American Home Shield 2010 Annual Report Download - page 16

Table of Contents
eliminates pre-existing condition exclusions and annual and lifetime maximum limits; restricts the extent to which policies can be rescinded; and requires
employers to provide employees with insurance coverage that meets minimum eligibility and coverage requirements. The legislation imposes implementation
effective dates that began in 2010. Due to the breadth and complexity of the health reform legislation, the current lack of implementing regulations and
interpretive guidance, the phased-in nature of the implementation and pending court challenges, it is difficult to predict the overall impact of the health reform
legislation on our business over the coming years. However, new requirements to provide additional health insurance benefits to our employees would likely
increase our expenses, and any such increases could be significant enough to materially impact our business, financial position, results of operations and cash
flows.
Compliance with environmental laws and regulations, including laws pertaining to the use of pesticides and fertilizers, could result in significant
costs that adversely impact our reputation, business, financial position, results of operations and cash flows.
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 generally 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 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 only be used on
certain types of locations. These laws may also require users to post notices on properties at 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. Although we strive to
comply with such regulations and have processes in place designed to achieve compliance, given our dispersed locations, distributed operations and numerous
employees, we can give no assurance that we will not violate these or other regulations or changes thereto. Even if we are able to comply with all such
regulations and obtain all necessary registrations and licenses, we cannot assure you that the pesticides or other products we apply, or the manner in which we
apply them, will not be alleged to cause injury to the environment, to people or to animals, or that such products will not be banned in certain circumstances.
The costs of compliance, non-compliance, remediation, combating unfavorable public perceptions or defending products liability lawsuits could have a
material adverse impact on our reputation, business, financial position, operating results and cash flows.
Local, state, federal and foreign agencies regulate the disposal, handling and storage of waste discharges from our facilities and the investigation and
clean-up of contaminated sites. We could incur significant costs, including investigation and clean-up costs, fines, penalties and civil or criminal sanctions and
claims by third parties for property damage and personal injury, as a result of violations of, or liabilities under, these laws and regulations. If there is a
significant change in the facts or circumstances surrounding the assumptions upon which we operate, or if we are found to violate applicable environmental
and public health laws and regulations, it could have a material adverse impact on future environmental capital expenditures and other environmental
expenses and on our financial position, results of operations and cash flows. In addition, potentially significant
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