American Home Shield 2008 Annual Report Download - page 52

Table of Contents
requirements, and the sale of certain marketable securities and the subsequent investment in repurchase agreements in an effort to limit our exposure to
changing market conditions.
Cash Flows from Financing Activities from Continuing Operations
Net cash provided from (used for) financing activities from continuing operations was $89.0 million for the year ended December 31, 2008 compared to
$4,867.4 million and ($78.1) million in the Successor period from July 25, 2007 to December 31, 2007 and the Predecessor period from January 1, 2007 to
July 24, 2007, respectively. During the year ended December 31, 2008, the Company made borrowings of $347.0 million and repayments of $182.0 million
under our Revolving Credit Facility. In September 2008, the Company borrowed $165 million under the Revolving Credit Facility and transferred $10 million
of interests under its accounts receivable securitization arrangement to increase the Company's cash position to preserve its financial flexibility in light of the
current uncertainty in the credit markets. ServiceMaster invested $150 million of the borrowings in money market funds which are invested in short term U.S.
Government securities and placed the remaining $25 million of borrowings in a money market account used to fund working capital needs. In February 2009,
ServiceMaster transferred $25 million from the money market funds invested in U.S. Government securities to a money market account used to fund seasonal
working capital needs. The Company also made scheduled principal payments of long-term debt of $59.0 million in the year ended December 31, 2008.
During the year ended December 31, 2008, the Company paid debt issuance costs of $27.0 million related to the conversion of the amounts outstanding under
the Interim Loan Facility into the Permanent Notes. Borrowings and payments of debt during the Successor period from July 25, 2007 to December 31, 2007
and the Predecessor period from January 1, 2007 to July 24, 2007 were primarily related to the funding of seasonal working capital needs through the
Company's revolving bank credit facility and the proceeds from debt incurred in connection with the Merger, net of issuance costs, of $3,698.5 million. The
Company also received cash equity contributions in connection with the Merger of $1,431.1 million.
Cash dividends paid to shareholders totaled $70.1 million for the Predecessor period from January 1, 2007 to July 24, 2007. No dividends were paid to
the Company's shareholder in the year ended December 31, 2008 and the Successor period from July 25, 2007 to December 31, 2007. During the Predecessor
period from January 1, 2007 to July 24, 2007, the Company received proceeds of $36.1 million under an employee share purchase plan. The employee share
purchase plan was terminated subsequent to the Merger.
Liquidity
The Merger was completed on the Closing Date. Following the completion of the Merger, the Company is highly leveraged, and a very substantial
portion of the Company's liquidity needs arise from debt service on indebtedness incurred in connection with the Merger and from funding the Company's
operations, working capital and capital expenditures. Equity contributions totaling $1,431 million from the Equity Sponsors, together with (i) borrowings
under the $1,150 million Interim Loan Facility, (ii) borrowings under a new $2,650 million senior secured term loan facility and (iii) cash on hand at
ServiceMaster, were used, among other things, to finance the aggregate Merger Consideration, to make payments in satisfaction of other equity-based
interests in ServiceMaster under the Merger Agreement, to settle existing interest rate swaps, to redeem or provide for the repayment of certain of the
Company's existing indebtedness and to pay related transaction fees and expenses. In addition, letters of credit issued under a new $150 million pre-funded
letter of credit facility were used to replace and/or secure letters of credit previously issued under a ServiceMaster credit facility that was terminated as of the
Closing Date. On the
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