<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 June 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: 76,770,220 shares on August 5, 1994.
This document consists of 12 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 six months
ended June 30, 1994 and June 30, 1993 2
Consolidated Statements of Financial Position
as of June 30, 1994 and December 31, 1993 3
Consolidated Statements of Cash Flows for the
six months ended June 30, 1994 and
June 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 10
Signature 11
1
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
<CAPTION>
SERVICEMASTER LIMITED PARTNERSHIP
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
Operating Revenue . . . . . . . . . . . . $ 791,496 $ 728,725 $ 1,449,134 $ 1,313,855
Operating Costs and Expenses:
Cost of services rendered
and products sold . . . . . . . . . . . 610,542 564,916 1,153,816 1,056,948
Selling and administrative expenses . . . 118,345 114,947 195,063 175,499
---------- --------- --------- ----------
Total operating costs and expenses. . . . 728,887 679,863 1,348,879 1,232,447
---------- --------- --------- ----------
Operating Income. . . . . . . . . . . . . 62,609 48,862 100,255 81,408
Non-operating Expenses (Income):
Interest expense. . . . . . . . . . . . . 8,258 8,273 16,365 16,843
Interest income . . . . . . . . . . . . . (1,276) (1,314) (2,751) (2,740)
Gain on issuance of subsidiary shares . . --- (30,200) --- (30,200)
Minority interest*. . . . . . . . . . . . 14,377 9,233 20,305 12,633
---------- --------- --------- ----------
Income before Income Taxes. . . . . . . . 41,250 62,870 66,336 84,872
Provision for income taxes. . . . . . . . 816 811 1,356 1,581
---------- --------- --------- ----------
Net Income. . . . . . . . . . . . . . . . $ 40,434 $ 62,059 $ 64,980 $ 83,291
========== ========= ========== ==========
Net Income Per Share. . . . . . . . . . . $ .52 $ .81 $ .84 $ 1.09
====== ====== ====== ======
Cash Distributions Per Share. . . . . . . $ .23 $ .22 $ .46 $ .44
====== ====== ====== ======
Net income per share is based on 77,686 shares and 76,346 shares for the three months ended June
30, 1994 and 1993, respectively, and 77,690 shares and 76,226 shares for the six months ended
June 30, 1994 and 1993 respectively.
*Includes General Partners' interest of $849 and $677 for the three months ended June 30, 1994 and
1993, respectively, and $1,346 and $1,082 for the six months ended June 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
June 30, December 31,
Assets 1994 1993
---------- ----------
<S> <C> <C>
Current Assets:
Cash and marketable securities, including cash and
cash equivalents of $5,781 and $17,271, respectively . $ 24,632 $ 32,730
Accounts and notes receivable, less allowances of $23,934
and $19,438 respectively . . . . . . . . . . . . . . . 213,145 173,278
Inventories . . . . . . . . . . . . . . . . . . . . . . . 42,010 37,870
Prepaid expenses and other assets . . . . . . . . . . . . 81,008 47,447
---------- ----------
Total current assets . . . . . . . . . . . . . . . . . 360,795 291,325
---------- ----------
Property and Equipment:
At cost. . . . . . . . . . . . . . . . . . . . . . . . 235,608 226,452
Less: accumulated depreciation . . . . . . . . . . . . 119,801 110,677
---------- ----------
Net property and equipment . . . . . . . . . . . . . . 115,807 115,775
---------- ----------
Contract rights, trade names, goodwill, and other,
net of accumulated amortization of $94,969
and $84,296, respectively. . . . . . . . . . . . . . . 611,126 604,613
Investment in Norrell Corporation . . . . . . . . . . . . --- 26,948
Notes receivable, long-term securities, and other assets. 81,739 83,800
---------- ----------
Total assets . . . . . . . . . . . . . . . . . . . . . $ 1,169,467 $ 1,122,461
========== ==========
Liabilities And Shareholders' Equity
Current Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . $ 40,648 $ 34,154
Accrued liabilities . . . . . . . . . . . . . . . . . . . 151,496 133,984
Deferred revenues . . . . . . . . . . . . . . . . . . . . 83,695 66,865
Current portion of long-term obligations. . . . . . . . . 8,103 4,612
---------- ----------
Total current liabilities. . . . . . . . . . . . . . . 283,942 239,615
---------- ----------
Long-Term Debt. . . . . . . . . . . . . . . . . . . . . . 370,706 384,509
Other Long-Term Obligations . . . . . . . . . . . . . . . 84,928 91,605
Commitments and Contingencies . . . . . . . . . . . . . . --- ---
Minority and General Partners' Interest
includes General Partners' interest of
$1,708 and $1,576, respectively . . . . . . . . . . . 124,369 117,513
Shareholders' Equity:
Limited partners' equity - shares issued 78,055
at June 30, 1994 and December 31, 1993 . . . . . . . . 344,295 328,320
Treasury shares at cost - 1,277 shares at
June 30, 1994 and 1,629 shares at
December 31, 1993 . . . . . . . . . . . . . . . . . . . (29,508) (29,571)
Share subscriptions receivable and restricted shares -
842 shares at June 30, 1994 and 872 shares
at December 31, 1993 . . . . . . . . . . . . . . . . . (9,265) (9,530)
---------- ----------
Total shareholders' equity . . . . . . . . . . . . . . 305,522 289,219
---------- ----------
Total liabilities and shareholders' equity . . . . . . $ 1,169,467 $ 1,122,461
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
(In thousands)
Six Months Ended
June 30,
1994 1993
----------- -----------
<S> <C> <C>
Cash and Cash Equivalents at January 1. . . . . . . . . . . . $ 17,271 $ 27,576
Cash Flows from Operations:
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . 64,980 83,291
Adjustments to reconcile net income
to net cash flows from operations:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 16,122 15,646
Amortization . . . . . . . . . . . . . . . . . . . . . . 8,988 7,471
Provisions for losses on receivables . . . . . . . . . . 6,120 6,937
Gain on issuance of subsidiary shares. . . . . . . . . . --- (30,200)
Change in working capital, net of acquisitions:
Receivables. . . . . . . . . . . . . . . . . . . . . . (45,120) (45,204)
Inventories and other current assets . . . . . . . . . (37,044) (31,139)
Accounts payable . . . . . . . . . . . . . . . . . . . 6,171 (1,471)
Deferred revenues. . . . . . . . . . . . . . . . . . . 16,830 18,299
Accrued liabilities. . . . . . . . . . . . . . . . . . 15,529 3,002
Other, net . . . . . . . . . . . . . . . . . . . . . . . 6,779 8,165
----------- -----------
Net Cash Provided from Operations . . . . . . . . . . . . . . 59,355 34,797
----------- -----------
Cash Flows from Investing Activities:
Sale of investment in Norrell Corporation. . . . . . . . . 29,021 5,524
Property additions . . . . . . . . . . . . . . . . . . . . (17,262) (16,837)
Business acquisitions, net of cash acquired. . . . . . . . (10,584) (4,501)
Net sales (purchases) of marketable securities . . . . . . (1,507) (227)
Sale of equipment and other assets . . . . . . . . . . . . 1,233 2,144
Payments to sellers of acquired businesses . . . . . . . . (1,099) (1,346)
Net sales (purchases) of long-term securities. . . . . . . (114) 228
----------- -----------
Net Cash Used for Investing Activities. . . . . . . . . . . . (312) (15,015)
----------- -----------
Cash Flows from Financing Activities:
Distributions to shareholders and to shareholders' trust . (39,751) (34,289)
Purchase of treasury shares. . . . . . . . . . . . . . . . (14,704) (6,315)
Redemption of preferred stock. . . . . . . . . . . . . . . (14,650) ---
Payment of long-term debt and other long-term obligations. (14,247) (104,572)
Short-term borrowings, net . . . . . . . . . . . . . . . . 6,734 46,377
Proceeds from employee share option plans. . . . . . . . . 3,566 2,137
Distributions to minority investors. . . . . . . . . . . . (1,306) (4,294)
Proceeds from issuance of subsidiary shares. . . . . . . . --- 68,000
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,825 (263)
----------- -----------
Net Cash Used for Financing Activities. . . . . . . . . . . . (70,533) (33,219)
----------- -----------
Cash Decrease during the Period . . . . . . . . . . . . . . . (11,490) (13,437)
----------- -----------
Cash and Cash Equivalents at June 30. . . . . . . . . . . . . $ 5,781 $ 14,139
=========== ===========
</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 necessary to present fairly the financial position of ServiceMaster
Limited Partnership as of June 30, 1994 and December 31, 1993, and the
results of operations for the three month and six month periods ended June
30, 1994 and 1993, and the cash flows for the six month periods ended June
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 six month periods
ended June 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
------- --------
<S> <C> <C>
Cash paid or received for:
- - -------------------------
Interest expense, net of amounts capitalized. . . . $ 13,757 $ 16,352
Interest and dividend income. . . . . . . . . . . . $ 912 $ 1,228
</TABLE>
5
<PAGE>
SERVICEMASTER LIMITED PARTNERSHIP
MANAGEMENT DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
SECOND QUARTER 1994 COMPARED TO SECOND QUARTER 1993
- - ---------------------------------------------------
Revenues increased 9% to $791 million due to internal growth and the
inclusion of VHA Long Term Care, which was acquired in August, 1993.
Operating income margins improved to 7.9% from 6.7% during the quarter
due to effective spending controls and continuing productivity improvements
in the Consumer Services businesses. As shown below, net income totalled
$40.4 million, a 27% increase over comparable prior year amounts. Earnings
per share totalled $.52, a 24% increase on that same basis.
<TABLE>
<CAPTION>
Three Months
Ended June 30,
1994 1993
------- -------
<S> <C> <C>
Net income before unusual gain on
issuance of subsidiary shares . . . . $ 40,434 $ 31,859
Per limited partners' share . . . . . $.52 $.42
Gain on issuance of subsidiary shares . --- 30,200
------- -------
Net income. . . . . . . . . . . . . . . $ 40,434 $ 62,059
======= =======
Per limited partners' share . . . . . $.52 $.81
==== ====
</TABLE>
The Consumer Services business segment continued to achieve accelerated
growth in revenues and profits, with a particularly strong performance at
TruGreen-ChemLawn. TruGreen-ChemLawn achieved a strong increase in
customer base as a result of an excellent response to its marketing programs.
The favorable effects on revenue growth were augmented by margin
improvements resulting from productivity increases and efficiencies resulting
from the integration of the TruGreen and ChemLawn operations. Terminix
continued to achieve improved margins, enabling it to realize solid profit
growth despite unfavorable late winter weather conditions which significantly
impaired the termite swarm season industry-wide. Merry Maids operations
continued their accelerated rate of growth as a result of strong license sales
and increased fees from existing franchisees. American Home Shield achieved
solid growth in sales in California and the rest of the country, as well as an
increase in contract renewal rates. Residential and Commercial operations
continued to achieve strong increases in revenues and profits primarily due to
improved volume.
The Management Services business segment achieved growth in revenues and
profits, despite adverse conditions in the acute care sector of the health care
market. Revenues in the education market continued to grow at double digit
rates during the second quarter, with profit growth temporarily slowed as a
result of start-up related costs at certain large facilities. The health care
business remained relatively flat as a result of adverse industry conditions and
sales delays due to the uncertainties of health care reform. The
industrial/commercial market continued to be adversely impacted by
downsizing and competitive market conditions.
6
<PAGE>
ServiceMaster Diversified Health Services is the Partnership's newest business
unit and includes the operations acquired from VHA Long Term Care. This
unit provides comprehensive management and related services to the long
term care industry, which includes nursing homes, skilled nursing facilities and
home health care agencies. This unit achieved strong double digit growth in
revenues and operating income compared to pre-acquisition levels.
On a consolidated basis, cost of services rendered and products sold increased
8.1% but continued to decline as a percentage of revenue from 77.5% in 1993
to 77.1% 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 15.8% in 1993 to 15.0% 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 decreased slightly due to lower average debt balances
outstanding for the second quarter reflecting reduced seasonal borrowings. 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,
Inc. There were no comparable transactions in 1994. The increase in
minority interest expense primarily reflects this additional 5.76% minority
interest in Consumer Services, as well as the significant increase in earnings
achieved by the segment.
SIX MONTHS ENDED JUNE 30, 1994 COMPARED TO SIX MONTHS
- - -----------------------------------------------------
ENDED JUNE 30, 1993
- - -------------------
Operating revenue for the first six months increased 10% to $1.45 billion
primarily due to internal growth and the inclusion of VHA Long Term Care.
Operating margins improved to 6.9% from 6.2% due to effective spending
controls and ongoing productivity improvements in the Consumer Services
businesses. As shown below, net income totalled $65.0 million, a 22%
increase over comparable prior year amounts. Earnings per share totalled
$.84, a 20% increase on that basis.
<TABLE>
<CAPTION>
Six Months
Ended June 30,
1994 1993
------- -------
<S> <C> <C>
Net income before unusual gain on
issuance of subsidiary shares . . . . $ 64,980 $ 53,091
Per limited partners' share . . . . . $.84 $.70
Gain on issuance of subsidiary shares . --- 30,200
------- -------
Net income. . . . . . . . . . . . . . . $ 64,980 $ 83,291
======= =======
Per limited partners' share . . . . . $.84 $1.09
==== =====
</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
7
<PAGE>
residential marketing program) and ongoing cost controls and productivity
improvements.
Terminix operations continued to improve margins enabling it to achieve
solid profit growth, despite severe late winter weather which adversely affected
the termite swarm season industry-wide. The Merry Maids and Residential
and Commercial operations continued to achieve strong double digit increases
in revenue and profits. American Home Shield achieved good improvement
in revenues and operating income, with encouraging growth in contracts
written in California and other major geographical areas, as well as increased
frequency 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. During the first six months profit
growth in the education market was temporarily slowed due to start-up
related costs at certain large facilities. The acute care health care market
grew modestly despite adverse industry conditions and sales delays due to the
uncertainties of health care reform.
ServiceMaster Diversified Health Services continues to achieve strong growth
in revenues and profits due to increases in the number of facilities served and
strong sales growth in ancillary products and services.
On a consolidated basis, cost of services rendered and products sold increased
9.2% over 1993, but declined as a percent of revenue from 80.4% in 1993 to
79.6% 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 11.1% over last
year and increased as a percentage of revenue from 13.4% in 1993 to 13.5%
in 1994. This increase as a percentage of revenue is also primarily
attributable to the changing business mix of the Partnership. Overall,
operating margins were improved to 6.9% from 6.2% during the six months
primarily due to continuing profitability improvements in the Consumer
Services business unit.
Interest expense decreased due to lower average debt balances outstanding for
the six months, reflecting lower seasonal borrowings as a result of improved
cash flows. 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. 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 in the first half of the year increased 70% to
$59.3 million, enabling the Partnership to fund its growth and reduce long-
term indebtedness. Cash and marketable securities totalled approximately
$24.6 million at June 30, 1994, a decrease from the December 31, 1993 level
due to the repayment of seasonal borrowings. The current ratio improved to
1.3 to 1.0 from 1.2 to 1.0 at the end of 1993. The Partnership does not have
any material capital commitments at this time.
8
<PAGE>
The increase in accounts and notes receivable reflects general business growth
and increased activity in the seasonal Consumer Services businesses. The
increase in inventories is a result of normal seasonal build-ups in the pest
control and lawn care businesses.
Prepaid expenses and other assets have increased since year-end but are lower
than first quarter balances as the lawn care operations defer certain direct
response marketing costs and other similar expenses in the first quarter and
amortize them over the ensuing production season as related revenues are
recognized. Deferred lawn care revenues follow this same pattern primarily
due to customer prepayments.
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 and increased participation by TruGreen-ChemLawn customers
in the customer prepayment program.
Long-term debt was reduced primarily as a result of strong cash flow from
operations. Proceeds from the sale of the Norrell investment were virtually
offset by the preferred share redemption described above and treasury share
purchases. The debt to equity ratio improved from 1.3 to 1.0 at year-end to
1.2 to 1.0 at June 30, 1994.
Minority interest increased from year-end reflecting normal accruals of
minority interest expense and the effects of the sale of small minority equity
interests in the Partnerships' Management Services subsidiary to members of
senior management of that unit. These increases offset the previously
described redemption of preferred shares.
Total shareholders' equity increased by 5.6% to $305.5 million as a result of
strong earnings, partially offset by distributions to shareholders and share
repurchases. Cash distributions paid directly to shareholders totalled $35.4
million or $.46 per share, a 4.5% increase over prior year. Distributions of
$3.2 million were also made to the trust established for the benefit of
shareholders.
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 June 30, 1994,
approximately $6 million of shares had been repurchased under this program.
9
<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 Six Months Ended
June 30, June 30,
1994 1993 1994 1993
---------- -------- --------- ----------
<S> <C> <C> <C> <C>
Shares used for computing primary earnings
per share--
Shares outstanding on weighted
average basis. . . . . . . . . . . . . 76,027 74,935 75,912 74,897
Equivalent shares--
Options and subscriptions outstanding. 1,659 1,411 1,778 1,329
---------- -------- --------- ----------
Weighted average and equivalent shares
for primary calculations . . . . . . . 77,686 76,346 77,690 76,226
========== ======== ========= ==========
Primary earnings per share. . . . . . . . $ .52 $ .81 $ .84 $ 1.09
====== ====== ===== =======
Net income. . . . . . . . . . . . . . . . $ 40,434 $ 62,059 $ 64,980 $ 83,291
Interest on convertible debentures. . . . 498 645 1,098 1,291
---------- -------- --------- ----------
Net income for fully diluted calculations $ 40,932 $ 62,704 $ 66,078 $ 84,582
========== ======== ========= ==========
Shares used for computing fully
diluted earnings per share--
Shares outstanding . . . . . . . . . . 77,703 76,552 77,699 76,514
Equivalent Shares--
Shares issuable upon conversion of
convertible debentures . . . . . . . . 1,751 2,425 1,751 2,425
---------- -------- -------- ----------
Weighted average and equivalent shares
for fully diluted calculations . . . . 79,454 78,977 79,450 78,939
========== ======== ======== ==========
Fully diluted earnings per share. . . . . $ .52 $ .79 $ .83 $ 1.07
===== ====== ===== =======
</TABLE>
10
<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: August 8, 1994
SERVICEMASTER LIMITED PARTNERSHIP
(Registrant)
By: s/Ernest J. Mrozek
------------------------------------------
Ernest J. Mrozek
Vice President and Chief Financial Officer
11
