American Home Shield 2006 Annual Report Download - page 14

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ServiceMaster is subject to a number of risks that might cause ServiceMaster's actual results to differ materially from its
expressed or implied forecasts, targets or projections, including:
• Litigation against ServiceMaster, particularly any class action litigation;
• Unanticipated changes in senior management;
• Legislation or other governmental action that detrimentally impacts ServiceMaster;
• Unexpected outcome of any Internal Revenue Service audit;
• New accounting pronouncements or changes in accounting policies; and
• Impairment of goodwill or other intangible assets.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
BUSINESS SUPPORT CENTER
ServiceMaster leases approximately 66,000 square feet of office space to accommodate personnel from the Business Support
Center in Downers Grove, Illinois. The lease expires at the end of 2012, but ServiceMaster has an option to terminate the lease as of
December 31, 2007 by giving written notice to the lessor by June 30, 2006. Additionally, ServiceMaster leases warehouse space in
Naperville, Illinois. ServiceMaster also leases office space in Memphis, Tennessee as described below to accommodate Memphis-
based personnel from the Business Support Center. ServiceMaster believes that these office facilities and warehouse are suitable
and adequate to support the Business Support Center's current needs in the Chicagoland and Memphis areas.
OPERATING COMPANIES
The headquarters for TruGreen ChemLawn, TruGreen LandCare, Terminix, American Residential Services and Rescue Rooter are
located in leased premises at 860 Ridge Lake Boulevard, Memphis, Tennessee. The headquarters for American Home Shield and
AmeriSpec are located in leased premises at 889 Ridge Lake Boulevard, Memphis, Tennessee. The headquarters for ServiceMaster
Clean, Merry Maids and Furniture Medic and a training facility are located in leased premises at 3839 Forest Hill Irene Road,
Memphis, Tennessee. The headquarters for American Mechanical Services is located in leased premises at 8039 Laurel Lakes
Court, Laurel, Maryland. In addition, ServiceMaster leases space for a call center located at 6399 ShelbyView Drive, Memphis,
Tennessee; offices located at 850 and 855 Ridge Lake Boulevard, Memphis, Tennessee; a training facility located at 1650 Shelby
Oaks Drive North, Memphis, Tennessee; and a warehouse located at 1575 Two Place, Memphis, Tennessee. ServiceMaster believes
that the headquarters, call center facility, offices, training facilities and warehouse are suitable and adequate to support the current
needs of its operating companies in the Memphis and Laurel areas.
ServiceMaster's operating companies own and lease a variety of facilities principally in the United States for branch and service
center operations and for office, storage, call center and data processing space. The following chart identifies the number of owned
and leased facilities for each operating company. ServiceMaster believes that these facilities, when considered with the
headquarters, call center facility, offices, training facilities and warehouses described above are suitable and adequate to support the
current needs of its business.
Operating Company Owned
Facilities Leased
Facilities
TruGreen ChemLawn 5 290
TruGreen LandCare 2 181
Terminix 11 455
American Home Shield 1 5
ServiceMaster Clean 0 9
Merry Maids 0 63
American Residential Services 4 76
American Mechanical Services 1 19
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of conducting its business activities, ServiceMaster becomes involved in judicial, administrative and
regulatory proceedings involving both private parties and governmental authorities. As of February 28, 2006 these proceedings
included general and commercial liability actions and a small number of environmental proceedings. ServiceMaster does not expect
any of these proceedings to have a material adverse effect on its financial condition, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this Form 10-K, no matters were submitted to a vote of security holders.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES