UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           --------------------------
                                    FORM 10-K

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

                  For the fiscal year ended December 31, 2002.
                                       OR
      [ ]    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       (I.R.S. Employer Identification No.)
     incorporation or organization)

         3250 Lacey Road, Suite 600, Downers Grove, Illinois, 60515-1700
               (Address of Principal Executive Offices, Zip Code)

                                 (630) 663-2000
              (Registrant's telephone number, including area code)

               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 [ ]

<PAGE>

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

     Indicate by check whether the registrant is an accelerated filer (as
defined in Rule12b-2 of the Act).
Yes  [x]    No [ ]

     The aggregate market value of shares of common stock held by non-affiliates
of the registrant as of June 28, 2002 was $3,990,819,969.

     The number of shares of the registrant's common stock outstanding as of
March 28, 2003 was 299,221,298.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Certain parts of the registrant's Annual Report to Shareholders for the
year ended December 31, 2002 are incorporated into Part I and Part II of this
Form 10-K.

     Certain parts of the registrant's Proxy Statement for the 2003 Annual
Meeting of Shareholders are incorporated into Part III of this Form 10-K.


<PAGE>



                                TABLE OF CONTENTS

<TABLE>

<CAPTION>
PART I
 <S>                                                                                                    <C>
  Item 1.  Business..............................................................................        1

  Item 2.  Properties............................................................................        7

  Item 3.  Legal Proceedings.....................................................................        8

  Item 4.  Submission of Matters to a Vote of Security Holders...................................        9

 PART II

  Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.................       10

  Item 6.  Selected Financial Data...............................................................       10

  Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations10

  Item 7A.  Quantitative and Qualitative Disclosures About Market Risk...........................       10

  Item 8.  Financial Statements and Supplementary Data...........................................       10

  Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure11

 PART III

 Item 10.  Directors and Executive Officers of the Registrant....................................       12

 Item 11.  Executive Compensation................................................................       13

 Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters........................................................................       13

 Item 13.  Certain Relationships and Related Transactions........................................       13

 Item 14.  Controls and Procedures...............................................................       13

 PART IV

 Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K......................       15

 Signatures......................................................................................       19

 Certification of Chief Executive Officer........................................................       21

 Certification of Chief Financial Officer.......................................................        22

 Exhibit Index...................................................................................       23
</TABLE>

<PAGE>

FORWARD-LOOKING STATEMENTS

     This Form 10-K contains or incorporates by reference statements  concerning
future  results  and other  matters  that may be  deemed to be  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of  1995.  The  ServiceMaster  Company   ("ServiceMaster")  intends  that  these
forward-looking  statements,  which look forward in time and include  everything
other than  historical  information,  be subject to the safe harbors  created by
such  legislation.  ServiceMaster  notes that these  forward-looking  statements
involve  risks and  uncertainties  that could affect its results of  operations,
financial  condition or cash flows.  Factors that could cause actual  results to
differ materially from those expressed or implied in a forward-looking statement
include the following, among others:

        o extreme weather conditions that affect the demand for ServiceMaster's
          services;
        o competition in the markets served by ServiceMaster;
        o labor shortages or increases in wage rates;
        o unexpected increases in operating costs, such as higher insurance,
          healthcare or fuel prices;
        o increased governmental regulation of telemarketing;
        o general economic conditions in the United States, especially as they
          may affect home sales or consumer spending levels;
        o time and expenses associated with integrating and winding down
          businesses; and
        o other factors described from time to time in documents filed
          by ServiceMaster with the Securities and Exchange Commission.

                                     PART I

ITEM 1.  BUSINESS

     ServiceMaster is a national service company providing  outsourcing services
to both  residential and commercial  customers.  Its core services  capabilities
include lawn care and landscape maintenance; termite and pest control; plumbing,
electrical,  heating and air conditioning services; home warranty; and cleaning,
disaster restoration and furniture repair. These services are provided through a
network of over 5,400 company-owned and franchised locations operating under the
following  leading  brands:  TruGreen  ChemLawn,  TruGreen  LandCare,  Terminix,
American  Residential  Services,  Rescue Rooter,  American Mechanical  Services,
American Home Shield, AmeriSpec,  Merry Maids, ServiceMaster Clean and Furniture
Medic.  Incorporated  in Delaware in 1991,  ServiceMaster  is the  successor  to
various entities dating back to 1947.

     ServiceMaster  is  organized  into  five  principal   operating   segments:
TruGreen;  Terminix;  American Home Shield;  American  Residential  Services and
American  Mechanical  Services;  and  Other  Operations.   All  subsidiaries  of
ServiceMaster are wholly owned,  except for The Terminix  International  Company
L.P.,  in which  Allied  Bruce-Terminix  Companies,  Inc.  is a Class B  limited
partner. The financial information for each operating segment for 2000, 2001 and
2002 contained in the Notes to the Consolidated Financial Statements included in
ServiceMaster's  Annual Report to  Shareholders  for the year ended December 31,
2002 ("Annual Report to Shareholders  for 2002") is incorporated by reference in
this Form 10-K.

CHANGE IN SEGMENT REPORTING

     ServiceMaster  previously  reported  its  American  Home  Shield,  American
Residential Services,  American Mechanical Services, Merry Maids,  ServiceMaster
Clean,  AmeriSpec and Furniture Medic  businesses as a single segment,  the Home
Maintenance  and  Improvement  segment.  Due  to  ServiceMaster's  sale  of  its
Management Services business and its exit from other businesses in 2001, certain
operations  have become more  significant  for segment  reporting  purposes.  In
addition,  ServiceMaster's  management  and reporting  structure  changed during
2002. As a result,  ServiceMaster  has expanded its business  segment  reporting
which  will allow for  better  ongoing  visibility  into the  components  of the
business.  American Home Shield and AmeriSpec  will now be reported  together as
the  American  Home Shield  segment.  The  combination  of American  Residential
Services and American  Mechanical  Services will now be reported together as the
American  Residential Services and American Mechanical Services segment, and the
franchise  operations of Merry Maids,  ServiceMaster  Clean and Furniture  Medic
will now be  reported


                                       1
<PAGE>


in the Other Operations segment.  Previously reported financial information that
is incorporated by reference in this Form 10-K has been  reclassified to reflect
the change in segment reporting.


SERVICES

                                TruGreen Segment

     The  TruGreen  segment  provides  lawn care  services  primarily  under the
TruGreen ChemLawn brand name and landscape  maintenance services primarily under
the  TruGreen  LandCare  brand name to  residential  and  commercial  customers.
Revenues derived from the TruGreen segment constituted 40%, 38% and 38% in 2000,
2001 and 2002,  respectively,  of the revenue from continuing  operations of the
consolidated  ServiceMaster  enterprise.  The  TruGreen  ChemLawn  and  TruGreen
LandCare businesses are seasonal in nature. Extreme weather conditions,  such as
a drought,  affect the demand for lawn care and landscape  maintenance  services
and may result in a decrease in revenues.

     TruGreen  ChemLawn.  TruGreen  ChemLawn is a leading  provider of lawn care
services in the United States with  approximately  3.4 million  residential  and
commercial customers.  As of December 31, 2002, TruGreen ChemLawn provided these
services in 47 states and the  District of  Columbia  through 201  company-owned
locations and 64 franchised locations. TruGreen ChemLawn also provides lawn care
services  through  a  subsidiary  in  Canada  and  has  entered  into  licensing
arrangements to provide these services in nine other countries, primarily in the
Middle East.

     TruGreen  LandCare.  TruGreen  LandCare is a leading  provider of landscape
maintenance  services in the United States with approximately 15,000 residential
and commercial  customers.  As of December 31, 2002,  TruGreen LandCare provided
these  services  in  36  states  and  the  District  of  Columbia   through  132
company-owned locations. TruGreen LandCare has no international operations.

                                Terminix Segment

     The Terminix segment  provides termite and pest control services  primarily
under the Terminix brand name to residential and commercial customers.  Revenues
derived from the Terminix segment constituted 21%, 24% and 26% in 2000, 2001 and
2002,   respectively,   of  the  revenue  from  continuing   operations  of  the
consolidated  ServiceMaster  enterprise.  The  Terminix  business is seasonal in
nature.  The termite swarm season,  which  generally  occurs in early spring but
varies by region depending on climate, has historically increased the demand for
termite  control  services and  resulted in an increase in revenues.  Similarly,
increased  pest  activity in the warmer  months has  historically  increased the
demand for pest control services and resulted in an increase in revenues.

     Terminix is a leading  provider of termite and pest control services in the
United States with over 2.9 million residential and commercial customers.  As of
December  31,  2002,  Terminix  provided  these  services  in 44 states  and the
District of Columbia  through 318  company-owned  locations  and 134  franchised
locations.  Terminix also  provides  termite and pest control  services  through
subsidiaries  in Mexico  and the  Netherlands  and has  entered  into  licensing
arrangements to provide these services in 29 other countries, primarily in Latin
America and the Middle East.

                          American Home Shield Segment

     The  American  Home Shield  segment  provides  home service  contracts  for
systems and appliances  primarily  under the American Home Shield brand name and
home inspection services primarily under the AmeriSpec brand name, in each case,
to residential customers. Revenues derived from the American Home Shield segment
constituted 9%, 11% and 12% in 2000, 2001 and 2002, respectively, of the revenue
from continuing  operations of the consolidated  ServiceMaster  enterprise.  The
American  Home Shield and  AmeriSpec  businesses  are seasonal in nature.  Sales
volume in the American Home Shield  segment  depends,  in part, on the number of
home  resale  closings  which  historically  has been  highest in the spring and
summer  months.  American Home Shield's  costs


                                       2
<PAGE>

related to service  call  volume is  highest  in the summer  months,  especially
during periods of unseasonably warm temperatures.

     American Home Shield.  American  Home Shield is a leading  provider of home
service  contracts for systems and appliances in the United States with over 1.1
million residential customers.  It provides residential customers with contracts
to repair or replace  electrical,  plumbing,  central  heating  and  central air
conditioning  systems,  hot water heaters and  appliances  that breakdown due to
normal wear and tear and administers those contracts through  independent repair
contractors.   As  of  December  31,  2002,  American  Home  Shield  issued  and
administered  home  service  contracts  in all 50  states  and the  District  of
Columbia.  American Home Shield has also entered into a licensing arrangement to
provide these services in Saudi Arabia.

     AmeriSpec.  AmeriSpec is a leading provider of home inspection  services in
the United  States  with  approximately  130,000  residential  customers.  As of
December  31,  2002,  AmeriSpec  provided  these  services  in 48 states and the
District of Columbia  through three  company-owned  locations and 223 franchised
locations. AmeriSpec has no international operations.

       American Residential Services and American Mechanical Services Segment

     The American  Residential Services and American Mechanical Services segment
provides electrical, heating, ventilation, air conditioning,  plumbing and drain
cleaning services primarily under the American  Residential  Services,  American
Mechanical  Services and Rescue Rooter brand names to residential and commercial
customers.  Revenues derived from the American Residential Services and American
Mechanical Services segment constituted 23%, 23% and 20% in 2000, 2001 and 2002,
respectively,  of the revenue from  continuing  operations  of the  consolidated
ServiceMaster  enterprise.   The  American  Residential  Services  and  American
Mechanical  Services  businesses  are  seasonal  in  nature,  with the  greatest
activity  occurring  in May  through  August  during  the peak air  conditioning
season.

     American  Residential  Services.   American  Residential  Services,   which
includes the business of Rescue  Rooter,  is a leading  provider of  electrical,
plumbing, heating,  ventilation, air conditioning and drain cleaning services in
the United States with approximately 1.6 million  residential  customers.  As of
December 31, 2002, American  Residential  Services provided these services in 26
states and the District of Columbia through 70 company-owned locations. American
Residential  Services has also entered into a licensing  arrangement  to provide
plumbing and drain cleaning services under the Rescue Rooter brand name in Saudi
Arabia.

     In the fourth  quarter of 2002, a subsidiary of  ServiceMaster  repurchased
the outstanding  minority equity interest in American  Residential Services held
by  management  of  American  Residential  Services,  making  it a wholly  owned
ServiceMaster business.

     American Mechanical Services. American Mechanical Services, a subsidiary of
American  Residential  Services,  is a leading provider of electrical,  heating,
ventilation   and  air   conditioning   services  in  the  United   States  with
approximately  4,000  commercial  customers.  As of December 31, 2002,  American
Mechanical   Services   provided   these  services  in  six  states  through  15
company-owned  locations.  American  Mechanical  Services  has no  international
operations.

                            Other Operations Segment

     The Other Operations segment provides  residential and commercial  disaster
restoration  and  cleaning  services   primarily  under  the  ServiceMaster  and
ServiceMaster Clean brand names,  domestic housekeeping services primarily under
the Merry Maids brand name and on-site furniture repair and restoration services
primarily  under the Furniture  Medic brand name. The Other  Operations  segment
also includes  ServiceMaster's  international  operations  and its  headquarters
functions. Revenues derived from the Other Operations segment constituted 7%, 4%
and 4% in 2000,  2001 and 2002,  respectively,  of the revenue  from  continuing
operations of the consolidated ServiceMaster enterprise.

                                       3
<PAGE>

     ServiceMaster  Clean.  ServiceMaster  Clean is a leading  franchisor in the
residential  and  commercial  cleaning  field in the United  States  with over 1
million  residential  and  commercial  customers.   As  of  December  31,  2002,
ServiceMaster  Clean  provided  these  services in all 50 states  through  2,983
franchised locations. ServiceMaster Clean also provides disaster restoration and
cleaning services through  subsidiaries in Ireland, the United Kingdom and Spain
and has entered into  licensing  arrangements  to provide  these  services in 18
other countries, primarily in Asia and the Middle East.

     Merry Maids.  Merry Maids is a leading  provider of domestic house cleaning
services in the United States with approximately 278,000 residential  customers.
As of December  31,  2002,  these  services  were  provided in 49 states and the
District of  Columbia  through 58  company-owned  locations  and 754  franchised
locations.  Merry Maids also provides  domestic house cleaning  services through
subsidiaries  in Denmark,  Ireland and the United  Kingdom and has entered  into
licensing  arrangements  to  provide  these  services  in  10  other  countries,
primarily in Asia.

     Furniture Medic. Furniture Medic is a leading provider of on-site furniture
repair and restoration services in the United States with approximately  140,000
residential  customers.  As of December 31, 2002, Furniture Medic provided these
services  in 46 states and the  District  of  Columbia  through  462  franchised
locations.   Furniture  Medic  also  provides   on-site   furniture  repair  and
restoration  services through  subsidiaries in France and the United Kingdom and
has entered into licensing  arrangements to provide these services in Canada and
Saudi Arabia.


MARKETING AND DISTRIBUTION

     ServiceMaster   markets  its  services  primarily  through   telemarketing,
television   and  radio   advertising,   yellow  pages   advertisements,   print
advertisements,   direct  mail  and  door-to-door  solicitation.   Additionally,
American Home Shield markets its home service  contracts  through  participating
real estate  brokerage  offices in  conjunction  with  resales of  single-family
residences and through financial institutions and insurance agencies.


HEADQUARTERS FUNCTIONS

     Business   Support  Center.   The  Business   Support  Center   coordinates
administration  of payroll,  benefits,  risk  management and travel services for
ServiceMaster's internal operations.  Various administrative support departments
also  provide  personnel,  communications,   marketing,  government  and  public
relations,   administrative,   accounting,   financial,  tax,  human  resources,
information  technology  and legal  services.  The  Business  Support  Center is
headquartered in Downers Grove,  Illinois,  and has additional personnel located
in Memphis, Tennessee.

     New Channels Development Group. In December 2002,  ServiceMaster  announced
the integration of ServiceMaster Home Service Center (formerly WeServeHomes.com)
into the  enterprise  marketing  support  function of  ServiceMaster  as the New
Channels   Development  Group.  The  New  Channels  Development  Group  actively
collaborates with ServiceMaster's  marketing officers to identify  opportunities
and  establish   priorities  for  opening  new  sales  channels  and  developing
multi-brand marketing programs.


PATENTS, TRADEMARKS AND LICENSES

     ServiceMaster holds various service marks,  trademarks and trade names that
it deems  particularly  important to the advertising and franchising  activities
conducted by each of its operating  segments.  These marks are registered in the
United States and over 97 other  countries and are renewed at each  registration
expiration date. ServiceMaster also holds various patents,  trademarks,  service
marks, trade names and copyrights, none of which are considered by ServiceMaster
to be material to its  financial  condition or results of  operations,  and owns
certain trade secrets,  including  training  manuals,  pricing models,  customer
information and software source code.


                                       4
<PAGE>

FRANCHISES

     Franchises are important to the TruGreen ChemLawn, Terminix,  ServiceMaster
Clean,  Merry Maids,  AmeriSpec and Furniture Medic businesses.  Total franchise
fees (initial and recurring)  represented  2.5% of consolidated  revenue in both
2002 and 2001 and 1.6% and 1.7% of consolidated  operating  expenses in 2002 and
2001,  respectively.  Total  franchise fee income  comprised  11.3% and 10.2% of
consolidated  operating  income  in  2002  and  2001,  respectively.   Franchise
agreements  made in the course of these  businesses  are generally for a term of
five years.  ServiceMaster renews the majority of its franchise agreements prior
to their expiration.


SALE OF REMAINING EUROPEAN PEST CONTROL OPERATIONS

     In September 2002,  ServiceMaster  sold the stock of its remaining Terminix
European pest control and property services subsidiaries to Ecolab Inc. The sale
included operations in the United Kingdom and the Republic of Ireland.


COMPETITION

     The following information is based on estimates,  which cannot be verified,
made by  ServiceMaster's  management.  ServiceMaster  competes  with many  other
companies in the sale of its services,  franchises  and products.  Some of these
competitors  are larger or have greater  financial and  marketing  strength than
ServiceMaster.   The  principal   methods  of  competition  in   ServiceMaster's
businesses include quality of service, name recognition,  pricing,  assurance of
customer satisfaction and reputation.

                                TruGreen Segment

     Lawn Care  Services.  Competition  in the market for lawn care  services is
strong, coming mainly from local,  independently owned firms and from homeowners
who care for their own lawns.

     Landscape  Maintenance  Services.  Competition  in the market for landscape
maintenance  services  is  strong,  coming  mainly  from  small,  owner-operated
companies operating in a limited geographic market and, to a lesser degree, from
a few large companies  operating in multiple  markets,  and from property owners
who perform their own landscaping services.

                                Terminix Segment

     Termite and Pest Control  Services.  Competition  in the market for termite
and pest control  services is strong,  coming mainly from  thousands of regional
and local,  independently  owned  firms,  from  homeowners  who treat  their own
termite  and pest  control  problems  and from one  other  large  company  which
operates on a national basis.

                          American Home Shield Segment

     Home  Service  Contracts  for Systems and  Appliances.  Competition  in the
market for home service  contracts for systems and appliances is strong,  coming
mainly from regional providers of home warranties. American Home Shield competes
with these companies for access to real estate brokers,  financial  institutions
and insurance agents that distribute its home service contracts.

     Home  Inspection  Services.  Competition in the market for home  inspection
services is strong,  coming mainly from regional and local,  independently owned
firms.


                                       5
<PAGE>


      American Residential Services and American Mechanical Services Segment

     Electrical, Heating, Ventilation and Air Conditioning Services. Competition
in the market for electrical, heating, ventilation and air conditioning services
is strong,  coming mainly from local,  independently  owned firms throughout the
United States and a few national companies.

     Plumbing  and  Drain  Cleaning  Services.  Competition  in the  market  for
plumbing  and drain  cleaning  services  is strong,  coming  mainly  from local,
independently owned firms throughout the United States and one national company.
Other Operations Segment

     Disaster  Restoration and Cleaning Services.  Competition in the market for
disaster restoration and cleaning services is strong,  coming mainly from local,
independently owned firms and a few national companies.

     House  Cleaning  Services.  Competition  in the market  for house  cleaning
services is strong,  coming mainly from local,  independently  owned firms and a
few national companies.

     Furniture Repair  Services.  Competition in the market for furniture repair
services is strong, coming mainly from local, independent contractors.


MAJOR CUSTOMERS

     ServiceMaster has no single customer that accounts for more than 10% of its
operating revenue. Additionally, no operating segment has a 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 material adverse effect on ServiceMaster's  financial  condition or
results of operations.


REGULATORY COMPLIANCE

     Government Regulations.  ServiceMaster's  operating segments are subject to
various  federal,  state and local laws and  regulations,  compliance with which
could reduce  ServiceMaster's  profitability or limit ServiceMaster's  growth by
increasing  operating  costs,  limiting or restricting the services  provided by
ServiceMaster  or the methods by which  ServiceMaster  sells  those  services or
conducts  its  business,  or  subjecting  ServiceMaster  to the  possibility  of
regulatory actions or proceedings.

     These federal and state laws include laws  relating to consumer  protection
matters,  permit and license  requirements,  workers'  safety (the  Occupational
Safety and Health Act) and employee  benefits (the  Consolidated  Omnibus Budget
Reconciliation  Act of 1985 and the Employee  Retirement  Income Security Act of
1974).  Each operating  segment must also meet the Department of  Transportation
and Federal Motor Carrier Safety Administration requirements with respect to its
fleet of vehicles,  and American  Home Shield and AmeriSpec are regulated by the
Department of Insurance in certain  states.  In addition,  the Health  Insurance
Portability and Accountability Act of 1996, which becomes effective on April 14,
2003,  will  restrict  the manner in which  ServiceMaster  operates  some of its
employee benefit plans.

     Consumer Protection and Telemarketing Matters.  ServiceMaster is subject to
numerous federal and state laws and regulations  designed to protect  consumers,
including laws governing  consumer  privacy,  the collection and use of consumer
data and telemarketing.  Noncompliance with such laws or regulations can subject
ServiceMaster to fines or various forms of civil or criminal prosecution, any of
which could have an adverse  effect on its  financial  condition  and results of
operations.

     At the federal level, the Federal Telephone Consumer Protection Act and the
Federal  Telemarketing  Sales  Rule  govern   ServiceMaster's   telephone  sales
practices.  At the state  level,  there are numerous  statutes  and  regulations
targeted at direct telephone sales activities.  For example, a growing number of
states have created

                                       6
<PAGE>

statewide  "do-not-call"  registries,  which prohibit telephone contact of those
registered  with the state.  The  implementation  of do-not-call  lists requires
ServiceMaster's  operating  segments to seek  additional  channels from which to
market and to solicit new customers.

     Franchise Matters. TruGreen ChemLawn, Terminix,  ServiceMaster Clean, Merry
Maids,  AmeriSpec,  and Furniture Medic are subject to various federal and state
franchising  laws and  regulations  governing  franchise sales and marketing and
franchise trade  practices,  including  applicable  rules and regulations of the
Federal  Trade  Commission.   These  laws  and  regulations   generally  require
disclosure of business  information  in connection  with the sale of franchises.
Certain state regulations also affect the ability of the franchisor to revoke or
refuse to renew a franchise.  ServiceMaster deals with franchisees in good faith
and  seeks  to  comply  with  regulatory   requirements.   From  time  to  time,
ServiceMaster  and one or more  franchisees  may  become  involved  in a dispute
regarding the franchise relationship,  including, among other things, payment of
royalties, location of stores, advertising, purchase of products by franchisees,
compliance with  ServiceMaster  standards and franchise renewal criteria.  There
can be no assurance that compliance  problems will not be encountered  from time
to time, or that material disputes with one or more franchisees will not arise.

     Environmental  Matters.  ServiceMaster's  businesses are subject to various
federal,  state and local laws and regulations regarding  environmental matters.
Terminix is regulated under many federal and state environmental laws, including
the  Federal  Environmental  Pesticide  Control  Act of  1972  and  the  Federal
Insecticide,  Fungicide  and  Rodenticide  Act of 1947.  TruGreen  ChemLawn  and
TruGreen LandCare are also regulated under many federal and state  environmental
laws,  including the  Comprehensive  Environmental  Response,  Compensation  and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
the Federal  Insecticide,  Fungicide and  Rodenticide  Act of 1947, the Resource
Conservation  and  Recovery  Act of 1976 and the Clean Water Act.  ServiceMaster
cannot  predict the effect on its  operations of possible  future  environmental
legislation  or  regulations.  During  2002,  there  were  no  material  capital
expenditures  for  environmental  control  facilities,   and  no  such  material
expenditures are anticipated in 2003.


EMPLOYEES

     On December 31, 2002,  ServiceMaster  had a total of  approximately  40,000
employees.


AVAILABLE INFORMATION

     ServiceMaster  maintains  an Internet  website at  http://www.svm.com  that
includes  a  hyperlink  to  a  website   maintained  by  a   third-party   where
ServiceMaster's  Annual  Report on Form  10-K,  Quarterly  Reports on Form 10-Q,
Current  Reports on Form 8-K and all  amendments  to those reports are available
without  charge as soon as reasonably  practicable  following the time that they
are filed with or furnished to the Securities and Exchange Commission.


ITEM 2.  PROPERTIES

BUSINESS SUPPORT CENTER

     In December  2002,  ServiceMaster  relocated  its Business  Support  Center
headquarters  to a new location  within Downers Grove,  Illinois.  ServiceMaster
leases approximately 66,000 square feet of office space to accommodate personnel
from the Business  Support  Center.  The lease  expires at the end of 2012,  but
ServiceMaster  has an option to  terminate  the lease  early  after five  years.
Additionally,  ServiceMaster  leases  warehouse  space in Naperville,  Illinois.
ServiceMaster  believes that this office facility and warehouse are suitable and
adequate  to  support  the  Business  Support  Center's  current  needs  in  the
Chicagoland area.


                                       7
<PAGE>


OPERATING SEGMENTS

     The  headquarters  for  TruGreen  ChemLawn,  TruGreen  LandCare,  Terminix,
American  Residential  Services and Rescue Rooter are located in leased premises
at  860  Ridge  Lake  Boulevard,   Memphis,   Tennessee.  The  headquarters  for
ServiceMaster  Clean,  Merry Maids,  Furniture  Medic,  American Home Shield and
AmeriSpec are located in leased premises at 889 Ridge Lake  Boulevard,  Memphis,
Tennessee.  The  headquarters  for American  Mechanical  Services are located in
leased  premises at 8039 Laurel Lake  Circle,  Laurel,  Maryland.  In  addition,
ServiceMaster  leases space for a call center located at 6399 Shelby View Drive,
Memphis,  Tennessee,  offices  located  at 850 and  855  Ridge  Lake  Boulevard,
Memphis, Tennessee, training facilities located at 1650 Shelby Oaks Drive North,
Memphis,  Tennessee  and 3839 Forest Hill Irene Road,  Memphis,  Tennessee and a
warehouse located at 1575 Two Place, Memphis, Tennessee.  ServiceMaster believes
that these headquarters,  call center facility, offices, training facilities and
warehouse  are  suitable  and  adequate  to  support  the  current  needs of its
operating segments in the Memphis and Laurel areas.

     ServiceMaster's  operating  companies 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.  ServiceMaster believes that these facilities,  when considered with
the  headquarters,  call  center  facility,  offices,  training  facilities  and
warehouses  described  above are  suitable  and  adequate to support the current
needs of its business.
<TABLE>

<CAPTION>
          Operating                             Owned            Leased           No. of
          Company                          Facilities        Facilities           States
          -------                          ----------        ----------           ------
          <S>                                      <C>              <C>               <C>
          TruGreen ChemLawn                         8               282               40
          TruGreen LandCare                         1               144               26
          Terminix                                 20               380               41
          American Residential Services             4                88               26
          American Mechanical Services              1                15                6
          American Home Shield                      1                 8                5
          ServiceMaster Clean                       0                 6                6
          Merry Maids                               0                58               25
</TABLE>

ITEM 3.  LEGAL PROCEEDINGS

     In the ordinary course of conducting its business activities, ServiceMaster
becomes  involved  in  judicial,   administrative  and  regulatory   proceedings
involving  both private  parties and  governmental  authorities.  As of March 1,
2003, these proceedings  included general and commercial liability actions and a
small number of environmental proceedings.  ServiceMaster does not expect any of
these  proceedings to have a material adverse effect on its financial  condition
or results of operations.

     In the fourth quarter of 2001,  ServiceMaster announced the sale of certain
subsidiaries  of its  Terminix  European  pest  control  and  property  services
operations.  In the fourth  quarter of 2002,  the  purchaser  made a claim for a
purchase price adjustment,  relating to an alleged breach of certain  conditions
in  the  purchase  agreement.  In  the  course  of  responding  to  that  claim,
ServiceMaster  discovered  that  personnel  of the  former  operations  had made
unsupported  monthly  adjustments to certain  accounts.  In recognition of these
facts, ServiceMaster agreed to an adjustment to the purchase price consisting of
an $8 million cash payment and the  cancellation of a previously  reserved note.
On  March  14,  2003,   ServiceMaster  contacted  the  Securities  and  Exchange
Commission  on  its  own  initiative  and  has  provided  the  Commission   with
information regarding the activities at the former subsidiary.


                                       8
<PAGE>


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During the fourth  quarter of the fiscal year covered by this Form 10-K, no
matters were submitted to a vote of security holders.


                                       9
<PAGE>

                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     ServiceMaster's common stock is traded on the New York Stock Exchange under
the symbol  "SVM." At March 28, 2003,  ServiceMaster's  common stock was held of
record  by   approximately   32,000   persons.   ServiceMaster   estimates  that
approximately  35,000  persons  held shares of its common  stock in the names of
nominees.

     The information contained in ServiceMaster's  Annual Report to Shareholders
for 2002 under the  captions  "Statements  of  Shareholders'  Equity"  and "Cash
Dividends Per Share" in the Quarterly Operating Results table is incorporated by
reference in this Form 10-K. The following table sets forth the quarterly prices
of   ServiceMaster's   common   stock,   as  reported  on  the  New  York  Stock
Exchange-Composite Transactions:
<TABLE>
<CAPTION>
                                    2002                            2001                            2000
<S>                         <C>            <C>             <C>             <C>             <C>             <C>
Price Per Share:             High            Low            High            Low             High            Low
First Quarter               $14.50         $13.16          $12.00          $ 9.95          $14.94          $10.69
Second Quarter               15.50          12.70           12.00            9.84           13.75           10.63
Third Quarter                13.63          10.30           12.84            9.95           11.50            8.38
Fourth Quarter               12.15           8.89           14.20           10.06           11.50            8.25

</TABLE>

ITEM 6.  SELECTED FINANCIAL DATA

     The information contained in ServiceMaster's  Annual Report to Shareholders
for 2002  under the  caption  "Five Year  Financial  Summary"  in the  Financial
Statements section is incorporated by reference in this Form 10-K.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The information contained in ServiceMaster's  Annual Report to Shareholders
for 2002 under the caption  "Management's  Discussion  and Analysis of Financial
Condition and Results of Operations" is  incorporated  by reference in this Form
10-K.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information contained in ServiceMaster's  Annual Report to Shareholders
for 2002 under the  caption  "Quantitative  and  Qualitative  Disclosures  about
Market Risk" is incorporated by reference in this Form 10-K.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Consolidated  Statements of Financial  Position as of December 31, 2002
and 2001, the Consolidated  Statements of Income,  Cash Flows and  Shareholders'
Equity for the years ended December 31, 2002, 2001 and 2000 and the Notes to the
Consolidated  Financial Statements contained in ServiceMaster's Annual Report to
Shareholders  for 2002 are  incorporated  by  reference  in this Form 10-K.  The
report of  Deloitte  & Touche  LLP  dated  March  26,  2003 on the  Consolidated
Financial Statements contained in ServiceMaster's  Annual Report to Shareholders
for 2002 are also incorporated by reference in this Form 10-K.



                                       10
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     On May 20, 2002, ServiceMaster, with the approval of the Board of Directors
and its  Audit and  Finance  Committee,  dismissed  Arthur  Andersen  LLP as its
independent  auditors and engaged  Deloitte & Touche LLP as its new  independent
auditors. The appointment of Deloitte & Touche became effective on May 22, 2002.
During the two fiscal years ended  December  31, 2001 and 2000,  and the interim
period  subsequent to December 31, 2001, and through May 20, 2002, there were no
disagreements  between  ServiceMaster  and  Arthur  Andersen  on any  matter  of
accounting  principles or practices,  financial statement disclosure or auditing
scope or procedure,  which, if not resolved to Arthur  Andersen's  satisfaction,
would have caused  Arthur  Andersen to make  reference to the subject  matter in
connection with its reports on ServiceMaster's consolidated financial statements
for such  periods.  Arthur  Andersen's  report on  ServiceMaster's  consolidated
financial  statements  for the years  ended  December  31, 2001 and 2000 did not
contain an adverse  opinion or a disclaimer of opinion,  nor was it qualified or
modified as to  uncertainty,  audit scope or accounting  principles.  During the
years ended  December 31, 2001 and 2000,  and the interim period from January 1,
2002 through May 20, 2002,  there were no reportable  events as described  under
Item  304(a)(1)(v)  of Regulation  S-K. During the years ended December 31, 2001
and 2000, and through May 20, 2002,  ServiceMaster did not consult with Deloitte
& Touche with respect to the application of accounting principles to a specified
transaction,  either completed or proposed, the type of audit opinion that might
be rendered on ServiceMaster's  consolidated financial statements, or any matter
that was the subject of a disagreement  or a reportable  event,  as described in
Items 304(a)(2)(i) and (ii) of Regulation S-K.




                                       11
<PAGE>


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


DIRECTORS

     The information  contained in ServiceMaster's  Proxy Statement for the 2003
Annual  Meeting  of  Shareholders  under  the  heading  "Item  1 -  Election  of
Directors" is incorporated by reference in this Form 10-K.


EXECUTIVE OFFICERS OF SERVICEMASTER

     The  following  table shows (i) the names and ages (as of March 1, 2003) of
ServiceMaster's  executive  officers,  (ii) all positions presently held by each
executive  officer,  and  (iii)  the year  each  person  became  an  officer  of
ServiceMaster.  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>
Jonathan P. Ward           48       Chairman and Chief Executive Officer                                       2001

Ernest J. Mrozek           49       President and Chief Operating Officer                                      1987

Steven C. Preston          42       Executive Vice President and Chief Financial Officer                       1997

Steven B. Bono             50       Senior Vice President, Corporate Communications                            2001

Mitchell T. Engel          50       Chief Marketing Officer                                                    2002

James A. Goetz             45       Senior Vice President and Chief Information Officer                        2000

Jim L. Kaput               42       Senior Vice President and General Counsel                                  2000

Elizabeth L. Reeves        49       Senior Vice President for People                                           2002
</TABLE>

     Mr. Ward is also a director of ServiceMaster.  For biographical information
with  respect  to  Mr.  Ward,   see  "Item  1  -  Election  of   Directors"   in
ServiceMaster's Proxy Statement for the 2003 Annual Meeting of Shareholders.

     Ernest J. Mrozek,  age 49, is President  and Chief  Operating  Officer.  He
served as  President of  ServiceMaster  Consumer and  Commercial  Services  from
November  1998 to April 2002.  From  January  1997 to October  1998 he served as
President and Chief Operating Officer, ServiceMaster Consumer Services.

     Steven C. Preston, age 42, 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.

     Steven B.  Bono,  age 50, has served as Senior  Vice  President,  Corporate
Communications since July 2001. He was on sabbatical from May 2000 to July 2001.
Mr.  Bono  served as Vice  President,  Communications  Strategy  of Jack  Morton
Worldwide in Chicago,  Illinois from  September  1997 to May 2000.  From January
1997 to August 1997, he served as Vice President, Strategic Executive Engagement
of American Telephone & Telegraph Company in Basking Ridge, New Jersey.

                                       12
<PAGE>

     Mitchell  T.  Engel,  age 50,  is Chief  Marketing  Officer.  He  served as
Principal  of Engel  Marketing  Services  from  April 1998 to April  2002.  From
January 1996 to March 1998 he was President,  Corporate  Operations & Associated
Communication Companies, True North Communications.

     James A. Goetz,  age 45, is Senior  Vice  President  and Chief  Information
Officer.  He served  as Chief  Information  Officer  of The  ServiceMaster  Home
Service Center L.L.C.  from September 2000 to January 2002. From January 1999 to
August 2000, he was Director of Internet  Services at IBM Global Services.  From
May 1996 to December 1998, he was Director of Internet  Partnering at IBM Global
Network.

     Jim L. Kaput,  age 42, 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.

     Elizabeth  L.  Reeves,  age 49, is Senior Vice  President  for People.  She
served as Executive  Vice  President of Global  Human  Resources  for Bcom3 from
October 2000 to September  2002. From March 1997 to September 2000 she was Group
Vice President, Human Resources for CNA.


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     The information  contained in ServiceMaster's  Proxy Statement for the 2003
Annual  Meeting of  Shareholders  under the heading  "Section  16(a)  Beneficial
Ownership Reporting Compliance" is incorporated by reference in this Form 10-K.


ITEM 11.  EXECUTIVE COMPENSATION

     The information  contained in ServiceMaster's  Proxy Statement for the 2003
Annual Meeting of Shareholders  under the headings  "Compensation of Directors,"
"Executive  Compensation"  and  "Agreements  with  Officers  and  Directors"  is
incorporated by reference in this Form 10-K.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

     The information  contained in ServiceMaster's  Proxy Statement for the 2003
Annual  Meeting of  Shareholders  under the  headings  "Ownership  of Our Common
Stock" and "Equity  Compensation  Plan Information" is incorporated by reference
in this Form 10-K.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  contained in ServiceMaster's  Proxy Statement for the 2003
Annual  Meeting of  Shareholders  under the heading  "Certain  Transactions"  is
incorporated by reference in this Form 10-K.


ITEM 14.   CONTROLS AND PROCEDURES

     ServiceMaster's Chairman and Chief Executive Officer, Jonathan P. Ward, and
ServiceMaster's  Chief  Financial  Officer,  Steven C. Preston,  have  evaluated
ServiceMaster's  disclosure controls and procedures within 90 days of the filing
of this report.

     Messrs.  Ward and Preston have  concluded that  ServiceMaster's  disclosure
controls and procedures provide reasonable assurance that ServiceMaster can meet
its disclosure obligations.  ServiceMaster's  disclosure controls and procedures
are  based  on a  roll-up  of  financial  and  non-financial  reporting  that is
consolidated  in the  principal


                                       13
<PAGE>

executive  office of  ServiceMaster  in Downers Grove,  Illinois.  The reporting
process is designed  to ensure that  information  required  to be  disclosed  by
ServiceMaster  in the reports that it files or submits with the  Securities  and
Exchange Commission is recorded,  processed,  summarized and reported within the
time periods  specified in the  Securities and Exchange  Commission's  rules and
forms.

     There have been no significant changes in ServiceMaster's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.




                                       14
<PAGE>




                                     PART IV

ITEM 15.  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 ServiceMaster's
                  Annual Report to Shareholders for 2002 and are incorporated by
                  reference in Part II, Item 8 of this Form 10-K:


                           Report of Independent Auditors

                           Consolidated  Statements  of Income for the three
                           years ended  December 31, 2002, 2001 (as restated)
                           and 2000 (as restated)

                           Consolidated Statements of Financial Position as of
                           December 31, 2002 and 2001 (as restated)

                           Consolidated Statements of Cash Flows for the three
                           years ended December 31, 2002, 2001 (as restated)
                           and 2000 (as restated)

                           Consolidated Statements of Shareholders' Equity for
                           the three years ended December 31, 2002, 2001 (as
                           restated) and 2000 (as restated)

                           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 Form 10-K:

                           Schedule II--Valuation and Qualifying Accounts

                           Independent Auditors' Report on Schedule

                           Exhibit 23--Independent Auditors' Consent

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

         3.  Exhibits

     The  exhibits  filed  with  this  report  are  listed on pages  23-26  (the
"Exhibits  Index").  Entries marked by an asterisk next to the exhibit's  number
identify management  contracts or compensatory plans,  contracts or arrangements
in  which  a  director  or  any  of  ServiceMaster's  executive  officers  to be
identified in the summary  compensation table included in ServiceMaster's  Proxy
Statement  for  the  2003  Annual  Meeting  of   Shareholders


                                       15
<PAGE>

participates or compensatory  plans,  contracts or arrangements  adopted without
approval of security  holders pursuant to which  ServiceMaster  may award equity
and in which any ServiceMaster employee currently participates.


(b) Reports on Form 8-K.

         No reports on Form 8-K were filed during the fourth quarter of the
         fiscal year covered by this Form 10-K.



                                       16
<PAGE>




                                   SCHEDULE II
                            THE SERVICEMASTER COMPANY
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                           Additions
                                                          Balance at       Charged to
                                                          Beginning of     Costs and                                 Balance
                                                           Period           Expenses           Deductions (1)     End of Period
                                                       --------------    --------------    -------------------------------------
<S>                                                           <C>               <C>                 <C>                  <C>
AS OF DECEMBER 31, 2002:
Continuing Operations -
    Allowance for doubtful accounts
        Accounts receivable (current)                         26,313            40,560               42,397              24,476
        Notes receivable (current)                             2,084             1,056                    -               3,140

Reserves related to strategic actions in the fourth
    quarter of 2001 (2)                                       36,000            (5,600)              14,900              15,500


Remaining Liabilities from Discontinued Operations (3)
    LandCare Construction                                     34,100             2,600               22,700              14,000
    Certified Systems, Inc.                                   23,800             3,500               13,700              13,600
    Management Services                                        7,400            (4,500)               1,300               1,600
    International businesses (4)                              19,600            21,900               20,100              21,400
    Other                                                     16,100               600                6,300              10,400

AS OF DECEMBER 31, 2001:
Continuing Operations -
    Allowance for doubtful accounts
        Accounts receivable (current)                         29,349            32,523               35,559              26,313
        Notes receivable (current)                             1,691               516                  123               2,084

Reserves related to strategic actions in the fourth
    quarter of 2001 (2)                                            -            40,000                4,000              36,000

Remaining Liabilities from Discontinued Operations (3)
    LandCare Construction                                      5,200            32,200                3,300              34,100
    Certified Systems, Inc.                                   12,600            13,000                1,800              23,800
    Management Services                                            -            22,700               15,300               7,400
    Other                                                        800            15,300                    -              16,100

AS OF DECEMBER 31, 2000:
Continuing Operations -
    Allowance for doubtful accounts
        Accounts receivable (current)                         31,457            32,184               34,292              29,349
        Notes receivable (current)                             1,417               755                  481               1,691

</TABLE>

(1)     Deductions in the allowance for doubtful accounts and notes receivable
        reflect write-offs of uncollectible accounts Deductions for the
        remaining items reflect cash payments, except for the items noted in
        (4).

(2)     Includes accruals for residual value guarantees on leased properties,
        severance for former executives and terminated employees, and
        transaction and other costs.

(3)     The beginning balance represents the liabilities of the discontinued
        operations that existed prior to the recording in the fourth quarter of
        2001 of the costs related to exiting these operations and the reserves
        for items recorded in the fourth quarter of 2001. Additions reflect the
        costs recorded related to exiting these operations.

(4)     The liabilities of this business assumed by the buyer of the sold
        operations totaled $19.6 million. The Company recorded accruals in
        connection with the 2002 sold operations and a cash adjustment to the
        purchase price of the 2001 disposition.



                                       17
<PAGE>


                         INDEPENDENT AUDITORS' REPORT



To the Shareholders of The ServiceMaster Company:

We have  audited the  consolidated  financial  statements  of The  ServiceMaster
Company as of December 31, 2002 and 2001, and for each of the three years in the
period ended  December 31, 2002,  and have issued our report thereon dated March
26, 2003;  such  financial  statements  and report  (which  report  expresses an
unqualified  opinion  and  includes  explanatory   paragraphs  relating  to  the
restatement of the Company's financial  statements and the adoption of Statement
of Financial Accounting Standards No. 142, Goodwill and Other intangible Assets)
are included in The  ServiceMaster  Company's 2002 Annual Report to Shareholders
and  are  incorporated  herein  by  reference.  Our  audits  also  included  the
consolidated financial statement schedule of The ServiceMaster  Company,  listed
in Item 15.  This  financial  statement  schedule is the  responsibility  of the
Company's  management.  Our responsibility is to express an opinion based on our
audits. In our opinion,  such financial statement  schedule,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly, in all material respects, the information set forth therein.


/s/ Deloitte & Touche LLP
Chicago, Illinois
March 31, 2003









                                       18
<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





Date: March 31, 2003                 By   /s/ JONATHAN P. WARD
                                     -------------------------------
                                     Jonathan P. Ward
                                     Chairman 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.
<TABLE>
<CAPTION>

         Signature                               Title                                  Date
         ---------                               -----                                  ----
<S>                                     <C>                                         <C>
/s/ JONATHAN P. WARD                    Chairman and Chief Executive                March 31, 2003
----------------------                  Officer and Director
   Jonathan P. Ward


/s/ STEVEN C. PRESTON                   Executive Vice President and                March 31, 2003
----------------------                  Chief Financial Officer (Principal
   Steven C. Preston                    Financial Officer and Principal
                                        Accounting Officer)



/s/ PAUL W. BEREZNY, JR.                    Director                                March 14, 2003
---------------------------
   Paul W. Berezny, Jr.


/s/ BRIAN GRIFFITHS                         Director                                March 14, 2003
---------------------------
   Brian Griffiths


/s/ SIDNEY E. HARRIS                        Director                                March 14, 2003
---------------------------
   Sidney E. Harris


/s/ ROBERTO R. HERENCIA                     Director                                March 14, 2003
---------------------------
  Roberto R. Herencia


/s/ HERBERT P. HESS                         Director                                March 14, 2003
---------------------------
   Herbert P. Hess


                                            Director
---------------------------
   Michelle M. Hunt


                                       19
<PAGE>

/s/ JAMES D. McLENNAN                       Director                                March 14, 2003
----------------------
   James D. McLennan

/s/ DALLEN W. PETERSON                      Director                                March 14, 2003
---------------------------
   Dallen W. Peterson


/s/ BETTY JANE SCHEIHING                    Director                                March 14, 2003
------------------------
  Betty Jane Scheihing


/s/ DONALD G. SODERQUIST                    Director                                March 28, 2003
------------------------
   Donald G. Soderquist


/s/ DAVID K. WESSNER                        Director                                March 14, 2003
---------------------------
   David K. Wessner

</TABLE>


                                       20
<PAGE>




                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jonathan P. Ward, certify that:

1. I have reviewed this annual report on Form 10-K of The ServiceMaster Company;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  March 31, 2003

                                       /s/ Jonathan P. Ward
                                       --------------------
                                       Jonathan P. Ward
                                       Chairman and Chief Executive Officer


                                       21
<PAGE>

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Steven C. Preston, certify that:

1. I have reviewed this annual report on Form 10-K of The ServiceMaster Company;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  March 31, 2003

                            /s/ Steven C. Preston
                            ---------------------
                            Steven C. Preston
                            Executive Vice President and Chief Financial Officer





                                       22
<PAGE>




                                 Exhibits Index

Exhibit 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 registrant's Current Report on Form 8-K, No. 2 dated
         February 26, 1998 (File No. 1-14762) (the "1998 8-K, No. 2").

3(ii)    Bylaws of The ServiceMaster Company, as amended through April 26, 2002,
         are incorporated by reference to Exhibit 3(ii) to the registrant's
         Quarterly Report on Form 10-Q for the quarter ended March 31, 2002
         (File No. 1-14762) (the "2002 10-Q").

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 registrant's 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
         registrant's 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 registrant's
         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
         registrant's 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 registrant's
         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 registrant's
         Registration Statement on Form S-3 (File No. 333-91381), filed on
         November 19, 1999 (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 registrant's Quarterly
         Report on Form 10-Q for the quarter ended March 31, 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.


                                       23
<PAGE>

                                 Exhibits Index

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

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     $490,000,000 Credit Agreement dated as of December 12, 2001 among The
         ServiceMaster Company, the Lenders, JPMorgan Chase Bank, Bank of
         America, Bank One N.A., First Union National Bank and SunTrust Bank is
         incorporated by reference to Exhibit 4.16 to the registrant's Annual
         Report on Form 10-K for the year ended December 31, 2001 (File No.
         1-14762) (the "2001 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*    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").

10.3*    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.

10.4*    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), filed on
         October 4, 1994 (the "1994 S-8").

10.5*    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.

10.6*    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").

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

10.8*    1998 Equity Incentive Plan is incorporated by reference to Exhibit
         10.15 to the 1997 10-K.

10.9*    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.

10.10*   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.

10.11*   1998 Non-Employee Directors Discounted Stock Option Plan is
         incorporated by reference to Exhibit 10.21 to the 1997 10-K.

10.12*   1998 Long-Term Performance Award Plan is incorporated by reference to
         Exhibit 10.22 to the 1997 10-K.

10.13*   2000 Equity Incentive Plan is incorporated by reference to Exhibit 4.4
         to the registrant's Registration Statement on Form S-8 (File No.
         333-42680), filed on July 31, 2000 (the "2000 S-8").

10.14*   Form of Option Agreement for the 2000 Equity Incentive Plan is
         incorporated by reference to Exhibit 10.17 to the 2001 10-K.

                                       24
<PAGE>

                                Exhibits Index

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

10.15*   Employment Agreement dated as of January 9, 2001 between The
         ServiceMaster Company and Jonathan P. Ward is incorporated by reference
         to Exhibit 10.19 to the Annual Report on Form 10-K for the year ended
         December 31, 2000 (File No. 1-14762) (the "2000 10-K").

10.16*   Stock Option Agreement dated as of January 9, 2001 between The
         ServiceMaster Company and Jonathan P. Ward is incorporated by reference
         to Exhibit 10.20 to the 2000 10-K.

10.17*   WeServeHomes.com 2000 Stock Option/Stock Issuance Plan is incorporated
         by reference to Exhibit 10.21 to the 2000 10-K.

10.18*   Form of Stock Option Agreement for the WeServeHomes.com 2000 Stock
         Option/Stock Issuance Plan is incorporated by reference to Exhibit
         10.22 to the 2000 10-K.

10.19*   Form of Stock Purchase Agreement for the WeServeHomes.com 2000 Stock
         Option/Stock Issuance Plan is incorporated by reference to Exhibit
         10.23 to the 2000 10-K.

10.20*+  2001 Directors Stock Plan, as amended and restated effective January
         24, 2003.

10.21*   Form of Option Agreement for the 2001 Directors Stock Plan is
         incorporated by reference to Exhibit 4.4 to the registrant's
         Registration Statement on Form S-8 (File No. 333-65520), filed on July
         20, 2001.

10.22*   Letter Agreement dated as of June 1, 2001 between The ServiceMaster
         Company and Carlos Cantu is incorporated by reference to Exhibit 10.1
         to the registrant's Quarterly Report on Form 10-Q for the quarter ended
         June 30, 2001 (File No. 1-14762).

10.23*   Letter Agreement dated as of March 21, 2002 between The ServiceMaster
         Company and C. William Pollard is incorporated by reference to Exhibit
         10.27 to the 2001 10-K.

10.24*   Employment Agreement dated as of April 18, 2002 between The
         ServiceMaster Company and Phillip B. Rooney is incorporated by
         reference to Exhibit 10.1 to the 2002 10-Q.

10.25*+  Employment Agreement dated as of April 1, 2002 between The
         ServiceMaster Company and Mitchell T. Engel.

10.26*   2001 Long-Term Performance Award Plan, as amended March 16, 2001, is
         incorporated by reference to Exhibit 10.2 to the registrant's Quarterly
         Report on Form 10-Q for the quarter ended March 31, 2001 (File No.
         1-14762).

10.27*   Form of Change in Control Severance Agreement is incorporated by
         reference to Exhibit 10.30 to the 2001 10-K.

10.28*   Form of Restricted Stock Award Agreement for the 2000 Equity Incentive
         Plan is incorporated by reference to Exhibit 10.31 to the 2001 10-K.

10.29*+  ServiceMaster Deferred Compensation Plan, as amended and restated
         effective October 24, 2002.

10.30*   Form of 5.50% Convertible Debenture due January 9, 2011 issued to
         Jonathan P. Ward is incorporated by reference to Exhibit 10.33 to the
         2001 10-K.

10.31*   Form of 5.50% Note due January 9, 2011 issued to Jonathan P. Ward is
         incorporated by reference to Exhibit 10.34 to the 2001 10-K.


                                       25
<PAGE>

                                Exhibits Index

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

10.32*   Form of 5.50% Convertible Debenture due May 10, 2011 issued to Jonathan
         P. Ward is incorporated by reference to Exhibit 10.35 to the 2001 10-K.

10.33*   Form of 5.50% Note due May 10, 2011 issued to Jonathan P. Ward is
         incorporated by reference to Exhibit 10.36 to the 2001 10-K.

10.34*   ServiceMaster Employee Share Purchase Plan, as amended and restated
         effective October 4, 2001, is incorporated by reference to Exhibit
         10.37 to the 2001 10-K.

10.35*+  2002 Directors Deferred Fees Plan effective October 25, 2002.

13+      Annual Report to Shareholders for the year ended December 31, 2002 (the
         "2002 Annual Report"). The parts of the 2002 Annual Report which are
         expressly incorporated into this report by reference shall be deemed
         filed with this report. All other parts of the 2002 Annual Report are
         furnished for the information of the Securities and Exchange Commission
         and are not filed with this report.

21+      Subsidiaries of ServiceMaster.

23+      Consent of Deloitte & Touche LLP.

99.1+    Certification of Chief Executive Officer.

99.2+    Certification of Chief Financial Officer.

99.3+    Statement on Scope and Organization of the Board of Directors of The
         ServiceMaster Company dated March 8, 2002.

99.4+    Charter and Operating Guidelines of the Audit and Finance Committee
         (Audit Capacity) dated as of July 19, 2002.

99.5+    Charter and Operating Guidelines of the Audit and Finance Committee
         (Finance Capacity) dated as of July 19, 2002.

99.6+    Charter and Operating Guidelines of the Compensation and Leadership
         Development Committee dated as of July 19, 2002.

99.7+    Charter and Operating Guidelines of the Governance and Nominating
         Committee dated as of July 19, 2002.
----------------

* Indicates compensatory plan, contract, or arrangement.

+  Filed herewith.


                                       26
<PAGE>

                                  EXHIBIT 21




                    SUBSIDIARIES OF THE SERVICEMASTER COMPANY

As of March 1, 2003, ServiceMaster had the following subsidiaries:
<TABLE>
<CAPTION>

                                                                                                   State or Country
                                                                                                        of
                                                                                                     Incorporation
Subsidiary                                                                                          or Organization
----------                                                                                          ---------------
<S>                                                                                                  <C>
ServiceMaster Consumer Services Limited Partnership........................................................Delaware
ServiceMaster Consumer Services, Inc.  ....................................................................Delaware
TruGreen Limited Partnership...............................................................................Delaware
TruGreen, Inc.  ...........................................................................................Delaware
Barefoot Grass Canada, Inc.  ..............................................................................Delaware
TruGreen LandCare L.L.C. 1.................................................................................Delaware
TruGreen Companies L.L.C...................................................................................Delaware
The Terminix International Company Limited Partnership.....................................................Delaware
Terminix International, Inc.  .............................................................................Delaware
ServiceMaster Residential/Commercial Services Limited Partnership..........................................Delaware
SM Clean L.L.C.............................................................................................Delaware
Merry Maids Limited Partnership............................................................................Delaware
MM Maids L.L.C.............................................................................................Delaware
American Home Shield Corporation 2.........................................................................Delaware
AmeriSpec, Inc.  ..........................................................................................Delaware
Furniture Medic Limited Partnership........................................................................Delaware
FM Medic L.L.C.............................................................................................Delaware
American Residential Services Holding L.L.C. 3.............................................................Delaware
ServiceMaster Aviation L.L.C...............................................................................Illinois
The ServiceMaster Acceptance Company Limited Partnership...................................................Delaware
ServiceMaster Acceptance Corporation.......................................................................Delaware
ServiceMaster Holding Corporation..........................................................................Delaware
ServiceMaster BSC L.L.C....................................................................................Delaware
ServiceMaster Funding Company L.L.C........................................................................Delaware
ServiceMaster Management Corporation.......................................................................Delaware
Steward Insurance Company...................................................................................Vermont
ServiceMaster Limited................................................................................United Kingdom
The ServiceMaster Home Service Center L.L.C................................................................Delaware

</TABLE>



--------
1 .......TruGreen LandCare L.L.C. has 12 subsidiaries.

2 .......American Home Shield Corporation has 15 subsidiaries, including
         AmeriSpec, Inc.

3 .......American Residential Services Holding L.L.C. has 22 subsidiaries.




                                        1
<PAGE>

                                   EXHIBIT 23

                         INDEPENDENT AUDITORS' CONSENT


     We consent to the incorporation by reference in registration Statement Nos.
333-81670,  333-73764,  333-65520,  333-53142,  333-50886, 333-42680, 333-33580,
333-78239, 333-74781, 033-55761 on Form S-8 and No. 333-91381 on Form S-3 of The
ServiceMaster Company of our report dated March 26, 2003 (which report expresses
an  unqualified  opinion and  includes  explanatory  paragraphs  relating to the
restatement of the Company's  financial  statements and adoption of Statement of
Financial  Accounting  Standards No. 142, Goodwill and Other Intangible Assets),
appearing in and incorporated by reference in this Annual Report on Form 10-K of
The ServiceMaster Company for the year ended December 31, 2002.


/s/ Deloitte & Touche LLP
Chicago, Illinois
March 31, 2003























                                       2
<PAGE>