<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
___X___ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
______ TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 {NO FEE REQUIRED}
For the transition period from ______ to ______
Commission file number 001-09378
---------
ServiceMaster Employee Share Purchase Plan
ServiceMaster Limited Partnership
One ServiceMaster Way
Downers Grove, Illinois 60515
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Committee and the Trustees have duly caused
this annual report to be signed by the undersigned thereunto
duly authorized.
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
By: s/S.D. KRAUSE
-------------------
S.D. Krause,
Administrative Committee Member
By: s/L.E. MALMQUIST
-------------------
L.E. Malmquist,
Administrative Committee Member
Date: March 28, 1996
2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
ServiceMaster Employee Share Purchase Plan:
We have audited the accompanying statements of net assets of
the ServiceMaster Employee Share Purchase Plan as of
December 31, 1995 and 1994, and the related statements of
changes in net assets for each of the three years in the
period ended December 31, 1995. These financial statements
are the responsibility of the Plan's Administrative
Committee. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets of
the Plan as of December 31, 1995 and 1994 and the changes
in net assets for each of the three years in the period
ended December 31, 1995 in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 28, 1996
3
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF NET ASSETS
As of December 31,
----------------------
1995 1994
---------- ---------
<S> <C> <C>
ASSETS:
Cash $ 306,912 $ -
Due from ServiceMaster 375,480 513,635
---------- ---------
NET ASSETS AVAILABLE $ 682,392 $ 513,635
========== =========
</TABLE>
The accompanying Notes to Financial Statements
are an integral part of these statements.
4
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31,
------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
TOTAL PLAN ASSETS AVAILABLE,
BEGINNING OF PERIOD $ 513,635 $2,240,440 $1,411,961
Additions:
Participant contributions - Note 3 5,448,271 5,522,397 5,004,160
ServiceMaster contributions 818,787 821,316 740,230
---------- ---------- ----------
Total Additions 6,267,058 6,343,713 5,744,390
---------- ---------- ----------
Deductions:
Shares issued to participants 6,098,301 8,066,934 4,905,949
Payments to terminated
participants - 3,584 9,962
---------- ---------- ----------
Total Deductions 6,098,301 8,070,518 4,915,911
---------- ---------- ----------
TOTAL PLAN ASSETS AVAILABLE,
END OF PERIOD $ 682,392 $ 513,635 $2,240,440
========== ========== ==========
</TABLE>
The accompanying Notes to Financial Statements
are an integral part of these statements.
5
<PAGE>
SERVICEMASTER EMPLOYEE SHARE PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. The Plan
The ServiceMaster Employee Share Purchase Plan ("the
Plan") was created to give eligible employees, wishing to
do so, a convenient means of purchasing ServiceMaster
Limited Partnership Shares through payroll deductions and
cash contributions, supplemented by contributions made by
ServiceMaster. Employees of ServiceMaster Limited
Partnership or any subsidiary or affiliate which has
adopted the Plan on behalf of its employees who regularly
work nine months or more during the year, who have an
average work week of 32 hours or more during the period
worked and who have attained age 18 are eligible to
participate in the Plan on the first business day of the
calendar quarter coinciding with or subsequent to the
first anniversary of their employment. As of December
31, 1995, 5,470 employees were participating in the Plan.
Details relating to shares issued by the Plan from
inception (July 1, 1972) through December 31, 1995, are
as follows:
<TABLE>
<CAPTION>
Number
of Shares Total Cost
----------- ------------
<S> <C> <C>
Issued during the year ended
December 31, 1995 to participants 240,425 $ 6,098,301
Issued from inception through
December 31, 1994 8,133,794 56,083,080
------------ ------------
Total issued from inception through
December 31, 1995 8,374,219 $ 62,181,381
============ ============
</TABLE>
Effective July 1, 1994, an administrator (Harris Bank),
instead of the Plan, purchases and allocates the shares
to the participants. Due to this change, the Plan no
longer maintains cash or share investments on behalf of
the participants. Shares are issued at the same price
they were purchased and are held by the Administrator in
an account on behalf of the individual participant. The
participant may request deliverance of the shares, and
earnings thereon, directly from the administrator at any
time.
2.Summary of Significant Accounting Policies
(a) The transactions of the Plan are accounted for
on the accrual basis of accounting.
(b) Expenses incurred by the Plan are paid by
ServiceMaster.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
3.Contributions
The amounts contributed by the participants and
ServiceMaster during 1995, 1994, and 1993 were as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
Contributed by Contributed by Contributed by
----------------------------- ----------------------------- ----------------------------
Participants ServiceMaster Participants ServiceMaster Participants ServiceMaster
------------ ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Participant contributions
and ServiceMaster
required contributions
for the year $ 5,448,271 $ 37,500 $ 5,522,397 $ 37,500 $ 5,004,160 $ 37,500
ServiceMaster additional
contributions - 781,287 - 783,816 - 702,730
------------ ------------- ------------ ------------- ------------ -------------
Total contributions $ 5,448,271 $ 818,787 $ 5,522,397 $ 821,316 $ 5,004,160 $ 740,230
============ ============= ============ ============= ============ =============
</TABLE>
Participant contributions and required ServiceMaster
contributions are accounted for on the accrual basis.
The ServiceMaster contribution to the Plan is equal to
the lesser of 15% of total participant contributions or
$37,500. ServiceMaster may elect to make additional
contributions to the Plan as it deems appropriate.
Participants may contribute a maximum of 10% of their
prior year compensation as defined in the Plan agreement.
The Company's Board of Directors in December approved
additional contributions which, together with the
required ServiceMaster contributions previously made,
were equivalent to a 15% matching of the participant
contributions made during 1995, 1994, and 1993, for
participants as of each year end.
4. Federal Income Taxes
(a) Tax Status of the Plan - The Plan is considered
a trust for tax reporting purposes but does not
qualify for tax exempt status under Section 501 of
the Internal Revenue Code. However, the Plan incurs
no tax liability since all Plan income is distributed
to the participants.
(b) Tax Status of Each Participant - Since the Plan
does not qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code or as
a "stock bonus plan" under Section 401 of the Code,
the participant realizes income equal to his share of
the ServiceMaster contributions and cash
distributions on shares issued to the participant
during the calendar year.
Through June 30, 1994, for federal income tax purposes,
the cost basis of the shares issued to the participant
was the average cost of the shares at the time it was
allocated to the participant's account by the Plan. Due
to the changes in the Plan described in the "General"
section, effective July 1, 1994, the cost basis of the
shares is the purchase price.
7
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report, dated March 28,
1996, appearing in the ServiceMaster Employee Share Purchase
Plan Annual Report on Form 11-K for the year ended December
31, 1995, to the Company's previously filed Registration
Statement Number 2-75851 on Form S-8.
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 28, 1996
8
