American Home Shield 2008 Annual Report Download - page 16

Table of Contents
The loss of the services of management personnel and other employees as a result of restructuring could adversely affect our financial performance.
Among the purposes of Fast Forward is to eliminate layers and bureaucracy and simplify work processes in order to better align the Company's work
processes around its operational and strategic objectives. Fast Forward has resulted in employee workforce reductions as part of the cost-savings to be
achieved and may include additional workforce reductions in the future. Ultimately, Fast Forward is expected to enhance our financial performance; however,
the loss of management personnel and other employees could affect our success and financial performance until the Fast Forward process is completed.
Our business process outsourcing initiatives have increased our reliance on third-party contractors and may expose our business to harm upon the
termination or disruption of our third-party contractor relationships.
Our strategy to increase profitability by reducing our costs of operations includes the implementation of business process outsourcing initiatives. As a
result, our future operations will increasingly rely on third-party vendors to provide services that we previously performed internally. Any disruption,
termination, or substandard performance of these outsourced services, including possible breaches by third party vendors of their agreements with us, could
adversely affect our brands, customer relationships, operating results and financial condition. Also, if a third-party outsourcing provider relationship is
terminated, there is a risk that we may not be able to enter into a similar agreement with an alternate provider in a timely manner or on terms that we consider
favorable. In addition, in the event a third-party outsourcing relationship is terminated and we are unable to replace it, there is a risk that we may no longer
have the capabilities to perform these services internally.
Laws and regulations regarding the use of pesticides and fertilizers, as well as other environmental laws and regulations, could result in significant
costs that adversely affect our operating results.
Local, state, federal and international laws and regulations relating to environmental, health and safety matters affect us in several ways. In the United
States, products containing pesticides must be registered with the U.S. Environmental Protection Agency ("EPA") (and similar state agencies) before they can
be sold or applied. The failure to obtain or the cancellation of any such registration, or the other withdrawal from the market place of such pesticides, could
have an adverse effect on our business, the severity of which would depend on the products involved, whether other products could be substituted and whether
our competitors were similarly affected. The pesticides we use are manufactured by independent third parties and are evaluated by the EPA as part of its
ongoing exposure risk assessment. The EPA may decide that a pesticide we use will be limited or will not be re-registered for use in the United States. We
cannot predict the outcome or the severity of the effect of the EPA's continuing evaluations.
In addition, the use of certain pesticides, herbicides and fertilizer products is regulated by various local, state, federal and international environmental and
public health agencies. These regulations may require that only certified or professional users apply the product or that certain products be used only on
certain types of locations, may require users to post notices on properties to which products have been or will be applied, may require notification to
individuals in the vicinity that products will be applied in the future or may restrict or ban the use of certain products. Even if we are able to comply with all
such regulations and obtain all necessary registrations and licenses, we cannot assure you that the products we apply or the manner in which we apply them,
particularly pesticide products, will not be alleged to cause injury to the environment or to people under any circumstances. The costs of compliance,
remediation or products liability lawsuits could materially affect our future operating results.
14