 10,000,000 | |
Professional Fees | 0 | 2,000,000 | 0 | 2,000,000 | |
Stock-based compensation expense | 3,000,000 | 3,000,000 | 13,000,000 | 10,000,000 | |
Terminix [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | [1] | 2,000,000 | 1,000,000 | 6,000,000 | 4,000,000 |
Impairment charges | 1,000,000 | 3,000,000 | |||
Severance and other restructuring costs | 1,000,000 | 1,000,000 | 3,000,000 | 4,000,000 | |
Unpaid and accrued costs | 2,000,000 | 2,000,000 | |||
Corporate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | [2] | 1,000,000 | $ 1,000,000 | 8,000,000 | 5,000,000 |
Unpaid and accrued costs | 2,000,000 | 2,000,000 | |||
Global Service Center Relocation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | [3] | 1,000,000 | |||
Lease termination costs | 1,000,000 | ||||
Severance And Other Costs [Member] | Corporate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 3,000,000 | 1,000,000 | |||
Other Costs [Member] | Corporate [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | [4] | $ 1,000,000 | $ 5,000,000 | $ 4,000,000 | |
[1] | For the three and nine months ended September 30, 2020, these charges included $ 1 million and $ 3 million of severance and other costs and $ 1 million and $ 3 million of impairment and other charges related to our call center right of use assets, which we exited during the second quarter. Severance and other costs of $ 2 million were unpaid and accrued as of September 30, 2020. For the three and nine months ended September 30, 2019, these charges included $ 1 million and $ 4 million, respectively, of severance and other costs. | ||||
[2] | We have historically made changes on an ongoing basis to enhance capabilities and reduce costs in our corporate functions that provide company-wide administrative services to support operations. Of the restructuring charges incurred by European Pest Control and Other, $ 2 million was unpaid and accrued as of September 30, 2020. For the three and nine months ended September 30, 2020 and 2019, these charges were comprised of the following | ||||
[3] | For the nine months ended September 30, 2019, these charges included lease termination and other charges of $ 1 million related to our headquarter relocation. | ||||
[4] | Represents costs incurred in connection with our CEO transition, charges associated with the marketing of our corporate aircraft for sale and accelerated depreciation on systems we are replacing with the implementation of our new customer experience platform. |
Restructuring And Other Charg_5
Restructuring And Other Charges (Schedule Of Reconciliation Of The Beginning And Ending Balances Of Accrued Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Balance at the beginning of the period | $ 1 | $ 7 | ||
Costs incurred | $ 2 | $ 2 | 14 | 10 |
Costs paid or otherwise settled | (12) | (16) | ||
Balance at the end of the period | $ 4 | $ 1 | $ 4 | $ 1 |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] - Subsequent Event [Member] - ServiceMaster Brands [Member] $ in Millions | Oct. 01, 2020USD ($) |
Details of assets and liabilities and operating results of discontinued operations | |
Sale of business, consideration received | $ 1,553 |
Gain on discontinued operations | 400 |
Expected net proceeds | $ 1,116 |
Discontinued Operations (Schedu
Discontinued Operations (Schedule Of Operating Results Of Discontinued Operations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Operating results of discontinued operations | |||||
Revenue | $ 71 | $ 63 | $ 198 | $ 191 | |
Cost of services rendered and products sold | 32 | 27 | 93 | 79 | |
Selling and administrative expenses | 11 | 12 | 34 | 38 | |
Amortization expense | 1 | 1 | 3 | ||
Restructuring and other charges | [1] | 9 | 1 | 18 | 3 |
Interest and net investment income | (1) | ||||
Income before income taxes | 18 | 22 | 53 | 69 | |
Provision for income taxes | 4 | 5 | 13 | 18 | |
Net earnings from discontinued operations | $ 14 | $ 17 | $ 40 | $ 51 | |
Weighted-average common shares outstanding - Basic | 132 | 135.8 | 132.9 | 135.9 | |
Weighted-average common shares outstanding - Diluted | 132 | 136.5 | 133.1 | 136.5 | |
Net earnings from discontinued operations (in dollars per share) | $ 0.11 | $ 0.13 | $ 0.30 | $ 0.38 | |
Net earnings from discontinued operations (in dollars per share) | $ 0.11 | $ 0.13 | $ 0.30 | $ 0.38 | |
Professional fees and other costs incurred | $ 9 | $ 18 | |||
[1] | Includes $ 9 million and $ 18 million of professional fees and other costs incurred in connection with the strategic evaluation and ultimate sale in the three and nine months ended September 30, 2020, respectively. |
Discontinued Operations (Sche_2
Discontinued Operations (Schedule Of Assets And Liabilities Of Discontinued Operations) (Details) - Discontinued Operations, Held-for-sale [Member] - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Details of assets and liabilities and operating results of discontinued operations | ||
Receivables, less allowances of $5 and $3, respectively | $ 47 | $ 40 |
Inventories | 6 | 2 |
Prepaid expenses and other assets | 3 | 3 |
Total Current Assets | 56 | 45 |
Property and equipment, net | 12 | 8 |
Operating lease right-of-use assets | 2 | 2 |
Goodwill | 180 | 183 |
Intangible assets, primarily trade names, service marks and trademarks, net | 626 | 622 |
Notes receivable | 11 | 13 |
Deferred customer acquisition costs | 1 | 1 |
Other assets | 4 | 5 |
Total Assets | 892 | 879 |
Accounts payable | 11 | 8 |
Payroll and related expenses | 4 | 5 |
Other | 30 | 23 |
Deferred revenue | 4 | 4 |
Current portion of lease liability | 1 | 1 |
Current portion of long-term debt | 2 | 1 |
Total Current Liabilities | 51 | 42 |
Long-Term Debt | 1 | 2 |
Deferred taxes | 2 | 1 |
Other long-term obligations | 6 | 6 |
Long-term lease liability | 1 | 2 |
Total Liabilities | 62 | 52 |
Receivables, allowances | $ 5 | $ 3 |
Discontinued Operations (Sche_3
Discontinued Operations (Schedule Of Cash Flows Of Discontinued Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Discontinued Operations [Abstract] | ||
Depreciation | $ 1 | |
Amortization | 1 | |
Capital expenditures | $ (1) | $ (1) |
Commitments And Contingencies_2
Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Millions | Nov. 04, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | |||||
Litigation and non-litigation reserve | $ 53 | ||||
Charge recorded in period | $ 49 | $ 49 | |||
Reduction in revenue related to remediation measures | $ 3 | ||||
Subsequent Event [Member] | |||||
Loss Contingencies [Line Items] | |||||
Consumer fund amount | $ 25 | ||||
Litigation Settlement, Amount | $ 19 |
Commitments And Contingencies_3
Commitments And Contingencies (Schedule Of Reconciliation Of Beginning And Ending Accrued Self-Insured Claims) (Details) - Accrued Self-Insured Claims, Net [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies [Line Items] | ||
Balance at the beginning of the period | $ 111 | $ 111 |
Provision for self-insured claims | 35 | 26 |
Cash payments | (21) | (28) |
Balance at the end of the period | $ 125 | $ 108 |
Commitments And Contingencies_4
Commitments And Contingencies (Schedule Of Reconciliation Of Beginning And Ending Accrued Litigated Claims And Non-Litigated Claims) (Details) - Litigated Claims And Non-Litigated Claims [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies [Line Items] | ||
Balance at the beginning of the period | $ 80 | $ 28 |
Provision for termite damage claims | 41 | 28 |
Cash payments | (42) | (31) |
Balance at the end of the period | $ 79 | $ 25 |
Goodwill And Intangible Asset_2
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill And Intangible Assets [Abstract] | ||||
Goodwill and trade name impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Accumulated impairment losses recorded in continuing operations | $ 0 | $ 0 |
Goodwill And Intangible Asset_3
Goodwill And Intangible Assets (Schedule Of Goodwill Balances For Continuing Operations By Reportable Segment And For Other Operations And Headquarters) (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($) | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | $ 2,096 | |
Acquisitions | 10 | |
Purchase accounting adjustments | 26 | |
Impact of foreign exchange rates | (5) | |
Balance at the end of the period | 2,127 | |
Terminix [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 1,946 | |
Acquisitions | 10 | |
Purchase accounting adjustments | 0 | |
Impact of foreign exchange rates | (1) | |
Balance at the end of the period | 1,956 | |
European Pest Control And Other [Member] | ||
Goodwill balances by segment for continuing operations | ||
Balance at the beginning of the period | 150 | [1] |
Acquisitions | 0 | [1] |
Purchase accounting adjustments | 26 | [1] |
Impact of foreign exchange rates | (4) | [1] |
Balance at the end of the period | $ 171 | [1] |
[1] | European Pest Control and Other includes goodwill related to pest control operations in Europe. |
Goodwill And Intangible Asset_4
Goodwill And Intangible Assets (Schedule Of Other Intangible Asset Balances For Continuing Operations) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | ||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | $ 1,596 | $ 1,626 | |
Accumulated Amortization | (483) | (457) | |
Net | 1,113 | 1,169 | |
Purchase accounting adjustments | 26 | ||
Customer Relationships [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | [1] | 640 | 659 |
Accumulated Amortization | [1] | (443) | (423) |
Net | [1] | 197 | 236 |
Purchase accounting adjustments | 17 | ||
Other Intangible Assets [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | [2] | 68 | 79 |
Accumulated Amortization | [2] | (41) | (34) |
Net | [2] | 28 | 45 |
Purchase accounting adjustments | 9 | ||
Trade Names [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | [3] | 888 | 888 |
Net | [3] | $ 888 | $ 888 |
[1] | Includes purchase accounting adjustments subsequent to December 31, 2019, primarily related to our acquisition of Nomor, of approximately $ 17 million. | ||
[2] | Includes purchase accounting adjustments subsequent to December 31, 2019, primarily related to our acquisition of Nomor, of approximately $ 9 million. | ||
[3] | Not subject to amortization. |
Goodwill And Intangible Asset_5
Goodwill And Intangible Assets (Schedule Of Anticipated Amortization Expense Of Intangible Assets) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Goodwill And Intangible Assets [Abstract] | |
Amortization expense, 2020 | $ 8 |
Amortization expense, 2021 | 35 |
Amortization expense, 2022 | 33 |
Amortization expense, 2023 | 30 |
Amortization expense, 2024 | 22 |
Amortization expense, 2025 | $ 18 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | Feb. 24, 2015 | Feb. 28, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Nov. 03, 2015 | Apr. 27, 2015 |
Stock-Based Compensation [Line Items] | ||||||||
Stock-based compensation expense | $ 3 | $ 3 | $ 13 | $ 10 | ||||
Stock-based compensation expense, net of tax | 3 | $ 2 | 9 | $ 8 | ||||
Total unrecognized compensation costs related to non-vested stock options and restricted share units | $ 39 | $ 39 | ||||||
Weighted-average period of recognition of stock-based compensation cost | 1 year 11 months 12 days | |||||||
Percent of current fair market value, discount eligible employees may purchase common stock | 10.00% | |||||||
Employee Stock Purchase Plan, maximum number of shares of common stock authorized for sale | 1,000,000 | |||||||
Employee stock plan, shares remaining in ESPP | 843,584 | |||||||
Number of shares of available for issuance | 790,543 | 790,543 | ||||||
Expiration date for ESPP | Apr. 27, 2025 | |||||||
Maximum [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Percent of current fair market value, discount eligible employees may purchase common stock | 10.00% | |||||||
Employee Stock Purchase Plan, maximum number of shares of common stock authorized for sale | 1,000,000 |
Comprehensive (Loss) Income (Na
Comprehensive (Loss) Income (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Nov. 05, 2019 | Dec. 31, 2018 | |
Interest Rate Swap Contract [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative Notional Amount Agreement Terminated | $ 171 | $ 171 | $ 4 | $ 479 | |||
Derivative, Notional Amount | 550 | 546 | 171 | $ 550 | $ 550 | $ 650 | |
Amount Received From Terminated Interest Rate Swap | $ 0 | 12 | 12 | ||||
Derivative, Fair Value, Net | 12 | $ 12 | 12 | ||||
Interest rate swap, remaining unamortized amount | $ 7 | ||||||
Interest Rate Swap Contracts II [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative Notional Amount Agreement Terminated | 171 | ||||||
Derivative, Notional Amount | $ 650 | 650 | |||||
Amount Received From Terminated Interest Rate Swap | $ 1 |
Comprehensive (Loss) Income (Su
Comprehensive (Loss) Income (Summary Of The Activity In Other Comprehensive Income (Loss), Net Of The Related Tax Effects) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Balance at the beginning of period | $ 9 | $ 5 | $ 9 | $ 5 | |||||
Other comprehensive income before reclassifications: | |||||||||
Pre-tax amount | (73) | (16) | |||||||
Tax provision | 12 | 7 | |||||||
After-tax amount | (61) | (9) | |||||||
Amounts reclassified from accumulated other comprehensive (loss) income | [1] | 3 | (3) | ||||||
Net current period other comprehensive (loss) income | $ (10) | $ 1 | (50) | $ (7) | $ (4) | (2) | (58) | (13) | |
Balance at the end of period | (49) | (8) | (49) | (8) | |||||
Unrealized Gains (Losses) On Derivatives [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Balance at the beginning of period | 13 | 20 | 13 | 20 | |||||
Other comprehensive income before reclassifications: | |||||||||
Pre-tax amount | (66) | (14) | |||||||
Tax provision | 12 | 7 | |||||||
After-tax amount | (54) | (7) | |||||||
Amount reclassified within accumulated other comprehensive (loss) income | [2] | 17 | |||||||
Amounts reclassified from accumulated other comprehensive (loss) income | [1] | 3 | (3) | ||||||
Net current period other comprehensive (loss) income | (34) | (10) | |||||||
Balance at the end of period | (21) | 9 | (21) | 9 | |||||
Foreign Currency Translation [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Balance at the beginning of period | $ (5) | $ (15) | (5) | (15) | |||||
Other comprehensive income before reclassifications: | |||||||||
Pre-tax amount | (7) | (2) | |||||||
After-tax amount | (7) | (2) | |||||||
Amount reclassified within accumulated other comprehensive (loss) income | [2] | (17) | |||||||
Net current period other comprehensive (loss) income | (24) | (2) | |||||||
Balance at the end of period | $ (29) | $ (18) | $ (29) | $ (18) | |||||
[1] | Amounts are net of tax. Reclassifications out of accumulated other comprehensive (loss) income included the following components for the periods indicated | ||||||||
[2] | Represents unrealized gains (losses) on our cross currency swap and net investment hedge related to foreign currency exchange rate fluctuations. |
Comprehensive (Loss) Income (Sc
Comprehensive (Loss) Income (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Impact of income taxes | $ (15) | $ (4) | $ (31) | $ (22) | ||||
Net (Loss) Income | (7) | $ 53 | $ 14 | 25 | $ 59 | $ 70 | 61 | 154 |
Amount Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net gains (losses) on derivatives | (2) | 1 | (4) | 4 | ||||
Impact of income taxes | 1 | 2 | ||||||
Net (Loss) Income | (2) | 1 | (3) | 3 | ||||
Amount Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] | Fuel Swap Contracts [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net gains (losses) on derivatives | (1) | (3) | ||||||
Amount Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] | Interest Rate Swap Contract [Member] | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Net gains (losses) on derivatives | $ (1) | $ 1 | $ (2) | $ 4 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Schedule Of Supplemental Information Relating To The Unaudited Condensed Consolidated Statements Of Cash Flows) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Cash paid for or (received from): | |||
Interest expense | [1] | $ 57 | $ 55 |
Interest and dividend income | (1) | (2) | |
Income taxes, net of refunds | $ 4 | 23 | |
Interest rate swap agreement termination fee | $ 12 | ||
[1] | For the nine months ended September 30, 2019, excludes $ 12 million received in connection with our partial terminations of the then-existing interest rate swap. |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information (Summary Of Cash And Cash Equivalents And Restricted Cash) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Supplemental Cash Flow Information [Abstract] | ||||
Cash and cash equivalents | $ 288 | $ 280 | $ 140 | $ 224 |
Restricted cash | 89 | 89 | 89 | 89 |
Total Cash and cash equivalents and Restricted cash | $ 377 | $ 368 | $ 228 | $ 313 |
Long-Term Debt (Term Loan Facil
Long-Term Debt (Term Loan Facility, Extinguishment Of Debt And Repurchase of Notes Narrative) (Details) - USD ($) shares in Millions | Nov. 05, 2019 | Mar. 27, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Apr. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 05, 2019 | Mar. 12, 2019 |
Debt Instrument [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 1,000,000 | $ 1,000,000 | $ 6,000,000 | ||||||||
Gain (Loss) on Investments | 40,000,000 | ||||||||||
Amortization of debt issuance costs | 3,000,000 | 2,000,000 | |||||||||
Revolving Credit Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment of debt | $ 120,000,000 | ||||||||||
Face amount of debt instrument | $ 120,000,000 | ||||||||||
Short-term Credit Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Face amount of debt instrument | $ 600,000,000 | ||||||||||
Senior Secured Term Loan Facility Maturing In 2026 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 1,000,000 | 1,000,000 | |||||||||
Advanced amortization payments | 51,000,000 | ||||||||||
Amortization of debt issuance costs | $ 2,000,000 | ||||||||||
Face amount of debt instrument | 600,000,000 | ||||||||||
Revolving Credit Facility Maturing In 2024 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowings | $ 400,000,000 | ||||||||||
Existing Term Facilities [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Extinguishment of Debt, Amount | $ 468,000,000 | ||||||||||
Loss on extinguishment of debt | 4,000,000 | ||||||||||
Notes [Member] | 7.25% notes maturing in 2038 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate (as a percent) | 7.25% | 7.25% | 7.25% | 7.25% | |||||||
Redemption percentage | 99.50% | ||||||||||
Face amount of debt instrument | $ 3,000,000 | ||||||||||
Notes [Member] | 7.45% notes maturing in 2027 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate (as a percent) | 7.45% | 7.45% | 7.45% | 7.45% | 7.45% | 7.45% | |||||
Repayment of principal amount | $ 1,000,000 | $ 1,000,000 | |||||||||
Redemption percentage | 105.50% | 105.50% | |||||||||
Face amount of debt instrument | $ 7,000,000 | ||||||||||
Percentage of capital stock of direct foreign subsidiaries | 65.00% | ||||||||||
Notes [Member] | Notes 7.45%, And 7.25% Collectively [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on extinguishment of debt | 2,000,000 | ||||||||||
Notes [Member] | 5.125% Notes Maturing In 2024 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate (as a percent) | 5.125% | 5.125% | 5.125% | ||||||||
Frontdoor, inc. [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Extinguishment of Debt, Amount | $ 600,000,000 | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 16.7 | ||||||||||
Gain (Loss) on Investments | $ 40,000,000 | ||||||||||
Proceeds From Spin-Off Entity Common Shares Retained, Net | $ 486,000,000 | ||||||||||
Use Of Cash To Retire Short-Term Credit Facility | $ 114,000,000 | ||||||||||
LIBOR [Member] | Fourth Amendment, Term Loan Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowing margin (as a percent) | 1.75% | ||||||||||
Alternative Base Rate [Member] | Fourth Amendment, Term Loan Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowing margin (as a percent) | 0.75% |
Long-Term Debt (Interest Rate S
Long-Term Debt (Interest Rate Swap Narrative) (Details) - Interest Rate Swap Contract [Member] - USD ($) $ in Millions | Nov. 05, 2019 | Nov. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |||||
Derivative [Line Items] | ||||||||||||
Derivative, Term of Contract | 7 years | |||||||||||
Derivative, Notional Amount | $ 550 | $ 550 | $ 546 | $ 171 | $ 550 | $ 650 | ||||||
Derivative, Average Fixed Interest Rate | 1.615% | 1.615% | [1] | 1.615% | [1] | 1.493% | [1] | 1.615% | [1] | 1.493% | [1] | |
Derivative, Floor Interest Rate | 0.00% | |||||||||||
Derivative terminated | $ 171 | $ 171 | $ 4 | $ 479 | ||||||||
Amount received from terminated interest rate swap | $ 0 | $ 12 | $ 12 | |||||||||
Derivative, Fixed Interest Rate | 3.365% | |||||||||||
[1] | Before the application of the applicable borrowing margin. |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | ||
Long-term debt [Line Items] | |||||
Less current portion | [1] | $ (100) | $ (69) | ||
Total long-term debt | 1,565 | 1,666 | |||
Fleet Agreement [Member] | |||||
Long-term debt [Line Items] | |||||
Vehicle finance leases | [2] | $ 93 | $ 95 | ||
Borrowing margin (as a percent) | 2.45% | 2.45% | |||
Variable rate basis | one-month LIBOR | ||||
Senior Secured Term Loan Facility Maturing In 2026 [Member] | |||||
Long-term debt [Line Items] | |||||
Advanced amortization payments | $ 51 | ||||
Senior Secured Term Loan Facility Maturing In 2026 [Member] | Secured Debt [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [3] | 538 | $ 593 | ||
Unamortized debt issuance costs | 7 | 6 | |||
Unamortized original issue discount | 1 | 1 | |||
5.125% Notes Maturing In 2024 [Member] | Notes [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [4] | $ 743 | $ 742 | ||
Interest rate (as a percent) | 5.125% | 5.125% | |||
Unamortized debt issuance costs | $ 7 | $ 8 | |||
7.45% notes maturing in 2027 [Member] | Notes [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [5] | $ 169 | $ 167 | ||
Interest rate (as a percent) | 7.45% | 7.45% | 7.45% | 7.45% | |
7.25% notes maturing in 2038 [Member] | Notes [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [5] | $ 41 | $ 40 | ||
Interest rate (as a percent) | 7.25% | 7.25% | 7.25% | ||
Notes 7.45%, And 7.25% Collectively [Member] | Notes [Member] | |||||
Long-term debt [Line Items] | |||||
Unamortized fair value adjustments related to purchase accounting | $ 26 | $ 28 | |||
Other [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | [6] | 82 | 98 | ||
Copesan Services, Inc. (“Copesan”) [Member] | Other [Member] | |||||
Long-term debt [Line Items] | |||||
Long-term debt | $ 81 | $ 85 | |||
[1] | The current portion of long-term debt consists of deferred purchase price and earnout payments on acquisitions and scheduled principal payments of long-term debt due within 12 months. | ||||
[2] | We have entered into a fleet management services agreement (the “Fleet Agreement”) which, among other things, allows us to obtain fleet vehicles through a leasing program. All leases under the Fleet Agreement are finance leases for accounting purposes. The lease rental payments include an interest component calculated using a variable rate based on one-month LIBOR plus other contractual adjustments and a borrowing margin totaling 2.45 percent. | ||||
[3] | As of September 30, 2020 and December 31, 2019, presented net of $ 7 million and $ 6 million in unamortized debt issuance costs, respectively, and $ 1 million of unamortized original issue discount in each period. On September 30, 2020, we made an advanced amortization payment of $ 51 million on the Term Loan B. See further discussion in Term Loan Facility below. | ||||
[4] | As of September 30, 2020 and December 31, 2019, presented net of $ 7 million and $ 8 million, respectively of unamortized debt issuance costs. | ||||
[5] | As of September 30, 2020 and December 31, 2019, collectively presented net of $ 26 million and $ 28 million, respectively, of unamortized fair value adjustments related to purchase accounting, which increases the effective interest rate from the coupon rates shown above. | ||||
[6] | As of September 30, 2020 and December 31, 2019, includes approximately $ 81 million and $ 85 million, respectively, of future payments in connection with acquisitions. |
Long-Term Debt (Schedule Of Int
Long-Term Debt (Schedule Of Interest Rate Swap Agreements) (Details) - Interest Rate Swap Contract [Member] - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Nov. 05, 2019 | Dec. 31, 2018 | [1] | |||||
Derivative [Line Items] | ||||||||||||
Balance at the beginning of the period | $ 550 | $ 650 | $ 650 | |||||||||
Terminated | $ (171) | $ (171) | (4) | (479) | ||||||||
Entered into effect | 550 | |||||||||||
Balance at the end of the period | $ 550 | $ 546 | $ 171 | $ 550 | ||||||||
Weighted Average Fixed Rate (as a percent) | 1.615% | [1] | 1.615% | [1] | 1.493% | [1] | 1.615% | [1] | 1.615% | 1.493% | ||
[1] | Before the application of the applicable borrowing margin. |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Assets recorded under finance leases | $ 235 | $ 220 |
Finance Lease, Accumulated Depreciation | 148 | $ 127 |
Finance lease, liability, current | $ 34 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt, Current Maturities | |
Finance lease, liability, noncurrent | $ 58 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations |
Leases (Components Of Lease Exp
Leases (Components Of Lease Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Depreciation of finance lease ROU assets | $ 10 | $ 9 | $ 29 | $ 25 |
Interest on finance lease liabilities | 1 | 1 | 2 | 4 |
Operating lease cost | 6 | 6 | 19 | 19 |
Variable lease cost | 1 | 1 | 3 | |
Sublease income | (1) | (1) | (2) | (2) |
Total lease cost | $ 16 | $ 17 | $ 49 | $ 48 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information And Other Information For Leases) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 21 | $ 17 |
Operating cash flows for finance leases | 2 | 4 |
Financing cash flows for finance leases | 28 | 25 |
ROU assets obtained in exchange for lease obligations: Operating leases | 3 | 7 |
ROU assets obtained in exchange for lease obligations: Finance leases | $ 23 | $ 39 |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments Under Non-Cancellable Leases) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Operating Leases, 2020 (excluding the nine months ended September 30, 2020) | $ 7 |
Operating Leases, 2021 | 22 |
Operating Leases, 2022 | 19 |
Operating Leases, 2023 | 15 |
Operating Leases, 2024 | 11 |
Operating Leases, Thereafter | 85 |
Operating Leases, Total future minimum lease payments | 158 |
Operating Leases, Less imputed interest | (42) |
Operating Leases, Total | 116 |
Finance Leases, 2020 (excluding the nine months ended September 30, 2020) | 10 |
Finance Leases, 2021 | 33 |
Finance Leases, 2022 | 23 |
Finance Leases, 2023 | 16 |
Finance Leases, 2024 | 8 |
Finance Leases, Thereafter | 4 |
Finance Leases, Total future minimum lease payments | 94 |
Finance Leases, Less imputed interest | (3) |
Finance Leases, Total | $ 92 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Millions, kr in Billions | Sep. 06, 2019USD ($) | Sep. 06, 2019SEK (kr) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($)entity | Dec. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Acquisitions [Line Items] | ||||||||
Number of Businesses Acquired | entity | 27 | |||||||
Net cash paid | $ 29 | $ 338 | ||||||
Goodwill | $ 2,127 | 2,127 | $ 2,096 | |||||
Goodwill in period | 224 | |||||||
Capital adjustments clawbacks | 3 | |||||||
Contingent consideration, revered amount repaid | 1 | |||||||
Acquisition related costs | $ 4 | |||||||
Acquisition-related Costs [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Pro forma financial information adjustment, quarterly interest expense | $ 1 | |||||||
Trade Names [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Other intangibles related to acquisitions | 35 | |||||||
Other Intangible Assets [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Other intangibles related to acquisitions | $ 114 | |||||||
Nine Tuck-In Pest Control [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Number of Businesses Acquired | item | 9 | |||||||
Net cash paid | $ 12 | |||||||
Two Pest Control [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Number of Businesses Acquired | item | 2 | |||||||
Net cash paid | $ 18 | |||||||
Business Combinations [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Number of Businesses Acquired | entity | 24 | |||||||
Asset Acquisitions [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Number of Businesses Acquired | entity | 3 | |||||||
Pest Control Acquisition [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Contingent consideration | 3 | 3 | ||||||
Goodwill | $ 10 | $ 10 | ||||||
Nomor [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Cash Acquired from Acquisition | $ 9 | |||||||
Net cash paid | 198 | kr 2 | ||||||
Goodwill | 153 | |||||||
Proceeds from revolving credit facility | 120 | |||||||
Other intangibles related to acquisitions | [1] | $ 66 | ||||||
Minimum [Member] | Pest Control Acquisition [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Contingent consideration, term | 1 year | |||||||
Maximum [Member] | Pest Control Acquisition [Member] | ||||||||
Acquisitions [Line Items] | ||||||||
Contingent consideration, term | 3 years | |||||||
[1] | Primarily customer lists. |
Acquisitions (Schedule Of Suppl
Acquisitions (Schedule Of Supplemental Cash Flow Information Regarding Acquisitions) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental cash flow information regarding acquisitions | ||
Assets acquired | $ 16 | $ 402 |
Liabilities assumed | (51) | |
Net assets acquired | 16 | 352 |
Net cash paid | 11 | 338 |
Seller financed debt | 5 | 11 |
Contingent earnout | 4 | |
Purchase price | $ 16 | $ 352 |
Acquisitions (Preliminary Purch
Acquisitions (Preliminary Purchase Price Allocation) (Details) - USD ($) $ in Millions | Sep. 06, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,127 | $ 2,096 | ||
Nomor [Member] | ||||
Business Acquisition [Line Items] | ||||
Current assets | [1] | $ 11 | ||
Property and equipment | 6 | |||
Goodwill | 153 | |||
Identifiable intangible assets | [2] | 66 | ||
Current liabilities | [3] | (20) | ||
Long-term liabilities | [4] | (19) | ||
Total purchase price | 198 | |||
Deferred tax liabilities, tax differences in intangible assets | 15 | |||
Cash Acquired from Acquisition | $ 9 | |||
[1] | Primarily trade receivables and net of approximately $ 9 million of cash acquired | |||
[2] | Primarily customer lists. | |||
[3] | Primarily advanced collections from customers. | |||
[4] | Includes $ 15 million of deferred tax liabilities as a result of tax basis differences in intangible assets . |
Acquisitions (Summary Of Pro Fo
Acquisitions (Summary Of Pro Forma Consolidated Financial Information) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Acquisitions [Abstract] | ||
Consolidated revenue | $ 474 | $ 1,414 |
Consolidated net income | $ 29 | $ 160 |
Basic earnings per share | $ 0.22 | $ 1.18 |
Diluted earnings per share | $ 0.21 | $ 1.17 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Taxes [Abstract] | |||||
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 13 | $ 13 | $ 14 | ||
Unrecognized tax benefits, reasonably possible decrease within the next 12 months | $ 2 | $ 2 | |||
Effective tax rate on income from continuing operations (as a percent) | (231.30%) | 34.80% | 61.80% | 17.40% |
Business Segment Reporting (Nar
Business Segment Reporting (Narrative) (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Business Segment Reporting [Abstract] | ||
Number of reportable segments | 1 | 2 |
Maximum percentage of revenue from customers and franchisees generated in foreign market | 5.00% |
Business Segment Reporting (Sch
Business Segment Reporting (Schedule Of Information For Continuing Operations For Each Reportable Segment And Other Operations And Headquarters) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 512 | $ 465 | $ 1,502 | $ 1,378 | |
Reportable Segment Adjusted EBITDA | 98 | 72 | 280 | 261 | |
Terminix [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 491 | 461 | 1,446 | 1,375 | |
Terminix [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 491 | 461 | 1,446 | 1,375 | |
Reportable Segment Adjusted EBITDA | [1] | 98 | 72 | 280 | 261 |
European Pest Control And Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 21 | 4 | 56 | 4 | |
European Pest Control And Other [Member] | Operating Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 21 | $ 4 | $ 56 | $ 4 | |
[1] | Presented below is a reconciliation of Net Income to Reportable Segment Adjusted EBITDA |
Business Segment Reporting (S_2
Business Segment Reporting (Schedule Of Reconciliation Of Net Income (Loss) To Reportable Segment Adjusted EBITDA) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Net income (loss) | $ (7) | $ 53 | $ 14 | $ 25 | $ 59 | $ 70 | $ 61 | $ 154 | |
Equity in earnings of joint ventures | 1 | 2 | |||||||
Depreciation and amortization expense | 27 | 23 | 81 | 68 | |||||
Acquisition-related costs | (1) | 8 | 12 | ||||||
Mobile Bay Formosan termite settlement | [1] | 51 | 51 | ||||||
Non-cash stock-based compensation expense | 3 | 3 | 13 | 10 | |||||
Restructuring and other charges | 2 | 4 | 14 | 12 | |||||
Realized (gain) on investment in frontdoor, inc. | (40) | ||||||||
Net earnings from discontinued operations | (14) | (17) | (40) | (51) | |||||
Provision for income taxes | 15 | 4 | 31 | 22 | |||||
Loss on extinguishment of debt | 1 | 1 | 6 | ||||||
Interest expense | 22 | 19 | 67 | 64 | |||||
Reportable Segment Adjusted EBITDA | 98 | 72 | 280 | 261 | |||||
Charge related to termite settlement | 49 | ||||||||
Reduction of revenue related to termite settlement | 3 | 2 | |||||||
Corporate [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Net income (loss) | (1) | (2) | (1) | (5) | |||||
ServiceMaster Brands [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Costs | 3 | 3 | 9 | 9 | |||||
European Pest Control [Member] | |||||||||
Reconciliation of Reportable Segment Adjusted EBITDA to Net Income (Loss) | |||||||||
Costs | $ (3) | $ (1) | $ (6) | $ (1) | |||||
[1] | Represents a charge of $ 49 million and the prior period portion of a reduction of revenue of $ 3 million and $ 2 million in the three and nine months ended September 30, 2020, respectively, related to the Mobile Bay Formosan termite settlement described in Note 6 to the condensed consolidated financial statements. We exclude these charges from Adjusted EBITDA because we believe they do not reflect our on-going operations and because we believe doing so is useful to investors in aiding period-to-period comparability. |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) kr in Millions, $ in Millions | Mar. 03, 2020USD ($) | Sep. 30, 2020USD ($) | Mar. 03, 2020SEK (kr) | Dec. 31, 2019USD ($) |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Letters of credit posted as collateral under fuel hedging program | $ 2 | |||
Hedging gains and losses in accumulated other comprehensive income expected to be recognized in earnings, net of tax | (5) | |||
Carrying Value [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Long term debt and capital lease obligation | 1,665 | $ 1,735 | ||
Estimated Fair Value [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value of total debt | $ 1,739 | $ 1,839 | ||
Cross-Currency Interest Rate Swap [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Swap interest payment percent, foreign | 3.50% | |||
Swap interest payment percent | 4.147% | |||
Term of agreement | 5 years | |||
Derivative, maturity date | Mar. 31, 2025 | |||
Aggregate notional amount | $ 74 | kr 725 | ||
Cross Currency Swap [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Term of agreement | 5 years | |||
Derivative, maturity date | Mar. 31, 2025 | |||
Aggregate notional amount | $ 131 | kr 1,275 | ||
Derivative fixed rate | 0.00% | 0.00% | ||
Fuel Swap Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Aggregate notional amount | $ 28 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of The Carrying Amount And Estimated Fair Value Of The Company's Financial Instruments That Are Recorded At Fair Value On A Recurring Basis) (Details) - Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Quoted Prices In Active Markets (Level 1) [Member] | ||
Financial Assets: | ||
Deferred compensation trust | $ 13 | $ 13 |
Total financial assets | 13 | 13 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Assets: | ||
Total financial assets | 5 | |
Total financial liabilities | 55 | 1 |
Significant Other Observable Inputs (Level 2) [Member] | Cross-Currency Interest Rate Swap [Member] | ||
Financial Assets: | ||
Derivative contracts | 7 | |
Significant Other Observable Inputs (Level 2) [Member] | Net Investment Hedge [Member] | ||
Financial Assets: | ||
Derivative contracts | 10 | |
Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Swap Contract [Member] | ||
Financial Assets: | ||
Derivative asset, current | 5 | |
Derivative contracts | 38 | 1 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Financial Assets: | ||
Total financial assets | 2 | 1 |
Total financial liabilities | 2 | |
Significant Unobservable Inputs (Level 3) [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, current | 2 | 1 |
Derivative contracts | 2 | |
Carrying Value [Member] | ||
Financial Assets: | ||
Deferred compensation trust | 13 | 13 |
Total financial assets | 15 | 19 |
Total financial liabilities | 57 | 1 |
Carrying Value [Member] | Cross-Currency Interest Rate Swap [Member] | ||
Financial Assets: | ||
Derivative contracts | 7 | |
Carrying Value [Member] | Net Investment Hedge [Member] | ||
Financial Assets: | ||
Derivative contracts | 10 | |
Carrying Value [Member] | Fuel Swap Contracts [Member] | ||
Financial Assets: | ||
Derivative asset, current | 2 | 1 |
Derivative contracts | 2 | |
Carrying Value [Member] | Interest Rate Swap Contract [Member] | ||
Financial Assets: | ||
Derivative asset, current | 5 | |
Derivative contracts | $ 38 | $ 1 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule Of Reconciliation Of The Beginning And Ending Fair Values Of Financial Instruments Valued Using Significant Unobservable Inputs (Level 3) On A Recurring Basis) (Details) - Fuel Swap Contracts [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of the beginning and ending fair values of financial instruments valued using significant unobservable inputs (Level 3) | ||
Balance at the beginning of the period | $ 1 | $ (4) |
Total gains (losses) (realized and unrealized) | ||
Included in earnings | 2 | |
Included in other comprehensive income | (2) | 2 |
Settlements | ||
Balance at the end of the period | $ (1) |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule Of Level 3 Financial Instruments) (Details) - Fuel Swap Contracts [Member] $ in Millions | Sep. 30, 2020USD ($)$ / gal | Dec. 31, 2019USD ($)$ / gal | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Information relating to the significant unobservable inputs of Level 3 financial instruments | |||||
Fair value | $ | $ 1 | $ (1) | $ (4) | ||
Discounted Cash Flows [Member] | Minimum [Member] | |||||
Information relating to the significant unobservable inputs of Level 3 financial instruments | |||||
Forward Unleaded Price per Gallon (in dollars per gallon) | [1] | 2.10 | 2.37 | ||
Discounted Cash Flows [Member] | Maximum [Member] | |||||
Information relating to the significant unobservable inputs of Level 3 financial instruments | |||||
Forward Unleaded Price per Gallon (in dollars per gallon) | [1] | 2.32 | 2.80 | ||
Discounted Cash Flows [Member] | Weighted Average [Member] | |||||
Information relating to the significant unobservable inputs of Level 3 financial instruments | |||||
Forward Unleaded Price per Gallon (in dollars per gallon) | 2.20 | 2.61 | |||
[1] | Forward prices per gallon were derived from third-party market data providers. A decrease in the forward price would result in a decrease in the fair value of the fuel swap contracts. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
(Loss) income from continuing operations | $ (21) | $ 8 | $ 20 | $ 103 | |
Weighted-average common shares outstanding | 132 | 135.8 | 132.9 | 135.9 | |
Effect of dilutive securities: | |||||
Weighted-average common shares outstanding-assuming dilution | 132 | 136.5 | 133.1 | 136.5 | |
Basic (loss) earnings per share from continuing operations (in dollars per share) | $ (0.17) | $ 0.06 | $ 0.14 | $ 0.76 | |
Diluted (loss) earnings per share from continuing operations (in dollars per share) | $ (0.17) | $ 0.06 | $ 0.14 | $ 0.75 | |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1.4 | 1.4 | 0.5 | ||
RSUs [Member] | |||||
Effect of dilutive securities: | |||||
Dilutive securities | [1] | 0.3 | 0.1 | 0.3 | |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0.2 | ||||
Stock Options [Member] | |||||
Effect of dilutive securities: | |||||
Dilutive securities | [1],[2] | 0.3 | 0.3 | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0.1 | ||||
[1] | Securities are not included in the table in periods when antidilutive. For the three months ended September 30, 2020, weighted average potentially dilutive shares from RSUs of 0.2 million and weighted average potentially dilutive shares from stock options of 0.1 million were excluded from the dilutive (loss) earnings per share calculation due to the antidilutive effect such shares would have had on net loss per common share. | ||||
[2] | Options to purchase 1.4 million shares for the three months ended September 30, 2020, and 1.4 million and 0.5 million shares for the nine months ended September 30, 2020, and 2019, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. There were an insignificant amount of options that would have been anti-dilutive in the three months ended September 30, 2019. |