Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Name | GRANT THORNTON LLP | ||
Auditor Firm ID | 248 | ||
Auditor Location | Atlanta, Georgia | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-4422 | ||
Entity Registrant Name | ROLLINS, INC. | ||
Entity Central Index Key | 0000084839 | ||
Entity Tax Identification Number | 51-0068479 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 2170 Piedmont Road, N.E. | ||
Entity Address, City or Town | Atlanta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30324 | ||
City Area Code | (404) | ||
Local Phone Number | 888-2000 | ||
Title of 12(b) Security | Common Stock, $1 Par Value | ||
Trading Symbol | ROL | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,888,772,207 | ||
Entity Common Stock, Shares Outstanding | 492,085,707 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 105,301 | $ 98,477 |
Trade receivables, net of allowance for expected credit losses of $13,885 and $16,854, respectively | 139,579 | 126,337 |
Financed receivables, short-term, net of allowance for expected credit losses of $1,463 and $1,297, respectively | 26,152 | 23,716 |
Materials and supplies | 28,926 | 30,843 |
Other current assets | 52,422 | 35,404 |
Total current assets | 352,380 | 314,777 |
Equipment and property, net of accumulated depreciation of $315,891 and $294,226, respectively | 133,257 | 178,052 |
Goodwill | 721,819 | 653,176 |
Operating lease right-of-use assets | 244,784 | 212,342 |
Financed receivables, long-term, net of allowance for expected credit losses of $2,522 and $1,934, respectively | 47,097 | 38,187 |
Other assets | 34,949 | 30,596 |
Total assets | 1,980,870 | 1,845,900 |
LIABILITIES | ||
Accounts payable | 44,568 | 64,596 |
Accrued insurance | 36,414 | 31,675 |
Accrued compensation and related liabilities | 97,862 | 91,011 |
Unearned revenues | 145,122 | 131,253 |
Operating lease liabilities - current | 75,240 | 73,248 |
Current portion of long-term debt | 18,750 | 17,188 |
Other current liabilities | 73,206 | 63,540 |
Total current liabilities | 491,162 | 472,511 |
Accrued insurance, less current portion | 31,545 | 36,067 |
Operating lease liabilities, less current portion | 172,520 | 140,897 |
Long-term debt | 136,250 | 185,812 |
Deferred income tax liabilities | 13,255 | 10,612 |
Other long-term accrued liabilities | 54,090 | 58,641 |
Total liabilities | 898,822 | 904,540 |
Commitments and contingencies | ||
Preferred stock, without par value; 500,000 shares authorized, zero shares issued | ||
Common stock, par value $1 per share; 800,000,000 shares authorized, 491,911,087 and 491,612,059 shares issued and outstanding, respectively | 491,911 | 491,612 |
Additional paid in capital | 105,629 | 101,757 |
Accumulated other comprehensive loss | (16,411) | (10,897) |
Retained earnings | 500,919 | 358,888 |
Total stockholders' equity | 1,082,048 | 941,360 |
Total liabilities and stockholders' equity | 1,980,870 | 1,845,900 |
Customer Contracts, Net | ||
ASSETS | ||
Intangible assets, net | 325,929 | 298,949 |
Trademarks & Tradenames, Net | ||
ASSETS | ||
Intangible assets, net | 108,976 | 109,044 |
Other Intangible Assets, Net | ||
ASSETS | ||
Intangible assets, net | $ 11,679 | $ 10,777 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 13,885 | $ 16,854 |
Financing receivables, short-term, allowance for doubtful accounts | 1,463 | 1,297 |
Net of Accumulated Decpreciation | 315,891 | 294,226 |
Financing receivables, long-term, allowance for doubtful accounts | $ 2,522 | $ 1,934 |
Preferred Stock, Shares Authorized | 500,000 | 500,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 |
Common Stock, Shares, Issued | 491,911,087 | 491,612,059 |
Common Stock, Shares, Outstanding | 491,911,087 | 491,612,059 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUES | |||
Customer services | $ 2,424,300 | $ 2,161,220 | $ 2,015,477 |
COSTS AND EXPENSES | |||
Cost of services provided (exclusive of depreciation and amortization below) | 1,162,617 | 1,048,592 | 993,593 |
Sales, general and administrative | 727,489 | 656,207 | 623,379 |
Depreciation and amortization | 94,205 | 88,329 | 81,111 |
Total operating expenses | 1,984,311 | 1,793,128 | 1,698,083 |
OPERATING INCOME | 439,989 | 368,092 | 317,394 |
Interest expense, net | 830 | 5,082 | 6,917 |
Other (income) expense, net | (35,679) | 8,290 | 49,317 |
CONSOLIDATED INCOME BEFORE INCOME TAXES | 474,838 | 354,720 | 261,160 |
PROVISION FOR INCOME TAXES | 124,151 | 93,896 | 57,813 |
NET INCOME | $ 350,687 | $ 260,824 | $ 203,347 |
NET INCOME PER SHARE - BASIC | $ 0.71 | $ 0.53 | $ 0.41 |
NET INCOME PER SHARE - DILUTED | 0.71 | 0.53 | 0.41 |
DIVIDENDS PAID PER SHARE | $ 0.42 | $ 0.33 | $ 0.31 |
Weighted average shares outstanding - basic | 492,054 | 491,604 | 491,216 |
Weighted average shares outstanding - diluted | 492,054 | 491,604 | 491,216 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
NET INCOME | $ 350,687 | $ 260,824 | $ 203,347 |
Other comprehensive income / (loss), net of tax: | |||
Pension and other postretirement benefit plans | (127) | 45,896 | |
Foreign currency translation adjustments | (5,895) | 10,443 | 4,350 |
Change in derivatives | 381 | (104) | (277) |
Other comprehensive (loss) income, net of tax | (5,514) | 10,212 | 49,969 |
Comprehensive income | $ 345,173 | $ 271,036 | $ 253,316 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Common Stock | Treasury | Additional Paid-in Capital | Accumulated Other Comprehensive Income/(Loss) | Retained EarningsImpact of adoption of ASC | Retained Earnings | Impact of adoption of ASC | Total |
Impact of adoption of ASC | $ 490,962 | $ 85,386 | $ (71,078) | $ 206,638 | $ 711,908 | |||
Beginning balance, value at Dec. 31, 2018 | $ 490,962 | 85,386 | (71,078) | 206,638 | 711,908 | |||
Beginning Balance, Shares at Dec. 31, 2018 | 490,962,000 | |||||||
Net income | 203,347 | 203,347 | ||||||
Other comprehensive income / (loss), net of tax: | ||||||||
Pension settlement loss, net of tax | 46,022 | |||||||
Pension liability adjustment, net of tax | 126 | 126 | ||||||
Foreign currency translation adjustments | 4,350 | 4,350 | ||||||
Interest rate swaps, net of tax | (277) | |||||||
Cash dividends | (153,836) | (153,836) | ||||||
Stock compensation | $ 580 | 13,772 | (193) | 14,159 | ||||
Stock compensation, Shares | 580,000 | |||||||
Employee stock buybacks | $ (396) | (9,745) | 132 | (10,009) | ||||
Employee stock buybacks, Shares | (396,000) | |||||||
Ending balance, value (Adoption of ASC 842) at Dec. 31, 2019 | $ 212 | |||||||
Ending balance, value at Dec. 31, 2019 | $ 491,146 | 89,413 | (21,109) | 256,300 | 815,750 | |||
Ending Balance, Shares at Dec. 31, 2019 | 491,146,000 | |||||||
Impact of adoption of ASC | Adoption of ASC 842 | 212 | |||||||
Impact of adoption of ASC | $ 491,146 | 89,413 | (21,109) | 256,300 | 815,750 | |||
Net income | 260,824 | 260,824 | ||||||
Other comprehensive income / (loss), net of tax: | ||||||||
Pension liability adjustment, net of tax | (127) | (127) | ||||||
Foreign currency translation adjustments | 10,443 | 10,443 | ||||||
Interest rate swaps, net of tax | (104) | (104) | ||||||
Cash dividends | (160,487) | (160,487) | ||||||
Stock compensation | $ 802 | 20,315 | (267) | 20,850 | ||||
Stock compensation, Shares | 802,000 | |||||||
Employee stock buybacks | $ (336) | (7,971) | 32 | (8,275) | ||||
Employee stock buybacks, Shares | (336,000) | |||||||
Ending balance, value (Adoption of ASC 326) at Dec. 31, 2020 | 2,486 | $ 2,486 | ||||||
Ending balance, value at Dec. 31, 2020 | $ 491,612 | 101,757 | (10,897) | 358,888 | 941,360 | |||
Ending Balance, Shares at Dec. 31, 2020 | 491,612,000 | |||||||
Impact of adoption of ASC | Adoption of ASC 326 | $ 2,486 | $ 2,486 | ||||||
Impact of adoption of ASC | $ 491,612 | 101,757 | (10,897) | 358,888 | 941,360 | |||
Net income | 350,687 | 350,687 | ||||||
Other comprehensive income / (loss), net of tax: | ||||||||
Foreign currency translation adjustments | (5,895) | (5,895) | ||||||
Interest rate swaps, net of tax | 381 | 381 | ||||||
Cash dividends | (208,656) | (208,656) | ||||||
Stock compensation | $ 593 | 14,272 | 14,865 | |||||
Stock compensation, Shares | 593,000 | |||||||
Employee stock buybacks | $ (294) | (10,400) | (10,694) | |||||
Employee stock buybacks, Shares | (294,000) | |||||||
Ending balance, value at Dec. 31, 2021 | $ 491,911 | 105,629 | (16,411) | 500,919 | 1,082,048 | |||
Ending Balance, Shares at Dec. 31, 2021 | 491,911,000 | |||||||
Impact of adoption of ASC | $ 491,911 | $ 105,629 | $ (16,411) | $ 500,919 | $ 1,082,048 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
OPERATING ACTIVITIES | |||
Net income | $ 350,687 | $ 260,824 | $ 203,347 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 94,205 | 88,329 | 81,111 |
Pension settlement loss | 49,898 | ||
Stock-based compensation expense | 14,865 | 20,850 | 14,158 |
Provision for expected credit losses | 15,285 | 17,536 | 15,145 |
(Gain) loss on sale of assets, net | (35,679) | 1,598 | (581) |
Provision for deferred income taxes | 1,652 | (1,215) | (7,228) |
Changes in operating assets and liabilities | |||
Trade accounts receivables and other accounts receivables | (22,439) | (12,045) | (20,151) |
Financing receivables | (14,473) | (11,787) | (9,080) |
Materials and supplies | 2,644 | (10,706) | (2,151) |
Other current assets | (11,159) | 6,847 | (13,147) |
Accounts payable and accrued expenses | 1,421 | 50,061 | 5,611 |
Unearned revenue | 11,934 | 7,276 | 5,424 |
Other long-term assets and liabilities | (7,138) | 18,217 | (2,783) |
Net cash provided by operating activities | 401,805 | 435,785 | 319,573 |
INVESTING ACTIVITIES | |||
Acquisitions, net of cash acquired | (146,098) | (147,613) | (430,558) |
Capital expenditures | (27,194) | (23,229) | (27,146) |
Proceeds from sale of assets | 74,438 | 7,700 | 1,758 |
Other investing activities, net | (111) | 747 | 839 |
Net cash (used in) investing activities | (98,965) | (162,395) | (455,107) |
FINANCING ACTIVITIES | |||
Payment of contingent consideration | (22,809) | (24,011) | (15,969) |
Borrowings under term loan | 250,000 | ||
Borrowings under revolving commitment | 206,500 | 135,000 | 190,000 |
Repayments of term loan | (88,000) | (54,000) | (60,000) |
Repayments of revolving commitment | (166,500) | (169,500) | (88,500) |
Payment of dividends | (208,656) | (160,487) | (153,836) |
Cash paid for common stock purchased | (10,694) | (8,275) | (10,009) |
Net cash (used in) provided by financing activities | (290,159) | (281,273) | 111,686 |
Effect of exchange rate changes on cash | (5,857) | 12,084 | 2,639 |
Net increase (decrease) in cash and cash equivalents | 6,824 | 4,201 | (21,209) |
Cash and cash equivalents at beginning of period | 98,477 | 94,276 | 115,485 |
Cash and cash equivalents at end of period | 105,301 | 98,477 | 94,276 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 1,313 | 5,056 | 6,452 |
Cash paid for income taxes, net | 119,762 | 81,184 | 75,812 |
Non-cash additions to operating lease right-of-use assets | $ 116,594 | $ 89,016 | $ 75,782 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Disclosures of Non-Cash Items | |||
Non-cash decrease (increase) in the minimum pension liability | $ 0 | $ (0.2) | $ 75.4 |
Non-cash acquisitions of assets in business combinations | 17.7 | $ 12.6 | $ 34.2 |
Non-cash acquisition holdback and earnout liabilities | $ 14.5 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Description Principles of Consolidation Subsequent Events Use of Estimates The Company considered the impact of COVID-19 on the assumptions and estimates used in preparing the consolidated financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the Company’s financial results for the year have been made. These adjustments are of a normal recurring nature but complicated by the uncertainty surrounding the global economic impact of COVID-19. The results of operations for the year ended December 31, 2021 are not necessarily indicative of results for future years. The severity, magnitude and duration, as well as the economic consequences of COVID-19, are uncertain, rapidly changing and difficult to predict. Therefore, our accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods Revenue Recognition Nature of Goods and Services and Performance Obligations The Company contracts with its customers to provide the following goods and services, each of which is a distinct performance obligation: Pest control services - The Company’s revenue recognition policies are designed to recognize revenues upon satisfaction of the performance obligation at the time services are performed. For certain revenue types, because of the timing of billing and the receipt of cash versus the timing of performing services, we use estimates as described below. Residential and commercial pest control services are primarily recurring in nature on a monthly, bi-monthly or quarterly basis, while certain types of commercial customers may receive multiple treatments within a given month. In general, pest control customers sign an initial one-year contract, and revenues are recognized at the time services are performed. The Company defers recognition of advance payments and recognizes the revenue as the services are rendered. The Company classifies discounts related to the advance payments as a reduction in revenues. Termite control services - Maintenance/monitoring/inspection - Termite baiting revenues are recognized based on the transfer of control of the individual units of accounting. At the inception of a new baiting services contract, upon quality control review of the installation, the Company recognizes revenue for the installation of the monitoring stations, initial directed liquid termiticide treatment and servicing of the monitoring stations. A portion of the contract amount is deferred for the undelivered monitoring performance obligation. This portion is recognized as income on a straight-line basis over the remaining contract term, which results in recognition of revenue that depicts the Company’s performance in transferring control of the service. The allocation of the transaction price to the two deliverables is based on the relative stand-alone selling price. There are no contingencies related to the delivery of additional items or meeting other specified performance conditions. Baiting renewal revenue is deferred and recognized over the annual contract period on a straight-line basis that depicts the Company’s performance in transferring control of the service. Revenue received for conventional termite renewals is deferred and recognized on a straight-line basis over the remaining contract term that depicts the Company’s performance in transferring control of the service; and, the cost of reinspections, reapplications and repairs and associated labor and chemicals are expensed as incurred. For outstanding claims, an estimate is made of the costs to be incurred (including legal costs) based upon current factors and historical information. The performance of reinspections tends to be close to the contract renewal date, and while reapplications and repairs involve an insubstantial number of the contracts, these costs are incurred over the contract term. As the revenue is being deferred, the future cost of reinspections, reapplications and repairs and associated labor and chemicals applicable to the deferred revenue are expensed as incurred. The Company accrues for noticed claims. The costs of providing termite services upon renewal are compared to the expected revenue to be received and a provision is made for any expected losses. Miscellaneous services - Products - Equipment rental (or lease) - Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record unearned revenue when revenue is recognized subsequent to billing. Unearned revenue mainly relates to the Company’s termite baiting offering, conventional renewals, and year-in-advance pest control services for which we have been paid in advance and earn the revenue when we transfer control of the product or service. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. Refer to Note 3 - Revenue for further information, including changes in unearned revenue for the year. The Company extends terms to certain customers on higher dollar termite and ancillary work, as well as to certain franchisees for initial funding on the sale of franchises. These financed receivables are segregated from our trade receivables. The allowance for expected credit losses reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. See Note 5 – Allowance for Credit Losses for further information. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. All revenues are reported net of sales taxes. The Company’s international operations accounted for approximately 8%, 7%, and 8% of revenues for the years ended December 31, 2021, 2020, and 2019 respectively. Allowance for Expected Credit Losses Advertising Years ended December 31, 2021 2020 2019 (in thousands) Advertising $ 91,879 $ 86,314 $ 81,174 Cash and Cash Equivalents At December 31, 2021 2020 2019 (in thousands) (in US dollars) Cash held in foreign bank accounts $ 78,102 $ 71,330 $ 74,094 The Company’s $105.3 million of total cash at December 31, 2021, is primarily cash held at various banking institutions. Approximately $78.1 million is held in cash accounts at international banking institutions and the remaining $27.2 million is primarily held in Federal Deposit Insurance Corporation (“FDIC”) insured non-interest-bearing accounts at various domestic banks which at times may exceed federally insured amounts. The Company’s international business is expanding, and we intend to continue to grow the business in foreign markets in the future through reinvestment of foreign deposits and future earnings as well as potential acquisitions of unrelated companies. Repatriation of cash from the Company’s foreign subsidiaries is not a part of the Company’s current business plan. Rollins maintains adequate liquidity and capital resources, without regard to its foreign deposits, that are directed to finance domestic operations and obligations and to fund expansion of its domestic business for the foreseeable future. Marketable Securities Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designations as of each balance sheet date. Debt securities are classified as available-for-sale because the Company does not have the intent to hold the securities to maturity. Available-for-sale securities are stated at their fair values, with the unrealized gains and losses reported in earnings. The Company had no marketable securities other than those held in the defined benefit pension plan and the non-qualified deferred compensation plan at December 31, 2021 and 2020. See Note 14 for further details. Materials and Supplies Other Current Assets Income Taxes Equipment and Property 10 operating equipment 2 Years ended December 31, 2021 2020 2019 (in thousands) Depreciation $ 40,592 $ 40,623 $ 36,646 Certain internal-use software and systems development costs are capitalized. Accordingly, the specific identified costs incurred to develop and obtain software, which is intended for internal use, are not capitalized until the software is put into use. Management, with the relevant authority, authorizes and commits to funding a software project and it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred during a software development’s discovery phase and post-integration stage, are expensed as incurred. Application development activities that are eligible for capitalization include software design and configuration, development of interfaces, coding, testing and installation. Capitalized internal-use software and systems costs are subsequently amortized on a straight-line basis over a three Impairment of Long-Lived Assets - “Property, Plant and Equipment” Goodwill and Other Intangible Assets “Intangibles - Goodwill and other” may Other Assets – Accrued Insurance Accrual for Termite Contracts Other Current Liabilities Other Long-term Accrued Liabilities Contingency Accruals “Contingencies,” Earnings Per Share “Earnings Per Share-Overall,” The Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends and therefore are considered participating securities. See Note 15 for further information on restricted stock granted to employees. The basic and diluted calculations are the same as we have no stock options or other potentially dilutive instruments outstanding. Basic and diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the respective periods. A reconciliation of weighted average shares outstanding along with the earnings per share attributable to restricted shares of common stock (participating securities) is as follows (in thousands except per share data). Years Ended December 31, 2021 2020 2019 Net income available to stockholders $ 350,687 $ 260,824 $ 203,347 Less dividends paid: Common stock (207,482) (159,524) (152,793) Restricted shares of common stock (1,174) (963) (1,042) Undistributed earnings for the period $ 142,031 $ 100,337 $ 49,512 Allocation of undistributed earnings: Common stock 141,224 99,676 49,144 Restricted shares of common stock 807 661 368 Basic and diluted shares outstanding: Common stock 489,259 488,364 487,569 Restricted shares of common stock 2,795 3,240 3,647 492,054 491,604 491,216 Basic and diluted earnings per share: Common stock: Distributed earnings $ 0.42 $ 0.33 $ 0.31 Undistributed earnings 0.29 0.20 0.10 $ 0.71 $ 0.53 $ 0.41 Restricted shares of common stock: Distributed earnings $ 0.42 $ 0.30 $ 0.29 Undistributed earnings 0.29 0.20 0.10 $ 0.71 $ 0.50 $ 0.39 Translation of Foreign Currencies The resulting translation adjustments are charged or credited to other comprehensive income. Gains or losses from foreign currency transactions, such as those resulting from the settlement of receivables or payables, denominated in foreign currency are included in the earnings of the current period. Stock-Based Compensation Compensation – Stock Compensation TLRSs provide for the issuance of a share of the Company’s common stock at no cost to the holder and generally vest after a certain stipulated number of years from the grant date, depending on the terms of the issue. Outstanding TLRSs vest in 20 percent increments starting with the second anniversary of the grant, over six years from the date of grant. During these years, grantees receive all dividends declared and retain voting rights for the granted shares. The agreements under which the restricted stock is issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the plans have lapsed. The fair value of these awards is recognized as compensation expense, net of estimated forfeitures, on a straight-line basis over six years. Comprehensive Income (Loss) Franchising Program Combined domestic and international revenues from Orkin, Critter Control and Australia franchises were $15.5 million for the year ended December 31, 2021 and $15.2 million and $17.1 million for the years ended December 31, 2020 and 2019, respectively. Total franchising revenues were less than 1.0% of the Company’s annual revenues. Right to access intellectual property (Franchise) Recent Accounting Guidance Recently adopted accounting standards In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The amendments in this Update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for fiscal years beginning after December 15, 2022 with early adoption permitted. The Company adopted this ASU during the fourth quarter of 2021 and the adoption did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU No. 2019 12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.’ The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods. The standard in this update is effective for the Company’s financial statements issued for fiscal years beginning in 2021. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments.” The updated accounting guidance requires changes to the recognition of credit losses on financial instruments not accounted for at fair value through net income. The Company adopted ASU 2016-13 effective January 1, 2020 and recognized the decrease in the allowance for expected credit losses, net of tax, as a $2.5 million increase to beginning retained earnings. Recently issued accounting standards to be adopted in 2022 or later In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance.” The amendments in this Update require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
ACQUISITIONS | |
ACQUISITIONS | 2. ACQUISITIONS The Company made 39 and 31 acquisitions during the years ended December 31, 2021, and 2020, respectively. Total cash purchase price for the Company’s acquisitions in 2021 and 2020 were $146.1 million and $147.6 million, respectively. For the 39 acquisitions completed in 2021, the preliminary values of major classes of assets acquired and liabilities assumed recorded at the dates of acquisition, adjusted during the valuation period are included in the reconciliation of the total consideration as follows (in thousands): 2021 2020 Accounts receivable, net $ 3,072 $ 3,547 Materials and supplies 891 582 Equipment and property 8,184 7,269 Goodwill 69,555 73,430 Customer contracts 80,239 72,608 Trademarks & tradenames 1,200 7,317 Other intangible assets 3,668 1,333 Current liabilities (6,483) (15,518) Other assets and liabilities, net 288 9,639 Total consideration paid 160,614 160,207 Less: Contingent consideration liability (14,516) (12,594) Total cash purchase price $ 146,098 $ 147,613 Goodwill from acquisitions represents the excess of the purchase price over the fair value of net assets of businesses acquired. The factors contributing to the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized. For the year ended December 31, 2021, $69.3 million of goodwill was added related to the 39 acquisitions noted above. The recognized goodwill is expected to be deductible for tax purposes. The purchase price allocations for these acquisitions are preliminary until the Company obtains final information regarding these fair values. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE | |
REVENUE | 3. REVENUE The following tables present our revenues disaggregated by revenue source (in thousands). Sales and usage-based taxes are excluded from revenues. No sales to an individual customer or in a country other than the United States accounted for 10% or more of the sales for the periods listed on the following table. Revenue, classified by the major geographic areas in which our customers are located, was as follows: 2021 2020 2019 (in thousands) United States $ 2,240,226 $ 2,006,368 $ 1,862,698 Other countries 184,074 154,852 152,779 Total Revenues $ 2,424,300 $ 2,161,220 $ 2,015,477 Revenue from external customers, classified by significant product and service offerings, was as follows: (in thousands) 2021 2020 2019 Residential revenue $ 1,103,687 $ 977,470 $ 861,636 Commercial revenue 844,928 766,716 770,342 Termite completions, bait monitoring, & renewals 465,053 406,782 371,258 Other revenues 10,632 10,252 12,241 Total Revenues $ 2,424,300 $ 2,161,220 $ 2,015,477 Deferred revenue recognized for the year ended December 31, 2021 and 2020 was $187.3 million and $173.2 million, respectively. Changes in unearned revenue were as follows: Year Ended December 31, 2021 2020 (in thousands) Beginning balance $ 149,224 $ 136,507 Deferral of unearned revenue 206,730 185,943 Recognition of unearned revenue (187,347) (173,226) Ending balance $ 168,607 $ 149,224 Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes both unearned revenue and revenue that will be billed and recognized in future periods. The Company has no material contracted not recognized revenue as of December 31, 2021 or December 31, 2020. At December 31, 2021 and December 31, 2020, the Company had long-term unearned revenue of $23.5 million and $18.0 million, respectively. Unearned short-term revenue is recognized over the next 12-month period. The majority of unearned long-term revenue is recognized over a period of five years or less with immaterial amounts recognized through 2032. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
DEBT | |
DEBT | 4. DEBT In April 2019, the Company entered into a Credit Agreement with Truist Bank, (formerly known as SunTrust Bank) and Bank of America, N.A. (the “Credit Agreement”) for an unsecured Revolving Commitment of up to $175.0 million, which includes a $75.0 million letter of credit subfacility and a $25.0 million swingline subfacility (the “Revolving Commitment”) and an unsecured variable rate $250.0 million Term Loan (the “Term Loan”). Both the Revolving Commitment and the Term Loan (the “Credit Facility”) have five-year durations commencing on April 29, 2019 and ending April 29, 2024 duration beyond the Revolving Commitment termination date as well as optional prepayment rights at any time and from time to time to prepay any borrowing, in whole or in part, without premium or penalty. As of December 31, 2021, the Revolving Commitment had outstanding borrowings of $107.0 million and the Term Loan had outstanding borrowings of $48.0 million. As of December 31, 2020, there were $203.0 million in aggregate outstanding borrowings. The $155.0 million outstanding borrowings value approximated the fair value at December 31, 2021 based upon interest rates available to the Company as evidenced by debt of other companies with similar credit characteristics. Our effective interest rate on the debt outstanding as of December 31, 2021 was 0.85%. The effective interest rate is comprised of the 1-month LIBOR plus a margin of 75.0 basis points as determined by our leverage ratio calculation. The Company has partially prepaid the Term Loan ahead of the amortization schedule and therefore, as of December 31, 2021, the only required payment was a balloon payment of $48.0 million in April 2024. The Company maintains approximately $37.2 million in letters of credit. These letters of credit are required by the Company’s fronting insurance companies and/or certain states, due to the Company’s self-insured status, to secure various workers’ compensation and casualty insurance contracts coverage. The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate such claims. On January 27, 2022, the Company entered into an amendment (the “Amendment”) to the Credit Agreement with Truist Bank and Bank of America, N.A whereby additional term loans in an aggregate principal amount of $252.0 million were advanced to the Company. The Amendment also replaced LIBOR as the benchmark interest rate for borrowings with the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) and reset the amortization schedule for all term loans under the Credit Agreement. The maturity of all loans made under the Credit Agreement prior to the Amendment remains unchanged at April 29, 2024 and all other terms of the Credit Agreement remain unchanged in all material respects. Subsequent to year end, in conjunction with this Amendment, the aggregate outstanding principal balance of all term loans under the Credit Agreement is $300.0 million (consisting of an outstanding principal balance of the initial term loan in the amount of $48.0 million and the additional $252.0 million term loan borrowing made). In order to comply with applicable debt covenants, the Company is required to maintain at all times a leverage ratio of not greater than 3.00:1.00. The leverage ratio is calculated as of the last day of the fiscal quarter most recently ended. The Company remained in compliance with applicable debt covenants at December 31, 2021 and expects to maintain compliance throughout 2022. |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2021 | |
ALLOWANCE FOR CREDIT LOSSES | |
ALLOWANCE FOR CREDIT LOSSES | 5. ALLOWANCE FOR CREDIT LOSSES The Company is exposed to credit losses primarily related to accounts receivables and financed receivables derived from customer services revenue. To reduce credit risk for residential pest control accounts receivable, we promote enrollment in our auto-pay programs. In general, we may suspend future services for customers with past due balances. The Company’s credit risk is generally low with a large number of entities comprising Rollins’ customer base and dispersion across many different geographical regions. The Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risks. The Company’s established credit evaluation and monitoring procedures seek to minimize the amount of business we conduct with higher risk customers. The credit quality of a potential obligor is evaluated at the loan origination based on an assessment of the individual’s Beacon/credit bureau score. Rollins requires a potential obligor to have good credit worthiness with low risk before entering into a contract. Depending upon the individual’s credit score, the Company may accept with 100% financing or require a significant down payment or turn down the contract. Delinquencies of accounts are monitored each month. Financing receivables include installment receivable amounts, some of which are due subsequent to one year from the balance sheet dates. The Company’s allowances for credit losses for trade accounts receivable and financed receivables are developed using historical collection experience, current economic and market conditions, reasonable and supportable forecasts, and a review of the current status of customers’ receivables. The Company’s receivable pools are classified between residential customers, commercial customers, large commercial customers, and financed receivables. Accounts are written-off against the allowance for credit losses when the Company determines that amounts are uncollectible, and recoveries of amounts previously written off are recorded when collected. The Company stops accruing interest to these receivables when they are deemed uncollectible. Below is a roll forward of the Company’s allowance for credit losses for the years ended December 31, 2021 and 2020. Allowance for Credit Losses Trade Financed Total (in thousands) Receivables Receivables Receivables Balance at December 31, 2019 $ 16,699 $ 2,959 $ 19,658 Adoption of ASC 326 (3,330) - (3,330) Provision for expected credit losses 14,699 2,837 17,536 Write-offs charged against the allowance (18,228) (2,565) (20,793) Recoveries collected 7,014 — 7,014 Balance at December 31, 2020 $ 16,854 $ 3,231 $ 20,085 Provision for expected credit losses 11,732 3,553 15,285 Write-offs charged against the allowance (19,882) (2,799) (22,681) Recoveries collected 5,181 — 5,181 Balance at December 31, 2021 $ 13,885 3,985 $ 17,870 Total financing receivables, net were $73.2 million and $61.9 million at December 31, 2021 and December 31, 2020, respectively. Financing receivables are generally charged-off when deemed uncollectable or when 180 days have elapsed since the date of the last full contractual payment. The Company’s charge-off policy has been consistently applied during the periods reported. Management considers the charge-off policy when evaluating the appropriateness of the allowance for expected credit losses. Gross charge-offs as a percentage of average financing receivables were 4.3% and 4.6% for the twelve months ended December 31, 2021 and December 31, 2020, respectively. Due to the low percentage of charge-off receivables and the high creditworthiness of the potential obligors, the Rollins, Inc. financing receivables portfolio has a low credit risk. The Company offers 90 days same-as-cash financing to some customers based on their creditworthiness. Interest is not recognized until the 91st Included in financing receivables are notes receivable from franchise owners. The majority of these notes are low risk as the repurchase of these franchises is guaranteed by the Company’s wholly-owned subsidiary, Orkin Systems, LLC, and the repurchase price of the franchise is currently estimated and has historically been well above the receivable due from the franchise owner. Also included in notes receivables are franchise notes from other brands which are not guaranteed and do not have the same historical valuation. The carrying amount of notes receivable approximates fair value as the interest rates approximate market rates for these types of contracts. Long-term installment receivables, net were $47.1 million and $38.2 million at December 31, 2021 and 2020, respectively. The following is a summary of the past due financing receivables: At December 31, 2021 2020 (in thousands) 30-59 days past due $ 1,911 $ 2,215 60-89 days past due 1,058 1,063 90 days or more past due 2,886 1,745 Total $ 5,855 $ 5,023 The following is a summary of percentage of gross financing receivables: At December 31, 2021 2020 Current 91.7 % 92.3 % 30-59 days past due 2.7 % 3.4 % 60-89 days past due 1.5 % 1.6 % 90 days or more past due 4.1 % 2.7 % Total 100.0 % 100.0 % |
EQUIPMENT AND PROPERTY
EQUIPMENT AND PROPERTY | 12 Months Ended |
Dec. 31, 2021 | |
EQUIPMENT AND PROPERTY | |
EQUIPMENT AND PROPERTY | 6. EQUIPMENT AND PROPERTY Equipment and property are presented at cost less accumulated depreciation and are detailed as follows: December 31, 2021 2020 (in thousands) Buildings $ 54,935 $ 91,453 Operating equipment 126,732 116,791 Furniture and fixtures 19,261 19,860 Computer equipment and systems 223,648 212,010 424,576 440,114 Less: accumulated depreciation (315,891) (294,226) 108,685 145,888 Land 24,572 32,164 Net equipment and property $ 133,257 $ 178,052 Included in computer equipment and systems at December 31, 2021 and 2020, are costs for internal use software of $143.5 million and $137.9 million, respectively. The related accumulated depreciation was $105.3 million and $89.4 million at December 31, 2021 and 2020, respectively. Included in equipment and property, net at December 31, 2021 and 2020, are fixed assets held in foreign countries of $8.4 million, and $8.5 million, respectively. Total depreciation expense was approximately $40.6 million in 2021, $40.6 million in 2020 and $36.6 million in 2019. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
LEASES | 7. LEASES The Company leases certain buildings, vehicles, and equipment in order to reduce the risk associated with ownership. The Company elected the practical expedient approach permitted under ASC Topic 842, “Leases” not to include short-term leases with a duration of 12 months or less on the balance sheet. As of December 31, 2021 and 2020, all leases were classified as operating leases. Building leases generally carry terms of 5 to 10 years with annual rent escalations at fixed amounts per the lease. Vehicle leases generally carry a fixed term of one year with renewal options to extend the lease on a monthly basis resulting in lease terms up to 7 years depending on the class of vehicle. The exercise of renewal options is at the Company’s sole discretion. It is reasonably certain that the Company will exercise the renewal options on its vehicle leases. The measurement of right-of-use assets and liabilities for vehicle leases includes the fixed payments associated with such renewal periods. We separate lease and non-lease components of contracts. Our lease agreements do not contain any material variable payments, residual value guarantees, early termination penalties or restrictive covenants. During the year ended December 31, 2021, the Company completed multiple sale-leaseback transactions where it sold 17 of its properties related to the Clark Pest Control acquisition for gross proceeds of $67.0 million and a pre-tax gain of $31.5 million, which is included in Other (income) expense, net on the income statement. These leases are classified as operating leases with terms of 7 The Company uses the rate implicit in the lease when available; however, most of our leases do not provide a readily determinable implicit rate. Accordingly, we estimate our incremental borrowing rate based on information available at lease commencement. Year Ended December 31, (in thousands, except Other Information) Lease Classification Financial Statement Classification 2021 2020 Short-term lease cost Cost of services provided, Sales, general, and administrative expenses $ 235 $ 189 Operating lease cost Cost of services provided, Sales, general, and administrative expenses 93,215 85,426 Total lease expense $ 93,450 $ 85,615 Other Information: Weighted-average remaining lease term - operating leases 5.5 years 3.8 years Weighted-average discount rate - operating leases 3.63 % 3.93 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 92,032 $ 84,673 Lease Commitments Future minimum lease payments, including assumed exercise of renewal options at December 31, 2021 were as follows: Operating (in thousands) 2022 82,959 2023 63,380 2024 39,426 2025 22,713 2026 14,882 Thereafter 54,024 Total Future Minimum Lease Payments 277,384 Less: Amount representing interest 29,624 Total future minimum lease payments, net of interest $ 247,760 Future commitments presented in the table above include lease payments in renewal periods for which it is reasonably certain that the Company will exercise the renewal option. Total future minimum lease payments for operating leases, including the amount representing interest, are comprised of $162.1 million for building leases and $115.3 million for vehicle leases. As of December 31, 2021, the Company had additional future obligations of $4.8 million for leases that had not yet commenced. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 8. FAIR VALUE MEASUREMENT The Company’s financial instruments consist of cash and cash equivalents, trade receivables, financed and notes receivable, accounts payable, other short-term liabilities, and debt. The carrying amounts of these financial instruments approximate their respective fair values. The Company also has derivative instruments as discussed in Note 11 and financial instruments related to its defined benefit pension plan and deferred compensation plan detailed in Note 14. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. During the year ended December 31, 2021, the Company invested $12.7 million of unrestricted cash in international bonds, a level 2 asset under the fair value hierarchy. The investment is recorded in other current assets. The fair market values of the bonds approximate their amortized costs. At December 31, 2021 and 2020, respectively, the Company had $25.2 million and $35.7 million of acquisition holdback and earnout liabilities with the former owners of acquired companies. Acquisition earnouts are generally earned by achieving certain levels of revenue growth while maintaining certain profit margins. The earnout liabilities are discounted to reflect the expected probability of payout, and both earnout and holdback liabilities are discounted to their net present value on the Company’s books and are considered Level 3 liabilities. The table below presents a summary of the changes in fair value for these liabilities. (in thousands) Acquisition holdback and earnout liabilities at December 31, 2019 $ 49,132 New acquisitions 12,594 Revaluations (2,305) Payouts (24,011) Interest on outstanding contingencies 2,025 Charge offset, forfeit and other (1,691) Acquisition holdback and earnout liabilities at December 31, 2020 35,744 New acquisitions 14,516 Revaluations — Payouts (22,809) Interest on outstanding contingencies 855 Charge offset, forfeit and other (3,150) Acquisition holdback and earnout liabilities at December 31, 2021 $ 25,156 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | |
GOODWILL | 9. GOODWILL Goodwill represents the excess of the purchase price over the fair value of net assets of businesses acquired. The carrying amount of goodwill was $721.8 million at December 31, 2021 and $653.2 million as of December 31, 2020. Goodwill increased for the year ended December 31, 2021 primarily due to acquisitions. The carrying amount of goodwill in foreign countries was $82.1 million as of December 31, 2021 and $81.4 million as of December 31, 2020. The changes in the carrying amount of goodwill for the twelve months ended December 31, 2021 and 2020 were as follows: (in thousands) Goodwill at December 31, 2019 $ 572,847 Goodwill acquired 73,430 Goodwill adjustments due to currency translation 6,899 Goodwill at December 31, 2020 653,176 Goodwill acquired 69,264 Goodwill adjustments due to currency translation (621) Goodwill at December 31, 2021 $ 721,819 |
CUSTOMER CONTRACTS, TRADENAMES
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | |
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | 10. CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS Customer contracts are amortized on a straight-line basis over the period of the agreements, as straight-line best approximates the ratio that current revenues bear to the total of current and anticipated revenues, based on the estimated lives of the assets. In accordance with the FASB ASC Topic 350 “Intangibles - Goodwill and other”, the expected lives of customer contracts were analyzed, and it was determined that customer contracts should be amortized over a life of 7 to 20 years dependent upon customer type. The carrying amount and accumulated amortization for customer contracts were as follows: December 31, 2021 2020 (in thousands) Customer contracts $ 551,277 $ 475,494 Less: accumulated amortization (225,348) (176,545) Customer contracts, net $ 325,929 $ 298,949 The net carrying amount of customer contracts in foreign countries was $42.1 million as of December 31, 2021 and $45.7 million as of December 31, 2020. Trademarks and tradenames are amortized on a straight-line basis over the period of their useful lives. The Company has determined these assets have useful lives between 7 and 20 years with non-amortizable, indefinite lived tradenames of $102.7 million and $97.4 million as of December 31, 2021 and 2020, respectively. The carrying amount and accumulated amortization for trademarks and tradenames were as follows: December 31, 2021 2020 (in thousands) Trademarks and tradenames $ 115,468 $ 115,131 Less: accumulated amortization (6,492) (6,087) Trademarks and tradenames, net $ 108,976 $ 109,044 The net carrying amount of trademarks and tradenames in foreign countries was $2.9 million as of December 31, 2021 and $3.3 million as of December 31, 2020. Other intangible assets include non-compete agreements and patents. Non-compete agreements are amortized on a straight-line basis over periods ranging from 3 to 20 years and patents are amortized on a straight-line basis over 15 years. The carrying amount and accumulated amortization for other intangible assets were as follows: December 31, 2021 2020 (in thousands) Other intangible assets $ 24,448 $ 23,247 Less: accumulated amortization (12,769) (12,470) Other intangible assets, net $ 11,679 $ 10,777 The net carrying amount of other intangible assets in foreign countries was $0.7 million as of December 31, 2021 and $1.0 million as of December 31, 2020. Included in the table above are non-amortizable, indefinite lived Internet domain names of $2.2 million at December 31, 2021 and 2020, respectively. Total amortization expense was approximately $53.6 million in 2021, $47.7 million in 2020 and $44.5 million in 2019. Estimated amortization expense for the existing carrying amount of customer contracts and other intangible assets for each of the five succeeding fiscal years are as follows: (in thousands) 2022 $ 58,635 2023 54,027 2024 50,601 2025 41,483 2026 37,084 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to certain interest rate risks on our outstanding debt and foreign currency risks arising from our international business operations and global economic conditions. The Company enters into certain derivative financial instruments to lock in certain interest rates, as well as to protect the value or fix the amount of certain obligations in terms of its functional currency, the U.S. dollar. Cash Flow Hedges of Interest Rate Risk The Company uses interest rate swap arrangements to manage or hedge its interest rate risk. Notwithstanding the terms of the swaps, the Company is ultimately obligated for all amounts due and payable under the Credit Facility. The Company does not use interest rate swaps for speculative or trading purposes. On June 19, 2019, the Company entered into a floating-to-fixed interest rate swap for an aggregate notional amount of $100.0 million in order to hedge a portion of the Company’s floating rate indebtedness under the Credit Facility. The Company designated the swap as a cash flow hedge. The swap requires the Company to pay a fixed rate of 1.94% per annum on the notional amount. The cash flows from the swap began June 30, 2019 and ended on December 31, 2021. Realized gains and losses in connection with each required interest payment are reclassified from Accumulated other comprehensive income (“AOCI”) to interest expense during the period of the cash flows. During 2021 and 2020, $0.4 million and $0.7 million was reclassified into interest expense. During 2019, $0.1 million was recorded as interest income, partially offsetting the floating rate interest expense on our Credit Facility. Hedges of Foreign Exchange Risk The Company is exposed to fluctuations in various foreign currencies against its functional currency, the US dollar. We use foreign currency derivatives, specifically foreign currency forward contracts (“FX Forwards”), to manage our exposure to fluctuations in the USD-CAD and AUD-USD exchange rates. FX Forwards involve fixing the foreign currency exchange rate for delivery of a specified amount of foreign currency on a specified date. The FX Forwards are typically settled in US dollars for their fair value at or close to their settlement date. We do not currently designate any of these FX Forwards under hedge accounting, but rather reflect the changes in fair value immediately in earnings. We do not use such instruments for speculative or trading purposes, but rather use them to manage our exposure to foreign exchange rates. Changes in the fair value of FX Forwards are recorded in other income/expense and were equal to net losses of $0.4 million for each of the twelve months ended December 31, 2021 and 2020. The fair values of the Company’s FX Forwards were recorded in Other current liabilities as net obligations of $0.0 million and $0.4 million at December 31, 2021 and 2020, respectively. As of December 31, 2020, the Company had the following outstanding FX Forwards (in thousands except for number of instruments): Number of Sell Buy FX Forward Contracts Instruments Notional Notional Sell AUD/Buy USD Fwd Contract 19 $ 2,500 $ 1,813 Sell CAD/Buy USD Fwd Contract 19 19,000 14,994 Total 38 $ 16,807 The financial statement impact related to these derivative instruments was insignificant for the years ended December 31, 2021, 2020, and 2019. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company’s income tax provision consisted of the following: For the years ended December 31, 2021 2020 2019 (in thousands) Current: Federal $ 87,888 $ 67,861 $ 43,593 State 24,131 18,381 15,337 Foreign 10,480 8,869 6,111 Total current tax 122,499 95,111 65,041 Deferred: Federal (34) (2,076) (5,217) State 1,795 312 (1,518) Foreign (109) 549 (493) Total deferred tax 1,652 (1,215) (7,228) Total income tax provision $ 124,151 $ 93,896 $ 57,813 The primary factors causing income tax expense to be different than the federal statutory rate for 2021, 2020 and 2019 are as follows: For the years ended December 31, 2021 2020 2019 (in thousands) Income tax at statutory rate $ 99,716 $ 74,491 $ 54,845 State income tax expense (net of federal benefit) 19,135 14,393 10,182 Foreign tax expense 2,837 2,341 933 Foreign tax credit (273) (240) (242) Repatriation tax under the Tax Cuts and Jobs Act of 2017 — — (844) Pension settlement — — (10,537) Executive compensation 2,786 5,557 2,445 Restricted stock adjustments (3,468) (3,927) (2,973) Other 3,418 1,281 4,004 Total income tax provision $ 124,151 $ 93,896 $ 57,813 Other includes the release of deferred tax liabilities, tax credits, valuation allowance, disallowed deductions, and other immaterial adjustments. The provision for income taxes resulted in an effective tax rate of 26.1% on income before income taxes for the year ended December 31, 2021. The effective rate differs from the annual federal statutory rate primarily because of state and foreign income taxes and certain other adjustments and disallowed deductions. For 2020 the effective tax rate was 26.5%. The effective rate differs from the annual federal statutory rate primarily because of state and foreign income taxes, adjustments related to the accelerated stock vesting expense and certain other disallowed deductions. For 2019 the effective tax rate was 22.1%. The effective income tax rate differs from the annual federal statutory tax rate primarily because of state and foreign income taxes and beneficial adjustments related to the pension settlement. During 2021, 2020 and 2019, the Company paid income taxes of $119.8 million, $81.2 million and $75.8 million, respectively, net of refunds. Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2021 and 2020 are as follows: December 31, 2021 2020 (in thousands) Deferred tax assets: Insurance and contingencies $ 18,258 $ 19,531 Unearned revenues 12,051 11,825 Compensation and benefits 13,546 12,304 State and foreign operating loss carryforwards 1,234 2,768 Bad debt reserve 3,873 4,214 Foreign tax credit 4,775 3,804 Termite accrual 642 721 Net pension liability 195 — Other 3,371 2,519 Valuation allowance (192) (144) Total deferred tax assets 57,753 57,542 Deferred tax liabilities: Depreciation and amortization (24,261) (25,730) Net pension liability — (727) Intangibles and other (43,799) (39,475) Total deferred tax liabilities $ (68,060) $ (65,932) Net deferred taxes Deferred tax assets $ 2,948 $ 2,222 Deferred tax liabilities $ (13,255) $ (10,612) Deferred tax assets are included in Other assets on the balance sheet. Analysis of the valuation allowance: December 31, 2021 2020 (in thousands) Valuation allowance at beginning of year $ 144 $ 83 Increase in valuation allowance 48 61 Valuation allowance at end of year $ 192 $ 144 As of December 31, 2021, the Company has net operating loss carryforwards for foreign and state income tax purposes of approximately $23.9 million, which will be available to offset future taxable income. If not used, these carryforwards will expire between 2022 and 2032. Management believes that it is unlikely to be able to utilize approximately $1.0 million of foreign net operating losses before they expire and has included a valuation allowance for the effect of these unrealizable operating loss carryforwards. The valuation allowance increased by $0.05 million due to foreign net operating losses. The Company has a foreign tax credit carryforward of $4.8 million which if not fully utilized will expire in 2026. Earnings from continuing operations before income tax included foreign income of $32.5 million in 2021, $25.3 million in 2020 and $26.7 million in 2019. The Company’s international business is expanding, and we intend to continue to grow the business in foreign markets in the future through reinvestment of foreign deposits and future earnings as well as acquisition of unrelated companies. Repatriation of cash from the Company’s international subsidiaries is not a part of the Company’s current business plan. The total amount of unrecognized tax benefits at December 31, 2021 that, if recognized, would affect the effective tax rate is $1.0 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2021 2020 (in thousands) Unrecognized tax benefits at beginning of year $ 844 $ 844 Additions for tax positions of prior years 174 — Unrecognized tax benefits at end of year $ 1,018 $ 844 The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. In addition, the Company has subsidiaries in various state and international jurisdictions that are currently under audit for years ranging from 2013 through 2019. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S., income tax examinations for years prior to 2013. It is reasonably possible that the amount of unrecognized tax benefits will decrease in the next 12 months. The Company’s policy is to record interest and penalties related to income tax matters in income tax expense. Accrued interest and penalties were $0.2 million and $0.07 million as of December 31, 2021 and 2020, respectively. During 2021 the Company recognized interest and penalties of $0.2 million. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company and its subsidiaries are involved in, and will continue to be involved in, various claims, arbitrations, contractual disputes, investigations, and regulatory and litigation matters relating to, and arising out of, our businesses and our operations. These matters may involve, but are not limited to, allegations that our services or vehicles caused damage or injury, claims that our services did not achieve the desired results, claims related to acquisitions and allegations by federal, state or local authorities of violations of regulations or statutes. In addition, we are parties to employment-related cases and claims from time to time, which may include claims on a representative or class action basis alleging wage and hour law violations. We are also involved from time to time in certain environmental matters primarily arising in the normal course of business. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable. As we previously disclosed, the SEC is conducting an investigation (the “SEC Investigation”). We believe the SEC Investigation is primarily focused on how the Company established accruals and reserves at period-ends for periods beginning January 1, 2016 through December 31, 2018 and the impact of those accruals and reserves on reported earnings per share, specifically, in the first quarter of 2016 and the second quarter of 2017. The Company is in ongoing discussions with the SEC staff regarding a potential resolution of the SEC Investigation. In light of the foregoing, in accordance with the accounting guidance in ASC 450, “Contingencies,” the Company recorded an accrual for $8.0 million related to the SEC Investigation in the third and fourth quarters of 2021, which is reflected in other current liabilities in our consolidated statements of financial position. The ultimate amount of any liability related to the potential resolution of the SEC Investigation could be different from the $8.0 million accrued as of December 31, 2021. The Company will continue to cooperate with the SEC in working towards a final resolution of the SEC Investigation. As we previously reported during the third quarter of 2021, the Audit Committee of the Company’s Board of Directors initiated a related, supplemental internal investigation. This supplemental investigation was concluded in the fourth quarter of 2021. The Company believes that no restatement of its prior period financial statements will be required as a result of the SEC Investigation or matters related thereto. Management does not believe that any pending claim, proceeding or litigation, regulatory action or investigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or liquidity; however, it is possible that an unfavorable outcome of some or all of the matters could result in a charge that might be material to the results of an individual quarter or year. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 14. EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans The Company has sponsored noncontributory tax-qualified defined benefit pension plans covering employees meeting certain age and service requirements, the most significant of which was the Rollins, Inc. Plan, which was terminated in 2018. The Company funds its plans with at least the minimum amount required by ERISA. Rollins, Inc. Retirement Income Plan, (the “Rollins, Inc. Plan”) In 2005, the Company ceased all future benefit accruals under the Rollins, Inc. Plan, although the Company remained obligated to provide employees benefits earned through June 2005. In September 2019, the Company settled this fully-funded pension plan through a combination of lump sum payments to participants, payments to the Pension Benefit Guaranty Corporation, and the purchase of a group annuity contract. With the completed funding of the plan payout settlements, the Company had approximately $31.8 million of pension assets remaining. The remaining assets were the result of the funded status of the Rollins, Inc. Plan, higher take rate of lump sum payment election by participants and optimal pricing of the group annuity contract. The Company evaluated the ERISA allowable opportunities for utilization of the excess pension assets, including funding other employee benefits. The Company used $18.0 million during the year ended December 31, 2020 and $11.0 million during the year ended December 31, 2019 of the $31.8 million to fund its 401(k) match obligation. As of December 31, 2020, the Company had approximately $1.2 million remaining of benefit plan assets related to the Rollins, Inc. Plan. During 2021 all remaining assets were reverted to the Company per ERISA regulations. The Company paid 46.1% of taxes upon reversion, which included 20% of excise tax. Waltham Services, LLC Hourly Employee Pension Plan (the “Waltham Plan”) The Company continues to sponsor the Waltham Plan, which covers less than 85 participants as of December 31, 2021. The Waltham Plan was amended, effective September 1, 2018, to freeze future benefit accruals for all participants. The Company accounts for all defined benefit plans in accordance with the FASB ASC Topic 715 “Compensation Retirement Benefits,” and engages an outside actuary to calculate obligations and costs. With the assistance of the actuary, the Company evaluates the significant assumptions used on a periodic basis, including the estimated future return on plan assets, the discount rate, and other factors, and makes adjustments to these liabilities as necessary. As of December 31, 2021, the Waltham Plan had assets of $2.2 million, a projected liability of $2.9 million and an unfunded status of $0.7 million. At December 31, 2021 the plan’s assets were comprised of listed common stocks and U.S government and corporate securities and are classified as Level 1 and Level 2 in the fair value hierarchy. Defined Contribution 401(k) Savings Plan The Company sponsors a defined contribution 401(k) Savings Plan (“the Plan”) that is available to a majority of the Company’s full-time employees the first day of the calendar quarter following completion of three months of service. The Plan is available to non-full-time employees the first day of the calendar quarter following one year of service upon completion of 1,000 hours one Nonqualified Deferred Compensation Plan The Deferred Compensation Plan provides that participants may defer up to 50% of their base salary and up to 85% of their annual bonus with respect to any given plan year, subject to a $2 thousand per plan year minimum. The Company may make discretionary contributions to participant accounts but has not done so since 2011. Accounts will be credited with hypothetical earnings, and/or debited with hypothetical losses, based on the performance of certain “Measurement Funds.” Account values are calculated as if the funds from deferrals and Company credits had been converted into shares or other ownership units of selected Measurement Funds by purchasing (or selling, where relevant) such shares or units at the current purchase price of the relevant Measurement Fund at the time of the participant’s selection. Deferred Compensation Plan benefits are unsecured general obligations of the Company to the participants, and these obligations rank in parity with the Company’s other unsecured and unsubordinated indebtedness. The Company has established a “rabbi trust,” which it uses to voluntarily set aside amounts to indirectly fund any obligations under the Deferred Compensation Plan. To the extent that the Company’s obligations under the Deferred Compensation Plan exceed assets available under the trust, the Company would be required to seek additional funding sources to fund its liability under the Deferred Compensation Plan. Generally, the Deferred Compensation Plan provides for distributions of any deferred amounts upon the earliest to occur of a participant’s death, disability, retirement or other termination of employment (a “Termination Event”). However, for any deferrals of salary and bonus (but not Company contributions), participants would be entitled to designate a distribution date which is prior to a Termination Event. Generally, the Deferred Compensation Plan allows a participant to elect to receive distributions under the Deferred Compensation Plan in installments or lump-sum payments. At December 31, 2021, the Deferred Compensation Plan had 75 life insurance policies with a net face value of $53.1 million compared to 75 policies with a face value of $50.2 million at December 31, 2020. The cash surrender value of these life insurance policies was worth $27.2 million and $24.5 million at December 31, 2021 and 2020, respectively. These policies are valued using the NAV practical expedient. The following table presents our non-qualified deferred compensation plan assets using the fair value hierarchy as of December 31, 2021 and 2020. (in thousands) Level 1 Level 2 Level 3 NAV Total December 31, 2021 $ 25 $ — $ — $ 27,211 $ 27,236 December 31, 2020 $ 25 $ — $ — $ 24,460 $ 24,485 Cash and cash equivalents, which are used to pay benefits and deferred compensation plan administrative expenses, are held in Money Market Funds. Total expense related to deferred compensation was $322 thousand, $278 thousand, and $250 thousand in 2021, 2020, and 2019, respectively. The Company had $27.2 million and $24.5 million in deferred compensation assets as of December 31, 2021 and 2020, respectively, included within other assets on the Company’s consolidated statements of financial position and $23.6 million and $21.5 million in deferred compensation liability as of December 31, 2021 and 2020, respectively, located within other current liabilities and long-term accrued liabilities on the Company’s consolidated statements of financial position. The amounts of assets were marked to fair value. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 15. STOCK-BASED COMPENSATION Stock Compensation Plans Time Lapse Restricted Shares and Restricted Stock Units Time lapse restricted shares (TLRSs) have been issued to officers and other employees under the Company’s Employee Stock Incentive Plan. The Company recognizes compensation expense for the unvested portion of awards outstanding over the remainder of the service period. The compensation cost recorded for these awards is based on their closing stock price at the grant date less the cost of estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures. TLRSs provide for the issuance of a share of the Company’s common stock at no cost to the holder and generally vest after a certain stipulated number of years from the grant date, depending on the terms of the issue. TLRSs vest in 20 percent increments starting with the second anniversary of the grant, over six years from the date of grant. During these years, grantees receive all dividends declared and retain voting rights for the granted shares. The agreements under which the one-time grant of restricted stock is issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the plans have lapsed. The Company issued time lapse restricted shares of 0.8 million, 0.9 million, and 0.7 million for the years ended December 31, 2021, 2020, and 2019, respectively. The Company issues new shares from its authorized but unissued share pool. At December 31, 2021, approximately 6.6 million shares of the Company’s common stock were reserved for issuance. In accordance with the FASB ASC Topic 718, “ Compensation – Stock Compensation,” The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense ($ in thousands): (in thousands) 2021 2020 2019 Time lapse restricted stock: Pre-tax compensation expense $ 14,865 $ 20,850 $ 14,158 Tax benefit (3,208) (3,752) (3,596) Restricted stock expense, net of tax $ 11,657 $ 17,098 $ 10,562 As of December 31, 2021 and 2020, $49.8 million and $40.5 million, respectively, of total unrecognized compensation cost related to time-lapse restricted shares are expected to be recognized over a weighted average period of approximately 4.0 years and 3.8 years at December 31, 2021 and 2020, respectively. The following table summarizes information on unvested restricted stock units outstanding as of December 31, 2021, 2020 and 2019. Weighted Average Number of Grant-Date (number of shares in thousands) Shares Fair Value Unvested as of December 31, 2018 4,086 $ 13.69 Forfeited (147) 16.40 Vested (1,201) 11.59 Granted 727 25.60 Unvested as of December 31, 2019 3,465 17.23 Forfeited (59) 17.11 Vested (1,397) 15.29 Granted 861 24.53 Unvested Restricted Stock at December 31, 2020 2,870 $ 20.36 Forfeited (191) 25.34 Vested (861) 16.67 Granted 778 37.04 Unvested Restricted Stock at December 31, 2021 2,596 $ 26.16 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) | 12 Months Ended |
Dec. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) | 16. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) Accumulated other comprehensive income/ (loss) consist of the following (in thousands): Foreign Pension Liability Currency Interest Adjustment Translation Rate Swaps Total Balance at December 31, 2018 $ (46,091) $ (24,987) $ — $ (71,078) Change during 2019: Before-tax amount 75,449 4,350 (277) 79,522 Tax expense (29,553) — — (29,553) Other comprehensive earnings/(loss) 45,896 4,350 (277) 49,969 Balance at December 31, 2019 (195) (20,637) (277) (21,109) Change during 2020: Before-tax amount (173) 10,443 (141) 10,129 Tax expense 46 — 37 83 Other comprehensive earnings/(loss) (127) 10,443 (104) 10,212 Balance at December 31, 2020 (322) (10,194) (381) (10,897) Change during 2021: Before-tax amount — (5,895) 516 (5,379) Tax benefit — — (135) (135) Other comprehensive earnings/(loss) — (5,895) 381 (5,514) Balance at December 31, 2021 $ (322) $ (16,089) $ — $ (16,411) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS Transactions with RPC, Inc. The Company provides certain administrative services to RPC, Inc. (“RPC”) (a company of which Mr. Gary W. Rollins is also Chairman, and which is otherwise affiliated with the Company). The service agreements between RPC and the Company provide for the provision of services on a cost reimbursement basis and are terminable on six months’ notice. The services covered by these agreements include administration of certain employee benefit programs and other administrative services. Charges to RPC (or to corporations which are subsidiaries of RPC) for such services and rent totaled approximately $0.1 million for each of the years ended December 31, 2021, 2020, and 2019. Transactions with LOR, Inc. Purchase of Gulfstream III Aircraft During the year ended December 31, 2021, the Company purchased a Gulfstream III aircraft (“Gulfstream”) from LOR Inc. (“LOR”), a company controlled by Gary W. Rollins and certain members of his family) to be used as the Company’s primary airplane. The Company purchased the Gulfstream for $0.5 million and paid the applicable taxes of forty thousand dollars. The purchase of the Gulfstream was approved by the Company’s Nominating and Corporate Governance Committee and the Committee was presented with an independent appraisal of the aircraft supporting the purchase. Pilot Sharing Agreement The Company also entered into a Pilot Sharing Agreement with LOR whereby he Company’s employee pilots may be used by LOR from time to time to operate the LOR aircraft and LOR will reimburse the Company for 50% of the costs of the pilots, including salary, benefits and training. In addition, LOR and the Company are each responsible for their own fuel costs. The Pilot Sharing Agreement was approved by the Company’s Nominating and Corporate Governance Committee. Charges to LOR under the Pilot Sharing Agreement total $0.8 million for the year ended December 31, 2021. Administrative Services Agreement The Company also provides certain administrative services to LOR and rents office, hanger and storage space to LOR. Charges to LOR (or corporations which are subsidiaries of LOR) for rent and administrative services totaled $0.6 million, $1.0 million and $0.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Lear Lease Agreement In 2014, P.I.A. LLC, a company then owned by our late Chairman of the Board of Directors, R. Randall Rollins, purchased a Lear Model 35A jet and entered into a lease arrangement with the Company for Company use of the aircraft for business purposes. P.I.A. LLC is now owned by a trust for the benefit of the late Mr. Rollins’ family. The lease is terminable by either party on 30 days’ notice. The Company pays $100 per month rent for the leased aircraft, and pays all variable costs and expenses associated with the leased aircraft, such as the costs for fuel, maintenance, storage and pilots. The Company has the priority right to use of the aircraft on business days, and Rollins family members and guests have the right to use the aircraft for personal use through the terms of an Aircraft Time Sharing Agreement with the Company. The amounts paid by the Company for the Rollins family and guests to use the aircraft for personal use will be disclosed in the Summary Compensation Table and the Director Compensation Table to be included in the Company’s 2022 Proxy Statement. During the years ended December 31, 2021, 2020 and 2019, the Company paid approximately $0.3 million, $0.6 million, and $0.9 million in rent and operating costs under the Aircraft Time Sharing Agreement, respectively. The foregoing related party transactions were previously approved by the Company’s Nominating and Governance Committee of the Board of Directors. Related Party Franchise Agreement On December 1, 2019, Orkin, a subsidiary of the Company entered into a franchise agreement with Wilson Pest Management, Inc. The franchise is owned 100% by John Wilson IV. During each of the years ended December 31, 2021 and 2020, the Company received a total of approximately $0.1 million. During the year ended December 31, 2019 the Company received $0.8 million which included payment for the franchise and an initial franchise fee of seventy-five Legal Fees Our Amended and Restated Bylaws require that the Company pay reasonable legal fees and expenses on behalf of our directors and officers that are named in certain legal proceedings. Pursuant to that provision, in connection with the SEC Investigation described in Note 13, during the year ended December 31, 2021, the Company paid legal expenses on behalf of certain current and former directors and officers in the aggregate amount of $1.3 million. |
CASH DIVIDEND
CASH DIVIDEND | 12 Months Ended |
Dec. 31, 2021 | |
CASH DIVIDEND | |
CASH DIVIDEND | 18. CASH DIVIDEND On January 27, 2022, the Company’s Board of Directors declared a regular quarterly cash dividend on its common stock of $0.10 payable March 10, 2022 to stockholders of record at the close of business February 10, 2022. The Company expects to continue to pay cash dividends to the common stockholders, subject to the earnings and financial condition of the Company and other relevant factors. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS ROLLINS, INC. AND SUBSIDIARIES Allowance for Expected Credit Losses Balance at Charged to Net Beginning of Adoption of Costs and (Deductions) Balance at (in thousands) Year ASC 326 Expenses Recoveries End of Year 2021 $ 20,085 $ — $ 15,285 $ (17,500) $ 17,870 2020 $ 19,658 $ (3,330) $ 17,536 $ (13,779) $ 20,085 2019 $ 16,666 $ — $ 15,145 $ (12,153) $ 19,658 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Business Description | Business Description |
Principles of Consolidation | Principles of Consolidation |
Subsequent Events | Subsequent Events |
Use of Estimates | Use of Estimates The Company considered the impact of COVID-19 on the assumptions and estimates used in preparing the consolidated financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the Company’s financial results for the year have been made. These adjustments are of a normal recurring nature but complicated by the uncertainty surrounding the global economic impact of COVID-19. The results of operations for the year ended December 31, 2021 are not necessarily indicative of results for future years. The severity, magnitude and duration, as well as the economic consequences of COVID-19, are uncertain, rapidly changing and difficult to predict. Therefore, our accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods |
Revenue Recognition | Revenue Recognition Nature of Goods and Services and Performance Obligations The Company contracts with its customers to provide the following goods and services, each of which is a distinct performance obligation: Pest control services - The Company’s revenue recognition policies are designed to recognize revenues upon satisfaction of the performance obligation at the time services are performed. For certain revenue types, because of the timing of billing and the receipt of cash versus the timing of performing services, we use estimates as described below. Residential and commercial pest control services are primarily recurring in nature on a monthly, bi-monthly or quarterly basis, while certain types of commercial customers may receive multiple treatments within a given month. In general, pest control customers sign an initial one-year contract, and revenues are recognized at the time services are performed. The Company defers recognition of advance payments and recognizes the revenue as the services are rendered. The Company classifies discounts related to the advance payments as a reduction in revenues. Termite control services - Maintenance/monitoring/inspection - Termite baiting revenues are recognized based on the transfer of control of the individual units of accounting. At the inception of a new baiting services contract, upon quality control review of the installation, the Company recognizes revenue for the installation of the monitoring stations, initial directed liquid termiticide treatment and servicing of the monitoring stations. A portion of the contract amount is deferred for the undelivered monitoring performance obligation. This portion is recognized as income on a straight-line basis over the remaining contract term, which results in recognition of revenue that depicts the Company’s performance in transferring control of the service. The allocation of the transaction price to the two deliverables is based on the relative stand-alone selling price. There are no contingencies related to the delivery of additional items or meeting other specified performance conditions. Baiting renewal revenue is deferred and recognized over the annual contract period on a straight-line basis that depicts the Company’s performance in transferring control of the service. Revenue received for conventional termite renewals is deferred and recognized on a straight-line basis over the remaining contract term that depicts the Company’s performance in transferring control of the service; and, the cost of reinspections, reapplications and repairs and associated labor and chemicals are expensed as incurred. For outstanding claims, an estimate is made of the costs to be incurred (including legal costs) based upon current factors and historical information. The performance of reinspections tends to be close to the contract renewal date, and while reapplications and repairs involve an insubstantial number of the contracts, these costs are incurred over the contract term. As the revenue is being deferred, the future cost of reinspections, reapplications and repairs and associated labor and chemicals applicable to the deferred revenue are expensed as incurred. The Company accrues for noticed claims. The costs of providing termite services upon renewal are compared to the expected revenue to be received and a provision is made for any expected losses. Miscellaneous services - Products - Equipment rental (or lease) - Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record unearned revenue when revenue is recognized subsequent to billing. Unearned revenue mainly relates to the Company’s termite baiting offering, conventional renewals, and year-in-advance pest control services for which we have been paid in advance and earn the revenue when we transfer control of the product or service. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. Refer to Note 3 - Revenue for further information, including changes in unearned revenue for the year. The Company extends terms to certain customers on higher dollar termite and ancillary work, as well as to certain franchisees for initial funding on the sale of franchises. These financed receivables are segregated from our trade receivables. The allowance for expected credit losses reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. See Note 5 – Allowance for Credit Losses for further information. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. All revenues are reported net of sales taxes. The Company’s international operations accounted for approximately 8%, 7%, and 8% of revenues for the years ended December 31, 2021, 2020, and 2019 respectively. |
Allowance for Expected Credit Losses | Allowance for Expected Credit Losses |
Advertising | Advertising Years ended December 31, 2021 2020 2019 (in thousands) Advertising $ 91,879 $ 86,314 $ 81,174 |
Cash and Cash Equivalents | Cash and Cash Equivalents At December 31, 2021 2020 2019 (in thousands) (in US dollars) Cash held in foreign bank accounts $ 78,102 $ 71,330 $ 74,094 The Company’s $105.3 million of total cash at December 31, 2021, is primarily cash held at various banking institutions. Approximately $78.1 million is held in cash accounts at international banking institutions and the remaining $27.2 million is primarily held in Federal Deposit Insurance Corporation (“FDIC”) insured non-interest-bearing accounts at various domestic banks which at times may exceed federally insured amounts. The Company’s international business is expanding, and we intend to continue to grow the business in foreign markets in the future through reinvestment of foreign deposits and future earnings as well as potential acquisitions of unrelated companies. Repatriation of cash from the Company’s foreign subsidiaries is not a part of the Company’s current business plan. Rollins maintains adequate liquidity and capital resources, without regard to its foreign deposits, that are directed to finance domestic operations and obligations and to fund expansion of its domestic business for the foreseeable future. |
Marketable Securities | Marketable Securities Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designations as of each balance sheet date. Debt securities are classified as available-for-sale because the Company does not have the intent to hold the securities to maturity. Available-for-sale securities are stated at their fair values, with the unrealized gains and losses reported in earnings. The Company had no marketable securities other than those held in the defined benefit pension plan and the non-qualified deferred compensation plan at December 31, 2021 and 2020. See Note 14 for further details. |
Materials and Supplies | Materials and Supplies |
Other Current Assets | Other Current Assets |
Income Taxes | Income Taxes |
Equipment and Property | Equipment and Property 10 operating equipment 2 Years ended December 31, 2021 2020 2019 (in thousands) Depreciation $ 40,592 $ 40,623 $ 36,646 Certain internal-use software and systems development costs are capitalized. Accordingly, the specific identified costs incurred to develop and obtain software, which is intended for internal use, are not capitalized until the software is put into use. Management, with the relevant authority, authorizes and commits to funding a software project and it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred during a software development’s discovery phase and post-integration stage, are expensed as incurred. Application development activities that are eligible for capitalization include software design and configuration, development of interfaces, coding, testing and installation. Capitalized internal-use software and systems costs are subsequently amortized on a straight-line basis over a three |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets - “Property, Plant and Equipment” |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets “Intangibles - Goodwill and other” may |
Other Assets | Other Assets – |
Accrued Insurance | Accrued Insurance |
Accrual for Termite Contracts | Accrual for Termite Contracts |
Other Current Liabilities | Other Current Liabilities |
Other Long-term Accrued Liabilities | Other Long-term Accrued Liabilities |
Contingency Accruals | Contingency Accruals “Contingencies,” |
Earnings Per Share | Earnings Per Share “Earnings Per Share-Overall,” The Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends and therefore are considered participating securities. See Note 15 for further information on restricted stock granted to employees. The basic and diluted calculations are the same as we have no stock options or other potentially dilutive instruments outstanding. Basic and diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the respective periods. A reconciliation of weighted average shares outstanding along with the earnings per share attributable to restricted shares of common stock (participating securities) is as follows (in thousands except per share data). Years Ended December 31, 2021 2020 2019 Net income available to stockholders $ 350,687 $ 260,824 $ 203,347 Less dividends paid: Common stock (207,482) (159,524) (152,793) Restricted shares of common stock (1,174) (963) (1,042) Undistributed earnings for the period $ 142,031 $ 100,337 $ 49,512 Allocation of undistributed earnings: Common stock 141,224 99,676 49,144 Restricted shares of common stock 807 661 368 Basic and diluted shares outstanding: Common stock 489,259 488,364 487,569 Restricted shares of common stock 2,795 3,240 3,647 492,054 491,604 491,216 Basic and diluted earnings per share: Common stock: Distributed earnings $ 0.42 $ 0.33 $ 0.31 Undistributed earnings 0.29 0.20 0.10 $ 0.71 $ 0.53 $ 0.41 Restricted shares of common stock: Distributed earnings $ 0.42 $ 0.30 $ 0.29 Undistributed earnings 0.29 0.20 0.10 $ 0.71 $ 0.50 $ 0.39 |
Translation of Foreign Currencies | Translation of Foreign Currencies The resulting translation adjustments are charged or credited to other comprehensive income. Gains or losses from foreign currency transactions, such as those resulting from the settlement of receivables or payables, denominated in foreign currency are included in the earnings of the current period. |
Stock-Based Compensation | Stock-Based Compensation Compensation – Stock Compensation TLRSs provide for the issuance of a share of the Company’s common stock at no cost to the holder and generally vest after a certain stipulated number of years from the grant date, depending on the terms of the issue. Outstanding TLRSs vest in 20 percent increments starting with the second anniversary of the grant, over six years from the date of grant. During these years, grantees receive all dividends declared and retain voting rights for the granted shares. The agreements under which the restricted stock is issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the plans have lapsed. The fair value of these awards is recognized as compensation expense, net of estimated forfeitures, on a straight-line basis over six years. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) |
Franchising Program | Franchising Program Combined domestic and international revenues from Orkin, Critter Control and Australia franchises were $15.5 million for the year ended December 31, 2021 and $15.2 million and $17.1 million for the years ended December 31, 2020 and 2019, respectively. Total franchising revenues were less than 1.0% of the Company’s annual revenues. Right to access intellectual property (Franchise) |
Recent Accounting Guidance | Recent Accounting Guidance Recently adopted accounting standards In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The amendments in this Update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for fiscal years beginning after December 15, 2022 with early adoption permitted. The Company adopted this ASU during the fourth quarter of 2021 and the adoption did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU No. 2019 12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.’ The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods. The standard in this update is effective for the Company’s financial statements issued for fiscal years beginning in 2021. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments.” The updated accounting guidance requires changes to the recognition of credit losses on financial instruments not accounted for at fair value through net income. The Company adopted ASU 2016-13 effective January 1, 2020 and recognized the decrease in the allowance for expected credit losses, net of tax, as a $2.5 million increase to beginning retained earnings. Recently issued accounting standards to be adopted in 2022 or later In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance.” The amendments in this Update require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Tabular disclosure of advertising costs | Years ended December 31, 2021 2020 2019 (in thousands) Advertising $ 91,879 $ 86,314 $ 81,174 |
Schedule of cash held in foreign banks accounts | At December 31, 2021 2020 2019 (in thousands) (in US dollars) Cash held in foreign bank accounts $ 78,102 $ 71,330 $ 74,094 |
Schedule of depreciation expense | Years ended December 31, 2021 2020 2019 (in thousands) Depreciation $ 40,592 $ 40,623 $ 36,646 |
Basic and diluted earnings per share | Years Ended December 31, 2021 2020 2019 Net income available to stockholders $ 350,687 $ 260,824 $ 203,347 Less dividends paid: Common stock (207,482) (159,524) (152,793) Restricted shares of common stock (1,174) (963) (1,042) Undistributed earnings for the period $ 142,031 $ 100,337 $ 49,512 Allocation of undistributed earnings: Common stock 141,224 99,676 49,144 Restricted shares of common stock 807 661 368 Basic and diluted shares outstanding: Common stock 489,259 488,364 487,569 Restricted shares of common stock 2,795 3,240 3,647 492,054 491,604 491,216 Basic and diluted earnings per share: Common stock: Distributed earnings $ 0.42 $ 0.33 $ 0.31 Undistributed earnings 0.29 0.20 0.10 $ 0.71 $ 0.53 $ 0.41 Restricted shares of common stock: Distributed earnings $ 0.42 $ 0.30 $ 0.29 Undistributed earnings 0.29 0.20 0.10 $ 0.71 $ 0.50 $ 0.39 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACQUISITIONS | |
Schedule of Assets Acquired and Liabilities assumed recorded at the date of acquisition | 2021 2020 Accounts receivable, net $ 3,072 $ 3,547 Materials and supplies 891 582 Equipment and property 8,184 7,269 Goodwill 69,555 73,430 Customer contracts 80,239 72,608 Trademarks & tradenames 1,200 7,317 Other intangible assets 3,668 1,333 Current liabilities (6,483) (15,518) Other assets and liabilities, net 288 9,639 Total consideration paid 160,614 160,207 Less: Contingent consideration liability (14,516) (12,594) Total cash purchase price $ 146,098 $ 147,613 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE | |
Revenue by major geographic area, and by significant product and service offerings | The following tables present our revenues disaggregated by revenue source (in thousands). 2021 2020 2019 (in thousands) United States $ 2,240,226 $ 2,006,368 $ 1,862,698 Other countries 184,074 154,852 152,779 Total Revenues $ 2,424,300 $ 2,161,220 $ 2,015,477 (in thousands) 2021 2020 2019 Residential revenue $ 1,103,687 $ 977,470 $ 861,636 Commercial revenue 844,928 766,716 770,342 Termite completions, bait monitoring, & renewals 465,053 406,782 371,258 Other revenues 10,632 10,252 12,241 Total Revenues $ 2,424,300 $ 2,161,220 $ 2,015,477 |
Changes in unearned revenue | Year Ended December 31, 2021 2020 (in thousands) Beginning balance $ 149,224 $ 136,507 Deferral of unearned revenue 206,730 185,943 Recognition of unearned revenue (187,347) (173,226) Ending balance $ 168,607 $ 149,224 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ALLOWANCE FOR CREDIT LOSSES | |
Schedule of allowance for credit losses | Allowance for Credit Losses Trade Financed Total (in thousands) Receivables Receivables Receivables Balance at December 31, 2019 $ 16,699 $ 2,959 $ 19,658 Adoption of ASC 326 (3,330) - (3,330) Provision for expected credit losses 14,699 2,837 17,536 Write-offs charged against the allowance (18,228) (2,565) (20,793) Recoveries collected 7,014 — 7,014 Balance at December 31, 2020 $ 16,854 $ 3,231 $ 20,085 Provision for expected credit losses 11,732 3,553 15,285 Write-offs charged against the allowance (19,882) (2,799) (22,681) Recoveries collected 5,181 — 5,181 Balance at December 31, 2021 $ 13,885 3,985 $ 17,870 |
Summary of the past due financing receivables | The following is a summary of the past due financing receivables: At December 31, 2021 2020 (in thousands) 30-59 days past due $ 1,911 $ 2,215 60-89 days past due 1,058 1,063 90 days or more past due 2,886 1,745 Total $ 5,855 $ 5,023 The following is a summary of percentage of gross financing receivables: At December 31, 2021 2020 Current 91.7 % 92.3 % 30-59 days past due 2.7 % 3.4 % 60-89 days past due 1.5 % 1.6 % 90 days or more past due 4.1 % 2.7 % Total 100.0 % 100.0 % |
EQUIPMENT AND PROPERTY (Tables)
EQUIPMENT AND PROPERTY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EQUIPMENT AND PROPERTY | |
Equipment and property are presented at cost less accumulated depreciation | December 31, 2021 2020 (in thousands) Buildings $ 54,935 $ 91,453 Operating equipment 126,732 116,791 Furniture and fixtures 19,261 19,860 Computer equipment and systems 223,648 212,010 424,576 440,114 Less: accumulated depreciation (315,891) (294,226) 108,685 145,888 Land 24,572 32,164 Net equipment and property $ 133,257 $ 178,052 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Schedule of operating lease costs and other information | Year Ended December 31, (in thousands, except Other Information) Lease Classification Financial Statement Classification 2021 2020 Short-term lease cost Cost of services provided, Sales, general, and administrative expenses $ 235 $ 189 Operating lease cost Cost of services provided, Sales, general, and administrative expenses 93,215 85,426 Total lease expense $ 93,450 $ 85,615 Other Information: Weighted-average remaining lease term - operating leases 5.5 years 3.8 years Weighted-average discount rate - operating leases 3.63 % 3.93 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 92,032 $ 84,673 |
Schedule of Future minimum lease payments | Operating (in thousands) 2022 82,959 2023 63,380 2024 39,426 2025 22,713 2026 14,882 Thereafter 54,024 Total Future Minimum Lease Payments 277,384 Less: Amount representing interest 29,624 Total future minimum lease payments, net of interest $ 247,760 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENT | |
Summary of the changes in fair value for Level 3 liabilities | (in thousands) Acquisition holdback and earnout liabilities at December 31, 2019 $ 49,132 New acquisitions 12,594 Revaluations (2,305) Payouts (24,011) Interest on outstanding contingencies 2,025 Charge offset, forfeit and other (1,691) Acquisition holdback and earnout liabilities at December 31, 2020 35,744 New acquisitions 14,516 Revaluations — Payouts (22,809) Interest on outstanding contingencies 855 Charge offset, forfeit and other (3,150) Acquisition holdback and earnout liabilities at December 31, 2021 $ 25,156 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | |
The changes in the carrying amount of goodwill | (in thousands) Goodwill at December 31, 2019 $ 572,847 Goodwill acquired 73,430 Goodwill adjustments due to currency translation 6,899 Goodwill at December 31, 2020 653,176 Goodwill acquired 69,264 Goodwill adjustments due to currency translation (621) Goodwill at December 31, 2021 $ 721,819 |
CUSTOMER CONTRACTS, TRADENAME_2
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangible assets | |
Estimated amortization expense for the existing carrying amount of customer contracts and other intangible assets | (in thousands) 2022 $ 58,635 2023 54,027 2024 50,601 2025 41,483 2026 37,084 |
Customer Contracts, Net | |
Intangible assets | |
Schedule of finite-lived intangible assets | December 31, 2021 2020 (in thousands) Customer contracts $ 551,277 $ 475,494 Less: accumulated amortization (225,348) (176,545) Customer contracts, net $ 325,929 $ 298,949 |
Trademarks & Tradenames, Net | |
Intangible assets | |
Schedule of intangible assets | December 31, 2021 2020 (in thousands) Trademarks and tradenames $ 115,468 $ 115,131 Less: accumulated amortization (6,492) (6,087) Trademarks and tradenames, net $ 108,976 $ 109,044 |
Other Intangible Assets, Net | |
Intangible assets | |
Schedule of intangible assets | December 31, 2021 2020 (in thousands) Other intangible assets $ 24,448 $ 23,247 Less: accumulated amortization (12,769) (12,470) Other intangible assets, net $ 11,679 $ 10,777 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Summary of outstanding FX Forwards | As of December 31, 2020, the Company had the following outstanding FX Forwards (in thousands except for number of instruments): Number of Sell Buy FX Forward Contracts Instruments Notional Notional Sell AUD/Buy USD Fwd Contract 19 $ 2,500 $ 1,813 Sell CAD/Buy USD Fwd Contract 19 19,000 14,994 Total 38 $ 16,807 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Company's income tax provision | For the years ended December 31, 2021 2020 2019 (in thousands) Current: Federal $ 87,888 $ 67,861 $ 43,593 State 24,131 18,381 15,337 Foreign 10,480 8,869 6,111 Total current tax 122,499 95,111 65,041 Deferred: Federal (34) (2,076) (5,217) State 1,795 312 (1,518) Foreign (109) 549 (493) Total deferred tax 1,652 (1,215) (7,228) Total income tax provision $ 124,151 $ 93,896 $ 57,813 |
Primary factors causing income tax expense to be different than the federal statutory rate | For the years ended December 31, 2021 2020 2019 (in thousands) Income tax at statutory rate $ 99,716 $ 74,491 $ 54,845 State income tax expense (net of federal benefit) 19,135 14,393 10,182 Foreign tax expense 2,837 2,341 933 Foreign tax credit (273) (240) (242) Repatriation tax under the Tax Cuts and Jobs Act of 2017 — — (844) Pension settlement — — (10,537) Executive compensation 2,786 5,557 2,445 Restricted stock adjustments (3,468) (3,927) (2,973) Other 3,418 1,281 4,004 Total income tax provision $ 124,151 $ 93,896 $ 57,813 |
Significant components of the Company's deferred tax assets and liabilities | December 31, 2021 2020 (in thousands) Deferred tax assets: Insurance and contingencies $ 18,258 $ 19,531 Unearned revenues 12,051 11,825 Compensation and benefits 13,546 12,304 State and foreign operating loss carryforwards 1,234 2,768 Bad debt reserve 3,873 4,214 Foreign tax credit 4,775 3,804 Termite accrual 642 721 Net pension liability 195 — Other 3,371 2,519 Valuation allowance (192) (144) Total deferred tax assets 57,753 57,542 Deferred tax liabilities: Depreciation and amortization (24,261) (25,730) Net pension liability — (727) Intangibles and other (43,799) (39,475) Total deferred tax liabilities $ (68,060) $ (65,932) Net deferred taxes Deferred tax assets $ 2,948 $ 2,222 Deferred tax liabilities $ (13,255) $ (10,612) |
Analysis of the valuation allowance | December 31, 2021 2020 (in thousands) Valuation allowance at beginning of year $ 144 $ 83 Increase in valuation allowance 48 61 Valuation allowance at end of year $ 192 $ 144 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | December 31, 2021 2020 (in thousands) Unrecognized tax benefits at beginning of year $ 844 $ 844 Additions for tax positions of prior years 174 — Unrecognized tax benefits at end of year $ 1,018 $ 844 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of non-qualified deferred compensation plan assets using the fair value hierarchy | (in thousands) Level 1 Level 2 Level 3 NAV Total December 31, 2021 $ 25 $ — $ — $ 27,211 $ 27,236 December 31, 2020 $ 25 $ — $ — $ 24,460 $ 24,485 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
STOCK-BASED COMPENSATION | |
Components of the Company's stock-based compensation | The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense ($ in thousands): (in thousands) 2021 2020 2019 Time lapse restricted stock: Pre-tax compensation expense $ 14,865 $ 20,850 $ 14,158 Tax benefit (3,208) (3,752) (3,596) Restricted stock expense, net of tax $ 11,657 $ 17,098 $ 10,562 |
Summary information on unvested restricted stock outstanding | Weighted Average Number of Grant-Date (number of shares in thousands) Shares Fair Value Unvested as of December 31, 2018 4,086 $ 13.69 Forfeited (147) 16.40 Vested (1,201) 11.59 Granted 727 25.60 Unvested as of December 31, 2019 3,465 17.23 Forfeited (59) 17.11 Vested (1,397) 15.29 Granted 861 24.53 Unvested Restricted Stock at December 31, 2020 2,870 $ 20.36 Forfeited (191) 25.34 Vested (861) 16.67 Granted 778 37.04 Unvested Restricted Stock at December 31, 2021 2,596 $ 26.16 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) | |
Accumulated other comprehensive income/ (loss) | Accumulated other comprehensive income/ (loss) consist of the following (in thousands): Foreign Pension Liability Currency Interest Adjustment Translation Rate Swaps Total Balance at December 31, 2018 $ (46,091) $ (24,987) $ — $ (71,078) Change during 2019: Before-tax amount 75,449 4,350 (277) 79,522 Tax expense (29,553) — — (29,553) Other comprehensive earnings/(loss) 45,896 4,350 (277) 49,969 Balance at December 31, 2019 (195) (20,637) (277) (21,109) Change during 2020: Before-tax amount (173) 10,443 (141) 10,129 Tax expense 46 — 37 83 Other comprehensive earnings/(loss) (127) 10,443 (104) 10,212 Balance at December 31, 2020 (322) (10,194) (381) (10,897) Change during 2021: Before-tax amount — (5,895) 516 (5,379) Tax benefit — — (135) (135) Other comprehensive earnings/(loss) — (5,895) 381 (5,514) Balance at December 31, 2021 $ (322) $ (16,089) $ — $ (16,411) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising | $ 91,879 | $ 86,314 | $ 81,174 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash | $ 105,300 | ||
International | |||
Cash | $ 78,102 | $ 71,330 | $ 74,094 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 40,592 | $ 40,623 | $ 36,646 |
Buildings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 10 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 40 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 2 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 10 years | ||
Operating equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 2 years | ||
Operating equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 10 years | ||
Internal-use software and systems development costs | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 3 years | ||
Internal-use software and systems development costs | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Asset life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net income | $ 350,687 | $ 260,824 | $ 203,347 |
Payments of Ordinary Dividends, Common Stock | (208,656) | (160,487) | (153,836) |
Undistributed earnings for the period | $ 142,031 | $ 100,337 | $ 49,512 |
Weighted average shares outstanding - basic | 492,054 | 491,604 | 491,216 |
Weighted average shares outstanding - diluted | 492,054 | 491,604 | 491,216 |
Basic earnings per share | $ 0.71 | $ 0.53 | $ 0.41 |
Diluted earnings per share | $ 0.71 | $ 0.53 | $ 0.41 |
Common Stock | |||
Payments of Ordinary Dividends, Common Stock | $ (207,482) | $ (159,524) | $ (152,793) |
Undistributed earnings for the period | $ 141,224 | $ 99,676 | $ 49,144 |
Weighted average shares outstanding - basic | 489,259 | 488,364 | 487,569 |
Weighted average shares outstanding - diluted | 489,259 | 488,365 | 487,569 |
Earnings Per Share, Basic, Distributed earnings | $ 0.42 | $ 0.33 | $ 0.31 |
Earnings Per Share, Basic, Undistributed earnings | 0.29 | 0.20 | 0.10 |
Earnings Per Share, Diluted, Distributed earnings | 0.43 | 0.33 | 0.31 |
Earnings Per Share, Diluted, Undistributed earnings | 0.29 | 0.20 | 0.10 |
Basic earnings per share | 0.71 | 0.53 | 0.41 |
Diluted earnings per share | $ 0.72 | $ 0.53 | $ 0.41 |
Restricted shares of common stock | |||
Payments of Ordinary Dividends, Common Stock | $ (1,174) | $ (963) | $ (1,042) |
Undistributed earnings for the period | $ 807 | $ 661 | $ 368 |
Weighted average shares outstanding - basic | 2,795 | 3,240 | 3,647 |
Weighted average shares outstanding - diluted | 2,795 | 3,240 | 3,647 |
Earnings Per Share, Basic, Distributed earnings | $ 0.42 | $ 0.30 | $ 0.29 |
Earnings Per Share, Basic, Undistributed earnings | 0.29 | 0.20 | 0.10 |
Earnings Per Share, Diluted, Distributed earnings | 0.42 | 0.30 | 0.29 |
Earnings Per Share, Diluted, Undistributed earnings | 0.29 | 0.20 | 0.10 |
Basic earnings per share | 0.71 | 0.50 | 0.39 |
Diluted earnings per share | $ 0.71 | $ 0.50 | $ 0.39 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2021USD ($)itemshares | Dec. 31, 2020USD ($)itemshares | Dec. 31, 2019USD ($)itemshares | Dec. 31, 2018shares | |
Summary of significant accounting policies | ||||
Revenues | $ 2,424,300,000 | $ 2,161,220,000 | $ 2,015,477,000 | |
Deferred revenue | 168,607,000 | 149,224,000 | 136,507,000 | |
Retained earnings | 500,919,000 | $ 358,888,000 | ||
Goodwill impairment loss | 0 | |||
Impairment of intangible assets | $ 0 | |||
Number of stock options outstanding | shares | 0 | |||
Accounting Standards Update 2016-13 [Member] | Impact of adoption of ASC | ||||
Summary of significant accounting policies | ||||
Retained earnings | $ 2,500,000 | |||
Time Lapse Restricted Shares Issued 2004 [Member] | ||||
Summary of significant accounting policies | ||||
Award vesting period | 6 years | |||
Annual percentage after the first year awards are vested | 20.00% | |||
Number of potentially dilutive instruments outstanding | shares | 2,596,000 | 2,870,000 | 3,465,000 | 4,086,000 |
UNITED STATES | ||||
Summary of significant accounting policies | ||||
Number of franchise agreements | item | 135 | 128 | 134 | |
Revenues | $ 2,240,226,000 | $ 2,006,368,000 | $ 1,862,698,000 | |
International | ||||
Summary of significant accounting policies | ||||
Number of franchise agreements | item | 103 | 101 | 104 | |
Revenues | $ 184,074,000 | $ 154,852,000 | $ 152,779,000 | |
Percent of total revenues | 8.00% | 7.00% | 8.00% | |
Cash held in FDIC | $ 27,200,000 | |||
Franchising revenue | ||||
Summary of significant accounting policies | ||||
Revenues | $ 15,500,000 | $ 15,200,000 | $ 17,100,000 | |
Maximum | Franchising revenue | ||||
Summary of significant accounting policies | ||||
Percent of total revenues | 1.00% | 1.00% | 1.00% | |
Maximum | Equipment rental | ||||
Summary of significant accounting policies | ||||
Percent of total revenues | 1.00% | 1.00% | 1.00% |
ACQUISITIONS - Assets acquired
ACQUISITIONS - Assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 721,819 | $ 653,176 | $ 572,847 |
Total cash purchase price | 146,100 | 147,600 | |
Acquisitions | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net | 3,072 | 3,547 | |
Materials and supplies | 891 | 582 | |
Equipment and property | 8,184 | 7,269 | |
Goodwill | 69,555 | 73,430 | |
Current liabilities | (6,483) | (15,518) | |
Other assets and liabilities, net | 288 | 9,639 | |
Total consideration paid | 160,614 | 160,207 | |
Less: Contingent consideration liability | (14,516) | (12,594) | |
Total cash purchase price | 146,098 | 147,613 | |
Acquisitions | Customer Contracts, Net | |||
Business Acquisition [Line Items] | |||
Intangible assets | 80,239 | 72,608 | |
Acquisitions | Trademarks & Tradenames, Net | |||
Business Acquisition [Line Items] | |||
Intangible assets | 1,200 | 7,317 | |
Acquisitions | Other Intangible Assets, Net | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 3,668 | $ 1,333 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($)item | |
BUSINESS COMBINATIONS | ||
Number of Businesses Acquired | item | 39 | 31 |
Total cash purchase price | $ 146,100 | $ 147,600 |
Increase in goodwill due to acquisition | $ 69,264 | $ 73,430 |
REVENUE - Disaggregation (Detai
REVENUE - Disaggregation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,424,300 | $ 2,161,220 | $ 2,015,477 |
UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,240,226 | 2,006,368 | 1,862,698 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 184,074 | $ 154,852 | $ 152,779 |
REVENUE -Significant product an
REVENUE -Significant product and service offerings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,424,300 | $ 2,161,220 | $ 2,015,477 |
Residential revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,103,687 | 977,470 | 861,636 |
Commercial revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 844,928 | 766,716 | 770,342 |
Termite completions, bait monitoring, & renewals | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 465,053 | 406,782 | 371,258 |
Other revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 10,632 | $ 10,252 | $ 12,241 |
REVENUE - Deferred revenue (Det
REVENUE - Deferred revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUE | ||
Beginning balance | $ 149,224 | $ 136,507 |
Deferral of unearned revenue | 206,730 | 185,943 |
Recognition of unearned revenue | (187,347) | (173,226) |
Ending balance | 168,607 | 149,224 |
Long-term unearned revenue | $ 23,500 | $ 18,000 |
Long-term unearned revenue, recognition period (or less) | 5 years |
DEBT (Details)
DEBT (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2019 | Dec. 31, 2021 | Feb. 25, 2022 | Jan. 27, 2022 | Dec. 31, 2020 | |
Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Letters of credit outstanding | $ 37.2 | ||||
Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Long-term Line of Credit | $ 155 | $ 203 | |||
Leverage ratio | 3 | ||||
Credit Agreement | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Effective interest rate | 0.85% | ||||
Variable interest rate | 0.75% | ||||
Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Long-term Line of Credit | $ 300 | ||||
Term Loan One | |||||
Line of Credit Facility [Line Items] | |||||
Long-term Line of Credit | $ 250 | $ 48 | 48 | ||
Term of debt | 5 years | ||||
Balloon payment to be paid | 48 | ||||
Term Loan Two | |||||
Line of Credit Facility [Line Items] | |||||
Long-term Line of Credit | $ 252 | $ 252 | |||
Revolving Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 175 | ||||
Long-term Line of Credit | $ 107 | ||||
Term of debt | 5 years | ||||
Revolving Credit Agreement | Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 75 | ||||
Revolving Credit Agreement | Swingline | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 25 |
ALLOWANCE FOR CREDIT LOSSES (De
ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | $ 20,085 | $ 19,658 |
Impact of adoption of ASC 326 | 17,870 | 20,085 |
Provision for expected credit losses | 15,285 | 17,536 |
Write-offs charged against the allowance | (22,681) | (20,793) |
Recoveries collected | (5,181) | 7,014 |
Ending Balance | 17,870 | 20,085 |
Impact of adoption of ASC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | (3,330) | |
Impact of adoption of ASC 326 | (3,330) | |
Ending Balance | (3,330) | |
Trade Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | 16,854 | 16,699 |
Impact of adoption of ASC 326 | 13,885 | 16,854 |
Provision for expected credit losses | 11,732 | 14,699 |
Write-offs charged against the allowance | (19,882) | (18,228) |
Recoveries collected | (5,181) | 7,014 |
Ending Balance | 13,885 | 16,854 |
Trade Receivable | Impact of adoption of ASC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | (3,330) | |
Impact of adoption of ASC 326 | (3,330) | |
Ending Balance | (3,330) | |
Financed Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | 3,231 | 2,959 |
Impact of adoption of ASC 326 | 3,985 | 3,231 |
Provision for expected credit losses | 3,553 | 2,837 |
Write-offs charged against the allowance | (2,799) | (2,565) |
Ending Balance | $ 3,985 | $ 3,231 |
ALLOWANCE FOR CREDIT LOSSES - P
ALLOWANCE FOR CREDIT LOSSES - Past Due Amounts (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable | $ 5,855 | $ 5,023 |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable | 1,911 | 2,215 |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable | 1,058 | 1,063 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable | $ 2,886 | $ 1,745 |
ALLOWANCE FOR CREDIT LOSSES -_2
ALLOWANCE FOR CREDIT LOSSES - Past due percentages (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Percentage of gross financing receivable | 100.00% | 100.00% |
Financial Asset, Current | ||
Financing Receivable, Past Due [Line Items] | ||
Percentage of gross financing receivable | 91.70% | 92.30% |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Percentage of gross financing receivable | 2.70% | 3.40% |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Percentage of gross financing receivable | 1.50% | 1.60% |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Percentage of gross financing receivable | 4.10% | 2.70% |
ALLOWANCE FOR CREDIT LOSSES - N
ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | |
ALLOWANCE FOR CREDIT LOSSES | ||
Financed receivables, long-term, net of allowance for expected credit losses | $ 47,097 | $ 38,187 |
Net financing receivables | $ 73,200 | $ 61,900 |
Financing receivable, percentage of finance subject to credit score | 100.00% | |
Number of days to elapse for financing receivables to be charged-off | 180 days | |
Charge-offs as a percentage of average financing receivables | 4.30% | 4.60% |
Number of days the Company offers cash financing to customers | 90 days | |
Number of days when the Company charges interest on cash financing to customers | 91 days | |
Period of past due loans that continue to accrue interest due to an administrative issue | 180 days | |
Number of accounts greater than 180 past due, which have been fully reserved | item | 1 |
EQUIPMENT AND PROPERTY (Details
EQUIPMENT AND PROPERTY (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (315,891) | $ (294,226) |
Net equipment and property | 133,257 | 178,052 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 54,935 | 91,453 |
Operating equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 126,732 | 116,791 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 19,261 | 19,860 |
Computer equipment and systems | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 223,648 | 212,010 |
Plant And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 424,576 | 440,114 |
Less: accumulated depreciation | (315,891) | (294,226) |
Net equipment and property | 108,685 | 145,888 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 24,572 | $ 32,164 |
EQUIPMENT AND PROPERTY - Narrat
EQUIPMENT AND PROPERTY - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation | $ 315,891 | $ 294,226 | |
Depreciation | 40,592 | 40,623 | $ 36,646 |
Computer equipment and systems | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 223,648 | 212,010 | |
Internal use software | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 143,500 | 137,900 | |
Accumulated depreciation | 105,300 | 89,400 | |
Foreign Countries [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Fixed Assets held in Foreign Countries | $ 8,400 | $ 8,500 |
LEASES - Lease Information (Det
LEASES - Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | ||
Short-term lease cost | $ 235 | $ 189 |
Operating lease cost | 93,215 | 85,426 |
Total lease expense | $ 93,450 | $ 85,615 |
Weighted-average remaining lease term - operating leases | 5 years 6 months | 3 years 9 months 18 days |
Weighted-average discount rate - operating leases | 3.63% | 3.93% |
Operating cash flows for operating leases | $ 92,032 | $ 84,673 |
LEASES - Minimum lease payments
LEASES - Minimum lease payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
LEASES | |
2022 | $ 82,959 |
2023 | 63,380 |
2024 | 39,426 |
2025 | 22,713 |
2026 | 14,882 |
Thereafter | 54,024 |
Total Future Minimum Lease Payments | 277,384 |
Less: Amount representing interest | (29,624) |
Total future minimum lease payments, net of interest | $ 247,760 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)property | Dec. 31, 2020 | |
Lessor, Lease, Description [Line Items] | ||
Future minimum lease payments | $ 277,384 | |
Number of properties associated in sale leaseback transactions | property | 17 | |
Lease not yet commenced, future minimum payments due | $ 4,800 | |
Other (income) expense, net | ||
Lessor, Lease, Description [Line Items] | ||
Gross proceeds sale-leaseback transactions | 67,000 | |
Gain on sale-leaseback transactions | $ 31,500 | |
Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Sale leaseback transaction lease term | P7Y | |
Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Sale leaseback transaction lease term | 15 years | |
Buildings | ||
Lessor, Lease, Description [Line Items] | ||
Future minimum lease payments | $ 162,100 | |
Buildings | Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Term of contract | 5 years | 5 years |
Buildings | Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Term of contract | 10 years | 10 years |
Vehicles | ||
Lessor, Lease, Description [Line Items] | ||
Future minimum lease payments | $ 115,300 | |
Vehicles | Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Term of contract | 1 year | 1 year |
Vehicles | Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Term of contract | 7 years | 7 years |
FAIR VALUE MEASUREMENT - Level
FAIR VALUE MEASUREMENT - Level 3 (Details) - Recurring - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Beginning balance | $ 35,744 | $ 49,132 |
New acquisitions | 14,516 | 12,594 |
Revaluations | (2,305) | |
Payouts | (22,809) | (24,011) |
Interest on outstanding contingencies | 855 | 2,025 |
Charge offset, forfeit and other | (3,150) | (1,691) |
Ending balance | $ 25,156 | $ 35,744 |
FAIR VALUE MEASUREMENT - Narrat
FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Acquisition holdback and earn out liabilities | $ 25,156 | $ 35,744 | $ 49,132 |
International Bond | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unrestricted Cash Invested in International Bond | $ 12,700 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | ||
Goodwill, beginning balance | $ 653,176 | $ 572,847 |
Goodwill acquired | 69,264 | 73,430 |
Goodwill adjustments due to currency translation | (621) | 6,899 |
Goodwill, ending balance | $ 721,819 | $ 653,176 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | |||
Goodwill | $ 721,819 | $ 653,176 | $ 572,847 |
International | |||
Goodwill [Line Items] | |||
Goodwill | $ 82,100 | $ 81,400 |
CUSTOMER CONTRACTS, TRADENAME_3
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS - Customer contracts (Details) - Customer Contracts, Net - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross finite-lived intangible assets | $ 551,277 | $ 475,494 |
Less: accumulated amortization | (225,348) | (176,545) |
Net finite-lived intangible assets | $ 325,929 | $ 298,949 |
CUSTOMER CONTRACTS, TRADENAME_4
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS - Trademarks and tradenames (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Trademarks & Tradenames, Net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 102,700 | $ 97,400 |
Trademarks & Tradenames, Net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 115,468 | 115,131 |
Less: accumulated amortization | (6,492) | (6,087) |
Intangible assets, net | $ 108,976 | $ 109,044 |
CUSTOMER CONTRACTS, TRADENAME_5
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS - Other intangible assets (Details) - Other Intangible Assets, Net - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 24,448 | $ 23,247 |
Less: accumulated amortization | (12,769) | (12,470) |
Intangible assets, net | $ 11,679 | $ 10,777 |
CUSTOMER CONTRACTS, TRADENAME_6
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS - Amortization (Details) $ in Thousands | Dec. 31, 2021USD ($) |
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS | |
2022 | $ 58,635 |
2023 | 54,027 |
2024 | 50,601 |
2025 | 41,483 |
2026 | $ 37,084 |
CUSTOMER CONTRACTS, TRADENAME_7
CUSTOMER CONTRACTS, TRADENAMES AND TRADEMARKS, AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible assets | |||
Amortization Expenses | $ 53,600 | $ 47,700 | $ 44,500 |
Trademarks & Tradenames, Net | |||
Intangible assets | |||
Gross intangible assets | 102,700 | 97,400 | |
Internet domains | |||
Intangible assets | |||
Gross intangible assets | 2,200 | 2,200 | |
Customer Contracts, Net | |||
Intangible assets | |||
Finite-Lived Intangible Assets, Net | 325,929 | 298,949 | |
Customer Contracts, Net | International | |||
Intangible assets | |||
Finite-Lived Intangible Assets, Net | $ 42,100 | 45,700 | |
Customer Contracts, Net | Minimum | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||
Customer Contracts, Net | Maximum | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 20 years | ||
Trademarks & Tradenames, Net | |||
Intangible assets | |||
Gross intangible assets | $ 115,468 | 115,131 | |
Trademarks & Tradenames, Net | International | |||
Intangible assets | |||
Finite-Lived Intangible Assets, Net | $ 2,900 | 3,300 | |
Trademarks & Tradenames, Net | Minimum | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||
Trademarks & Tradenames, Net | Maximum | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 20 years | ||
Other Intangible Assets, Net | |||
Intangible assets | |||
Gross intangible assets | $ 24,448 | 23,247 | |
Other Intangible Assets, Net | International | |||
Intangible assets | |||
Finite-Lived Intangible Assets, Net | $ 700 | $ 1,000 | |
Non-compete agreements | Minimum | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||
Non-compete agreements | Maximum | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 20 years | ||
Patents | |||
Intangible assets | |||
Finite-Lived Intangible Asset, Useful Life | 15 years |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) $ in Thousands | Dec. 31, 2021USD ($)instrument |
Not Designated as Hedging Instrument [Member] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Derivative, Number of Instruments Held | instrument | 38 |
Buy Notional | $ 16,807 |
Sell AUD/Buy USD Fwd Contract [Member] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Derivative, Number of Instruments Held | instrument | 19 |
Sell Notional | $ 2,500 |
Buy Notional | $ 1,813 |
Sell CAD/Buy USD Fwd Contract [Member] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Derivative, Number of Instruments Held | instrument | 19 |
Sell Notional | $ 19,000 |
Buy Notional | $ 14,994 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 19, 2019 | |
Interest Rate Swap | Cash Flow Hedges | ||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||
Notional amount | $ 100 | |||
Fixed interest rate | 1.94% | |||
Gain (loss) on reclassification of accumulated other comprehensive income | $ 0.1 | |||
Interest Rate Swap | Cash Flow Hedges | Designated as Hedging Instrument | Interest Expense | ||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||
Gain (loss) on reclassification of accumulated other comprehensive income | $ 0.4 | $ 0.7 | ||
Foreign Exchange Forward | Other Current Liabilities | ||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||
Fair value of liability | 0 | 0.4 | ||
Foreign Exchange Forward | Other Income/Expense | ||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||
Gain (loss) on derivatives | $ (0.4) | $ (0.4) |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 87,888 | $ 67,861 | $ 43,593 |
State | 24,131 | 18,381 | 15,337 |
Foreign | 10,480 | 8,869 | 6,111 |
Total current tax | 122,499 | 95,111 | 65,041 |
Deferred: | |||
Federal | (34) | (2,076) | (5,217) |
State | 1,795 | 312 | (1,518) |
Foreign | (109) | 549 | (493) |
Total deferred tax | 1,652 | (1,215) | (7,228) |
Total income tax provision | $ 124,151 | $ 93,896 | $ 57,813 |
INCOME TAXES - Reconciliation (
INCOME TAXES - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | |||
Income tax at statutory rate | $ 99,716 | $ 74,491 | $ 54,845 |
State income tax expense (net of federal benefit) | 19,135 | 14,393 | 10,182 |
Foreign tax expense | 2,837 | 2,341 | 933 |
Foreign tax credit | (273) | (240) | (242) |
Repatriation tax under the Tax Cuts and Jobs Act of 2017 | (844) | ||
Pension settlement | (10,537) | ||
Executive compensation | 2,786 | 5,557 | 2,445 |
Restricted stock adjustments | (3,468) | (3,927) | (2,973) |
Other | 3,418 | 1,281 | 4,004 |
Total income tax provision | $ 124,151 | $ 93,896 | $ 57,813 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | |||
Insurance and contingencies | $ 18,258 | $ 19,531 | |
Unearned revenues | 12,051 | 11,825 | |
Compensation and benefits | 13,546 | 12,304 | |
State and foreign operating loss carryforwards | 1,234 | 2,768 | |
Bad debt reserve | 3,873 | 4,214 | |
Foreign tax credit | 4,775 | 3,804 | |
Termite accrual | 642 | 721 | |
Net pension liability | 195 | ||
Other | 3,371 | 2,519 | |
Valuation allowance | (192) | (144) | $ (83) |
Total deferred tax assets | 57,753 | 57,542 | |
Deferred tax liabilities | |||
Depreciation and amortization | (24,261) | (25,730) | |
Net pension liability | (727) | ||
Intangibles and other | (43,799) | (39,475) | |
Total deferred tax liabilities | (68,060) | (65,932) | |
Net deferred taxes | |||
Deferred tax liabilities | (13,255) | (10,612) | |
Other Assets | |||
Net deferred taxes | |||
Deferred tax assets | $ 2,948 | $ 2,222 |
INCOME TAXES - Valuation allowa
INCOME TAXES - Valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
Valuation allowance at beginning of year | $ 144 | $ 83 |
Increase in valuation allowance | 48 | 61 |
Valuation allowance at end of year | $ 192 | $ 144 |
INCOME TAXES - Unrecognized tax
INCOME TAXES - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
Unrecognized tax benefits at beginning of year | $ 844 | $ 844 |
Additions for tax positions of prior years | 174 | |
Unrecognized tax benefits at end of year | 1,018 | $ 844 |
Amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate | $ 1,000 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Provision for Income Tax, effective rate | 26.10% | 26.50% | 22.10% |
Cash paid for income taxes, net | $ 119,762 | $ 81,184 | $ 75,812 |
Foreign earnings from continuing operations before income tax | 32,500 | 25,300 | $ 26,700 |
Accrued interest and penalties | 200 | $ 70 | |
Interest and penalties | 200 | ||
International | |||
Operating Loss Carryforwards [Line Items] | |||
Tax Credit Carryforward | 4,800 | ||
State and Local and Foreign Jurisdiction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 23,900 | ||
Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 1,000 | ||
Increase in valuation allowance, net operating losses | $ 50 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Dec. 31, 2021USD ($) |
Other Current Liabilities | |
COMMITMENTS AND CONTINGENCIES | |
Accruals | $ 8 |
EMPLOYEE BENEFIT PLANS - Non-qu
EMPLOYEE BENEFIT PLANS - Non-qualified deferred compensation plan assets fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Deferred Compensation Plan Assets | $ 27,236 | $ 24,485 |
Level 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Deferred Compensation Plan Assets | 25 | 25 |
NAV | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Deferred Compensation Plan Assets | $ 27,211 | $ 24,460 |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021USD ($)policy | Dec. 31, 2020USD ($)itempolicy | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | |
Employee benefit plans | ||||
Requisite service hours for non full-time employees to participate in contribution plan | 1000 hours | |||
Maximum percentage of base salary to be deferred | 50.00% | |||
Maximum percentage of annual bonus to be deferred | 85.00% | |||
Minimum deferral amount per plan year | $ 2 | |||
Number of life insurance policies | policy | 75 | 75 | ||
Life insurance policies, net face value | $ 53,100 | $ 50,200 | ||
Cash surrender value of life insurance policies | 27,200 | 24,500 | ||
Total expense (income) related to deferred compensation | 322 | 278 | $ 250 | |
Deferred compensation liability | 23,600 | 21,500 | ||
Deferred Compensation Plan Assets | $ 27,236 | 24,485 | ||
Pension Plan | ||||
Employee benefit plans | ||||
Defined benefit plan excise tax percentage | 20.00% | |||
Defined benefit plan tax paid upon reversion percent | 46.10% | |||
Rollins, Inc. Plan | ||||
Employee benefit plans | ||||
Employer contributions to 401(k) plan | 18,000 | 11,000 | ||
Benefit plan assets | 1,200 | $ 31,800 | ||
401(k) Plan | ||||
Employee benefit plans | ||||
Requisite service period for full-time employees to participate in contribution plan | 3 months | |||
Period of service after which the non-full time employees are eligible to participate in defined contribution plan | 1 year | |||
Employers match of employees pay (as a percent) | 100.00% | |||
Employer contribution | $ 25,700 | $ 27,400 | $ 25,500 | |
Percentage of Rollins, Inc. Common Stock to plan assets | 28.70% | 34.90% | 30.80% | |
Administrative fees | $ 100 | $ 100 | $ 100 | |
401(k) Plan | First percentage of an employees compensation that the Company will match | ||||
Employee benefit plans | ||||
Employers match of employees pay (as a percent) | 3.00% | |||
Employers match of employees contribution (as a percent) | 3.00% | |||
401(k) Plan | Maximum percentage to be matched over the initial percentage | ||||
Employee benefit plans | ||||
Employers match of employees pay (as a percent) | 50.00% | |||
401(k) Plan | Maximum | Maximum percentage to be matched over the initial percentage | ||||
Employee benefit plans | ||||
Employers match of employees pay (as a percent) | 6.00% | |||
Waltham Plan | ||||
Employee benefit plans | ||||
Fair value of plan assets | $ 2,200 | |||
Fair value of plan obligation | 2,900 | |||
Unfunded status amount | (700) | |||
Waltham Plan | Maximum | ||||
Employee benefit plans | ||||
Number of participants | item | 85 | |||
Deferred Compensation Plan | ||||
Employee benefit plans | ||||
Deferred Compensation Plan Assets | $ 27,200 | $ 24,500 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) - Time Lapse Restricted Shares Issued 2004 [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax compensation expense | $ 14,865 | $ 20,850 | $ 14,158 |
Tax benefit | (3,208) | (3,752) | (3,596) |
Restricted stock expense, net of tax | $ 11,657 | $ 17,098 | $ 10,562 |
STOCK-BASED COMPENSATION - Unve
STOCK-BASED COMPENSATION - Unvested RSUs (Details) - Time Lapse Restricted Shares Issued 2004 [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Balance outstanding at the beginning of the period (in shares) | 2,870,000 | 3,465,000 | 4,086,000 |
Balance at the beginning of the period (in dollars per share) | $ 20.36 | $ 17.23 | $ 13.69 |
Forfeited (in shares) | (191,000) | (59,000) | (147,000) |
Forfeited (in dollars per share) | $ 25.34 | $ 17.11 | $ 16.40 |
Vested (in shares) | (861,000) | (1,397,000) | (1,201,000) |
Vested (in dollars per share) | $ 16.67 | $ 15.29 | $ 11.59 |
Granted (in shares) | 778,000 | 861,000 | 727,000 |
Granted (in dollars per share) | $ 37.04 | $ 24.53 | $ 25.60 |
Balance outstanding at the end of the period (in shares) | 2,596,000 | 2,870,000 | 3,465,000 |
Balance at the end of the period (in dollars per share) | $ 26.16 | $ 20.36 | $ 17.23 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - Time Lapse Restricted Shares Issued 2004 [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based payment award vesting rights percentage | 20.00% | ||
Award vesting period | 6 years | ||
Granted (in shares) | 778,000 | 861,000 | 727,000 |
Common stock reserved for issuance upon exercise of stock options (in shares) | 6,600,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 49.8 | $ 40.5 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 4 years | 3 years 9 months 18 days |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, value | $ 941,360 | $ 815,750 | $ 711,908 |
Change during the year: | |||
Other comprehensive earnings/(loss) | (5,514) | 10,212 | 49,969 |
Ending balance, value | 1,082,048 | 941,360 | 815,750 |
Interest Rate Swap | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, value | (381) | (277) | |
Change during the year: | |||
Before-tax amount | 516 | (141) | (277) |
Tax benefit | (135) | 37 | |
Other comprehensive earnings/(loss) | 381 | (104) | (277) |
Ending balance, value | (381) | (277) | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, value | (322) | (195) | (46,091) |
Change during the year: | |||
Before-tax amount | (173) | 75,449 | |
Tax benefit | 46 | (29,553) | |
Other comprehensive earnings/(loss) | (127) | 45,896 | |
Ending balance, value | (322) | (322) | (195) |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, value | (10,194) | (20,637) | (24,987) |
Change during the year: | |||
Before-tax amount | (5,895) | 10,443 | 4,350 |
Other comprehensive earnings/(loss) | (5,895) | 10,443 | 4,350 |
Ending balance, value | (16,089) | (10,194) | (20,637) |
Accumulated Other Comprehensive Income/(Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, value | (10,897) | (21,109) | (71,078) |
Change during the year: | |||
Before-tax amount | (5,379) | 10,129 | 79,522 |
Tax benefit | (135) | 83 | (29,553) |
Other comprehensive earnings/(loss) | (5,514) | 10,212 | 49,969 |
Ending balance, value | $ (16,411) | $ (10,897) | $ (21,109) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Dec. 01, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2014USD ($) |
John Wilson IV | Wilson Pest Management [Member] | |||||
Related party transactions | |||||
Ownership percentage | 100.00% | ||||
R P C Inc [Member] | |||||
Related party transactions | |||||
Notice period for termination of service agreement | 6 months | ||||
Gary W. Rollins | R P C Inc [Member] | |||||
Related party transactions | |||||
Related party revenue | $ 100,000 | $ 100,000 | $ 100,000 | ||
Gary W. Rollins | L O R Inc [Member] | |||||
Related party transactions | |||||
Related party transaction purchases amount | 500,000 | ||||
Tax expense on purchases from related party | 40,000 | ||||
Gary W. Rollins | Pilot Sharing Agreement [Member] | L O R Inc [Member] | |||||
Related party transactions | |||||
Related party revenue | $ 800,000 | ||||
Percent of use of aircraft by the company | 50 | ||||
Gary W. Rollins | Rent and Administrative Services Agreement [Member] | L O R Inc [Member] | |||||
Related party transactions | |||||
Related party revenue | $ 600,000 | 1,000,000 | 800,000 | ||
Certain current and former directors and officers | SEC Investigation Legal Fees | |||||
Related party transactions | |||||
Related party expense | 1,300,000 | ||||
R Randall Rollins [Member] | P I A L L C [Member] | |||||
Related party transactions | |||||
Notice period for termination of service agreement | 30 days | ||||
Monthly rent payment | $ 100 | ||||
Related party expense | 300,000 | 600,000 | 900,000 | ||
John F. Wilson | Wilson Pest Management [Member] | |||||
Related party transactions | |||||
Related party revenue | $ 100,000 | $ 100,000 | $ 800,000 | ||
Franchise fee | $ 75,000 | ||||
Franchise royalty fee (as a percent) | 9.00% |
CASH DIVIDEND (Details)
CASH DIVIDEND (Details) | Jan. 27, 2022$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividend declared quarterly (in dollars per share) | $ 0.10 |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - SEC Schedule, 12-09, Allowance, Credit Loss [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount, Beginning Balance | $ 20,085 | $ 19,658 | $ 16,666 |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Adoption of ASC 326 | (3,330) | ||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Additions, Charge to Cost and Expense | 15,285 | 17,536 | 15,145 |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Addition, Recovery | (17,500) | (13,779) | (12,153) |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount, Ending Balance | $ 17,870 | $ 20,085 | $ 19,658 |