<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 10549
FORM 10-Q
__x__QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
------------------
_____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 1-9378
SERVICEMASTER LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 36-3497008
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
One ServiceMaster Way, Downers Grove, Illinois 60515
(Address of principal executive offices) (Zip Code)
708-271-1300
(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 the number of shares outstanding of each of the issuer's
classes of shares: 76,532,460 shares on November 7, 1994.
This document consists of 13 pages, including the cover page.
<PAGE>
TABLE OF CONTENTS
Page
No.
----
SERVICEMASTER LIMITED PARTNERSHIP (Registrant) -
Part I. Financial Information:
- - - ------- ----------------------
Consolidated Statements of Income for the
three months ended and the nine months
ended September 30, 1994 and September 30, 1993 2
Consolidated Statements of Financial Position
as of September 30, 1994 and December 31, 1993 3
Consolidated Statements of Cash Flows for the
nine months ended September 30, 1994 and
September 30, 1993 4
Notes to Consolidated Financial Statements 5
Management Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II. Other Information
- - - -------- -----------------
Exhibit 11 - Exhibit Regarding Detail of Income
Per Share Computation 11
Signature 12
1
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SERVICEMASTER LIMITED PARTNERSHIP
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
Operating Revenue . . . . . . . . . . . . $ 797,015 $ 749,746 $2,246,149 $ 2,063,601
Operating Costs and Expenses:
Cost of services rendered
and products sold . . . . . . . . . . . 612,264 582,081 1,766,080 1,639,029
Selling and administrative expenses . . . 125,527 120,236 320,590 295,736
---------- --------- --------- ----------
Total operating costs and expenses. . . . 737,791 702,317 2,086,670 1,934,765
---------- --------- --------- ----------
Operating Income. . . . . . . . . . . . . 59,224 47,429 159,479 128,836
Non-operating Expenses (Income):
Interest expense. . . . . . . . . . . . . 8,157 7,691 24,522 24,532
Interest income . . . . . . . . . . . . . (1,496) (1,456) (4,247) (4,196)
Gain on issuance of subsidiary shares . . --- --- --- (30,200)
Minority interest*. . . . . . . . . . . . 13,519 8,748 33,824 21,382
---------- --------- --------- ----------
Income before Income Taxes. . . . . . . . 39,044 32,446 105,380 117,318
Provision for income taxes. . . . . . . . 990 814 2,346 2,395
---------- --------- --------- ----------
Net Income. . . . . . . . . . . . . . . . $ 38,054 $ 31,632 $ 103,034 $ 114,923
========== ========= ========= ==========
Net Income Per Share. . . . . . . . . . . $ .49 $ .41 $ 1.33 $ 1.50
===== ===== ====== =====
Cash Distributions Per Share. . . . . . . $ .23 $ .22 $ .69 $ .66
===== ===== ===== =====
Net income per share is based on 77,421 shares and 77,054 shares for the three months ended
September 30, 1994 and 1993, respectively, and 77,600 shares and 76,504 shares for the nine
months ended September 30, 1994 and 1993 respectively.
*Includes General Partners' interest of $745 and $648 for the three months ended September 30, 1994
and 1993, respectively, and $2,091 and $1,730 for the nine months ended September 30, 1994 and
1993, respectively.
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER LIMITED PARTNERSHIP
Consolidated Statements of Financial Position
(In thousands)
As of
September 30, December 31,
Assets 1994 1993
---------- ----------
<S> <C> <C>
Current Assets:
Cash and marketable securities, including cash and
cash equivalents of $24,593 and $17,271, respectively. $ 44,265 $ 32,730
Accounts and notes receivable, less allowances of $22,233
and $19,438 respectively . . . . . . . . . . . . . . . 236,751 173,278
Inventories . . . . . . . . . . . . . . . . . . . . . . . 39,972 37,870
Prepaid expenses and other assets . . . . . . . . . . . . 48,626 47,447
---------- ----------
Total current assets . . . . . . . . . . . . . . . . . 369,614 291,325
---------- ----------
Property and Equipment:
At cost. . . . . . . . . . . . . . . . . . . . . . . . 248,701 226,452
Less: accumulated depreciation . . . . . . . . . . . . 130,076 110,677
---------- ----------
Net property and equipment . . . . . . . . . . . . . . 118,625 115,775
---------- ----------
Contract rights, trade names, goodwill, and other,
net of accumulated amortization of $99,658
and $84,296, respectively. . . . . . . . . . . . . . . 638,478 604,613
Investment in Norrell Corporation . . . . . . . . . . . . --- 26,948
Notes receivable, long-term securities, and other assets. 82,190 83,800
---------- ----------
Total assets . . . . . . . . . . . . . . . . . . . . . $ 1,208,907 $ 1,122,461
========== ==========
Liabilities And Shareholders' Equity
Current Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . $ 41,284 $ 34,154
Accrued liabilities . . . . . . . . . . . . . . . . . . . 173,223 133,984
Deferred revenues . . . . . . . . . . . . . . . . . . . . 68,078 66,865
Current portion of long-term obligations. . . . . . . . . 8,341 4,612
---------- ----------
Total current liabilities. . . . . . . . . . . . . . . 290,926 239,615
---------- ----------
Long-Term Debt. . . . . . . . . . . . . . . . . . . . . . 384,232 384,509
Other Long-Term Obligations . . . . . . . . . . . . . . . 88,114 91,605
Commitments and Contingencies . . . . . . . . . . . . . . --- ---
Minority and General Partners' Interest
includes General Partners' interest of
$1,551 and $1,576, respectively . . . . . . . . . . . 136,401 117,513
Shareholders' Equity:
Limited partners' equity - shares issued 78,055
at September 30, 1994 and December 31, 1993. . . . . . 356,130 328,320
Treasury shares at cost - 1,585 shares at
September 30, 1994 and 1,629 shares at
December 31, 1993 . . . . . . . . . . . . . . . . . . . (37,808) (29,571)
Share subscriptions receivable and restricted shares -
831 shares at September 30, 1994 and 872 shares
at December 31, 1993 . . . . . . . . . . . . . . . . . (9,088) (9,530)
---------- ----------
Total shareholders' equity . . . . . . . . . . . . . . 309,234 289,219
---------- ----------
Total liabilities and shareholders' equity . . . . . . $ 1,208,907 $ 1,122,461
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
(In thousands)
Nine Months Ended
September 30,
1994 1993
----------- -----------
<S> <C> <C>
Cash and Cash Equivalents at January 1. . . . . . . . . . . . $ 17,271 $ 27,576
Cash Flows from Operations:
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . 103,034 114,923
Adjustments to reconcile net income
to net cash flows from operations:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 23,907 21,947
Amortization . . . . . . . . . . . . . . . . . . . . . . 15,362 15,880
Provisions for losses on receivables . . . . . . . . . . 10,871 9,947
Gain on issuance of subsidiary shares. . . . . . . . . . --- (30,200)
Change in working capital, net of acquisitions:
Receivables. . . . . . . . . . . . . . . . . . . . . . (63,653) (61,063)
Inventories and other current assets . . . . . . . . . (4,169) (10,651)
Accounts payable . . . . . . . . . . . . . . . . . . . 4,221 (874)
Deferred revenues. . . . . . . . . . . . . . . . . . . 1,197 2,403
Accrued liabilities. . . . . . . . . . . . . . . . . . 32,487 28,764
Other, net . . . . . . . . . . . . . . . . . . . . . . . 23,571 9,219
----------- -----------
Net Cash Provided from Operations . . . . . . . . . . . . . . 146,828 100,295
----------- -----------
Cash Flows from Investing Activities:
Business acquisitions, net of cash acquired. . . . . . . . (42,248) (69,771)
Sale of investment in Norrell Corporation. . . . . . . . . 29,021 5,524
Property additions . . . . . . . . . . . . . . . . . . . . (23,748) (27,139)
Net purchases of securities. . . . . . . . . . . . . . . . (3,019) (587)
Sale of equipment and other assets . . . . . . . . . . . . 1,973 3,334
Payments to sellers of acquired businesses . . . . . . . . (1,662) (1,800)
----------- -----------
Net Cash Used for Investing Activities. . . . . . . . . . . . (39,683) (90,439)
----------- -----------
Cash Flows from Financing Activities:
Distributions to shareholders and to shareholders' trust . (64,915) (61,010)
Payment of debt and other obligations. . . . . . . . . . . (33,709) (125,910)
Short-term borrowings, net . . . . . . . . . . . . . . . . 32,897 111,627
Purchase of treasury shares. . . . . . . . . . . . . . . . (25,978) (7,528)
Redemption of preferred stock. . . . . . . . . . . . . . . (14,650) ---
Proceeds from employee share option plans. . . . . . . . . 4,269 3,043
Distributions to holders of minority interests . . . . . . (2,271) (4,294)
Proceeds from issuance of subsidiary shares. . . . . . . . --- 68,000
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 4,534 (298)
----------- -----------
Net Cash Used for Financing Activities. . . . . . . . . . . . (99,823) (16,370)
----------- -----------
Cash Increase (Decrease) during the Period. . . . . . . . . . 7,322 (6,514)
----------- -----------
Cash and Cash Equivalents at September 30 . . . . . . . . . . $ 24,593 $ 21,062
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
SERVICEMASTER LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: The consolidated financial statements include the accounts of the
Partnership and its significant subsidiaries, collectively referred to as "the
Partnership". Intercompany transactions and balances have been eliminated
in consolidation.
Note 2: The consolidated financial statements included herein have been
prepared by the Partnership pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. However, the Partnership believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these consolidated financial statements be
read in conjunction with the financial statements and the notes thereto
included in the Partnership's latest Annual Report to Shareholders and the
Annual Report to the Securities and Exchange Commission on Form 10-K for
the year ended December 31, 1993. In the opinion of the Partnership, all
adjustments, consisting only of normal and recurring adjustments, necessary to
present fairly the financial position of ServiceMaster Limited Partnership as
of September 30, 1994 and December 31, 1993, and the results of operations
for the three month and nine month periods ended September 30, 1994 and
1993, and the cash flows for the nine month periods ended September 30,
1994 and 1993, have been included. The results of operations for any interim
period are not necessarily indicative of the results which might be obtained
for a full year.
Note 3: For interim accounting purposes, certain costs directly associated
with the generation of lawn care revenues are initially deferred and
recognized as expense as the related revenues are recognized. Full year
results are not affected.
Note 4: In the Consolidated Statements of Cash Flows, the caption Cash and
Cash Equivalents includes investments in short-term, highly-liquid securities
having a maturity of three months or less. Supplemental information relating
to the Consolidated Statements of Cash Flows for the nine month periods
ended September 30, 1994 and 1993 is presented in the following table. The
decrease in interest paid in 1994 from 1993 is primarily due to the timing of
interest payments relating to refinanced debt in January 1994 and reduced
debt balances reflecting reduced seasonal borrowings.
<TABLE>
<CAPTION>
(In thousands)
1994 1993
Cash paid or received for: ------- --------
- - - --------------------------
<S> <C> <C>
Interest expense, net of amounts capitalized. . . . $ 19,736 $ 20,066
Interest and dividend income. . . . . . . . . . . . $ 1,657 $ 1,877
</TABLE>
5
<PAGE>
SERVICEMASTER LIMITED PARTNERSHIP
MANAGEMENT DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
THIRD QUARTER 1994 COMPARED TO THIRD QUARTER 1993
- - - -------------------------------------------------
Revenues increased 6.3% to $797 million due to internal growth and the
inclusion of VHA Long Term Care, which was acquired in August, 1993.
Operating income margins improved to 7.4% from 6.3% during the quarter
due to effective spending controls and continuing productivity improvements,
particularly in the Consumer Services businesses. Net income was $38.1
million, reflecting a 20% increase over one year ago while earnings per share
totalled $.49, also a 20% increase.
The Consumer Services business segment continued to achieve accelerated
growth in revenues and profits. TruGreen-ChemLawn achieved a strong
increase in customer base as a result of an excellent response to its marketing
programs. Margin improvements were also experienced at this unit resulting
from the leveraging of increased volume, the conversion to a more efficient
fleet and other productivity improvements. Terminix also continued to
improve margins, enabling it to realize solid profit growth despite unusual
weather patterns which significantly impaired the termite swarm season
industry wide and adversely impacted revenue growth. The Residential and
Commercial and Merry Maids franchised businesses achieved strong increases
in net profits from new franchise sales and from royalties from existing
franchisees. American Home Shield achieved solid increases in volume in
both California and the rest of the country, as well as continuing
improvement in the rate of contract renewals, resulting in a sharp
improvement in operating profits.
The Management Services business segment had revenues comparable to 1993
with overall profits slightly below last year. A modest increase in profits was
achieved in the acute care sector of the health care market. Revenues in the
education market increased while profits were reduced below prior year levels,
primarily as a result of operating problems at two accounts that were started
in the fourth quarter of last year. The business and industry group continued
to be adversely impacted by downsizing and competitive market conditions.
In order to respond to unique customer needs and rapid changes in industry
conditions, Management Services is reorganizing its operations from a
regional, geographic-based structure to a centralized, market-oriented
structure based on the three principle markets served: health care, education,
and business and industry. Management believes these changes will enhance
customer focus. These changes will also improve efficiencies as a result of the
centralization of certain support functions and the elimination of certain
middle level positions.
ServiceMaster Diversified Health Services, which provides comprehensive
management services to the long term care sector of the health care market
(including nursing homes, skilled nursing facilities and home health care
agencies) achieved strong double digit growth in revenues and operating
profits.
6
<PAGE>
International operations achieved solid growth in revenues and profits. Two
international pest control companies, Peter Cox in England and Protekta
Riwa in the Netherlands, were acquired late in the quarter, and had a slight
positive effect on results for the period.
On a consolidated basis, cost of services rendered and products sold increased
5.2% but continued to decline as a percentage of revenue from 77.6% in 1993
to 76.8% in 1994. This decrease as a percentage of revenue continues to
reflect the changing mix of the business as Consumer Services increases in
size in relation to the overall business of the Partnership. The Consumer
Services businesses operate at a higher gross profit than the Management
Services businesses but incur higher levels of selling and administrative costs.
Consolidated selling and administrative expenses decreased as a percent of
revenue from 16.0% in 1993 to 15.7% in 1994. This decrease as a percent of
revenue reflects profitability improvements in the Consumer Services
businesses and the addition of VHA Long Term Care, which has relatively
lower selling and administrative expenses as a percent of revenue.
Interest expense increased from prior year reflecting increased borrowings
relating to the two European pest control acquisitions made during the
quarter. The increase in minority interest expense primarily reflects higher
amounts associated with WMX Technologies' minority ownership interest in
Consumer Services, which had significant increases in earnings.
NINE MONTHS ENDED SEPTEMBER 30, 1994 COMPARED TO NINE
- - - -----------------------------------------------------
MONTHS ENDED SEPTEMBER 30, 1993
- - - -------------------------------
Operating revenue for the nine months increased 9% to $2.25 billion
primarily due to internal growth and the inclusion of VHA Long Term Care,
which was acquired in August of 1993. Operating margins improved to 7.1%
from 6.2% due to effective spending controls and ongoing productivity
improvements in the Consumer Services businesses. As shown below, net
income totalled $103.0 million, a 22% increase over comparable prior year
amounts. Earnings per share totalled $1.33, a 20% increase on that basis.
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
1994 1993
------- -------
<S> <C> <C>
Net income before unusual gain on
issuance of subsidiary shares . . . . $103,034 $ 84,723
Per limited partners' share . . . . . $1.33 $1.11
Gain on issuance of subsidiary shares . --- 30,200
------- -------
Net income. . . . . . . . . . . . . . . $103,034 $114,923
======= =======
Per limited partners' share . . . . . $1.33 $1.50
==== ====
</TABLE>
The Consumer Services business segment achieved strong growth in revenues
and net income with solid performances achieved by all units. The TruGreen-
ChemLawn operations had strong growth in revenues and profits resulting
from good sales volume (reflecting an excellent response to its off-season
residential marketing program) and ongoing cost controls and productivity
improvements. Terminix operations continued to improve margins enabling it
to achieve solid profit growth, despite the unusual weather patterns which
7
<PAGE>
adversely affected the termite swarm season industry-wide. The Merry Maids
and Residential and Commercial operations continued to achieve strong
growth in revenue and profits. American Home Shield achieved good
improvement in revenues and operating income, with encouraging volume
improvements in California as well as the rest of the country and continuing
improvements in the rate of contract renewals.
The Management Services segment achieved good growth in revenues in the
education market, while the health care market grew at a slower pace as a
result of adverse industry conditions. Nine month profit in the education
market was below prior year primarily reflecting profit shortfalls at two large
accounts that were started in the fourth quarter of last year. The acute care
health care market grew moderately despite adverse industry conditions and
sales delays due to the uncertainties surrounding health care reform. The
business and industry group continued to be adversely impacted by downsizing
and competitive pressures, with profits reduced below prior year levels.
ServiceMaster Diversified Health Services continued to achieve strong growth
in revenues and operating profits due to increases in fees from management
contracts and strong sales growth in ancillary products and services.
On a consolidated basis, cost of services rendered and products sold increased
7.8% over 1993, but declined as a percent of revenue from 79.4% in 1993 to
78.6% in 1994, reflecting the continued stronger mix of the higher gross
margin Consumer Services businesses. Consumer Services incurs a relatively
lower level of cost of services but higher selling and administrative costs than
Management Services.
Consolidated selling and administrative expenses increased 8.4% over last year
and as a percentage of revenue remained consistent with prior year at 14.3%.
Overall, consolidated operating income margins were improved to 7.1% from
6.2% during the nine months primarily due to continuing profitability
improvements in the Consumer Services business unit and the addition of
VHA Long Term Care, which has relatively higher operating income margins
as a percent of revenue.
Interest expense remained flat compared to prior year reflecting lower
seasonal borrowings as a result of improved cash flows offset by borrowings
associated with the two European pest control acquisitions. A $30.2 million
gain was recognized in June of 1993 relating to the purchase of an additional
5.76% interest in Consumer Services by WMX Technologies for $68 million
in cash. There were no comparable transactions in 1994. The increase in
minority interest expense primarily reflects this additional 5.76% interest in
the Consumer Services segment, as well as the significant increase in earnings
achieved by that segment.
FINANCIAL CONDITION
- - - -------------------
Funds provided from operations for the nine months increased 46% to $146.8
million, enabling the Partnership to fund its growth, pay for acquisitions,
repurchase $26 million in treasury shares and still reduce long-term debt
slightly from beginning of the year levels. Cash and marketable securities
totalled approximately $44.3 million at September 30, 1994, an increase of
$11.5 million from the December 31, 1993 level. The current ratio improved
to 1.3 to 1.0 from 1.2 to 1.0 at the end of 1993. Management believes that
funds generated from operations and existing cash resources are adequate to
8
<PAGE>
satisfy the ongoing working capital needs of the Partnership. The Partnership
does not have any material capital commitments at this time.
In August of 1994, the Partnership acquired the assets and liabilities of Peter
Cox PLC, a United Kingdom-based pest control and wood preservation
business for approximately $22 million in cash. In September of 1994, the
Partnership acquired the assets and liabilities of Protekta/Riwa a Netherlands-
based group of pest control companies for approximately $7 million in cash.
Contract rights, trade names, and other intangible assets increased as a result
of these acquisitions.
The increase in accounts and notes receivable reflects general business
growth, including strong growth in the more seasonal Consumer Services
businesses and the acquisition of two European pest control businesses.
Inventories are at a higher level than year-end due to seasonal patterns.
Prepaid expenses and other assets have increased since year-end but are lower
than first and second quarter levels as the lawn care operations defer certain
direct response marketing costs and other similar expenses in the first quarter
and part of the second quarter and amortize them over the ensuing
production season as related revenues are recognized. Deferred lawn care
revenues are associated with customer prepayments and follow this same
pattern.
In February, 1994, the Partnership sold its minority interest in Norrell
Corporation for approximately $29 million in cash. In May, 1994, the
Partnership redeemed all of the preferred shares of a Partnership subsidiary
that were formerly held by the principal shareholder of Norrell Corporation
for a combination of $14.6 million in cash and approximately 373,000 limited
partnership shares.
Short-term liabilities, primarily payroll related accruals, increased from year-
end reflecting the seasonality of the lawn care and pest control operations.
The increase in deferred revenues reflects improved volume at American
Home Shield.
Long-term debt was reduced primarily as a result of strong cash flows from
operations offset in part by $29 million in new debt resulting from the
European acquisitions. Proceeds from the sale of the Norrell investment
were more than offset by the preferred share redemption described above and
treasury share purchases. The long-term debt to equity ratio improved from
1.3 to 1.0 at year-end to 1.2 to 1.0 at September 30, 1994.
Minority interest increased from year-end primarily reflecting WMX
Technologies minority interest in the Consumer Services segment, other
normal accruals of minority interest expense and the effects of the sale at the
beginning of the year of a small minority equity interest in the Partnerships'
Management Services subsidiary to members of senior management of that
unit. These increases more than offset the previously described redemption of
preferred shares.
Total shareholders' equity increased by 6.9% to $309.2 million as a result of
strong earnings, partially offset by distributions to shareholders and share
repurchases. Cash distributions paid directly to shareholders totalled $52.9
million or $.69 per share, a 4.5% increase over prior year. Distributions of
$10.4 million were also made to the trust established for the benefit of
shareholders.
9
<PAGE>
On April 29, 1994, the Board of Directors of the Partnership authorized the
repurchase of up to $30 million of Limited Partnership shares in the open
market or in privately-negotiated transactions. Shares repurchased under the
program will be available for general Partnership purposes, including
employee benefit programs and business acquisitions. Through September 30,
1994, approximately $17 million of shares had been repurchased under this
program.
10
<PAGE>
PART II. OTHER INFORMATION
<TABLE>
<CAPTION>
SERVICEMASTER LIMITED PARTNERSHIP
Exhibit 11
EXHIBIT REGARDING DETAIL OF INCOME PER SHARE COMPUTATION
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
---------- -------- --------- ----------
<S> <C> <C> <C> <C>
Shares used for computing primary earnings
per share--
Shares outstanding on weighted
average basis. . . . . . . . . . . . . 75,752 75,329 75,858 75,043
Equivalent shares--
Options and subscriptions outstanding. 1,669 1,725 1,742 1,461
---------- -------- --------- ----------
Weighted average and equivalent shares
for primary calculations . . . . . . . 77,421 77,054 77,600 76,504
========== ======== ========= ==========
Primary earnings per share. . . . . . . . $ .49 $ .41 $ 1.33 $ 1.50
===== ===== ===== ======
Net income. . . . . . . . . . . . . . . . $ 38,054 $ 31,632 $ 103,034 $ 114,923
Interest on convertible debentures. . . . 495 644 1,593 1,935
---------- -------- --------- ----------
Net income for fully diluted calculations $ 38,549 $ 32,276 $ 104,627 $ 116,858
========== ======== ========= ==========
Shares used for computing fully
diluted earnings per share--
Shares outstanding . . . . . . . . . . 77,423 77,125 77,606 76,839
Equivalent Shares--
Shares issuable upon conversion of
convertible debentures . . . . . . . . 1,751 2,424 1,751 2,424
---------- -------- --------- ----------
Weighted average and equivalent shares
for fully diluted calculations . . . . 79,174 79,549 79,357 79,263
========== ======== ========= ==========
Fully diluted earnings per share. . . . . $ .49 $ .41 $ 1.32 $ 1.47
==== ===== ===== ======
</TABLE>
11
<PAGE>
SIGNATURE
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.
Date: November 14, 1994
SERVICEMASTER LIMITED PARTNERSHIP
(Registrant)
By: s/Ernest J. Mrozek
---------------------------------------
Ernest J. Mrozek
Vice President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 24,593
<SECURITIES> 19,672
<RECEIVABLES> 258,984
<ALLOWANCES> 22,233
<INVENTORY> 39,972
<CURRENT-ASSETS> 369,614
<PP&E> 248,701
<DEPRECIATION> 130,076
<TOTAL-ASSETS> 1,208,907
<CURRENT-LIABILITIES> 290,926
<BONDS> 384,232
<COMMON> 0
0
0
<OTHER-SE> 309,234
<TOTAL-LIABILITY-AND-EQUITY> 1,208,907
<SALES> 2,246,149
<TOTAL-REVENUES> 2,246,149
<CGS> 1,766,080
<TOTAL-COSTS> 1,766,080
<OTHER-EXPENSES> 320,590
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,522
<INCOME-PRETAX> 105,380
<INCOME-TAX> 2,346
<INCOME-CONTINUING> 103,034
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,034
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.32
</TABLE>
