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<SEC-DOCUMENT>0000084839-03-000030.txt : 20030723
<SEC-HEADER>0000084839-03-000030.hdr.sgml : 20030723
<ACCEPTANCE-DATETIME>20030722173139
ACCESSION NUMBER:		0000084839-03-000030
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20030723

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ROLLINS INC
		CENTRAL INDEX KEY:			0000084839
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-TO DWELLINGS & OTHER BUILDINGS [7340]
		IRS NUMBER:				510068479
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04422
		FILM NUMBER:		03797104

	BUSINESS ADDRESS:	
		STREET 1:		2170 PIEDMONT RD NE
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30324
		BUSINESS PHONE:		4048882000

	MAIL ADDRESS:	
		STREET 1:		2170 PIEDMONT ROAD NE
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30324
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a10q2nd.txt
<DESCRIPTION>SECOND QUARTER 2003 10-Q
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

[X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003.

OR

[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 1-4422



                                  ROLLINS, INC.
             (Exact name of registrant as specified in its charter)


                    Delaware                                 51-0068479
(State or other jurisdiction of incorporation            (I.R.S. Employer
              or organization)                           Identification No.)

                   2170 Piedmont Road, N.E., Atlanta, Georgia
                    (Address of principal executive offices)

                                      30324
                                   (Zip Code)

                                 (404) 888-2000
              (Registrant's telephone number, including area code)
                        --------------------------------


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in rule 12b-2 of the Exchange Act).
Yes [X] No [ ]

Rollins, Inc. had 45,116,771 shares of its $1 Par Value Common Stock outstanding
as of July 15, 2003.
<PAGE>
<TABLE>
<CAPTION>
                                                 ROLLINS, INC. AND SUBSIDIARIES

                                                             INDEX

<S>            <C>                                                                                    <C>
PART I         FINANCIAL INFORMATION                                                                  Page No.
                                                                                                   --------------

               Item 1.   Financial Statements.

                         Consolidated Statements of Financial Position as of June 30, 2003
                         and December 31, 2002                                                             2

                         Consolidated Statements of Income for the Three and Six Months
                         Ended June 30, 2003 and 2002                                                      3

                         Consolidated Statements of Cash Flows for the Six Months Ended
                         June 30, 2003 and 2002                                                            4

                         Notes to Consolidated Financial Statements                                        5

               Item 2.   Management's Discussion and Analysis of Financial Condition and
                         Results of Operations.                                                            8

               Item 3.   Quantitative and Qualitative Disclosures About Market Risk.                      11

               Item 4.   Controls and Procedures.                                                         11

PART II        OTHER INFORMATION

               Item 1.   Legal Proceedings.                                                               12

               Item 4.   Submission of Matters to a Vote of Security Holders.                             12

               Item 6.   Exhibits and Reports on Form 8-K.                                                12

SIGNATURES                                                                                                14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART I  FINANCIAL INFORMATION
Item 1. Financial Statements.

                                        ROLLINS, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                (In thousands except share and per share data)

                                                                            (Unaudited)
                                                                              June 30,            December 31,
                                                                                2003                  2002
                                                                       --------------------   ------------------
       <S>         <C>                                                 <C>                    <C>
       ASSETS
                   Cash and Short-Term Investments                     $            64,865    $          38,315
                   Trade Receivables, Net of Allowance for
                        Doubtful Accounts of $4,724 and $5,441,
                        respectively                                                54,392               47,740
                   Materials and Supplies                                           11,073               10,662
                   Deferred Income Taxes                                            19,800               20,035
                   Other Current Assets                                             11,037                9,470
                                                                       --------------------   ------------------

                       Current Assets                                              161,167              126,222

                   Equipment and Property, Net                                      34,391               38,880
                   Goodwill                                                         72,498               72,392
                   Customer Contracts and Other Intangible Assets                   33,700               35,507
                   Deferred Income Taxes                                            42,278               44,406
                                                                       --------------------   ------------------

                       Total Assets                                    $           344,034      $       317,407
                                                                       ====================   ==================

       LIABILITIES
                   Accounts Payable                                    $            15,912      $        12,138
                   Accrued Insurance                                                12,668               11,740
                   Accrued Payroll                                                  30,354               28,623
                   Unearned Revenue                                                 44,848               43,049
                   Accrual for Termite Contracts                                    19,000               19,000
                   Other Current Liabilities                                        19,360               15,312
                                                                       --------------------   ------------------

                       Current Liabilities                                         142,142              129,862

                   Accrued Insurance, Less Current Portion                          29,471               30,222
                   Accrual for Termite Contracts, Less Current Portion              26,980               27,446
                   Accrued Pension                                                   5,770               10,769
                   Long-Term Accrued Liabilities                                    27,512               28,418
                                                                       --------------------   ------------------

                       Total Liabilities                                           231,875              226,717
                                                                       --------------------   ------------------

       Commitments and Contingencies

       STOCKHOLDERS' EQUITY
                   Common Stock, par value $1 per share; 99,500,000
                        shares authorized; 45,101,771 and 44,799,368
                        shares issued and outstanding, respectively                 45,102               44,799
                   Additional Paid-In Capital                                        4,178                  299
                   Accumulated Other Comprehensive Loss                            (16,613)             (16,947)
                   Retained Earnings                                                79,492               62,539
                                                                       --------------------   ------------------

                       Total Stockholders' Equity                                  112,159               90,690
                                                                       --------------------   ------------------

                       Total Liabilities and Stockholders'             $           344,034    $         317,407
                   Equity
                                                                       ====================   ==================
<FN>
            The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
                         ROLLINS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                 (In thousands except share and per share data)
                                   (Unaudited)

                                                                   Three Months Ended                     Six Months Ended
                                                                        June 30,                              June 30,
                                                          ----------------------------------   ------------------------------------
                                                                 2003              2002               2003               2002
                                                          ----------------  ----------------   ----------------   -----------------
<S>        <C>                                            <C>               <C>                <C>                <C>
REVENUES
           Customer Services                              $       185,105   $       184,189    $       340,227    $        337,491
                                                          ----------------  ----------------   ----------------   -----------------

COSTS AND EXPENSES
           Cost of Services Provided                               95,550            97,205            179,628             181,227
           Depreciation and Amortization                            5,037             5,446             10,193              10,873
           Sales, General & Administrative                         62,253            62,720            116,475             118,557
           Interest (Income) Expense                                  (94)              (39)              (160)                 10
                                                          ----------------  ----------------   ----------------   -----------------
                                                                  162,746           165,332            306,136             310,667
                                                          ----------------  ----------------   ----------------   -----------------
INCOME BEFORE INCOME TAXES                                         22,359            18,857             34,091              26,824
                                                          ----------------  ----------------   ----------------   -----------------

PROVISION FOR INCOME TAXES
           Current                                                  7,290             5,942             10,753               7,746
           Deferred                                                 1,207             1,224              2,202               2,447
                                                          ----------------  ----------------   ----------------   -----------------
                                                                    8,497             7,166             12,955              10,193
                                                          ----------------  ----------------   ----------------   -----------------
NET INCOME                                                $        13,862   $        11,691    $        21,136    $         16,631
                                                          ================  ================   ================   =================
EARNINGS PER SHARE - BASIC
           Net Income                                     $          0.31   $          0.26    $          0.47    $           0.37
                                                          ================  ================   ================   =================
EARNINGS PER SHARE - DILUTED
           Net Income                                     $          0.30   $          0.26    $          0.46    $           0.37
                                                          ================  ================   ================   =================

           Average Shares Outstanding---Basic                      45,117            45,227             45,015              45,211

           Average Shares Outstanding---Diluted                    46,404            45,543             46,258              45,516

DIVIDENDS PAID PER SHARE                                  $          0.05   $        0.0333    $          0.10    $         0.0666
                                                          ================  ================   ================   =================

<FN>
                     The accompanying notes are an integral part of these
consolidated financial statements.
</FN>
</TABLE>
                                       3
<PAGE>
<TABLE>
<CAPTION>
                                              ROLLINS, INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (In thousands)
                                                       (Unaudited)

                                                                                               Six Months Ended
                                                                                                   June 30,
                                                                                   ----------------------------------------
                                                                                           2003                  2002
                                                                                   ------------------     -----------------
<S>            <C>                                                                 <C>                    <C>
OPERATING ACTIVITIES
               Net Income                                                          $          21,136      $         16,631
               Adjustments to Reconcile Net Income to Net
                  Cash Provided by Operating Activities:
                     Depreciation and Amortization                                            10,193                10,873
                     Provision for Deferred Income Taxes                                       2,364                 2,463
                     Other, Net                                                                  163                   173
               (Increase) Decrease in Assets:
                     Trade Receivables                                                        (6,517)               (6,238)
                     Materials and Supplies                                                     (358)                  309
                     Other Current Assets                                                     (1,566)                2,284
                     Other Non-Current Assets                                                    (60)                   94
               Increase (Decrease) in Liabilities:
                     Accounts Payable and Accrued Expenses                                    11,874                 7,186
                     Unearned Revenue                                                          1,799                12,235
                     Accrued Insurance                                                           177                   526
                     Accrual for Termite Contracts                                              (466)                  841
                     Long-Term Accrued Liabilities                                            (5,864)                  224
                                                                                   ------------------     -----------------
               Net Cash Provided by Operating Activities                                      32,875                47,601
                                                                                   ------------------     -----------------

INVESTING ACTIVITIES
               Purchases of Equipment and Property                                            (2,332)               (4,611)
               Net Cash Used for Acquisition of Companies                                     (1,508)               (1,358)
                                                                                   ------------------     -----------------

               Net Cash Used in Investing Activities                                          (3,840)               (5,969)
                                                                                   ------------------     -----------------

FINANCING ACTIVITIES
               Dividends Paid                                                                 (4,500)               (3,016)
               Common Stock Purchased                                                            ---                (1,292)
               Payments on Capital Leases                                                        ---                  (256)
               Other                                                                           2,015                   292
                                                                                   ------------------     -----------------

               Net Cash Used in Financing Activities                                          (2,485)               (4,272)
                                                                                   ------------------     -----------------

               Net Increase in Cash and Short-Term Investments                                26,550                37,360
               Cash and Short-Term Investments At Beginning of Period                         38,315                 8,650
                                                                                   ------------------     -----------------
               Cash and Short-Term Investments At End of Period                    $          64,865      $         46,010
                                                                                   ==================     =================
<FN>
                 The accompanying notes are an integral part of these
consolidated financial statements.
</FN>
</TABLE>
                                        4
<PAGE>
                         ROLLINS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1.        BASIS OF PREPARATION

               The consolidated  financial  statements included herein have been
               prepared  by  Rollins,  Inc.  (the  "Company"),   without  audit,
               pursuant  to the  rules and  regulations  of the  Securities  and
               Exchange  Commission.  Footnote  disclosures normally included in
               financial  statements  prepared  in  accordance  with  accounting
               principles  generally  accepted  in the United  States  have been
               condensed or omitted pursuant to such rules and regulations.

               These  consolidated   financial  statements  should  be  read  in
               conjunction  with the  financial  statements  and  related  notes
               contained  in the  Company's  annual  report on Form 10-K for the
               year ended December 31, 2002.

               The Company has only one reportable segment, its pest and termite
               control  business.  The Company's  results of operations  and its
               financial condition are not reliant upon any single customer or a
               few customers or the Company's foreign operations.

               In  the  opinion  of  management,   the  consolidated   financial
               statements   included   herein   contain  all  normal   recurring
               adjustments necessary to present fairly the financial position of
               the Company as of June 30, 2003 and December  31,  2002,  and the
               results of operations for the three and six months ended June 30,
               2003 and 2002 and cash  flows for the six  months  ended June 30,
               2003 and 2002.  Operating  results  for the three and six  months
               ended June 30, 2003 are not necessarily indicative of the results
               that may be expected for the year ending December 31, 2003.

               Comprehensive   income  includes  foreign  currency   translation
               adjustments (See Note 5). For the three and six months ended June
               30,  2003  and  2002,  comprehensive  income  is  not  materially
               different from net income.

               The Board of Directors,  at its quarterly  meeting on January 28,
               2003,  authorized a three-for-two  stock split by the issuance on
               March 10, 2003 of one additional common share for each two common
               shares held of record on February 10, 2003. Accordingly,  the par
               value for additional  shares issued was adjusted to common stock,
               and fractional shares resulting from the stock split were settled
               in cash. All share and per share data appearing  throughout  this
               Form 10-Q have been retroactively adjusted for this stock split.

               In November  2002,  the  Emerging  Issues Task Force  issued EITF
               00-21, Revenue Arrangements with Multiple Deliverables,  which is
               effective for revenue arrangements entered into in fiscal periods
               beginning after June 15, 2003. This EITF addresses how to account
               for arrangements  that may involve the delivery or performance of
               multiple  products,  services,  and/or rights to use assets.  The
               Company's    termite   baiting   business    involves    multiple
               deliverables,   consisting   of  an  initial   installation   and
               subsequent  monitoring  inspections.  Since the  inception of its
               termite  baiting  program in 1999,  the Company has  consistently
               deferred a portion of the selling price to be recognized over the
               first year of the contracts  based on a fair value  assessment of
               the service  provided.  The Company  will adopt EITF 00-21 in the
               third quarter of 2003.  Management  believes that the adoption of
               this statement  will not have a material  effect on the Company's
               financial position, results of operations or liquidity.

               In December  2002,  the FASB issued FASB  Interpretation  No. 46,
               Consolidation  of Variable  Interest  Entities  ("FIN  46").  The
               Interpretation  requires  that  a  variable  interest  entity  be
               consolidated  by a  company  if  that  company  is  subject  to a
               majority of the risk of loss from the variable  interest entity's
               activities  or  entitled  to receive a majority  of the  entity's
               residual returns or both. The  consolidation  requirements of FIN
               46 apply  immediately to variable interest entities created after
               January 31, 2003. The consolidation  requirements  apply to older
               entities  in the first  fiscal year or interim  period  beginning
               after June 15, 2003. Certain of the disclosure requirements apply
               in all  financial  statements  issued  after  January  31,  2003,
               regardless of when the variable  interest entity was established.
               The Company believes the adoption of the Interpretation  will not
               have a  material  impact on the  financial  position,  results of
               operations or liquidity of the Company.

               Certain  amounts  for prior  periods  have been  reclassified  to
               conform  with current  period  consolidated  financial  statement
               presentation.  Such reclassifications had no effect on previously
               reported net income.

               The business of the Company is affected by the seasonal nature of
               the Company's pest and termite  control  services as evidenced by
               the following chart.

                                       5
<PAGE>
                                     Total Net Revenues
                    ---------------------------------------------------
                         2003              2002               2001
                    --------------    --------------    ---------------

   First Quarter    $     155,122     $     153,302     $      150,280
   Second Quarter         185,105           184,189            180,731
   Third Quarter            N/A             174,063            169,223
   Fourth Quarter           N/A             153,871            149,691

NOTE 2.        EARNINGS PER SHARE

               In accordance with SFAS No. 128,  Earnings Per Share, the Company
               computes  basic  Earnings  Per  Share  ("EPS")  on the  basis  of
               weighted-average  shares outstanding.  Diluted EPS is computed on
               the basis of  weighted-average  shares  outstanding  plus  common
               stock options outstanding during the period, which, if exercised,
               would have a dilutive  effect on EPS.  Basic and diluted EPS have
               been  restated  for  the   three-for-two   stock  split  for  all
               applicable  periods  presented (See Note 1). A reconciliation  of
               the number of weighted-average shares used in computing basic and
               diluted EPS is as follows:
<TABLE>
<CAPTION>
                                                                                  Three Months Ended            Six Months Ended
                                                                              --------------------------   ------------------------
                                                                                       June 30,                      June 30,
                                                                              --------------------------   ------------------------
       (In thousands except per share data amounts)                                2003          2002           2003         2002
       -------------------------------------------------------------------------------------------------   ------------------------
        <S>                                                                     <C>           <C>              <C>          <C>
        Basic and diluted earnings available to stockholders
        (numerator):                                                            $13,862       $11,691          $21,136      $16,631
        Shares (denominator):
                Weighted-average shares outstanding                              45,117        45,227           45,015       45,211
                Effect of Dilutive securities:
                          Employee Stock Options                                  1,287           316            1,243          305
                                                                             ---------------------------   ------------------------
                          Adjusted Weighted-Average Shares and
                             Assumed Exercises                                   46,404        45,543           46,258       45,516


        Per share amounts:
                Basic earnings per common share                                   $0.31         $0.26            $0.47        $0.37
                Diluted earnings per common share                                 $0.30         $0.26            $0.46        $0.37
       -------------------------------------------------------------------------------------------------   ------------------------
</TABLE>

NOTE 3.        LEGAL PROCEEDINGS

               Orkin, one of the Company's subsidiaries, is a named defendant in
               Helen Cutler and Mary Lewin v. Orkin Exterminating  Company, Inc.
               et al. pending in the District Court of Houston County,  Alabama.
               The plaintiffs in the above mentioned case filed suit in March of
               1996 and are seeking monetary  damages and injunctive  relief for
               alleged  breach of  contract  arising  out of  alleged  missed or
               inadequate  reinspections.   The  attorneys  for  the  plaintiffs
               contend  that the case is  suitable  for a class  action  and the
               court has ruled that the plaintiffs  would be permitted to pursue
               a class action lawsuit against Orkin. Orkin believes this case to
               be without  merit and  intends  to defend  itself  vigorously  at
               trial.  At this time, the final outcome of the litigation  cannot
               be  determined.  However,  in  the  opinion  of  Management,  the
               ultimate  resolution  of this  action  will not  have a  material
               adverse effect on the Company's  financial  position,  results of
               operations or liquidity.

               Orkin  is also a named  defendant  in  Butland  et al.  v.  Orkin
               Exterminating  Company,  Inc. et al. pending in the Circuit Court
               of Hillsborough County, Tampa, Florida. The plaintiffs filed suit
               in March of 1999 and are  seeking  monetary  damages in excess of
               $15,000  for each  named  plaintiff  and  injunctive  relief  for
               alleged  breach of  contract,  fraud and  various  violations  of
               Florida   state  law.  The  Court  ruled  in  early  April  2002,
               certifying  the class action  lawsuit  against  Orkin.  Orkin has
               appealed  this ruling to the  Florida  Second  District  Court of
               Appeals.  Moreover,  Orkin believes this case to be without merit
               and  intends  to  defend  itself  vigorously  through  trial,  if
               necessary.  At this time,  the final  outcome  of the  litigation
               cannot be determined.  However, in the opinion of Management, the
               ultimate  resolution  of this  action  will not  have a  material
               adverse effect on the Company's  financial  position,  results of
               operations or liquidity.

               Orkin is  involved  in certain  environmental  matters  primarily
               arising  in the  normal  course of  business.  In the  opinion of
               Management,  the Company's  liability  under any of these matters
               would not materially affect its financial condition or results of
               operations.

                                       6
<PAGE>
               Additionally,  in the  normal  course  of  business,  Orkin  is a
               defendant in a number of lawsuits,  which allege that  plaintiffs
               have been  damaged as a result of the  rendering  of  services by
               Orkin personnel and equipment. Orkin is actively contesting these
               actions.  In the opinion of Management,  however,  the outcome of
               these  actions  will not have a  material  adverse  effect on the
               Company's financial position, results of operations or liquidity.

NOTE 4.        STOCKHOLDERS' EQUITY

               For the  second  quarter  and six  months  ended  June 30,  2003,
               approximately  85,500  and  218,000  shares of common  stock were
               issued upon exercise of stock options by employees  respectively.
               The Company  accounts for its employee  stock  options  under the
               recognition  and  measurement  principles  of APB Opinion No. 25,
               Accounting   for  Stock   Issued  to   Employees,   and   related
               Interpretations.  The following  table  illustrates the effect on
               net income and  earnings per share if the Company had applied the
               fair value  recognition  provisions  of FASB  Statement  No. 123,
               Accounting for Stock-Based Compensation,  to stock-based employee
               compensation.
<TABLE>
<CAPTION>
                                                                 Three Months Ended        Six Months Ended
                                                               ------------------------------------------------
                                                                      June 30,                 June 30,
                                                               ------------------------------------------------
                     (In thousands, except per share data)       2003       2002           2003        2002
                                                               ----------------------   -----------------------
                     <S>                                          <C>        <C>           <C>         <C>
                     Net income, as reported                      $13,862    $11,691       $21,136     $16,631
                     Deduct:  Total stock-based employee
                        compensation expense determined
                        under fair value based method for
                        all awards, net of related
                        tax effects                                  (483)      (463)         (966)       (926)
                                                               ----------------------   -----------------------
                     Pro forma net income                         $13,379    $11,228       $20,170     $15,705
                                                               ----------------------   -----------------------

                     Earnings per share:
                         Basic-as reported                          $0.31      $0.26         $0.47       $0.37
                         Basic-pro forma                            $0.30      $0.25         $0.45       $0.35

                         Diluted-as reported                        $0.30      $0.26         $0.46       $0.37
                         Diluted-pro forma                          $0.29      $0.25         $0.44       $0.35
</TABLE>

NOTE 5.        ACCUMULATED OTHER COMPREHENSIVE LOSS

               Accumulated other comprehensive loss consists of the following
               (in thousands):
<TABLE>
<CAPTION>
                                                               Minimum            Foreign
                                                               Pension            Currency
                                                              Liability         Translation           Total
                                                           ---------------     --------------    ---------------
         <S>                                               <C>                 <C>               <C>
         Balance at December 31, 2001                      $       (4,047)     $        (775)    $       (4,822)
         Change during first six months of 2002:
             Before-tax amount                                        ---                149                149
             Tax benefit                                              ---                (57)               (57)
                                                           ---------------     --------------    ---------------
                                                                      ---                 92                 92
                                                           ---------------     --------------    ---------------
         Balance at June 30, 2002                          $       (4,047)     $        (683)    $       (4,730)
                                                           ===============     ==============    ===============

         Balance at December 31, 2002                      $      (16,182)     $        (765)    $      (16,947)
         Change during first six months of 2003:
             Before-tax amount                                        ---                538                538
             Tax benefit                                              ---               (204)              (204)
                                                           ---------------     --------------    ---------------
                                                                      ---                334                334
                                                           ---------------     --------------    ---------------
               Balance at June 30, 2003                    $      (16,182)     $        (431)    $      (16,613)
                                                           ===============     ==============    ===============
</TABLE>

NOTE 6.        ACCRUAL FOR TERMITE CONTRACTS

               During  the  first  quarter  of 2003,  the  Company  adopted  the
               accounting  provisions of FASB  Interpretation No. 45 ("FIN 45"),
               Guarantor's   Accounting   and   Disclosure    Requirements   for
               Guarantees,   Including  Direct  Guarantees  of  Indebtedness  of
               Others,  which requires that the fair value of guarantees  issued
               after  December  31, 2002 be recorded  as a  liability,  with the
               offsetting entry being recorded based on the circumstances in

                                       7
<PAGE>
               which the  guarantee was issued.  FIN 45 further  states that the
               liability  is typically  reduced over the term of the  guarantee.
               The adoption had no impact on the Company's  financial  position,
               results of operations or liquidity.

               The  Company   maintains   an  accrual   for  termite   contracts
               representing the estimated costs of reapplications, repair claims
               and  associated  labor,  chemicals,  and other costs  relative to
               termite  control  services  performed  prior to the balance sheet
               date as discussed in further  detail  under  Critical  Accounting
               Policies in Item 2. A reconciliation  of the beginning and ending
               balances of the accrual for termite contracts is as follows:

(In thousands)
- -----------------------------------------------------------------
Beginning Balance as of December 31, 2002                $46,446
Current Year Provision                                    12,592
Settlements, Claims and Expenditures Made
  During the Period                                      (13,058)
                                                     ------------
Ending Balance as of June 30, 2003                       $45,980
- -----------------------------------------------------------------

Item 2.        Management's Discussion and Analysis of Financial Condition and
               Results of Operations.

The  Company's  continued  emphasis on customer  retention,  along with building
recurring revenues, resulted in revenue growth of 0.5% in the second quarter and
0.8%  for  the  first  six  months  of  2003  despite  a  sluggish  economy  and
unseasonably wet and cold weather  conditions in parts of the U.S. The financial
results for the second quarter and the first six months of 2003 were  positively
impacted  by the  continued  benefit of our recent  service  initiatives,  which
included  every-other-month  residential pest control service,  AcuridSM premium
commercial  pest  control  services,  and  termite  directed  liquid and baiting
treatment.

For the second  quarter of 2003,  the  Company  had net income of $13.9  million
compared  to net income of $11.7  million in the second  quarter of 2002,  which
represents a 18.6%  increase.  For the first six months of 2003, the Company had
net income of $21.1 million compared to net income of $16.6 million in the first
six months of 2002, which represents a 27.1% increase.  The overall  improvement
in profit margins is largely a result of decreased Cost of Services Provided and
Sales, General & Administrative as a percentage of revenues.

For the first six months of 2003,  the Company  generated  cash of $26.6 million
compared to $37.4 million for the first six months of 2002. The Company had Cash
and Short-Term  Investments of $64.9 million at June 30, 2003, compared to $38.3
million at December 31, 2002 and $46.0 million at June 30, 2002.

Results of Operations

Revenues for the quarter  ended June 30, 2003  increased to $185.1  million,  an
increase of $916,000 or 0.5% from last year's second quarter  revenues of $184.2
million.  Revenues  for the six month  period  ended June 30, 2003  increased to
$340.2  million,  an increase of $2.7 million or 0.8% from last year's first six
month revenues of $337.5  million.  The revenue  increase was  attributable to a
modest  increase  in revenues  from  residential  and  commercial  pest  control
service. The growth in pest control revenues reflects a successful 2002 and 2003
price  increase  campaign,  as well as higher  average  selling  prices  for new
customers.  Every-other-month  service,  our primary  residential  pest  control
service  offering,  continues to grow in importance,  comprising over 50% of our
residential pest control customer base at June 30, 2003. Our commercial revenues
improved  slightly  in the second  quarter  and six  months,  as a result of new
service offerings and a successful price increase campaign  implemented in April
2003.  Termite  revenues  decreased in the second quarter and six months of 2003
reflecting continuing wet and cold weather in parts of the U.S. Per the National
Climatic Data Center's 109 years of tracking  weather data,  temperatures in the
Northeast  Region of the  country  were the 10th  coldest on record.  Also,  the
Southeast experienced the second wettest six month period on record. The Company
experienced an improvement in recurring termite revenues mainly from higher bait
monitoring services.  Despite the decrease in termite sales dollars, the Company
managed to achieve a slight improvement in average selling prices. The Company's
foreign operations made up less than 6.2% of the Company's total revenues in the
second quarter and six months of 2003 and 2002.

The business of the Company is affected by the seasonal  nature of the Company's
pest and termite control services as evidenced by the following chart.

                                     Total Net Revenues
                    ---------------------------------------------------
                         2003              2002               2001
                    --------------    --------------    ---------------

   First Quarter    $     155,122     $     153,302     $      150,280
   Second Quarter         185,105           184,189            180,731
   Third Quarter            N/A             174,063            169,223
   Fourth Quarter           N/A             153,871            149,691

                                       8
<PAGE>
Cost of Services  Provided for the second  quarter ended June 30, 2003 decreased
$1,655,000  or  1.7%,   while  margins   improved  by  1.2  percentage   points,
representing  51.6% of revenues for the second quarter 2003 compared to 52.8% of
revenues  in the prior year  second  quarter.  For the first six months of 2003,
Cost of Services Provided  decreased  $1,599,000 or 0.9%, while margins improved
by 0.9  percentage  points,  representing  52.8% of  revenues  for the first six
months of 2003 compared to 53.7% of revenues in the prior year. The decrease for
the  quarter  and six months  ended June 30,  2003 can be mainly  attributed  to
reductions in service  salaries,  insurance and claims expense and materials and
supplies  partially offset by higher fleet costs,  which were affected by higher
gasoline prices and unusually  large numbers of vehicles  cycling off of leases.
Pest  control  and  termite  technician   productivity  and  employee  retention
continued to improve. In management's  opinion,  better employee retention helps
to drive better customer retention.

Sales,  General and  Administrative  for the second  quarter ended June 30, 2003
decreased  $467,000 or 0.7% and, as a percentage  of  revenues,  improved by 0.5
margin points for the second quarter, averaging 33.6% of total revenues compared
to 34.1% for the prior year quarter.  Sales,  General and Administrative for the
first six months of 2003  decreased $2.1 million or 1.8% and, as a percentage of
revenues,  improved  by 0.9 margin  points for the first six  months,  averaging
34.2% of total revenues  compared to 35.1% for the prior year.  Improvement  for
the year was mainly attributed to reduced sales salaries due to reduction of the
sales costs partially offset by higher marketing costs related to a new campaign
in Canada.

Depreciation and Amortization  expenses for the quarter ended June 30, 2003 were
approximately  $409,000 or 7.5% lower than the prior year quarter. For the first
six months of 2003,  Depreciation and Amortization  expenses were  approximately
$680,000  or 6.3%  lower  than the prior  year.  The  decrease  was due to lower
capital spending and certain technology assets becoming fully depreciated in the
last twelve months.

The  Company's  tax  provision of $8.5 million for the second  quarter and $13.0
million for the first six months ended June 30, 2003 reflects  increased pre-tax
income  over the prior  year  periods.  The  effective  tax rate was 38% in both
periods.

Critical Accounting Policies

We view  critical  accounting  policies  to be  those  policies  that  are  very
important to the portrayal of our financial condition and results of operations,
and that require Management's most difficult,  complex or subjective  judgments.
The circumstances  that make these judgments  difficult or complex relate to the
need for  Management  to make  estimates  about the effect of  matters  that are
inherently  uncertain.  We believe  our  critical  accounting  policies to be as
follows:

     Accrual  for  Termite  Contracts  - The  Company  maintains  an accrual for
     termite  contracts  representing  the  estimated  costs of  reapplications,
     repair claims and associated labor, chemicals,  and other costs relative to
     termite  control  services  performed  prior to the balance sheet date. The
     Company  contracts an independent third party actuary on an annual basis to
     provide the Company a range of estimated  liability  based upon  historical
     claims  information.  The  actuarial  study  is a  major  consideration  in
     determining  the accrual  balance,  along with  Management's  knowledge  of
     changes in business practices, contract changes, ongoing claims and termite
     remediation  trends. The reserve is established based on all these factors.
     Management  makes  judgments   utilizing  these  operational   factors  but
     recognizes  that they are  inherently  subjective  due to the difficulty in
     predicting  settlements  and awards.  Other  factors that may impact future
     cost include  chemical life expectancy and governmental  regulation.  It is
     significant  that the actual number of claims has decreased in recent years
     due to changes in the  Company's  business  practices.  However,  it is not
     possible to accurately predict future significant claims.  Positive changes
     to our business  practices  include  revisions made to our contracts,  more
     effective treatment methods that include a directed-liquid baiting program,
     more effective termiticides, and expanded training methods and techniques.

     Accrued  Insurance  - The Company  self-insures,  up to  specified  limits,
     certain  risks  related to general  liability,  workers'  compensation  and
     vehicle liability.  The estimated costs of existing and future claims under
     the  self-insurance  program are accrued  based upon  historical  trends as
     incidents occur, whether reported or unreported (although actual settlement
     of the claims may not be made until future periods) and may be subsequently
     revised  based  on  developments  relating  to  such  claims.  The  Company
     contracts an independent  third party actuary on an annual basis to provide
     the Company a range of estimated  liability  based upon  historical  claims
     information.  The  actuarial  study is a major  consideration,  along  with
     Management's  knowledge of changes in business practice and existing claims
     compared to current balances. The reserve is established based on all these
     factors.  Management's  judgment is inherently  subjective  and a number of
     factors are  outside  Management's  knowledge  and  control.  Additionally,
     historical  information  is not  always an  accurate  indication  of future
     events.  It should be noted that the  number of claims has been  decreasing
     due to the  Company's  proactive  risk  management  to develop and maintain
     ongoing programs.  However, it is not possible to accurately predict future
     significant   claims.   Initiatives  that  have  been  implemented  include
     pre-employment screening and an annual Motor Vehicle report required on all
     its drivers, utilization of a Global Positioning System that has been fully
     deployed to our Company vehicles,  post-offer  physicals for new employees,
     and  pre-hire,  random and  post-accident  drug  testing.  The  Company has
     improved  the time  required  to report a claim by  utilizing a "Red Alert"
     program that provides serious

                                       9
<PAGE>
     accident  assessment  twenty four hours a day and seven days a week and has
     instituted a modified  duty  program  that enables  employees to go back to
     work on a limited-duty basis.

     Revenue  Recognition  - The  Company's  revenue  recognition  policies  are
     designed to  recognize  revenues at the time  services are  performed.  For
     certain revenue types,  because of the timing of billing and the receipt of
     cash versus the timing of performing services, certain accounting estimates
     are  utilized.   Residential  and  commercial  pest  control  services  are
     primarily recurring in nature,  while certain types of commercial customers
     may receive  multiple  treatments  within a given month.  In general,  pest
     control  customers  sign an initial one year  contract,  and  revenues  are
     recognized at the time services are performed.  For pest control customers,
     the Company  offers a discount  for those  customers  who prepay for a full
     year of services.  The Company defers recognition of these advance payments
     and  recognizes  the  revenue as the  services  are  rendered.  The Company
     classifies the discounts  related to the advance payments as a reduction in
     revenues. Termite baiting revenues are recognized when the initial services
     are  performed at the  inception of a new  contract,  although a portion of
     every termite baiting sale is deferred.  The amount deferred is an estimate
     of the value of  monitoring  services  to be  rendered  after  the  initial
     service.   The  amount   deferred  is  then   recognized  as  income  on  a
     straight-line  basis over the  remaining  contract  term,  which results in
     recognition  of  revenue  in a  pattern  that  approximates  the  timing of
     performing monitoring visits.  Baiting renewals are deferred and recognized
     over the annual contract period on a straight-line  basis that approximates
     the  timing of  performing  the  required  monitoring  visits.  Traditional
     termite  treatments  are  recognized  as revenue at the time  services  are
     performed. Traditional termite contract renewals are recognized as revenues
     at the  renewal  date in order to match the  revenue  with the  approximate
     timing of the corresponding service provided.

Liquidity and Capital Resources

The Company believes its current cash balances, future cash flows from operating
activities and available borrowings under its $40.0 million credit facility will
be  sufficient  to finance  its current  operations  and  obligations,  and fund
expansion of the business for the foreseeable  future. The Company's  operations
generated  cash of $32.9  million for the first six months  ended June 30, 2003,
compared  with cash  provided by operating  activities  of $47.6 million for the
same period in 2002. The 2003 results were achieved primarily from higher income
from  operations.  The decrease in net cash provided by operations  was due to a
decrease in year over year growth in unearned revenues. Unearned Revenue in 2002
was  unusually  high due to new computer  system  capabilities  allowing to more
effectively solicit customers.  The decrease in Long-Term Accrued Liabilities in
the  first  six  months  of 2003 was due to the  timing  difference  in  pension
payments between 2003 and 2002.

The Company invested  approximately $2.3 million in capital  expenditures during
the six months ended June 30, 2003,  and expects to invest  between $7.0 million
and $9.0 million for the remainder of 2003.  Capital  expenditures for the first
six months  consisted  primarily of the purchase of equipment  replacements  and
upgrades and  improvements  to the  Company's  management  information  systems.
During the first six months, the Company made acquisitions totaling $1.5 million
compared to $1.4 million during 2002. The Company  currently does not have plans
to  aggressively  seek new  acquisitions  but  will  give  consideration  to any
unusually  attractive  acquisition  opportunities  presented.  A  total  of $4.5
million was paid in cash dividends ($0.10 per share) during the first six months
of 2003. At the January 28, 2003 Board of Directors' Meeting, the Board approved
a 50%  increase  in the  dividend,  from  $0.033 to $0.05 per share on the split
number of shares, as well as a three-for-two stock split to holders of record on
February 10, 2003 payable March 10, 2003. The capital expenditures, acquisitions
and cash  dividends  were funded  entirely  through  existing  cash balances and
operating activities. The Company maintains a $40.0 million credit facility with
a commercial  bank, of which no borrowings were  outstanding as of June 30, 2003
or July 15, 2003. However, the Company does maintain approximately $32.0 million
in Letters of Credit.

Orkin,  one of the Company's  subsidiaries,  is  aggressively  defending a class
action lawsuit filed in  Hillsborough  County,  Tampa,  Florida.  In early April
2002, the Circuit Court of Hillsborough County certified the class action status
of Butland et al. v. Orkin  Exterminating  Company,  Inc. et al. Orkin is also a
defendant in Helen Cutler and Mary Lewin v. Orkin Exterminating Company, Inc. et
al pending  in the  District  Court of  Houston  County,  Alabama.  For  further
discussion, see Note 3 to the accompanying financial statements.

The  Company  made  contributions  of  $20.0  million  to  the  defined  benefit
retirement  plan  (the  "Plan")  during  2002  as a  result  of the  Plan  being
underfunded.  The Company made  contributions of $5.0 million to the Plan in the
second quarter of 2003 and believes that it may make additional contributions in
the amount of  approximately  $5.0  million  in the  remainder  of 2003.  In the
opinion of Management,  additional Plan  contributions  will not have a material
effect on the Company's financial position, results of operations or liquidity.

Impact of Recent Accounting Pronouncements

In November  2002,  the Emerging  Issues Task Force  issued EITF 00-21,  Revenue
Arrangements  with  Multiple  Deliverables,   which  is  effective  for  revenue
arrangements  entered into in fiscal periods beginning after June 15, 2003. This
EITF addresses how to account for arrangements  that may involve the delivery or
performance of multiple products, services, and/or rights to

                                       10
<PAGE>
use  assets.   The  Company's   termite  baiting  business   involves   multiple
deliverables,  consisting of an initial  installation and subsequent  monitoring
inspections.  Since the inception of its termite  baiting  program in 1999,  the
Company  has  consistently  deferred  a  portion  of  the  selling  price  to be
recognized over the first year of the contracts based on a fair value assessment
of the service provided.  The Company will adopt EITF 00-21 in the third quarter
of 2003. Management believes that the adoption of this statement will not have a
material effect on the Company's  financial  position,  results of operations or
liquidity.

In December 2002, the FASB issued FASB  Interpretation No. 46,  Consolidation of
Variable  Interest  Entities  ("FIN 46").  The  Interpretation  requires  that a
variable interest entity be consolidated by a company if that company is subject
to a majority of the risk of loss from the variable interest entity's activities
or entitled to receive a majority of the entity's  residual returns or both. The
consolidation  requirements  of FIN 46 apply  immediately  to variable  interest
entities created after January 31, 2003. The consolidation requirements apply to
older entities in the first fiscal year or interim period  beginning  after June
15,  2003.  Certain  of the  disclosure  requirements  apply  in  all  financial
statements  issued  after  January 31,  2003,  regardless  of when the  variable
interest  entity was  established.  The  Company  believes  the  adoption of the
Interpretation  will not  have a  material  impact  on the  financial  position,
results of operations or liquidity of the Company.

Forward-Looking Statements

This Quarterly Report contains forward-looking  statements within the meaning of
the  Private  Securities  Litigation  Reform Act of 1995.  Such  forward-looking
statements include statements  regarding the expected impact of potential future
pension plan  contributions,  the outcome of litigation  arising in the ordinary
course of business  and the outcome of the Helen  Cutler and Mary Lewin v. Orkin
Exterminating  Company,  Inc. et al.  ("Cutler") and the Butland et al. v. Orkin
Exterminating  Company,  Inc. et al.  ("Butland")  litigation  on the  Company's
financial  condition,  results of operations and liquidity;  the adequacy of the
Company's  resources  to fund  operations  and  obligations;  the  impact of the
corporate  restructuring  on  liquidity  and  results  of  operations;  and  the
Company's projected 2003 capital expenditures. The actual results of the Company
could differ materially from those indicated by the  forward-looking  statements
because  of  various  risks,   timing  and  uncertainties   including,   without
limitation,  the  possibility  of an adverse  ruling  against the Company in the
Cutler, Butland or other litigation;  general economic conditions;  market risk;
changes in  industry  practices  or  technologies;  the degree of success of the
Company's  termite  process  reforms  and pest  control  selling  and  treatment
methods; the Company's ability to identify potential  acquisitions;  climate and
weather  trends  particularly  unseasonable  cold and wet  weather;  competitive
factors and pricing practices; that the cost reduction benefits of the corporate
restructuring  may not be as great as expected or eliminated  positions may have
to be reinstated in the future;  potential increases in labor costs; and changes
in various government laws and regulations,  including environmental regulations
and additional  risks  discussed in the Company's Form 10-K for 2002. All of the
foregoing  risks and  uncertainties  are  beyond the  ability of the  Company to
control,   and  in  many  cases  the  Company   cannot  predict  the  risks  and
uncertainties  that could  cause its actual  results to differ  materially  from
those indicated by the forward-looking statements.

Item 3.        Quantitative and Qualitative Disclosures About Market Risk.

As of June 30, 2003, the Company  maintained an investment  portfolio subject to
short-term  interest  rate risk  exposure.  The Company has been affected by the
impact  of  lower  interest  rates  on  interest   income  from  its  short-term
investments.  The Company is also subject to interest rate risk exposure through
borrowings  on its $40.0  million  credit  facility.  Due to the absence of such
borrowings as of June 30, 2003 and as currently anticipated for the remainder of
2003,  this risk is not  expected to have a material  effect upon the  Company's
results of operations or financial  position going forward.  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.

Item 4.        Controls and Procedures.

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 operations of our disclosure
controls and procedures,  as defined in rules 13a-15(e) and 15d -15(e) under the
Securities  Exchange Act of 1934, as of June 30, 2003. Based on this evaluation,
our principal  executive officer and principal  financial officer concluded that
our  disclosure  controls and  procedures  were effective such that the material
information  required to be included in our Securities  and Exchange  Commission
("SEC") reports is recorded, processed,  summarized and reported within the time
periods  specified in SEC rules and forms relating to Rollins,  Inc.,  including
our consolidated subsidiaries, and was made known to them by others within those
entities, particularly during the period when this report was being prepared.

In addition,  there were no  significant  changes in our  internal  control over
financial  reporting that could  significantly  affect these controls during the
quarter.  We  have  not  identified  any  significant   deficiency  or  material
weaknesses  in our internal  controls,  and  therefore  there were no corrective
actions taken.

                                       11
<PAGE>
PART II  OTHER INFORMATION

Item 1.           Legal Proceedings.

                  See Note 3 to Part I, Item 1 for discussion of certain
                  litigation.

Item 4.           Submission of Matters to a Vote of Security Holders.

                  The Company's Annual Meeting of Stockholders was held on April
                  22, 2003. At the meeting, stockholders voted on the following
                  proposals:

                  1. To elect two Class II Directors for the three-year term
                  expiring in 2006. Each nominee for Class II Director was
                  elected by a vote of the stockholders as follows:
<TABLE>
<CAPTION>
                  Election of Class II Directors:                     For                           Withheld
                  ---------------------------------------    ----------------------         -------------------------
                  <S>                                              <C>                               <C>
                  Gary W. Rollins                                  28,210,903                        119,594
                  Henry B. Tippie                                  28,223,559                        106,938

                  2. To approve the Performance-Based Incentive Cash
                  Compensation Plan for Executive Officers. The proposal was
                  approved by a vote of stockholders as follows:

                  For                                              28,116,573
                  Against                                             197,091
                  Abstain                                              16,833
                                                             ----------------------
                                                                   28,330,497
                                                             ----------------------
</TABLE>
Item 6.           Exhibits and Reports on Form 8-K.

                  (a)   Exhibits

                        (3)  (i)   Restated Certificate of Incorporation of
                                   Rollins, Inc. is incorporated herein by
                                   reference to Exhibit (3) (i) as filed with
                                   its Form 10-K for the year ended December 31,
                                   1997.

                            (ii)   Amended and Restated By-laws of Rollins, Inc.

                           (iii)   Amendment to the By-laws of Rollins, Inc. is
                                   incorporated herein by reference to Exhibit
                                   (3) (iii) as filed with its Form 10-Q for the
                                   quarterly period ended March 31, 2001.

                            (iv)   Amendment to the By-laws of Rollins, Inc. is
                                   incorporated herein by reference to Exhibit
                                   (3)(iv) as filed with its Form 10-K for the
                                   year ended December 31, 2002.

                        (4)        Form of Common Stock Certificate of Rollins,
                                   Inc. is incorporated herein by reference to
                                   Exhibit (4) as filed with its Form 10-K for
                                   the year ended December 31, 1998.

                        (99.1)     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 2002.

                        (99.2)     Certification of Chief Financial Officer
                                   Pursuant to Item 601(b)(31) of Regulation
                                   S-K, as adopted pursuant to Section 302 of
                                   the Sarbanes-Oxley Act of 2002.

                        (99.3)     Certification of Chief Executive Officer and
                                   Chief Financial Officer Pursuant to 18 U.S.C.
                                   Section 1350, As Adopted Pursuant to Section
                                   906 of the Sarbanes-Oxley Act of 2002.

                                       12
<PAGE>
                  (b) Reports on Form 8-K.

                                   On April 3, 2003, the Company furnished a
                                   report on Form 8-K, which reported under Item
                                   9 that the Company will present at Tulane
                                   University's Seventh Annual A.B. Freeman
                                   School of Business Burkenroad Reports
                                   Conference in New Orleans, LA.

                                   On April 24, 2003, the Company furnished a
                                   report on Form 8-K, which reported under Item
                                   9 that on April 22, 2003, the Company
                                   reported earnings for the first quarter ended
                                   March 31, 2003.

                                   On April 24, 2003, the Company furnished a
                                   report on Form 8-K, which reported under Item
                                   9 that on April 22, 2003, the Board of
                                   Directors has declared a regular quarterly
                                   dividend of $0.05 per share.

                                       13
<PAGE>

                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                  ROLLINS, INC.
                                  (Registrant)




Date:  July 23, 2003              By:   /s/ Gary W. Rollins
                                  -----------------------------
                                        Gary W. Rollins
                                        Chief Executive Officer, President
                                        and Chief Operating Officer
                                        (Member of the Board of Directors)

Date:  July 23, 2003              By:   /s/ Harry J. Cynkus
                                  -----------------------------
                                        Harry J. Cynkus
                                        Chief Financial Officer and Treasurer
                                        (Principal Financial and Accounting
                                        Officer)

                                       14

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>3
<FILENAME>a3ii.txt
<DESCRIPTION>EXHIBIT 3II AMENDED AND RESTATED BY-LAWS
<TEXT>
Exhibit 3ii

                          AMENDED AND RESTATED BY-LAWS
                                       OF
                                  ROLLINS, INC.

                                  July 22, 2003


                                     OFFICES

     FIRST:  The registered  office of the corporation  shall be located at 2170
Piedmont Road, N.E.. in the City of Atlanta,  Georgia,  and the registered agent
in charge of said office shall be Corporation Service Company.

                                 CORPORATE SEAL

     SECOND:  The corporate  seal shall have  inscribed  thereon the name of the
corporation,   the  year  of  its  incorporation  and  the  words  "Incorporated
Delaware."

                            MEETINGS OF STOCKHOLDERS

     THIRD:  The annual  meeting of  stockholders  for the election of directors
shall be held on the fourth  Tuesday of April at such office of the  corporation
as may be  designated  by the Board of  Directors  and included in the notice of
such  meeting,  in each  year,  or if that day be a legal  holiday,  on the next
succeeding day not a legal holiday, at which meeting they shall elect by ballot,
by plurality  vote, a board of directors and may transact such other business as
may come before the meeting.

     Special  meetings  of the  stockholders  may be  called  at any time by the
chairman  and shall be called by the  chairman  or  secretary  on the request in
writing or by vote of a majority of the  directors  or at the request in writing
of  stockholders  of record  owning a majority  in amount of the  capital  stock
outstanding and entitled to vote.

     All  such  meetings  of the  stockholders  shall  be held at such  place or
places,  within or without  the State of  Delaware,  as may from time to time be
fixed by the  board of  directors  or as shall  be  specified  and  fixed by the
respective notices or waivers of notice thereof.

                                       1
<PAGE>
     Each  stockholder   entitled  to  vote  shall,  at  every  meeting  of  the
stockholders,  be entitled to one vote in person or by proxy, signed by him, for
each share of voting stock held by him, but no proxy shall be voted on after the
meeting of  stockholders  for which such proxy was  solicited and which has been
adjourned  sine die.  Such  right to vote  shall be  subject to the right of the
board of  directors  to close  the  transfer  books or to fix a record  date for
voting stockholders as hereinafter  provided and if the directors shall not have
exercised  such right,  no share of stock shall be voted on at any  election for
directors  which  shall have been  transferred  on the books of the  corporation
within twenty days next preceding such election.

     Notice of all meetings shall be mailed by the secretary to each stockholder
of record  entitled to vote, at his or her last known post office  address,  not
less than ten days before any annual or special meeting.

     The holders of a majority  of the stock  outstanding  and  entitled to vote
shall constitute a quorum,  but the holders of a smaller amount may adjourn from
time to time without further notice until a quorum is secured.

                                    DIRECTORS

     FOURTH: The property and business of this Corporation shall be managed by a
Board of up to nine Directors. The Directors shall be divided into three classes
of  approximately  equal size except that the classes may be unequal as a result
of the  death,  resignation,  removal  or other  vacancy  of a member of a class
unless a class  were to have no  members  remaining,  in which  case such  class
vacancy  will be  filled  as  soon  as  practicable.  Subject  to the  foregoing
sentence,  there shall be no limitation  on the number of Directors  that may be
designated to a particular  class. At each Annual Meeting of  Stockholders,  the
successors  to the class of  Directors  whose term expires at that time shall be
elected to hold office for the term of three  years to succeed  those whose term
expires,  so that the term of office of one class of  Directors  shall expire in
each year.  Each  Director  shall hold office for

                                       2
<PAGE>
the  remainder  of the term for which he is  elected or  appointed  or until his
successor  shall be elected and qualified,  or until his death of until he shall
resign.

                               POWERS OF DIRECTORS

     FIFTH: The board of directors shall have, in addition to such powers as are
hereinafter  expressly  conferred  on it, all such powers as may be exercised by
the  corporation,  subject to the provisions of the statute,  the certificate of
incorporation and the by-laws.

     The board of directors shall have power:

     To purchase or otherwise  acquire  property,  rights or privileges  for the
corporation, which the corporation has power to take, at such prices and on such
terms as the board of directors may deem proper.

     To pay for such  property,  rights or  privileges  in whole or in part with
money,  stock, bonds,  debentures or other securities of the corporation,  or by
the delivery of other property to the corporation.

     To  create,  make  and  issue  mortgages,  bonds,  deeds  of  trust,  trust
agreements and negotiable or transferable instruments and securities, secured by
mortgages  or  otherwise,  and to do every  other  act and  thing  necessary  to
effectuate the same.

     To appoint agents, clerks, assistants, factors, employees and trustees, and
to dismiss them at its  discretion,  to fix their duties and  emoluments  and to
change them from time to time and to require security as it may deem proper. Any
employee  appointed by the board may be given such  designation  or title as the
board shall  determine;  however,  any such  designation or title given any such
employee  shall not be deemed to constitute  such  employee a corporate  officer
under Article EIGHTH of these by-laws.

     To  confer  on any  officer  of the  corporation  the  power of  selecting,
discharging or suspending

                                       3
<PAGE>
such employees.

     To determine  by whom and in what manner the  corporation's  bills,  notes,
receipts,  acceptances,  endorsements,  checks,  releases,  contracts  or  other
documents shall be signed.

                              MEETING OF DIRECTORS

     SIXTH: After such annual election of directors, the newly elected directors
may meet for the purpose of  organization,  the  election  of  officers  and the
transaction of other  business,  at such place and time as shall be fixed by the
stockholders  at the annual  meeting,  and,  if a majority of the  directors  be
present  at such  place  and time as shall be fixed by the  stockholders  at the
annual meeting, and, if a majority of the directors be present at such place and
time,  no prior  notice of such  meeting  shall be  required  to be given to the
directors.  The  place  and time of such  meeting  may also be fixed by  written
consent of the directors.

     Regular  meetings of the  directors  shall be held  annually  following the
stockholders  meeting on the fourth Tuesday of April and quarterly on the fourth
Tuesdays of July,  October and January of each year at the  executive  office of
the corporation in Atlanta,  Georgia,  or elsewhere and at other times as may be
fixed by resolution of the board.

     Special  meetings  of the  directors  may be called by the  chairman on two
days' notice in writing or on one day's notice by telegraph to each director and
shall be called by the  chairman in like  manner on the  written  request of two
directors.

     Special  meetings of the  directors may be held within or without the State
of  Delaware at such  places as is  indicated  in the notice or waiver of notice
thereof

     A majority of the directors shall constitute a quorum, but a smaller number
may  adjourn  from  time to time,  without  further  notice,  until a quorum  is
secured.

                                       4
<PAGE>
                            COMPENSATION OF DIRECTORS

                            AND MEMBERS OF COMMITTEES

     SEVENTH:  Directors and members of standing  committees  shall receive such
compensation  for  attendance  at each  regular or special  meeting as the board
shall from time to time prescribe.

                           OFFICERS OF THE CORPORATION

     EIGHTH: The officers of the corporation shall be a chairman, a president, a
secretary,  a  treasurer  and such  other  officers  as may from time to time be
chosen by the board of directors. The chairman and the president shall be chosen
from among the directors.

     One person may hold more than one office.

     The officers of the  corporation  shall hold office until their  successors
are chosen and qualify in their  stead.  Any officer  chosen or appointed by the
board of directors  may be removed  either with or without  cause at any time by
the  affirmative  vote of a majority  of the whole  board of  directors.  If the
office of any officer or  officers  becomes  vacant for any reason,  the vacancy
shall be filled by the  affirmative  vote of a  majority  of the whole  board of
directors.

                             DUTIES OF THE CHAIRMAN

     NINTH:  It shall be the duty of the  chairman to preside at all meetings of
stockholders  and  directors;  to have  general  and  active  management  of the
business of the  corporation;  and to see that all orders and resolutions of the
board of directors  are carried into effect.  The chairman  shall be vested with
all the powers and be required to perform all the duties of the president in his
absence or disability.

                                       5
<PAGE>
                             DUTIES OF THE PRESIDENT

     TENTH:  The  president  shall  be  the  chief  executive   officer  of  the
corporation.  It shall be the duty of the president to execute, unless otherwise
delegated,  all  contracts,   agreements,  deeds,  bonds,  mortgages  and  other
obligations and instruments,  in the name of the  corporation,  and to affix the
corporate seal thereto when authorized by the board.

     He shall have the general  supervision  and direction of the other officers
of the corporation and shall see that their duties are properly performed.

     The  president  shall be vested  with all the  powers  and be  required  to
perform all the duties of the chairman in his absence or disability.

                                CHAIRMAN PRO TEM

     ELEVENTH:  In the absence or disability of the chairman and the  president,
the board may appoint from their own number a chairman.

                                    SECRETARY

     TWELFTH:  The secretary shall attend all meetings of theboard of directors,
and all other  meetings as directed by the board of  directors.  He shall act as
clerk thereof and shall record all of the proceedings of such meetings in a book
kept for that purpose.  He shall give proper notice of meetings of  stockholders
and directors and shall perform such other duties as shall be assigned to him by
the president or the chairman of the board of directors.

                                    TREASURER

                                       6
<PAGE>
     THIRTEENTH: The treasurer shall have custody of the funds and securities of
the  corporation  and shall keep full and  accurate  accounts  of  receipts  and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable  effects in the name and to the credit of the  corporation in
such depositories as may be designated by the board of directors.

     He shall keep an account of stock registered and transferred in such manner
and subject tosuch regulations as the board of directors may prescribe.

     He  shall  give  the  corporation  a bond,  if  required  by the  board  of
directors,  in such sum and in form and with security  satisfactory to the board
of directors  for the faithful  performance  of the duties of his office and the
restoration  to the  corporation,  in case of his death,  resignation or removal
from  office,  of all  books,  papers.  vouchers,  money and other  property  of
whatever kind in his possession,  belonging to the corporation. He shall perform
such other duties as the board of directors  may from time to time  prescribe or
require.

                       DUTIES OF OFFICERS MAY BE DELEGATED

     FOURTEENTH:  In case of the  absence or  disability  of any  officer of the
corporation  or for any other  reason  deemed  sufficient  by a majority  of the
board,  the board of  directors  may  delegate his powers or duties to any other
officer or to any director for the time being.

                              CERTIFICATES OF STOCK

     FIFTEENTH:  Certificates  of stock  shall be signed by the  chairman or the
president and either the treasurer,  assistant treasurer, secretary or assistant
secretary. If a certificate of stock be lost or destroyed, another may be issued
in its  stead  upon  proof  of such  loss or  destruction  and the  giving  of a
satisfactory  bond of  indemnity,  in an  amount  sufficient  to  indemnify  the
corporation against any claim. A new certificate may be issued without requiring
bond when, in the judgment

                                       7
<PAGE>
of the directors, it is proper to do so. Certificates may be signed by facsimile
signature if so ordered by the board of directors.

                                TRANSFER OF STOCK

     SIXTEENTH: All transfers of stock of the corporation shall be made upon its
books by the  holder of the  shares in  person  or by his  lawfully  constituted
representative, upon surrender of certificates of stock for cancellation.

     The  corporation  shall  have  authority  to  appoint  transfer  agents and
registrars by resolution of the board of directors.

                            CLOSING OF TRANSFER BOOKS

     SEVENTEENTH:  The board of  directors  shall  have power to close the stock
transfer  books  of the  corporation  for a  period  not  exceeding  sixty  days
preceding the date of any meeting of stockholders or the date for payment of any
dividend or the date for the  allotment of rights or the date when any change or
conversion  or exchange of capital stock shall go into effect or for a period of
not  exceeding   sixty  days  in  connection   with  obtaining  the  consent  of
stockholders  for any purpose;  provided,  however,  that in lieu of closing the
stock transfer books as aforesaid, the by-laws may fix or authorize the board of
directors to fix in advance a date not exceeding  sixty days  preceding the date
of any meeting of stockholders  or the date for the payment of any dividend,  or
the date for the  allotment of rights or the date when any change or  conversion
or exchange of capital stock shall go into effect,  or a date in connection with
obtaining  such  consent,  and in such  case  such  stockholders  and only  such
stockholders  as shall be  stockholders  of record on the date so fixed shall be
entitled  to such  notice of, and to vote at such  meeting  and any  adjournment
thereof, or to receive payment of such dividend, or to receive such allotment of

                                       8
<PAGE>
rights, or to exercise such rights, or to give such consent, as the case may be,
notwithstanding  any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

                             STOCKHOLDERS OF RECORD

          EIGHTEENTH: The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of
Delaware.

                                   FISCAL YEAR

     NINETEENTH: The fiscal year of the corporation shall begin on the first day
of January in each year.

                                    DIVIDENDS

     TWENTIETH: Dividends upon the capital stock may be declared by the board of
directors  at any  regular  or  special  meeting  and  may be paid in cash or in
property or in shares of the capital stock. Before paying any dividend or making
any distribution of profits, the directors may set apart out of any of the funds
of the corporation  available for dividends a reserve or reserves for any proper
purpose and may alter or abolish any such reserve or reserves.

                                  CHECKS FOR MONEY

     TWENTY-FIRST:  All checks,  drafts or orders for the payment of money shall
be signed

                                       9
<PAGE>
by the  treasurer or by such other officer or officers as the board of directors
may from time to time designate. No check shall be signed in blank. The board of
directors  also  from time to time may  authorize  specified  employees  to sign
checks on the corporation's accounts.

                                BOOKS AND RECORDS

     TWENTY-SECOND: The books, accounts and records of the corporation except as
otherwise  required by the laws of the State of Delaware,  may be kept within or
without the State of Delaware,  at such place or places as may from time to time
be designated by the by-laws or by resolution of the directors.

                                     NOTICES

     TWENTY-THIRD:  Notice  required to be given under the  provisions  of these
by-laws to any director,  officer or stockholder  shall not be construed to mean
personal  notice,  but may be given in writing by depositing  the same in a post
office  or  letter-box,  in  a  postpaid  sealed  wrapper,   addressed  to  such
stockholder,  officer or director at such address as appears on the books of the
corporation,  and such  notice  shall be deemed to be given at the time when the
same shall be thus mailed.  Any  stockholder,  officer or director may waive, in
writing, any notice,  required to be given under these by-laws whether before or
after the time stated therein.

                              AMENDMENTS OF BY-LAWS

     TWENTY-FOURTH: These by-laws may be amended, altered, repealed, or added to
at any  regular  meeting of the  stockholders  or board of  directors  or at any
special  meeting called for that purpose,  by affirmative  vote of a majority of
the stock  issued and  outstanding  and entitled to vote or of a majority of the
directors in office, as the case may be.

                                       10
<PAGE>
                          INDEMNIFICATION OF DIRECTORS.

                             OFFICERS AND EMPLOYEES

     TWENTY-FIFTH:  Indemnification.  The Corporation  shall  indemnify,  in the
manner and to the  fullest  extent now or  hereafter  permitted  by the  General
Corporation  Law of the State of  Delaware,  any  person ( or the  estate of any
person)  who was or is a party to, or is  threatened  to be made a party to, any
threatened,  pending or completed action, suit or proceeding,  whether or not by
or in the right of the Corporation and whether civil, criminal,  administrative,
investigative  or otherwise,  by reason of the fact that such person is or was a
director, officer or General Counsel of the Corporation, or is or was serving at
the  request of the  Corporation  as a director,  officer or General  Counsel of
another corporation,  partnership, joint venture, trust or other enterprise. The
indemnification provided herein shall be made if he acted in good faith and in a
manner he  reasonably  believed to be in or not opposed to the best  interest of
the Corporation,  and, with respect to any criminal action or proceeding, has no
reasonable   cause  to  believe  his  conduct  was  unlawful;   except  that  no
indemnification  shall be made in respect  of any  claim,  issue or matter as to
which such person shall have been  determined to be liable for gross  negligence
or willful  misconduct in the performance of his duty to the  Corporation.  Such
determination may be made by a majority of a committee composed of the directors
not involved in the matter in controversy (whether or not a quorum). To the full
extent  permitted  by law, the  indemnification  provided  herein shall  include
expenses  (including  attorneys'  fees),  judgments,  fines and amounts  paid in
settlement, and, in the manner provided by law, any such expenses may be paid by
the  Corporation  in advance of the final  disposition  of such action,  suit or
proceeding. The indemnification provided herein shall not be deemed to limit the
right of the  Corporation  to indemnify any other employee for any such expenses
to the full extent provided by the law, nor shall it be deemed  exclusive of any
other rights to which any person seeking  indemnification  from the  Corporation
may be entitled  under any  agreement,  vote of  stockholders  or  disinterested

                                       11
<PAGE>
directors or otherwise, both as to action in his official capacity and as to act
in another capacity while holding such office.  The Corporation may, to the full
extent permitted by law,  purchase and maintain  insurance on behalf of any such
person against any liability which may be asserted against him.

NON-DISCRIMATION STATEMENT

     TWENTY-SIXTH:   Consistent   with  the   Corporation's   equal   employment
opportunity policy,  nominations for the elections of directors shall be made by
the Board of Directors and voted upon by the stockholders in a manner consistent
with these By-Laws and without regard to the nominee's race,  color,  ethnicity,
religion, sex, age, national origin, veteran status, or disability.

                                       12

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>a991.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
Exhibit 99.1

                                 Certifications

I, Gary W. Rollins, President and Chief Executive Officer of Rollins, Inc.,
      certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Rollins, Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

     4. The  registrant's  other  certifying  officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and  15d-15(e))  for the registrant and we
     have:

          a) Designed such disclosure  controls and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervisions,  to ensure  that  material  information  relating to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

          b) Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of  the  period  covered  by  this  quarterly  report  based  on  such
          evaluation; and

          c)  Disclosed in this report any change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and


     5. The registrant's other certifying officer(s) and I have disclosed, based
     on our most recent evaluation of internal control over financial reporting,
     to the  registrant's  auditors and the audit committee of the  registrant's
     board of directors (or persons performing the equivalent functions):


          (a) All significant deficiencies and material weaknesses in the design
          or operation of internal  control over financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

          (b) Any fraud,  whether or not material,  that involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal control over financial reporting.


Date:  July 23, 2003                    By:   /s/ Gary W. Rollins
                                        ---------------------------
                                              Gary W. Rollins
                                              Chief Executive Officer, President
                                              and Chief Operating Officer
                                              (Member of the Board of Directors)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>a992.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
Exhibit 99.2

I, Harry J. Cynkus, Chief Financial Officer of Rollins, Inc., certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Rollins, Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

     4. The  registrant's  other  certifying  officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and  15d-15(e))  for the registrant and we
     have:

          a) Designed such disclosure  controls and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervisions,  to ensure  that  material  information  relating to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

          b) Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of  the  period  covered  by  this  quarterly  report  based  on  such
          evaluation; and

          c)  Disclosed in this report any change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and


     5. The registrant's other certifying officer(s) and I have disclosed, based
     on our most recent evaluation of internal control over financial reporting,
     to the  registrant's  auditors and the audit committee of the  registrant's
     board of directors (or persons performing the equivalent functions):


          (a) All significant deficiencies and material weaknesses in the design
          or operation of internal  control over financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

          (b) Any fraud,  whether or not material,  that involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal control over financial reporting.


Date:  July 23, 2003              By:   /s/ Harry J. Cynkus
- -----------------------           -----------------------------
                                        Harry J. Cynkus
                                        Chief Financial Officer and Treasurer
                                        (Principal Financial and Accounting
                                        Officer)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>6
<FILENAME>a993.txt
<DESCRIPTION>EXHIBIT 99.3
<TEXT>
Exhibit 99.3



   CERTIFICATION OF PERIODIC FINANCIAL REPORTS PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002



To the best of their knowledge the undersigned hereby certify that the Quarterly
Report on Form 10-Q of Rollins,  Inc.  for the  quarterly  period ended June 30,
2003,  fully complies with the  requirements  of Section 13(a) of The Securities
Exchange Act of 1934 (15 U.S.C.  78m) and that the information  contained in the
quarterly  report  fairly  presents,  in all material  respects,  the  financial
condition and results of operations of Rollins, Inc.




Date:  July 23, 2003                   /s/ Gary W. Rollins
                                       -----------------------------------
                                       Gary W. Rollins
                                       Chief Executive Officer, President
                                       and Chief Operating Officer

Date:  July 23, 2003                   /s/ Harry J. Cynkus
                                       -----------------------------------
                                       Harry J. Cynkus
                                       Chief Financial Officer and Treasurer

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
