<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 Partnership Share Investment 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 Trustees have duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
By: /s/ S. D. Krause
-------------------------------------
S. D. Krause,
Trustee
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 and Trustees of the
ServiceMaster Partnership Share Investment Plan:
We have audited the accompanying statements of financial
condition of the ServiceMaster Partnership Share Investment 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
Trustees. 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.
2
<TABLE>
<CAPTION>
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
STATEMENTS OF FINANCIAL POSITION
As of December 31,
1993 1992
-------------- --------------
<S> <C> <C>
ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 0 $ 124,118
Due from participants - contributions. . . . . . . . 0 13,953
Investment in ServiceMaster Limited
Partnership shares at cost (Total
market value - $0 in 1993
and $5,949,850 in 1992) - Note 3. . . . . . . . . 0 4,463,765
------------- -------------
Total Plan Assets . . . . . . . . . . . . . . . . $ 0 $ 4,601,836
============= =============
LIABILITIES:
Due to active participants:
Payable in shares. . . . . . . . . . . . . . . . . . $ 0 $ 4,370,504
Payable in cash. . . . . . . . . . . . . . . . . . . 0 163,957
Due to former participants:
Payable in shares. . . . . . . . . . . . . . . . . . 0 65,536
Payable in cash. . . . . . . . . . . . . . . . . . . 0 1,839
------------ -------------
Total Plan Liabilities. . . . . . . . . . . . . . 0 4,601,836
============ =============
The accompanying Notes to Financial Statements
are an integral part of these statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
STATEMENT OF CHANGES IN PLAN EQUITY
Years Ended December 31,
1993 1992 1991
------------ ---------- ----------
<S> <C> <C> <C>
TOTAL PLAN EQUITY,
BEGINNING OF PERIOD. . . . . . . . . . . . . $ 0 $ 2,226,034 $ 1,819,324
------------ ---------- ----------
Additions:
Participant contributions - Note 4 . . . . . 0 1,812,515 1,559,962
ServiceMaster contributions - Note 4 . . . . 0 1,345,228 1,189,924
Other. . . . . . . . . . . . . . . . . . . . 0 134 (43)
----------- --------- ----------
Total Additions. . . . . . . . . . . . . . . . 0 3,157,877 2,749,843
----------- --------- ----------
Deductions:
Shares issued or allocated
to participants . . . . . . . . . . . . . 0 4,370,504 1,771,257
Cash issued to participants. . . . . . . . . 0 163,957 0
Participants' accounts closed payable in:
Cash. . . . . . . . . . . . . . . . . . . 0 30,935 4,603
Shares. . . . . . . . . . . . . . . . . . 0 102,413 71,595
Payable to ServiceMaster . . . . . . . . . . 0 299,217 137,832
Taxes paid by Company. . . . . . . . . . . . 0 416,885 357,846
----------- --------- ---------
Total Deductions . . . . . . . . . . . . . . . 0 5,383,911 2,343,133
----------- --------- ---------
TOTAL PLAN EQUITY,
END OF PERIOD. . . . . . . . . . . . . . . . $ 0 $ 0 $ 2,226,034
=========== ========= ==========
The accompanying Notes to Financial Statements
are an integral part of these statements.
</TABLE>
5
<PAGE>
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. The Plan
The ServiceMaster Partnership Share Investment 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, supplemented by contributions made by ServiceMaster. On
December 31, 1992, the Company announced its intent to terminate the
Plan and initiated steps to effect the termination. The Company made its
final contribution to the Plan in December, 1992. All assets of the Plan
were distributed in 1993 and any remaining assets were transferred back
to ServiceMaster Limited Partnership.
Employees of ServiceMaster Limited Partnership or any subsidiary or
affiliate which had adopted the Plan on behalf of its employees who
regularly worked twelve months during the year, who had an average work
week of 37 hours or more during the period worked and who had attained
age 18 were eligible to participate in the Plan on the first business day of
the calendar quarter coinciding with or next following the first anniversary
of their employment. Notwithstanding the foregoing, those employees
who had met the above-listed requirements and who were employed as
facility level production employees under a contractual agreement with an
employer's customer, except supervisors and secretaries, were eligible to
participate in the Plan on the first business day of the first calendar
quarter coinciding with or next following the third (rather than first)
anniversary of employment.
Details relating to shares issued by the Plan (reflecting all share splits)
from inception (April 1, 1988) through December 31, 1993, were as
follows:
<TABLE>
<CAPTION>
Number of
Shares Total Cost
<S> <C> <C>
Issued during the year
ended December 31, 1993:
to active participants . . . . . . . . . . . . 302,473 $ 4,134,202
to former participants . . . . . . . . . . . . 4,320 69,475
------- ----------
Total. . . . . . . . . . . . . . . . . . . . . . . 306,793 $ 4,203,677
Issued from inception
through December 31, 1992. . . . . . . . . . . . 466,201 $ 5,066,988
------- ---------
Total issued from
inception through
December 31, 1993. . . . . . . . . . . . . . . . 772,994 $ 9,270,665
======= =========
</TABLE>
6
<PAGE>
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
1. The Plan (Continued)
The ServiceMaster contribution to the Plan was as follows:
<TABLE>
<CAPTION>
Match of Participants
Class Years of Employment Mandatory Contribution
----- -------------------- -----------------------
<S> <C> <C>
A 1 but less than 7 100%
B 7 but less than 13 200%
C 13 but less than 25 300%
D 25 or more 300%
</TABLE>
Participants could contribute a maximum of $120 in Basic
Contributions and $880 in Voluntary Contributions per calendar year as
provided in the Plan. ServiceMaster could elect to make additional
discretionary cash contributions to the Plan in excess of specified
contributions.
Shares were purchased and allocated to participants' accounts monthly.
Share certificates were issued to participants from the Participant Account
at the end of the year and Company shares were issued according to the
vesting schedule provided in the Plan. Shares were issued at the price at
which they were allocated. Throughout 1993, all of the remaining
Company shares were issued, but were restricted according to the vesting
schedule.
After the close of each calendar quarter, the vested cash balances and
the shares allocated to participants who had voluntarily or involuntarily
withdrawn from the Plan during the quarter were distributed.
2. Summary of Significant Accounting Policies
(a) The fund accounting concept was used in accounting for the
ServiceMaster Partnership Share Investment Plan (the "Plan") since the
Plan was not conducted for profit. Cash distributions on shares held by
the Plan were credited directly and paid to the participants quarterly. Any
market appreciation or depreciation on the shares attached to the shares
and was a gain or loss to the participant, not the Plan. Any expenses
incurred by the Plan were paid by ServiceMaster. The Plan's transactions
with respect to its investment in securities did not give rise to capital gains
or losses.
(b) All assets were stated at cost due to the non-profit features of the
Plan.
(c) The transactions of the Plan were accounted for on the accrual
basis of accounting.
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<PAGE>
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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
- ------------ ------- ------ ---------- ----- ----------
<C> <C> <C> <C> <C> <C>
1993 0 0 $0 0 $0
1992 321,614 137/8 4,463,765 181/2 5,949,850
</TABLE>
ServiceMaster Limited Partnership shares are traded on the New York
Stock Exchange.
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
basic and
ServiceMaster
contributions
for the year . . $ 0 $ 0 $ 510,324 $ 1,345,228 $ 448,772 $ 1,189,924
Participant
voluntary
contributions. . $ 0 $ 0 $ 1,302,191 $ 0 $ 1,111,190 $ 0
---------- ---------- ---------- ---------- ---------- ----------
Total
contributions. . $ 0 $ 0 $ 1,812,515 $ 1,345,228 $ 1,559,962 $ 1,189,924
========== ========== ========== ========== ========== ==========
</TABLE>
Participants with less than 25 years of employment became vested in
the ServiceMaster contributions three years after the shares had been
allocated. Participants with more than 25 years of employment became
vested in those shares immediately. If a participant's employment
terminated for reasons other than death or disability before the participant
was fully vested in the ServiceMaster contributions, the unvested portion
was forfeited. Forfeitures were used to reduce the current year
ServiceMaster contribution.
8
<PAGE>
SERVICEMASTER PARTNERSHIP SHARE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Federal Income Taxes
(a) Tax Status of the Plan - The Plan was considered a trust for tax
reporting purposes but did not qualify for tax exempt status under Section
501 of the Internal Revenue Code. However, the Plan incurred no tax
liability since all Plan income was distributed to the participants.
(b) Tax Status of Each Participant - Since the Plan did 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 realized income equal to his or her 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
participants was the average cost of the shares at the time it was allocated
to participant's accounts.
9
<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 Partnership Share Investment Plan Annual Report
on Form 11-K for the year ended December 31, 1993, to the Company's
previously filed Registration Statement Number 33-19763 on Form S-8.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
March 29, 1994.
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