American Home Shield 2008 Annual Report Download - page 15

Table of Contents
reorganization and restructuring program ("Fast Forward"). Our various business strategies and initiatives, including our productivity and customer retention
initiatives, are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. We expect to
incur certain costs to achieve our expected cost savings and efficiency improvements. These costs may turn out to be substantially higher than we currently
estimate, and we may not fully achieve our expected cost savings and efficiency improvements. Our ability to successfully realize cost savings and the timing
of any realization may be affected by factors such as the need to ensure continuity in our operations, contracts, regulations and/or statutes governing
employee-employer relationships, our ability to renegotiate contracts or find alternative suppliers and other factors. Our business strategy may also change
from time to time. As a result, we may not be able to achieve our expected results of operations.
Public perceptions that our products and services are not environmentally friendly or safe may adversely affect the demand for our services.
In providing our services, we use, among other things, fertilizers, herbicides and pesticides. Public perception that our products and services are not
environmentally friendly or safe or are harmful to humans, whether justified or not, could lead to reduced demand for our services, impair our reputation,
involve us in litigation, damage our brand names and otherwise have a material adverse effect on our business, financial condition and results of operations.
Changes in the types or mix of our service offerings could affect our financial performance.
Our financial performance is affected by changes in the types or mix of services we offer our customers. For example, when Terminix transitioned from
offering primarily bait termite services to providing both liquid and bait termite services, this transition required the purchase of additional equipment and
additional training for our associates. The bait and termite service lines also have different price points (for both the initial treatment and for renewals),
different ongoing service obligations, and different revenue recognition policies. These changes in mix can also affect the timing of our revenues. An
unsuccessful rollout or adjustment of our service offerings could have a material adverse effect on our financial performance.
Government laws and regulations applicable to our businesses could increase our legal and regulatory expenses and affect our financial
performance.
Our businesses are subject to significant federal, state and local laws and regulations. These federal, state and local laws and regulations include laws
relating to consumer protection, wage and hour requirements, the employment of immigrants, labor relations, permit and licensing requirements, workers'
safety, the environment, insurance and home warranty, employee benefits, telemarketing and advertising, the application of fertilizers, herbicides, pesticides
and other chemicals, noise and air pollution from power equipment and water management techniques. In particular, we anticipate that the new U.S.
Presidential administration and Congress may promulgate additional legislation and regulation, including legislation relating to the Employee Free Choice
Act, the environment, or "do-not-mail", "do-not-leave", or other advertising, that may be detrimental to our business or may substantially increase our
operating costs. It is difficult to predict the future impact of the broad and expanding legislative and regulatory requirements affecting our businesses but
changes to such requirements may affect our operations and financial performance. In addition, if we were to fail to comply with any applicable law or
regulation, we could be subject to substantial fines or damages, be involved in litigation, suffer losses to our reputation or suffer the loss of licenses or
penalties that may affect how our business is operated, which, in turn, would have a material adverse effect on our business, financial condition and results of
operations.
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