<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
__x__ ANNUAL REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
____ TRANSITION REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from _____ to _____
Commission file number ______________________
ServiceMaster Employee Share Purchase Plan
ServiceMaster Limited Partnership
One ServiceMaster Way
Downers Grove, Illinois 60515
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee and the Trustee have duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
By: /s/ S. D. Krause
-------------------------------
S. D. Krause,
Administrative Committee Member
By: /s/ L. E. Malmquist
--------------------------------
L. E. Malmquist,
Administrative Committee Member
Date: March 29, 1994.
2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
ServiceMaster Employee Share Purchase Plan:
We have audited the accompanying statements of financial
condition of the ServiceMaster Employee Share Purchase Plan as of
December 31, 1993 and 1992, and the related statements of changes in
plan equity for each of the three years in the period ended December 31,
1993. These financial statements are the responsibility of the Plan's
Administrative Committee. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial condition of the Plan as of
December 31, 1993 and 1992 and the changes in its plan equity for each
of the three years in the period ended December 31, 1993 in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
March 25, 1994.
3
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
As of December 31,
1993 1992
---------- ----------
<S> <C> <C>
ASSETS:
Cash. . . . . . . . . . . . . . . . . . $ 309,361 $ 371,539
Due from ServiceMaster. . . . . . . . . 175,158 --
Investment in ServiceMaster Limited
Partnership shares at cost (Total
market value - $1,776,638 in 1993
and $1,132,283 in 1992) - Note 3 . . 1,808,955 1,115,524
---------- ----------
Total Plan Assets. . . . . . . . . . $ 2,293,474 $ 1,487,063
========== ==========
LIABILITIES:
Due to participants . . . . . . . . . . $ 47,013 $ 32,597
Due to former participants. . . . . . . 6,021 4,664
Due to ServiceMaster. . . . . . . . . . -- 37,841
--------- ---------
Total Plan Liabilities . . . . . . . 53,034 75,102
-------- --------
EQUITY:
Allocated cash. . . . . . . . . . . . . 27,204 16,416
Allocated share accounts. . . . . . . . 2,213,236 1,395,545
--------- ---------
Total Plan Equity. . . . . . . . . . 2,240,440 1,411,961
--------- ---------
Total Plan Liabilities and Equity. . $ 2,293,474 $ 1,487,063
========= =========
The accompanying Notes to Financial Statements
are an integral part of these statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENT OF CHANGES IN PLAN EQUITY
Years Ended December 31,
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
TOTAL PLAN EQUITY,
BEGINNING OF PERIOD . . . . . . . .$ 1,411,961 $ 1,481,138 $ 393,265
---------- ---------- ----------
Additions:
Participant contributions - Note 4. 5,004,160 3,113,256 2,862,576
ServiceMaster contributions . . . . 740,230 460,983 431,030
---------- ---------- ----------
Total Additions . . . . . . . . . . . 5,744,390 3,574,239 3,293,606
---------- ---------- ----------
Deductions:
Shares issued to participants . . . 4,905,949 3,635,665 2,200,044
Payments to terminated participants 9,962 7,751 5,689
---------- ---------- ----------
Total Deductions. . . . . . . . . . . 4,915,911 3,643,416 2,205,733
---------- ---------- ----------
TOTAL PLAN EQUITY,
END OF PERIOD . . . . . . . . . . .$ 2,240,440 $ 1,411,961 $ 1,481,138
========== ========== ==========
The accompanying Notes to Financial Statements
are an integral part of these statements.
</TABLE>
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<PAGE>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. The Plan
The ServiceMaster Employee Share Purchase Plan (the "Plan") was
created to give eligible employees wishing to do so a convenient means of
purchasing ServiceMaster Limited Partnership Shares through payroll
deductions and cash contributions, supplemented by contributions made
by ServiceMaster. Employees of ServiceMaster Limited Partnership or
any subsidiary or affiliate which has adopted the Plan on behalf of its
employees who regularly work nine months or more during the year, who
have an average work week of 32 hours or more during the period worked
and who have attained age 18 are eligible to participate in the Plan on the
first business day of the calendar quarter coinciding with or subsequent to
the first anniversary of their employment. As of December 31, 1993,
5,633 employees were participating in the Plan.
Details relating to shares issued by the Plan (reflecting all share splits)
from inception (July 1, 1972) through December 31, 1993, are as follows:
<TABLE>
<CAPTION>
Number of
Shares Total Cost
--------- -----------
<S> <C> <C>
Issued during the year
ended December 31, 1993
to participants . . . . . . . . . . . 243,052 $ 4,905,949
Issued from inception
through December 31, 1992 . . . . . . 7,573,908 $43,110,197
--------- ----------
Total issued from
inception through
December 31, 1993 . . . . . . . . . . 7,816,960 $48,016,146
========= ==========
</TABLE>
Participant contributions and required ServiceMaster contributions are
accounted for on the accrual basis. The ServiceMaster contribution to the
Plan is equal to the lesser of 15% of total participant contributions or
$37,500. ServiceMaster may elect to make additional contributions to the
Plan as it deems appropriate. Participants may contribute a maximum of
10% of their prior year compensation as defined in the Plan agreement.
Shares are purchased and allocated to participants' accounts monthly.
Share certificates are issued to participants every three months
immediately prior to the cash distribution record date for ServiceMaster
shares. The shares are issued at the same price at which they were
allocated.
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
After the close of each calendar quarter, the cash balances and the
shares allocated to participants who have voluntarily withdrawn from the
Plan during the quarter are distributed.
2. Summary of Significant Accounting Policies
(a) The fund accounting concept is used in accounting for the Plan
since the Plan is not conducted for profit. Cash distributions on shares
held by the Plan are credited directly and paid to the participants
quarterly. Expenses incurred by the Plan are paid by ServiceMaster. Any
market appreciation or depreciation on the shares attaches to the shares
and is a gain or loss to the participant, not the Plan. The Plan's
transactions with respect to its investment in securities do not give rise to
capital gains or losses.
(b) All assets are stated at cost due to the non-profit features of the
Plan.
(c) The transactions of the Plan are accounted for on the accrual basis
of accounting.
(d) Certain immaterial 1992 amounts have been reclassified to
conform with the 1993 presentation.
3. Investment in ServiceMaster Limited Partnership Shares
The Plan held the following investment in ServiceMaster Limited
Partnership shares, reflecting all share splits:
<TABLE>
<CAPTION>
Average Cost Market Value
------------------------- ----------------
Number Cost Value
of per per
December 31, Shares Share Total Share Total
- ------------ ------ ----- ---------- ----- --------
<S> <C> <C> <C> <C> <C>
1993 64,900 277/8 $1,808,955 273/8 $1,776,638
1992 61,204 181/4 1,115,524 181/2 1,132,283
</TABLE>
The investment balance at December 31, 1993 represents the last four
months of 1993's allocated shares which have not been issued.
ServiceMaster Limited Partnership shares are traded on the New York
Stock Exchange.
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<PAGE>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Contributions
The amounts contributed by the participants and ServiceMaster during
1993, 1992, and 1991 were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------------------------- ------------------------ ---------------------------
Contributed by Contributed by Contributed by
--------------------------- -------------------------- ---------------------------
Participants ServiceMaster Participants ServiceMaster Participants ServiceMaster
------------- ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Participant con-
tributions and
ServiceMaster
required
contributions
for the year. $5,004,160 $ 37,500 $3,113,256 $ 37,500 $2,862,576 $ 37,500
ServiceMaster
additional
contributions $ -- $ 702,730 $ -- $ 423,483 $ -- $ 393,530
-------- -------- -------- -------- ------- --------
Total
contributions $5,004,160 $ 740,230 $3,113,256 $ 460,983 $2,862,576 $ 431,030
========= ======== ========= ======== ========= ========
</TABLE>
The Company's Board of Directors in December approved additional
contributions which, together with the required ServiceMaster
contributions previously made, were equivalent to a 15% matching of the
participant contributions made during 1993, 1992, and 1991, for
participants as of each year end.
5. Federal Income Taxes
(a) Tax Status of the Plan - The Plan is considered a trust for tax
reporting purposes but does not qualify for tax exempt status under
Section 501 of the Internal Revenue Code. However, the Plan incurs no
tax liability since all Plan income is distributed to the participants.
(b) Tax Status of Each Participant - Since the Plan does not qualify as
an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code or as a "stock bonus plan" under Section 401 of the Code,
the participant realizes income equal to his share of the ServiceMaster
contributions and cash distributions on shares issued to the participant
during the calendar year.
For federal income tax purposes, the cost basis of the shares issued to
the participant is the average cost of the shares at the time it is allocated
to the participant's account by the Plan.
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<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants we hereby consent to the
incorporation by reference of our report, dated March 25, 1994, appearing
in the ServiceMaster Employee Share Purchase Plan Annual Report on
Form 11-K for the year ended December 31, 1993, to the Company's
previously filed Registration Statement Number 2-75851 on Form S-8.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
March 29, 1994.
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