Rollins (ROL) 10-K risk factor changes: FY2014 vs FY2013

[removed: Overview][added: Overview]

[removed: The Company][added: The Company]

Rollins, Inc. (the “Company”) was originally incorporated in 1948 under the laws of the state of Delaware as Rollins Broadcasting, Inc. The Company is an international service company with headquarters located in Atlanta, Georgia, providing pest and termite control services through its wholly-owned subsidiaries to both residential and commercial customers in North America and Australia with international franchises in Central America, South America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, [removed: Africa] [added: Africa,] and Mexico.

[removed: RESULTS] [added: RESULTS] OF [removed: OPERATIONS][added: OPERATIONS]

| Years ended December 31, | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Revenues | | [removed: $] [added: $] | [removed: 1,337,374] [added: 1,411,566] | | | $ | [removed: 1,270,909] [added: 1,337,374] | | | $ | [removed: 1,205,064] [added: 1,270,909] | | | | [removed: 5.2] [added: 5.5] | % | | | [removed: 5.5] [added: 5.2] | % |

| Cost of services provided | | | [removed: 678,459] [added: 707,739] | | | | [removed: 647,578] [added: 678,459] | | | | [removed: 616,842] [added: 647,578] | | | | [removed: (4.8] [added: (4.3] | ) | | | [removed: (5.0] [added: (4.8] | ) |

| Depreciation and amortization | | | [removed: 39,571] [added: 43,509] | | | | [removed: 38,655] [added: 39,571] | | | | [removed: 37,503] [added: 38,655] | | | | [removed: (2.4] [added: (10.0] | ) | | | [removed: (3.1] [added: (2.4] | ) |

| Sales, general and administrative | | | [removed: 428,288] [added: 441,706] | | | | [removed: 407,488] [added: 428,288] | | | | [removed: 388,710] [added: 407,488] | | | | [removed: (5.1] [added: (3.1] | ) | | | [removed: (4.8] [added: (5.1] | ) |

| [removed: (Gain)/loss] [added: Gain] on [removed: sales/impairment] [added: sales] of assets, net | | | [removed: (165] [added: (618] | ) | | | [removed: (468] [added: (165] | ) | | | [removed: 405] [added: (468] | [added: )] | | | [removed: (64.7] [added: 274.5] | [removed: )] | | | [removed: 215.6] [added: (64.7] | [added: )] |

| Pension Settlement | | | — | | | | [removed: 1,000] [added: —] | | | | [removed: —] [added: 1,000] | | | | N/M | | | | [removed: N/M] [added: 100.0] | |

| Interest (income)/expense | | | [removed: (385] [added: (254] | ) | | | [removed: 14] [added: (385] | [added: )] | | | [removed: 508] [added: 14] | | | | [removed: N/M] [added: (34.0] | [added: )] | | | [removed: 97.2] [added: N/M] | |

| Income before income taxes | | | [removed: 191,606] [added: 219,484] | | | | [removed: 176,642] [added: 191,606] | | | | [removed: 161,096] [added: 176,642] | | | | [removed: 8.5] [added: 14.5] | | | | [removed: 9.7] [added: 8.5] | |

| Provision for income taxes | | | [removed: 68,276] [added: 81,820] | | | | [removed: 65,310] [added: 68,276] | | | | [removed: 60,385] [added: 65,310] | | | | [removed: (4.5] [added: (19.8] | ) | | | [removed: (8.2] [added: (4.5] | ) |

| Net income | | [added: $] | [removed: 123,330] [added: 137,664] | | | [added: $] | [removed: 111,332] [added: 123,330] | | | [added: $] | [removed: 100,711] [added: 111,332] | | | | [removed: 10.8] [added: 11.6] | % | | | [removed: 10.5] [added: 10.8] | % |

The year [removed: 2013] [added: 2014] marked the Company’s [removed: 16th] [added: 17th] consecutive year of reporting improved [removed: results of] revenue and profit.

In [removed: 2013] [added: 2014] the Company’s revenue grew [removed: 5.2%,] [added: 5.5%,] with growth in all lines of service.

The Company’s revenue from [added: its] bed bug service offering grew over [removed: 20%] [added: 18%] for the year and HomeTeam’s [removed: TAEXX] [added: TAEXX®] homebuilder installations rose almost [removed: 36%.][added: 5.5%.]

We have also expanded Orkin’s international franchise portfolio to a total of [removed: 26] [added: 37] international franchises [removed: in 9 regions.]

Management is pleased with the [removed: 2013] [added: 2014] accomplishments and recognizes many opportunities to improve our business in the future.

We feel we have a premium brand in Orkin® that is recognized around the world, as well as other [added: pest control] brands that are well known in their respective markets.

We will continue to look for better ways to do what we do [removed: in providing] [added: to provide] our customers with premiere service that [removed: addresses] [added: facilitates] their pest control needs.

[removed: Results] [added: Results] of Operations—2013 Versus [removed: 2012][added: 2012]

The Company remained flat in its depreciation and amortization margin [removed: in 2013] at 3.0% in 2013 and 2012.

Residential pest control represented approximately 41% of the Company’s business and increased [removed: 6.1%] [added: 4.5%] driven by increased leads, closure and pricing as well as increased capture of [removed: TAEXX] [added: TAEXX®] homebuilder [removed: installations and] [added: installations,] bed bug [removed: revenues.][added: revenues and acquisitions.]

While most costs increased during the year due to the Company’s early 2013 and late 2012 acquisitions, service salaries, personnel related costs and materials and supplies increased due to increased sales, increased [removed: TAEXX] [added: TAEXX®] installations and higher group medical insurance premiums.

[removed: _(Gain)/loss] [added: _Gain] on [removed: Sales/Impairment] [added: Sales] of assets, Net_

[removed: (Gain)/loss] [added: Gain] on [removed: sales/impairment] [added: sales] of assets, net decreased to $0.2 million gain for the year ended December 31, 2013 compared to $0.5 million gain in 2012.

[removed: Results] [added: Results] of [removed: Operations—2012] [added: Operations—2014] Versus [removed: 2011][added: 2013]

The Company’s gross margin increased [removed: slightly] to [removed: 49.0%] [added: 49.9%] for [removed: 2012] [added: 2014] from [removed: 48.8%] [added: 49.3%] in [removed: 2011.][added: 2013.]

Sales, general and administrative expense decreased in [removed: 2012] [added: 2014] to [removed: 32.1%] [added: 31.3%] of revenue versus [removed: 32.3%] [added: 32.0%] in [removed: 2011.][added: 2013.]

The [removed: Company experienced a reduction in its depreciation and amortization margin to 3.0% in 2012 versus 3.1% in 2011] [added: increase is] due to [removed: several assets being fully depreciated, partially offset by] amortization of intangible assets acquired in [removed: 2011.][added: late 2013 and early 2014 partially offset by several fixed and intangible assets being fully depreciated or amortized.]

The Company had net income of [removed: $111.3] [added: $137.7] million [added: in 2014] compared to [removed: $100.7] [added: $123.3] million in [removed: 2011, a 10.5%] [added: 2013, an 11.6%] increase.

Revenues for the year ended December 31, [removed: 2012] [added: 2014] were [removed: $1.3] [added: $1.412] billion, an increase of [removed: $65.8] [added: $74.2] million or 5.5% from [removed: 2011] [added: 2013] revenues of [removed: $1.2] [added: $1.337] billion.

Commercial pest control represented approximately [removed: 41.0%] [added: 41%] of the Company’s business in [removed: 2012] [added: 2014] and grew [removed: 3.7%] [added: 6.7%] in [removed: 2012] [added: 2014] due to increases in [removed: sales,] [added: sales and] bed bug revenues and [removed: revenues from 2011] acquisitions.

Residential pest control represented approximately [removed: 41.0%] [added: 41%] of the Company’s business and increased [removed: 8.0%] [added: 6.1%] driven by increased leads, closure and [removed: pricing.][added: pricing as well as increased capture of TAEXX® homebuilder installations.]

The Company’s termite business, which represented approximately [removed: 18.0%] [added: 17%] of the Company’s revenue, grew [removed: 4.0%] [added: 5.0%] in [removed: 2012] [added: 2014] due to increases in ancillary [removed: services] [added: service] sales as well as [removed: the Company’s expanded sales force] [added: increases in customers from cross-selling campaigns,] and [removed: price increases.][added: acquisitions.]

The Company’s foreign operations accounted for approximately 8% of total revenues for the years ended December 31, [removed: 2012] [added: 2014] and [removed: 2011.][added: 2013.]

Orkin had [removed: 79] [added: 92] and [removed: 76] [added: 80] total domestic and international franchises at December 31, [removed: 2012] [added: 2014] and [removed: 2011,] [added: 2013,] respectively.

For the twelve months ended December 31, [removed: 2012] [added: 2014] cost of services provided increased [removed: $30.8] [added: $29.3] million or [removed: 5.0%,] [added: 4.3%,] compared to the twelve months ended December 31, [removed: 2011.][added: 2013.]

| --- | --- |

The Company’s depreciation and amortization margin increased 0.1 point to 3.1 % in 2014 compared to 3.0% in 2013.

Net profit margin improved to 9.8% in 2014 from 9.2% in 2013.

The Company implemented its traditional price increase program in June 2014.

The Company’s acquisitions accounted for less than 2% of the revenue increase.

Nearly 80.0% of the Company’s revenue was recurring in 2014 and 2013.

The Company established new franchises in Brazil, China, Ecuador, Egypt, Guatemala, Honduras, Paraguay, Puerto Rico Saudi Arabia, Uruguay, and the US Virgin Islands in 2014 for a total of 37 international franchises at December 31, 2014 with 26 at December 31, 2013.

Gross margin for the year was 49.9% for 2014 and 49.3% for 2013 due to favorable termite and casualty claim development, reduced fleet costs and good cost controls across most spending categories.

The dollar increase was due primarily to amortization related to acquisitions that occurred over the previous 12 months.

As a percentage of revenues, SG&A decreased due to the Company being able to leverage our administrative and sales salaries against higher revenues, along with a lower advertising run rate than the prior year.

The Company recognized gains from the sale of owned vehicles and property in 2014 and 2013.

Interest (income)/expense, net for the year ended December 31, 2014 was $0.3 million income, a decrease of $0.1 million compared to $0.4 million in 2013.

The Company’s effective tax rate was 37.3% in 2014 compared to 35.6% in 2013, due primarily to state and foreign income taxes, and the release of certain deferred tax liabilities in 2013.

Less than 2.0% of the Company’s revenue increase came from pricing actions.

Interest income for the year is due to interest received on cash balances in the Company’s various cash accounts.

_Gain on Sales of assets, Net_

The Credit Agreement was amended on October 30, 2014 to extend the maturity date to October 31, 2018 and add three optional one year extensions.

| Business combination related liabilities | | $ | 4,578 | | | $ | 2,458 | | | $ | 2,120 | | | $ | — | | | $ | — | |

| Non-cancelable operating leases | | | 81,898 | | | | 25,512 | | | | 27,511 | | | | 15,030 | | | | 13,845 | |

| Total (2) | | $ | 86,991 | | | $ | 27,970 | | | $ | 30,146 | | | $ | 15,030 | | | $ | 13,845 | |

The provision of the new guidance was effective as of the beginning of our 2014 fiscal year.

Adoption of this new guidance did not have a material impact on the Company’s reported results of operations or financial position.

The provision of the new guidance was effective as of the beginning of our 2014 fiscal year.

Adoption of this new guidance did not have a material impact on the Company’s reported results of operations or financial position.

In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205 and 360): Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.

ASU 2014-08 amends the definition for what types of asset disposals are to be considered discontinued operations, and amends the required disclosures for discontinued operations and assets held for sale.

ASU 2014-08 also enhances the convergence of the FASB’s and the International Accounting Standard Board’s reporting requirements for discontinued operations.

The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): “Revenue from Contracts with Customers” (ASU 2014-09) which requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service.

ASU 2014-09 is effective retrospectively for the annual or interim reporting periods beginning on or after December 15, 2016.

The Company is currently evaluating the impact of ASU 2014-09 on its financial statements.

In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items (Topic 225): Income Statement-Extraordinary and Unusual Items (ASU 2015-01) eliminate the GAAP concept of extraordinary items.

The new guidance eliminates the separate presentation of extraordinary items, net of tax and the related earnings per share, but does not affect the requirement to disclose material items that are unusual in nature or infrequently occurring.

The amendments in this update are effective for fiscal periods beginning on or after December 15, 2015, and interim periods within annual periods beginning on or after December 15, 2015.

The Company is currently evaluating the impact of this standard on its consolidated financial statements.

We do not expect this standard to have a material impact on the Company’s reported results of operations or financial position.

Further in February 2014 we expanded our international footprint by acquiring Allpest WA located in Perth, Australia.

| --- |

Net profit margin improved to 8.8% in 2012 from 8.4% in 2011.

The Company established new franchises in Mexico, China, Turks and Caicos Islands and Chile for a total of 22 and 18 international franchises at December 31, 2012 and 2011, respectively.

Gross margin for the year was 49.0% for 2012 and 48.8% for 2011.

While all costs increased during the year due to the Company’s early 2012 and late 2011 acquisitions, insurance and claims expense increased but was partially offset by lower termite provision claims and telephone costs were down marginally due to cost controls, partially offset by higher personnel related costs including payroll taxes and group premiums.

The increase is due to amortization of intangible assets acquired in late 2011 and early 2012 partially offset by several intangible assets being fully amortized.

As a percentage of revenues, SG&A decreased due to reductions in professional services due to timing of projects and reduced salaries as a percentage of revenues as the Company continues to maximize efficiency in its workforce.

Interest expense, net for the year ended December 31, 2012 was $14 thousand, a decrease of $0.5 million compared to $0.5 million in 2011 due to the pay-off of the remainder of the Company’s outstanding borrowings in 2011.

_Pension Settlement_

Management terminated its wholly-owned subsidiary’s (Waltham Services, LLC) salaried pension plan and recorded a settlement loss, which resulted in an additional expense of $1.0 million for the year ended December 31, 2012.

The Company recognized gains from the sale of owned vehicles and property in Canada in 2012 while recognizing impairment on software related to terminated projects for approximately $0.5 million in 2011.

The Company’s effective tax rate was 37.0% in 2012 compared to 37.5% in 2011, due primarily to differences in state tax rates.

| | | (in thousands) | | | | | | | | | | |

| Business combination related liabilities | | $ | 6,496 | | | $ | 4,018 | | | $ | 2,291 | | | $ | 187 | | | $ | — | |

| Non-cancelable operating leases | | | 75,195 | | | | 27,550 | | | | 26,916 | | | | 12,194 | | | | 8,535 | |

| Total (2) | | $ | 82,206 | | | $ | 31,568 | | | $ | 29,722 | | | $ | 12,381 | | | $ | 8,535 | |

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02).

This standard provides new accounting guidance that permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test.

An entity would continue to calculate the fair value of an indefinite-lived intangible asset if the asset fails the qualitative assessment, while no further analysis would be required if it passes.

This guidance is effective for the Company beginning in the first quarter of 2014; we do not expect the new guidance to have a material effect on our financial statements.

In March 2013, the FASB issued ASU 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.

The objective of the amendments in this Update is to resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity.

| 22 |

[removed: Market Risk][added: Market Risk]

However, the Company does maintain approximately [removed: $30.1] [added: $35.5] million in Letters of Credit.

[removed: MANAGEMENT’S] [added: MANAGEMENT’S] REPORT ON INTERNAL CONTROLS OVER FINANCIAL [removed: REPORTING][added: REPORTING]

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of internal controls over financial reporting, as of December 31, [removed: 2013] [added: 2014] based on criteria established in the [removed: 1992] [added: 2013] Internal Control—Integrated framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management’s assessment is that Rollins, Inc. maintained effective internal control over financial reporting as of December 31, [removed: 2013.][added: 2014.]

The independent registered public accounting firm, Grant Thornton LLP has audited the consolidated financial statements as of and for the year ended December 31, [removed: 2013,] [added: 2014,] and has also issued their report on the effectiveness of the Company’s internal control over financial reporting, included in this report on page [removed: 25.][added: 24.]

| /s/ Gary W. Rollins | | | [removed: |] /s/ Harry J. Cynkus | [added: |]

| Gary W. Rollins Vice Chairman and Chief Executive Officer | | | [removed: |] Harry J. Cynkus Senior Vice President, Chief Financial Officer and Treasurer | [added: |]

Atlanta, [removed: Georgia][added: GA]

Board of Directors and [removed: Shareholders][added: Stockholders’]

We have audited the internal control over financial reporting of Rollins, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in [removed: the 1992] [added: the, 2013] Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in the [removed: 1992] [added: 2013] Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company as of and for the year ended December 31, [removed: 2013,] [added: 2014,] and our report dated February [removed: 26, 2014] [added: 25, 2015] expressed an unqualified opinion on those financial statements.

We have audited the accompanying consolidated statements of financial position of Rollins, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the related consolidated statements of income, comprehensive earnings, [removed: shareholders’] [added: stockholders’] equity, and cash [removed: flows] [added: flows,] for each of the three years in the period ended December 31, [removed: 2013.][added: 2014.]

These financial statements and [added: the] financial statement schedule are the responsibility of the Company’s management.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Rollins, Inc. and subsidiaries as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2013] [added: 2014] in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in the [removed: 1992] [added: 2013] Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February [removed: 26, 2014] [added: 25, 2015] expressed an unqualified opinion.

| --- | --- |

| 22 |

February 25, 2015

February 25, 2015

Board of Directors and Stockholders’

February 25, 2015

February 26, 2014

| 26 |

The Company is an international service company with headquarters located in Atlanta, Georgia, providing pest and termite control services through its wholly-owned subsidiaries to both residential and commercial customers in North America and Australia with international franchises in Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, [removed: Africa] [added: Africa,] and Mexico.

Orkin [added: either] serves customers, [removed: either] directly or [removed: indirectly through franchises,] [added: franchises operations,] in the United States, Canada, Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, [removed: Africa] [added: Africa,] and Mexico providing essential pest control services and protection against termite damage, rodents and insects to homes and businesses, including hotels, food service establishments, food manufacturers, retailers and transportation companies.

At the time of the acquisition, HomeTeam, with its unique [removed: Taexx] [added: Taexx®] tubes in the wall pest control system, was recognized as a premier pest control business and ranked as the 4th largest company in the industry.

Rollins Australia (“Rollins Australia”), a wholly-owned subsidiary of the Company, acquired Allpest WA (“Allpest”), in February [removed: 2014 subsequent to Rollins 2013 fiscal year end.][added: 2014.]

Revenue, operating profit and identifiable assets for this segment, which includes the United States, Canada, Australia, Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, [removed: Africa] [added: Africa,] and Mexico are included in Item 8 of this document, “Financial Statements and Supplementary Data” on pages [removed: 27] [added: 26] and [removed: 28.][added: 27.]

During the years ended December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] the Company repurchased on the open market [removed: 0.3] [added: 1.0] million and [removed: 0.8] [added: 0.3] million shares at a weighted average price of [removed: $24.56] [added: $29.19] and [removed: $20.93,] [added: $24.56,] respectively.

In total, there are [removed: 5.0] [added: 4.0] million additional shares authorized to be repurchased under prior Board approval.

| December 31, | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Backlog | | [removed: $] [added: $] | [removed: 3,286] [added: 3,676] | | | $ | [removed: 2,876] [added: 3,286] | | | $ | [removed: 2,781] [added: 2,876] | |

The Company through its wholly-owned Orkin subsidiary began its Orkin franchise program in the U.S. in 1994, and established its first international franchise in 2000 and since has expanded to Central America, South America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, [removed: Africa] [added: Africa,] and Mexico.

| Franchises | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| United States Franchises | | | [removed: 54] [added: 55] | | | | [removed: 57] [added: 54] | | | | [removed: 58] [added: 57] | |

| International Franchises | | | [removed: 26] [added: 37] | | | | [removed: 22] [added: 26] | | | | [removed: 18] [added: 22] | |

| Total Franchises | | | [removed: 80] [added: 92] | | | | [removed: 79] [added: 80] | | | | [removed: 76] [added: 79] | |

[removed: Seasonality][added: Seasonality]

| (in thousands) | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| First Quarter | | [removed: $] [added: $] | [removed: 299,714] [added: 313,388] | | | $ | [removed: 289,465] [added: 299,714] | | | $ | [removed: 271,643] [added: 289,465] | |

| Second Quarter | | | [removed: 350,798] [added: 369,357] | | | | [removed: 334,872] [added: 350,798] | | | | [removed: 320,436] [added: 334,872] | |

| Third Quarter | | | [removed: 362,155] [added: 384,870] | | | | [removed: 340,179] [added: 362,155] | | | | [removed: 323,929] [added: 340,179] | |

| Fourth Quarter | | | [removed: 324,707] [added: 343,951] | | | | [removed: 306,393] [added: 324,707] | | | | [removed: 289,056] [added: 306,393] | |

| [removed: Year] [added: Years] ended December 31, | | [removed: $] [added: $] | [removed: 1,337,374] [added: 1,411,566] | | | $ | [removed: 1,270,909] [added: 1,337,374] | | | $ | [removed: 1,205,064] [added: 1,270,909] | |

[removed: Inventories][added: Inventories]

[removed: Competition][added: Competition]

The Company believes that Rollins, through its wholly-owned subsidiaries Orkin, Orkin Canada, HomeTeam Pest Defense, Western Pest Services, The Industrial Fumigant Company, Crane Pest Control, Waltham [removed: Services] [added: Services, TruTech, Permatreat,] and [removed: TruTech] [added: Rollins Australia] competes favorably with competitors as the world’s largest pest and termite control company.

The principal methods of competition in the Company’s pest and termite control business are quality of service and guarantees, including service quality, and product availability, terms of guarantees, reputation for safety, technical [removed: proficiency] [added: proficiency,] and price.

[removed: Research] [added: Research] and [removed: Development][added: Development]

[removed: Environmental] [added: Environmental] and Regulatory [removed: Considerations][added: Considerations]

[removed: Federal] [added: _Federal] Insecticide Fungicide and Rodentcide Act [removed: (“FIFRA”)][added: (“FIFRA”)_]

[removed: Food] [added: _Food] Quality Protection Act of 1996 [removed: (“FQPA”)][added: (“FQPA”)_]

[removed: Environmental Remediation][added: _Environmental Remediation_]

[removed: Employees][added: Employees]

The number of persons employed by the Company as of January 31, [removed: 2014] [added: 2015] was approximately [removed: 10,650.][added: 11,000.]

| December 31, | | [removed: | 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Employees | | | [removed: | 10,649] [added: 10,936] | | | | [removed: 10,470] [added: 10,649] | | | | [removed: 10,112] [added: 10,470] | |

[added: |] Item 1.A. [added: | Risk Factors |]

Pest and termite services represent discretionary expenditures to [removed: most] [added: many] of our residential customers.

[removed: Item] [added: | Item] 1.B. [added: | Unresolved Staff Comments |]

| --- | --- |

Unless stated otherwise, all share and per share data are presented prior to the three-for-two stock split effective March 10, 2015.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- |

| --- | --- |

The authorized share repurchases are in addition to the Company’s existing plan of which 298,183 shares remained available for repurchase as of July 24, 2012.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Risk Factors

Unresolved Staff Comments

In the normal course of business, certain of the Company’s subsidiaries are defendants in a number of [removed: lawsuits] [added: lawsuits, claims] or arbitrations which allege that [removed: plaintiffs have been damaged as a result of] the [removed: rendering of] [added: subsidiaries’] services [removed: by the defendant subsidiary.][added: caused damage.]

[removed: The subsidiaries] [added: We] are actively contesting [added: each of] these [removed: actions.][added: matters.]

In addition, the Company defends employment related cases [added: and claims] from time to time.

[removed: Additionally,] [added: Presently,] the Company and a subsidiary, The Industrial Fumigant Company, LLC, are named defendants in Severn Peanut Co. and Meherrin Agriculture & Chemical Co. v.

The Severn lawsuit, a matter related to a fumigation service, has been filed in the [removed: Northern Division of the] United States District Court for the Eastern District of North Carolina.

[removed: Orkin, LLC is] [added: We are] involved in certain environmental matters primarily arising in the normal course of business.

| --- | --- |

The court dismissed plaintiffs’ claim for breach of contract on March 15, 2014, and it dismissed plaintiffs’ only remaining claim (negligence) on December 15, 2014.

Plaintiffs have appealed the rulings.

On April 29, 2014, Foster Poultry Farms sued Orkin, LLC and Orkin Services of California, Inc., for breach of contract, breach of covenant of good faith and fair dealing, and negligence.

The lawsuit is pending in the United States District Court for the Northern District of California.

Foster Farms is seeking damages related to pest control services performed at its chicken processing facility during a nine month period.

The Company intends to defend this matter vigorously.

On December 2, 2014, Plaintiff Killian Pest Control sued Rollins, Inc., its subsidiary HomeTeam Pest Defense, and alleged that HomeTeam’s exclusive use of its “tubes in the walls” system violates the federal Sherman Antitrust Act, and California’s Cartwright Act and Business and Professions Code.

Plaintiffs seek a declaratory judgment that the alleged misconduct violates the Sherman and Cartwright Acts, and the Business and Professions Code; a permanent injunction against continuing alleged violations; and monetary damages.

The lawsuit is pending in the United States District Court, Northern District of California.

The Company cannot currently estimate the loss, if any, because the lawsuit is at an early stage and involves unresolved issues of law and fact.

The Company intends to defend this matter vigorously.

On December 2, 2014, Plaintiff Jose Luis Garnica, on behalf of himself and a class of similarly situated customers, sued Rollins, Inc., its subsidiary HomeTeam Pest Defense, and alleged that HomeTeam’s exclusive use of its “tubes in the walls” system violates the federal Sherman Antitrust Act.

The Plaintiff seeks a declaratory judgment that the alleged misconduct violates the Sherman Act; a permanent injunction against continuing violations; and monetary damages.

The lawsuit is pending in the United States District Court, Northern District of California.

The Company cannot currently estimate the loss, if any, because the lawsuit is at an early stage and involves unresolved issues of law and fact.

The Company intends to defend this matter vigorously.

John Maciel v.

Orkin, Inc., et al.

is a wage and hour related matter in which the plaintiffs sought certification of a class.

The Maciel lawsuit was filed in the Superior Court of Los Angeles County, California, and has now been settled resulting in a dismissal of the suit with prejudice on January 28, 2014.

The plaintiffs are seeking damages for breach of contract and negligence.

The Industrial Fumigant Company, LLC was also a named defendant in Insurance Company of the State of Pennsylvania as Subrogee of Archer-Daniels-Midland Company, Agrinational Insurance Company, Inc. as Subrogee of Archer-Daniels-Midland Company, and Archer-Daniels-Midland Company v.

The Industrial Fumigant Co., The Industrial Fumigant Company, LLC, and James Miller.

This lawsuit has been settled resulting in a dismissal of the suit with prejudice on January 24, 2014.

In the opinion of management, the Company’s liability under any of these matters would not and did not materially affect its financial condition, results of operations or liquidity.

Item 4.

Mine Safety Disclosures.

Not applicable.

10-K 1 [removed: e00043_rol-10k.htm][added: e00088-rol_10k.htm]

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: | Form 10-K | | | | |]

For the fiscal year ended December 31, [removed: 2013][added: 2014]

[removed: ROLLINS, INC.][added: | Rollins, Inc. | | | | |]

| [removed: Delaware] [added: Delaware] | [removed: 51-0068479] | [added: 51-0068479 |]

| (State or other jurisdiction of | [added: |] (I.R.S. Employer Identification No.) |

| incorporation or organization) | | [added: |]

| [removed: 2170] [added: 2170] Piedmont Road, N.E., Atlanta, [removed: Georgia] [added: Georgia] | [removed: 30324] | [added: 30324 |]

| (Address of principal executive offices) | [added: |] (Zip Code) |

| [removed: Common] [added: Common] Stock, $1 Par [removed: Value] [added: Value] | | [removed: The] [added: The] New York Stock [removed: Exchange] [added: Exchange] |

The aggregate market value of Rollins, Inc. Common Stock held by non-affiliates on June 30, [removed: 2013] [added: 2014] was [removed: $1,646,439,937] [added: $1,896,575,939] based on the reported last sale price of common stock on June 30, [removed: 2013,] [added: 2014,] which is the last business day of the registrant’s most recently completed second fiscal quarter.

Rollins, Inc. had [removed: 146,093,456] [added: 145,783,052] shares of Common Stock outstanding as of January 31, [removed: 2014.][added: 2015.]

[added: |] For the Year Ended December 31, [removed: 2013][added: 2014 | | | | |]

[added: |] Table of Contents [added: | | | | |]

[removed: | Part] [added: PART] I [removed: | | | | |]

| [Item [removed: 1](#a_001).] [added: 1.](#ria002_v1)] | | [removed: [Business](#a_001)] [added: [Business](#ria002_v1)] | | 6 |

| [Item [removed: 1.A](#a_002).] [added: 1.A.](#ria003_v1)] | | [Risk [removed: Factors](#a_002)] [added: Factors](#ria003_v1)] | | 9 |

| [Item [removed: 1.B](#a_003).] [added: 1.B.](#ria004_v1)] | | [Unresolved Staff [removed: Comments](#a_003)] [added: Comments](#ria004_v1)] | | 10 |

| [Item [removed: 2](#a_004).] [added: 2.](#ria005_v1)] | | [removed: [Properties](#a_004)] [added: [Properties](#ria005_v1)] | | 10 |

| [Item [removed: 3](#a_005).] [added: 3.](#ria006_v1)] | | [Legal [removed: Proceedings](#a_005)] [added: Proceedings](#ria006_v1)] | | 10 |

| [Item [removed: 4](#a_006).] [added: 4.](#ria007_v1)] | | [Mine Safety [removed: Disclosures.](#a_006)] [added: Disclosures.](#ria007_v1)] | | 11 |

| [Item [removed: 4.A](#a_007).] [added: 4.A.](#ria008_v1)] | | [Executive Officers of the [removed: Registrant](#a_007).] [added: Registrant.](#ria008_v1)] | | 11 |

| [removed: Part II] [added: [Part I](#ria001_v1)] | | | | |

| [Item [removed: 5](#a_008).] [added: 5.](#ria010_v1)] | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#a_008).] [added: Securities.](#ria010_v1)] | | 12 |

| [Item [removed: 6](#a_009).] [added: 6.](#ria011_v1)] | | [Selected Financial [removed: Data](#a_009).] [added: Data.](#ria011_v1)] | | 14 |

| [Item [removed: 7](#a_010).] [added: 7.](#ria012_v1)] | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#a_010).] [added: Operations.](#ria012_v1)] | | 15 |

| [Item [removed: 7.A](#a_011).] [added: 7.A.](#ria013_v1)] | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#a_011).] [added: Risk.](#ria013_v1)] | | [removed: 23] [added: 22] |

| [Item [removed: 8](#a_012).] [added: 8.](#ria014_v1)] | | [Financial Statements and Supplementary [removed: Data](#a_012).] [added: Data.](#ria014_v1)] | | [removed: 27] [added: 26] |

| [Item [removed: 9](#a_013).] [added: 9.](#ria015_v1)] | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosures](#a_013).] [added: Disclosures.](#ria015_v1)] | | [removed: 54] [added: 55] |

| [Item [removed: 9.B](#a_015).] [added: 9.B.](#ria017_v1)] | | [Other [removed: Information](#a_015)] [added: Information](#ria017_v1)] | | [removed: 54] [added: 55] |

| [removed: Part III] [added: [Part III](#ria018_v1)] | | | | |

| [Item [removed: 10](#a_016).] [added: 10.](#ria019_v1)] | | [Directors, Executive Officers and Corporate [removed: Governance.](#a_016)] [added: Governance.](#ria019_v1)] | | [removed: 54] [added: 55] |

| [Item [removed: 12](#a_018).] [added: 12.](#ria021_v1)] | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#a_018).] [added: Matters.](#ria021_v1)] | | [removed: 55] [added: 56] |

| [Item [removed: 13](#a_019).] [added: 13.](#ria022_v1)] | | [Certain Relationships and Related Party Transactions, and Director [removed: Independence](#a_019).] [added: Independence.](#ria022_v1)] | | [removed: 55] [added: 57] |

| [Item [removed: 14](#a_020).] [added: 14.](#ria023_v1)] | | [Principal Accounting Fees and [removed: Services](#a_020).] [added: Services.](#ria023_v1)] | | [removed: 55] [added: 57] |

| [removed: Part IV] [added: [Part II](#ria009_v1)] | | | | |

| [Item [removed: 15](#a_021).] [added: 15.](#ria025_v1)] | | [Exhibits, Financial Statement [removed: Schedules](#a_021).] [added: Schedules.](#ria025_v1)] | | [removed: 56] [added: 58] |


| --- | --- | --- |

| --- | --- | --- |

| [Item 9.A.](#ria016_v1) | | [Controls and Procedures.](#ria016_v1) | | 55 |

| [Item 11.](#ria020_v1) | | [Executive Compensation.](#ria020_v1) | | 56 |

| | | [Signatures.](#ria026_v1) | | 60 |

| | | [Schedule II.](#ria027_v1) | | 62 |

| | | [Exhibit Index.](#ria028_v1) | | 63 |

| 5 |

| --- |

_______________________

______________

| --- | --- |

| [Item 9.A](#a_014). | | [Controls and Procedures](#a_014). | | 54 |

| [Item 11](#a_017). | | [Executive Compensation](#a_017). | | 55 |

| | | [Signatures](#a_022). | | 58 |

| | | [Schedule II](#a_023). | | 60 |

| | | [Exhibit Index](#a_024). | | 61 |

| --- | --- |

| R. Randall Rollins (1) | [removed: 82] [added: 83] | Chairman of the Board of Directors | 10/22/1991 |

| Gary W. Rollins (1) (2) | [removed: 69] [added: 70] | Vice Chairman and Chief Executive Officer | 7/24/2001 |

| John Wilson (3) | [removed: 56] [added: 57] | President and Chief Operating Officer | 1/23/2013 |

| Harry J. Cynkus (4) | [removed: 64] [added: 65] | Senior Vice President, Chief Financial Officer and Treasurer | 5/28/1998 |

| Eugene Iarocci (5) | [removed: 67] [added: 68] | Vice President | 2/22/2011 |

| Bob Wanzer (6) | [removed: 60] [added: 61] | Vice President | 2/22/2011 |

| Tom Luczynski (7) | [removed: 57] [added: 58] | Secretary | 5/4/2010 |

| | (7) | Tom Luczynski assumed responsibilities as Corporate Secretary on May 4, 2010. Currently also serving as [added: Group] Vice President of Orkin international [removed: development, franchising] [added: development] and [removed: support services,] [added: franchising including Rollins Australia,] Mr. Luczynski joined the Company in 1985 as manager of reporting and was promoted to Vice President of Orkin finance in 1995. Prior to joining Rollins, Mr. Luczynski held financial positions with Revere Copper and Brass and Keytek-Elco Corporation. Mr. Luczynski is active in the pest control industry and has previously served on various trade industry organization’s board committees. In addition, he has served as president of the Atlanta chapter of FEI and president of the Atlanta chapter of the Institute of Management Accountants. |

[removed: PART II][added: PART II]

| --- | --- |

Not applicable.

| Item 4.A. | Executive Officers of the Registrant. |

| --- | --- |

______________

The high and low prices of the Company’s common stock and dividends paid for each quarter in the years ended December 31, [removed: 2013] [added: 2014] and [removed: 2012] [added: 2013] were as follows:

| [removed: 2013] [added: 2014] | | High | | | | Low | | | | Per Share | | | | [removed: 2012] [added: 2013] | | High | | | | Low | | | | Per Share | | |

| First Quarter | | $ | [removed: 25.61] [added: 30.70] | | | $ | [removed: 22.34] [added: 27.01] | | | $ | [removed: 0.09] [added: 0.11] | | | First Quarter | | $ | [removed: 23.04] [added: 25.61] | | | $ | [removed: 19.30] [added: 22.34] | | | $ | [removed: 0.08] [added: 0.09] | |

| Second Quarter | | $ | [removed: 26.09] [added: 31.49] | | | $ | [removed: 22.46] [added: 29.32] | | | $ | [removed: 0.09] [added: 0.11] | | | Second Quarter | | $ | [removed: 22.48] [added: 26.09] | | | $ | [removed: 20.03] [added: 22.46] | | | $ | [removed: 0.08] [added: 0.09] | |

| Third Quarter | | $ | [removed: 27.99] [added: 30.61] | | | $ | [removed: 24.09] [added: 27.98] | | | $ | [removed: 0.09] [added: 0.11] | | | Third Quarter | | $ | [removed: 24.41] [added: 27.99] | | | $ | [removed: 22.08] [added: 24.09] | | | $ | [removed: 0.08] [added: 0.09] | |

| Fourth Quarter | | $ | [removed: 30.63] [added: 33.93] | | | $ | [removed: 26.12] [added: 27.62] | | | $ | [removed: 0.18] [added: 0.21] | | | Fourth Quarter | | $ | [removed: 23.80] [added: 30.63] | | | $ | [removed: 21.42] [added: 26.12] | | | $ | [removed: 0.20] [added: 0.18] | |

As of January 31, [removed: 2014,] [added: 2015,] there were [removed: 2,045] [added: 2,135] holders of record of the Company’s common stock.

On January [removed: 28, 2014] [added: 27, 2015] the Board of Directors approved a quarterly cash dividend per common share of [removed: $0.105] [added: $0.12] payable March 10, [removed: 2014] [added: 2015] to stockholders of record at the close of business February 10, [removed: 2014.][added: 2015.]

On October [removed: 22, 2013,] [added: 28, 2014,] the Board of Directors declared a special year-end dividend of [removed: $0.09] [added: $0.10] per share payable December 10, [removed: 2013] [added: 2014] to stockholders of record at the close of business November [removed: 8, 2013.][added: 10, 2014.]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

During the years ended December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] the Company repurchased on the open market [removed: 0.3] [added: 1.0] million and [removed: 0.8] [added: 0.3] million shares at a weighted average price of [removed: $24.56] [added: $29.19] and [removed: $20.93,] [added: $24.56,] respectively.

In total, there [removed: remains 5.0] [added: remain 4.0] million additional shares authorized to be repurchased under prior Board approval.

| Period | | Total Number of Shares Purchased [added: (1)] | | | | Weighted Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Repurchase Plans [added: (2)] | | | | Maximum Number of Shares that May Yet Be Purchased Under the Repurchase Plans | | |

[removed: PERFORMANCE GRAPH][added: PERFORMANCE GRAPH]

[removed: ][added: ]

| Cumulative Total Shareholder Return [removed: $ at] [added: $ at] Fiscal Year End | [removed: 2008 |] 2009 | 2010 | 2011 | 2012 | 2013 | [added: 2014 |]

| --- | --- |

On January 27, 2015, the Board of Directors at its quarterly meeting authorized a three-for-two stock split of the Company’s common shares by the issuance on March 10, 2015 of one additional common share for each two common shares held of record at February 10, 2015.

The stock split will increase the Company’s outstanding shares from approximately 145,783,052 to 218,674,578 shares.

Our historical outstanding shares will be recast upon distribution.

| October 1 to 31, 2014 | | | — | | | $ | — | | | | — | | | | 3,952,205 | |

| November 1 to 30, 2014 | | | 537 | | | | 27.68 | | | | — | | | | 3,952,205 | |

| December 1 to 31, 2014 | | | — | | | | — | | | | — | | | | 3,952,205 | |

| Total | | | 537 | | | $ | 27.68 | | | | — | | | | 3,952,205 | |

| | (1) | Includes repurchases from employees for the payment of taxes on vesting of restricted shares in the following amounts: October 2014: 0; November 2014: 537; and December 2014: 0. |

| --- | --- | --- |

| | (2) | The Company has a share repurchase plan adopted in 2012, to repurchase up to 5.0 million shares of the Company’s common stock. The plan has no expiration date. |

| --- | --- | --- |

| Rollins, Inc. | 100.00 | 156.24 | 178.33 | 180.38 | 252.24 | 280.61 |

| S&P 500 | 100.00 | 115.06 | 117.49 | 136.30 | 180.44 | 205.14 |

| Peer Index | 100.00 | 117.14 | 131.28 | 167.69 | 219.29 | 245.61 |

| October 1 to 31, 2013 | | | — | | | $ | — | | | | — | | | | 4,957,484 | |

| November 1 to 30, 2013 | | | — | | | $ | — | | | | — | | | | 4,957,484 | |

| December 1 to 31, 2013 | | | — | | | $ | — | | | | — | | | | 4,957,484 | |

| Total | | | — | | | $ | — | | | | — | | | | 4,957,484 | |

There were no repurchases of the Company’s common stock during the fourth quarter ended December 31, 2013.

| Rollins, Inc. | 100.00 | 108.43 | 169.42 | 193.37 | 195.59 | 273.52 |

| S&P 500 | 100.00 | 126.46 | 145.51 | 148.59 | 172.37 | 228.19 |

| Peer Index | 100.00 | 123.79 | 145.00 | 162.52 | 207.59 | 271.46 |

[removed: FIVE-YEAR] [added: FIVE-YEAR] FINANCIAL [removed: SUMMARY][added: SUMMARY]

[removed: Rollins,] [added: _Rollins,] Inc. and [removed: Subsidiaries][added: Subsidiaries_]

[removed: STATEMENT] [added: | STATEMENT] OF OPERATIONS [removed: DATA:][added: DATA: | | | | | | | | | | | | | | | | | | | | |]

| Years ended December 31, | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| Revenues | | [removed: $] [added: $] | [removed: 1,337,374] [added: 1,411,566] | | | $ | [removed: 1,270,909] [added: 1,337,374] | | | $ | [removed: 1,205,064] [added: 1,270,909] | | | $ | [removed: 1,136,890] [added: 1,205,064] | | | $ | [removed: 1,073,958] [added: 1,136,890] | |

| Income Before Income Taxes | | | [removed: 191,606] [added: 219,484] | | | | [removed: 176,642] [added: 191,606] | | | | [removed: 161,096] [added: 176,642] | | | | [removed: 143,545] [added: 161,096] | | | | [removed: 126,291] [added: 143,545] | |

| Net Income | | | [removed: 123,330] [added: 137,664] | | | | [removed: 111,332] [added: 123,330] | | | | [removed: 100,711] [added: 111,332] | | | | [removed: 90,002] [added: 100,711] | | | | [removed: 83,984] [added: 90,002] | |

| Earnings Per Share - Basic: | | | [removed: 0.84] [added: 0.94] | | | | [removed: 0.76] [added: 0.84] | | | | [removed: 0.69] [added: 0.76] | | | | [removed: 0.61] [added: 0.69] | | | | [removed: 0.56] [added: 0.61] | |

| Earnings Per Share - Diluted: | | | [removed: 0.84] [added: 0.94] | | | | [removed: 0.76] [added: 0.84] | | | | [removed: 0.69] [added: 0.76] | | | | [removed: 0.61] [added: 0.69] | | | | [removed: 0.56] [added: 0.61] | |

| Dividends paid per share | | | [removed: 0.45] [added: 0.52] | | | | [removed: 0.44] [added: 0.45] | | | | [removed: 0.28] [added: 0.44] | | | | [removed: 0.24] [added: 0.28] | | | | [removed: 0.19] [added: 0.24] | |

| Net cash provided by operating activities | | [removed: $] [added: $] | [removed: 162,665] [added: 194,146] | | | $ | [removed: 141,919] [added: 162,665] | | | $ | [removed: 154,647] [added: 141,919] | | | $ | [removed: 124,053] [added: 154,647] | | | $ | [removed: 110,846] [added: 124,053] | |

| Net cash used in investing activities | | | [removed: (30,790] [added: (89,471] | ) | | | [removed: (42,693] [added: (30,790] | ) | | | [removed: (29,154] [added: (42,693] | ) | | | [removed: (47,645] [added: (29,154] | ) | | | [removed: (26,562] [added: (47,645] | ) |

| Net cash used in financing activities | | | [removed: (75,653] [added: (106,518] | ) | | | [removed: (80,989] [added: (75,653] | ) | | | [removed: (99,427] [added: (80,989] | ) | | | [removed: (65,497] [added: (99,427] | ) | | | [removed: (89,753] [added: (65,497] | ) |

| Depreciation | | | [removed: 14,415] [added: 16,627] | | | | [removed: 15,212] [added: 14,415] | | | | [removed: 15,112] [added: 15,212] | | | | [removed: 15,975] [added: 15,112] | | | | [removed: 15,874] [added: 15,975] | |

| Amortization of intangible assets | | | [removed: 25,156] [added: 26,882] | | | | [removed: 23,443] [added: 25,156] | | | | [removed: 22,391] [added: 23,443] | | | | [removed: 20,433] [added: 22,391] | | | | [removed: 21,295] [added: 20,433] | |

| Capital expenditures | | [removed: $] [added: $] | [removed: (18,632] [added: (28,739] | ) | | $ | [removed: (19,040] [added: (18,632] | ) | | $ | [removed: (18,652] [added: (19,040] | ) | | $ | [removed: (13,036] [added: (18,652] | ) | | $ | [removed: (15,740] [added: (13,036] | ) |

| Current assets | | [removed: $] [added: $] | [removed: 272,442] [added: 283,958] | | | $ | [removed: 205,992] [added: 272,442] | | | $ | [removed: 175,822] [added: 205,992] | | | $ | [removed: 151,021] [added: 175,822] | | | $ | [removed: 120,530] [added: 151,021] | |

| Total assets | | | [removed: 739,217] [added: 808,162] | | | | [removed: 692,506] [added: 739,217] | | | | [removed: 645,650] [added: 692,506] | | | | [removed: 619,014] [added: 645,650] | | | | [removed: 566,496] [added: 619,014] | |

| Line of credit | | | — | | | | — | | | | — | | | | [removed: 26,000] [added: —] | | | | [removed: 30,000] [added: 26,000] | |

| [removed: Stockholders'] [added: Stockholders’] equity | | [removed: $] [added: $] | [removed: 438,255] [added: 462,676] | | | $ | [removed: 354,956] [added: 438,255] | | | $ | [removed: 323,997] [added: 354,956] | | | $ | [removed: 297,970] [added: 323,997] | | | $ | [removed: 264,566] [added: 297,970] | |

| Number of shares outstanding at year-end | | | [removed: 145,864] [added: 145,522] | | | | [removed: 146,015] [added: 145,864] | | | | [removed: 146,251] [added: 146,015] | | | | [removed: 147,181] [added: 146,251] | | | | [removed: 148,357] [added: 147,181] | |

| --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

All earnings per share and dividends per share have been adjusted for the 2010 three-for-two stock split effective December 10, 2010.

[removed: CONSOLIDATED] [added: | CONSOLIDATED] STATEMENTS OF FINANCIAL [removed: POSITION][added: POSITION | | | | | | | | |]

| Rollins, Inc. and Subsidiaries [removed: (in thousands except share information)] | | | | | | | | |

| December 31, | | [added: 2014 | | | |] 2013 | | | | 2012 | | |

| Cash and cash equivalents [added: at beginning of year] | | [removed: $] | 118,216 | | | [removed: $] | 65,082 | | [added: | | 46,275 | |]

| Trade receivables, net of allowance for doubtful accounts of [removed: $9,078] [added: $10,944] and [removed: $8,211,] [added: $9,078,] respectively | | | [removed: 72,849] [added: 77,854] | | | | [removed: 68,920] [added: 72,849] | |

| Financed receivables, short-term, net of allowance for doubtful accounts of [removed: $1,777] [added: $1,748] and [removed: $1,842,] [added: $1,777,] respectively | | | [removed: 12,220] [added: 12,234] | | | | [removed: 11,823] [added: 12,220] | |

| Materials and supplies | | | [removed: 12,251] [added: 14,078] | | | | [removed: 11,847] [added: 12,251] | |

| Deferred income taxes | | | [removed: 39,518] [added: 42,764] | | | | [removed: 33,338] [added: 39,518] | |

| Other current assets | | | [removed: 19,388] [added: 28,656] | | | | [removed: 14,982] [added: 19,388] | |

| Total Current Assets | | | [removed: 274,442] [added: 283,958] | | | | [removed: 205,992] [added: 274,442] | |

| Equipment and property, net | | | [removed: 87,215] [added: 101,669] | | | | [removed: 82,263] [added: 87,215] | |

| Goodwill | | | [removed: 211,847] [added: 255,563] | | | | [removed: 212,477] [added: 211,847] | |

| Customer contracts, net | | | [removed: 101,457] [added: 104,657] | | | | [removed: 113,400] [added: 101,457] | |

| Other intangible assets, net | | | [removed: 27,112] [added: 28,815] | | | | [removed: 28,389] [added: 27,112] | |

| Deferred income taxes | | | [removed: 4,544] [added: 7,881] | | | | [removed: 26,841] [added: 4,544] | |

| Financed receivables, long-term, net of allowance for doubtful accounts of [removed: $1,423] [added: $1,402] and [removed: $1,408,] [added: $1,423,] respectively | | | [removed: 11,608] [added: 11,787] | | | | [removed: 11,681] [added: 11,608] | |

| Prepaid pension | | | [removed: 7,113] [added: —] | | | | [removed: —] [added: 7,113] | |

| Other assets | | | [removed: 13,879] [added: 13,832] | | | | [removed: 11,463] [added: 13,879] | |

| Total Assets | | $ | [removed: 739,217] [added: 808,162] | | | $ | [removed: 692,506] [added: 739,217] | |

| Accounts payable | | | [removed: 23,194] [added: 22,878] | | | | [removed: 24,854] [added: 23,194] | |

| Accrued insurance | | | [removed: 25,631] [added: 24,204] | | | | [removed: 24,164] [added: 25,631] | |

| Accrued compensation and related liabilities | | | [removed: 66,175] [added: 74,090] | | | | [removed: 60,042] [added: 66,175] | |

| Unearned revenue | | | [removed: 91,014] [added: 94,056] | | | | [removed: 87,753] [added: 91,014] | |

| Other current liabilities | | | [removed: 29,778] [added: 37,451] | | | | [removed: 31,603] [added: 29,778] | |

| Total current liabilities | | | [removed: 235,792] [added: 252,679] | | | | [removed: 228,416] [added: 235,792] | |

| Accrued insurance, less current portion | | | [removed: 28,245] [added: 30,946] | | | | [removed: 31,283] [added: 28,245] | |

| Accrued pension | | | [removed: 691] [added: 29,558] | | | | [removed: 43,271] [added: 691] | |

| Long-term accrued liabilities | | | [removed: 36,234] [added: 32,303] | | | | [removed: 34,580] [added: 36,234] | |

| Total Liabilities | | | [removed: 300,962] [added: 345,486] | | | | [removed: 337,550] [added: 300,962] | |

| Common stock, par value $1 per share; 250,000,000 shares authorized, respectively, [removed: 145,864,443] [added: 145,721,938] and [removed: 146,015,082] [added: 145,864,443] shares issued, respectively | | | [removed: 145,864] [added: 145,722] | | | | [removed: 146,015] [added: 145,864] | |

| Paid-in-capital | | | [removed: 53,765] [added: 62,839] | | | | [removed: 45,156] [added: 53,765] | |

| Accumulated other comprehensive loss | | | [removed: (31,771] [added: (65,488] | ) | | | [removed: (56,967] [added: (31,771] | ) |

| Retained earnings | | | [removed: 270,397] [added: 319,803] | | | | [removed: 220,752] [added: 270,397] | |

| Total [removed: Stockholders'] [added: Stockholders’] Equity | | | [removed: 438,255] [added: 462,676] | | | | [removed: 354,956] [added: 438,255] | |

| Total Liabilities and [removed: Stockholders'] [added: Stockholders’] Equity | | $ | [removed: 739,217] [added: 808,162] | | | $ | [removed: 692,506] [added: 739,217] | |

[removed: CONSOLIDATED] [added: | CONSOLIDATED] STATEMENTS OF [removed: INCOME][added: INCOME | | | | | | | | | | | | |]

| [removed: Rollins, Inc. and Subsidiaries] (in thousands except per share data) | | | | | | | | | | | | |

| Years ended December 31, | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Customer services | | $ | [removed: 1,337,374] [added: 1,411,566] | | | $ | [removed: 1,270,909] [added: 1,337,374] | | | $ | [removed: 1,205,064] [added: 1,270,909] | |

| Cost of services provided | | | [removed: 678,459] [added: 707,739] | | | | [removed: 647,578] [added: 678,459] | | | | [removed: 616,842] [added: 647,578] | |

| (in thousands except share information) | | | | | | | | |

| Cash and cash equivalents | | $ | 108,372 | | | $ | 118,216 | |

| Treasury Stock, par value $1 per share ; 200,000 and 0 shares, respectively | | | (200 | ) | | | — | |

| 26 |

| NET INCOME | | $ | 137,664 | | | $ | 123,330 | | | $ | 111,332 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Rollins, Inc. and Subsidiaries | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Excess Tax Benefit on Share-based payments | | | — | | | | — | | | | — | | | | — | | | | 3,231 | | | | — | | | | — | | | | 3,231 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Other Comprehensive Income, Net of Tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Excess Tax Benefit on Share-based payments | | | — | | | | — | | | | — | | | | — | | | | 3,722 | | | | — | | | | — | | | | 3,722 | |

| Net Income | | | | | | | | | | | | | | | | | | | | | | | | | | | 137,664 | | | | 137,664 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Other Comprehensive Income, Net of Tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Common Stock Issued for Acquisitions | | | 390 | | | | 390 | | | | 193 | | | | 193 | | | | 15,831 | | | | — | | | | — | | | | 16,414 | |

| Common Stock Purchased (1) | | | (613 | ) | | | (613 | ) | | | (393 | ) | | | (393 | ) | | | (15,831 | ) | | | — | | | | (12,508 | ) | | | (29,345 | ) |

| Stock Compensation | | | 293 | | | | 293 | | | | — | | | | — | | | | 10,286 | | | | — | | | | — | | | | 10,579 | |

| Excess Tax Benefit on Share-based payments | | | — | | | | — | | | | — | | | | — | | | | 4,744 | | | | — | | | | — | | | | 4,744 | |

| Balance at December 31, 2014 | | | 145,722 | | | $ | 145,722 | | | | (200 | ) | | $ | (200 | ) | | $ | 62,839 | | | $ | (65,488 | ) | | $ | 319,803 | | | $ | 462,676 | |

| Rollins, Inc. and Subsidiaries | | | | | | | | | | | | |

| Net Income | | $ | 137,664 | | | $ | 123,330 | | | $ | 111,332 | |

| Depreciation, amortization and other non-cash charges | | | 42,277 | | | | 39,304 | | | | 38,074 | |

| Capital expenditures | | | (28,739 | ) | | | (18,632 | ) | | | (19,040 | ) |

The Company used 582,233 shares of Company stock at a price of $28.19 per share or $16.4 million in acquisitions of companies.

On February 2, 2015 we announced that Harry J.

Cynkus, CFO of Rollins, Inc. would retire in 2015.

Eddie Northen is expected to succeed Harry Cynkus as CFO effective May 1, 2015.

_Three-for-two stock split_—The Board of Directors at its quarterly meeting on January 27, 2015, authorized a three-for-two stock split by the issuance on March 10, 2015 of one additional common share for each two common shares held of record at February 10, 2015.

Unless otherwise stated all share and per share data appearing in the consolidated financial statements and related notes are presented prior to this stock split.

| At December 31, | | 2014 | | | | 2013 | | |

| Years ended December 31, | | 2014 | | | | 2013 | | | | 2012 | | |

_Three-for-two stock split_—The Board of Directors at its quarterly meeting on January 27, 2015, authorized a three-for-two stock split by the issuance on March 10, 2015 of one additional common share for each two common shares held of record at February 10, 2015.

Unless otherwise stated all share and per share data appearing in the consolidated financial statements and related notes are presented prior to this stock split.

All share and per share information in the following chart are stated prior to the stock split effective March 10, 2015:

| Years Ended December 31, | | 2014 | | | | 2013 | | | | 2012 | | |

| Net income available to stockholders | | $ | 137,664 | | | $ | 123,330 | | | $ | 111,332 | |

| Common stock | | | 143,646 | | | | 143,526 | | | | 143,499 | |

| Undistributed earnings | | | 0.42 | | | | 0.39 | | | | 0.32 | |

| Distributed earnings | | $ | 0.52 | | | $ | 0.45 | | | $ | 0.44 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at December 31, 2010 | | | 147,181 | | | $ | 147,181 | | | $ | 27,816 | | | $ | (32,490 | ) | | $ | 155,463 | | | $ | 297,970 | |

| Net Income | | | | | | | | | | | | | | | | | | | 100,711 | | | | 100,711 | |

| Stock Compensation | | | 595 | | | | 595 | | | | 6,960 | | | | | | | | | | | | 7,555 | |

| Excess Tax Benefit on Restricted Stock, Dividend Compensation and Non-Qualified Stock Options | | | | | | | | | | | 4,616 | | | | | | | | | | | | 4,616 | |

| Common Stock Purchased (1) | | | (782 | ) | | | (782 | ) | | | | | | | | | | | (15,580 | ) | | | (16,362 | ) |

| Excess Tax Benefit on Restricted Stock, Dividend Compensation and Non-Qualified Stock Options | | | | | | | | | | | 3,231 | | | | | | | | | | | | 3,231 | |

| Excess Tax Benefit on Restricted Stock, Dividend Compensation | | | | | | | | | | | 3,722 | | | | | | | | | | | | 3,722 | |

| (Gain)/loss on sales/impairments of assets, net | | | (165 | ) | | | (468 | ) | | | 405 | |

| Other, net | | | (102 | ) | | | (113 | ) | | | (762 | ) |

| Payments on line of credit borrowings | | | — | | | | — | | | | (26,000 | ) |

| Book overdrafts in bank accounts | | | — | | | | — | | | | (4,500 | ) |

| Principal payments on capital lease obligations | | | — | | | | — | | | | (38 | ) |

| Cash and cash equivalents at beginning of year | | | 65,082 | | | | 46,275 | | | | 20,913 | |

| --- | --- |

As of the filing date, February 26, 2014, there were no subsequent events that would affect the Company’s financial statements.

Initial franchise fees are treated as unearned revenue in the Statement of Financial Position until such time.

At times, cash and cash equivalents may exceed federally insured amounts.

| Total shares of common stock | | | | | | | | | | | | |

In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02).

This standard provides new accounting guidance that permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test.

An entity would continue to calculate the fair value of an indefinite-lived intangible asset if the asset fails the qualitative assessment, while no further analysis would be required if it passes.

This guidance is effective for the Company beginning in the first quarter of 2014; we do not expect the new guidance to have a material effect on our financial statements.

In March 2013, the FASB issued ASU 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.

The objective of the amendments in this Update is to resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity.

| | | | 207,408 | | | | 191,918 | |

| | | | 62,531 | | | | 57,550 | |

| Goodwill at December 31, 2013 | | $ | 211,847 | |

| 2014 | | | $ | 22,630 | |

| --- | --- | --- | --- | --- | --- |

| 2015 | | | | 19,978 | |

| 2016 | | | | 17,211 | |

| 2017 | | | | 15,582 | |

| 2018 | | | | 12,094 | |

| Pension liability | | | — | | | | 16,703 | |

| Valuation allowance at beginning of year | | $ | 2,096 | | | $ | 1,646 | |

| Additions based on tax positions related to current year | | | 0 | | | | 45 | |

| Reductions for tax positions of prior years | | | — | | | | (344 | ) |

| Expiration of statute of limitation | | | — | | | | (139 | ) |

In many cases these uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities.

| --- | --- | --- |

Based on management’s evaluation as of December 31, [removed: 2013,] [added: 2014,] in which the principal executive officer and principal financial officer of the Company participated, the principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective, at the reasonable assurance level to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

_Management’s Report on Internal Control Over Financial Reporting_—Management’s Report on Internal Control Over Financial Reporting is contained on page [removed: 24.][added: 23]

_Changes in Internal Controls_—There were no changes in our internal control over financial reporting during the fourth quarter of [removed: 2013] [added: 2014] that materially affected or are reasonably likely to materially affect these controls.

| --- | --- | --- |

[removed: PART III][added: PART III]

| --- | --- | --- |

Information concerning directors and executive officers is included in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Stockholders (the “Proxy Statement”), in the section titled “Election of Directors”.

[removed: _Audit] [added: _Audit] Committee and Audit Committee Financial [removed: Expert_][added: Expert_]

Information concerning the Audit Committee of the Company and the Audit Committee Financial Expert(s) is included in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Stockholders, in the section titled “Corporate Governance and Board of Directors’ Committees and Meetings – Audit Committee.” This information is incorporated herein by reference.

[removed: _Code] [added: _Code] of [removed: Ethics_][added: Ethics_]

[removed: _Section] [added: _Section] 16(a) Beneficial Ownership Reporting [removed: Compliance_][added: Compliance_]

Information regarding compliance with Section 16(a) of the Exchange Act is included under “Compliance with Section 16(a) of the Securities Exchange Act” in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Stockholders, which is incorporated herein by reference.

| --- | --- | --- |

| 55 |

| 54 |

The information under the captions “Compensation Committee Interlocks and Insider Participation,” “Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” and “Executive Compensation” included in the Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 22, 2014] [added: 28, 2015] is incorporated herein by reference.

| --- | --- | --- |

The information under the captions “Capital Stock” and “Election of Directors” included in the Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 22, 2014] [added: 28, 2015] is incorporated herein by reference.

[removed: EQUITY] [added: EQUITY] COMPENSATION PLAN [removed: INFORMATION][added: INFORMATION]

The following table sets forth certain information regarding equity compensation plans as of December 31, [removed: 2013.][added: 2014.]

| [removed: Plan Category] [added: Plan Category] | | [removed: Number] [added: Number] of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights [removed: (A)] [added: (A)] | | | | [removed: Weighted] [added: Weighted] Average Exercise Price of Outstanding Options, Warrants and Rights [removed: (B)] [added: (B)] | | | | [removed: Number] [added: Number] of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) (C [removed: )] [added: )] | | |

| Equity compensation plans [added: not] approved [added: by security holders] | | | [added: —] | | | [added: $] | [added: —] | | | | [added: —] | |

| | (1) | Includes [removed: 4,088,068] [added: 3,795,913] shares available for grant under the 2008 Employee Stock Incentive Plan. The 2008 Employee Stock Incentive Plan provides for awards of the Company’s common stock and awards that are valued in whole or in part by reference to the Company’s common stock apart from stock options and SARs including, without limitation, restricted stock, performance-accelerated restricted stock, performance stock, performance units, and stock awards or options valued by reference to book value or subsidiary performance. |

| Equity compensation plans approved by security holders | | | 2,066,505 | | | $ | — | | | | 3,795,913 | |

| Total | | | 2,066,505 | | | $ | — | | | | 3,795,913 | (1) |

| --- | --- | --- |

| 56 |

| --- |

| by security holders | | | 2,453,551 | | | $ | — | | | | 4,088,068 | |

| Equity compensation plans not approved | | | | | | | | | | | | |

| by security holders | | | — | | | $ | — | | | | — | |

| Total | | | 2,453,551 | | | $ | — | | | | 4,088,068 | (1) |

| --- | --- | --- |

Information regarding principal accounting fees and services is set forth under “Independent Public Accountants” in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Stockholders, which information is incorporated herein by reference.

[removed: PART IV][added: PART IV]

| --- | --- | --- |

| 57 |

| 55 |

| [removed: | (10) (a)] [added: (4)] | | [removed: Rollins, Inc.] Form of [removed: Restricted] [added: Common] Stock [removed: Agreement] [added: Certificate of Rollins, Inc.] incorporated herein by reference to Exhibit [removed: (10)(c)] [added: (4)] as filed with its Form 10-K for the year ended December 31, [removed: 2004.] [added: 1998.] |

| [removed: |] (10) [removed: (b)] [added: (a)] | | Rollins, Inc. Amended and Restated Deferred Compensation Plan, incorporated herein by reference to Exhibit 4.1 filed with the registrant’s Form S-8 filed November 18, 2005. |

| [removed: |] (10) [removed: (c)] [added: (b)] | | Form of Plan Agreement pursuant to the Rollins, Inc. Amended and Restated Deferred Compensation Plan, incorporated herein by reference to Exhibit 4.2 filed with the registrant’s Form S-8 filed November 18, 2005. |

| [removed: |] (10) [removed: (d)] [added: (c)] | | Written description of Rollins, Inc. Performance-Based Incentive Cash Compensation Plan incorporated herein by reference to Exhibit 10(a) as filed with its Form 8-K dated April 23, 2013. |

| [removed: |] (10) [removed: (e)] [added: (d)] | | Forms of award agreements under the 2013 Cash Incentive Plan incorporated herein by reference to Exhibit 10(b) of its Form 8-K dated April 22, 2008. |

| [removed: |] (10) [removed: (f)] [added: (e)] | | 2008 Stock Incentive Plan incorporated herein by reference to Exhibit A of the March 17, 2008 Proxy Statement for the Annual Meeting of the Stockholders held on April 22, 2008. |

| [removed: |] (10) [removed: (g)] [added: (f)] | | Form of Restricted Stock Grant Agreement incorporated herein by reference to Exhibit 10(d) as filed with its Form 8-K dated April 22, 2008. |

| [removed: |] (10) [removed: (h)] [added: (g)] | | Form of Time-Lapse Restricted Stock Agreement incorporated herein by reference to Exhibit 10.1 as filed with its Form 10-Q for the quarter ended March 31, 2012. |

| [removed: |] (10) [removed: (i)] [added: (h)] | | Summary of Compensation Arrangements with Executive Officers, incorporated herein reference to Exhibit (10)(q) as filed with its Form 10-K for the year ended December 31, 2010. |

| [removed: |] (10) [removed: (j)] [added: (h)] | | Summary of Compensation Arrangements with [removed: Non-Employee Directors,] [added: Executive Officers,] incorporated herein [removed: by] reference to [removed: Exhibits (10)(n)] [added: Exhibit (10)(q)] as filed with its Form 10-K for the year ended December 31, [removed: 2012.] [added: 2010.] |

| [removed: |] (3) (i) | | (A) Restated Certificate of Incorporation of Rollins, Inc. dated July 28, 1981, incorporated herein by reference to Exhibit (3)(i)(A) as filed with the registrant’s Form 10-Q filed August 1, 2005. | [removed: |]

| | | [removed: |] (B) Certificate of Amendment of Certificate of Incorporation of Rollins, Inc. dated August 20, 1987, incorporated herein by reference to Exhibit 3(i)(B) filed with the registrant’s 10-K filed March 11, 2005. | [removed: |]

| | | [removed: |] (C) Certificate of Change of Location of Registered Office and of Registered Agent dated March 22, 1994, incorporated herein by reference to Exhibit (3)(i)(C) filed with the registrant’s Form 10-Q filed August 1, 2005. | [removed: |]

| | | [removed: |] (D) Certificate of Amendment of Certificate of Incorporation of Rollins, Inc. dated April 25, 2006, incorporated herein by reference to Exhibit 3(i)(D) filed with the registrant’s 10-Q filed October 31, 2006 | [removed: |]

| | | [removed: |] (E) Certificate of Amendment of Certificate of Incorporation of Rollins, Inc. dated April, 26, [removed: 2011, incorporated herein by reference to Exhibit (3)(i)(E) as filed with the Registrant’s 10-Q filed October 28,] 2011. | [removed: |]

| [removed: |] (ii) | | Revised By-laws of Rollins, Inc. dated [removed: January 22, 2013,] [added: October 28, 2014,] incorporated herein by reference to Exhibit (3) (i) as filed with its Form [removed: 8-K dated January 25, 2013. |] [added: 10-Q filed October 29, 2014.] |

| [removed: | (4)] [added: (10) (h)] | | [removed: Form of Common Stock Certificate] [added: Summary] of [removed: Rollins, Inc.] [added: Compensation Arrangements with Executive Officers,] incorporated herein [removed: by] reference to Exhibit [removed: (4)] [added: (10)(q)] as filed with its Form 10-K for the year ended December 31, [removed: 1998. |] [added: 2010.] |

| [removed: |] (10) [removed: (a)] [added: (g)] | | [removed: Rollins, Inc.] Form of [added: Time-Lapse] Restricted Stock Agreement incorporated herein by reference to Exhibit [removed: (10)(c)] [added: 10.1] as filed with its Form [removed: 10-K] [added: 10-Q] for the [removed: year] [added: quarter] ended [removed: December] [added: March] 31, [removed: 2004. |] [added: 2012.] |

| [removed: |] (10) [removed: (b)] [added: (a)] | | Rollins, Inc. Amended and Restated Deferred Compensation Plan, incorporated herein by reference to Exhibit 4.1 filed with the registrant’s Form S-8 filed November 18, 2005. | [removed: |]