American Home Shield 2009 Annual Report Download - page 117

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 15. Cash and Marketable Securities (Continued)
The aggregate market value of the Company's short-term and long-term investments in debt and equity securities was $132.2 million and $133.1 million,
and the aggregate cost basis was $126.7 million and $134.9 million at December 31, 2009 and 2008, respectively.
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 gross
realized gains resulting from sales of available-for-sale securities of $3.9 million ($2.4 million, net of tax) and $13.2 million ($10.0 million, net of tax) for the
years ended December 31, 2009 and 2008, respectively, $6.3 million ($4.1 million, net of tax) for the Successor period from July 25, 2007 to December 31,
2007 and $22.1 million ($14.0 million, net of tax) for the Predecessor period from January 1, 2007 to July 24, 2007. The Company recorded gross realized
losses resulting from sales of available-for-sale securities of $1.5 million ($0.9 million, net of tax) and $10.9 million ($8.3 million, net of tax) for the years
ended December 31, 2009 and 2008, respectively, $2.9 million ($1.9 million, net of tax) for the Successor period from July 25, 2007 to December 31, 2007
and $1.8 million ($1.1 million, net of tax) for the Predecessor period from January 1, 2007 to July 24, 2007. The Company recorded impairment charges of
$5.9 million ($3.6 million, net of tax) for the year ended December 31, 2009, $16.5 million ($12.6 million, net of tax) for the year ended December 31, 2008,
$10.9 million ($7.1 million, net of tax) for the Successor period from July 25, 2007 to December 31, 2007 and $0.9 million ($0.6 million, net of tax) for the
Predecessor period January 1, 2007 to July 24, 2007 due to other than temporary declines in the value of certain investments. The unrealized gains in the
investment portfolio were $7.7 million and $4.2 million as of December 31, 2009 and 2008, respectively. Unrealized losses were $2.2 million and
$6.0 million as of December 31, 2009 and 2008, respectively. The portion of unrealized losses which had been in a loss position for more than one year at
December 31, 2009 and 2008 was $0.7 million and $0.4 million, respectively. The aggregate fair value of the investments with unrealized losses totaled
$7.9 million and $26.8 million at December 31, 2009 and 2008, respectively.
Note 16. Receivable Sales
The Company has entered into an accounts receivable securitization arrangement under which TruGreen LawnCare and Terminix may sell certain
eligible trade accounts receivable to Funding, the Company's wholly owned, bankruptcy-remote subsidiary which is consolidated for financial reporting
purposes. Funding, in turn, may transfer, on a revolving basis, an undivided percentage ownership interest of up to $50.0 million in the pool of accounts
receivable to one or both of the Purchasers. The amount of the eligible receivables varies during the year based on seasonality of the businesses and could, at
times, limit the amount available to the Company from the sale of these interests. As of December 31, 2009, the amount of eligible receivables was
approximately $36.0 million.
The accounts receivable securitization arrangement is a 364-day facility that is renewable annually at the option of Funding, with a final termination date
of July 17, 2012. Only one of the Purchasers is required to purchase interests under the arrangement. If this Purchaser were to exercise its right to terminate its
participation in the arrangement, which it may do in the third quarter of each year, the amount of cash available to the Company may be reduced or
eliminated.
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