Rollins (ROL) 10-K risk factor changes: FY2018 vs FY2017

[removed: Presentation][added: Presentation]

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

[removed: Overview][added: Overview]

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

| | | | | | | | | | | | | | [added: |] % [removed: better/(worse) as] [added: Better/(worse)] compared [removed: to prior year] | | | | | [added: | |]

| Years ended December 31, | [added: | 2018 | | | |] 2017 | | | | 2016 | | | | [removed: 2015] [added: 2018] | | | | 2017 | | | [removed: 2016 | |]

| Revenues | [removed: $] | [removed: 1,673,957] [added: $] | [added: 1,821,565] | | [added: |] $ | [removed: 1,573,477] [added: 1,673,957] | | | $ | [removed: 1,485,305] [added: 1,573,477] | | | [removed: 6.4] | [removed: %] [added: 8.8] | | [removed: 5.9] | [removed: %] | [added: 6.4 | |]

| Cost of services provided | [removed: 819,943] | | [added: 894,437] | | [removed: 772,348] | | [added: 819,943] | | [removed: 735,976] | | [added: 772,348] | | [removed: (6.2] | [removed: )] | [added: (9.1] | [removed: (4.9] [added: )] | [added: | | (6.2 |] ) |

| Depreciation and amortization | [removed: 56,580] | | [added: 66,792] | | [removed: 50,902] | | [added: 56,580] | | [removed: 44,522] | | [added: 50,902] | | [removed: (11.2] | [removed: )] | [added: (18.0] | [removed: (14.3] [added: )] | [added: | | (11.2 |] ) |

| Sales, general and administrative | [removed: 503,433] | | [added: 550,698] | | [removed: 490,528] | | [added: 503,433] | | [removed: 463,742] | | [added: 490,528] | | [removed: (2.6] | [removed: )] | [added: (9.4] | [removed: (5.8] [added: )] | [added: | | (2.6 |] ) |

| Gain on sales of assets, net | [removed: (242] | | [removed: )] [added: (875] | [added: )] | [removed: (777] | | [added: (242 |] ) | | [removed: (1,953] | [added: (777] | ) | | [removed: (68.9] | [removed: )] [added: 261.6] | | [removed: (60.2] | [added: | (68.9 |] ) |

| Interest [removed: income] [added: income, net] | [removed: (259] | | [removed: )] [added: (220] | [added: )] | [removed: (160] | | [added: (259 |] ) | | [removed: (160] | [added: (160] | ) | | [removed: 61.9] | [added: (15.1] | [added: )] | [removed: —] | | [added: 61.9 | |]

| Income before income taxes | [removed: 294,502] | | [added: 310,733] | | [removed: 260,636] | | [added: 294,502] | | [removed: 243,178] | | [added: 260,636] | | [removed: 13.0] | | [added: 5.5] | [removed: 7.2] | | [added: | 13.0 | |]

| [removed: Provision] [added: Provisions] for income taxes | [removed: 115,378] | | [added: 79,070] | | [removed: 93,267] | | [added: 115,378] | | [removed: 91,029] | | [added: 93,267] | | [removed: (23.7] | [removed: )] | [added: 31.5] | [removed: (2.5] | [added: | | (23.7 |] ) |

| Net income | [removed: $] | [removed: 179,124] [added: $] | [added: 231,663] | | [added: |] $ | [removed: 167,369] [added: 179,124] | | | $ | [removed: 152,149] [added: 167,369] | | | [removed: 7.0] | [removed: %] [added: 29.3] | | [removed: 10.0] | [removed: %] | [added: 7.0 | |]

[removed: General] [added: General] Operating [removed: Comments][added: Comments]

[removed: 2017] [added: 2018] marked the Company’s [removed: 20th] [added: 21st] consecutive year of improved revenues and profits.

Revenues for the year rose [removed: 6.4] [added: 8.8] percent to [removed: $1.674] [added: $1.822] billion compared to [removed: $1.573] [added: $1.674] billion for the prior year.

Income before income taxes increased [removed: 13.0%] [added: 5.5%] to [removed: $294.5] [added: $310.7] million compared to [removed: $260.6] [added: $294.5] million the prior year.

Net income increased [removed: 7.0%] [added: 29.3%] to [removed: $179.1] [added: $231.7] million, with earnings per diluted share of [removed: $0.82] [added: $0.71] compared to [removed: $167.4] [added: $179.1] million, or [removed: $0.77] [added: $0.55] per diluted share for the prior year.

The Company’s [removed: 2017] [added: 2018] net income was [removed: negatively] [added: positively] affected by the [removed: 2017 Tax Cuts and Jobs Act (“TCJA”)] [added: TCJA] which was signed in to law on December 22, 2017.

The estimated [removed: negative] [added: positive] impact of the enactment of the TCJA was [removed: an $11.6] [added: a $38.4] million [removed: increase] [added: decrease] to tax expense, which was a direct [removed: decrease] [added: increase] to net income.

This resulted in a $0.05 per diluted share decrease in net income for the [added: 2018 fiscal] year.

All of the Company’s business lines experienced growth for the year, with residential pest control revenues up [removed: 6.4%,] [added: 9.1%,] commercial pest control revenues up [removed: 5.1%] [added: 6.0%] and termite and ancillary services revenues up [removed: 9.7%.][added: 12.8%, each compared to 2017.]

[removed: Results] [added: Results] of Operations—2017 Versus [removed: 2016][added: 2016]

The Company is now in [removed: 53] [added: 57] countries and continues to seek new international opportunities.

[removed: Revenues][added: _Revenues_]

Growth occurred across all service lines [removed: and brands] with our Canadian and Australian companies being hindered by unfavorable foreign currency exchange rates.

Commercial pest control was negatively impacted by foreign currency exchange [added: rates] as [removed: Orkin Canada and Rollins Australia] [added: our foreign companies] are heavily commercial.

The Company’s termite business, which represented approximately 18% of the Company’s revenue, grew 9.7% in 2017 due to acquisitions, increases in drywood fumigations and ancillary service [removed: sales,] [added: sales] (such as moisture control and insulation).

[removed: Cost] [added: _Cost] of Services [removed: Provided][added: Provided_]

[removed: Depreciation] [added: _Depreciation] and [removed: Amortization][added: Amortization_]

The dollar increase was primarily due to depreciation increasing $2.7 million or 10.7% as we continue to depreciate our CRM software BOSS, while amortization of intangible assets increased $3.0 million or 11.5% for 2017 due to the additional amortization of customer contracts of Northwest [removed: Exterminating,] [added: Pest Control,] as well as several other acquisitions over the last year.

[removed: Sales,] [added: _Sales,] General and [removed: Administrative][added: Administrative_]

[removed: Gain] [added: _Gain] on Sales of assets, [removed: Net][added: Net_]

[removed: Interest] [added: _Interest] Income, [removed: Net][added: Net_]

[removed: Taxes][added: _Taxes_]

[removed: The] [added: 2017 had an] $11.6 million increase in tax [removed: was] as follows: [removed: ($8.0] [added: $8.0] million from transition tax on foreign earnings, $2.9 million from the revaluation of deferred tax assets, and $0.7 million from reductions in tax benefits on stock [removed: compensation).][added: compensation.]

[removed: Results] [added: Results] of [removed: Operations—2016] [added: Operations—2018] Versus [removed: 2015][added: 2017]

The Company’s revenues increased to [removed: $1.573] [added: $1.822] billion in [removed: 2016, a 5.9%] [added: 2018, an 8.8%] increase compared to [removed: 2015.][added: 2017.]

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| | | (in thousands) | | | | | | | | | | | | to prior year | | | | | | |

_Overview_

Gross margin decreased to 50.9% for 2018 from 51.0% in 2017.

Rollins’ net income of $231.7 million in 2018 was an increase of $52.5 million or 29.3% over $179.1 million in 2017.

Net profit margin improved to 12.7% in 2018 from 10.7% in 2017.

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Acquisitions from foreign companies, which are primarily commercial, contributed to the increase, as well as increases in sales, an emphasis on closing leads, and better cancellation rates.

Residential pest control, which represented approximately 42% of the Company’s revenue, increased 9.1% driven by an increase in sold units, lead closure, a better cancellation rate, and pricing, as well as increased TAEXX® homebuilder installations, and acquisitions.

Revenue from franchising was up 30.4% in 2018 compared to 2017 as we expand Orkin’s international footprint and recognition of initial franchise fees, partially offset by the decreases associated with acquired franchises from Critter Control.

Gross margin for the year decreased to 50.9% for 2018 compared to 51.0% for 2017 due to unfavorable personnel related costs as we increased our 401k match to employees and experienced an increase in group insurance premiums in 2018 and an increase in payroll taxes and FICA taxes.

Administrative Salaries were up due to increased office wages as well as an increase in restricted share amortization as we granted our long-term employees time-lapse restricted stock which is amortized over one year.

The Company experienced higher fleet costs as gasoline prices per gallon rose and miles driven increased with acquisitions and additional work, which was partially offset by the usage of our routing and scheduling system.

Leased vehicle costs increased as we added to our fleet and leased vehicle prices increased.

Professional services and Maintenance and repairs increased due to outside consultants and maintenance contracts on various IT projects and equipment.

The dollar increase was primarily due to depreciation increasing $3.0 million or 10.9% as we depreciate acquired and purchased assets and depreciation from various IT related projects.

Amortization of intangible assets increased $7.2 million or 24.8% for 2018 due to the additional amortization of customer contracts of several acquisitions over the last year including a full year of Northwest Pest Control, acquired late 2017, and the 2018 acquisition of OPC Services as well as several smaller foreign and domestic companies.

SG&A increased to 30.2% of revenues for the year ended December 31, 2018 compared to 30.1% in 2017.

The Company increased its 401k match to employees and granted a one-time vested stock grant during the year which increased personnel related costs and administrative salaries, respectively.

Group insurance premiums were up for the year as well as payroll taxes.

The company’s acquisitions and rising gasoline costs and lease expenses raised our fleet costs and the Company had increased use of outside professional services in IT projects as well as other projects.

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_Overview_

_Revenues_

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_Cost of Services Provided_

_Depreciation and Amortization_

_Sales, General and Administrative_

_Gain on Sales of assets, Net_

_Taxes_

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The Company has initiated the process to transition its Pension Plan to an Insurance provider.

The timeline will take approximately 6-9 months from December 31, 2018.

The Company’s Pension Plan is currently more than 100% funded.

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

Net income excluding the effect of the TCJA increased 13.9% to $190.7 million or $0.87 per share.

Net income and diluted earnings per share excluding the effect of the TCJA are non-GAAP financial measures.

Management believes these measures help investors understand the effect of these on reported results.

During the year, the Company increased its presence around the world with the addition of 11 new Orkin international franchises.

HomeTeam Pest Defense announced that they had reached one million TAEXX® installations.

We acquired Northwest Exterminating based in Marietta, GA which contributed in the growth of the Company's revenues the last five months.

Strategic acquisitions remain a priority for Rollins.

The Company also continued to improve our routing and scheduling capabilities as we utilize our Customer Service Manager (“CSM”) BOSS and its Virtual Route Management feature.

BOSS has been fully implemented in the Orkin’s U.S. operations.

Strategic acquisitions remain a priority for Rollins, and as in the past, we will continue to seek out companies that are a “fit” for us in both, the pest control and wildlife areas of our business.

Management believes that the Corporate tax rate in 2018 will be in the mid 20% range with a lower rate in the first quarter 2018 adjusted throughout the year to the mid 20% range for the year.

Gross margin increased to 50.9% for 2016 from 50.4% in 2015.

Rollins’ net income of $167.4 million in 2016 was an increase of $15.2 million or 10.0% over $152.1 million in 2015.

Net profit margin improved to 10.6% in 2016 from 10.2% in 2015.

Residential pest control which represented approximately 42% of the Company’s

revenue, increased 7.3% driven by increased leads, the improved closure and pricing as well as increased TAEXX® homebuilder installations, bed bug revenues and acquisitions.

Foreign currency exchange translation and increased domestic revenues have reduced the percentage in both years.

Revenue from franchises was up 8.4% in 2016 compared to 2015.

Gross margin for the year increased to 50.9% for 2016 compared to 50.4% for 2015 due to favorable service salary cost as we finalized the roll-out of BOSS, our CRM and operating system, improving our routing and scheduling to maximize efficiencies, lower personnel related expenses as healthcare claims were lower than expected, and insurance and claims were lower as a percentage of revenues as we continue to focus on efficiency and safety.

The favorable margins were partially offset by professional fees as we used outside sources to roll-out BOSS.

We experienced good cost controls across most spending categories during 2016 compared to 2015.

The dollar increase was due primarily to depreciation increasing $5.4 million as we began to depreciate our CRM software BOSS, while amortization of intangible assets increased as we acquired 34 companies in 2016.

SG&A remained flat at 31.2% of revenues for each of the years 2016 and 2015.

The Company had a one-time tax event to dissolve its subsidiary, Kinro Investment Inc. This increased SG&A expense $9.1 million or 0.6 percentage points due to the one-time tax event that was offset as a credit in income tax expense.

Sales salaries increased due to the increase in sales commissions and service contracts increased as a result of maintaining the BOSS system.

The increases were offset by decreases as a percentage of revenue by administrative salaries as we continue to grow revenue with a static headcount, personnel related expense margin decreased due to lower than expected healthcare claims, and decreases in insurance claims as we continue to focus on efficiency and safety, and telephone costs as we negotiate contracts for Internet service.

The decrease was due to the Company selling two buildings in 2015.

The Company’s effective tax rate decreased to 35.8% in 2016 compared to 37.4% in 2015, due primarily to a one-time tax event in 2016 and differences in state and foreign income taxes.

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| Business combination related liabilities | $ | 29,389 | | | $ | 18,661 | | | $ | 10,728 | | | $ | — | | | $ | — | |

| Non-cancelable operating leases | 143,539 | | | | 34,112 | | | | 24,890 | | | | 38,713 | | | | 45,824 | | |

| Total (2) | $ | 177,012 | | | $ | 56,857 | | | $ | 35,618 | | | $ | 38,713 | | | $ | 45,824 | |

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

[removed: However, the] [added: The] Company [removed: does maintain] [added: maintains] approximately [removed: $29.4] [added: $32.9] million in [removed: Letters] [added: letters] of [removed: Credit.][added: 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: 2017] [added: 2018] based on criteria established in the 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: 2017.][added: 2018.]

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: 2017,] [added: 2018,] 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: 26.][added: 24.]

| /s/ Gary W. Rollins | | /s/ Paul [removed: E] [added: E.] Northen |

| Gary W. Rollins Vice Chairman and Chief Executive Officer | | Paul E. Northen [added: Senior] Vice President, Chief Financial Officer and Treasurer |

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL [removed: REPORTING][added: REPORTING]

[removed: Opinion] [added: _Opinion] on internal control over financial [removed: reporting][added: reporting_]

We have audited the internal control over financial reporting of Rollins, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in the 2013 [removed: Internal Control-Integrated Framework] [added: _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: 2017,] [added: 2018,] based on criteria established in the 2013 [removed: Internal Control-Integrated Framework] [added: _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) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, [removed: 2017,] [added: 2018,] and our report dated [removed: February 26, 2018,] [added: March 1, 2019] expressed an unqualified opinion on those financial statements.

[removed: Basis] [added: _Basis] for [removed: opinion][added: opinion_]

[removed: Definition] [added: _Definition] and limitations of internal control over financial [removed: reporting][added: reporting_]

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

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON CONSOLIDATED FINANCIAL STATEMENTS AND [removed: SCHEDULE][added: SCHEDULE]

[removed: Opinion] [added: _Opinion] on the financial [removed: statements][added: statements_]

We have audited the accompanying consolidated [removed: balance sheets] [added: statements] of [added: financial position of] Rollins, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] the related consolidated statements of income, comprehensive earnings, stockholders’ equity, and cash [removed: flows,] [added: flows] for each of the three years in the period ended December 31, [removed: 2017] [added: 2018,] and the related notes and [added: financial statement] schedule [added: included under item 15(a)] (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] 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) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in the 2013 [removed: Internal Control-Integrated Framework] [added: _Internal Control—Integrated Framework_] issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated [removed: February 26, 2018] [added: March 1, 2019] expressed an unqualified opinion.

On October 31, 2012, the Company entered into a Revolving Credit Agreement with SunTrust Bank and Bank of America, N.A. for an unsecured line of credit of up to $175.0 million, which includes a $75.0 million letter of credit subfacility, and a $25.0 million swingline subfacility.

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.

On October 27, 2015 the Company exercised a one year extension option to extend the maturity date to October 31, 2019.

As of December 31, 2018, no borrowings were outstanding under the line of credit or under the swingline subfacility.

These letters of credit are required by the Company’s fronting insurance companies and/or certain states, due to the Company’s self-insured status, to secure various workers’ compensation and casualty insurance contracts coverage.

The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate such claims.

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March 1, 2019

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March 1, 2019

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_Basis for opinion_

Atlanta, Georgia

March 1, 2019

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The Company maintains an investment portfolio subject to short-term interest rate risk exposure.

The Company is also subject to interest rate risk exposure through borrowings on its $175.0 million credit facility.

Currently, the Company has no outstanding borrowings.

The Company is also exposed to market risks arising from changes in foreign exchange rates.

The Company believes that this foreign exchange rate risk will not have a material effect upon the Company’s results of operations or financial position going forward.

For a discussion of the Company’s activities to manage risks relative to fluctuations in foreign currency exchange rates, see note 10 to the accompanying financial statements.

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February 26, 2018

[removed: Our] [added: _Our] business depends on our strong brands, and failing to maintain and enhance our brands could hurt our ability to retain and expand our base of [removed: customers.][added: customers._]

Our strong brands, Rollins, Orkin, HomeTeam Pest Defense, Western Pest Services, Northwest [removed: Exterminating,] [added: Pest Control,] The Industrial Fumigant Company, Crane Pest Control, Waltham Services, Trutech, [removed: Permatreat,] [added: PermaTreat,] Critter Control, Allpest, Safeguard Pest [removed: Control] [added: Control, Aardwolf Pestkare, OPC Services,] and other strong brands have significantly contributed to the success of our business.

[removed: Economic] [added: _Economic] conditions may adversely affect our [removed: business][added: business._]

[removed: Our] [added: _Our] inability to attract and retain skilled workers may impair growth potential and [removed: profitability.][added: profitability._]

[removed: We] [added: _We] may not be able to maintain our competitive position in the pest control industry in the [removed: future.][added: future._]

[removed: Our] [added: _Our] operations could be affected by pending and ongoing [removed: litigation.][added: litigation._]

[removed: Our] [added: _Our] operations could be affected if there is unauthorized access of personal, financial, or other data or information about our customers, employees, third parties, or of Company’s proprietary of confidential information.

We could be subject to interruption of our business operations, private litigation, reputational damage and costly [removed: penalties.][added: penalties._]

[added: The systems currently used for transmission and approval of payment card] transactions, and the technology utilized in payment cards themselves, all of which can put payment card data at risk, meet standards set by the payment card industry (“PCI”).

[removed: Our] [added: _Our] operations may be adversely affected if we are unable to comply with regulatory and environmental [removed: laws.][added: laws._]

[removed: We] [added: _We] may not be able to identify, complete or successfully integrate [removed: acquisitions.][added: acquisitions._]

[removed: Our] [added: _Our] operations are affected by adverse weather [removed: conditions.][added: conditions._]

[removed: Our] [added: _Our] franchisees, subcontractors, and vendors could take actions that could harm our [removed: business.][added: business._]

Similarly, if subcontractors, vendors and franchisees do not successfully operate their businesses in a manner consistent with required laws, standards and regulations, we could be subject to claims from regulators or legal claims for the actions or omissions of such [removed: third‑party] [added: third-party] distributors, subcontractors, vendors and franchisees.

If franchisees or groups representing franchisees were to bring legal proceedings against us, we would vigorously defend against the claims in any [added: such proceeding.]

[removed: Our] [added: _Our] brand recognition could be impacted if we are not able to adequately protect our intellectual property and other proprietary rights that are material to our [removed: business.][added: business._]

Our ability to compete effectively depends in part on our rights to service marks, trademarks, trade names and other intellectual property rights we own or license, particularly our registered brand names and service marks, Orkin®, Orkin Canada®, AcuridSM, Western Pest Services®, the Industrial Fumigant [removed: Company,] [added: Company®,] HomeTeam Pest Defense®, TAEXX®, Critter Control®, Northwest [removed: Exterminating®,] [added: Pest Control®,] Allpest®, Murray®, Safeguard® and others.

[removed: The] [added: _The] Company’s management has a substantial ownership interest; public stockholders may have no effective voice in the Company’s [removed: management.][added: management._]

Randall [removed: Rollins] [added: Rollins,] and his brother, Gary W.

Rollins, who is the Vice Chairman and Chief Executive Officer, and a director of the [removed: Company] [added: Company,] and certain companies under their control, controls in excess of fifty percent of the Company’s voting power.

Rollins, Inc.’s executive officers, directors and their affiliates hold [removed: directly] [added: directly,] or through indirect beneficial ownership, in the aggregate, approximately 56 percent of the Company’s outstanding shares of common stock.

[removed: Our] [added: _Our] management has a substantial ownership interest, and the availability of the Company’s common stock to the investing public may be [removed: limited.][added: limited._]

[removed: Provisions] [added: _Provisions] in Rollins, Inc.’s certificate of incorporation and bylaws may inhibit a takeover of the [removed: Company.][added: Company._]

[removed: Item] [added: Item] 1.B.

Unresolved Staff [removed: Comments][added: Comments]

_Expanding into international markets presents unique challenges and our expansion efforts with respect to international operations may not be successful._

An element of our strategy includes further expansion into international markets.

Our ability to successfully operate in international markets may be adversely affected by political, economic and social conditions beyond our control, local laws and customs, and legal and regulatory constraints, including compliance with applicable anti-corruption and currency laws and regulations, of the countries or regions in which we currently operate or intend to operate in the future.

Risks inherent in our existing and future international operations also include, among others, the costs and difficulties of managing international operations, difficulties in identifying and gaining access to local suppliers, suffering possible adverse tax consequences from changes in tax laws or the unfavorable resolution of tax assessments or audits, maintaining product quality and greater difficulty in enforcing intellectual property rights.

Additionally, foreign currency exchange rates and fluctuations thereof may have an adverse effect on the financial results of our international operations.

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The systems currently used for transmission and approval of payment card

such proceeding.

[removed: Item] [added: Item] 4.

Mine Safety [removed: Disclosures.][added: Disclosures.]

[removed: FOR THE FISCAL YEAR ENDED DECEMBER] [added: For the fiscal year ended December] 31, [removed: 2017][added: 2018]

[removed: Commission] [added: Commission] file No. [removed: 1-4422][added: 1-4422]

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

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

[removed: Registrant’s] [added: Registrant’s] telephone number, including area code: (404) [removed: 888-2000][added: 888-2000]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| | | [removed: Name] [added: Name] of [removed: each] [added: each] |

| [removed: Title] [added: Title] of each [removed: class] [added: class] | | [removed: Exchange] [added: Exchange] on which [removed: registered] [added: registered] |

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

[removed: Securities] [added: Securities] registered pursuant to section 12(g) of the Act: [removed: None.][added: None.]

Yes [removed: ý] [added: x] No o

Yes o No [removed: ý][added: x]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: x]

| [removed: |] Large accelerated filer | [removed: ý] [added: x] | | Accelerated filer | o | |

| [removed: |] Non-accelerated filer | o | | Smaller reporting company | o | (Do not check if a smaller reporting company) |

| [removed: |] Emerging growth company | [added: o] | | | | |

| [removed: |] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. o | | | | | |

The aggregate market value of Rollins, Inc. Common Stock held by non-affiliates on June 30, [removed: 2017] [added: 2018] was [removed: $3,875,558,068] [added: $5,080,852] based on the reported last sale price of common stock on June 30, [removed: 2017,] [added: 2018,] which is the last business day of the registrant’s most recently completed second fiscal quarter.

Rollins, Inc. had [removed: 218,209,925] [added: 327,532,811] shares of Common Stock outstanding as of January 31, [removed: 2018.][added: 2019.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the Proxy Statement for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders of Rollins, Inc. are incorporated by reference into Part III, Items 10-14.

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

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

| [removed: For] [added: For] the Year Ended December 31, [removed: 2017] [added: 2018] | | | | [added: |]

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

| | | | [removed: Page] | [added: Page |]

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

| [removed: Item 1.] [added: [Item 1.](#i19083a001_v1)] | | [removed: [Business.](#sD038EB20FDF6FD91EAE25542C2E134AB)] [added: [Business.](#i19083a001_v1)] | [removed: [3](#sD038EB20FDF6FD91EAE25542C2E134AB)] | [added: 3 |]

| [removed: Item 1.A.] [added: [Item 1.A.](#i19083a002_v1)] | | [Risk [removed: Factors.](#s703F5ECCFBD3F2AD622C5542C3055078)] [added: Factors.](#i19083a002_v1)] | [removed: [5](#s703F5ECCFBD3F2AD622C5542C3055078)] | [added: 6 |]

| [removed: Item 1.B.] [added: [Item 1.B.](#i19083a003_v1)] | | [Unresolved Staff [removed: Comments.](#s69D90612BB8ADCBC61515542C33584A1)] [added: Comments.](#i19083a003_v1)] | [removed: [8](#s69D90612BB8ADCBC61515542C33584A1)] | [added: 9 |]

| [removed: Item 2.] [added: [Item 2.](#i19083a004_v1)] | | [removed: [Properties.](#sDF4C1B62A29452D3F2275542C356E1BF)] [added: [Properties.](#i19083a004_v1)] | [removed: [9](#sDF4C1B62A29452D3F2275542C356E1BF)] | [added: 9 |]

| [removed: Item 3.] [added: [Item 3.](#i19083a005_v1)] | | [Legal [removed: Proceedings.](#s17B29B076D694D1913CD5542C388C3B8)] [added: Proceedings.](#i19083a005_v1)] | [removed: [9](#s17B29B076D694D1913CD5542C388C3B8)] | [added: 10 |]

| [removed: Item 4.] [added: [Item 4.](#i19083a006_v1)] | | [Mine Safety [removed: Disclosures.](#s155C39EAB88FBD72FBA15542C3AB9929)] [added: Disclosures.](#i19083a006_v1)] | [removed: [9](#s155C39EAB88FBD72FBA15542C3AB9929)] | [added: 10 |]

| [removed: Item 4.A.] [added: [Item 4.A.](#i19083a007_v1)] | | [Executive Officers of the [removed: Registrant.](#s4EAF102B3537B948CE8B5542C3DC6F36)] [added: Registrant.](#i19083a007_v1)] | [removed: [10](#s4EAF102B3537B948CE8B5542C3DC6F36)] | [added: 10 |]

| [removed: Part II] [added: Part II] | | | | [added: |]

| [removed: Item 5.] [added: [Item 5.](#i19083a008_v1)] | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities.](#sAFF8FA4036F842A1DA275542C42F9E58)] [added: Securities.](#i19083a008_v1)] | [removed: [11](#sAFF8FA4036F842A1DA275542C42F9E58)] | [added: 11 |]

| [removed: Item 6.] [added: [Item 6.](#i19083a009_v1)] | | [Selected Financial [removed: Data.](#s1DF57A06B56297908F9E5542C451FE2F)] [added: Data.](#i19083a009_v1)] | [removed: [13](#s1DF57A06B56297908F9E5542C451FE2F)] | [added: 13 |]

| [removed: Item 7.] [added: [Item 7.](#i19083a010_v1)] | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations.](#s76AB714ED9994198DBE65542BD09EC68)] [added: Operations.](#i19083a010_v1)] | [removed: [14](#s76AB714ED9994198DBE65542BD09EC68)] | [added: 14 |]

| [removed: Item 7.A.] [added: [Item 7.A.](#i19083a011_v1)] | | [Quantitative and Qualitative Disclosures about Market [removed: Risk.](#sA2064AA2A7F02B1E04735542C529D13B)] [added: Risk.](#i19083a011_v1)] | [removed: [25](#sA2064AA2A7F02B1E04735542C529D13B)] | [added: 22 |]

| [removed: Item 8.] [added: [Item 8.](#i19083a012_v1)] | | [Financial Statements and Supplementary [removed: Data.](#s1F78C3BC4D3713C697A65542C54BAFD5)] [added: Data.](#i19083a012_v1)] | [removed: [26](#s1F78C3BC4D3713C697A65542C54BAFD5)] | [added: 26 |]

10-K 1 i19083_rol-10k.htm

Yes x No o

Yes x No o

Yes o No x

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| | | [Signatures.](#i19083a022_v1) | | 68 |

| 2 |

| --- |

Three-for-Two Stock Split

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It has since been expanded to Central America, South America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe, Africa, and Mexico.

| 3 |

| --- |

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| Orkin franchise | | 2018 | | | | 2017 | | | | 2016 | | |

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| 4 |

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| 5 |

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10-K 1 rol-123117x10k.htm 10-K

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| | | | | | | |

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| | | [Signatures.](#s514B90CF21C11DCA3F0B5542CCC7C549) | [64](#s514B90CF21C11DCA3F0B5542CCC7C549) |

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

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The Company purchased Murray Pest Control and Scientific Pest Management in 2016.

| | | | | | |

| Rollins Australia Franchises | 2017 | | | 2016 | |

| Murray Pest Control franchises | 8 | | | 4 | |

| Scientific Pest Management franchises | 3 | | | 3 | |

| 9 |

| --- |

Each of the executive officers of the Company was elected by the Board of Directors to serve until the Board of Directors’ meeting immediately following the next Annual Meeting of Stockholders or until his or [removed: herearlier] [added: her earlier] removal by the Board of Directors or his or her resignation.

| [removed: Name] [added: Name] | | [removed: Age] [added: Age] | | [removed: Office] [added: Office] with [removed: Registrant] [added: Registrant] | | [removed: Date] [added: Date] First [removed: Elected to] [added: Elected to] Present [removed: Office] [added: Office] |

| R. Randall Rollins (1) | | [removed: 86] [added: 87] | | Chairman of the Board of Directors | | 10/22/1991 |

| Gary W. Rollins (1) (2) | | [removed: 73] [added: 74] | | Vice Chairman and Chief Executive Officer | | 7/24/2001 |

| John [added: F.] Wilson (3) | | [removed: 60] [added: 61] | | President and Chief Operating Officer | | 1/23/2013 |

| Paul [removed: E] [added: E.] Northen (4) | | [removed: 53] [added: 54] | | [added: Senior] Vice President, Chief Financial Officer and Treasurer | | 1/26/2016 |

| Elizabeth [added: B.] Chandler (5) | | [removed: 54] [added: 55] | | [added: Vice President, General Counsel and] Corporate Secretary [removed: and Chief Legal Officer] | | 1/1/2018 |

| [added: |] (1) | R. Randall Rollins and Gary W. Rollins are brothers. |

| [added: |] (2) | Gary W. Rollins was elevated to Vice Chairman Rollins in January 2013. He was elected to the office of Chief Executive Officer in July 2001. In February 2004, he was named Chairman of Orkin, LLC. |

| [added: |] (3) | John Wilson joined the Company in 1996 and has held various positions of increasing responsibility, serving as a technician, sales inspector, branch manager, region manager, vice president and division president. His most senior positions have included Vice President of Rollins, Inc., Southeast Division President, Atlantic Division Vice President and Central Commercial region manager. Mr. Wilson was elevated to President and Chief Operating Officer in January 2013. |

| [added: |] (4) | Paul E. Northen joined Rollins in 2015 as CFO and Corporate Treasurer. He was promoted to Vice President of Rollins, Inc. in January 2016. He began his career with UPS in 1985 and brings a wealth of Tax, Risk Management and Audit experience as well as strong international exposure to Rollins. Prior to joining Rollins, Mr. Northen was Vice President of International Finance and Accounting-Global Business Services for UPS. He previously held the positions of CFO of UPS’ Asia Pacific Region based in Hong Kong, and as Vice President of Finance in UPS’ Pacific and Western Regions. |

| [added: |] (5) | Elizabeth (Beth) Brannen Chandler joined Rollins in 2013 as Vice President and General Counsel. In 2016, Beth assumed responsibility for the Risk Management and Internal Audit groups. She was appointed to Corporate Secretary in January 2018. Before joining Rollins, Mrs. Chandler was vice president, general counsel and corporate secretary for Asbury Automotive. Prior to working with Asbury, Mrs. Chandler served as city attorney for the City of Atlanta; and she served as vice president, assistant general counsel and corporate secretary for Mirant Corp. |

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

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

| 10 |

| --- |

| | | | | | | |

| | |

| --- | --- |

As of January 31, [removed: 2018,] [added: 2019,] there were [removed: 2,496] [added: 3,502] holders of record of the Company’s common stock.

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

During the years ended December 31, [added: 2018 and] 2017, the Company did not repurchase shares on the open [removed: market compared to 0.8 million shares at a weighted average price of $27.19 in 2016.][added: market.]

In total, there remain [removed: 5.1] [added: 7.6] million additional shares authorized to be repurchased under prior Board approval.

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

| [added: |] (1) | Includes repurchases from employees for the payment of taxes on vesting of restricted shares in the following amounts: October [removed: 2017:] [added: 2018:] 0; November [removed: 2017:] [added: 2018:] 0; and December [removed: 2017: 1,167.] [added: 2018: 0.] |

| [added: |] (2) | The Company has a share repurchase plan adopted in 2012, to repurchase up to [removed: 7.5] [added: 11.25] million shares of the Company’s common stock. The plan has no expiration date. |

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

[removed: ][added: ]

[removed: COMPARISON] [added: COMPARISON] OF FIVE YEAR CUMULATIVE TOTAL [removed: RETURN*][added: RETURN*]

[removed: |] Rollins, Inc., S&P 500 Index and [removed: peer group] [added: S&P 500 Commercial Services & Supplies] composite index [removed: | | | | | | | | | | | | | | | | | |]

| Cumulative Total Shareholder Return $ at Fiscal Year End | [removed: 2012] | [removed: | |] 2013 | | | [added: |] 2014 | | | [added: |] 2015 | | | [added: |] 2016 | | | [added: |] 2017 | | [added: | | 2018 | | |]

| | | | | | | | | | | Total number of shares | | | | Maximum number of | | |

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

| | | of shares | | | | average price | | | | publicly announced | | | | purchased under the | | |

| Period | | purchased (1) | | | | paid per share | | | | repurchase plans (2) | | | | repurchase plans | | |

| October 1 to 31, 2018 | | | — | | | $ | — | | | | — | | | | 7,610,416 | |

| November 1 to 30, 2018 | | | — | | | | — | | | | — | | | | 7,610,416 | |

| December 1 to 31, 2018 | | | — | | | | — | | | | — | | | | 7,610,416 | |

| Total | | | — | | | $ | — | | | | — | | | | 7,610,416 | |

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

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

| 11 |

| --- |

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

| Rollins, Inc. | | | 100.00 | | | | 111.17 | | | | 132.63 | | | | 176.07 | | | | 245.82 | | | | 289.79 | |

| S&P 500 | | | 100.00 | | | | 113.69 | | | | 115.26 | | | | 129.05 | | | | 157.22 | | | | 150.33 | |

| S&P 500 Commercial Services & Supplies | | | 100.00 | | | | 114.86 | | | | 111.07 | | | | 139.68 | | | | 168.82 | | | | 169.65 | |

| 12 |

| --- |

The high and low prices of the Company’s common stock and dividends paid for each quarter in the years ended December 31, 2017 and 2016, were as follows:

STOCK PRICES AND DIVIDENDS

Rounded to the nearest $.01

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

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

| | | | | | | | | | | Dividends Paid Per Share | | | | | | | | | | | | | | Dividends Paid Per Share | | |

| | | Stock Price | | | | | | | | | | | Stock Price | | | | | | | | | | | | | |

| 2017 | | High | | | | Low | | | | | 2016 | | High | | | | Low | | | | | | | | | |

| First Quarter | | $ | 37.29 | | | $ | 32.82 | | | $ | 0.12 | | | First Quarter | | $ | 29.11 | | | $ | 23.69 | | | $ | 0.10 | |

| Second Quarter | | $ | 43.75 | | | $ | 35.82 | | | $ | 0.12 | | | Second Quarter | | $ | 29.27 | | | $ | 26.21 | | | $ | 0.10 | |

| Third Quarter | | $ | 46.22 | | | $ | 39.90 | | | $ | 0.12 | | | Third Quarter | | $ | 29.71 | | | $ | 27.29 | | | $ | 0.10 | |

| Fourth Quarter | | $ | 48.29 | | | $ | 42.82 | | | $ | 0.22 | | | Fourth Quarter | | $ | 34.24 | | | $ | 28.00 | | | $ | 0.20 | |

On January 23, 2018 the Board of Directors approved a 21.7% increase in the Company's quarterly cash dividend per common share to $0.14 payable March 9, 2018 to stockholders of record at the close of business February 9, 2018.

On October 24, 2017, the Board of Directors declared its regular $0.115 per share as well as a special year-end dividend of $0.10 per share both payable December 11, 2017 to stockholders of record at the close of business November 10, 2017.

The Company expects to continue to pay cash dividends to the common stockholders, subject to the earnings and financial condition of the Company and other relevant factors.

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

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

| October 1 to 31, 2017 | | — | | | $ | — | | | — | | | 5,073,611 | |

| November 1 to 30, 2017 | | — | | | — | | | | — | | | 5,073,611 | |

| December 1 to 31, 2017 | | 1,167 | | | 46.53 | | | | — | | | 5,073,611 | |

| Total | | 1,167 | | | $ | 46.53 | | | — | | | 5,073,611 | |

| | |

| --- | --- |

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

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

| Rollins, Inc. | 100.00 | | | 139.85 | | | 155.55 | | | 185.54 | | | 246.31 | | | 344.05 | |

| S&P 500 | 100.00 | | | 132.39 | | | 150.51 | | | 152.59 | | | 170.84 | | | 208.14 | |

| Peer Index | 100.00 | | | 130.77 | | | 146.46 | | | 159.68 | | | 185.38 | | | 227.58 | |

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

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

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

| [removed: | (in] [added: (In] thousands except per share data) | | | | | | | | | | | | | | | | | | | [added: | |]

| Years ended December 31, | [removed: 2017] | [added: 2018] | | | [removed: 2016] | [added: 2017] | | | [removed: 2015] | [added: 2016] | | | [removed: 2014] | [added: 2015] | | | [removed: 2013] | [added: 2014] | | [added: |]

| Revenues | [removed: $] | [removed: 1,673,957] [added: $] | [added: 1,821,565] | | [added: |] $ | [removed: 1,573,477] [added: 1,673,957] | | | $ | [removed: 1,485,305] [added: 1,573,477] | | | $ | [removed: 1,411,566] [added: 1,485,305] | | | $ | [removed: 1,337,374] [added: 1,411,566] | |

| Income [removed: Before Income Taxes] [added: before taxes] | [removed: 294,502] | | [added: 310,733] | | [removed: 260,636] | | [added: 294,502] | | [removed: 243,178] | | [added: 260,636] | | [removed: 219,484] | | [added: 243,178] | | [removed: 191,606] | | [added: 219,484] | [added: |]

| Net [removed: Income] [added: income] | [removed: 179,124] | [added: $] | [added: 231,663] | | [removed: 167,369] | [added: $] | [added: 179,124] | | [removed: 152,149] | [added: $] | [added: 167,369] | | [removed: 137,664] | [added: $] | [added: 152,149] | | [removed: 123,330] | [added: $] | [added: 137,664] | [added: |]

| OTHER DATA: | | | | | | | | | | | | | | | | | | | | [added: |]

| Net cash provided by operating activities | [removed: $] | [removed: 235,370] [added: $] | [added: 286,272] | | [added: |] $ | [removed: 226,525] [added: 235,370] | | | $ | [removed: 196,356] [added: 226,525] | | | $ | [removed: 194,146] [added: 196,356] | | | $ | [removed: 162,665] [added: 194,146] | |

| Net cash used in investing activities | [removed: (154,175] | | [removed: )] [added: (101,375] | [added: )] | [removed: (76,842] | | [added: (154,175 |] ) | | [removed: (69,942] | [added: (76,842] | ) | | [removed: (89,471] | [added: (69,942] | ) | | [removed: (30,790] | [added: (89,471] | ) |

| Net cash used in financing activities | [removed: (130,263] | | [removed: )] [added: (162,283] | [added: )] | [removed: (136,371] | | [added: (130,263 |] ) | | [removed: (97,216] | [added: (136,371] | ) | | [removed: (106,519] | [added: (97,216] | ) | | [removed: (75,653] | [added: (106,519] | ) |

| Depreciation | [removed: 27,381] | | [added: 30,364] | | [removed: 24,725] | | [added: 27,381] | | [removed: 19,354] | | [added: 24,725] | | [removed: 16,627] | | [added: 19,354] | | [removed: 14,415] | | [added: 16,627] | [added: |]

| Amortization of intangible assets | [removed: 29,199] | | [added: 36,428] | | [removed: 26,177] | | [added: 29,199] | | [removed: 25,168] | | [added: 26,177] | | [removed: 26,882] | | [added: 25,168] | | [removed: 25,156] | | [added: 26,882] | [added: |]

| Capital expenditures | [removed: $] | [removed: (24,680] [added: $] | [removed: )] [added: (27,179] | [added: )] | [added: |] $ | [removed: (33,081] [added: (24,680] | ) | | $ | [removed: (39,495] [added: (33,081] | ) | | $ | [removed: (28,739] [added: (39,495] | ) | | $ | [removed: (18,632] [added: (28,739] | ) |

| BALANCE SHEET DATA AT END OF YEAR: | | | | | | | | | | | | | | | | | | | | [added: |]

| Current assets | [removed: $] | [removed: 262,795] [added: $] | [added: 286,021] | | [added: |] $ | [removed: 290,171] [added: 262,795] | | | $ | [removed: 269,434] [added: 290,171] | | | $ | [removed: 241,194] [added: 269,434] | | | $ | [removed: 234,924] [added: 241,194] | |

| Total assets | [removed: 1,033,663] | | [added: 1,094,124] | | [removed: 916,538] | | [added: 1,033,663] | | [removed: 848,651] | | [added: 916,538] | | [removed: 808,162] | | [added: 848,651] | | [removed: 739,217] | | [added: 808,162] | [added: |]

| Stockholders’ equity | [removed: $] | [removed: 653,924] [added: $] | [added: 711,908] | | [added: |] $ | [removed: 568,545] [added: 653,924] | | | $ | [removed: 524,029] [added: 568,545] | | | $ | [removed: 462,676] [added: 524,029] | | | $ | [removed: 438,255] [added: 462,676] | |

All share and per share data presented in the following table have been adjusted for the three-for-two stock splits effective March 10, 2015 and December 10, 2018.

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

| Earnings per share – Basic | | $ | 0.71 | | | $ | 0.55 | | | $ | 0.51 | | | $ | 0.47 | | | $ | 0.42 | |

| Earnings per share – Diluted | | $ | 0.71 | | | $ | 0.55 | | | $ | 0.51 | | | $ | 0.47 | | | $ | 0.42 | |

| Dividends per share | | $ | 0.47 | | | $ | 0.37 | | | $ | 0.33 | | | $ | 0.28 | | | $ | 0.23 | |

| Number of shares outstanding at year-end | | | 327,308 | | | | 326,988 | | | | 326,688 | | | | 327,830 | | | | 327,425 | |

| 13 |

| --- |

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

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

| Earnings Per Share - Basic: | 0.82 | | | | 0.77 | | | | 0.70 | | | | 0.63 | | | | 0.56 | | |

| Earnings Per Share - Diluted: | 0.82 | | | | 0.77 | | | | 0.70 | | | | 0.63 | | | | 0.56 | | |

| Dividends paid per share | 0.56 | | | | 0.50 | | | | 0.42 | | | | 0.35 | | | | 0.30 | | |

| Number of shares outstanding at year-end | 217,992 | | | | 217,792 | | | | 218,553 | | | | 218,283 | | | | 218,797 | | |

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

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

| [removed: (in] [added: _(in] thousands except share [removed: information)] [added: information)_] | | | | | | | | [added: |]

| December 31, | [added: | 2018 | | | |] 2017 | | | | 2016 | | |

| ASSETS | | | | | | | | [added: |]

| Cash and cash equivalents [added: at beginning of year] | [removed: $] | [removed: 107,050] | [added: 107,050] | | [removed: $] | [added: |] 142,785 | | [added: | | 134,574 | |]

| Trade receivables, net of allowance for doubtful accounts of [removed: $11,814] [added: $13,285] and [removed: $11,443,] [added: $11,814,] respectively | [removed: 97,802] | | [added: 104,016] | | [removed: 88,490] | | [added: 97,802] | [added: |]

| Financing receivables, short-term, net of allowance for doubtful accounts of [removed: $1,535] [added: $1,845] and [removed: $1,727,] [added: $1,535,] respectively | [removed: 17,263] | | [added: 18,454] | | [removed: 15,968] | | [added: 17,263] | [added: |]

| Materials and supplies | [removed: 14,983] | | [added: 15,788] | | [removed: 13,724] | | [added: 14,983] | [added: |]

| Other current assets | [removed: 25,697] | | [added: 32,278] | | [removed: 29,204] | | [added: 25,697] | [added: |]

| Total Current Assets | [removed: 262,795] | | [added: 286,021] | | [removed: 290,171] | | [added: 262,795] | [added: |]

| Equipment and property, net | [removed: 134,088] | | [added: 136,885] | | [removed: 133,477] | | [added: 134,088] | [added: |]

| Goodwill | [removed: 346,514] | | [added: 368,481] | | [removed: 255,665] | | [added: 346,514] | [added: |]

| Customer contracts, net | [removed: 152,869] | | [added: 178,075] | | [removed: 117,466] | | [added: 152,869] | [added: |]

| Other intangible assets, net | [removed: 61,548] | | [added: 11,043] | | [removed: 44,310] | | [added: 11,550] | [added: |]

| Financing receivables, long-term, net of allowance for doubtful accounts of [removed: $1,357] [added: $1,536] and [removed: $1,430] [added: $1,357] respectively | [removed: 20,414] | | [added: 28,227] | | [removed: 16,748] | | [added: 20,414] | [added: |]

| Prepaid [removed: Pension] [added: pension] | [removed: 17,595] | | [added: 5,274] | | [removed: —] | | [added: 17,595] | [added: |]

| Deferred income taxes | [removed: 18,420] | | [added: 6,915] | | [removed: 41,877] | | [added: 18,420] | [added: |]

| Other assets | [removed: 19,420] | | [added: 19,063] | | [removed: 16,824] | | [added: 19,420] | [added: |]

| Total Assets | [removed: 1,033,663] | [added: $] | [added: 1,094,124] | | [removed: 916,538] | [added: $] | [added: 1,033,663] | [added: |]

| LIABILITIES | | | | | | | | [added: |]

| Accounts payable | [removed: 26,161] | [added: $] | [added: 27,168] | | [removed: 30,284] | [added: $] | [added: 26,161] | [added: |]

| Accrued insurance | [removed: 28,018] | | [added: 27,709] | | [removed: 26,201] | | [added: 28,018] | [added: |]

| Accrued compensation and related liabilities | [removed: 73,016] | | [added: 77,741] | | [removed: 75,839] | | [added: 73,016] | [added: |]

| Unearned revenue | [removed: 109,029] | | [added: 116,005] | | [removed: 99,820] | | [added: 109,029] | [added: |]

| Other current liabilities | [removed: 58,345] | | [added: 50,406] | | [removed: 44,847] | | [added: 58,345] | [added: |]

| Total current liabilities | [removed: 294,569] | | [added: 299,029] | | [removed: 276,991] | | [added: 294,569] | [added: |]

| Accrued insurance, less current portion | [removed: 34,245] | | [added: 33,867] | | [removed: 32,023] | | [added: 34,245] | [added: |]

| Long-term accrued liabilities | [removed: 50,925] | | [added: 49,320] | | [removed: 36,099] | | [added: 50,925] | [added: |]

| Total Liabilities | [removed: 379,739] | | [added: 382,216] | | [removed: 347,993] | | [added: 379,739] | [added: |]

| Commitments and Contingencies | | | | | | | | [added: |]

| STOCKHOLDERS’ EQUITY | | | | | | | | [added: |]

| Preferred stock, without par value; 500,000 authorized, zero shares issued | [removed: —] | | [added: —] | | [removed: —] | | [added: —] | [added: |]

| Common stock, par value $1 per share; 375,000,000 shares authorized, [removed: 217,992,177] [added: 327,308,079] and [removed: 217,791,511] [added: 326,988,265] shares issued, respectively | [removed: 217,992] | | [added: 327,308] | | [removed: 217,792] | | [added: 326,988] | [added: |]

| Paid-in-capital | [removed: 81,405] | | [added: 85,386] | | [removed: 77,452] | | [added: 81,405] | [added: |]

| Accumulated other comprehensive loss | [removed: (45,956] | | [removed: )] [added: (71,078] | [added: )] | [removed: (70,075] | | [added: (45,956 |] ) |

| Total Stockholders’ Equity | [removed: 653,924] | | [added: 711,908] | | [removed: 568,545] | | [added: 653,924] | [added: |]

| Total Liabilities and Stockholders’ Equity | [removed: $] | [removed: 1,033,663] [added: $] | [added: 1,094,124] | | [added: |] $ | [removed: 916,538] [added: 1,033,663] | |

[removed: The] [added: _The] accompanying notes are an integral part of these consolidated financial [removed: statements.][added: statements._]

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

| Cash and cash equivalents | | $ | 115,485 | | | $ | 107,050 | |

| Trademarks and tradenames, net | | | 54,140 | | | | 49,998 | |

| Retained earnings | | | 370,292 | | | | 291,487 | |

| 26 |

| --- |

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

| INCOME PER SHARE - DILUTED | | $ | 0.71 | | | $ | 0.55 | | | $ | 0.51 | |

| Weighted average shares outstanding - basic | | | 327,291 | | | | 326,982 | | | | 327,366 | |

| Weighted average shares outstanding - diluted | | | 327,291 | | | | 326,982 | | | | 327,366 | |

| 27 |

| --- |

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

| NET INCOME | | $ | 231,663 | | | $ | 179,124 | | | $ | 167,369 | |

_The accompanying notes are an integral part of these consolidated financial statements_

| 28 |

| --- |

_Rollins, Inc. and Subsidiaries_

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

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

| Net Income | | | | | | | | | | | | | | | | | | | | | | | | | | | 231,663 | | | | 231,663 | |

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

| Cash Dividends | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (152,742 | ) | | | (152,742 | ) |

| Stock Compensation | | | 605 | | | | 605 | | | | — | | | | — | | | | 13,323 | | | | — | | | | (202 | ) | | | 13,726 | |

| Employee Stock Buybacks | | | (285 | ) | | | (285 | ) | | | — | | | | — | | | | (9,342 | ) | | | — | | | | 86 | | | | (9,541 | ) |

| Balance at December 31, 2018 | | | 327,308 | | | $ | 327,308 | | | | — | | | $ | — | | | $ | 85,386 | | | $ | (71,078 | ) | | $ | 370,292 | | | $ | 711,908 | |

_The accompanying notes are an integral part of these consolidated financial statements._

| 29 |

| --- |

_Rollins, Inc. and Subsidiaries_

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

| Net Income | | $ | 231,663 | | | $ | 179,124 | | | $ | 167,369 | |

_The accompanying notes are an integral part of these consolidated financial statements_

| 30 |

| --- |

1.

| 31 |

| --- |

On January 7, 2019, Rollins, Inc. (the “Company”) and certain of its affiliates entered into certain agreements providing for the acquisition (the “Acquisition”) of a pest control business as follows: (a) a Stock Purchase Agreement among the Company, Clark Pest Control of Stockton, Inc. (“Clark Pest Control”), JJT King, Inc., and the stockholders of Clark Pest Control pursuant to which the Company will acquire all of the issued and outstanding shares of Clark Pest Control, (b) a Real Estate Purchase Agreement between RCI-King, Inc., a wholly-owned subsidiary of the Company, and Clarkson California Properties pursuant to which an affiliate of the Company will acquire certain real estate used in Clark Pest Control’s business, and (c) an Asset Purchase Agreement between King Distribution, Inc., a wholly-owned subsidiary of the Company, and Geotech Supply Co., LLC pursuant to which an affiliate of the Company will acquire certain assets used in the business of distributing certain equipment and supplies related to the pest control business of Clark Pest Control.

Subject to post-closing adjustments, the final purchase is expected to be in the area of $400 million including the real estate assets.

The purchase price was negotiated at arm’s-length and the agreement contains customary representations, warranties, noncompetition agreements and holdback provisions.

| | | | | | | | |

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

| Accrued pension | — | | | | 2,880 | | |

| Retained earnings | 400,483 | | | | 343,376 | | |

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

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

| Weighted average shares outstanding - basic | 217,988 | | | | 218,244 | | | | 218,583 | | |

| Weighted average shares outstanding - diluted | 217,988 | | | | 218,244 | | | | 218,583 | | |

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

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

| Balance at December 31, 2014 | 218,483 | | | $ | 218,483 | | | (200 | | ) | | $ | (200 | ) | | $ | 62,839 | | | $ | (65,488 | ) | | $ | 247,042 | | | $ | 462,676 | |

| Net Income | | | | | | | | | | | | | | | | | | | | | | | | 152,149 | | | | 152,149 | | |

| Stock Compensation | 597 | | | 597 | | | | — | | | | — | | | | 11,731 | | | | — | | | | (218 | | ) | | 12,110 | | |

| Employee Stock Buybacks | (308 | ) | | (308 | | ) | | — | | | | — | | | | (6,754 | | ) | | — | | | | 90 | | | | (6,972 | | ) |

| Cash Dividends | — | | | — | | | | — | | | | — | | | | — | | | | — | | | | (109,002 | | ) | | (109,002 | | ) |

| Excess tax benefits from share-based payments | — | | | | 3,699 | | | | 1,946 | | |

| Cash and cash equivalents at beginning of year | 142,785 | | | | 134,574 | | | | 108,372 | | |

In 2015, the Company used 873,349 shares of Company stock at a price of $18.79 per share or $16.4 million in acquisitions of companies.

Safeguard, which was acquired in June 2016, is a pest control company established in the United Kingdom in 1991 with a history of providing superior pest control, bird control, and specialist services to residential and commercial customers.

Northwest Exterminating, LLC, a wholly-owned subsidiary of the Company founded in 1951, was acquired by Rollins, Inc. in August 2017.

As of the filing date, February 26, 2018, there were no subsequent events that would affect the Company’s financial statements.

For pest control customers, the Company offers a discount for those customers who prepay for a full year of services.

Currency exchange translation and increases in foreign revenues are the cause of the increased percentage from 2016.

Interest income on installment receivables is accrued monthly based on actual loan balances and stated interest rates.

Recognition of initial franchise fee revenues occurs when all material services or conditions relating to a new agreement have been substantially performed or satisfied by the Company, and initial franchise fees are treated as unearned revenue in the Statement of Financial Position until such time.

Gains on sales of pest control customer accounts to franchises are recognized at the time of sale and when collection is reasonably assured.

| Common stock | 215,927 | | | | 215,831 | | | | 215,749 | | |

| | 217,988 | | | | 218,244 | | | | 218,583 | | |

| Common stock: | | | | | | | | | | | |

| Distributed earnings | $ | 0.56 | | | $ | 0.50 | | | $ | 0.42 | |

| Undistributed earnings | 0.26 | | | | 0.27 | | | | 0.28 | | |

| | $ | 0.82 | | | $ | 0.77 | | | $ | 0.70 | |

| Distributed earnings | $ | 0.53 | | | $ | 0.46 | | | $ | 0.40 | |

| | $ | 0.79 | | | $ | 0.73 | | | $ | 0.68 | |

All Orkin domestic franchises have a guaranteed repurchase clause that the Orkin franchise may be repurchased by Orkin at a later date once it has been established; therefore, initial Orkin domestic franchise fees are deferred in accordance with the Financial Accounting Standards Board ("FASB ) Accounting Standards Codification ("ASC") Topic 952-605 “Franchisor Revenue Recognition,” for the duration of the initial contract period and are included as unearned revenue in the Consolidated Statements of Financial Position.

The Company adopted this ASU on January 1, 2018 it had no impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business.

The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606.

In March 2017, the FASB issued Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post retirement Benefit Cost (“ASU 2017-07”).

The update requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period.

[removed: Evaluation] [added: _Evaluation] of Disclosure Controls and [removed: Procedures—We] [added: Procedures_—We] have established disclosure controls and procedures to ensure, among other things, that material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors.

Based on management’s evaluation as of December 31, [removed: 2017,] [added: 2018,] 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.

[removed: Management’s] [added: _Management’s] Report on Internal Control Over Financial [removed: Reporting—Management’s] [added: Reporting_—Management’s] Report on Internal Control Over Financial Reporting is contained on page [removed: 25.][added: 23.]

[removed: Changes] [added: _Changes] in Internal [removed: Controls—There] [added: Controls_—There] were no changes in our internal control over financial reporting during the fourth quarter of [removed: 2017] [added: 2018] 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: 2018] [added: 2019] Annual Meeting of Stockholders (the “Proxy Statement”), in the section titled [removed: “Election] [added: “Proposal 1: Election] of Directors”.

Information about executive officers is contained on page [removed: 11] [added: 10] of this document.

[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 [removed: for its 2018 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_]

In addition, the Company has adopted a Code of Business Conduct and Ethics for Directors and Executive Officer and Related Party [removed: Transaction Policy.][added: Transactions policy.]

Both of these documents are available on the Company’s website at [removed: www.rollins.com] [added: www.rollins.com, under the heading “Investor Relations – Corporate Governance,”] and a copy is available by writing to Investor Relations at 2170 Piedmont Road, Atlanta, Georgia 30324.

The Company intends to satisfy the disclosure requirement under Item 10 of Form [removed: 8-K] [added: 10-K1] regarding an amendment to, or waiver from, a provision of its code of ethics that relates to any elements of the code of ethics definition enumerated in SEC rules by posting such information on its internet website, the address of which is provided above.

[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 [removed: Securities] Exchange Act” in the Company’s Proxy [removed: Statement for its 2018 Annual Meeting of Stockholders,] [added: Statement,] which is incorporated herein by reference.

| 63 |

| --- |

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 [removed: for the Annual Meeting of Stockholders to be held April 24, 2018] 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: 24, 2018] [added: 23, 2019] 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: 2017.][added: 2018.]

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

| Equity compensation plans [added: not] approved by security holders | [removed: 2,017,119] | | [added: —] | [added: | |] $ | — | | | [removed: 4,273,709] | [added: —] | |

| Equity compensation plans [removed: not] approved by security holders | [removed: —] | | [added: 2,724,456] | [added: | |] $ | — | | | [removed: —] | [added: 5,933,319] | |

| [added: |] (1) | Includes [removed: 4,273,709] [added: 5,933,319] shares available for grant under the [removed: 2008] [added: 2018] Employee Stock Incentive Plan. The [removed: 2008] [added: 2018] 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. |

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

| Total | | | 2,724,456 | | | $ | — | | | | 5,933,319 | (1) |

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

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

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

| Total | 2,017,119 | | | $ | — | | | 4,273,709 | | (1) |

| | |

| --- | --- |

Information regarding principal accounting fees and services is set forth under “Independent [added: Registered] Public [removed: Accountants”] [added: Accounting Firm”] in the Company’s Proxy [removed: Statement for its 2018 Annual Meeting of Stockholders,] [added: Statement,] which information is incorporated herein by reference.

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

| 64 |

| --- |

[removed: (a)Consolidated] [added: _(a) Consolidated] Financial Statements, Financial Statement Schedule and [removed: Exhibits.][added: Exhibits._]

| [added: |] 1. | Consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements and Schedule are filed as part of this report. |

| [added: |] 2. | The financial statement schedule listed in the accompanying Index to Consolidated Financial Statements and Schedule is filed as part of this report. |

| [added: |] 3. | Exhibits listed in the accompanying Index to Exhibits are filed as part of this report. The following such exhibits are management contracts or compensatory plans or arrangements: |

| (10) (b) | | [removed: [Form] [added: 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, [removed: 2005.](http://www.sec.gov/Archives/edgar/data/84839/000091406205000692/rollinss81105ex42.txt)] [added: 2005.] |

| (10) (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 [removed: 23,] [added: 25,] 2013.](http://www.sec.gov/Archives/edgar/data/84839/000110465913033048/a13-10751_1ex10da.htm) |

| (10) (d) | | [removed: [Forms] [added: Forms] of award agreements under the 2013 Cash Incentive Plan incorporated herein by reference to Exhibit 10(a) as filed with its Form 10-K dated February 27, [removed: 2017.](http://www.sec.gov/Archives/edgar/data/84839/000117120017000077/i17072_ex10-d1.htm)] [added: 2017.] |

| (10) (e) | | [removed: [2008] [added: 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, [removed: 2008.](http://www.sec.gov/Archives/edgar/data/84839/000104746908002942/a2183718zdef14a.htm)] [added: 2008.] |

| (10) (f) | | [Form of Restricted Stock Grant Agreement incorporated herein by reference to Exhibit 10(d) as filed with its Form 8-K dated April [removed: 22,] [added: 28,] 2008.](http://www.sec.gov/Archives/edgar/data/84839/000008483908000071/exh10d.htm) |

| (10) (g) | | [removed: [Form] [added: 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, [removed: 2012.](http://www.sec.gov/Archives/edgar/data/84839/000110465912029465/a12-8764_1ex10d1.htm)] [added: 2012.] |

| (10) (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, [removed: 2010.](http://www.sec.gov/Archives/edgar/data/84839/000104746910001320/a2196759zex-10_q.htm)] [added: 2010.](http://www.sec.gov/Archives/edgar/data/84839/000104746911001349/a2202150zex-10_q.htm)] |

| (10) (i) | | [removed: [Summary] [added: Summary] of Compensation Arrangements with Non-Employee Directors, incorporated herein by reference to Exhibit 10(i) filed with the Registrant’s 10-K filed February 25, [removed: 2015.](http://www.sec.gov/Archives/edgar/data/84839/000155278115000273/e00088_ex10i.htm)] [added: 2015.] |

| [removed: (b)] | [removed: Exhibits] [added: _(b)_ | _Exhibits_] (inclusive of item 3 above): |

| (3) (i) | | [removed: |] [(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.](http://www.sec.gov/Archives/edgar/data/84839/000008483905000070/exhibit3ia.txt) |

| | | [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.](http://www.sec.gov/Archives/edgar/data/84839/000008483905000028/f03ib.txt) |

| | | [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.](http://www.sec.gov/Archives/edgar/data/84839/000008483905000070/exhibit3ic.txt) |

| | | [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, [removed: 2006](http://www.sec.gov/Archives/edgar/data/84839/000008483906000070/ex3id.htm)] [added: 2006.](http://www.sec.gov/Archives/edgar/data/84839/000008483906000070/ex3id.htm)] |

| | | [removed: |] [(E) Certificate of Amendment of Certificate of Incorporation of Rollins, Inc. dated April, 26, 2011, incorporated herein by reference to Exhibit 3(i)(E) filed with the Registrant’s 10-K filed February 25, 2015.](http://www.sec.gov/Archives/edgar/data/84839/000155278115000273/e00088_ex3ie.htm) [removed: [(F) Certificate of Amendment of Certificate of Incorporation of Rollins, Inc. dated April 28, 2015, incorporated herein by reference to Exhibit 3(i)(F) filed with the Registrant’s 10-Q filed on July 29, 2015.](http://www.sec.gov/Archives/edgar/data/84839/000155278115000727/e00291_ex3.htm)] |

| (ii) | | [removed: |] [Revised By-laws of Rollins, Inc. dated April 25, 2017, incorporated herein by reference to Exhibit (3) (i) as filed with its Form 10-Q filed April 28, 2017.](http://www.sec.gov/Archives/edgar/data/84839/000117120017000223/i17220_ex3-ii.htm) |

| [removed: (4 | )] [added: (4)] | | [Form of Common Stock Certificate of Rollins, Inc. incorporated herein by reference to Exhibit (4) as filed with its Form 10-K for the year ended December 31, 1998.](http://www.sec.gov/Archives/edgar/data/84839/000104746999011738/0001047469-99-011738.txt) |

| (10) (a) | | [removed: | [Rollins,] [added: 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, [removed: 2005.](http://www.sec.gov/Archives/edgar/data/84839/000091406205000692/rollinss81105ex41.txt)] [added: 2005.] |

| [removed: (21 | )] [added: (21)] | | [Subsidiaries of [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/84839/000008483918000065/exhibit21.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/84839/000117120019000087/i19083_ex21.htm)] |

| [removed: (23.1 | )] [added: (23.1)] | | [Consent of Grant Thornton LLP, Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/84839/000008483918000065/exhibit231.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/84839/000117120019000087/i19083_ex23-1.htm)] |

| [removed: (24 | )] [added: (24)] | | [Powers of Attorney for [removed: Directors.](https://www.sec.gov/Archives/edgar/data/84839/000008483918000065/exhibit24.htm)] [added: Directors.](https://www.sec.gov/Archives/edgar/data/84839/000117120019000087/i19083_ex24-1.htm)] |

| [removed: (31.1 | )] [added: (31.1)] | | [Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/84839/000008483918000065/exhibit311.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/84839/000117120019000087/i19083_ex31-1.htm)] |