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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 2000.
                        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             (I.R.S. Employer Identification No.)
 Incorporation or Organization)


         One ServiceMaster Way, Downers Grove, Illinois               60515-1700
         ----------------------------------------------               ----------
               (Address of Principal Executive Offices)               (Zip Code)

Registrant's telephone number, including area code: (630) 271-1300

Securities registered pursuant to Section 12(b) of the Act:

                                                Name of Each Exchange
         Title of Each Class                    On Which Registered
         ------------------------------         ------------------------
         Common Stock                           New York Stock Exchange
         Preferred Stock Purchase Rights        New York Stock Exchange


Securities registered pursuant to Section 12(g) of the Act: None

          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 by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of  Regulation  S-K ((ss.)  229.405 of this  chapter) is not  contained
herein, and will not be contained, to the best of the Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]

         The  aggregate   market  value  of  shares  of  common  stock  held  by
non-affiliates  of the  Registrant as of March 7, 2001 was  $2,998,872,297.  The
number of shares  outstanding  of the  Registrant's  common stock as of March 7,
2001 was 298,833,100.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Certain parts of the Registrant's Annual Report to Shareholders for the
year ended December 31, 2000 are  incorporated  into Part I, Part II and Part IV
of this Form 10-K.

         Certain parts of the  Registrant's  Proxy Statement for the 2001 Annual
Meeting of Shareholders are incorporated into Part III of this Form 10-K.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


PART I
  <S>                                                                                               <C>

  1.  Business...................................................................................        1

  2.  Properties.................................................................................       10

  3.  Legal Proceedings..........................................................................       11

  4.  Submission of Matters to a Vote of Security Holders........................................       12

 PART II

  5.  Market for Registrant's Common Equity and Related Stockholder Matters......................       13

  6.  Selected Financial Data....................................................................       13

  7.  Management's Discussion and Analysis of Financial Condition and Results of Operations......       13

  7A.  Quantitative and Qualitative Disclosures About Market Risk................................       13

  8.  Financial Statements and Supplementary Data................................................       13

  9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......       14

 PART III

 10.  Directors and Executive Officers of the Registrant.........................................       15

 11.  Executive Compensation.....................................................................       17

 12.  Security Ownership of Certain Beneficial Owners and Management.............................       17

 13.  Certain Relationships and Related Transactions.............................................       17

 PART IV

 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K...........................       18

 Signatures......................................................................................       22

 Exhibit Index...................................................................................       24

</TABLE>

                                       -i-
<PAGE>

                                     PART I


Item 1.  Business

         This Annual Report on Form 10-K is filed by The ServiceMaster  Company,
a  Delaware  corporation  ("ServiceMaster").  The  ServiceMaster  Company is the
successor to ServiceMaster Limited Partnership,  a Delaware limited partnership.
On December 26, 1997, by means of a statutory merger, The ServiceMaster  Company
succeeded to  ServiceMaster  Limited  Partnership as the publicly  traded parent
entity in the ServiceMaster enterprise.


Forward-Looking Statements

         This  Annual  Report  contains or  incorporates  by  reference  certain
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation Reform Act of 1995.  ServiceMaster  intends that such forward-looking
statements  be  subject  to  the  safe  harbors  created  by  such  legislation.
ServiceMaster  notes that  statements  that look forward in time,  which include
everything other than historical  information,  involve risks and  uncertainties
that affect  ServiceMaster's  results of  operations.  Factors which could cause
actual  results  to differ  materially  from  those  expressed  or  implied in a
forward-looking   statement  include  the  following  (among  others):   weather
conditions  adverse  to  certain  of  ServiceMaster's  businesses;  the entry of
additional  competitors  in any of the markets  served by  ServiceMaster;  labor
shortages;  consolidation  of hospitals in the healthcare  market;  the cost and
length of time to integrate acquired businesses; unexpected changes in operating
costs; the condition of the U.S. economy;  and other factors discussed from time
to time in ServiceMaster's filings with the Securities and Exchange Commission.


Principal Business Groups

         ServiceMaster  is a holding  company  whose  shares of common stock are
traded on the New York Stock Exchange.  Through its subsidiaries,  ServiceMaster
is engaged in  providing  a variety of  specialty  services  to  homeowners  and
commercial  facilities and supportive  management  services in several  markets,
including the healthcare  market,  the education market, and certain segments of
the business and industry market.

         ServiceMaster is organized into four principal operating groups.  Three
groups--the  TruGreen Group,  the Terminix Group,  and the Home  Maintenance and
Improvement  Group--are   headquartered  in  Memphis,   Tennessee.   The  fourth
group--ServiceMaster   Management   Services   Group--has   operating  divisions
headquartered in Downers Grove,  Illinois. All subsidiaries of ServiceMaster are
wholly owned, except for (1) WeServeHomes.com,  Inc., in which Kleiner, Perkins,
Caufield  & Byers  has an 18.0%  equity  interest  and  senior  managers  of the
ServiceMaster  enterprise  have a 0.9% equity  interest,  (2)  TruGreen  Holding
L.L.C.  and  American  Residential  Services  L.L.C.,  in each of  which  senior
management for those  subsidiaries have purchased nominal equity interests which
are subject to certain put and call rights,  and (3) The Terminix  International
Company  L.P.,  in which  Allied  Bruce-Terminix  Companies,  Inc.  is a Class B
limited partner.  Financial information for each operating group for 1998, 1999,
and 2000 is contained in the Notes to the Consolidated  Financial  Statements of
our Annual Report to Shareholders for 2000 and is incorporated by reference.

         The services provided by the TruGreen,  Terminix,  and Home Maintenance
and Improvement Groups comprise the ServiceMaster  "Quality Service Network" and
are accessed via a single  toll-free  telephone  number  (1-800-WE SERVE) or the
internet  at   www.WeServeHomes.com.   ServiceMaster   focuses  on  establishing
relationships  to  provide  one  or  more  services  on a  repetitive  basis  to
customers.  Since 1986,  the number of customers  served by the Quality  Service
Network has  increased  from fewer than one million  domestic  customers to more
than 12 million worldwide customers.

                                       1
<PAGE>

TruGreen Group

         We provide lawn care, tree and shrub services  through TruGreen Limited
Partnership   ("TruGreen   ChemLawn")  under  the  "TruGreen",   "ChemLawn"  and
"Barefoot" service marks, among others. We provide landscaping and tree services
through  TruGreen  LandCare L.L.C.  under the "TruGreen" and "LandCare"  service
marks,   among  others.   Customers   include  both  homeowners  and  commercial
facilities.  Revenues derived from the TruGreen Group  constituted 19%, 24%, and
26% in  1998,  1999,  and  2000 of the  operating  revenue  of the  consolidated
ServiceMaster  enterprise.  The TruGreen ChemLawn and TruGreen LandCare business
is seasonal in nature.

         TruGreen ChemLawn.  As of December 31, 2000,  TruGreen ChemLawn had 211
company-owned  branches  and 71  franchised  branches.  With  nearly 3.5 million
residential and commercial customers,  TruGreen ChemLawn is the leading provider
of lawn care services in the United  States.  TruGreen  ChemLawn  provides lawn,
tree and shrub care services in Egypt,  Japan,  the Palestine  Authority,  Saudi
Arabia,  and  Turkey  through  licensing  arrangements  and in Canada  through a
subsidiary.

         TruGreen  LandCare.  On March 18,  1999,  ServiceMaster  completed  the
acquisition of LandCare USA, Inc., a leading provider of commercial  landscaping
and tree  services  (including  line  clearing and tree care).  The  landscaping
business  previously  conducted  by  TruGreen  ChemLawn  was  combined  with the
business of the acquired  company and now operates as TruGreen  LandCare  L.L.C.
TruGreen  LandCare is a leading  provider  of  commercial  landscaping  and tree
services.  As of December 31,  2000,  TruGreen  LandCare  had 140  company-owned
branches  with  approximately   18,000  customers.   TruGreen  Landcare  has  no
international operations.

         On January 1, 2001,  members of senior management of the TruGreen Group
purchased an equity interest in TruGreen Holding L.L.C.,  the holding company of
both TruGreen ChemLawn and TruGreen LandCare.  The capital structure of TruGreen
Holding consists of 90% intercompany  debt and 10% equity.  Senior management of
TruGreen ChemLawn and TruGreen LandCare  purchased just under 5.0% of the equity
interest,  representing  just under  0.5% of the total  investment  in  TruGreen
Holding.  Such interest is subject to reciprocal  put and call rights which will
become exercisable on January 1, 2006 and which will be consummated on the basis
of the then fair market value of the interest.  The  intercompany  debt has been
eliminated in the consolidated financial statements of ServiceMaster.

Terminix Group

         We provide  termite and pest  control  services  through  The  Terminix
International  Company L.P.  under the  "Terminix"  service mark,  among others.
Customers  include both homeowners and commercial  facilities.  Revenues derived
from the Terminix Group constituted 13%, 12%, and 12% in 1998, 1999, and 2000 of
the operating revenue of the consolidated ServiceMaster enterprise. The Terminix
business is seasonal in nature.

         With over 2.6 million  domestic  residential and commercial  customers,
Terminix,  through its  company-owned  branches and franchisees,  is the leading
provider  of termite  and pest  control  services  in the United  States.  As of
December 31, 2000,  Terminix was providing  these  services in 45 states through
255  company-owned  branches  and 209  franchised  branches.  Terminix  provides
termite and pest control  services  through  licensing  arrangements  with local
service providers in 29 countries and through subsidiaries in 9 countries.

         Effective January 1, 2001,  Terminix acquired  substantially all of the
assets and  certain  liabilities  of the termite  and pest  control  business of
Allied  Bruce-Terminix  Companies,  Inc., the largest franchisee of Terminix. As
part of the  acquisition,  Allied  Bruce  became a Class B  limited  partner  of
Terminix,  entitling Allied Bruce to quarterly cash  distributions.  The Class B
partnership  interest belonging to Allied Bruce is subject to reciprocal put and
call rights under which the Class B  partnership  interest is  exchangeable  for
shares of ServiceMaster common stock. The put right is exercisable  immediately;
the call right will become exercisable on January 1, 2006.

                                       2
<PAGE>

Home Maintenance and Improvement Group

         We provide  other  specialty  services  to  homeowners  and  commercial
facilities  principally  through six companies:  American  Residential  Services
L.L.C.; American Home Shield Corporation;  ServiceMaster  Residential/Commercial
Services L.P.  ("ServiceMaster  Clean"); Merry Maids L.P.; AmeriSpec,  Inc.; and
Furniture  Medic  L.P.  The  services  provided  by  these  companies   include:
electrical,  plumbing, heating,  ventilation and air conditioning services under
the "ARS" and "AMS" service  marks,  among others;  plumbing and drain  cleaning
services  under  the  "Rescue  Rooter"  service  mark,  among  others;  warranty
contracts  for home  systems and  appliances  under the  "American  Home Shield"
service mark,  among others;  residential  and commercial  cleaning and disaster
restoration services under the "ServiceMaster" and "ServiceMaster Clean" service
marks,  among others;  domestic  housekeeping  services  under the "Merry Maids"
service mark,  among others;  home  inspection  services  under the  "AmeriSpec"
service mark, among others;  and on-site  furniture repair and restoration under
the "Furniture  Medic" and "Rx" service marks,  among others.  Revenues  derived
from the Home Maintenance and Improvement  Group constituted 9%, 16%, and 20% in
1998, 1999, and 2000 of the operating revenue of the consolidated  ServiceMaster
enterprise.

         American Residential Services. American Residential Services, a leading
provider of electrical,  plumbing,  heating,  ventilation  and air  conditioning
services,  was acquired by  ServiceMaster  in April 1999.  American  Residential
Services  performed  services for approximately 1.6 million customers in 2000 in
26 states through 97 company-owned  branches.  American Residential Services has
no international licensees or company-owned operations. The American Residential
Services business is seasonal in nature.

         American  Residential  Services  includes  the assets and  business  of
Rescue Rooter,  which provides plumbing and drain cleaning services,  originally
acquired  by  ServiceMaster  in January  1998.  Under the Rescue  Rooter  brand,
American Residential Services also provides plumbing and drain cleaning services
through a  licensing  arrangement  with a local  service  provider  in one other
country.

         American  Mechanical  Services,  a subsidiary  of American  Residential
Services,  is a leading provider of heating,  ventilation,  and air conditioning
services to commercial customers.

         In 1999,  ServiceMaster  established  a capital  structure for American
Residential  Services  whereby  90% of the  invested  capital was in the form of
intercompany  debt and 10% in the form of  equity.  In 1999,  members  of senior
management  purchased 8.5% of that equity  interest,  representing  0.85% of the
total investment in American Residential Services.  Management's equity interest
is subject to reciprocal  put and call rights which will become  exercisable  on
July 1, 2004 and which will be  consummated on the basis of the then fair market
value  of  the  interest.   The   intercompany   debt  has  been  eliminated  in
ServiceMaster's consolidated financial statements.

         American  Home Shield.  American  Home Shield is a leading  provider of
home systems and appliance  warranty  contracts  ("warranty  contracts")  in the
United  States,  providing  homeowners  with  contracts  covering  the repair or
replacement of built-in appliances, hot water heaters and electrical,  plumbing,
central heating and central air conditioning systems which malfunction by reason
of normal wear and tear. Warranty contracts are sold through  participating real
estate brokerage offices in conjunction with resales of single-family residences
to homeowners.  American Home Shield also sells warranty  contracts  directly to
non-moving  homeowners by renewing existing  contracts and through various other
distribution  channels which are currently  being  expanded.  As of December 31,
2000,   American  Home  Shield  warranty  contracts  provided  for  services  to
approximately  860,000  homes  through  21,754  independent  repair  maintenance
contractors  in 50 states and the  District  of  Columbia,  with  operations  in
California,  Texas, and Arizona accounting for 25%, 21% and 6%, respectively, of
gross  contracts  written by American  Home  Shield.  American  Home Shield also
provides home service warranty contracts through a licensing  arrangement with a
local service provider in Saudi Arabia.

         ServiceMaster  Clean.  ServiceMaster Clean is the leading franchisor in
the  United  States  in  the   residential   and  commercial   cleaning   field.
ServiceMaster  Clean  provides  carpet and  upholstery  cleaning and  janitorial

                                       3
<PAGE>

services,  disaster restoration  services,  and window cleaning services.  As of
December 31, 2000,  these  services were provided to  approximately  1.9 million
residential  and  commercial  customers  worldwide  through a  network  of 4,442
independent  franchisees.  ServiceMaster  Clean  provides its  services  through
subsidiaries in Canada,  Ireland and the United Kingdom,  and through  licensing
arrangements with local service providers in 17 other countries.

         Merry Maids. With approximately 306,000 worldwide customers,  including
274,000  customers in the United States,  Merry Maids is the leading provider of
domestic house cleaning  services in the United States. As of December 31, 2000,
these  services  were  provided  through  43  company-owned  branches  and 1,114
licensees  operating  in all 50 states.  Merry  Maids  provides  domestic  house
cleaning services through subsidiaries in Canada, Ireland and the United Kingdom
and through  licensing  arrangements  with local  service  providers  in 9 other
countries.

         AmeriSpec.  AmeriSpec is a  wholly-owned  subsidiary  of American  Home
Shield.  AmeriSpec  is a leading  provider  of home  inspection  services in the
United  States.   AmeriSpec   provides  home  inspection   services   through  1
company-owned  branch  and  430  franchise  locations.  During  2000,  AmeriSpec
conducted  approximately  140,000 home inspections in 48 states and Canada, with
operations in California,  Illinois, and New York accounting for 18.2%, 4.1% and
3.4%,  respectively,  of the  gross  number  of  inspections  conducted  through
AmeriSpec.  AmeriSpec has no international licensees or company-owned operations
except for Canada.

         Furniture Medic.  Furniture Medic provides on-site furniture repair and
restoration  services in 46 states. As of December 31, 2000, these services were
provided to approximately 175,000 residential and commercial customers worldwide
through a network of 597 licensees.  Furniture  Medic also provides its services
through  subsidiaries  in Canada and the United  Kingdom and through a licensing
arrangement with a local service provider in Saudi Arabia.

ServiceMaster Management Services Group

         ServiceMaster pioneered the providing of supportive management services
to healthcare  facilities by  instituting  housekeeping  management  services in
1962. Since then,  ServiceMaster  has expanded its management  services business
and it now provides a variety of supportive  management  services to healthcare,
education,  and business and industrial  customers  (including the management of
housekeeping,  plant operations and maintenance,  laundry and linen, grounds and
landscaping, clinical equipment maintenance, food service, materials management,
and total facility  management).  ServiceMaster's  general  programs and systems
free the customer to focus on its core business  activity with  confidence  that
the support services are being managed and performed in an efficient manner.

         ServiceMaster  Management  Services  provides  service on a  nationwide
basis to three  key  markets.  These  markets  are  healthcare,  education,  and
business & industry.  Revenues derived from  ServiceMaster  Management  Services
Group  constituted  39%, 33%, and 32% in 1998,  1999,  and 2000 of the operating
revenue of the consolidated ServiceMaster enterprise.

         As of December 31, 2000,  ServiceMaster  Management  Services  provided
supportive  management  services  to  1,094  healthcare  customers  and  to  623
educational and commercial customers.  These services were being provided in all
50  states  and  the  District  of  Columbia.  Outside  of  the  United  States,
ServiceMaster  provides  management  services through a subsidiary in Canada and
through  licensing  arrangements  with local  service  providers in Japan and 25
other countries.

         Healthcare  Market.  ServiceMaster  Management  Services  is a  leading
provider to the healthcare market of supportive  management services,  including
the management of housekeeping,  plant  operations and maintenance,  laundry and
linen, grounds and landscaping,  clinical equipment maintenance,  food services,
and total facility  management.  As of December 31, 2000,  ServiceMaster  served
1,094 customers and managed 1,126 healthcare facilities. Although the healthcare
market has undergone  significant  consolidation in recent years,  ServiceMaster

                                       4
<PAGE>

believes that there  continues to be potential  for expansion in the  healthcare
market due to the trend of  healthcare  facilities  to  outsource  more of their
service requirements.

         Education  Market.  ServiceMaster  Management  Services  is  a  leading
provider to the education market of maintenance, custodial and grounds services.
The facilities  which comprise the education  market  include  primary  schools,
secondary schools and school districts,  private specialty schools, and colleges
and universities.  As of December 31, 2000, ServiceMaster served 294 educational
customers  and  managed  4,581  facilities.   ServiceMaster  believes  there  is
potential for expansion in the  education  market due to its current  relatively
low  penetration  of that  market  and the trend of  educational  facilities  to
outsource  more of  their  service  requirements.  However,  a  majority  of the
educational  facilities  continue to assume direct  responsibility  for managing
their support functions.

         Business & Industry  Market.  ServiceMaster  Management  Services  is a
leading  provider of plant  operations  and  maintenance,  custodial and grounds
management  services to business and industrial  customers in selected  markets.
These markets include the food processing, transportation,  healthcare products,
and  automotive  markets.  As of December  31,  2000,  ServiceMaster  served 329
customers and managed 11,057  business or industrial  facilities.  ServiceMaster
believes that there is potential for expansion in these  business and industrial
markets due to  ServiceMaster's  current low  penetration of those markets,  the
trend of businesses to outsource  more of their  service  requirements,  and the
trend of governmental units to privatize parts of their operations.


2000 Strategic Business Initiatives

         During  the  year  2000,   ServiceMaster  introduced  or  expanded  two
strategic business initiatives.

         E-Commerce Initiative.  ServiceMaster  organized a new Internet company
to provide  comprehensive  on-line  solutions for home services,  products,  and
information.  On January 20, 2000,  ServiceMaster,  in conjunction with Kleiner,
Perkins,  Caufield & Byers,  announced  the  formation  and  initial  funding of
WeServeHomes.com,  Inc.  as  the  Internet  company  which  will  provide  these
solutions at a website having the URL "WeServeHomes.com".  WeServeHomes launched
its web site on March 31, 2000. The equity  interests in WeServeHomes  initially
were  divided  between  ServiceMaster  (approximately  84%) and Kleiner  Perkins
(approximately  16%, for which Kleiner Perkins contributed $15 million in cash).
Subsequently,  certain senior managers in the ServiceMaster enterprise purchased
an equity  interest for $1 million in May 2000.  Current  equity  interests  are
81.1%, 18.0%, and 0.9% for ServiceMaster, Kleiner Perkins and senior managers of
the  ServiceMaster  enterprise.  In February 2001,  Kleiner Perkins  exercised a
warrant to purchase additional capital stock for $5.0 million, and ServiceMaster
purchased  additional  capital  stock for $10  million.  Kleiner  Perkins  has a
warrant to purchase an additional  $6.5 million in capital stock.  ServiceMaster
supports  WeServeHomes  through  intensive  co-branding  efforts,  access to the
customer  base of  operating  companies  of the  Quality  Service  Network,  the
fulfillment  by those  operating  companies  of orders  placed  by  WeServeHomes
customers, and licenses for the use of certain service marks.

         ServiceMaster  Site Service.  ServiceMaster Site Service, a division of
Business & Industry  Management  Services,  expanded its  operations  in several
markets,   including  retail  chain  stores,   outpatient   healthcare  centers,
telecommunications  and  self-service  storage  centers.  It currently  has over
10,000 sites under management. Customers of ServiceMaster Site Service typically
have  multiple  locations   throughout  a  large  geographic  area  and  require
centralized  ordering,  dispatching  and  reporting  of  maintenance  and repair
services.   ServiceMaster   Site  Service  leverages  the  capabilities  of  the
ServiceMaster  enterprise  to manage  the  maintenance  and  repair of  customer
facilities,  providing a single toll-free number to a national operations center
in Memphis, Tennessee where individual customer locations may order services.


Other Businesses

         ServiceMaster Employer Services. ServiceMaster Employer Services is one
of the nation's larger  professional  employer  organizations.  It provides more
than 704 clients,  leasing  approximately 11,186 employees,

                                       5
<PAGE>

with administrative processing of payroll, workers compensation insurance,
health insurance,  unemployment insurance,  and other employee benefits.

          International   Operations.   ServiceMaster   provides   services   in
international markets either through licensing  arrangements with local entities
or ownership of foreign operating companies acquired by ServiceMaster. Except as
noted below,  the TruGreen,  Terminix,  Home  Maintenance  and  Improvement  and
ServiceMaster  Management  Services Groups are responsible for overseeing  these
activities.

          ServiceMaster  manages the following  European pest control companies,
     all of which are subsidiaries of TMX-Europe B.V., a wholly-owned subsidiary
     of   ServiceMaster:   Terminix  Ltd.,  a  leading  pest  control  and  wood
     preservation  company in the United Kingdom and Ireland;  Terminix B.V. and
     Riwa B.V.,  each a leading  pest  control  company in the  Netherlands  and
     Belgium; Anticimex Development A.B., a holding company for the leading pest
     control  company in Sweden and which also operates in Norway;  and Terminix
     GmbH & Co. KG, a holding  company for a group of pest control  companies in
     Germany.


Intellectual Property; Franchises

         ServiceMaster  holds various  service marks,  trademarks,  trade names,
patents,  and  copyrights,  none of which,  other than certain service marks and
trademarks,  is  considered  by  ServiceMaster  to be material to its  financial
condition  and  results  of  operations.   ServiceMaster's   service  marks  and
trademarks are important for all elements of ServiceMaster's business,  although
these  marks are  particularly  important  in the  advertising  and  franchising
activities  conducted  by the  TruGreen,  Terminix,  and  Home  Maintenance  and
Improvement Groups. These marks are registered in over 95 countries and the U.S.
and are renewed at each registration  expiration date.  ServiceMaster  also owns
certain trade secrets  including  training  manuals,  pricing  models,  customer
information, and software source code.

         Franchises   are  important  for  the  TruGreen   ChemLawn,   Terminix,
ServiceMaster  Clean,  Merry Maids,  AmeriSpec,  and Furniture Medic businesses.
Nevertheless,  revenues and profits  derived from  franchise-related  activities
constitute  less  than  2% of  the  revenue  and  profits  of  the  consolidated
ServiceMaster  enterprise.  Franchise  agreements  made in the  course  of these
businesses  are  generally  for a term of five  years.  Most of  ServiceMaster's
franchise agreements which expire in any given year are renewed.


Dispositions

         ServiceMaster   Diversified   Health   Services.   In  September  2000,
ServiceMaster   sold  substantially  all  of  the  operations  of  ServiceMaster
Diversified Health Services, which provides management services to freestanding,
hospital-based and  government-owned  nursing homes, skilled nursing facilities,
and assisted  living  facilities,  to a company owned and operated by a group of
former  senior   managers  of   ServiceMaster   Diversified   Health   Services.
ServiceMaster   retained  its  ownership   interest  in  five  assisted   living
facilities;  however, the new owners of the Diversified Health Services business
will operate  these  facilities.  This sale is consistent  with  ServiceMaster's
previously  announced  strategy  to reduce its  operational  involvement  in the
long-term care industry.

         TruGreen  Interior  Plantcare.  In September  2000,  TruGreen  sold the
operations  of  its  interior  plantcare  division.   The  transaction  did  not
materially  impact  ServiceMaster's  operating  results for the year.  This sale
represents  ServiceMaster's  continued focus on the growth and investment in its
core business.


Other Activities

         Shared Services. Shared Services coordinates administration of payroll,
benefits,  risk  management,  and the  administration  of  travel  services  for
ServiceMaster's  internal operations.  In addition,  Shared Services manages the

                                       6
<PAGE>

sale  and  distribution  of  products   including   technical   development  and
assistance,  financing for customers and  affiliates,  and sales and support for
international affiliates.

         Supporting   Departments.   ServiceMaster   has   various   departments
responsible for technical,  engineering,  management  information,  planning and
market  services,  and  product  and  process  development  activities.  Various
administrative   support  departments   provide  personnel,   public  relations,
administrative,  education,  accounting,  financial, information technology, and
legal services.

         Manufacturing   Division.    ServiceMaster's   manufacturing   division
formulates,  combines,  and distributes supplies,  products,  and equipment used
internally in providing  management  services to customers and which are sold to
licensees  for use in the  operation of their  businesses.  The  customer  bases
consists of 69% internal management services customers,  27% distributors who in
turn sell to licensees, and 4% international and other customers.  ServiceMaster
has a small share of the market for the manufacture and distribution of cleaning
equipment,  chemicals,  and supplies.  The  manufacturing  division offers about
4,000 products in its product line, and employs 75 people.


Industry Position, Competition and Customers

         We base  the  following  information  on  estimates,  which  cannot  be
verified, made by our management.  In considering  ServiceMaster's  industry and
competitive  positions,  you should recognize that  ServiceMaster  competes with
many other companies in the sale of its services,  franchises,  and products and
that  some of  these  competitors  are  larger  or have  greater  financial  and
marketing strength than ServiceMaster.

         In the TruGreen, Terminix, and Home Maintenance and Improvement Groups,
we employ the following  principal  methods of  competition:  name  recognition,
price,  assurance of customer  satisfaction,  and a history of providing quality
services to homeowners.  In the  ServiceMaster  Management  Services  Group,  we
employ the  following  principal  methods of  competition:  quality of  service,
price, and experience in providing  management  services.  In the  ServiceMaster
Employer  Services  business,  we employ  the  following  principal  methods  of
competition: name recognition, assurance of customer satisfaction, and financial
strength.

         The TruGreen,  Terminix,  and Home  Maintenance and Improvement  Groups
provide a variety of residential and commercial  services under their respective
brands on the basis of their and  ServiceMaster's  reputation,  the  strength of
their service marks, their size and financial capability, and their training and
technical support services.

TruGreen Group

         Lawn Care  Services.  TruGreen  ChemLawn,  both  directly  and  through
independently owned franchisees,  provides lawn care services to residential and
commercial customers.  Competition within the lawn care market is strong, coming
mainly from local,  independently-owned  firms and from  homeowners who care for
their lawns  personally.  TruGreen  ChemLawn is the leading  national  lawn care
company within the lawn care market.

         Lawn care  services are regulated by law in most of the states in which
TruGreen  ChemLawn  operates.  These laws  require  licensing  which  requires a
showing of technical  competence and adequate  bonding and insurance.  Pesticide
products used in the lawn care  industry are regulated  primarily at the federal
level under the Federal Insecticide, Fungicide and Rodenticide Act, though there
is also limited state regulation.  There are also many  telemarketing  laws that
regulate the sales practices of TruGreen ChemLawn.  These laws,  together with a
variety of state and local laws and regulations,  may limit or prohibit the sale
of  services  and the use of  certain  pesticides,  thereby  possibly  adversely
affecting the business of TruGreen ChemLawn.

         Landscaping and Tree Services.  TruGreen LandCare provides  landscaping
installation,   landscape  maintenance,   nursery  and  tree  care  services  to
commercial and residential customers. Competition in the landscape and tree care
service industry is strong.  Most competitors of TruGreen  LandCare's  landscape
and tree care  services

                                       7
<PAGE>

are small, owner-operated companies operating in a limited geographic market,
but there are a few large companies operating in multiple markets.
Competition in the power line brush and tree clearing market is characterized by
a small number of large companies. Many of TruGreen LandCare's commercial
accounts, particularly in landscape construction and power line clearing, are
large contracts which can adversely affect the business if canceled.


Terminix Group

         Termite  and Pest  Control  Services.  The market for  termite and pest
control  services  to  commercial  and  residential   customers   includes  many
competitors.  Terminix is the leading  national termite and pest control company
within this market.  Competition  within the termite and pest control  market is
strong,  coming  mainly  from  regional  and  local,  independently-owned  firms
throughout the United States,  from  homeowners who treat their termite and pest
control problems personally and from one other large company which operates on a
national basis.

         Termite and pest control  services are  regulated by law in most of the
states in which Terminix operates. These laws require licensing which requires a
showing of technical  competence and adequate  bonding and  insurance.  The laws
also regulate the manner in which Terminix  conducts and documents its pesticide
applications.  The pest  management  industry is regulated at the federal  level
under the Federal  Insecticide,  Fungicide  and  Rodenticide  Act, and pesticide
applicators  (such as Terminix)  are regulated  under the Federal  Environmental
Pesticide  Control Act of 1972. These local,  state and federal laws and related
regulations may adversely affect the use of certain  pesticides and the business
of Terminix.

Home Maintenance and Improvement Group

         Heating, Ventilation and Air Conditioning Services.  Competition in the
market for heating,  ventilation and air conditioning services is strong in both
the residential and commercial sectors.  American  Residential Services believes
that its share of the total potential market for such services is small and that
there is significant potential for future expansion and penetration. Many states
in which American  Residential Services provides heating,  ventilation,  and air
conditioning  services  regulate  these  services.  The level of regulation  and
licensing varies from state to state.

         Plumbing and Drain  Cleaning  Services.  Competition  in the market for
plumbing  and drain  cleaning  services  is strong in both the  residential  and
commercial sectors. Rescue Rooter believes that its share of the total potential
market for such  services is small and that there is  significant  potential for
future expansion and penetration.  Plumbing is regulated by most states in which
Rescue Rooter operates. The level of licensing varies from state to state. There
are no state or federal guidelines regulating drain cleaning services.

         Home  Systems and  Appliance  Warranty  Contracts.  Competition  in the
market for home  systems and  appliance  warranty  contracts  is strong,  coming
mainly  from  regional  competitors  in the real  estate  distribution  channel,
marketed  and sold  through  real estate  professionals  in  connection  with an
underlying  residential real estate  transaction.  Some competition also derives
from  insurance  affiliated  entities  in the  consumer  segment.  ServiceMaster
believes  that  American  Home  Shield  maintains  a  favorable  position in its
industry  due to the  system  developed  and used by  American  Home  Shield for
accepting,  dispatching,  and fulfilling service calls from homeowners through a
nationwide network of independent  contractors.  American Home Shield also has a
computerized information system developed and owned by American Home Shield, and
an electronic  digital voice  communication  system  through which American Home
Shield handles  requests for service.  Many states in which American Home Shield
provides home systems and appliance warranty contracts regulate these services.

         Residential and Commercial Cleaning Services. Competition in the market
for domestic house cleaning  services is very strong. In urban areas, the market
involves  numerous local companies and a few national  companies.  ServiceMaster
believes that its share of the total potential market for such services is small
and  that  there  is  significant   potential  for  further   expansion  of  its
housecleaning   business  through  continued   internal  expansion  and  greater
penetration of the  housecleaning  market.  Through  company-owned  branches and

                                       8
<PAGE>

franchisees,  ServiceMaster  Clean and  Merry  Maids  have a small  share of the
market for the cleaning of residential  and commercial  buildings.  There are no
state or federal  guidelines  regulating  residential  and  commercial  cleaning
services.

         Home Inspection Services. Competition within the home inspection market
is strong, coming mainly from regional and local, independently-owned firms. The
level  of  regulation  and  licensing  varies  from  state  to  state.  The home
inspection industry is unregulated at the federal level.

         Furniture  Repair  Services.  Competition  in the market for  furniture
repair  services  is  strong,   coming  mainly  from  independent   contractors.
ServiceMaster  believes that Furniture Medic  maintains a favorable  position in
its  industry  due to  its  on-site  delivery  of  services  and  its  patented,
environmentally  sensitive  procedure for repairing  furniture in the customer's
home.  There are no state or  federal  guidelines  regulating  furniture  repair
services.


ServiceMaster Management Services Group

         Health  Care.  Within  the  market  consisting  of  general  healthcare
facilities having 50 or more beds,  ServiceMaster is a leading supplier of plant
operations and maintenance,  housekeeping,  clinical equipment maintenance,  and
laundry and linen  management  services.  The majority of healthcare  facilities
within  this  market  not  currently  served  by  ServiceMaster   assume  direct
responsibility for managing their own non-medical  support functions.  There are
no state or federal guidelines regulating the services rendered by ServiceMaster
Management Services in the healthcare market.

         ServiceMaster  believes  that its  management  services for  healthcare
facilities  may expand by the addition of facilities  not presently  served,  by
initiating  additional  services at  facilities  which use only a portion of the
services now offered,  by the development of new services,  and by growth in the
size of facilities served. At the same time, industry consolidation,  changes in
use and methods of healthcare  delivery,  and payment for services (including in
particular changes in Medicare reimbursement regulations) continue to affect the
healthcare environment.

         Education.  ServiceMaster is a leading provider to the education market
of maintenance,  custodial,  and grounds services. The facilities which comprise
the education market served by ServiceMaster include primary schools,  secondary
schools and school  districts,  private  specialty  schools,  and  colleges  and
universities.  ServiceMaster  believes  there is potential  for expansion in the
education  market due to its current  relatively low  penetration of that market
and the trend of  educational  facilities  to  outsource  more of their  service
requirements.  However,  a majority of the  educational  facilities  continue to
assume direct responsibility for managing their support functions.  There are no
state or federal  guidelines  regulating the services  rendered by ServiceMaster
Management Services in the education market.

         Business and  Industry.  ServiceMaster  is a leading  provider of plant
operations  and  maintenance,  custodial  and  grounds  management  services  to
business and industrial  customers in selected markets.  ServiceMaster  believes
that there is potential for expansion in those business and  industrial  markets
which  ServiceMaster has elected to emphasize due to ServiceMaster's low current
penetration of those markets, the trend of businesses to outsource more of their
service  requirements and the trend of governmental  units to privatize parts of
their   operations.   The  emphasized   markets  include  the  food  processing,
transportation,  healthcare products, and automotive markets. There are no state
or  federal  guidelines   regulating  the  services  rendered  by  ServiceMaster
Management Services in the business and industry market.


Major Customers

         ServiceMaster has no single customer that accounts for more than 10% of
its operating  revenue.  No part of  ServiceMaster's  business is dependent on a
single  customer  or a few  customers,  the loss of which  would have a

                                       9
<PAGE>

material adverse effect on ServiceMaster's  financial  condition or results of
operation.  Revenues from governmental sources are immaterial.


Employees

         On December 31, 2000, ServiceMaster had a total of approximately 72,000
employees.

         ServiceMaster  provides its employees  with annual  vacation,  medical,
hospital and life insurance  benefits and the right to participate in additional
benefit plans which are described in the Notes to Financial  Statements included
in ServiceMaster's Annual Report to Shareholders for the year ended December 31,
2000.


Item 2.  Properties

ServiceMaster and ServiceMaster Management Services Group

         Chicago Area.  The  headquarters  campus of  ServiceMaster,  which also
serves as  headquarters  for the  ServiceMaster  Management  Services  Group and
WeServeHomes.com,  is owned by ServiceMaster  and is located on a seventeen-acre
tract at One ServiceMaster Way, Downers Grove, Illinois. The campus contains two
office  buildings.  The headquarters  building  contains  approximately  118,900
square feet of office space,  2,100 square feet of laboratory  space,  and space
for food service  demonstrations,  dining facilities,  and the Kenneth and Norma
Wessner  Training  Center.  ServiceMaster  leases  approximately  half the space
(50,000  square feet) in the second  building to a commercial  tenant,  with the
balance of the space utilized by ServiceMaster  and WeServeHomes  personnel.  In
addition to the  headquarters  campus,  ServiceMaster  owns a 50,000 square foot
warehouse and distribution facility near Aurora, Illinois. We believe that these
office  and   warehouse   facilities   are  suitable  and  adequate  to  support
ServiceMaster's  current needs for  administrative  and  warehouse  space in the
Chicago area.

         Cairo, Illinois. ServiceMaster owns five properties in Cairo, Illinois:
(1) a 36,000  square  foot,  three-story  building  used for  manufacturing  and
warehousing equipment,  supplies and products used in the business; (2) a 30,000
square foot warehouse and package facility; (3) a 43,000 square foot three-story
warehouse and manufacturing  building; (4) a 2,500 square foot building used for
a machine shop;  and (5) a 6,000 square foot warehouse  facility.  ServiceMaster
also leases one warehouse  property with 14,000 square feet in Cairo,  Illinois.
We believe that these  manufacturing  and warehouse  facilities are suitable and
adequate to support the current needs of ServiceMaster.

TruGreen, Terminix, and Home Maintenance and Improvement Groups

         Memphis,  Tennessee.  The headquarters for TruGreen ChemLawn,  TruGreen
LandCare,  Terminix,  American  Home  Shield,  AmeriSpec,  American  Residential
Services,  Rescue Rooter, and American Mechanical Services are located in leased
premises at 860 Ridge Lake Boulevard,  Memphis,  Tennessee. The headquarters for
ServiceMaster  Clean,  Merry Maids,  and  Furniture  Medic are located in leased
premises at 889 Ridge Lake  Boulevard,  Memphis,  Tennessee.  Besides  these two
headquarters facilities in Memphis, ServiceMaster leases space for a call center
located at 6399 Shelby View Drive, Memphis,  Tennessee. The call center contains
approximately  60,000  square feet of office space from which  telephone  sales,
scheduling services, and other business functions are conducted. We believe that
these  headquarters  and call center  facilities  are  suitable  and adequate to
support the current office needs of the TruGreen, Terminix, and Home Maintenance
and Improvement Groups in the Memphis area.

         The  operating  companies  within  these  three  groups own and lease a
variety of facilities throughout the United States for branch operations and for
office,  storage,  call center,  and data processing  space. The following chart
identifies for each operating company the number of owned facilities, the number
of leased  facilities,  and the number of states  represented by those owned and
leased  facilities.  We  believe  that  these  facilities,  when  added  to

                                       10
<PAGE>
the headquarters  and call center  facilities,  are suitable and adequate to
support the  current  needs  of  the  TruGreen,   Terminix,  and  Home
Maintenance  and Improvement Groups.


Operating                             Owned            Leased           No. of
Company                          Facilities        Facilities           States
--------------                   ----------        ----------           ------

TruGreen ChemLawn                         9               271               43
TruGreen LandCare                         1               177               28
Terminix                                 27               390               41
American Residential Services             6                58               23
Rescue Rooter                             3                17               10
American Mechanical Services              1                15                7
American Home Shield                      1                11                7
ServiceMaster Clean                       0                 5                5
Merry Maids                               0                44               21
Furniture Medic                           0                 0                0


ServiceMaster Employer Services

         The  headquarters  for  ServiceMaster  Employer  Services and Certified
Systems,  Inc., the principal subsidiary of ServiceMaster Employer Services, are
located at 3218 Highway 67, Mesquite,  Texas.  ServiceMaster  Employer  Services
leases other administrative  facilities in Little Rock,  Arkansas,  and Memphis,
Tennessee.  We believe that these office facilities are suitable and adequate to
support the current needs of ServiceMaster Employer Services.


Item 3.  Legal Proceedings

         In  the  ordinary   course  of  conducting  its  business   activities,
ServiceMaster  becomes  involved  in  judicial,  administrative  and  regulatory
proceedings which involve both private parties and governmental authorities.  As
of March 1, 2001, these  proceedings  included general and commercial  liability
actions and a small number of environmental proceedings.

         Ray D. Martin V.  ServiceMaster.  In June 1996, Ray D. Martin, a former
salesman employed by ServiceMaster  Management Services,  filed a lawsuit in the
State Court of Fulton County,  Georgia (Civ. Action File No.  96VS114677J).  The
complaint,  as originally filed,  contended that  ServiceMaster had not paid Mr.
Martin  the  full  amount  of  commission  due to 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  ServiceMaster,  thereby leaving only the question of
damages  to be  considered  at the trial.  At trial in  September  1999,  a jury
awarded the plaintiff  compensatory damages and fees of approximately $1 million
and punitive  damages of $135 million.  In October 1999,  ServiceMaster  filed a
motion for judgment  notwithstanding  the verdict or, in the alternative,  for a
new trial.  On June 1, 2000 the trial court entered a new judgment in the amount
of $461,440 in compensatory damages and $45 million in punitive damages, as well
as amounts for  attorneys  fees and  interest.  ServiceMaster  filed a notice of
appeal  that  same  day.  On  June  13,  2000,  Mr.  Martin  filed a  notice  of
cross-appeal.   The  appeal  will  be  fully   briefed  by  early  spring  2001.
ServiceMaster  believes that the award of $45 million in punitive damages is not
supported  by the  facts of the  case or by  applicable  state  law and that the
judgment will be reversed by the court of appeals. Under Georgia law, a judgment
accrues  interest at the rate of 12% per annum.  ServiceMaster  continues  to be
unable   reasonably  to  estimate  the  ultimate   outcome  of  this  case,  and
accordingly,  minimal  expense has been  recorded.  If the existing  judgment is
sustained,  or if the original  judgment is reinstated (which is not anticipated
by  ServiceMaster),  then it would be likely  that  ServiceMaster's  results  of
operations for a particular year may be materially adversely affected.  However,
ServiceMaster  believes,  based on advice from legal counsel,  that the

                                       11
<PAGE>

ultimate outcome of this litigation is not expected to have a material  adverse
effect on ServiceMaster's financial condition or results of operations.


Item 4.  Submission of Matters to a Vote of Security Holders

         During the fourth quarter of the fiscal year covered by this report, we
submitted no matters to a vote of security holders.

                                       12
<PAGE>


                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         Except for the  information set forth in the second and third sentences
of this Item 5, the portions of our Annual Report to Shareholders for 2000 under
the  captions  "Statements  of  Shareholders'  Equity"  (pages  60-61) and "Cash
Dividends  Per Share" and "Price Per Share" in the Quarterly  Operating  Results
table (pages  80-81)  supply the  information  required by this item,  and these
portions are incorporated by reference. Our common stock is listed and traded on
the New York Stock Exchange under the symbol "SVM". At March 7, 2001, our common
stock was held of record by  approximately  59,500  persons.  We  estimate  that
approximately  42,000  persons  held shares of our common  stock in the names of
nominees.


Item 6.  Selected Financial Data

         The portion of the our Annual  Report to  Shareholders  for 2000 in the
Financial  Statements  section under the caption "Eleven Year Financial Summary"
on pages 50-51 supplies the information  required by this item, and that portion
is incorporated by reference.


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

         Management's discussion and analysis of financial condition and results
of operations  for the three years ended  December 31, 2000, is contained in the
Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations  section of our Annual Report to Shareholders for 2000 on pages 39-49
and is incorporated by reference.


Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

         ServiceMaster is exposed to market risk from changes in interest rates.
However,  ServiceMaster  generally  maintains  the majority of its debt at fixed
rates (over 85% at December 31, 2000 after  considering  swap  agreements),  and
therefore its exposure to short-term interest rate fluctuations is immaterial to
the consolidated financial statements of ServiceMaster as a whole. ServiceMaster
has from time to time,  entered into interest rate swap or similar  arrangements
to  mitigate  its  exposure to interest  rate  fluctuations,  and does not, as a
matter of policy,  enter  into  hedging  contracts  for  trading or  speculative
purposes.  Further  disclosure  is  included in the  Long-Term  Debt note in the
Financial  Statements  of our Annual  Report to  Shareholders  for 2000 on pages
73-74 and is incorporated by reference.


Item 8.  Financial Statements and Supplementary Data

         The consolidated  statements of financial  position of ServiceMaster as
of December 31, 2000 and 1999, and the consolidated  statements of income,  cash
flows, and shareholders' equity for the years ended December 31, 2000, 1999, and
1998 and notes to the  consolidated  financial  statements  are contained in the
Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations  and the  Financial  Statements  sections  of our  Annual  Report  to
Shareholders  for 2000 on pages 52-81 and are  incorporated  by  reference.  The
report of Arthur Andersen LLP thereon dated January 23, 2001, and the summary of
significant  accounting  policies are contained in the Financial  Statements and
Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations sections of our Annual Report to Shareholders for 2000 on pages 52-55
and are incorporated by reference.

                                       13
<PAGE>
Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         None.

                                       14
<PAGE>


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant


Directors

         The information  contained under the heading "Election of Directors" in
the proxy  statement for our 2001 Annual Meeting of Shareholders is incorporated
by reference.


Senior Management Advisers

         Our Bylaws provide that our Board of Directors may appoint  officers of
ServiceMaster or a subsidiary and other persons having a special relationship to
ServiceMaster to serve as Senior Management Advisers. Senior Management Advisers
attend the  meetings of the Board and advise the Board but do not have the power
to vote. The Board has determined  that  providing  officers the  opportunity to
advise and interact with the Board is in the best interest of  ServiceMaster  as
well as the  individual  officers.  The Senior  Management  Advisers  receive no
additional compensation for these services.

         Our Board  appointed  the  persons  listed  below as Senior  Management
Advisers effective as of the 2000 annual meeting of the Board to serve until the
annual meeting of the Board in 2001 or until otherwise determined by the Board.

         Robert  D.  Erickson,  age 57,  is an  Executive  Vice  President.  Mr.
Erickson  was a  director  of  ServiceMaster  from  May  1987  to May  1993.  He
previously served as a director of ServiceMaster  from May 1981 to June 1984. He
served  as  the  President  and  Chief  Operating  Officer  of   ServiceMaster's
International business unit from October 1993 to December 1997.

         Jim L. Kaput,  age 40, is Senior Vice President and General  Counsel of
ServiceMaster.  From June 1994 until he joined  ServiceMaster in April 2000, Mr.
Kaput was a partner at the law firm of Sidley & Austin in Chicago, Illinois.

         Donald K. Karnes,  age 50, is President of TruGreen Group. He served as
Group President of ServiceMaster  Consumer and Commercial  Services from January
1996 to December 2000.

         Robert F. Keith, age 44, is Group President of ServiceMaster Management
Services.  He served as President  and Chief  Operating  Officer,  ServiceMaster
Management  Services from January 1997 to October 1998,  and President and Chief
Operating  Officer,  ServiceMaster  Consumer Services from July 1994 to December
1996.

         Ernest J. Mrozek,  age 47, is President of  ServiceMaster  Consumer and
Commercial  Services.  He  served as  President  and  Chief  Operating  Officer,
ServiceMaster  Consumer  Services from January 1997 to October 1998,  and Senior
Vice President and Chief Financial Officer of ServiceMaster from January 1995 to
December 1996.

         Steven C. Preston,  age 40, has served as Executive  Vice President and
Chief  Financial  Officer since July 1, 1998. He served as Senior Vice President
and Chief Financial  Officer from April 1997 through June 1998. From August 1993
to March 1997, he was Senior Vice  President  and Corporate  Treasurer for First
Data Corporation, Atlanta, Georgia.

          Phillip B. Rooney, age 56, is President of Management  Services Group.
He served as  President  of  Business  Services  Group,  from April 2000 to
December  2000.  From April 1997 to April 2000 he served as Vice  Chairman.
From May 1996 to February 1997 he was President and Chief Executive Officer
of Waste Management,  Inc.,

                                       15
<PAGE>

Oakbrook, Illinois. Mr. Rooney is a director of Van Kampen Fund, Oak Brook,
Illinois, an investment management company and Illinois Tool Works, Inc.,
Glenview,  Illinois, a diversified manufacturing company.

         David M. Slott,  age 42, is Chief Operating  Officer of TruGreen Group.
He served as President and Chief Operating Officer of TruGreen from January 1996
to December 2000.

          Richard W.  Williams,  age 51, is President  of  Education  Management
     Services.  He served as Executive  Vice  President of Education  Management
     Services from January 1994 to April 1996.


Executive Officers of ServiceMaster

         The following  table shows (i) the names and ages (as of March 1, 2001)
of our executive  officers;  (ii) all positions  presently held by each officer;
and (iii) the year each person  became an officer.  Each person has served as an
officer  continuously  since  the  year  shown.  There  are no  arrangements  or
understandings  between any executive  officer and any other person  pursuant to
which the officer was or is to be selected as an officer.

<TABLE>
<CAPTION>

                                                                                                       First Became
 Name                      Age      Present Positions                                                    An Officer
------------------        -----     ----------------------------                                       ------------
<S>                       <C>       <C>                                                                <C>

C. William Pollard         62       Chairman and Director                                                      1977

Jonathan P. Ward           46       President, Chief Executive Officer, and Director                           2001

Carlos H. Cantu            67       Senior Chairman and Director                                               1986

Robert D. Erickson         57       Executive Vice President and a Senior Management Adviser                   1976

Jim L. Kaput               40       Senior Vice President, General Counsel, and a Senior                       2000
                                    Management Adviser

Donald K. Karnes           50       President, TruGreen Group, and a Senior Management Adviser                 1992

Robert F. Keith            44       Group President, Management Services, and                                  1986
                                    a Senior Management Adviser

Ernest J. Mrozek           47       President, Consumer and Commercial Services, and a                         1987
                                    Senior Management Adviser

Steven C. Preston          40       Executive Vice President and Chief Financial Officer, and                  1997
                                    a Senior Management Adviser

Phillip B. Rooney          56       President, Management Services Group, and a Senior Management              1997
                                    Adviser

David M. Slott             42       Chief Operating Officer, TruGreen Group, and a Senior                      1990
                                    Management Adviser

Richard W. Williams        51       President, Education Management Services, and a Senior                     1982
                                    Management Adviser

David P. Aldridge          41       Senior Vice President                                                      1990

Patrick E. Moroney         47       Senior Vice President and Chief Information Officer                        2000


                                       16
<PAGE>
Deborah A. O'Connor        38       Senior Vice President and Controller                                       1993

Eric R. Zarnikow           41       Senior Vice President and Treasurer                                        1994

</TABLE>

          Messrs.  Pollard, Ward, and Cantu are also directors of ServiceMaster.
     For biographical  information with respect to these persons,  see "Election
     of  Directors"  in the  proxy  statement  for our 2001  Annual  Meeting  of
     Shareholders.  Messrs.  Erickson,  Kaput, Karnes,  Keith, Mrozek,  Preston,
     Rooney, Slott, and Williams are Senior Management Advisers. See page 15 for
     biographical information with respect to these persons.

         David P. Aldridge, age 41, has served as Senior Vice President, People,
since April 2000. He served as Vice President,  Service  Solutions  Development,
from  October 1997 to March 2000.  Prior to 1997 he served as Vice  President of
Integrated Services.

         Patrick E.  Moroney,  age 47, has served as Senior Vice  President  and
Chief  Information  Officer since July 2000. He served  Monsanto  Corporation in
Chicago, Illinois, as Chief Information Officer from March 1997 to July 2000 and
as Director of Information Technology during 1995 and 1996.

         Deborah A.  O'Connor,  age 38, has served as Senior Vice  President and
Controller since December 1999. She served as Vice President and Controller from
January 1993 until December 1999.

         Eric R.  Zarnikow,  age 41, has  served as Senior  Vice  President  and
Treasurer  since  December  1999. He served as Vice President and Treasurer from
May 1994 until December 1999.


Compliance with Section 16(a) of the Securities Exchange Act of 1934

         The information  contained under the heading  "Section 16(a) Beneficial
Ownership  Reporting  Compliance"  in the proxy  statement  for our 2001  Annual
Meeting of Shareholders is incorporated by reference.


Item 11.  Executive Compensation

         The  information   contained  under  the  headings   "Compensation   of
Directors",  "Executive Compensation",  and "Certain  Transactions-Employment of
Jonathan  P.  Ward" in the  proxy  statement  for our  2001  Annual  Meeting  of
Shareholders is incorporated by reference.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The information  contained  under the heading  "Ownership of our Common
Stock" in the proxy  statement for our 2001 Annual  Meeting of  Shareholders  is
incorporated by reference.


Item 13.  Certain Relationships and Related Transactions

         The information  contained under the heading "Certain  Transactions" in
the proxy  statement for our 2001 Annual Meeting of Shareholders is incorporated
by reference.


                                       17
<PAGE>


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K


(a)      Financial Statements, Schedules, and Exhibits.


         1.  Financial Statements

                  The  documents  shown  below are  contained  in the  Financial
                  Statements and Management  Discussion and Analysis  section of
                  our Annual Report to Shareholders  for 2000 on pages 52-81 and
                  are incorporated by reference:

                           Summary of Significant Accounting Policies

                           Report of Independent Public Accountants

                           Consolidated  Statements  of Income for the three
                           years ended  December 31,  2000,  1999 and 1998

                           Consolidated Statements of Financial Position as of
                           December 31, 2000 and 1999

                           Consolidated  Statements  of Cash Flows for the three
                           years ended December 31, 2000, 1999 and 1998

                           Consolidated  Statements of Shareholders'  Equity for
                           the three years ended  December 31, 2000,  1999,  and
                           1998.

                           Notes to the Consolidated Financial Statements


         2.  Financial Statements Schedules

                  Schedule  IV--Amounts  Receivable  from  Related  Parties  and
                  Underwriters,  Promoters,  and  Employees  other than  Related
                  Parties:

                           None

                  Included in Part IV of this Report:

                           Schedule II--Valuation and Qualifying Accounts

                           Report of Independent Public Accountants on Schedules

                           Exhibit 23--Consent of Independent Public Accountants

         Other schedules are omitted because of the absence of conditions  under
which they are  required or because  the  required  information  is given in the
financial statements or notes thereto.

                                       18
<PAGE>

         3.  Exhibits

                  The exhibits  filed with this report are listed on pages 24-26
(the  "Exhibits  Index").  Certain  entries in the Exhibits Index are management
contracts  or  compensatory  plans  in  which  a  director  or any of our  named
executive  officers  does or may  participate.  Such entries are indicated by an
asterisk next to the exhibit's  number.  Reference is made to the Exhibits Index
for the filing with the Commission that contains such contract or plan.


(b)      Reports on Form 8-K filed during the last quarter of 2000.

                  None

                                       19
<PAGE>

                                   SCHEDULE II

                            THE SERVICEMASTER COMPANY

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                        Additions       Deductions
                                                                        ---------       ----------
                                                       Balance at       Charged to     Write-offs of    Balance at
                                                      Beginning of      Costs and      Uncollectible      end of
Description                                             Period          Expenses        Accounts         Period
<S>                                                   <C>               <C>             <C>           <C>
AS OF DECEMBER 31, 2000:
Allowance for doubtful accounts --

Accounts receivable (current)                           $37,203          40,926           42,375       $35,754
                                                        -------          ------           ------       -------
Notes receivable (current)                               $1,808             889              481        $2,216
                                                         ------             ---              ---        ------
AS OF DECEMBER 31, 1999:
Allowance for doubtful accounts --

Accounts receivable (current)                           $34,153          28,797           25,747       $37,203
                                                        -------          ------           ------       -------

Notes receivable (current)                               $4,835             688            3,715        $1,808
                                                         ------            ----            -----        ------
AS OF DECEMBER 31, 1998:
Allowance for doubtful accounts --
Accounts receivable (current)                           $27,544          25,998           19,389       $34,153
                                                        -------          ------           ------       -------
Notes receivable (current)                              $ 4,677             686              528        $4,835
                                                        -------             ---              ---        ------

</TABLE>


                                       20
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders of The ServiceMaster Company:

We have audited in accordance with auditing standards  generally accepted in the
United States, the financial statements included in The ServiceMaster  Company's
annual report to  shareholders  incorporated by reference in this Form 10-K, and
have issued our report  thereon dated  January 23, 2001.  Our audit was made for
the  purpose of forming an  opinion on those  statements  taken as a whole.  The
schedules  included  in Part IV in the  Form  10-K  are  the  responsibility  of
ServiceMaster's  management and are presented for purposes of complying with the
Securities  and  Exchange  Commission's  rules  and  are not  part of the  basic
financial  statements.  These  supporting  schedules  have been subjected to the
auditing procedures applied in the audit of the basic financial  statements and,
in our  opinion,  fairly  state in all  material  respects  the  financial  data
required to be set forth therein in relation to the basic  financial  statements
taken as a whole.



                                      Arthur Andersen LLP
Chicago, Illinois
January 23, 2001



                                       21
<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                                      THE SERVICEMASTER COMPANY
                                      Registrant


Date: March 16, 2001                  By   /s/ JONATHAN P. WARD
                                           ------------------------
                                           Jonathan P. Ward
                                           President and Chief Executive Officer


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


         Signature                  Title                                  Date

/s/ C. WILLIAM POLLARD        Chairman and Director               March 16, 2001
---------------------------
   C. William Pollard



/s/ JONATHAN P. WARD          President, Chief Executive          March 16, 2001
---------------------------   Officer and Director
   Jonathan P. Ward



/s/ CARLOS H. CANTU           Senior Chairman and Director        March 16, 2001
---------------------------
   Carlos H. Cantu



/s/ STEVEN C. PRESTON         Executive Vice President and        March 16, 2001
----------------------        Chief Financial Officer (Principal
   Steven C. Preston          Financial Officer and Principal
                              Accounting Officer)




/s/ PAUL W. BEREZNY, JR.      Director                            March 16, 2001
---------------------------
   Paul W. Berezny, Jr.



/s/ BRIAN GRIFFITHS           Director                            March 16, 2001
---------------------------
   Brian Griffiths


                                       22
<PAGE>


/s/ SIDNEY E. HARRIS          Director                            March 16, 2001
---------------------------
   Sidney E. Harris



/s/ GLENDA A. HATCHETT        Director                            March 16, 2001
---------------------------
   Glenda A. Hatchett



/s/ HERBERT P. HESS           Director                            March 16, 2001
---------------------------
   Herbert P. Hess



/s/ MICHELE M. HUNT           Director                            March 16, 2001
---------------------------
   Michele M. Hunt



/s/ GUNTHER H. KNOEDLER       Director                            March 16, 2001
-----------------------
   Gunther H. Knoedler



/s/ JAMES D. McLENNAN         Director                            March 16, 2001
----------------------
   James D. McLennan



/s/ VINCENT C. NELSON         Director                            March 16, 2001
----------------------
   Vincent C. Nelson



/s/ DALLEN W. PETERSON        Director                            March 16, 2001
-----------------------
   Dallen W. Peterson



/s/ DONALD G. SODERQUIST      Director                            March 16, 2001
------------------------
   Donald G. Soderquist



/s/ CHARLES W. STAIR          Director                            March 16, 2001
-----------------------
   Charles W. Stair



/s/ DAVID K. WESSNER          Director                            March 16, 2001
-----------------------
   David K. Wessner



                                       23
<PAGE>

                                 Exhibits Index

Exh.
No.                        Description of Exhibit
----   -------------------------------------------------------------------

3(i) Amended and Restated  Certificate  of  Incorporation  of The  ServiceMaster
     Company,  a Delaware  corporation,  as filed with the  Secretary  of State,
     State of  Delaware,  on November 6, 1997 is  incorporated  by  reference to
     Exhibit 1 to the Current  Report on Form 8-K, No. 2 dated February 26, 1998
     (File No. 1-4762) (the "1998 8-K, No. 2").

3(ii)Bylaws of The  ServiceMaster  Company as amended through September 29, 2000
     are  incorporated  by reference  to Exhibit 1.4 to Amendment  No. 1 to Form
     8-A/A dated October 6, 2000 (File No. 1-14762).

4.1      Shareholder Rights Agreement between The ServiceMaster  Company and the
         Harris  Trust and  Savings  Bank as  adopted  on  December  12,1997  is
         incorporated by reference to Exhibit 3 to the 1998 8-K, No.2.

4.2  Certificate of Designation,  Preferences and Rights of Junior Participating
     Preferred Stock, Series A, is incorporated by reference to Exhibit 4 to the
     1998 8-K, No. 2.

4.3      Indenture dated as of August 15, 1997 between The ServiceMaster Company
         and the Harris  Trust and Savings  Bank as trustee is  incorporated  by
         reference  to Exhibit  4.1 to the  Registration  Statement  on Form S-3
         (File No. 333-32167) (the "1997 S-3").

4.4      First  Supplemental  Indenture  dated as of August 15, 1997 between The
         ServiceMaster  Company and the Harris Trust and Savings Bank as trustee
         is  incorporated  by reference  to Exhibit 4.4 to the Annual  Report on
         Form 10-K for the year ended December 31, 1997 (File No.  1-14762) (the
         "1997 10-K").

4.5      Second  Supplemental  Indenture dated as of January 1, 1998 between The
         ServiceMaster  Company and the Harris Trust and Savings Bank as trustee
         is incorporated by reference to Exhibit 2 to the Current Report on Form
         8-K, No. 1 dated February 26, 1998 (File No. 1-14762).

4.6  Third  Supplemental  Indenture  dated  as of  March  2,  1998  between  The
     ServiceMaster  Company and the Harris  Trust and Savings Bank as trustee is
     incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K,
     No. 3 dated February 27, 1998 (File No. 1-14762) (the "1998 8-K, No. 3").

4.7      Fourth  Supplemental  Indenture dated as of August 10, 1999 between The
         ServiceMaster  Company and the Harris Trust and Savings Bank as trustee
         is incorporated by reference to Exhibit 3 to the Current Report on Form
         8-K dated August 16, 1999 (File No. 1-14762) (the "1999 8-K").

4.8      Indenture  dated as of  November  18, 1999  between  The  ServiceMaster
         Company  and  the  Harris   Trust  and  Savings   Bank  as  trustee  is
         incorporated by reference to Exhibit 4.16 to the Registration Statement
         on Form S-3 (File No. 333-91381) (the "1999 S-3").

4.9      First  Supplemental  Indenture  dated as of April 4, 2000  between  The
         ServiceMaster  Company and Harris  Trust and Savings Bank as trustee is
         incorporated  by  reference to Exhibit 4.2 to the  Quarterly  Report on
         Form 10-Q dated May 15, 2000 (File No. 1-14762) (the "2000 10-Q").

4.10 Forms of 6.95% Note due August 14,  2007 and 7.45% Note due August 14, 2027
     are incorporated by reference to Exhibit 4.2 to the 1997 S-3.

4.11 Form of 7.10%  Note due  March 1,  2018 is  incorporated  by  reference  to
     Exhibit 4.1 the 1998 8-K, No. 3.

4.12 Form of 7.25%  Note due  March 1,  2038 is  incorporated  by  reference  to
     Exhibit 4.2 to the 1998 8-K, No. 3.

4.13 Form of 7.875% Note due August 15, 2009 is  incorporated  by  reference  to
     Exhibit 4 to the 1999 8-K.

                                       24
<PAGE>

4.14 Form of 7.875% Note due August 15, 2009 is  incorporated  by  reference  to
     Exhibit 5 to the 1999 8-K.

4.15 Form of 8.45%  Note due April 15,  2005 is  incorporated  by  reference  to
     Exhibit 4.1 to the 2000 10-Q.

4.16     $750,000,000  Credit Agreement among The ServiceMaster  Company Limited
         Partnership,  the First  National  Bank of Chicago and Morgan  Guaranty
         Trust Company dated as of April 1, 1997, is  incorporated  by reference
         to Exhibit 10.2 to the 1997 10-K.

10.1*Senior  Executive  Ownership  Election  Plan as  approved  by the  Board of
     Directors on December 10, 1999 is incorporated by reference to Exhibit 10.5
     to the 1999 10-K.

10.2*    Form of Directors  Deferred Fees Plan is  incorporated  by reference to
         Exhibit 10.18 to the ServiceMaster Limited Partnership Annual Report on
         Form 10-K for the year ended December 31, 1990 (File No.  1-09378) (the
         "1990 10-K").

10.3*Form of Directors  Deferred Fees Agreement is  incorporated by reference to
     Exhibit 10.19 of the 1990 10-K.

10.4*Form of Deferred  Fees Plan Trust is  incorporated  by reference to Exhibit
     10.20 of the 1990 10-K.

10.5*    10-Plus Plan as amended  September 3, 1991 is incorporated by reference
         to Exhibit 10.21 to the ServiceMaster Limited Partnership Annual Report
         on Form 10-K for the year ended  December  31, 1991 (File No.  1-09378)
         (the "1991 10-K").

10.6*Form of Option Agreement for the 10-Plus Plan as amended  September 3, 1991
     is incorporated by reference to Exhibit 10.22 to the 1991 10-K.

10.7*    1994  Non-Employee  Directors  Share  Option  Plan is  incorporated  by
         reference  to  Exhibit  4.2 to the  ServiceMaster  Limited  Partnership
         Registration  Statement  on Form S-8 (File  No.  33-55761)  (the  "1994
         S-8").

10.8*    Form of  Option  Agreement  for the 1994  Non-Employee  Director  Share
         Option Plan is  incorporated  by  reference  to Exhibit 4.3 to the 1994
         S-8.

10.9*    1997 Share Option Plan is incorporated by reference to Exhibit 10.28 to
         the ServiceMaster  Limited  Partnership  Annual Report on Form 10-K for
         the year ended December 31,1996 (File No. 1-09378) (the "1996 10-K").

10.10* Form of Option  Agreement for the 1997 Share Option Plan is  incorporated
     by reference to Exhibit 10.29 to the 1996 10-K.

10.11* 1998 Equity  Incentive Plan is incorporated by reference to Exhibit 10.15
     to the 1997 10-K.

10.12*   Form  of  Option   Agreement  for  the  1998  Equity   Incentive   Plan
         (Non-Qualifying  Stock Options) is incorporated by reference to Exhibit
         10.20 to the 1997 10-K.

10.13*   Form of Option  Agreement for the 1998 Equity Incentive Plan (Incentive
         Stock  Options) is  incorporated  by reference to Exhibit  10.21 to the
         1997 10-K.

10.14* 1998 Non-Employee  Directors Discounted Stock Option Plan is incorporated
       by reference to Exhibit 10.21 to the 1997 10-K.

                                       25
<PAGE>

10.15* 1998 Long-Term  Performance  Award Plan is  incorporated  by reference to
       Exhibit 10.22 to the 1997 10-K.

10.16* 2000 Equity Incentive Plan is incorporated by reference to Exhibit 4.4 to
     the  Registration  Statement  on Form S-8 (File No.  333-42680)  (the "2000
     S-8").

10.17*   Form of Option Agreement for the 2000 Equity Incentive Plan.

10.18* 2001 Long-Term  Performance  Award Plan is  incorporated  by reference to
     Exhibit B to the Proxy Statement dated March 24, 2000 (File No. 1-14762).

10.19*   Employment Agreement of Jonathan P. Ward dated as of January 9, 2001.

10.20*   Stock Option Agreement of Jonathan P. Ward dated as of January 9, 2001.

10.21*   WeServeHomes.com 2000 Stock Option/Stock Issuance Plan.

10.22* Form of  Stock  Option  Agreement  for the  WeServeHomes.com  2000  Stock
     Option/Stock Issuance Plan.

10.23* Form of Stock  Purchase  Agreement  for the  WeServeHomes.com  2000 Stock
     Option/Stock Issuance Plan.

11       Exhibit  regarding  detail of income per share  computation for each of
         the three years ended December 31, 2000,  1999 and 1998 is incorporated
         by  reference  to the  footnote  on page 57 of the 2000  Annual  Report
         (defined in Exhibit 13).

13       Annual Report to Shareholders for the year ended December 31, 2000 (the
         "2000 Annual  Report").  The parts of the 2000 Annual  Report which are
         expressly  incorporated  into this report by reference  shall be deemed
         filed with this report.  All other parts of the 2000 Annual  Report are
         furnished for the  information of the Commission and are not filed with
         this report.

21       Subsidiaries of ServiceMaster.

23       Consent of Arthur Andersen LLP.


                                       26