American Home Shield 2009 Annual Report Download - page 15

Table of Contents
Terminix Termite Inspection and Protection Plan and TruGreen Targeted Lawn Care program, or our expected cost savings and efficiency improvements,
including those related to reorganization and restructuring programs. As an example, in 2009 TruGreen LawnCare initiated restructuring activities related to a
reorganization of field leadership and a restructuring of branch operations, designed to result in a centralization of core field functions and certain
administrative functions; however, we may not be able to achieve the increase in sales, cost savings, efficiencies and other anticipated benefits from this
initiative. In addition, 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 or these initiatives may adversely impact our customer retention and/or our operations. 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 or animals, whether justified or not, could reduce demand for our services, increase regulation or
government restrictions, impair our reputation, involve us in litigation, damage our brand names and otherwise have a material adverse effect on our financial
position, results of operations and cash flows.
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
training. 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 position, results of operations and cash flows.
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 service contracts, employee benefits, marketing (including telemarketing or green marketing) 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 various federal, state and local governing bodies may propose additional legislation and regulation that may be detrimental to our
business or may substantially increase our operating costs, including legislation relating to the Employee Free Choice Act; environmental regulations related
to water quality, water use, chemical use, climate change and other environmental matters; or "do-not-knock", "do-not-mail",
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