1340792--7/19/2007--Ashton_Woods_USA

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Our operating results are variable, and as a result, our historical performance may not be a meaningful indicator of future results. An increase in mortgage interest rates or unavailability of mortgage financing may reduce consumer demand for our homes. We intend to continue to consider growth or expansion of our operations which could have a material adverse effect on our cash flows or profitability. Lack of greater geographic diversification could expose our business to increased risks if there are economic downturns in our markets. We could experience a reduction in home sales and revenues or reduced cash flows if we are unable to obtain reasonably priced financing to support our homebuilding and land development activities. Changes in the government regulations applicable to homebuilders could restrict our business activities, increase our operating expenses and cause our revenues to decline. We may incur additional operating expenses due to compliance requirements or fines, penalties and remediation costs pertaining to environmental regulations within our markets. We are subject to warranty claims arising in the ordinary course of our business that could adversely affect our results of operations. Our operating expenses could increase if we are required to pay higher insurance premiums or incur substantial litigation costs for claims involving construction and product defect liability claims, including claims related to mold, which could cause our net income to decline. We are dependent on the services of certain key employees, and the loss of their services could hurt our business. We are dependent on the continued availability and satisfactory performance of our subcontractors, which, if unavailable, could have a material adverse effect on our business. Supply risks and shortages relating to labor and materials can harm our business by delaying construction and increasing costs. Our financial condition and results of operations may be adversely affected by any decrease in the value of our land inventory, as well as by the associated carrying costs. Our business and operating results could be adversely affected by adverse weather conditions and natural disasters. If we are unsuccessful in competing against other homebuilders, our market share could decline or our growth could be impaired and, as a result, our financial results could suffer.

Full 10-K form ▸

1340792--7/19/2007--Ashton_Woods_USA_L.L.C.