<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 LP Master Trust
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 Plan administrators have duly
caused this annual report to be signed by the undersigned
thereunto duly authorized.
SERVICEMASTER LP MASTER TRUST
By:_____s/LAINE E. MALMQUIST__________________________________
Laine E. Malmquist,
Vice President, Benefits &
Manager General Accounting
By:_____s/DEBORAH A. O'CONNOR_________________________________
Deborah A. O'Connor,
Administrative Committee Member
By:_____s/BARBARA SCHRAM______________________________________
Barbara Schram, Plan Manager
Date: March 28, 1996
2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
ServiceMaster LP Profit Sharing, Savings and
Retirement Plans and the Trustee of the
ServiceMaster LP Master Trust:
We have audited the accompanying statements of net
assets available for Plan benefits of the ServiceMaster LP
Master Trust as of December 31, 1995 and 1994, and the
related statements of changes in net assets available for
Plan benefits for each of the three years in the period
ended December 31, 1995. These financial statements and the
schedules referred to below are the responsibility of the
Plans' Administrative Committee. Our responsibility is to
express an opinion on these financial statements and
schedules 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 available for Plan benefits of the Master Trust as of
December 31, 1995 and 1994, and the changes in its net
assets available for Plan benefits, for each of the three
years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The supplemental schedules of Assets Held for Investment
Purposes and Reportable Transactions are presented for
purposes of additional analysis and are not a required part
of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects
in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
March 28, 1996
3
<PAGE>
SERVICEMASTER LP MASTER TRUST
FEIN: #36-3497008
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1995 AND 1994
I N D E X
---------
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS
OF DECEMBER 31, 1995 AND 1994
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND
1993
NOTES TO FINANCIAL STATEMENTS
SCHEDULE A - ITEM 27d - SCHEDULE OF 5% REPORTABLE
TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995
SCHEDULE B - ITEM 27a - SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AS OF DECEMBER 31, 1995
4
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER LP MASTER TRUST
FEIN: #36-3497008
STATEMENTS OF NET ASSETS AVAILABLE
FOR PLAN BENEFITS
As of December 31,
----------------------------
1995 1994
---- ----
<S> <C> <C>
ASSETS:
Investments:
Money market fund $ 167,027 $ 111,693
ServiceMaster Limited Partnership
Shares, at market 56,145,361 43,475,786
Liberty Life Group Pension Contract,
at market 88,580,287 79,492,239
--------------- -------------
Total Investments 144,892,675 123,079,718
Receivables:
Due from employer 2,534,338 2,955,116
Participant contributions 162,801 223,220
Other 5,415 4,964
--------------- -------------
Total Assets 147,595,229 126,263,018
--------------- -------------
LIABILITIES:
Accounts payable 252,832 374,398
Refundable employee contributions 785,622 --
--------------- -------------
Total Liabilities 1,038,454 374,398
--------------- -------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 146,556,775 $ 125,888,620
=============== =============
</TABLE>
The accompanying Notes to Financial Statements
are an integral part of these statements.
5
<PAGE>
<TABLE>
<CAPTION>
SERVICEMASTER LP MASTER TRUST
FEIN: #36-3497008
STATEMENTS OF CHANGES NET ASSETS AVAILABLE FOR PLAN
BENEFITS
Years Ended December 31,
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Additions:
Contributions:
Participant $ 6,994,834 $ 8,464,954 $ 5,970,176
Employer 2,513,522 2,955,116 3,485,000
Interest income 108,580 64,276 145,215
ServiceMaster share distributions 1,668,424 1,703,467 1,763,726
Liberty Life Contract income 4,360,287 3,560,393 2,296,446
Realized/Unrealized gains (losses)
on investments 23,713,262 (13,072,194) 33,864,601
------------ ------------ ------------
Total Additions 39,358,909 3,676,012 47,525,164
Deductions:
Equity applicable to
former participants 17,850,022 10,906,520 10,110,106
Provision for income taxes 442,609 551,527 336,836
Administrative/investment expenses 398,123 375,733 203,858
------------ ------------ ------------
Total Deductions 18,690,754 11,833,780 10,650,800
------------ ------------ ------------
Net increase (decrease) 20,668,155 (8,157,768) 36,874,364
Net assets available for
Plan benefits:
Beginning of year 125,888,620 134,046,388 97,172,024
------------ ------------ ------------
End of year $146,556,775 $125,888,620 ACCOUNTANT'S REPORT
6
<PAGE>
SERVICEMASTER LP MASTER TRUST
FEIN: #36-3497008
NOTES TO FINANCIAL STATEMENTS
1. Master Trust
Effective January 1, 1994, the account balances of the
ServiceMaster service partner plans were transferred to
newly established plans. All of the plans contain
identical provisions. The financial statements of the
Trust include all of the assets of the following plans,
collectively referred to as "the Plan."
1. Service Partners Education Company Profit Sharing,
Savings and Retirement Plan (formerly Service Partners East
Company Profit Sharing, Savings and Retirement Plan)
2. Service Partners Aviation Company Profit Sharing, Savings
and Retirement Plan (formerly Service Partners West Company
Profit Sharing, Savings and Retirement Plan)
3. Service Partners Health Care Company Profit Sharing, Savings
and Retirement Plan (formerly Service Partners Mid-America
Profit Sharing, Savings and Retirement Plan)
4. Service Partners Long Term Care Company Profit Sharing,
Savings and Retirement Plan (formerly Service Partners Southeast
Company Profit Sharing, Savings and Retirement Plan)
5. Service Partners Food Service Company Profit
Sharing, Savings and Retirement Plan
6. Service Partners ICMS Company Profit Sharing,
Savings and Retirement Plan
7. Service Partner Diversified Health Services Company Profit
Sharing, Savings and Retirement Plan
8. ServiceMaster Profit Sharing, Savings and Retirement Plan
2. Summary of Significant Accounting Policies
Asset Valuation - The investments of the Plan are
valued in the financial statements at their respective
year-end market values.
Basis of Accounting - The transactions of the Plan are
accounted for on the accrual basis.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Expenses of the Plan - Certain administrative expenses
of the Plan (including investment management fees and
other plan expenses) were paid from the Plan assets.
Income Taxes - The Plan is required to pay federal
income taxes related to its share of taxable income from
its direct holding of ServiceMaster Limited Partnership
shares.
Participating Employers - Employers participating in
the Plan are various subsidiaries and affiliates of
ServiceMaster including ServiceMaster Management
Services, Diversified Health Services, and ServiceMaster
International and Parent.
3. The Plan
Purpose - The purpose of the Plan emphasizes ownership
and opportunity as presented below:
(a) to simulate interest, ownership and committed participation
in building the service foundation of the Company;
(b) to share with Plan participants the economic benefits
produced by their efforts;
(c) to assist in providing Plan participants with retirement benefits.
Participation - The Plan was established as of January 1, 1976.
As of December 31, 1995, there were 3,979 participants in the Plan.
All employees (other than employees covered by a
collective bargaining agreement which does not provide
for Plan participation or whose compensation is regulated
under the Register of Wage Determinations maintained by
the United States Department of Labor Standards
Administration) of a participating employer which has
adopted the Plan who have completed one year of service
(defined as at least 1,000 hours of employment during the
first 12 months of employment or any plan year
thereafter), attained age 18 years and elected to make
contributions to the Plan are eligible to participate in
the Plan.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Participant Contributions - Starting in 1994,
participants may elect to contribute a minimum of 1% of
pay and up to 15% of pay. Pretax contributions (basic
contributions) up to the first 4% of pay (or $1,000,
whichever is greater) are eligible for an employer
matching contribution.
Prior to 1994, participants were required to make
mandatory contributions of $75 per quarter (or $300 per
year). These contributions were eligible for an employer
matching contribution. In addition, participants could
elect to contribute 1% to 15% of their compensation on a
voluntary basis, but these contributions were not
eligible for an employer matching contribution. The
increase in employee contributions in 1994 was due to the
change described above as a larger portion of participant
contributions was eligible for the matching employer
contribution.
Employer Contributions - The company contribution will
continue to be discretionary. The amount of contribution
from profits will be determined each year by the Board of
Directors after a review of the overall financial
performance of ServiceMaster and the key business units.
The employer's discretionary profit sharing contribution
was $2,513,522, $2,955,116 and $3,485,000 for 1995, 1994
and 1993, respectively. In 1993, the Company chose to
reimburse the Plan for $1.3 million of expenses paid by
the Plan in prior years. This reimbursement was included
in the Company's 1993 contribution.
Vesting Policy and Payment of Benefits - Upon
termination of employment and after completion of seven
years of service or in the event of disability or death,
the participant or his beneficiary is entitled to receive
the full amount allocated to his account. If a
participant's employment is terminated prior to the
completion of seven years of service for any reason,
other than death or disability, they will receive, in
addition to the balance of their participant contribution
accounts, including any rollovers or tax deductible
voluntary contributions, that portion of the employer
contribution account equal to 20% after the completion of
three years of service and 20% for each additional full
year of service (as defined in the Plan document), up to
100% after seven years of service.
Benefits are distributed to participants in cash (in a
lump sum or periodic payments) or ServiceMaster
partnership shares, as provided by the Plan.
Allocation of Employer Contributions - Starting in
1994, employer profit sharing contributions are allocated
to each participant on the basis of their basic
contributions, that is pretax contributions up to the
first 4% of pay (or $1,000 which ever is greater). Prior
to 1994, employer contributions were allocated to each
participant on the basis of their mandatory contributions
and years of service as of the beginning of each year.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Forfeitures - Forfeitures represent amounts forfeited
by participants upon termination and are allocable to
eligible participants in the same manner as employer
profit sharing contributions.
Amendment or Termination - The Plan may be amended or
discontinued by the Company (with respect to all
participating employers) or by a participating employer
(with respect to its eligible employees) at any time. If
the Plan is discontinued, participants with respect to
whom the Plan is terminated become fully vested in their
allocated account balances.
4. Plan Assets
The Plan invests in ServiceMaster Limited Partnership
shares. As of December 31, 1995 and 1994, the Plan was
holding 1,856,045 and 1,783,622 shares, respectively.
The year-end share price as of December 31, 1995 and 1994
was $30-1/4 and $24-3/8, respectively.
The Plan also invests in a Group Contract at Liberty
Life Assurance Company. At December 31, 1995, the
market value of assets in this Contract consisted of
ServiceMaster Limited Partnership shares ($50,215,000)
and fixed income investments managed by the Wellington
Management Company ($38,365,287).
5. Federal Income Taxes
Tax Status of the Plan - One of the Plans obtained its
latest determination letter on August 4, 1995, in which
the Internal Revenue Service (the "IRS") stated that the
Plan, as written, was in compliance with the requirements
of the Internal Revenue Code (the "Code"). This Plan has
been amended since August 4, 1995. The Plans have filed
a request for a determination letter with the IRS. The Plan
administrator beliebes that the Plans are currently
designed and being operated in compliance with the
requirements of the Code and that the trust is tax-exempt
as of the financial statement dates.
Although the Plan is a tax-exempt entity, it is required
to pay federal income taxes related to its share of
taxable income from its direct holding of ServiceMaster
Limited Partnership Shares.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Tax Status of Each Participant - Participant
contributions made on or after April 1, 1988 are
deductible for federal income tax purposes when made to
the Plan. Participants will be subject to tax on the
participant contributions, employer contributions and
income credited to their plan accounts when an actual
distribution from the Plan is received. However,
participant contributions made prior to April 1, 1988
were not deductible for federal income tax purposes when
made to the Plan. Therefore, participants will be
subject to tax only on the employer contributions and
income related to pre-April 1, 1988 participant
contributions upon distribution from the Plan.
6. Reconciliation of Financial Statements to Form 5500
The Form 5500 requires that net assets available for
benefits exclude amounts allocated to withdrawing
participants. (These are participants that have benefit
claims which have not been paid, but have been processed
and approved for payment prior to year-end).
The following is a reconciliation of net assets
available for benefits per the financial statements to
the Form 5500:
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------------
1995 1994 1993
---------- --------- ----------
<S> <C> <C> <C>
Net assets available for benefits
per the financial statements $ 146,556,775 $ 125,888,620 $ 134,046,388
Amounts allocated to
withdrawing participants (3,155,616) (5,357,049) (1,796,299)
------------- ------------- -------------
Net assets available for benefits
per the Form 5500 $ 143,401,159 $ 120,531,571 $ 132,250,089
============= ============= =============
</TABLE>
Amounts allocated to withdrawing participants for benefit
claims that have been processed and approved for payment
prior to December 31 but not yet paid as of that date,
are recorded as benefits paid for that year on the Form 5500.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Benefits paid to participants per
the financial statements $ 17,850,022 $ 10,906,520 $ 10,110,106
Add: Amounts allocated to withdrawing
participants in current year 3,155,616 5,357,049 1,796,299
Less: Amounts allocated to withdrawing
participants from prior year (5,357,049) (1,796,299) (1,871,511)
------------- ------------ ------------
Benefits paid to participants per
the Form 5500 $ 15,648,589 $ 14,467,270 $ 10,034,894
============= ============ ============
12
<PAGE>
SERVICEMASTER LP MASTER TRUST
SCHEDULE A-REPORTABLE TRANSACTIONS
ITEM 27d - Schedule of 5% Reportable Transactions
FEIN: #36-3497008
FOR THE YEAR ENDED DECEMBER 31, 1995
</TABLE>
<TABLE>
<CAPTION>
Current
Value of
Asset on
No. of Purchase Sales Transaction Gain
Transactions Price Proceeds Cost Date (Loss)
------------ ----------- ----------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Money market fund -
EB STIF Fund
Purchases 68 $16,589,129 -- $ 16,589,129 $ 16,589,129 --
Sales 50 -- $16,533,795 $ 16,533,795 $ 16,533,795 --
</TABLE>
13
<PAGE>
SERVICEMASTER LP MASTER TRUST
SCHEDULE B-ASSETS HELD FOR INVESTMENT
ITEM 27a - Schedule of Assets for Investment Purposes
FEIN: #36-3497008
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
COST OR MARKET
DESCRIPTION BOOK VALUE VALUE
----------- ---------- --------
<S> <C> <C>
Money market fund -
EB STIF Fund $ 167,027 $ 167,027
ServiceMaster Limited
Partnership shares(a)
(1,856,045) 21,302,407 56,145,361
Liberty Life Group
Pension Contract(b) 58,764,470 88,580,287
------------ -------------
TOTAL INVESTMENTS $ 80,233,904 $ 144,892,675
============ =============
(a) Represents a party-in-interest.
(b) Contract assets as of December 31, 1995 include
ServiceMaster Limited Partnership shares (cost of
$29,786,133 and market value of $50,215,000) and fixed
income investments managed by the Wellington Management
Company (cost of $28,978,337 and market value of
$38,365,287).
</TABLE>
14
<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 LP Master Trust
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
15
