SERVICEMASTER CO, LLC

[1]	In the six months ended June 30, 2014, the Company recorded a pre-tax non-cash impairment charge of $139 million ($84 million, net of tax) associated with the trade name at its former TruGreen business, which is reported in Loss from discontinued operations, net of income taxes.

Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Cash and Cash Equivalents at Beginning of Period

$ 389

$ 484

Cash Flows from Operating Activities from Continuing Operations:

Net Income (Loss)

(73)

Adjustments to reconcile net loss to net cash provided from operating activities:

Loss from discontinued operations, net of income taxes

^[1]

Depreciation expense

Amortization expense

Amortization of debt issuance costs

Impairment of software and other related costs

Gain on sale of Merry Maids branches

(3)

Loss on extinguishment of debt

Call premium paid on retirement of debt

(23)

Deferred income tax provision

Stock-based compensation expense

Excess tax benefits from stock-based compensation

(10)

Gain on sales of marketable securities

(6)

(4)

Other

Change in working capital, net of acquisitions:

Receivables

(31)

(29)

Inventories and other current assets

(3)

(20)

Accounts payable

Deferred revenue

Accrued liabilities

Accrued interest payable

(12)

(4)

Accrued restructuring charges

(3)

Current income taxes

(3)

Net Cash Provided from Operating Activities from Continuing Operations

210

149

Cash Flows from Investing Activities from Continuing Operations:

Property additions

(20)

(26)

Sale of equipment and other assets

Other business acquisitions, net of cash acquired

(19)

(41)

Notes receivable, financial investments and securities, net

Net Cash Used for Investing Activities from Continuing Operations

(20)

(36)

Cash Flows from Financing Activities from Continuing Operations:

Borrowings of debt

178

Payments of debt

(411)

(22)

Debt issuance costs paid

(2)

Contribution to TruGreen Holding Corporation

(35)

Repurchase of common stock and RSU vesting

(4)

Issuance of common stock

Excess tax benefits from stock-based compensation

Net Cash Used for Financing Activities from Continuing Operations

(213)

(54)

Cash Flows from Discontinued Operations:

Cash used for operating activities

(6)

(10)

Cash used for investing activities

(2)

Cash used for financing activities

(3)

Net Cash Used for Discontinued Operations

(6)

(15)

Cash Decrease During the Period

(28)

Cash and Cash Equivalents at End of Period

361

528

SvM [Member]

Cash and Cash Equivalents at Beginning of Period

368

476

Cash Flows from Operating Activities from Continuing Operations:

Net Income (Loss)

(72)

Adjustments to reconcile net loss to net cash provided from operating activities:

Loss from discontinued operations, net of income taxes

Depreciation expense

Amortization expense

Amortization of debt issuance costs

Impairment of software and other related costs

Gain on sale of Merry Maids branches

(3)

Loss on extinguishment of debt

Call premium paid on retirement of debt

(23)

Deferred income tax provision

Stock-based compensation expense

Excess tax benefits from stock-based compensation

(10)

Gain on sales of marketable securities

(6)

(4)

Other

Change in working capital, net of acquisitions:

Receivables

(31)

(32)

Inventories and other current assets

(3)

(15)

Accounts payable

Deferred revenue

Accrued liabilities

Accrued interest payable

(12)

(4)

Accrued restructuring charges

(3)

Current income taxes

(3)

Net Cash Provided from Operating Activities from Continuing Operations

211

149

Cash Flows from Investing Activities from Continuing Operations:

Property additions

(20)

(26)

Sale of equipment and other assets

Other business acquisitions, net of cash acquired

(19)

(41)

Notes receivable, financial investments and securities, net

Notes receivable from affiliate

(2)

Net Cash Used for Investing Activities from Continuing Operations

(20)

(38)

Cash Flows from Financing Activities from Continuing Operations:

Borrowings of debt

178

Payments of debt

(411)

(22)

Debt issuance costs paid

(2)

Contribution to TruGreen Holding Corporation

(35)

Contribution from Holdings

Excess tax benefits from stock-based compensation

Net Cash Used for Financing Activities from Continuing Operations

(205)

(57)

Cash Flows from Discontinued Operations:

Cash used for operating activities

(6)

(10)

Cash used for investing activities

(2)

Cash used for financing activities

(3)

Net Cash Used for Discontinued Operations

(6)

(15)

Cash Decrease During the Period

(19)

Cash and Cash Equivalents at End of Period

$ 348

$ 515

[1]	In the six months ended June 30, 2014, the Company recorded a pre-tax non-cash impairment charge of $139 million ($84 million, net of tax) associated with the trade name at its former TruGreen business, which is reported in Loss from discontinued operations, net of income taxes.

Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 361	$ 389
Marketable securities	23	19
Receivables, less allowances of $25 and $25, respectively	476	441
Inventories	40	42
Prepaid expenses and other assets	50	44
Deferred customer acquisition costs	34	35
Deferred taxes	66	76
Total Current Assets	1,049	1,044
Property and Equipment:
At cost	392	369
Less: accumulated depreciation	(253)	(233)
Net Property and Equipment	139	136
Other Assets:
Goodwill	2,080	2,069
Intangible assets, primarily trade names, service marks and trademarks, net	1,677	1,696
Notes receivable	30	26
Long-term marketable securities	61	88
Other assets	43	41
Debt issuance costs	28	34
Total Assets	5,108	5,134
Current Liabilities:
Accounts payable	116	84
Accrued liabilities:
Payroll and related expenses	61	82
Self-insured claims and related expenses	119	92
Accrued interest payable	22	34
Other	67	51
Deferred revenue	541	514
Liabilities of discontinued operations	4	9
Current portion of long-term debt	41	39
Total Current Liabilities	972	905
Long-Term Debt	2,797	3,017
Other Long-Term Liabilities:
Deferred taxes	717	715
Other long-term obligations, primarily self-insured claims	$ 149	$ 138
Commitments and Contingencies (See Note 4)
Shareholders' Equity:
Common stock $0.01 par value (authorized 2,000,000,000 shares with 142,787,730 shares issued and 135,146,287 outstanding at June 30, 2015 and 141,731,682 shares issued and 134,092,335 outstanding at December 31, 2014)	$ 2	$ 2
Additional paid-in capital	2,234	2,207
Retained deficit	(1,626)	(1,720)
Accumulated other comprehensive loss	(15)	(8)
Less common stock held in treasury, at cost (7,641,443 shares at June 30, 2015 and 7,639,347 shares at December 31, 2014)	(122)	(122)
Total Shareholders' Equity	473	359
Total Liabilities and Shareholders' Equity	5,108	5,134
SvM [Member]
Current Assets:
Cash and cash equivalents	348	368
Marketable securities	23	19
Receivables, less allowances of $25 and $25, respectively	476	441
Inventories	40	42
Prepaid expenses and other assets	50	44
Deferred customer acquisition costs	34	35
Deferred taxes	77	97
Total Current Assets	1,048	1,045
Property and Equipment:
At cost	392	369
Less: accumulated depreciation	(253)	(233)
Net Property and Equipment	139	136
Other Assets:
Goodwill	2,080	2,069
Intangible assets, primarily trade names, service marks and trademarks, net	1,677	1,696
Notes receivable	30	26
Long-term marketable securities	61	88
Other assets	43	41
Debt issuance costs	28	34
Total Assets	5,107	5,135
Current Liabilities:
Accounts payable	116	84
Accrued liabilities:
Payroll and related expenses	60	80
Self-insured claims and related expenses	119	92
Accrued interest payable	22	34
Other	57	51
Deferred revenue	541	514
Liabilities of discontinued operations	4	9
Current portion of long-term debt	41	39
Total Current Liabilities	961	902
Long-Term Debt	2,797	3,017
Other Long-Term Liabilities:
Deferred taxes	716	715
Other long-term obligations, primarily self-insured claims	149	138
Total Other Long-Term Liabilities	$ 865	$ 853
Commitments and Contingencies (See Note 4)
Shareholders' Equity:
Additional paid-in capital	$ 2,164	$ 2,129
Retained deficit	(1,665)	(1,759)
Accumulated other comprehensive loss	(15)	(8)
Total Shareholders' Equity	484	362
Total Liabilities and Shareholders' Equity	$ 5,107	$ 5,135