American Home Shield 2008 Annual Report Download - page 109

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 14. Long-Term Debt (Continued)
The final maturity date of the Revolving Credit Facility is July 24, 2013. The interest rates applicable to the loans under the Revolving Credit Facility
will be based on a fluctuating rate of interest measured by reference to either, at the borrower's option, (1) an adjusted London inter-bank offered rate
(adjusted for maximum reserves), plus a borrowing margin (as of December 31, 2008—2.50%), or (2) an alternate base rate, plus a borrowing margin (as of
December 31, 2008—1.50%). The borrowing margin, in each case, will be adjusted from time to time based on the Consolidated Secured Leverage Ratio (as
defined in the Revolving Credit Agreement) for the previous fiscal quarter.
The agreements governing the Term Facilities, the Permanent Notes and the Revolving Credit Facility contain certain covenants that, among other
things, limit or restrict the incurrence of additional indebtedness, liens, sales of assets, certain payments (including dividends) and transactions with affiliates,
subject to certain exceptions. The Company was in compliance with the covenants under these agreements at December 31, 2008.
Cash interest payments were $270 million for the year ended December 31, 2008, $141 million for the Successor period from July 25, 2007 to
December 31, 2007, $27 million for the Predecessor period from January 1, 2007 to July 24, 2007 and $57 million for the year ended December 31, 2006.
Future scheduled long-term debt payments are $221 million in 2009 (average rate of 3.2 percent), $53 million in 2010 (average rate of 5.1 percent),
$36 million in 2011 (average rate of 3.9 percent), $31 million in 2012 (average rate of 3.7 percent) and $29 million in 2013 (average rate of 3.3 percent). The
scheduled long-term debt payments of $221 million in 2009 include the repayment of $165 million borrowed under the Revolving Credit Facility and
$10 million transferred under the Company's accounts receivable securitization arrangement.
Note 15. Cash and Marketable Securities
Cash, money market funds and certificates of deposits, with maturities of three months or less, are included in the Statements of Financial Position
caption "Cash and Cash Equivalents." As of December 31, 2008 and 2007, the Company's investments consist primarily of domestic publicly traded debt of
$90.1 million and $130.6 million, respectively, and common equity securities of $43.0 million and $137.2 million, respectively.
The aggregate market value of the Company's short-term and long-term investments in debt and equity securities was $133.1 million and $267.8 million,
and the aggregate cost basis was $134.9 million and $260.8 million at December 31, 2008 and 2007, respectively.
Interest and dividend income received on cash and marketable securities was $13 million for the year ended December 31, 2008, $12 million for the
Successor period from July 25, 2007 to December 31, 2007, $28 million for the Predecessor period from January 1, 2007 to July 24, 2007 and $26 million for
the year ended December 31, 2006. Gains and losses on sales of investments, as determined on a specific identification basis, are included in investment
income in the period they are realized. The Company periodically reviews its portfolio of investments to determine whether there has been an other than
temporary decline in the value of the investments from factors such as deterioration in the financial condition of the issuer or the market(s) in which it
competes. The Company recorded an impairment charge of approximately $16.5 million ($12.6 million after-tax) for the year ended December 31, 2008,
$10.9 million ($7.1 million after-tax) for the Successor period from July 25, 2007 to December 31, 2007, $0.9 million ($0.6 million after-tax) for the
Predecessor period January 1, 2007 to July 24, 2007 and $2.4 million ($1.6 million after-tax) for the year ended December 31, 2006 due to other than
temporary declines in the value
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