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In general, Section 382 limits the use of a corporation's net operatinglosses and certain other tax benefits following a change in ownership of thecorporation. Section 382 rules governing when a change in ownership occursare complex and subject to interpretation; however, a change in ownershipgenerally occurs when there has been a cumulative change in the stockownership of the corporation held by 5% stockholders of more than 50percentage points over an applicable three-year period.
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To the extent the Company has not experienced a change in ownership,subsequent changes in the stock ownership of the Company could result in achange in ownership that would trigger the limitations of Section 382. If theCompany were to experience a change in ownership under Section 382, theCompany may be limited in its ability to fully utilize its net operating losstax assets to offset future taxable income.
The Company recognizes that investment decisions are within the discretionof each investor; however, along with the other risk factors set forth in theCompany's most recent Form 10-K and other public filings, the Company advisesinvestors to consider the potential negative impact of Section 382 on theCompany that can arise from any of the following trading transactions (eitheralone or in combination):
For these purposes, a 5% stockholder is generally any person or group ofpersons that at any time during an applicable three-year period has owned 5%or more of the outstanding common stock of Rural/Metro Corporation. UnderSection 382, stock ownership would be determined under complex attributionrules pursuant to the Tax Code and generally includes shares held directly,indirectly (through intervening entities) and constructively (by certainrelated parties and certain unrelated parties acting as a group).
About Rural/Metro
Rural/Metro Corporation provides emergency and non-emergency ambulanceservices and private fire protection services in 23 states and approximately400 communities throughout the United States. For more information, visit thecompany's web site at www.ruralmetro.com.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risksand uncertainties that could cause actual results to differ materially. Theserisks and uncertainties include, among others, the Company's ability toaccurately assess transactions in the Company's stock by its significantstockholders and the accuracy of the Company's assumptions surrounding itsSection 382 analysis. Although Rural/Metro believes that the expectationsreflected in such forward-looking statements are reasonable, it can give noassurance that such expectations will prove to have been correct.
Reference is made to a more complete discussion of forward-lookingstatements and applicable risks that may cause actual results to differmaterially from those contemplated by such forward-looking statements("Cautionary Statements") that include, among others, those identified underthe captions "Forward-Looking Statements" and "Risk Factors" in the Company'sannual report on Form 10-K for the fiscal year ended June 30, 2007, which isavailable free of charge on the website of the Securities and ExchangeCommission (the "SEC") at www.sec.gov or on the Company's website atwww.ruralmetro.com. All subsequent written and oral forward-looking statements(or statements that may be attributed to the Company) are expressly qualifiedby the Cautionary Statements. The Company's forward-looking statements arebased on informat
