SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    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, 1999

                   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 1-14762

                            THE SERVICEMASTER COMPANY

             (Exact name of registrant as specified in its charter)

       Delaware                                            36-3858106
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


One ServiceMaster Way, Downers Grove, Illinois                 60515-1700
(Address of principal executive offices)                       (Zip Code)

                                  630-271-1300
              (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: 310,498,000 shares on November 5, 1999.

This document consists of 18 pages, including the cover page.

<PAGE>

                                  TABLE OF CONTENTS

                                                                            Page

                                                                             No.

THE SERVICEMASTER COMPANY (Registrant) -

PART I.  FINANCIAL INFORMATION

Consolidated Statements of Income for the three and

   nine months ended September 30, 1999 and September 30, 1998                 2

Consolidated Statements of Financial Position

   as of September 30, 1999 and December 31, 1998                              3

Consolidated Statements of Cash Flows for the nine months

   ended September 30, 1999 and September 30, 1998                             4

Notes to Consolidated Financial Statements                                     5

Management Discussion and Analysis of Financial Position

   and Results of Operations                                                   9

PART II.  OTHER INFORMATION

Item 1: Legal Proceedings                                                     16

Signature                                                                     17

                                       1
<PAGE>

                          PART I. FINANCIAL INFORMATION
                            THE SERVICEMASTER COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                                                 Three Months Ended                       Nine Months Ended
                                                                    September 30,                           September 30,

                                                                1999               1998                  1999               1998
                                                           ---------------    --------------       ----------------   --------------
<S>                                                         <C>                 <C>                 <C>                 <C>
OPERATING REVENUE ..................................        $ 1,584,225         $ 1,273,093         $ 4,236,361         $ 3,499,508


OPERATING COSTS AND EXPENSES:
Cost of services rendered

and products sold ..................................          1,224,340             956,375           3,292,992           2,702,538
Selling and administrative expenses ................            226,898             202,870             589,615             499,554
Other, net (1) .....................................               --                  --                85,500                --
                                                            -----------         -----------         -----------         -----------
Total operating costs and expenses .................          1,451,238           1,159,245           3,968,107           3,202,092
                                                            -----------         -----------         -----------         -----------

OPERATING ..........................................            132,987             113,848             268,254             297,416
Income

NON-OPERATING EXPENSE (INCOME):
Interest ...........................................             30,083              22,404              80,921              71,044
expense
Interest and investment income .....................            (10,125)             (3,092)            (19,395)            (11,916)
                                                            -----------         -----------         -----------         -----------

INCOME BEFORE INCOME TAXES .........................            113,029              94,536             206,728             238,288
Provision for income taxes .........................             46,392              38,184              86,447              96,262
                                                            -----------         -----------         -----------         -----------

NET INCOME .........................................        $    66,637         $    56,352         $   120,281         $   142,026
                                                            ===========         ===========         ===========         ===========
PER SHARE

   Basic (1) (2) (3) ...............................        $       .21         $       .19         $       .39         $       .49
                                                            ===========         ===========         ===========         ===========
   Diluted (1) (2) (3) .............................        $       .21         $       .19         $       .38         $       .48
                                                            ===========         ===========         ===========         ===========

 DIVIDENDS PER SHARE (3) ...........................        $       .09         $       .08         $       .27         $       .24
                                                            ===========         ===========         ===========         ===========
</TABLE>

(1) In the second quarter of 1999, the Company realized an after-tax gain of $30
million ($50.1 million pretax)  relating to the sales of its Premier  automotive
business  and  its  remaining  15  percent  interest  in  ServiceMaster   Energy
Management,  and  recorded a one-time  after-tax  charge of $81 million  ($135.6
million pretax) relating to its Diversified Health Services business.  Excluding
the impact of these items, net income and earnings per share were as follows:

<TABLE>
<CAPTION>
                                                                       Three Months Ended                     Nine Months Ended
                                                                          September 30,                          September 30,

                                                                      1999               1998              1999              1998
                                                                 --------------     -------------    -------------     ------------
<S>                                                              <C>                 <C>               <C>              <C>
Net income before non-recurring items, net ...............       $    66,637         $  56,352         $  171,581       $    142,026
Per share before non-recurring items, net:
   Basic .................................................             $ .21             $ .19              $ .56               $.49
                                                                  ==========        ==========        ===========        ===========
   Diluted ...............................................             $ .21             $ .19              $ .55               $.48
                                                                  ==========        ==========        ===========        ===========
</TABLE>

(2) Basic earnings per share are calculated  based on 311,158 shares and 294,686
shares for the three months ended September 30, 1999 and 1998,  respectively and
307,106 shares and 286,938  shares for the nine months ended  September 30, 1999
and 1998,  respectively.  Diluted  earnings  per share are  calculated  based on
317,502 shares and 304,464 shares for the three months ended  September 30, 1999
and 1998, respectively and 314,589 shares and 296,603 shares for the nine months
ended September 30, 1999 and 1998, respectively.

(3) All share and per share data reflect the three-for-two share split effective
August 26, 1998.

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       2
<PAGE>





                            THE SERVICEMASTER COMPANY
                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                  As of
                                                                       September 30,    December 31,
                                                                           1999             1998
                                                                       ------------    -------------
ASSETS

CURRENT ASSETS:
<S>                                                                    <C>               <C>
Cash and cash equivalents............................................  $     21,722      $    66,400
Marketable securities................................................        55,190           54,022
Receivables, less allowances of $39,246
   and $38,988, respectively.........................................       598,909          372,375
Inventories..........................................................        76,171           49,770
Prepaid expenses and other assets....................................       175,664          127,635
                                                                       ------------    -------------
    Total current assets.............................................       927,656          670,202
                                                                       ------------    -------------

PROPERTY AND EQUIPMENT:
   At cost...........................................................       650,791          441,209
   Less:  accumulated depreciation...................................       330,507          229,049
                                                                       ------------    -------------
    Net property and equipment.......................................       320,284          212,160
                                                                       ------------    -------------

INTANGIBLE ASSETS, PRIMARILY TRADE NAMES AND GOODWILL,
   net of accumulated amortization of $319,718
   and $272,254, respectively........................................     2,406,923        1,884,002
NOTES RECEIVABLE, LONG-TERM SECURITIES, AND OTHER ASSETS.............       136,521          148,487
                                                                       ------------    -------------

    Total assets.....................................................  $  3,791,384    $   2,914,851
                                                                       ============    =============
</TABLE>


<TABLE>
<CAPTION>



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
<S>                                                                    <C>             <C>
Accounts payable.....................................................  $    136,600    $     110,523
Income taxes payable.................................................        36,197           84,165
Accrued liabilities..................................................       311,054          302,424
Deferred revenues....................................................       237,996          204,969
Current portion of long-term obligations.............................        44,725           51,616
                                                                       ------------    -------------
    Total current liabilities........................................       766,572          753,697
                                                                       ------------    -------------

LONG-TERM DEBT.......................................................     1,687,831        1,076,167
OTHER LONG-TERM OBLIGATIONS..........................................       112,183          128,501
COMMITMENTS AND CONTINGENCIES .......................................

SHAREHOLDERS' EQUITY:
Common stock $0.01 par value, authorized 1 billion shares; issued
    and outstanding 311,390 and 298,030 shares, respectively.........         3,114            2,980
Additional paid-in capital...........................................     1,035,811          788,124
Retained earnings....................................................       217,049          179,840
Accumulated other comprehensive income...............................        (2,957)           3,911
Restricted stock.....................................................        (2,778)          (3,383)
Treasury stock.......................................................       (25,441)         (14,986)
                                                                       ------------    -------------
    Total shareholders' equity.......................................     1,224,798          956,486
                                                                       ------------    -------------
    Total liabilities and shareholders' equity......................   $  3,791,384    $   2,914,851
                                                                       ============    =============
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                       3
<PAGE>




                                       THE SERVICEMASTER COMPANY
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (IN THOUSANDS)
<TABLE>
<CAPTION>


                                                                                 Nine Months Ended
                                                                                   September 30,

                                                                               1999             1998
                                                                          ------------      ------------
<S>                                                                       <C>               <C>
CASH AND CASH EQUIVALENTS AT JANUARY 1................................    $     66,400      $     64,876

CASH FLOWS FROM OPERATIONS:
NET INCOME............................................................         120,281           142,026
    Adjustments to reconcile net income
    to net cash flows from operations:

       Depreciation and amortization..................................          94,759            79,137
       Non-recurring items (pretax)...................................          85,500                 -
       Change in working capital, net of acquisitions:
         Receivables..................................................        (106,890)          (84,901)
         Inventories and other current assets.........................         (26,856)           (8,011)
         Accounts payable.............................................         (21,705)            9,527
         Deferred revenues............................................           9,429             3,380
         Accrued liabilities..........................................         (31,110)          (21,150)
         Deferred 1998 tax payment....................................         (78,478)                -
         Deferred income taxes........................................          24,073            88,736
    Other, net........................................................            (335)           (3,127)
                                                                         -------------      -------------
NET CASH PROVIDED FROM OPERATIONS.....................................          68,668           205,617
                                                                         -------------      ------------

NET CASH PROVIDED FROM OPERATIONS EXCLUDING ALL TAXES (MEMO)                   209,520           213,143

CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions, net of cash acquired.......................        (452,441)         (171,640)
    Property additions................................................         (71,875)          (58,921)
    Sale of equipment and other assets...............................            4,796             3,775
    Proceeds from the sale of businesses..............................          68,490                 -
    Payments to sellers of acquired businesses........................          (9,589)           (7,830)
    Notes receivable and financial investments........................         (16,751)           (3,920)
    Net purchases of investment securities............................          (6,500)           (5,802)
                                                                          -------------      ------------
NET CASH USED FOR INVESTING ACTIVITIES................................        (483,870)         (244,338)
                                                                          -------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings, net...................................................       1,164,916            253,567
    Payments of borrowings and other obligations......................        (692,665)          (373,727)
    Shareholders' dividends...........................................         (83,072)           (58,316)
    Purchase of ServiceMaster stock...................................         (35,174)           (12,237)
    Proceeds from employee share plans................................          16,019              7,302
    Proceeds from stock offering......................................               -            208,770
    Other.............................................................             500              5,194
                                                                                   ---             ------
NET CASH PROVIDED FROM FINANCING ACTIVITIES...........................         370,524             30,553
                                                                          -------------       ------------

CASH DECREASE DURING THE PERIOD.......................................         (44,678)           (8,168)
                                                                          -------------      ------------

CASH AND CASH EQUIVALENTS AT SEPTEMBER 30.............................    $     21,722       $     56,708
                                                                          =============      ============
</TABLE>




                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                       4
<PAGE>


                              THE SERVICEMASTER COMPANY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note  1:  The  consolidated   financial   statements  include  the  accounts  of
ServiceMaster and its significant subsidiaries, collectively referred to as "the
Company".  Intercompany  transactions  and  balances  have  been  eliminated  in
consolidation.

Note 2: The consolidated financial statements included herein have been prepared
by the  Company  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 Company 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 Company'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,  1998.  In the  opinion  of the
Company,  all adjustments  necessary to present fairly the financial position of
The  ServiceMaster  Company as of September 30, 1999 and December 31, 1998,  and
the  results of  operations  for the three  month and nine month  periods  ended
September  30,  1999 and  1998,  and the cash  flows for the nine  months  ended
September 30, 1999 and 1998 have been included. The preparation of the financial
statements  requires  management  to  make  certain  estimates  and  assumptions
required under generally  accepted  accounting  principles which may differ from
the actual  results.  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.  All such  costs  are fully
recognized within the fiscal year in which they are incurred.

Note  4:  On July  24,  1998,  the  Company's  Board  of  Directors  declared  a
three-for-two  share split effective August 26, 1998, for shareholders of record
on August  12,  1998.  All share and per share data have been  restated  for all
periods presented to reflect this three-for-two split.

Note 5: Basic earnings per share  includes no dilution from options,  debentures
or other financial  instruments and is computed by dividing income  available to
common  stockholders  by the  weighted  average  number of  shares  outstanding.
Diluted  earnings  per share  reflects  the  potential  dilution of  convertible
securities and options to purchase common stock.  The following chart reconciles
both  the  numerator  and  the  denominator  of the  basic  earnings  per  share
computation to the numerator and  denominator of the diluted  earnings per share
computation.


<TABLE>
<CAPTION>

                                                                Three Months                      Three Months
                                                          Ended September 30, 1999          Ended September 30, 1998
                                                  -------------------------------    ------------------------------

(IN THOUSANDS, EXCEPTPER SHARE DATA)              Income      Shares       EPS       Income      Shares       EPS
<S>                                               <C>         <C>          <C>       <C>         <C>          <C>
Basic earnings per share                          $66,637     311,158      $.21      $56,352     294,686      $.19
Effect of dilutive securities -options                  -       6,344      ====            -       9,778     =====
                                               ----------  ----------             ----------    --------
Diluted earnings per share                        $66,637     317,502      $.21      $56,352     304,464      $.19
                                                  =======     =======      ====      =======     =======     =====


</TABLE>



                                       5
<PAGE>

<TABLE>
<CAPTION>


                                                    Nine Months                         Nine Months
                                              Ended September 30, 1999          Ended September 30, 1998
                                           -------------------------------    ------------------------------

(IN THOUSANDS, EXCEPT PER SHARE DATA)         Income      Shares      EPS        Income      Shares      EPS
<S>                                          <C>          <C>         <C>       <C>          <C>         <C>
Basic earnings per share                     $120,281     307,106     $.39      $142,026     286,938     $.49
Effect of dilutive securities:                                       =====                              =====
  Options                                           -       7,483                      -       9,300
  Convertible debentures                            -           -                     32         365
                                           ----------  ----------             ----------  ----------
Diluted earnings per share                   $120,281    $314,589     $.38      $142,058     296,603     $.48
                                           ==========  ==========    =====    ==========   =========    =====

</TABLE>

NOTE 6: 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 months ended  September 30,
1999 and 1998 is presented in the following  table.  The $7 million  increase in
interest and investment income resulted primarily from additional gains relating
to finacial  investments.  The significant increase in income taxes paid in 1999
reflects  the payment of the 1998  federal  tax  obligation  and 1999  estimated
income tax payments.
<TABLE>
<CAPTION>

(IN THOUSANDS)                                                   1999          1998
                                                               ---------   -----------
Cash paid or (received for):
<S>                                                           <C>          <C>
Interest expense............................................  $   84,135   $  78,995
Interest and investment income..............................  $  (13,054)  $  (6,597)
Income taxes................................................  $  140,852   $   7,526
</TABLE>

NOTE 7: Total  comprehensive  income was $63.9 million and $52.6 million for the
three months ended September 30, 1999 and 1998, respectively, and $113.4 million
and $138.9  million  for the nine  months  ended  September  30,  1999 and 1998,
respectively.  Total  comprehensive  income  includes  net  income,  changes  in
unrealized gains on marketable securities and translation balances.

NOTE 8: In the second quarter the Company sold its Premier business unit for $76
million to Durr AG of Germany.  In addition,  the Company sold its  remaining 15
percent  interest  in  ServiceMaster  Energy  Management  to its  partner  Texas
Utilities.  These sales resulted in after-tax gains totaling  approximately  $30
million ($50 million pretax).

NOTE  9:  The  business  of the  Company  is  primarily  conducted  through  the
ServiceMaster  Consumer and  Commercial  Services and  ServiceMaster  Management
Services  operating units. The Consumer and Commercial  Services unit provides a
variety of specialty  services to  residential  and  commercial  customers.  The
Management Services unit provides a variety of supportive management services to
health  care,   education,   and  commercial   accounts.   The  Company  derives
substantially  all of its revenues from customers in the United States with less
than five percent generated in foreign markets.

The Other Operations group includes primarily ServiceMaster Employer Services, a
professional  employer  organization  that provides clients with  administrative
processing of payroll,  insurance,  and other  employee  benefit  programs,  and
Diversified  Health  Services which  provides  services and products to the long
term  care  industry,   and  the  Company's  headquarters   operation.   Segment
information  as of and for the three months and nine months  ended  September 30
are as follows:


                                       6
<PAGE>
<TABLE>
<CAPTION>


                                                         THREE MONTHS
                                                      ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)

                                                        CONSUMER &
                                                        COMMERCIAL           MANAGEMENT             OTHER
                      1999                               SERVICES             SERVICES           OPERATIONS        CONSOLIDATED
--------------------------------------------------    -----------------    -----------------    --------------     ---------------
<S>                                                     <C>                   <C>                   <C>                   <C>
Revenue                                                 $  943,585            $  481,948            $  158,692            $1,584,225
Operating Income                                        $  106,880            $   19,829            $    6,278            $  132,987
Total Assets                                            $3,298,910            $  215,949            $  276,525            $3,791,384

                     1998
--------------------------------------------------
Revenue                                                 $  589,710            $  522,983            $  160,400            $1,273,093
Operating Income                                        $   85,845            $   20,916            $    7,087            $  113,848
Total Assets                                            $2,175,220            $  249,440            $  458,804            $2,883,464

</TABLE>
<TABLE>
<CAPTION>


                                                          NINE MONTHS
                                                      ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)

                                                        CONSUMER &
                                                        COMMERCIAL           MANAGEMENT             OTHER
                      1999                               SERVICES             SERVICES           OPERATIONS        CONSOLIDATED
--------------------------------------------------    -----------------    -----------------    --------------     ---------------
<S>                                                      <C>                 <C>                 <C>               <C>
Revenue                                                  $2,316,436          $1,451,334          $  468,591        $4,236,361
Operating Income                                         $  295,679          $  106,483          $ (133,908)       $  268,254
Operating Income Excluding Non-Recurring Items           $  295,679          $   56,383          $    1,692        $  353,754

                     1998
--------------------------------------------------
Revenue                                                  $1,534,921          $1,504,727          $  459,860        $3,499,508
Operating Income                                         $  226,582          $   57,065          $   13,769        $  297,416

</TABLE>


NOTE 10:  In the  first  quarter  of 1999,  the  Company  announced  that it was
undertaking a strategic review and assessment of its Diversified Health Services
business due to changes in government  reimbursement and compliance policies and
the resulting financial difficulties of a number of its customers. Based on this
review,  the  Company  determined  to  reduce  the  scope  of  services  offered
substantially  and, in the second  quarter,  the Company  recorded an  after-tax
charge of $81 million for the restructuring and write-down of assets relating to
Diversified  Health Services.  The after-tax  components of the charge consisted
of: the write-down of impaired  assets  primarily  goodwill ($51  million),  the
write-down of receivables,  loans and investments in nursing homes and contracts
($19 million), and the provision for losses on contractual arrangements and exit
costs of certain ancillary  services ($11 million).  Approximately $2 million of
this  provision  was  utilized in the third  quarter.  The Company  believes the
remaining $9 million is adequate.  The results of operations of the  Diversified
Health Services  business were not material to the Company's  financial  results
for the periods presented.

NOTE 11:  In June  1998,  the  Financial  Accounting  Standards  Board  issued a
Statement of Financial  Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities".  This Statement was subsequently amended to
defer its effective date. The Company intends to adopt this Statement in January
2001 as required by the amended  Statement.  Adoption of this  Statement  is not
expected to have a material impact on the Company's financial statements.

NOTE  12:  In  June  1996,  Ray  D.  Martin,  a  former  salesman   employed  by
ServiceMaster's Management Services unit filed a lawsuit in the Circuit Court of
Fulton County,  Georgia (Civ. Action File No. 96VS114677J),  which as originally
filed  contended that the Company had not paid him the full amount of commission
due to him on a sale in which he was  involved.  The Company  believed  that the
commission  was  not  payable  under  the


                                       7
<PAGE>

Company's  commission  policies  and  procedures.  The amount  then in issue was
approximately  $180,000. In the course of the pre-trial  proceedings,  the trial
court entered a default judgment against the Company.  Consequently, the Company
was not  permitted  to  defend  its  position  and  the  only  issue  left to be
considered  at the trial was the  question of damages.  In  addition,  the trial
court then  permitted  the  plaintiff  to amend his  complaint to include a tort
claim,  which allowed for the levying of punitive  damages.  However,  the trial
court did not permit the Company to file an answer to the amended  complaint  or
otherwise  to make the  point  that  there is no basis  for a tort  claim in the
circumstances of this case. On September 29, 1999, the trial court entered final
judgement  for the  plaintiff in a total amount of  $136,259,417.  Under Georgia
law, that judgment will accrue post-judgment interest at a statutory rate of 12%
per annum,  except for the portion of the  judgment  ($77,189)  that  represents
pre-judgment  interest.  On October 14,  1999,  the  Company  filed a motion for
judgment  notwithstanding  the verdict or, in the  alternative,  for a new trial
and/or  remittitur.  The  Company  believes  that the award of $135  million  in
punitive  damages is not  supportable  by the facts of the case or by applicable
state law. The Company is not presently able to reasonably estimate the ultimate
outcome of this case,  and  accordingly,  no expense for this  judgment has been
recorded.  In the event that the adverse judgment is sustained after all appeals
(which is not anticipated by the Company), it would be likely that the Company's
results  of  operations  for a  particular  year  may  be  materially  adversely
affected.  However,  the  Company  believes  that the  ultimate  outcome of this
litigation  is not expected to have a material  adverse  effect on the Company's
financial condition.


                                       8
<PAGE>

                            THE SERVICEMASTER COMPANY
                       MANAGEMENT DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

THIRD QUARTER 1999 COMPARED TO THIRD QUARTER 1998

Revenues  increased 24 percent over the third  quarter of 1998 to $1.6  billion,
reflecting   strong  growth  from  both  base   operations   and   acquisitions.
Approximately  six percent of the revenue increase resulted from internal growth
and small roll-up  acquisitions in established  businesses  while the entry into
the  landscaping,  HVAC, and plumbing markets provided 25 percent of the growth.
This growth was partially offset by the sale of Premier and ServiceMaster Energy
Management and the wind-down of the Home Health Care business.  Operating income
increased  17 percent over the prior year.  Margins  decreased to 8.4 percent of
revenue from 8.9 percent in 1998,  because  newer  initiatives  in  landscaping,
HVAC, and plumbing reported margins below the Company average. Operating margins
before these  platforms would have been flat even though a severe drought in the
Mid Atlantic  and  Northeast  regions of the country in 1999 reduced  margins in
TruGreen-ChemLawn,  the Company's largest  operating unit.  Diluted earnings per
share  increased  11% to $.21  compared  to $.19 last year.  Net income of $66.6
million  grew 18%, a faster rate than  earnings  per share due to an increase in
shares outstanding resulting from the impact of shares issued for acquisitions.

Even despite the severe weather  conditions  this year, the Company  expects net
income  growth for the year to be in the range of 17  percent to 19 percent  and
earnings  per share  growth to be in the 10  percent to 12  percent  range.  The
Company has launched two new business initiatives, the first of which will focus
on expanding the Company's  core service  capabilities  to the consumer  market,
providing an e-commerce  alternative for selling, and providing and bundling our
service  offering  and  related  products.  The other  initiative  will focus on
expanding  our  outsourcing,  site  service  and  information  resources  to the
business  and  commercial  market.  The Company  expects  earnings  per share to
continue  to grow at double  digit  rates for the next two years,  but less than
historical  levels because of the investments that the Company will be making to
support these initiatives which are likely to be $.03 to $.05 per share in 2000.

The Consumer and  Commercial  Services  business unit  reported  revenue of $944
million,  an increase of 60 percent,  resulting from double-digit growth at each
of the companies and the  successful  integration of new  businesses.  Operating
income increased 25% to $106.9 million. TruGreen reported a substantial increase
in revenues and a more modest growth in profits, reflecting the impact of severe
weather  conditions on the lawn care  operations  partially  offset by increases
from the landscape initiative.  The lawn care operations reported modest revenue
growth  but lower  profits  due to the  effects  of the  extreme  drought in the
Northeast and the Mid Atlantic regions of the country.  The profit reduction was
primarily a result of lower employee  productivity  as the drought  impaired the
Company's ability to complete its expected level of services. TruGreen LandCare,
the Company's commercial landscape operations, reported significant increases in
revenue  and  profits  reflecting  strong  internal  growth  and the  successful
integration  of  acquisitions.   Terminix  achieved  double-digit  increases  in
revenues and profits  resulting from strong  customer demand for termite baiting
systems,  improved  margins  reflecting  strong growth in higher margin  termite
renewal  contracts as well as the  integration  of  acquisitions.  American Home
Shield had strong growth in revenues and profits with double-digit  increases in
warranty  contracts sold through all distribution  channels,  which include real
estate,  customer renewals,  and  direct-to-consumer  sales. The combined Rescue
Rooter and American  Residential  Services (ARS) operations reported substantial
growth in revenue and profits,  reflecting  double-digit  internal growth in the
Rescue  Rooter  operations  and the  addition of ARS,  which  continues  to meet
management's expectations. The franchise operations,  Residential/Commercial and
Merry Maids, reported double-digit growth in revenues and profits as a result of
the continued strong growth of company owned  operations and increased  licenses
sales.

                                       9
<PAGE>

The  Management  Services  business  unit  reported  revenue of $482 million and
operating income of $19.8 million,  both down from prior year levels  reflecting
the disposition of two businesses.  Revenues from continuing operations grew two
percent as strong growth in the Business & Industry market was partially  offset
by a decrease in the larger Healthcare market.  Operating income from continuing
operations increased four percent reflecting strong overhead cost controls.

Cost of services  rendered and products sold  increased 28 percent due primarily
to acquisitions and general  business  growth,  and increased as a percentage of
revenue to 77.3 percent from 75.1 percent in 1998. The  acquisitions  related to
the landscaping,  HVAC and plumbing initiatives have significantly impacted this
comparison  because  their cost of services as a percentage of revenue is higher
than the average for the enterprise. Excluding these platforms, cost of services
rendered and products sold  decreased as a percentage of revenue to 74.1 percent
from 74.8 percent in 1998. This decrease  primarily reflects the changing mix of
the  business  as  Consumer  and  Commercial   Services  increases  in  size  in
relationship to the overall business of the Company. The Consumer and Commercial
services business generally operates at higher gross margin levels than the rest
of the  business,  but also incur  somewhat  higher  selling and  administrative
expenses as a percentage of revenues.

Selling and administrative expenses increased 12 percent due to general business
growth  and  acquisitions,  and  decreased  as a  percentage  of revenue to 14.3
percent from 15.9 percent in 1998. The platform  initiatives  noted above have a
lower  selling and  administrative  expense as a percentage  of revenue than the
Company  average.  Excluding  these  initiatives,   selling  and  administrative
expenses  increased as a percentage of revenue to 17.2 percent from 16.3 percent
in 1998, primarily due to the changing business mix of the Company noted above.

Interest  expense  increased over the prior year primarily due to increased debt
levels  associated  with  acquisitions.  The increase in interest and investment
income   primarily   resulted  from  additional   gains  realized  on  financial
investments.  The tax provision reflects a higher effective tax rate compared to
last year, primarily due to the non-deductibility of goodwill from several large
acquisitions completed in 1999.

NINE MONTHS ENDED SEPTEMBER 30, 1999 AS COMPARED TO SEPTEMBER 30, 1998

Revenues for the nine months  increased  21 percent  over 1998 to $4.2  billion,
reflecting   strong  base  business  growth  and  the  effect  of  acquisitions.
Approximately  7 percent  of the growth  came from  internal  sources  and small
roll-up  acquisitions in existing service lines with another 19 percent increase
resulting from the newer  initiatives  in  landscaping,  plumbing,  and HVAC. As
noted in the three  month  comparison,  this  growth  was offset by the sale and
exiting of certain businesses. Operating income, excluding non-recurring unusual
items increased 19 percent,  while operating margins decreased to 8.4 percent of
revenue from 8.5 percent in 1998. The decrease in operating margins reflects the
impact of the newer  initiatives  that have operating  margins below the Company
average. Diluted earnings per share for the nine months, excluding non-recurring
items,  increased  15 percent to $.55  compared to $.48 last year.  On this same
basis,  net income grew 21 percent to $171.6  million from $142.0  million.  Net
income  grew at a faster  rate than  earnings  per share due to an  increase  in
shares  outstanding  resulting  from the equity  offering in May 1998 and shares
issued for acquisitions.  In the second quarter,  the Company realized after-tax
gains  totaling $30 million  relating to the sales of businesses and recorded an
after-tax  charge of $81 million  relating to its  Diversified  Health  Services
business.  These items reduced net income from ongoing operations by $51 million
($85.5 million  pretax).  As a result of these items,  for the nine months,  the
Company  reported net income of $120.3 million and diluted earnings per share of
$.38.

The  Consumer  and  Commercial  Services  business  unit  achieved  a 51 percent
increase in revenue to $2.3 billion and operating  income of $295.7 million,  30
percent higher than last year.  The profit growth of the segment  reflected both
acquisitions and internal  growth.  The  TruGreen-ChemLawn  lawn care operations
reported  modest  revenue  growth but lower  profits  due to the severe  weather
conditions


                                       10
<PAGE>

experienced  this year  including  the  worst  summer  drought  on record in the
Northeast and Mid Atlantic states.  TruGreen-LandCare,  the Company's commercial
landscape operations, achieved significant increases in both revenue and profits
reflecting  strong  internal  growth and the impact of  acquisitions,  including
LandCare  USA,  which was  completed in March.  Terminix  reported  double digit
revenue growth and a very strong increase in profits reflecting strong growth in
higher  margin  termite  completions  and  renewal  contracts,  improved  branch
efficiencies  as well as the integration of  acquisitions.  American Home Shield
reported  double-digit  growth  in both  revenues  and  profits  with  excellent
increases in  direct-to-consumer  sales and renewal sales.  The combined  Rescue
Rooter  and ARS  operations  reported  significant  increases  in  revenues  and
profits, reflecting the acquisition of ARS in April and solid internal growth in
the Rescue Rooter business. The franchise operations, Residential/Commercial and
Merry Maids,  reported strong revenue and profit growth for the nine months with
good growth and  productivity  improvements  at the company owned  operations as
well as increased franchise licenses sales.

The  Management  Services  business  unit  reported  revenue of $1.5 billion and
operating  income of $106.5 million for the nine months.  In the second quarter,
the  segment  recorded  a  significant  gain  related  to the sale of two of its
business  units.  Revenues  and  operating  income  from  continuing  operations
increased three percent and five percent, respectively. This growth reflects the
benefit  of  acquisitions  made in April  1998  and  overhead  efficiency  gains
throughout the business unit. For the nine months,  the  traditional  Healthcare
market reported a decrease in revenue and profits, reflecting the termination of
large accounts in the latter part of 1998. The Education  market reported higher
profits,  as controlled  overhead  spending  offset margin declines from certain
contract renegotiations. The Business & Industry group achieved strong growth in
revenues and profits,  reflecting the successful integration of acquisitions and
base  business  growth.  Through the first nine months,  all three markets had a
higher base of annualized revenue than the beginning of the year levels.

Cost of services  rendered and products  sold  increased 22 percent for the nine
months,  primarily due to  acquisitions  and general  business  growth.  Cost of
services  increased as a percentage of revenue to 77.7 percent in 1999 from 77.2
percent in 1998.  As  discussed  in the three  month  comparison,  the  platform
acquisitions  in landscaping,  HVAC and plumbing have affected this  comparison.
Excluding  these  initiatives,  cost of  services  rendered  and  products  sold
decreased as a percentage  of revenue to 75.7 percent from 77.0 percent in 1998.
This  decrease  primarily  reflects the changing mix of the business as Consumer
and Commercial Services increase in size in relationship to the overall business
of the Company. The Consumer and Commercial Services business generally operates
at higher  gross  margin  levels  than the rest of the  business  but also incur
somewhat higher selling and administrative expenses as a percentage of revenue.

Selling and administrative expenses for the nine months increased 18 percent due
to general  business growth and  acquisitions,  and decreased as a percentage of
revenue  to 13.9  percent  in 1999  from 14.3  percent  in 1998.  Excluding  the
platform  initiatives,  selling  and  administrative  expenses  increased  as  a
percentage  of revenue to 15.9 percent from 14.5 percent in 1998,  primarily due
to the changing business mix of the Company noted above.

The increase in interest  expense for the nine months is due to  increased  debt
levels associated with  acquisitions,  partially offset by proceeds from the May
1998 equity offering.  Interest and investment  income increased over prior year
levels primarily due to additional gains realized on financial investments.  The
tax provision  reflects a higher  effective tax rate compared to last year,  and
resulted from increased non-deductible intangible amortization expense.

FINANCIAL POSITION

Net cash  provided  from  operations  for the nine  months of $68.7  million was
significantly  below 1998. The decrease  primarily  reflects the deferral of the
1998  federal tax  payment  until  March of 1999 and  estimated  payments on the
Company's  1999  earnings.  Excluding  all  tax  payments,  cash  provided  from


                                       11
<PAGE>

operations in 1999 of $209.5 million was slightly below the 1998 level of $213.1
million. Working capital needs increased over 1998, reflecting the growth in the
Company's  seasonal  businesses,   especially  landscaping   operations,   which
experienced  a significant  increase in  receivables.  Management  believes that
funds generated from operations and other existing resources will continue to be
adequate to satisfy ongoing working capital needs of the Company.

Accounts  and notes  receivable  grew over year end levels,  reflecting  general
business  growth,  increased  seasonal  activity in the Consumer and  Commercial
Services segment, and acquisitions, primarily LandCare and ARS. Inventories also
increased  over year end  levels as a result of normal  seasonal  build-ups  and
acquisitions.

Prepaids and other assets have increased from year end because of seasonality in
the  lawn  care  business  and   acquisitions  in  the  landscape  and  plumbing
operations.  The lawn care  operation  defers certain  marketing  costs that are
incurred earlier in the year, but are directly associated with revenues realized
in subsequent  quarters of the current year. These costs are then amortized over
the balance of the current lawn care production  season, as the related revenues
are recognized. In addition, prepaid expenses have increased due to the deferral
of contract  acquisition  costs at  American  Home  Shield,  which have grown in
relation to the increased volume of warranty contracts written.

Deferred  revenues  also  increased  reflecting  strong  growth at American Home
Shield,  increases in customer  prepayments for pest control  services,  and the
acquisition of ARS.  Accrued  liabilities  and payables  increased from year end
primarily due to the acquisition activity and seasonality of the business.

Property  and   equipment   increased  due  to  general   business   growth  and
acquisitions,  primarily LandCare and ARS. Capital expenditures grew, reflecting
increased  investments  in  technology  throughout  the  organization,  business
growth,  and  recurring  capital  needs.  The Company  has no  material  capital
commitments at this time.

Total  acquisitions  for the first nine months of 1999 were  approximately  $843
million  ($618  million  of  which  was  from  the  LandCare  USA  and  American
Residential Services  acquisitions).  Approximately one-third of the acquisition
payments  were in the form of shares.  Intangible  assets,  primarily  goodwill,
increased $523 million from year-end, reflecting the effect of the acquisitions,
which  included  $260 million from  LandCare,  $213 million from ARS and various
smaller acquisitions in the Consumer and Commercial Services segment.

Debt levels increased due to the seasonal nature of the Company's operating cash
flows  and the 1998  and  1999  tax  payments,  combined  with  the  effects  of
acquisitions  and  property  additions.  The  Company  is party  to a number  of
long-term debt agreements  which require it to maintain  compliance with certain
financial covenants, including limitations on indebtedness, restricted payments,
fixed charge coverage  ratios,  and net worth. The Company is in compliance with
the covenants related to these debt agreements.

In August 1999, the Company  completed a senior  unsecured debt offering of $250
million,  7.875  percent  notes  priced to yield 7.98 percent and due August 15,
2009. The net proceeds were used to repay a portion of the Company's  borrowings
under its  revolving  bank credit  facility,  thereby,  reducing  the  Company's
exposure to short term interest rate fluctuations.

Total shareholders'  equity increased to $1.2 billion at September 30, 1999 from
$956  million at December 31, 1998,  reflecting  earnings  growth as well as the
shares issued for acquisitions,  partially offset by cash dividends and treasury
share  repurchases.  Cash  dividends paid directly to  shareholders  totaled $83
million,  or $.27 per share for the nine months ended  September  30, 1999.  The
increase from the prior year reflects a 13 percent increase in the dividend rate
per share and an increase in shares  outstanding,  primarily  resulting from the
May 1998 equity offering and shares issued in acquisitions.


                                       12
<PAGE>

In October 1999, the Company  announced  that its Board of Directors  authorized
the  repurchase  of $150  million of shares  over time in the open  market or in
privately negotiated transactions.

YEAR 2000 READINESS DISCLOSURE

YEAR 2000 COMPLIANCE.  Certain computer programs use two digits rather than four
to define the applicable year and consequently may not function  properly beyond
the year 1999 unless they are remediated.  In addition,  some computer  programs
are unable to recognize  the year 2000 as a leap year.  These  problems may also
exist in chips embedded in various types of equipment. The Company has long been
aware of this Year 2000 (Y2K) problem and has dealt with the Y2K problem  either
through  system  upgrades,  which were planned to occur in the normal  course of
business,  or by putting  programs  into place which the Company  believes  will
result in the  completion  of necessary  remediation  efforts  prior to the year
2000.

STATE OF READINESS.  The Company has initiated a program (the "Y2K  program") to
address  Y2K issues as they affect the  Company's  information  technology  (IT)
systems,  electronic data  interfaces and its non-IT hardware and services.  The
Y2K program was set up to use the following  steps as  appropriate:  inventory -
assessment - planning - renovation - testing - implementation.  In addition, the
program  called for  inquiries  of the  Company's  major  suppliers of goods and
services  to  determine   their  Y2K  status  and  a  review  of  the  Company's
relationships   with  its   customers  to  determine  if  the  Company  has  any
responsibility  for the status of the  customers' IT and/or  non-IT  systems and
hardware.

Since early 1998, the Company has monitored its progress on the Y2K program on a
consolidated  basis.  In 1998, the Company  completed an inventory which covered
both IT and non-IT items for all operating  companies and  administrative  units
within the ServiceMaster  enterprise.  All items in the inventory were placed in
one of four categories:  mission  critical,  critical,  important,  and ordinary
within the context of the operating company or administrative unit involved.  (A
"mission  critical" or  "critical"  designation  for an item within an operating
company  or  administrative  unit does not  necessarily  hold the same  level of
criticality from the perspective of the entire ServiceMaster enterprise.)

Remediation  plans were developed for the mission critical and critical matters,
with milestones  established for each plan. This program has enabled  management
to measure the progress  made in respect of each plan against the work  schedule
established  for that plan.  Although  these  plans  encompass  many  separately
identifiable items, from a ServiceMaster  enterprise  standpoint,  nine projects
(the "Key Projects") were identified by management as either mission critical or
critical  and as requiring a measurable  amount of  attention to  remediate.  At
November 12, 1999,  eight of these Key Projects had been completed and the ninth
of these Key Project  will be completed by the end of November  1999.  Thus,  by
November 30, 1999, all Key Projects will have been completed in accordance  with
their scheduled completion dates and well in advance of December 31, 1999.

In early 1998,  the Company  established a Y2K committee in the parent unit with
responsibility for monitoring the Y2K program in each of the Company's operating
units. This committee has provided status reports to the Board of Directors on a
regular basis.

In addition to the Key Projects,  remediation  plans were developed for LandCare
USA, Inc. and American  Residential  Services,  which were acquired in March and
April of 1999,  respectively.  These  companies had extensive  branch  networks,
which operated on a variety of different  platforms.  The Company has remediated
these branches by implementing a common operating system, where possible by year
end,  and by  implementing  Y2K  upgrades to the  existing  systems in the other
branches.  At this time,  the Company does not expect Y2K problems to occur as a
result of the 1999 acquisitions which will have a material adverse effect on the
ServiceMaster enterprise.


                                       13
<PAGE>

YEAR 2000 COSTS.  Several of the Key Projects are upgrades of systems  which the
Company would have undertaken  irrespective  of the Y2K problem.  In some cases,
including a new accounting and financial reporting system for the parent company
and  its  Management  Services  subsidiary,  work  on  these  systems  has  been
accelerated  in view of Y2K issues.  Other  upgrades or new systems were already
scheduled for completion prior to the year 2000,  including a new support system
for the  Company's  American Home Shield  subsidiary  and a new  accounting  and
billing system for the recently developed  commercial  landscape business within
the Company's TruGreen-LandCare subsidiary.

References  to "Year  2000  costs" in this  report do not  include  the costs of
projects for which no acceleration is occurring due to Y2K issues. The Company's
Year  2000  costs to date are not  material  to its  results  of  operations  or
financial position and the Company does not expect its future Year 2000 costs to
be material to the Company's  results of operations or financial  position.  All
Year 2000 costs (as well as the costs of installing the system upgrades referred
to above) have been,  and are expected to continue to be,  funded with cash from
operations.

YEAR 2000 RISKS.  The Company  believes that its greatest risk in respect of the
Year 2000  problem is that key third party  suppliers  of goods or services  may
fail to complete  their own  remediation  efforts in a timely manner and thereby
provoke an interruption in the ability of one or more of the operating  segments
of the Company to provide  uninterrupted  services to their  customers.  Utility
services (electrical,  water and gas), telephone service,  banking services and,
to a much lesser degree, the delivery of certain products are the critical items
in this regard.  Based on the Company's  inquiries to its providers of goods and
services as well as on the basis of the Company's general knowledge of the state
of readiness of the utility companies and banks with which it does business, the
Company does not expect to suffer any material  interruption  in the services on
which the Company and its customers depend.

The Company has reviewed its agreements with certain of its customers, including
particularly the customers of its Management  Services units for whom such units
provide facility  management  services.  The Company is satisfied that it is not
responsible, contractually or otherwise, for the Y2K readiness of the customer's
IT and non-IT  systems and  hardware,  and the Company has  notified  all of its
customers to this effect  where,  in the Company's  judgment,  the nature of the
customers' business or facility warranted such notices.

Where the Company uses its own  software in the course of  providing  management
services,  the  Company is  responsible  to make such  software  Y2K ready.  The
Company is  confident  that such  software is Y2K ready.  For those units of the
Company which sell  franchises  and which provide  software to the  franchisees,
such  software is already,  or soon is either fully Y2K ready or,  provision has
been  made  for  making  available  to  franchisees  software  from  third-party
developers from whom appropriate Y2K assurances have been or will be received.

CONTINGENCY  PLANS. At this time, the Company expects all of its internal key IT
and  non-IT  systems  to be Y2K ready  before  the end of the year  1999.  If it
appears  that timely  delivery of any Key  Projects  becomes  questionable,  the
Company will put in place the appropriate contingency plans.

The Company expects that its significant  providers of goods and services are or
will be Y2K ready by the end of the year 1999. The Company will continue to make
inquires  of its key  suppliers  for the  purpose of testing  this  expectation.
Insofar as the Company is exposed to risks  originating  in Y2K  problems at key
suppliers,  the Company  will  utilize  short-term  solutions,  but no practical
long-term contingency plans for these external Y2K problems are possible.

Although the Company believes that its own critical  remediation efforts will be
fully  completed by the end of November  1999,  the untimely  completion  of Y2K
remediation  efforts by third parties could,  in certain  circumstances,  have a
material adverse effect on the operations of the Company.


                                       14
<PAGE>

DEFINITION.  As used in this Year 2000 Readiness Disclosure Statement,  the term
"year 2000 ready" or "Y2K ready" when used with  reference to a item of software
or  equipment  means the  capability  of the  software or  equipment  to process
correctly  (including  calculating,   comparing,   sequencing,   displaying,  or
storing),  transmit,  or receive date data from,  into, and between the 20th and
21st  centuries,  and  during  the years  1999 and  2000,  and to make leap year
calculations,  provided  that all  products  used with the software or equipment
properly exchange accurate date data with it.



                                       15
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS

         In the  ordinary  course  of  its  business  activities,  ServiceMaster
becomes  involved in judicial and  administrative  proceedings that involve both
private parties and  governmental  authorities.  As of November 15, 1999,  these
proceedings  included  a number of  general  liability  actions  and  regulatory
proceedings and a very small number of environmental proceedings,  none of which
was material to ServiceMaster's financial condition or results of operations.

         RAY D. MARTIN V.  SERVICEMASTER.  In June 1996, Ray D. Martin, a former
salesman employed by ServiceMaster's  Management  Services unit, filed a lawsuit
in the State Court of Fulton County, Georgia (Civ. Action File No. 96VS114677J),
which as originally  filed  contended that the Company had not paid him the full
amount of commission  due him on a sale in which he was involved.  In the course
of the pre-trial proceedings, the trial court entered a default judgment against
the  Company  (thereby  leaving  under the court's  orders only the  question of
damages to be considered at the trial).  On September 13, 1999, the jury awarded
the plaintiff compensatory damages of approximately  $1,000,000 and on September
14,  1999,  a jury  awarded  the  plaintiff  punitive  damages  and fees of $135
million.  On September 29, 1999,  the trial court entered final judgment for the
plaintiff  on the basis of these  verdicts  in a total  amount of  $136,259,417.
Under  Georgia  law,  that  judgment  will  accrue  post-judgment  interest at a
statutory  rate  of 12%  per  annum,  except  for the  portion  of the  judgment
($77,189)  that  represents  pre-judgment  interest.  On October 14,  1999,  the
Company  filed a motion for  judgment  notwithstanding  the  verdict  or, in the
alternative, for a new trial and/or remittitur. ServiceMaster believes it likely
that the judgment will be reversed or  substantially  reduced by the trial court
or, if necessary, by an appellate court.

IN ACCORDANCE  WITH THE PRIVATE  SECURITIES  LITIGATION  REFORM ACT OF 1995, THE
COMPANY  NOTES  THAT  STATEMENTS  THAT  LOOK  FORWARD  IN  TIME,  WHICH  INCLUDE
EVERYTHING OTHER THAN HISTORICAL  INFORMATION,  INVOLVE RISKS AND  UNCERTAINTIES
THAT MAY AFFECT THE COMPANY'S ACTUAL RESULTS OF OPERATIONS.  FACTORS WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY  INCLUDE THE FOLLOWING (AMONG OTHERS):
WEATHER  CONDITIONS  ADVERSE TO CERTAIN OF THE COMPANY'S CONSUMER AND COMMERCIAL
SERVICES BUSINESSES, LABOR SHORTAGES, THE ENTRY OF ADDITIONAL COMPETITORS IN ANY
OF THE  MARKETS  SERVED  BY  THE  COMPANY,  CONSOLIDATION  OF  HOSPITALS  IN THE
HEALTHCARE  MARKET,  THE  CONDITION OF THE U.S.  ECONOMY,  THE  INABILITY OF KEY
SUPPLIERS TO ACHIEVE  TIMELY Y2K  COMPLIANCE  IN THEIR  DELIVERY  SYSTEMS OR THE
INABILITY  OF THE  COMPANY  TO MAKE ITS OWN  SYSTEMS  Y2K  COMPLIANT,  AND OTHER
FACTORS  LISTED FROM TIME TO TIME IN THE COMPANY'S  FILINGS WITH THE  SECURITIES
AND EXCHANGE COMMISSION.




                                       16
<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 15, 1999

                            THE SERVICEMASTER COMPANY

                            (Registrant)

                            By:       /s/Steven C. Preston
                               -------------------------------
                            Steven C. Preston

                            Executive Vice President and Chief Financial Officer






                                       17
<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 15, 1999

                          THE SERVICEMASTER COMPANY

                          (Registrant)

                          By:
                             --------------------------
                          Steven C. Preston
                          Executive Vice President and Chief Financial Officer




                                       18
<PAGE>