American Home Shield 2007 Annual Report Download - page 11

These federal and state laws include laws relating to consumer protection, wage and hour regulations, permit and license
requirements, workers' safety (e.g., the Occupational Safety and Health Act), environmental regulations (e.g., the Clean Air Act)
and employee benefits (e.g., the Consolidated Omnibus Budget Reconciliation Act of 1985 and the Employee Retirement Income
Security Act of 1974). The TruGreen LawnCare, TruGreen LandCare and Terminix businesses must also meet the Department of
Transportation and Federal Motor Carrier Safety Administration requirements with respect to their fleets of vehicles. American
Home Shield is regulated by the Department of Insurance in certain states and the Real Estate Commission in Texas.
Consumer Protection and Telemarketing Matters
ServiceMaster is subject to federal and state laws and regulations designed to protect consumers, including laws governing
consumer privacy and fraud, the collection and use of consumer data, telemarketing and other forms of solicitation. Noncompliance
with these laws and regulations can subject ServiceMaster to fines or various forms of civil or criminal prosecution, any of which
could have an adverse effect on its financial condition, results of operations and cash flows.
The telemarketing rules adopted by the Federal Communications Commission pursuant to the Federal Telephone Consumer
Protection Act and the Federal Telemarketing Sales Rule issued by the Federal Trade Commission govern ServiceMaster's
telephone sales practices. In addition, many states have adopted statutes and regulations targeted at direct telephone sales activities.
The implementation of do-not-call lists requires TruGreen LawnCare, and, to a lesser extent, ServiceMaster's other operating
segments, to seek additional marketing methods and channels.
Franchise Matters
TruGreen LawnCare, Terminix, ServiceMaster Clean, Merry Maids, AmeriSpec and Furniture Medic are subject to various federal
and state laws and regulations governing franchise sales and marketing and franchise trade practices generally, including applicable
rules and regulations of the Federal Trade Commission. These laws and regulations generally require disclosure of business
information in connection with the sale of franchises. Certain state regulations also affect the ability of the franchisor to revoke or
refuse to renew a franchise. ServiceMaster seeks to comply with regulatory requirements and deal with franchisees in good faith.
From time to time, ServiceMaster and one or more franchisees may become involved in a dispute regarding the franchise
relationship, including, among other things, payment of royalties, location of branches, advertising, purchase of products by
franchisees, compliance with ServiceMaster standards and franchise renewal criteria. There can be no assurance that compliance
problems will not be encountered from time to time or that material disputes with one or more franchisees will not arise.
Environmental Matters
ServiceMaster's businesses are subject to various federal, state and local laws and regulations regarding environmental matters.
Terminix, TruGreen LawnCare and TruGreen LandCare are regulated under many federal and state environmental laws, including
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Environmental Pesticide Control Act of 1972, the Federal Insecticide, Fungicide and
Rodenticide Act of 1947, the Resource Conservation and Recovery Act of 1976, the Clean Air Act, the Emergency Planning and
Community Right-to-Know Act of 1986, the Oil Pollution Act of 1990 and the Clean Water Act of 1977. ServiceMaster cannot
predict the effect on its operations of possible future environmental legislation or regulations. During 2006, there were no material
capital expenditures for environmental control facilities, and no such material expenditures are anticipated in 2007. In the first
quarter of 2006, Terminix recorded a $2 million charge for costs associated with site remediation at two locations.
EMPLOYEES
On December 31, 2006, ServiceMaster had a total of approximately 32,000 employees.
AVAILABLE INFORMATION
ServiceMaster maintains a website at http://www.svm.com that includes a hyperlink to a website maintained by a third-party where
ServiceMaster's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments
to those reports are available without charge as soon as reasonably practicable following the time that they are filed with or
furnished to the Securities and Exchange Commission. A copy of each of ServiceMaster's Corporate Governance Principles, Audit
and Finance Committee Charter, Compensation and Leadership Development Committee Charter, Governance and Nominating
Committee Charter, Financial Code of Ethics and Code of Conduct is posted on ServiceMaster's website at http://www.svm.com
under "Corporate Governance" and is available in print to any shareholder who requests it by writing to the Corporate Secretary at
the following address: The ServiceMaster Company, 3250 Lacey Road, Suite 600, Downers Grove, Illinois 60515.
ITEM 1A. RISK FACTORS
This Form 10-K contains or incorporates by reference statements concerning future results and other matters that may be deemed to
be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. ServiceMaster intends
that these forward-looking statements, which look forward in time and include everything other than historical information, be
subject to the safe harbors created by that legislation. ServiceMaster notes that these forward-looking statements involve risks and
uncertainties that could affect its results of operations, financial condition or cash flows. Factors that could cause actual results to
differ materially from those expressed or implied in a forward-looking statement include the following, among others:
Weather conditions and seasonality affect the demand for ServiceMaster's services.
The demand for ServiceMaster's services is affected by weather conditions. The business of ServiceMaster is