American Home Shield 2008 Annual Report Download - page 13

Table of Contents
of the Credit Facilities. These disruptions also could cause our commercial customers to encounter liquidity issues that could lead to some of our services
being cancelled or reduced.
Although we are not currently experiencing any limitation of access to the Credit Facilities and are not aware of any issues currently impacting the ability
of the lenders under them to honor their commitments to extend credit, there is no assurance that the U.S. and global credit crisis will not adversely affect our
ability to borrow on the Credit Facilities in the future. Liquidity or capital problems at one or more of the lenders on the Revolving Credit Facility could
reduce or eliminate the amount available for us to draw under such facility. Our access to additional capital may not be available on terms acceptable to us or
at all.
There can be no assurance that these disruptions and turmoil will not get worse over time and thus impact us more than they have to date. These
economic uncertainties make it very difficult for us to accurately forecast and plan future business activities. The continuance of the current uncertain
economic conditions or further deterioration of such conditions could have a material adverse impact on our financial position, revenues, results of operations
and cash flows.
Continued weakening in general economic conditions, especially as they may affect home re-sales, unemployment or consumer confidence or
spending levels, may adversely affect the demand for our services.
Changes in general economic conditions and consumer confidence affect the demand for our services. The U.S. and global economy is currently
undergoing a general economic downturn. A continuation or worsening of this downturn, including continued or further softening of the home sale or resale
market, consumer confidence and spending levels, increases in home foreclosures, further deterioration or disruption in the credit markets and increases in
unemployment rates, could reduce the demand for our services. These factors could also negatively impact the timing or the ultimate collection of accounts
receivable, which would negatively impact our operating revenues, profitability and cash flows.
The failure of any banking institution in which we deposit our funds or any insurance company that provides insurance to us may have an adverse
effect on our financial condition or result of operations.
The deterioration in global economic conditions and the weakening of the financial markets have reduced the financial strength of some financial
institutions and insurance companies. We maintain cash balances in excess of federally-insured limits at various depository institutions. If one or more of the
depository institutions in which we maintain significant cash balances were to fail, our ability to access these funds might be temporarily or permanently
limited, and could materially impact our liquidity and potentially cause material financial losses. Similarly, if one or more insurance companies were to fail,
we may encounter issues with our insurance coverage and payment of claims. We also may not be able to replace our insurance coverage with another insurer
on terms as favorable as our current insurance arrangements. Thus, the failure of a banking institution or insurance company with which we do business may
have a material adverse effect on our business, financial condition and results of operations.
Weather conditions and seasonality affect the demand for our services and our results of operations.
The demand for our services and our results of operations are affected by weather conditions and by the seasonal nature of our lawn care and landscape
maintenance services, termite and pest control services, home inspection services and disaster restoration services. For example, in our markets that do not
have a year-round growing season, the demand for our lawn care and landscape maintenance services decreases during the winter months. Droughts and late
spring or fall snow storms can adversely impact the demand for lawn care and landscape maintenance
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