American Home Shield 2015 Annual Report Download - page 30

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Insurance
We maintain insurance coverage that we believe is appropriate for our business, including workers’ compensation, auto
liability, general liability, umbrella and property insurance. In addition, we provide various insurance coverages, including deductible
reimbursement policies, to our business units through our wholly-owned captive insurance company, which was domiciled in Vermont
through 2015 and since 2016 has been domiciled in Tennessee.
Information Technology
We have invested in information systems and software packages designed to allow us to grow efficiently, deliver and
implement nationally, while retaining local and regional flexibility. We believe this provides us with a competitive advantage in our
operations. Our sophisticated IT systems enable us to provide a high level of convenience and service to our customers. Terminix is
able to provide a two-hour service window to customers. Similarly, American Home Shield’s call centers, which operate and take
service calls 24 hours a day, seven days a week, successfully assign contractors to a job within 15 minutes or less approximately 90
percent of the time.
Employees
The average number of persons employed by our continuing operations during 2015 was approximately 13,000. None of our
employees in the United States are represented by collective bargaining agreements.
Regulatory Compliance
Our businesses are subject to various international, federal, state, provincial and local laws and regulations, compliance with
which increases our operating costs, limits or restricts the services provided by our reportable segments or the methods by which our
businesses offer, sell and fulfill those services or conduct their respective businesses, or subjects us and our reportable segments to the
possibility of regulatory actions or proceedings. Noncompliance with these laws and regulations can subject us to fines or various
forms of civil or criminal prosecution, any of which could have a material adverse effect on our reputation, business, financial
position, results of operations and cash flows.
These international, federal, state, provincial and local laws and regulations include laws relating to consumer protection,
wage and hour, deceptive trade practices, permitting and licensing, state contractor laws, real estate settlements, workers’ safety, tax,
healthcare reforms, franchise-related issues, collective bargaining and other labor matters, environmental and employee benefits. The
Terminix business must also meet certain Department of Transportation and Federal Motor Carrier Safety Administration
requirements with respect to certain vehicles in its fleet. Terminix is regulated by federal, state and local laws, ordinances and
regulations which are enforced by Pest Control Boards, Departments of Environmental Conservation and similar government entities.
American Home Shield is regulated in certain states by the applicable state insurance regulatory authority and by the Real Estate
Commission in Texas. ServiceMaster Clean and Merry Maids use products containing ingredients regulated by the U.S.
Environmental Protection Agency (the “EPA”), and ServiceMaster Clean is subject to licensing and certification requirements for
applying disinfectants, sanitizers and other EPA registered products in certain states. AmeriSpec is regulated by various state and local
home inspection laws and regulations.
Environmental, Health and Safety Matters
Our businesses are subject to various international, federal, state and local laws and regulations regarding environmental,
health and safety matters. Among other things, these laws regulate the emission or discharge of materials into the environment, govern
the use, storage, treatment, disposal and management of hazardous substances and wastes and protect the health and safety of our
employees. These laws also impose liability for the costs of investigating and remediating, and damages resulting from, present and
past releases of hazardous substances, including releases by prior owners or operators of sites we currently own or operate.
Compliance with environmental, health and safety laws increases our operating costs, limits or restricts the services provided
by our reportable segments or the methods by which they offer, sell and fulfill those services or conduct their respective businesses, or
subjects us and our reportable segments to the possibility of regulatory or private actions or proceedings.
Terminix is regulated under many federal and state environmental laws, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (the “CERCLA”), the Superfund Amendments and Reauthorization Act of 1986
(the “Superfund”), 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, each as amended.
We cannot predict the effect of possible future environmental laws on our operations. Changes in, or new interpretations of,
existing laws, regulations or enforcement policies, the discovery of previously unknown contamination, or the imposition of other
environmental liabilities or obligations in the future, may lead to additional compliance or other costs. During 2015 there were no
material capital expenditures for environmental control facilities, and there are no material expenditures anticipated for 2016 or 2017
related to such facilities.
28 2015 Annual Report