927914--3/13/2006--ALDERWOODS_GROUP

related topics

{debt, indebtedness, cash}

{regulation, government, change}

{operation, international, foreign}

{condition, economic, financial}

{provision, law, control}

{loan, real, estate}

{competitive, industry, competition}

{tax, income, asset}

The Company's significant level of debt and interest payment obligations may restrict future operations and impair the Company's ability to meet debt obligations. Despite the Company's significant level of debt, the Company is permitted to incur more debt, which could intensify the risks described above. The Company may not be able to generate sufficient cash to service all of its debt. The Company depends on the cash flows from its subsidiaries to meet its obligations. Restrictive covenants in the Company's Credit Agreement and the indenture governing the Eight-Year Senior Unsecured Notes may prevent it from pursuing business activities that could otherwise improve its results of operations. The Company operates in a highly competitive industry. The Company's investments held in trusts are invested in securities, the value of which is affected by financial market conditions that are beyond its control. The level of pre-need sales and the terms of the Company's pre-need contracts may adversely impact its results of operations and cash flows. Increasing insurance benefits related to pre-need services funded through life insurance or annuity contracts may not cover future increases in the cost of providing a price guaranteed funeral service. Fluctuations in the value of the Canadian dollar could result in currency exchange losses. Changes in tax rates and tax laws and results of tax audits may affect future results. Payment of dividends is not anticipated and is subject to restriction. Certain provisions in the Company's charter documents have anti-takeover effects. Declines in the number of deaths in the Company's markets can cause a decrease in revenues. Changes in the number of deaths are not predictable from market to market or over the short term. The growth in the rate of cremations in North America may result in decreased revenue and gross margin. The funeral home, cemetery and insurance industries are highly regulated. Funeral and cemetery businesses have high fixed costs.

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927914--3/13/2006--ALDERWOODS_GROUP_INC