American Home Shield 2010 Annual Report Download - page 49

Table of Contents
Cash Flows from Investing Activities from Continuing Operations
Net cash used for investing activities from continuing operations was $185.6 million for the year ended December 31, 2010 compared to $87.5 million
for the year ended December 31, 2009.
Capital expenditures increased to $145.4 million for the year ended December 31, 2010 from $62.5 million for the year ended December 31, 2009 and
included vehicle purchases of $51.4 million, real estate purchases of $37.4 million in connection with purchases of properties previously under lease as further
discussed in "Liquidity," recurring capital needs and information technology projects. The Company anticipates that capital expenditures, excluding vehicle
fleet purchases, for the full year 2011 will range from $50.0 million to $60.0 million, reflecting recurring needs and the continuation of investments in
information systems and productivity enhancing operating systems. The Company's capital requirement for fleet vehicles for the full year 2011 is expected to
range from $55.0 million to $65.0 million. The Company has no additional material capital commitments at this time.
Cash payment for acquisitions, excluding the Merger, for the year ended December 31, 2010 totaled $57.9 million, compared with $32.6 million for the
year ended December 31, 2009. Consideration paid for tuck-in acquisitions consisted of cash payments and debt payable to sellers. In August 2010, Terminix
acquired the assets of Antimite Termite and Pest Control, a company with annual revenues of approximately $30 million. The Company expects to continue
its tuck-in acquisition program at Terminix, TruGreen LawnCare and Merry Maids.
The increased cash flows from notes receivable, financial investments and securities for the years ended December 31, 2010 and 2009 reflects the return
of the Company's $22.0 million investment in previously leased real estate facilities as further discussed in "Liquidity," offset, in part, by a decrease in net
sales of certain marketable securities.
Cash Flows from Financing Activities from Continuing Operations
Net cash used for financing activities from continuing operations was $46.4 million for the year ended December 31, 2010 compared to $253.3 million
for the year ended December 31, 2009. During the year ended December 31, 2010, the Company borrowed and repaid $5.0 million under the Revolving
Credit Facility, borrowed $10.0 million under other financing arrangements, made scheduled principal payments of long-term debt of $43.8 million, and as
further discussed in "Liquidity," made repayments of $12.5 million in connection with purchases of properties previously under lease. During the year ended
December 31, 2009, the Company completed open market purchases of $89.0 million in face value of the Permanent Notes for a cost of $41.0 million. The
Company also made repayments of $165.0 million under the Revolving Credit Facility and made scheduled principal payments of long-term debt of
$46.9 million during the year ended December 31, 2009.
Liquidity
The Company is highly leveraged, and a very substantial portion of the Company's liquidity needs is due to service requirements on indebtedness
incurred in connection with the Merger and funding the Company's operations, working capital and capital expenditures. The agreements governing the Term
Facilities, the Permanent Notes and the Revolving Credit Facility contain certain covenants that limit or restrict the incurrence of additional indebtedness, debt
repurchases, liens, sales of assets, certain payments (including dividends) and transactions with affiliates, subject to certain exceptions. The Company was in
compliance with the covenants under these agreements at December 31, 2010.
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