<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, 1994
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
ServiceMaster Employee Share Purchase Plan
Servicemaster Limited Partnership
One ServiceMaster Way
Downers Grove, Illinois 60515
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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 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 28, 1995
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
ServiceMaster Employee Share Purchase Plan:
We have audited the accompanying statements of net assets of
the ServiceMaster Employee Share Purchase Plan as of December 31,
1994 and 1993, and the related statements of changes in net assets
for each of the three years in the period ended December 31, 1994.
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 net assets of the Plan as of
December 31, 1994 and 1993 and the changes in its net assets for
each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
March 28, 1995.
3
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<TABLE>
<CAPTION>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF NET ASSETS
As of December 31,
---------------------------------
1994 1993
-------- --------
<S> <C> <C>
ASSETS:
Cash. . . . . . . . . . . . . . . . . . . . . . . $ --- $ 309,361
Due from ServiceMaster. . . . . . . . . . . . . . 513,635 175,158
Investment in ServiceMaster Limited
Partnership shares at cost (Total market
value in 1993 - $1,776,638) - Note 3. . . . . . --- 1,808,955
------------- ------------
Total Plan Assets. . . . . . . . . . . . . . . . $ 513,635 $ 2,293,474
------------- ------------
LIABILITIES:
Due to participants . . . . . . . . . . . . . . . $ --- $ 47,013
Due to former participants. . . . . . . . . . . . --- 6,021
------------- ------------
Total Plan Liabilities. . . . . . . . . . . . . . --- $ 53,034
------------- ------------
NET ASSETS AVAILABLE . . . . . . . . . . . . . . $ 513,635 $ 2,240,440
============= ============
</TABLE>
The accompanying Notes to Financial Statements
are an integral part of these statements.
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<TABLE>
<CAPTION>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31,
--------------------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
TOTAL PLAN ASSETS AVAILABLE,
BEGINNING OF PERIOD . . . . . . . . . . . . $ 2,240,440 $ 1,411,961 $ 1,481,138
------------ ------------ ------------
Additions:
Participant contributions - Note 4. . . . . . 5,522,397 5,004,160 3,113,256
ServiceMaster contributions . . . . . . . . . 821,316 740,230 460,983
------------ ------------ ------------
Total Additions. . . . . . . . . . . . . . . . 6,343,713 5,744,390 3,574,239
------------ ------------ ------------
Deductions:
Shares issued to participants . . . . . . . . 8,066,934 4,905,949 3,635,665
Payments to terminated participants . . . . . 3,584 9,962 7,751
------------ ------------ ------------
Total Deductions . . . . . . . . . . . . . . . 8,070,518 4,915,911 3,643,416
------------ ------------ ------------
TOTAL PLAN ASSETS AVAILABLE,
END OF PERIOD. . . . . . . . . . . . . . . $ 513,635 $ 2,240,440 $ 1,411,961
============ ============ ============
</TABLE>
The accompanying Notes to Financial Statements
are an integral part of these statements.
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
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, 1994, 6,220 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, 1994, are as
follows:
<TABLE>
<CAPTION>
Number
of Shares Total Cost
----------- ---------------
<S> <C> <C>
Issued during the year
ended December 31, 1994
to participants . . . . . . . . . . . . . . . 316,834 $ 8,066,934
Issued from inception
through December 31, 1993 . . . . . . . . . . 7,816,960 $ 48,016,146
--------- --------------
Total issued from
inception through
December 31, 1994 . . . . . . . . . . . . . . 8,133,794 $ 56,083,080
========= ==============
</TABLE>
Effective July 1, 1994, an administrator (Harris Bank), instead of the
Plan, purchases and allocates the shares to the participants. Due to this
change, the Plan does not maintain cash or share investments on behalf
of the participants. Shares are issued at the same price they were
purchased and are held by the Administrator in an account on behalf of
the individual participant. The participant may request deliverance of
the shares, and earnings thereon, directly from the administrator at any
time.
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO OF FINANCIAL STATEMENTS (Continued)
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. Expenses incurred by the
Plan are paid by ServiceMaster. In prior years before the administrative
changes noted previously, any market appreciation or depreciation on
the shares attached to the shares and was a gain or loss to the
participant, not the Plan.
(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.
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>
1994 --- na --- na ---
1993 64,900 277/8 $1,808,955 273/8 $1,776,638
</TABLE>
ServiceMaster Limited Partnership shares are traded on the New
York Stock Exchange.
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SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO OF FINANCIAL STATEMENTS (Continued)
4. Contributions
The amounts contributed by the participants and ServiceMaster
during 1994, 1993, and 1992 were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
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 . . . . . . $ 5,522,397 $ 37,500 $ 5,004,160 $ 37,500 $ 3,113,256 $ 37,500
ServiceMaster
additional
contributions. . . . $ --- $ 783,816 $ --- $ 702,730 $ --- $ 423,483
----------- --------- ----------- ---------- ----------- ---------
Total
Contributions. . . . $ 5,522,397 $ 821,316 $ 5,004,160 $ 740,230 $ 3,113,256 $ 460,983
=========== ========= =========== ========== =========== =========
</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.
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 1994, 1993, and 1992, 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.
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Through June 30, 1994, for federal income tax purposes, the cost basis
of the shares issued to the participant was the average cost of the shares
at the time it was allocated to the participant's account by the Plan. Due
to the changes in the Plan described in Note 1, effective July 1, 1994, the
cost basis of the shares is the purchase price.
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report, dated March 28, 1995, appearing
in the ServiceMaster Employee Share Purchase Plan Annual Report on
Form 11-K for the year ended December 31, 1994, to the Company's
previously filed Registration Statement Number 2-75851 on Form S-8.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
March 28, 1995
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