<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _________
COMMISSION FILE NUMBER 1-12188
SODEXHO MARRIOTT SERVICES, INC.
-------------------------------
401(K) EMPLOYEES' RETIREMENT
----------------------------
SAVINGS PLAN AND TRUST
------------------------
(Full title of the plan)
9801 WASHINGTONIAN BOULEVARD, GAITHERSBURG, MARYLAND 20878
---------------------------------------------------- ----------
(Address of the plan) (Zip Code)
SODEXHO MARRIOTT SERVICES, INC.
------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
9801 WASHINGTONIAN BOULEVARD, GAITHERSBURG, MARYLAND 20878
---------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
- ---------------------------------
(a) Financial statements and supplemental schedules as of December 31,
1998, and for the period from March 27, 1998 (date of inception) to
December 31, 1998, prepared in accordance with financial reporting
requirements of ERISA.
Beginning at the next page of this document.
(b) Exhibits
The following exhibit is furnished to this Form 11-K:
(23) Consent of Independent Auditors
SIGNATURES
----------
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the administrative committee (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
SODEXHO MARRIOTT SERVICES, INC.
401(K) EMPLOYEES' RETIREMENT
SAVINGS PLAN AND TRUST
Date: JUNE 29, 1999 /s/ LAWRENCE E. HYATT
------------- ----------------------------
Lawrence E. Hyatt
Senior Vice President and
Chief Financial Officer
Sodexho Marriott Services, Inc.
<PAGE>
SODEXHO MARRIOTT SERVICES, INC 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Financial Statements and Supplemental Schedules
December 31, 1998
(With Independent Auditors' Report Thereon)
<PAGE>
[KPMG LOGO]
2001 M Street, N.W.
Washington, DC 20036
INDEPENDENT AUDITORS' REPORT
The Administrative Committee and Participants
Sodexho Marriott Services, Inc. 401(k) Employees' Retirement Savings
Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of Sodexho Marriott Services, Inc. 401(k) Employees' Retirement Savings Plan and
Trust (the Plan) as of December 31, 1998, and the related statement of changes
in net assets available for benefits for the period from March 27, 1998 (date of
inception) to December 31, 1998. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides 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 benefits of the Plan as of
December 31, 1998, and the changes in net assets available for benefits for the
period from March 27, 1998 (date of inception) to December 31, 1998 in
conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Item 27A -
Schedule of Assets Held for Investment Purposes (Schedule I and I-a), Item 27A
Part 2 - Schedule of Assets Held for Investment Purposes Which Were Both
Acquired and Disposed of Within the Plan Year (Schedule II), and Item 27D
Part 2 - Schedule of Reportable Transactions (Schedule III) are presented for
the purpose 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.
/s/ KPMG LLP
June 11, 1999
<PAGE>
<TABLE>
<CAPTION>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Statement of Net Assets Available for Benefits
December 31, 1998
<S> <C>
Assets:
Investments:
At fair value:
Sodexho Marriott Services, Inc. common stock $ 10,690,115
Marriott International, Inc. common stock 70,303,192
Other common stock 14,398,023
Firm purchase commitments, net (7,600,012)
Corporate bonds, notes, and other obligations 10,657,001
Government obligations 7,615,968
Mutual and collective investment funds 178,934,073
Participant notes receivable 8,723,054
At contract value:
Guaranteed investment contracts 67,117,017
----------------
Total investments 360,838,431
----------------
Receivables:
Due from Sodexho Marriott Services, Inc. for
Company contribution 6,767,341
Accrued interest and dividends 429,724
Receivables from sales of investments 45,692,455
----------------
Total receivables 52,889,520
----------------
Total assets 413,727,951
----------------
Liabilities:
Accounts payable on investments purchased 15,298,507
Custodian and advisor fees payable 270,640
Excess contributions due to participants 906,302
Other 14,272
----------------
Total liabilities 16,489,721
----------------
Net assets available for benefits $ 397,238,230
================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Statement of Changes in Net Assets Available for Benefits
For the Period from March 27, 1998 (date of inception) to December 31, 1998
<S> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 43,816,825
Interest 6,462,165
Dividends 4,470,587
Less investment expense (806,618)
-----------------
53,942,959
Contributions:
Participants 19,984,324
Company 6,767,341
Transfers from other plans 331,423,922
Other 89,603
-----------------
Total additions 412,208,149
-----------------
Deductions from net assets attributed to:
Benefits paid to participants 14,426,015
Administrative expenses 543,904
-----------------
Total deductions 14,969,919
-----------------
Net increase 397,238,230
Net assets available for benefits, beginning of period --
-----------------
Net assets available for benefits, end of period $ 397,238,230
=================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(1) DESCRIPTION OF PLAN
The following description of the Sodexho Marriott Services, Inc. (the
Company) 401(k) Employees' Retirement Savings Plan and Trust (the Plan),
provides only general information. Participants should refer to the
summary plan description or Plan document for a more complete description
of the Plan's provisions.
On March 27, 1998, Marriott International, Inc. spun off its lodging,
senior living and distribution services business into a new corporation
called New Marriott. The remaining contract services division, referred
to as Marriott Management Services Corp., then merged with the North
American operations of Sodexho Alliance and became Sodexho Marriott
Services, Inc. Employees of Sodexho Marriott Services, Inc. became
eligible to participate in the Plan. As a result, the employees of the
Company transferred their funds into the Plan, which totaled $331
million, from the Marriott International, Inc. Employees' Profit Sharing,
Retirement and Savings Plan and Trust.
(A) GENERAL
The Plan is a defined contribution plan covering eligible
employees of the Company who are at least 21 years of age and have
completed at least 1,000 hours of service within a 12-month
period. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA).
(B) CONTRIBUTIONS
Each year, participants may contribute up to 15 percent or a fixed
dollar amount (minimum of $3 per week) of annual plan eligible
compensation. The Company's matching contribution to the Plan is a
discretionary amount determined by the Company's Board of
Directors. In general, Company contributions are allocated among
active participants' accounts in proportion to each participant's
basic savings during the year. Basic savings represent up to the
first 6 percent of a participant's eligible compensation
contributed to the Plan. Contributions are subject to certain
limitations.
(C) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions and allocations of (i) the Company's contribution,
and (ii) Plan earnings or losses, and charged with an allocation
of administrative expenses. Allocations are based on participant
contributions as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the
participant's vested account.
(D) VESTING
Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's contribution
portion of their account plus actual earnings thereon is based on
years of service. The Company contribution becomes 20 percent
vested after two years of service. Vesting increases 20 percent a
year thereafter until the fifth year of service, at which time a
participant's Company contribution becomes 100 percent vested. All
participants become fully vested upon death, permanent disability,
or retirement which is defined as attainment of age 55 for
salaried participants or age 45 for most hourly participants.
4
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(E) INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee
contributions in 1 percent increments in any of twelve investment
options.
Stable Value Fund - Funds are invested in high-quality insurance
companies, banks and other short-term fixed income investments.
Bond Fund - Funds are invested in investment-grade bonds or other
debt securities issued by international and domestic corporations
and banks and U.S. government agencies.
Balanced Fund - Funds are invested in a widely diversified
portfolio of equity and fixed income securities.
Stock Fund - Funds are invested in a widely diversified portfolio
of common stocks, convertible debt and other equity-linked
securities.
International Stock Fund - Funds are primarily invested in a
diversified portfolio of common stocks and other equity-linked
securities of companies located outside the United States.
Sodexho Marriott Services, Inc. Stock Fund - Funds are invested
in Sodexho Marriott Services, Inc. common stock.
T. Rowe Price New Horizon Fund - Funds are invested primarily in
common stocks of small, rapidly growing companies.
Fidelity Contrafund - Funds are primarily invested in common
stocks of companies that are currently undervalued or out of
public favor but that have a potential for capital growth.
Franklin Mutual Shares Class I Fund - Funds are invested in
common and preferred stock and corporate debt securities of
any credit quality.
T. Rowe Price Mid-Cap Growth Fund - Funds are invested in common
stocks of mid-size companies.
Morgan Stanley Institutional Equity Growth Fund - Funds are
invested in stocks of large, high-quality companies, which are
expected to achieve and sustain rapid earnings growth.
T. Rowe Price Equity Income Fund - Funds are invested in common
stocks of established U.S. companies that pay above-average
dividends.
Marriott International, Inc. Stock Fund - Funds are invested in
Marriott International, Inc. common stock. Effective with
inception of the Plan, participants are not permitted to invest
their funds into the Marriott International, Inc. Stock Fund.
Participants may change their investment options daily.
5
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(F) PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $400
up to a maximum equal to the lesser of $50,000, reduced by the
highest outstanding loan balance in the previous 12-month period,
or 50 percent of their vested account balance. Loan transactions
are treated as a transfer to (from) the investment fund from (to)
the Participant Notes fund. Loan terms range from 1 to 4 years or
up to 10 years for the purchase of a primary residence. The loans
are collateralized by the balance in the participant's account and
bear interest at the prime rate published by the Wall Street
Journal plus 100 basis points. Interest rates range from 8.75
percent to 9.5 percent. Principal and interest are paid ratably
through weekly or biweekly payroll deductions.
(G) PAYMENT OF BENEFITS
Upon termination of service, a participant may elect to receive
either a lump-sum amount equal to the value of the participant's
vested interest in his or her account, annual installments over a
specified period chosen by the participant, or an annuity.
(H) FORFEITED ACCOUNTS
The unvested portion of the Company contribution is forfeited and
used to reduce Plan expenses.
(I) ADMINISTRATION
The Company serves as the named fiduciary of the Plan.
Administration of the Plan is under the direction of a
three-member Administrative Committee, all of whom are corporate
officers of the Company.
(J) ADMINISTRATIVE AND INVESTMENT EXPENSES
Certain administrative and all investment expenses are paid by the
Plan and are allocated to participants based on account balances.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the
accrual method of accounting.
(B) USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of additions to and deductions from net assets
during the reporting period. Actual results could differ from
those estimates.
(C) INVESTMENTS VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value except for its
investment in Guaranteed Investment Contracts (GICs) with fully
benefit responsive features, which are valued at contract
6
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
value. Shares of mutual and collective investment funds are valued
at market prices, which represent the net asset value of shares
held by the Plan at year-end. The Company's stock and Marriott
International, Inc. stock are valued at their quoted market price.
Participant notes receivable are valued at cost, which
approximates fair value.
Investment earnings are allocated to accounts of Plan participants
on a daily basis.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date. Realized gains and losses
from security transactions are reported on an average cost method.
(D) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(3) RELATED-PARTY TRANSACTIONS
The Plan may, at the discretion of Plan participants, invest an unlimited
amount of its assets in securities issued by the Company. The Plan held
386,092 shares of common stock of the Company as of December 31, 1998.
Dividends on Sodexho Marriott Services Inc. common stock approximated
$7,205 for the period from March 27, 1998 (date of inception) to December
31, 1998.
Certain investments are purchased from the custodian (Bankers Trust
Company) and certain investments are managed by the Plan recordkeeper (T.
Rowe Price). Fees paid by the Plan for the investment management services
amounted to approximately $160,000 and $648,000 for Bankers Trust Company
and T. Rowe Price, respectively, for the period ended December 31, 1998.
(4) GUARANTEED INVESTMENT CONTRACTS
The Plan is invested in certain investment contracts with insurance
companies. The custodians of these investment contracts are T. Rowe Price
and PRIMCO. The accounts are credited with earnings on the underlying
investments and charged for Plan withdrawals and administrative expenses.
The contracts are carried at contract value (which represents
contributions made under the contracts, plus earnings, less withdrawals
and administrative expenses), because they are fully benefit responsive.
There are no reserves against contract value for credit risk of the
contract issuer or otherwise. The estimated fair value of the investment
contracts at December 31, 1998 was $68,672,633. The average yield was
approximately 6.40% for the year ended December 31, 1998.
The fair values for these GICs have been estimated based on a discounted
cash flow analysis. The estimated fair value is calculated based on the
net present value of expected future payments, which include interest and
a lump sum contract amount, discounted at a rate determined by the
quality of the GICs and the average remaining life. This calculation is
necessary, as GICs are not actively traded investments for which a daily
fair value is readily available.
The issuers of the GICs are generally insurance companies. Where there
are no underlying assets collateralizing the investment, the Plan's
ultimate realization of amounts invested in GICs is dependent on the
continued financial stability of the issuers of the GICs.
7
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(5) INVESTMENTS
The following investments represent 5 percent or more of the Plan's net
assets:
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------
PERCENTAGE
FAIR VALUE OR OF PLAN
CONTRACT VALUE NET ASSETS
------------------- ------------------
<S> <C> <C>
Bankers Trust Pyramid Cash Fund $ 177,601,918 45%
Marriott International, Inc. common stock 70,303,192 18
=================== ==================
</TABLE>
During the period ended December 31, 1998, the Plan's investments
(including investments bought, sold and held during the year) appreciated
(depreciated) in value as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1998
-----------------
<S> <C>
Net appreciation (depreciation) in fair value of investments:
Sodexho Marriott Services, Inc. common stock $ 5,682,532
Marriott International, Inc. common stock 39,555,169
Other common stock (625,826)
Corporate bonds, notes and other obligations 353,398
Government obligations 254,163
Firm purchase commitments, net (11,777)
T. Rowe Price New Horizon Fund (616,616)
T. Rowe Price Mid-Cap Growth Fund 295,506
T. Rowe Price Equity Income (481,857)
Fidelity Contrafund 533,020
Morgan Stanley Institutional Equity Growth Fund (499,911)
Franklin Mutual Shares Class I Fund (620,976)
----------------
Net appreciation in fair value of
investments $ 43,816,825
================
</TABLE>
(6) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
(7) TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated June 18, 1999, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code. The Plan administrator and the Plan's counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the Internal Revenue Code.
8
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(8) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits as
reported in the financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------
<S> <C>
Net assets available for benefits as reported in financial statements $ 397,238,230
Less - distributions payable to terminated employees 89,191
--------------------------
Net assets available for benefits per Form 5500 $ 397,149,039
==========================
</TABLE>
The following is a reconciliation of benefits paid to participants as
reported in the financial statements to the Form 5500:
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 27, 1998
(DATE OF INCEPTION) TO
DECEMBER 31, 1998
--------------------------
<S> <C>
Benefits paid to participants as reported in the financial statements $ 14,426,015
Add: amounts allocated to withdrawing participants
at December 31, 1998 89,191
--------------------------
Benefits paid to participants as reported in the Form 5500 $ 14,515,206
==========================
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to December 31, 1998 but not yet paid as of that date.
9
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(9) FUND INFORMATION
The following table shows net assets available for benefits and
changes in net assets available for benefits by investment option as
of December 31, 1998 and for the period from March 27, 1998 (date of
inception) to December 31, 1998:
<TABLE>
<CAPTION>
NET ASSETS AVAILABLE FOR BENEFITS BY FUND
DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
MARRIOTT INTER- SODEXHO T.TROWE
STABLE INTERNATIONAL NATIONAL MARRIOTT PRICE
VALUE BOND BALANCED STOCK INC. STOCK SERVICES, INC. NEW
FUND FUND FUND FUND STOCK FUND FUND STOCK FUND HORIZON FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments:
At estimated fair value:
Sodexho Marriott Services,
Inc. common stock $ -- $ -- $ -- $ -- $ -- $ -- $10,690,115 $ --
Marriott International,
Inc. common stock -- -- -- -- 70,303,192 -- -- --
Other common stock -- -- -- -- -- -- -- 6,598,352
Firm purchase commitments,
net -- (2,944,078) (4,655,934) -- -- -- -- --
Corporate bonds, notes,
and other obligations -- 1,507 1,922 -- -- -- -- --
Government obligations -- 2,951,357 4,664,611 -- -- -- -- --
Mutual and collective
investment funds 14,877,775 18,924,714 64,661,827 78,106,564 698,127 618,372 420,523 --
Participant notes
receivable -- -- -- -- -- -- -- --
At contract value:
Guaranteed investment
contracts 67,117,017 -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Total investments 81,994,792 18,933,500 64,672,426 78,106,564 71,001,319 618,372 11,110,638 6,598,352
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Receivables:
Due from Sodexho Marriott
Services, Inc. for
Company contribution 1,461,576 335,373 1,150,476 1,382,511 1,256,173 125,181 203,432 116,596
Accrued interest
and dividends 54,622 25,046 116,060 102,445 123,365 2,734 1,528 --
Receivables from sales
of investments 2,045 5,082,067 8,274,869 49,998 -- 6,456,430 -- 336,984
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Total receivables 1,518,243 5,442,486 9,541,405 1,534,954 1,379,538 6,584,345 204,960 453,580
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Total assets 83,513,035 24,375,986 74,213,831 79,641,518 72,380,857 7,202,717 11,315,598 7,051,932
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Liabilities:
Accounts payable on
investments purchased -- 5,080,539 7,934,506 -- -- -- -- 336,984
Custodian and advisor
fees payable 41,770 17,998 88,577 99,801 11,560 (46) 2,583 1,182
Excess contributions
due to participants 64,061 14,699 50,425 60,595 55,058 5,487 8,916 5,110
Other (523,325) 20,734 122,345 146,956 178,869 8,739 (378,141) 13,391
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Total liabilities (417,494) 5,133,970 8,195,853 307,352 245,487 14,180 (366,642) 356,667
---------- ---------- ---------- ---------- ---------- --------- ---------- ---------
Net assets
available for benefits $83,930,529 $19,242,016 $66,017,978 $79,334,166 $72,135,370 $7,188,537 $11,682,240 $6,695,265
========== ========== ========== ========== ========== ========= ========== =========
</TABLE>
10 (1 of 2)
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
(9) FUND INFORMATION
The following table shows net assets available for benefits and
changes in net assets available for benefits by investment option as
of December 31, 1998 and for the period from March 27, 1998 (date of
inception) to December 31, 1998:
<TABLE>
<CAPTION>
NET ASSETS AVAILABLE FOR BENEFITS BY FUND
DECEMBER 31, 1998
---------------------------------------------------------------------------------------------
T.EROWE T. ROWE MORGAN STANLEY FRANKLIN
PRICE PRICE INSTITUTIONAL MUTUAL PARTICIPANT
MID-CAP EQUITY FIDELITY EQUITY SHARES NOTES CLEARING
GROWTH FUND INCOME FUND CONTRAFUND GROWTH FUND CLASS I FUND RECEIVABLE ACCOUNT TOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments:
At estimated fair value:
Sodexho Marriott Services,
Inc. common stock $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 10,690,115
Marriott International,
Inc. common stock -- -- -- -- -- -- -- 70,303,192
Other common stock -- 7,799,671 -- -- -- -- -- 14,398,023
Firm purchase commitments,
net -- -- -- -- -- -- -- (7,600,012)
Corporate bonds, notes,
and other obligations 10,653,572 -- -- -- -- -- -- 10,657,001
Government obligations -- -- -- -- -- -- -- 7,615,968
Mutual and collective
investment funds -- -- 49 26 -- -- 626,096 178,934,073
Participant notes
receivable -- -- -- -- -- 8,723,054 -- 8,723,054
At contract value:
Guaranteed investment
contracts -- -- -- -- -- -- -- 67,117,017
---------- --------- --------- ----------- --------- --------- ------- -----------
Total investments 10,653,572 7,799,671 49 26 -- 8,723,054 626,096 360,838,431
---------- --------- --------- ----------- --------- --------- ------- -----------
Receivables:
Due from Sodexho Marriott
Services, Inc. for
Company contribution 182,116 137,862 148,749 198,579 68,717 -- -- 6,767,341
Accrued interest
and dividends -- (77) -- -- -- -- 4,001 429,724
Receivables from sales
of investments 222,874 424,540 9,089,521 11,596,638 4,156,489 -- -- 45,692,455
---------- --------- --------- ----------- --------- --------- ------- -----------
Total receivables 404,990 562,325 9,238,270 11,795,217 4,225,206 -- 4,001 52,889,520
---------- --------- --------- ----------- --------- --------- ------- -----------
Total assets 11,058,562 8,361,996 9,238,319 11,795,243 4,225,206 8,723,054 630,097 413,727,951
---------- --------- --------- ----------- --------- --------- ------- -----------
Liabilities:
Accounts payable on
investments purchased 222,874 424,540 615,746 422,442 260,876 -- -- 15,298,507
Custodian and advisor
fees payable 1,741 1,363 1,456 1,881 774 -- -- 270,640
Excess contributions
due to participants 7,982 6,042 6,569 8,730 3,012 -- 609,616 906,302
Other 368,226 13,589 67,573 (39,361) 14,677 -- -- 14,272
---------- --------- --------- ----------- --------- --------- ------- -----------
Total liabilities 600,823 445,534 691,344 393,692 279,339 -- 609,616 16,489,721
---------- --------- --------- ----------- --------- --------- ------- -----------
Net assets
available for benefits $10,457,739 $7,916,462 $8,546,975 $11,401,551 $3,945,867 8,723,054 $ 20,481 $397,238,230
========== ========= ========= =========== ========= ========= ======= ===========
</TABLE>
10 (2 of 2)
(Continued)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
<TABLE>
<CAPTION>
CHANGE IN NET ASSETS AVAILABLE FOR BENEFITS BY FUND
FOR THE PERIOD FROM MARCH 27, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998
----------------------------------------------------------------------------------------------
MARRIOTT INTER- SODEXHO T. ROWE
STABLE INTERNATIONAL NATIONAL MARRIOTT PRICE
VALUE BOND BALANCED STOCK INC. STOCK SERVICES, INC. NEW
FUND FUND FUND FUND STOCK FUND FUND STOCK FUND HORIZON FUND
---------- ---------- ---------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation) in
fair value of investment $ -- 284,650 (775,272) 763,616 39,555,169 (303,036) 5,682,532 (616,616)
Interest 3,508,198 796,976 1,249,266 270,341 59,626 23,842 7,205 --
Dividends -- -- 627,097 740,367 511,657 -- -- 336,985
Less investment expenses (134,303) (64,930) (283,197) (304,232) (8,365) (1,244) (7,671) (391)
----------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
3,373,895 1,016,696 817,894 1,470,092 40,118,087 (280,438) 5,682,066 (280,022)
Contributions:
Participants 6,540,398 1,035,312 3,122,179 3,979,468 (44,853) 859,963 164,890 791,956
Company 1,461,576 335,373 1,150,476 1,382,511 1,256,173 125,181 203,432 116,596
Transfer from other plans 73,497,180 16,869,989 66,047,819 77,907,592 42,684,035 6,941,859 3,896,555 5,747,190
Other (50,478) (1,555) 1,635 (38,166) 158,615 (83) 21,847 (2)
----------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total additions 84,822,571 19,255,815 71,140,003 84,701,497 84,172,057 7,646,482 9,968,790 6,375,718
----------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Deductions from net assets
attributed to:
Benefits paid to
participants 4,690,663 716,723 1,682,469 2,434,299 2,149,887 288,529 266,472 355,263
Administrative expenses 119,714 26,855 91,513 107,819 113,422 11,076 15,192 8,151
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Total deductions 4,810,377 743,578 1,773,982 2,542,118 2,263,309 299,605 281,664 363,414
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Funds transfers during
the period 3,918,335 729,779 (3,348,043) (2,825,213) (9,773,378) (158,340) 1,995,114 682,961
----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net increase 83,930,529 19,242,016 66,017,978 79,334,166 72,135,370 7,188,537 11,682,240 6,695,265
Net assets available for
benefits, beginning
of period -- -- -- -- -- -- -- --
Net assets available for
benefits, end of period $83,930,529 19,242,016 66,017,978 79,334,166 72,135,370 7,188,537 11,682,240 6,695,265
=========== ========== ========== ========== ========== ========= ========== =========
</TABLE>
11 (1 of 2)
<PAGE>
SODEXHO MARRIOTT SERVICES, INC. 401(K) EMPLOYEES'
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 31, 1998
<TABLE>
<CAPTION>
CHANGE IN NET ASSETS AVAILABLE FOR BENEFITS BY FUND
FOR THE PERIOD FROM MARCH 27, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 1998
-------------------------------------------------------------------------------------------------
T. ROWE T. ROWE MORGAN STANLEY FRANKLIN
PRICE PRICE INSTITUTIONAL MUTUAL PARTICIPANT
MID-CAP EQUITY FIDELITY EQUITY SHARES NOTES CLEARING
GROWTH FUND INCOME FUND CONTRAFUND GROWTH FUND CLASS I FUND RECEIVABLE ACCOUNT TOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation) in
fair value of investment 295,506 (481,857) 533,020 (499,911) (620,976) -- -- 43,816,825
Interest -- -- -- -- -- 524,025 22,686 6,462,165
Dividends 222,875 504,639 610,445 595,382 321,141 -- (1) 4,470,587
Less investment expenses (515) (451) (453) (549) (318) -- 1 (806,618)
---------- ---------- ---------- ----------- ----------- ----------- -------- ------------
517,866 22,331 1,143,012 94,922 (300,153) 524,025 22,686 53,942,959
Contributions:
Participants 839,608 713,507 607,806 964,513 409,569 -- 8 19,984,324
Company 182,116 137,862 148,749 198,579 68,717 -- -- 6,767,341
Transfer from other plans 7,218,280 6,750,486 5,003,796 8,534,631 3,574,709 6,749,801 -- 331,423,922
Other -- (1) 5,300 (1,583) 3 (3,716) (2,213) 89,603
---------- ---------- ---------- ----------- ----------- ----------- -------- ------------
Total additions 8,757,870 7,624,185 6,908,663 9,791,062 3,752,845 7,270,110 20,481 412,208,149
---------- ---------- ---------- ----------- ----------- ----------- -------- ------------
Deductions from net assets
attributed to:
Benefits paid to
participants 461,907 190,102 223,683 448,486 118,420 399,112 -- 14,426,015
Administrative expenses 12,234 9,564 9,193 13,968 5,203 -- -- 543,904
----------- ---------- ---------- ----------- ----------- ----------- -------- ------------
Total deductions 474,141 199,666 232,876 462,454 123,623 399,112 -- 14,969,919
----------- ---------- ---------- ----------- ----------- ----------- -------- ------------
Funds transfers during
the period 2,174,010 491,943 1,871,188 2,072,943 316,645 1,852,056 -- --
----------- ---------- ---------- ----------- ----------- ----------- -------- ------------
Net increase 10,457,739 7,916,462 8,546,975 11,401,551 3,945,867 8,723,054 20,481 397,238,230
Net assets available for
benefits, beginning
of period -- -- -- -- -- -- -- --
Net assets available for
benefits, end of period 10,457,739 7,916,462 8,546,975 11,401,551 3,945,867 8,723,054 20,481 397,238,230
=========== ========== ========== =========== =========== =========== ======== ============
</TABLE>
11 (2 of 2)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
------------------
BANKERS TRUST COMPANY ITEM 27A - SCHEDULE OF GLOBAL ASSETS - EB
NEW YORK ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
06/04/99 E25A OCLD PAGE 1
ACCOUNT 122490 - COMBINED SODEXHO MARRIOTT SERVICES
401(K) EMPLOYEES RET SVGS PLAN & TRUST
COMBINED ACCOUNT
MARKET
IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY DESCRIPTION OF INTEREST COST VALUE
============================================= ======================= ============ ============
<S> <C> <C> <C>
* BT PYRAMID DIRECTED ACCOUNT CASH FUND 177,601,917.920 177,601,917.92 177,601,917.92
CONSOLIDATED RAIL CORP 354.500 361.44 365.58
PASS THRU TR PASS THRU CTF SER
1995-A 6.76% 05/25/2015
FEDERAL HOME LN MTG CORP PARTN CTF 1,699.060 1,746.71 1,742.96
GROUP# 14-0357
7.750% 12/01/2007
FEDERAL HOME LN MTG CORP 6,872.350 7,169.60 7,183.60
PARTN CTF POOL #182224
8.500% 03/01/2009
FNMA 15YR 6.00% (600,000.000) (599,062.50) (601,500.00)
SHORT TBA
FNMA 6.50% 30YR (100,000.000) (100,234.38) (100,565.00)
SHORT TBA
GNMA 30YR 7.50% (800,000.000) (822,375.01) (824,744.00)
SHORT TBA
GNMA 30YR 6.50% (100,000.000) (100,546.88) (101,000.00)
SHORT TBA
<FN>
* Party in interest
</FN>
</TABLE>
See accompanying independent auditors' report
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
------------------
BANKERS TRUST COMPANY ITEM 27A - SCHEDULE OF GLOBAL ASSETS - EB
NEW YORK ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
06/04/99 E25A OCLD PAGE 2
ACCOUNT 122490 - COMBINED SODEXHO MARRIOTT SERVICES
MARKET
IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY DESCRIPTION OF INTEREST COST VALUE
============================================= ======================= ============ ============
<S> <C> <C> <C>
GNMA 6.00% 30YR (1,200,000.000) (1,183,312.50) (1,189,500.00)
SHORT TBA
FNMA 30YR 6.00% (300,000.000) (294,703.13) (294,703.13)
SHORT TBA
FNMA 15YR 7.00% (4,400,000.000) (4,488,000.00) (4,488,000.00)
SHORT TBA
FEDERAL NATL MTG ASSN 4,400,000.000 4,491,437.51 4,493,500.00
TBA 15YR 7.000% 01/01/2014
FEDERAL NATL MTG ASSN 300,000.000 295,617.19 296,109.00
TBA 30YR 6.000% 01/01/2029
FEDERAL NATL MTG ASSN 100,000.000 100,906.25 100,672.00
TBA 30YR 6.500% 01/01/2029
FEDERAL NATL MTG ASSN 600,000.000 599,625.00 601,500.00
TBA 6.000% 01/01/2014
GOVERNMENT NATL MTG ASSN 800,000.000 825,000.00 824,744.00
30YR TBA 7.500% 01/01/2029
GOVERNMENT NATL MTG ASSN 1,200,000.000 1,192,750.00 1,189,500.00
30YR TBA 7.500% 01/01/2029
GOVERNMENT NATL MTG ASSN 100,000.000 101,093.75 101,016.00
30YR TBA 7.500% 01/01/2029
</TABLE>
See accompanying independent auditors' report
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
------------------
BANKERS TRUST COMPANY ITEM 27A - SCHEDULE OF GLOBAL ASSETS - EB
NEW YORK ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
06/04/99 E25A OCLD PAGE 3
ACCOUNT 122490 - COMBINED SODEXHO MARRIOTT SERVICES
MARKET
IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY DESCRIPTION OF INTEREST COST VALUE
============================================= ======================= ============ ============
<S> <C> <C> <C>
HOME LN TR 3,033.360 3,059.19 3,063.66
1997-HI3 LN BACKED NT CL A-PB
7.18% 12/12/2022
* MARRIOTT INTL INC NEW 2,424,248.000 38,832,760.38 70,303,192.00
CLASS A
* ROWE T PRICE EQUITY INCOME FUND 296,340.076 8,213,961.23 7,799,670.80
SH BEN INT
* ROWE T PRICE MID CAP GROWTH FD INC 312,604.818 10,164,950.09 10,653,572.20
FD
(PRICE FUNDS:M CAP GRO)
* ROWE T PRICE NEW HORIZONS FD INC COM 282,705.729 7,000,893.34 6,598,351.71
* SODEXHO MARRIOTT SERVICES INC 386,092.000 5,609,729.68 10,690,115.30
ACCOUNT TOTAL 247,454,744.88 283,666,204.60
Participant notes receivable 8,723,054
Interest bearing cash included in Mutual and Collective Investment funds 1,332,155
<FN>
* Party in interest
</FN>
</TABLE>
See accompanying independent auditors' report
<PAGE>
SCHEDULE I - A
ITEM 27A - SCHEDULE OF
ASSET HELD FOR INVESTMENT PURPOSES
GUARANTEED INVESTMENT CONTRACTS
Allstate Life Insurance Company $ 1,242,413
Allstate Life Insurance Company 3,887,073
*Bankers Trust (DEL) Basic 4,255,605
Business Men's Assurance 272,187
Caisse des Depots (CDC) 4,279,130
Caisse des Depots (CDC) 1,126,347
Canada Life Assurance Company 1,379,474
Canada Life Assurance Company 785,659
Canada Life Assurance Company 231,946
Combined Insurance Company 1,259,125
Continental Assurance Company 4,317,961
First Allmerica Financial 1,971,111
John Hancock Mutual Life 1,135,767
John Hancock Mutual Life 4,637,979
John Hancock Mutual Life 57,628
Life of Virginia 1,305,610
Life of Virginia 1,281,236
Massachusetts Mutual Life Insurance Company 847,784
<PAGE>
SCHEDULE I - A
ITEM 27A - SCHEDULE OF
ASSET HELD FOR INVESTMENT PURPOSES
GUARANTEED INVESTMENT CONTRACTS
Metropolitan Life Insurance Company 1,958,510
Metropolitan Life Insurance Company 2,361,900
New York Life Insurance Company 2,591,195
New York Life Insurance Company 758,467
Pacific Life 1,133,504
Peoples Security Life 693,113
Peoples Security Life 1,588,930
Peoples Security Life 1,005,137
Peoples Security Life 999,385
Peoples Security Life 1,016,687
Protective Life 1,167,139
Rabobank Nederland 1,802,608
Rabobank Nederland 994,295
State Street Bank & Trust 4,088,728
United of Omaha 966,889
National Westminster 2,883,137
Transamerica Life 6,833,358
--------------------
Total $ 67,117,017
====================
* Party in interest
See accompanying independent auditors' report
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
-------------------
BANKERS TRUST COMPANY ITEM 27A PART 2 - SCHEDULE OF GLOBAL ASSETS - EB
NEW YORK ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED
OF WITHIN THE PLAN YEAR
FROM 03/27/1998 TO 12/31/1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
06/05/99 PAGE 1
ACCOUNT 122490 - COMBINED SODEXHO MARRIOTT SERVICES
401(K) EMPLOYEES RET SVGS PLAN & TRUST
COMBINED ACCOUNT
MARKET
IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY DESCRIPTION OF INTEREST COST VALUE
============================================= ======================= ============ ============
<S> <C> <C> <C>
ACE LTD COM 25,800.000 967,500.00
25,800.000 709,177.41
PARTNERRE HOLDINGS LTD 10,100.000 508,787.50
COM 10,100.000 440,998.77
ARKANSAS ST DEV FIN 100,000.000 127,066.00
DTD 05/15/1988 9.750% 11/15/2014 100,000.000 129,183.00
GNMA G & D
ASSET SECURITIZATIONCOMMERCIAL PAPER 300,000.000 295,647.17
DISC DTD 10NOV1998 DUE 16FEB1999 300,000.000 295,647.17
BCE INC COM 7,800.000 310,050.00
7,800.000 321,609.10
BRITISH AIRWAYS PLC 5,400.000 465,543.10
ADR 2ND INSTALLMENT 5,400.000 444,367.17
BRITISH PETE LTD AMERN DEPOSITARY SH 15,080.000 1,322,549.28
15,180.855 1,352,777.61
CABLE & WIRELESSPUB LTD CO 9,700.000 350,441.64
SPONSORED ADR COM 9,700.000 348,356.11
CIESCO L P COMMERCIAL PAPER 250,000.000 248,266.67
DISC DTD 25NOV1998 DUE 12JAN1999 250,000.000 248,266.67
ELECTRICITE DE FRANCE COMMERCIAL PAPER 200,000.000 198,957.33
DISC DTD 22SEP1998 DUE 26OCT1998 200,000.000 198,957.33
FORD MTR CO DEL 310,000.000 306,534.20
DEB DTD 09/30/1998 6.625% 10/01/2008 310,000.000 310,231.90
GLAXO WELLCOME PLC 5,300.000 309,058.90
SPONSORED ADR 5,300.000 358,476.32
</TABLE>
See accompanying independent auditors' report
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
-------------------
BANKERS TRUST COMPANY ITEM 27A PART 2 - SCHEDULE OF GLOBAL ASSETS - EB
NEW YORK ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED
OF WITHIN THE PLAN YEAR
FROM 03/27/1998 TO 12/31/1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
06/05/99 PAGE 2
ACCOUNT 122490 - COMBINED SODEXHO - COMBINED
MARKET
IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY DESCRIPTION OF INTEREST COST VALUE
============================================= ======================= ============ ============
<S> <C> <C> <C>
HOECHST A G 9,600.000 391,102.50
SPONSORED ADR 9,600.000 417,708.95
HYDRO-QUEBEC 300,000.000 403,917.00
DEB SER HQ 300,000.000 419,754.00
DTD 11/15/1990 9.50% 11/15/2030
HYDRO QUEBEC 100,000.000 117,861.00
DEB DTD 01/30/1992 8.400% 01/15/2022 100,000.000 118,683.00
IMPERIAL CHEM INDS PLC 10,800.000 731,469.47
ADR NEW 10,800.000 481,948.66
INTER-AMERICAN DEVELOPMENT BANK 400,000.000 406,604.00
DTD 03/18/1993 7.125% 03/15/2023 400,000.000 415,204.00
MANITOBA PROV CDA 100,000.000 137,696.00
DEB SER EE 100,000.000 138,350.00
DTD 09/15/1998 9.500% 09/15/2018
MATSUSHITA ELEC INDL LTD ADR 2,900.000 475,522.30
2,900.000 488,013.70
MUTUAL RISK MANAGEMENT LTD 25,700.000 925,200.00
COM 25,700.000 911,443.77
NATIONAL RURAL UTIL CORP 400,000.000 398,709.67
DISC NT 10/06/1998 400,000.000 398709.67
NEWS CORP LTD 18,100.000 441,187.50
SPONSORED ADR REPDSTG PD LTD 18,100.000 424,616.92
VTG ORD
RIO TINTO PLC 10,300.000 535,772.22
SPONSORED ADR 10,300.000 464,120.02
ROYAL DUTCH PETE CO 32,900.000 1,811,005.04
N Y REGISTRY SH PAR N CLDR 1.25 32,900.000 1,605,718.96
</TABLE>
See accompanying independent auditors' report
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
-------------------
BANKERS TRUST COMPANY ITEM 27A PART 2 - SCHEDULE OF GLOBAL ASSETS - EB
NEW YORK ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED
OF WITHIN THE PLAN YEAR
FROM 03/27/1998 TO 12/31/1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
06/05/99 PAGE 3
ACCOUNT 122490 - COMBINED SODEXHO - COMBINED
MARKET
IDENTITY OF ISSUE, BORROWER, OR SIMILAR PARTY DESCRIPTION OF INTEREST COST VALUE
============================================= ======================= ============ ============
<S> <C> <C> <C>
SMITHKLINE BEECHAM PLC ADR 5,900.000 378,859.84
RESTG ORD A COM 5,900.000 378,263.10
SONY CORP ADR NEW 50 YEN SH 6,200.000 537,135.98
6,200.000 441,050.18
TRANSCANADA PIPELINES LTD COM 15,300.000 341,388.90
15,300.000 222,033.82
USB FINANCE COMMERCIAL PAPER 800,000.000 795,706.67
DISC DTD 10AUG1998 DUE 14SEP1998 800,000.000 795,706.67
UNILEVER N V NEW YORK SHS 6,500.000 486,687.50
6,500.000 520,552.81
VODAFONE GROUP PLC 11,800.000 1,224,993.40
SPONSORED ADR 11,800.000 1,893,031.74
WILLIS CORROON GROUP PLC 25,000.000 348,450.00
F/K/A WILLIS CORROON PLC 25,000.000 418,625.00
SPONSORED ADR
ZENECA GROUP PLC SPONSORED 1,100.000 44,184.74
ADR COM 1,100.000 49,242.32
</TABLE>
See accompanying independent auditors' report
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
------------------------
NEW YORK ITEM 27D PART 2- SCHEDULE OF REPORTABLE TRANSACTIONS
BANKERS TRUST COMPANY CUMULATIVE TRANSACTIONS BY ISSUE GLOBAL ASSETS - EB
FROM 03/27/1998 TO 12/31/1998 PREPARED ON ACCRUAL BASIS (TRADE-DATED)
ACCOUNT 122490 - COMBINED 06/05/99 PAGE 1
SODEXHO MARRIOTT SERVICES
401(k) Employees Ret Svgs Plan & Trust
Combined Account
Market Value 12/31/1998 $ 397,238,230
--------------------DISPOSED-------------------- -------------ACQUIRED------------
SECURITY DESCRIPTION SALES PROCEEDS GAIN OR LOSS PURCHASES COST
========================================= ======== ============== ============ ============ =============
<S> <C> <C> <C> <C> <C>
BT PYRAMID DIRECTED ACCOUNT CASH FUND 1,101 145,893,011.72 0.00 1,190 323,494,929.64
MARRIOTT INTL INC NEW 5 21,434,058.27 517,155.78 0 0.00
MARRIOTT INTL INC NEW CLASS A 48 15,760,537.87 7,555,298.97 6 26,466,467.35
UNITED STATES TREASURY NOTES
DTD 12/31/96 5.75% 12/31/98 0 0.00 0.00 3 39,545,038.67
</TABLE>
<PAGE>
INDEX TO EXHIBITS
-----------------
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
(23) Consent of Independent Auditors
Exhibits omitted are not required or not applicable.
[KPMG LOGO]
2001 M Street, N.W.
Washington, DC 20036
CONSENT OF INDEPENDENT AUDITORS
The Board of Trustees
Sodexho Marriott Services, Inc. 401(k) Employees'
Retirement Savings Plan and Trust:
We consent to incorporation by reference in the registration statement No.
333-63863 on Form S-8 of Sodexho Marriott Services, Inc. for Sodexho Marriott
Services, Inc. 401(k) Employees' Retirement Savings Plan and Trust, of our
report dated June 11, 1999, relating to the statement of net assets available
for benefits of the Sodexho Marriott Services, Inc. Employees' Retirement
Savings Plan and Trust as of December 31, 1998 and the related statement of
changes in net assets available for benefits for the period from March 27, 1998
(date of inception) to December 31, 1998, and supplemental schedules, which
report appears in the December 31, 1998 annual report on Form 11-K of the
Sodexho Marriott Services, Inc. 401(k) Employees' Retirement Savings Plan and
Trust.
/s/KPMG LLP
Washington, DC
June 29, 1999
