Rollins : 2024 Bank of America Information and Business Services Conference Presentation

Bank of America Information and

Business Services Conference 2024

Rollins, Inc.

March 14, 2024

Safe Harbor

Statements made in this earnings presentation may contain forward-looking statements that involve risks and uncertainties concerning the Company's business and financial results. We have based these forward-looking statements largely on our current opinions, expectations, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Such forward looking statements include, but are not limited to, express and implied statements regarding the Company's belief that it will be able to successfully focus on delivering continued growth and improving profitability in 2024, that healthy market growth and solid execution will drive strong organic growth in 2024, with good performance across all major service areas, the Company will be able to successfully focus on delivering strong growth and incremental margins in 2024, complemented by a strategic and disciplined approach to M&A, the Company remains well positioned to continue to drive growth through acquisitions, the Company will be able to successfully focus on driving growth while evaluating several initiatives aimed at improving productivity, the Company is well positioned to continue to deliver strong results, that the Company will be able to successfully focus on executing additional programs that it believes will improve the efficiency of its business model, that the Company will continue to see good leverage across the income statement in 2024, that the Company's continued focus on implementing continuous improvement initiatives will improve the efficiency of its business, the Company will be able to continue to focus on pricing, as well as ongoing execution of its modernization program in 2024, the Company will be able to successfully evaluate a number of initiatives that will improve performance, the Company's strong cash position will enable a balanced capital allocation strategy focused on investing in growth opportunities in its core market in 2024, the Company's current staffing levels will be able to respond to favorable demand trends and to accelerate modernization efforts, and the Company's belief that it has a healthy pipeline of acquisitions with attractive multiples, and the Fox acquisition is leading to robust growth in M&A.

Our actual results could differ materially from those indicated by the forward-looking statements because of various risks, timing and uncertainties including, without limitation, the failure to maintain and enhance our brands and develop a positive client reputation; our ability to protect our intellectual property and other proprietary rights that are material to our business and our brand recognition; actions taken by our franchisees, subcontractors or vendors that may harm our business; general economic conditions; the effects of a pandemic or other major public health concern on the Company's business, results of operations, accounting assumptions and estimates and financial condition; adverse economic conditions, including, without limitation, market downturns, inflation and restrictions in customer discretionary expenditures, increases in interest rates or other disruptions in credit or financial markets, increases in fuel prices, raw material costs or other operating costs; potential increases in labor costs; labor shortages and/or our inability to attract and retain skilled workers; competitive factors and pricing practices; changes in industry practices or technologies; the degree of success of our termite process reforms and pest control selling and treatment methods; our ability to identify, complete and successfully integrate potential acquisitions; unsuccessful expansion into international markets; climate change and unfavorable weather conditions; a breach of data security resulting in the unauthorized access of personal, financial, proprietary, confidential or other personal data or information about our customers, employees, third parties, or of our proprietary confidential information; damage to our brands or reputation; new or proposed regulations regarding climate change; any noncompliance with, changes to, or increased enforcement of various government laws and regulations, including environmental regulations; possibility of an adverse ruling against us in pending litigation, regulatory action or investigation; the adequacy of our insurance coverage to cover all significant risk exposures; the effectiveness of our risk management and safety program; general market risk; management's substantial ownership interest and its impact on public stockholders and the availability of the Company's common stock to the investing public; and the existence of certain anti-takeover provisions in our governance documents, which could make a tender offer, change in control or takeover attempt that is opposed by the Company's Board of Directors more difficult or expensive. These and other risks and uncertainties that may impact our business as well as these forward-looking statements include, but are not limited to, those described in Item 1A "Risk Factors" or Part I and elsewhere in our Annual Report on Form 10-K for our fiscal years ended December 31, 2023 and December 31, 2022 and may also be described from time to time in our other reports filed with the SEC. You should not rely on our forward-looking statements. All of the foregoing risks and uncertainties are beyond our ability to control, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. The Company does not undertake to update its forward-looking statements.

Reconciliation Of GAAP And NON-

GAAP Financial Measures

The Company has used the non-GAAP financial measures of organic revenues, organic revenues by type, adjusted net income, adjusted earnings per share ("EPS"), earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, free cash flow, free cash flow conversion, net debt, net leverage ratio, adjusted sales, general and administrative expenses ("Adjusted SG&A"), and adjusted other income, net in this earnings presentation. Organic revenue is calculated as revenue less the revenue from acquisitions completed within the prior 12 months and excluding the revenue from divested businesses. Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures those expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control and restructuring costs related to restructuring and workforce reduction plans, and gains on the sale of businesses and by further subtracting the tax impact of those expenses. EBITDA is calculated by adding back to net income interest, taxes, depreciation and amortization and EBITDA margin is calculated as EBITDA divided by revenue. Adjusted EBITDA and adjusted EBITDA margin are calculated by adding back to EBITDA those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control and restructuring costs related to restructuring and workforce reduction plans, and gains on the sale of businesses. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Free cash flow conversion is calculated as free cash flow divided by net income. Net debt is calculated as total long-term debt less cash and cash equivalents. Net leverage ratio is calculated by dividing net debt by trailing twelve-month EBITDA. Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control. Adjusted other income, net is calculated by removing gains on the sale of businesses. These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP.

Management uses adjusted net income, adjusted EPS, adjusted SG&A, adjusted other income, net, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, and adjusted incremental EBITDA margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Management also uses organic revenues and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions. Management uses free cash flow to demonstrate the Company's ability to maintain its asset base and generate future cash flows from operations. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management uses net debt as an assessment of overall liquidity, financial flexibility, and leverage. Net leverage ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period-over-period comparisons of, the Company's results of operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

See the appendix for a reconciliation of non-GAAP financial measures used in this presentation with their most comparable GAAP measures.

APPENDIX

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