1052045--3/30/2010--SERVICEMASTER

related topics

{debt, indebtedness, cash}

{competitive, industry, competition}

{condition, economic, financial}

{cost, regulation, environmental}

{regulation, government, change}

{financial, litigation, operation}

{system, service, information}

{personnel, key, retain}

{cost, operation, labor}

{investment, property, distribution}

{property, intellectual, protect}

{tax, income, asset}

{regulation, change, law}

{acquisition, growth, future}

Risks Related to Our Business and Our Industry Continued weakening in general economic conditions, especially as they may affect home sales, unemployment or consumer confidence or spending levels, may adversely affect our results of operations. The failure of any banking institution in which we deposit our funds or any insurance company that provides insurance to us may have an adverse effect on our financial condition or results of operations. Weather conditions and seasonality affect the demand for our services and our results of operations. Our market segments are highly competitive. Competition could reduce our market share and adversely impact our results of operations. Increases in raw material prices, fuel prices and other operating costs could adversely affect our results of operations. Our future success depends on our ability to attract and retain trained workers and third party contractors. We may not successfully implement our business strategies or realize all of our expected cost savings. Public perceptions that our products and services are not environmentally friendly or safe may adversely affect the demand for our services. Changes in the types or mix of our service offerings could affect our financial performance. Government laws and regulations applicable to our businesses could increase our legal and regulatory expenses and affect our financial performance. The loss of the services of management personnel and other employees as a result of restructuring initiatives could adversely affect our financial performance. 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. 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. We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business. Disruptions or security failures in our information technology systems could create liability for us and/or limit our ability to effectively monitor, operate and control our operations and adversely affect our operating results. If we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions or private litigation and our reputation could suffer. We are subject to various restrictive covenants that could adversely impact our operations. Future acquisitions could affect our financial performance. We may be required to recognize additional impairment charges. Our franchisees could take actions that could harm our business. Risks Related to Our Capital Structure and Our Debt We are indirectly owned and controlled by the Equity Sponsors, and their interests as equity holders may conflict with the interests of holders of our debt. We have substantial debt and may incur substantial additional debt, which could adversely affect our financial health and our ability to obtain financing in the future, react to changes in our business and satisfy our obligations. Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further exacerbate the risks associated with our substantial debt. The agreements and instruments governing our debt contain restrictions and limitations that could significantly impact our ability to operate our business. Our ability to generate the significant amount of cash needed to pay interest and principal on our debt and our ability to refinance all or a portion of our debt or obtain additional financing depends on many factors beyond our control. Increases in interest rates would increase the cost of servicing our debt and could reduce our profitability.

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1052045--3/30/2010--SERVICEMASTER_CO