Servicemaster
Co. (SVM, Financial) filed Quarterly Report for the period ended 2010-09-30.
Servicemaster
Co. has a market cap of $1.88 billion; its shares were traded at around $11.39 with a P/E ratio of 35.59 and P/S ratio of 17.54. The dividend yield of Servicemaster
Co. stocks is 0.7%.SVM is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
(5) Represents management and consulting fees payable to certain related parties. A management fee is payable to CD&R pursuant to a consulting agreement under which CD&R provides the Company with on-going consulting and management advisory services in exchange for an annual management fee of $6.25 million, which is payable quarterly. On July 30, 2009, the annual management fee payable under the consulting agreement with CD&R was increased from $2.0 million to $6.25 million in order to align the fee structure with current market rates. Under this agreement, the Company recorded a management fee of $1.6 million and $3.7 million for the third quarter of 2010 and 2009, respectively. The full year management fee was applied in 2009, and the incremental fees relating to the first three quarters of 2009 were recorded and paid to CD&R in the third quarter of 2009.
In addition, in August 2009, the Company entered into consulting agreements with Citigroup, BAS and JPMorgan, each of which is an Equity Sponsor or an affiliate of an Equity Sponsor. Under the consulting agreements, Citigroup, BAS and JPMorgan each provide the Company with on-going consulting and management advisory services through September 30, 2016 or the earlier termination of the existing consulting agreement between the Company and CD&R. The Company pays annual management fees of $0.5 million, $0.5 million and $0.25 million to Citigroup, BAS and JPMorgan, respectively. The Company recorded consulting fees related to these agreements of $0.3 million and $0.9 million for the third quarter of 2010 and 2009, respectively. The full year management fee was applied in 2009, and the incremental fees relating to the first three quarters of 2009 were recorded and paid to Citigroup, BAS and JPMorgan in the third quarter of 2009. On September 30, 2010, Citigroup transferred the management responsibility for, and its proprietary interests in, certain investment funds that own shares of common stock of Holdings to StepStone Group LLC (StepStone) and Lexington Partners Advisors LP. Citigroup also assigned its obligations and rights under the consulting agreement to StepStone, and beginning in the fourth quarter of 2010, the consulting fee otherwise payable to Citigroup will be paid to StepStone.
Non-operating expense totaled $67.5 million for the third quarter of 2010 compared to $69.8 million for the third quarter of 2009. This decrease includes a $2.9 million decrease in interest expense resulting from decreases in our weighted average interest rates and average long-term debt balances, offset, in part, by a $0.6 million decrease in interest and net investment income. Interest and net investment income was comprised of the following for the third quarter of 2010 and 2009:
(1) Represents restructuring charges related to a reorganization of field leadership and a restructuring of branch operations. For the third quarter of 2010, these costs included consulting fees of $0.7 million. For the third quarter of 2009, these costs included consulting fees of $4.1 million and severance, lease termination and other costs of $1.9 million. In connection with the restructuring of branch operations, we expect to incur cash charges through the second quarter of 2011 primarily related to consulting fees. Such charges are expected to amount to an additional $0.7 million, pre-tax, and will be recorded as restructuring charges in the condensed consolidated statement of operations as incurred.
(3) For the three months ended September 30, 2010, these costs included adjustments to lease termination reserves related to previous restructuring initiatives of $1.2 million and a net reversal of consulting and other costs of $0.2 million. For the three months ended September 30, 2009, these costs included adjustments to lease termination reserves related to previous restructuring initiatives of $0.4 million and consulting and other costs of $1.4 million.
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Co. (SVM, Financial) filed Quarterly Report for the period ended 2010-09-30.
Servicemaster
Co. has a market cap of $1.88 billion; its shares were traded at around $11.39 with a P/E ratio of 35.59 and P/S ratio of 17.54. The dividend yield of Servicemaster
Co. stocks is 0.7%.SVM is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Operating income was $116.7 million for the third quarter of 2010 compared to $94.8 million for the third quarter of 2009. Income from continuing operations before income taxes was $49.2 million for the third quarter of 2010 compared to $25.0 million for the third quarter of 2009. The increase in income from continuing operations before income taxes of $24.2 million reflects the net effect of:(5) Represents management and consulting fees payable to certain related parties. A management fee is payable to CD&R pursuant to a consulting agreement under which CD&R provides the Company with on-going consulting and management advisory services in exchange for an annual management fee of $6.25 million, which is payable quarterly. On July 30, 2009, the annual management fee payable under the consulting agreement with CD&R was increased from $2.0 million to $6.25 million in order to align the fee structure with current market rates. Under this agreement, the Company recorded a management fee of $1.6 million and $3.7 million for the third quarter of 2010 and 2009, respectively. The full year management fee was applied in 2009, and the incremental fees relating to the first three quarters of 2009 were recorded and paid to CD&R in the third quarter of 2009.
In addition, in August 2009, the Company entered into consulting agreements with Citigroup, BAS and JPMorgan, each of which is an Equity Sponsor or an affiliate of an Equity Sponsor. Under the consulting agreements, Citigroup, BAS and JPMorgan each provide the Company with on-going consulting and management advisory services through September 30, 2016 or the earlier termination of the existing consulting agreement between the Company and CD&R. The Company pays annual management fees of $0.5 million, $0.5 million and $0.25 million to Citigroup, BAS and JPMorgan, respectively. The Company recorded consulting fees related to these agreements of $0.3 million and $0.9 million for the third quarter of 2010 and 2009, respectively. The full year management fee was applied in 2009, and the incremental fees relating to the first three quarters of 2009 were recorded and paid to Citigroup, BAS and JPMorgan in the third quarter of 2009. On September 30, 2010, Citigroup transferred the management responsibility for, and its proprietary interests in, certain investment funds that own shares of common stock of Holdings to StepStone Group LLC (StepStone) and Lexington Partners Advisors LP. Citigroup also assigned its obligations and rights under the consulting agreement to StepStone, and beginning in the fourth quarter of 2010, the consulting fee otherwise payable to Citigroup will be paid to StepStone.
Non-operating expense totaled $67.5 million for the third quarter of 2010 compared to $69.8 million for the third quarter of 2009. This decrease includes a $2.9 million decrease in interest expense resulting from decreases in our weighted average interest rates and average long-term debt balances, offset, in part, by a $0.6 million decrease in interest and net investment income. Interest and net investment income was comprised of the following for the third quarter of 2010 and 2009:
(1) Represents restructuring charges related to a reorganization of field leadership and a restructuring of branch operations. For the third quarter of 2010, these costs included consulting fees of $0.7 million. For the third quarter of 2009, these costs included consulting fees of $4.1 million and severance, lease termination and other costs of $1.9 million. In connection with the restructuring of branch operations, we expect to incur cash charges through the second quarter of 2011 primarily related to consulting fees. Such charges are expected to amount to an additional $0.7 million, pre-tax, and will be recorded as restructuring charges in the condensed consolidated statement of operations as incurred.
(3) For the three months ended September 30, 2010, these costs included adjustments to lease termination reserves related to previous restructuring initiatives of $1.2 million and a net reversal of consulting and other costs of $0.2 million. For the three months ended September 30, 2009, these costs included adjustments to lease termination reserves related to previous restructuring initiatives of $0.4 million and consulting and other costs of $1.4 million.
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