American Home Shield 2009 Annual Report Download - page 59

Table of Contents
The decrease in accounts payable reflects a change in the timing of payments to vendors.
Accrued payroll and related expenses decreased from prior year levels reflecting decreased accruals for incentive compensation.
Accrued self-insurance claims and related expenses decreased from prior year levels, reflecting a reduction in required reserve levels under certain of our
self-insurance programs, offset, in part, by an increase in accruals for home service contract claims in the American Home Shield business.
Other accrued liabilities decreased from prior year levels, reflecting reductions in accrued interest due to changes in the timing of interest payment on our
permanent financing and decreases in the fair value liability recorded for fuel hedges.
The growth in deferred revenue reflects growth in home service contracts written at American Home Shield.
Long-term debt decreased from prior year levels, reflecting the repayment of amounts outstanding under the Revolving Credit Facility, the completion of
open market purchases of the Permanent Notes and scheduled principal payments of long-term-debt.
Other long-term obligations, primarily self-insured claims, decreased from prior year levels due primarily to decreases in the fair value liability recorded
for interest rate swap contracts and reductions in required reserve levels under certain of our self-insurance programs.
Total shareholder's equity was $1,186.3 million at December 31, 2009 compared to $1,132.4 million at December 31, 2008.
Financial Position—Discontinued Operations
The assets and liabilities related to discontinued operations have been classified in a separate caption on the Consolidated Statements of Financial
Position.
As part of the InStar, American Residential Services and American Mechanical Services sale agreements, the Company guaranteed obligations to third
parties with respect to bonds (primarily performance and license type), operating leases for which the Company has been released as being the primary
obligor, real estate leased and operated by the buyers, and other guarantees of payment. At the present time, the Company does not believe it is probable that
the buyers will default on their obligations subject to guarantee. The fair value of the Company's obligations related to these guarantees is not significant and
no liability has been recorded.
Off-Balance Sheet Arrangements
The Company has off-balance sheet arrangements in the form of guarantees as discussed in Note 10 of the Consolidated Financial Statements.
Critical Accounting Policies and Estimates
The preparation of the Consolidated Financial Statements requires management to make certain estimates and assumptions required under GAAP which
may differ from actual results. The more significant areas requiring the use of management estimates relate to revenue recognition; the allowance for
uncollectible receivables; accruals for self-insured retention limits related to medical, workers' compensation, auto and general liability insurance claims;
accruals for home service contracts and termite damage claims; the possible outcome of outstanding litigation; accruals for income tax liabilities as well as
deferred tax accounts; the deferral and amortization of customer acquisition costs; useful lives for depreciation and amortization expense; the valuation of
marketable securities; and the valuation of tangible and intangible assets. In 2009, there have been no changes
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