American Home Shield 2010 Annual Report Download - page 12

Table of Contents
ITEM 1A. RISK FACTORS
The following discussion of risk factors contains "forward-looking statements," as discussed in Part II, Item 7 below. These risk factors may be
important to understanding any statement in this Annual Report on Form 10-K or elsewhere. Our business, operations and financial condition are subject to
various risks. The risks and uncertainties described below are not the only ones relevant to us. Additional risks and uncertainties not currently known to us or
that we currently believe are immaterial may also adversely impact our reputation, business, financial position, results of operations and cash flows. The
following information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the
Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K.
Risks Related to Our Business and Our Industry
Adverse credit and financial market events and conditions could, among other things, impede access to or increase the cost of financing or cause our
commercial customers to incur liquidity issues that could lead to some of our services being cancelled or result in reduced revenues and lower
operating income, which could have an adverse impact on our business, financial position, results of operations and cash flows.
Adverse developments in the credit and financial markets, unstable consumer sentiment and high unemployment continue to challenge the U.S. and
global financial and credit markets and overall economies. These developments have had a significant material adverse impact on a number of financial
institutions and have limited access to capital and credit for many companies. Disruptions in credit or financial markets could, among other things, lead to
impairment charges, make it more difficult for us to obtain, or increase our cost of obtaining, financing for our operations or investments or to refinance our
debt in the future, cause our lenders to depart from prior credit industry practice and not give technical or other waivers under our senior secured term loan
facility and pre-funded letter of credit facility (together, the "Term Facilities") and senior secured revolving credit facility (the "Revolving Credit Facility")
(the Term Facilities and Revolving Credit Facility are collectively referred to herein as the "Credit Facilities"), to the extent we may seek them in the future,
thereby causing us to be in default under one or more 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, or that could result in an increase in the time it takes our customers to pay
us, or that could lead to a decrease in pricing for our services and products, any of which could adversely affect our accounts receivable and, in turn, increase
our working capital needs.
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 under 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. Although we were able to obtain an amendment and extension of our Revolving
Credit Facility in February 2011, our access to additional capital may not be available on terms acceptable to us or at all.
There can be no assurance that adverse developments in the credit and financial markets, along with other economic uncertainties, will not get worse
over time and thus impact us more than they have to date. Adverse developments in the credit and financial markets and economic uncertainties make it
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 business, financial position, results of operations and cash flows.
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