SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                  Annual Report Pursuant To Section 13 Or 15(d)
                     Of The Securities Exchange Act of 1934

   For the fiscal year ended December 31, 1998. Commission File number 1-14762


                            THE SERVICEMASTER COMPANY
           (Exact Name of Registrant as Specified in its Certificate)
                (Successor to ServiceMaster Limited Partnership)


                  Delaware                   36-3858106
      (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
      Incorporation or Organization)


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

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

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

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

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 No

     The  Aggregate  Market  Value  of  Shares  Held  by  Non-Affiliates  of the
Registrant  As of March  22,  1999 was  $5,830,705,378.  The  Number  of  Shares
Outstanding  of  the  Registrant's  Common  Stock  as  of  March  22,  1999  was
309,315,048.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Certain parts of the Registrant's Annual Report to Stockholders for the
year ended December 31, 1998 are  incorporated  into Part I, Part II and Part IV
of this Form 10-K.

         Certain parts of the  Registrant's  Definitive  Proxy Statement for the
April 30, 1999 Annual Meeting of Stockholders  is incorporated  into Part III of
this Form 10-K.


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                                     PART I

Item 1.  Business

         This annual report on Form 10-K is filed by The ServiceMaster  Company,
a Delaware corporation  (hereinafter sometimes referred to as the "Registrant").
The Registrant and its affiliated entities are referred to as "ServiceMaster" or
the "Company" or the "ServiceMaster enterprise." The Registrant is the successor
to  ServiceMaster  Limited  Partnership,  a  Delaware  limited  partnership.  On
December 26, 1997, by means of a statutory merger,  the Registrant  succeeded to
and became  substituted for  ServiceMaster  Limited  Partnership as the publicly
traded parent entity in the ServiceMaster enterprise.

Forward-Looking Statements

         In  accordance  with the Private  Securities  Litigation  Reform Act of
1995,  the  Registrant  notes  that  statements  set  forth or  incorporated  by
reference in this Annual  Report on Form 10-K that look  forward in time,  which
include  everything  other  than  historical  information,   involve  risks  and
uncertainties  that may  affect the  Company's  actual  results  of  operations.
Factors  that could  cause  actual  results  to differ  materially  include  the
following (among others): weather conditions adverse to certain of the Company's
businesses,  the entry of additional competitors in any of the markets served by
the Company,  labor  shortages,  consolidation  of  hospitals in the  healthcare
market,  the condition of the United States  economy,  and other factors  listed
from time to time in the  Company's  filings  with the  Securities  and Exchange
Commission (including, but not limited to, its Year 2000 readiness disclosures).

Principal Business Groups

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

         The  Company  is  organized  into  two  principal   operating   groups:
ServiceMaster  Consumer  Services and  ServiceMaster  Management  Services.  The
Company also has a third operating group:  ServiceMaster Employer Services. Each
of these  operating  groups is headed by a limited  partnership or a corporation
which has its own group of operating subsidiaries.  The parent companies for the
principal   operating  groups  are   ServiceMaster   Consumer  Services  Limited
Partnership,  which  was  formed  in  the  summer  of  1990,  and  ServiceMaster
Management Services Limited Partnership,  which was formed in December 1991. The
parent  companies  for the  principal  operating  groups are wholly owned by the
Company.  All  subsidiaries of the operating  group parent  companies are wholly
owned,  except for Rescue Rooter L.L.C., a subsidiary of ServiceMaster  Consumer
Services in which senior Rescue Rooter management have acquired equity interests
of not more than 10  percent in total and which are  subject to certain  put and
call rights.

Trademarks and Service Marks; Franchises

         The  Company's  trademarks  and  service  marks are  important  for all
elements  of the  Company's  business,  although  such  marks  are  particularly
important  in  the  advertising  and  franchising  activities  conducted  by the
operating  subsidiaries of ServiceMaster  Consumer  Services L.P. Such marks are
registered and are renewed at each registration expiration date.

         Within  ServiceMaster  Consumer Services,  franchises are important for
the TruGreen-ChemLawn,  Terminix,  ServiceMaster  Residential/Commercial,  Merry
Maids,  AmeriSpec and Furniture  Medic  businesses.  Nevertheless,  revenues and
profits derived from  franchise-related  activities  constitute less than 10% of
the revenue and profits of the consolidated ServiceMaster enterprise.  Franchise
agreements  made in the course of these  businesses  are generally for a term of
five  years.  ServiceMaster's  renewal  history  is that  most of the  franchise
agreements which expire in any given year are renewed.

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ServiceMaster Consumer Services

     ServiceMaster  Consumer Services provides  specialty services to homeowners
and   commercial    facilities   through   eight   companies:    TruGreen   L.P.
("TruGreen-ChemLawn");  The Terminix  International  Company L.P.  ("Terminix");
ServiceMaster Residential/Commercial Services L.P. ("Res/Com"); Merry Maids L.P.
("Merry  Maids");  American Home Shield  Corporation  ("American Home Shield" or
"AHS"); AmeriSpec, Inc. ("AmeriSpec"); Furniture Medic L.P. ("Furniture Medic");
and Rescue  Rooter  L.L.C.  ("Rescue  Rooter").  Rescue  Rooter was  acquired by
ServiceMaster  Consumer  Services on January 1, 1998.  The services  provided by
these  companies  include:  lawn care,  tree and shrub services and indoor plant
maintenance  services under the  "TruGreen",  "ChemLawn" and "Barefoot"  service
marks;  termite and pest control  services  under the  "Terminix"  service mark;
residential and commercial cleaning and disaster  restoration services under the
"ServiceMaster"  service mark; domestic  housekeeping  services under the "Merry
Maids" service mark;  home systems and appliance  warranty  contracts  under the
"American  Home  Shield"  service  mark;  home  inspection  services  under  the
"AmeriSpec"  service mark;  on-site  furniture repair and restoration  under the
"Furniture  Medic" service mark; and plumbing and drain cleaning  services under
the "Rescue Rooter" service mark.

         The services provided by the eight Consumer Services companies are part
of the  ServiceMaster  "Quality  Service  Network" and are accessed by calling a
single toll-free  telephone  number:  1-800-WE SERVE.  ServiceMaster  focuses on
establishing  relationships  to  provide  one or more  of  these  services  on a
repetitive  basis to customers.  Since 1986,  the number of customers  served by
ServiceMaster  Consumer  Services  has  increased  from fewer  than one  million
domestic customers to more than 10.5 million worldwide customers.

         Oversight   responsibility  for  the  ServiceMaster  Consumer  Services
businesses  which  are  conducted  in  foreign  markets  is in  the  appropriate
subsidiary of ServiceMaster Consumer Services L.P.

         TruGreen-ChemLawn.  TruGreen-ChemLawn  is a wholly-owned  subsidiary of
ServiceMaster Consumer Services L.P. As of December 31, 1998,  TruGreen-ChemLawn
had 230 company-owned  branches and 82 franchised branches.  With over 3 million
residential and commercial customers,  TruGreen-ChemLawn is the leading provider
of lawn care services in the United States and a leading  provider of commercial
landscaping  services.  TruGreen-ChemLawn  provides  lawn,  tree and shrub  care
services  in  Egypt,   Japan,   Saudi  Arabia,   and  Turkey  through  licensing
arrangements and in Canada through a subsidiary. TruGreen-ChemLawn also provides
interior  plantscape  services to commercial  customers.  The  TruGreen-ChemLawn
businesses are seasonal in nature.  On March 18, 1999,  ServiceMaster  completed
the  acquisition  of  LandCare  USA,  Inc.,  a leading  provider  of  commercial
landscaping  services and tree services  (including line clearing and tree care.
ServiceMaster  thereafter combined the LandCare USA business with the commercial
landscaping business of TruGreen-ChemLawn.

         Terminix.  Terminix  is  a  wholly-owned  subsidiary  of  ServiceMaster
Consumer  Services  L.P.  With  over  2.5  million  residential  and  commercial
customers, Terminix, through its company-owned branches and through franchisees,
is the  leading  provider  of termite  and pest  control  services in the United
States.  As of December 31, 1998,  Terminix was providing these services through
256 company-owned  branches in 40 states and through 240 franchised  branches in
28 states.  Terminix also manages the following European pest control companies,
all of which are subsidiaries of TMX-Europe  B.V., a wholly-owned  subsidiary of
the  Company:  Terminix  Peter  Cox  Ltd.,  a  leading  pest  control  and  wood
preservation  company in the United Kingdom and Ireland;  Terminix Protekta B.V.
and Riwa  B.V.,  each a leading  pest  control  company in the  Netherlands  and
Belgium;  Anticimex  Development  A.B.,  a holding  company for the leading pest
control  company in Sweden and which also operates in Norway;  and the Stenglein
Group,  a group of pest control  companies in Germany.  Terminix  also  provides
termite and pest control  services  through  licensing  arrangements  with local
service  providers in twenty-seven  other countries and through  subsidiaries in
eight other countries. The Terminix business is seasonal in nature.

         Res/Com. Res/Com is a wholly-owned subsidiary of ServiceMaster Consumer
Services L.P.  ServiceMaster,  through Res/Com, is the leading franchisor in the
United States in the residential and commercial cleaning field. Res/Com provides
carpet and upholstery  cleaning and janitorial  services,  disaster  restoration
services and window cleaning  services.  As of December 31, 1998, these services
were provided to approximately 1.6 million residential and commercial  customers
worldwide  through a network  of over  4,200  independent  franchisees.  Res/Com
provides

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its services through subsidiaries in Canada,  Germany,  Ireland and the
United Kingdom, and through licensing  arrangements with local service providers
in 17 other countries.

         Merry Maids. Merry Maids is a wholly-owned  subsidiary of ServiceMaster
Consumer  Services  L.  P.  Merry  Maids  is  the  organization   through  which
ServiceMaster  provides  domestic house cleaning  services.  With  approximately
338,000  worldwide  customers,  Merry Maids is the leading  provider of domestic
house  cleaning  services in the United States.  As of December 31, 1998,  these
services  were  provided  through  27  company-owned  branches  in 19 states and
through 829  licensees  operating  in all 50 states.  Merry Maids also  provides
domestic house cleaning  services through  subsidiaries in Canada and the United
Kingdom and through licensing arrangements with local service providers in eight
other countries.

         American Home Shield. AHS is a wholly-owned subsidiary of ServiceMaster
Consumer  Services L.P. AHS is a leading  provider of home systems and appliance
warranty  contracts  ("warranty  contracts")  in the  United  States,  providing
homeowners  with  contracts  covering  the  repair or  replacement  of  built-in
appliances,  hot water heaters and  electrical,  plumbing,  central  heating and
central air conditioning  systems which malfunction by reason of normal wear and
tear.  Warranty  contracts are sold through  participating real estate brokerage
offices in conjunction with resales of  single-family  residences to homeowners.
AHS also sells warranty contracts directly to non-moving  homeowners by renewing
existing  contracts and through  various other  distribution  channels which are
currently  being  expanded.  As of December  31, 1998,  AHS  warranty  contracts
provided for  services to  approximately  700,000  homes  through  approximately
12,250 independent repair maintenance  contractors in 50 states and the District
of Columbia,  with  operations in California,  Texas and Arizona  accounting for
32%,  26% and 8%,  respectively,  of gross  contracts  written by AHS.  AHS also
provides home service warranty  contracts  through  licensing  arrangements with
local service providers in three other countries.

         AmeriSpec.  AmeriSpec is a wholly-owned subsidiary of AHS. AmeriSpec is
a leading  provider of home  inspection  services in the United  States.  During
1998,  AmeriSpec conducted  approximately  135,000 home inspections in 45 states
and Canada, with operations in California,  New York and Illinois accounting for
27%,  5% and 4%,  respectively,  of the gross  number of  inspections  conducted
through AmeriSpec.

         Furniture  Medic.  Furniture  Medic  is a  wholly-owned  subsidiary  of
ServiceMaster  Consumer Services L.P. Furniture Medic provides on-site furniture
repair and  restoration  services in 46 states.  As of December 31, 1998,  these
services were provided through 530 licensees.  Furniture Medic also provides its
services  through  subsidiaries  in Canada and the United  Kingdom  and  through
licensing arrangements with local service providers in two other countries.

         Rescue Rooter. Rescue Rooter is a subsidiary of ServiceMaster  Consumer
Services  L.P.  Rescue  Rooter  acquired  the  business  and  assets  of  Rescue
Industries,  Inc. on January 1, 1998.  Rescue Rooter provides plumbing and drain
cleaning  services,  and heating  and air  conditioning  services,  in 12 states
through 25 company-owned  branches and one franchise  location.  In 1998, Rescue
Rooter performed services for approximately  410,000  customers.  As of March 1,
1999 certain key employees of Rescue Rooter had purchased an aggregate 8.35% out
of a potential  10% equity  interest in Rescue  Rooter  pursuant to a management
equity plan.  Such interest is subject to  reciprocal  put and call rights which
will become  exercisable on January 1, 2003 and which will be consummated on the
basis of the then fair market  value of the  interest.  On March 23,  1999,  the
Registrant  announced  an  intention  to make a cash tender offer for all of the
outstanding shares of American Residential Services, Inc., a leading provider of
heating,  ventilation and air condition  services ("ARS").  See Exhibit 99.4. If
ARS is acquired by ServiceMaster, its business and operations will be integrated
with the business and operations of Rescue Rooter.


ServiceMaster Management Services

         ServiceMaster pioneered the providing of supportive management services
to health care  facilities by instituting  housekeeping  management  services in
1962. Since then,  ServiceMaster  has expanded its management  services business
such that it now provides a variety of supportive  management services to health
care,  education and business and industrial customers (including the management
of housekeeping,  plant operations and

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maintenance,  laundry and linen,  grounds
and  landscaping,   clinical  equipment   maintenance,   food  service,   energy
management, and total facility management). ServiceMaster's general programs and
systems free the customer to focus on its core business activity with confidence
that the support  services  are being  managed  and  performed  in an  efficient
manner.

         ServiceMaster   Management   Services  L.P.  is  organized  into  three
divisions,  each of which  provides  service on a  nationwide  basis  within its
market. These markets are: Healthcare Management Services;  Education Management
Services;  and Business & Industry Management  Services.  The responsibility for
overseeing the  Management  Services  businesses  which are conducted in foreign
markets lies with ServiceMaster Management Services L.P.

         As  of  December  31,  1998,  ServiceMaster  was  providing  supportive
management  services  to  approximately  1,633  health  care  customers  and  to
approximately  498  educational  and commercial  customers.  These services were
being  provided in all 50 states and the  District of  Columbia.  Outside of the
United  States,   ServiceMaster  was  providing   management   services  through
subsidiaries in Canada and Japan,  through an affiliated  company in Mexico, and
through licensing arrangements with local service providers in twenty-five other
countries.

         ServiceMaster  Healthcare Management Services.  The Healthcare division
of  ServiceMaster  Management  Services L.P. is a leading provider to the health
care market of  supportive  management  services,  including  the  management of
housekeeping,  plant operations and maintenance,  laundry and linen, grounds and
landscaping,  clinical equipment  maintenance,  food services and total facility
management.  As of December 31,  1998,  the  Healthcare  division was serving in
approximately  1,877 healthcare  facilities.  Although the healthcare market has
undergone significant consolidation in recent years, ServiceMaster believes that
there  continues to be potential for expansion in the  healthcare  market due to
the  trend  of  healthcare   facilities  to  outsource  more  of  their  service
requirements.

         ServiceMaster  Education Management Services. The Education division of
ServiceMaster  Management  Services L.P. is a leading  provider to the education
market of  maintenance,  custodial and grounds  services.  The facilities  which
comprise the education  market include primary  schools,  secondary  schools and
school districts, private specialty schools and colleges and universities. As of
December  31,  1998,   ServiceMaster  was  serving  281  educational  customers.
ServiceMaster  believes there is potential for expansion in the education market
due to its current  relatively  low  penetration of that market and the trend of
educational   facilities   to  consider   outsourcing   more  of  their  service
requirements.  However,  a majority of the  educational  facilities  continue to
assume direct responsibility for managing their support functions.

         ServiceMaster  Business & Industry Management Services.  The Business &
Industry  division  of  ServiceMaster  Management  Services  L.P.  is a  leading
provider of plant operations and maintenance,  custodial and grounds  management
services to business and industrial customers in selected markets.  Such markets
include the food processing, transportation,  healthcare products and automotive
markets.  ServiceMaster  believes that there is potential for expansion in these
business and industrial markets due to  ServiceMaster's  current low penetration
of those markets,  the trend of businesses to consider outsourcing more of their
service  requirements and the trend of governmental  units to privatize parts of
their   operations.   As  of  December  31,  1998,   ServiceMaster  was  serving
approximately 217 business or industrial customers.

         The Business  and  Industry  division  includes  Premier  Manufacturing
Support Services Limited Partnership.  Premier is a leading provider of facility
management  services in the  automotive  industry,  specializing  in paint booth
cleaning  services.  As of December  31,  1998,  Premier was serving 77 customer
locations in ten countries.

Other Businesses

         ServiceMaster  Diversified  Health  Services.  In  1998,  ServiceMaster
Diversified   Health   Services   ("DHS")   provided   management   services  to
freestanding, hospital-based and government-owned nursing homes, skilled nursing
facilities, and assisted living facilities;  design,  development,  refurbishing
and   construction   consulting   services   to   long-term   care   facilities;
rehabilitation  services; the sale of various medical produces and supplies; and

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pharmacy  management.  In  January  1999,  DHS  sold  its  hospice  business  in
connection with the ServiceMaster Home Health Care sale described below.

         ServiceMaster  Home Health  Care.  During the year 1998,  ServiceMaster
Home Health Care  Services  Inc.,  a wholly  owned  subsidiary  of the  Company,
provided  management  services to  hospital-based  home health care agencies (as
well as the direct  operation of  freestanding  home health care  agencies).  On
January 4, 1999, the Company announced the completion of its strategic review of
its home health care business and the decision to sell its direct  operations of
home health care agencies and certain support  operations and to discontinue its
outsource and operation of home health care agencies.  ServiceMaster Home Health
Care  Services  will  continue to provide  consulting  services to hospitals and
other providers of home health care.

         ServiceMaster Employer Services. ServiceMaster Employer Services is one
of the nation's larger  professional  employer  organizations.  It provides more
than 950 clients with administrative processing of payroll, workers compensation
insurance, health insurance, unemployment insurance and other employee benefits.

         Energy  Management.  During the year 1998, the Company  provided energy
management   services  through  Energy  Management   Services,   a  division  of
ServiceMaster Management Services L.P. On January 4, 1999, the Company announced
the  formation  of a  strategic  venture  with Texas  Utilities  Company for the
ownership  and  operation  of the energy  management  business.  The new venture
acquired all the assets of ServiceMaster  Energy  Management and is owned 85% by
Texas Utilities Company and 15% by the Company.

         International  Operations.  Consumer services and supportive management
services in international  markets are provided through  licensing  arrangements
and ownership of foreign operating  companies acquired by ServiceMaster.  Except
as noted below,  these  activities in Europe,  Latin America and the Middle East
are administered as part of the operations of ServiceMaster  Management Services
L.P.  and  ServiceMaster   Consumer  Services  L.P.,   respectively.   Operating
arrangements and market expansion efforts in the Pacific Rim are administered by
the parent company.

Other Activities

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

         Manufacturing  Division.  ServiceMaster  has a  manufacturing  division
which formulates, combines and distributes supplies, products and equipment that
are used internally in providing  management services to customers and which are
sold to licensees  for use in the operation of their  businesses.  ServiceMaster
has a small share of the market for the manufacture and distribution of cleaning
equipment, chemicals and supplies.

         Venture Fund.  ServiceMaster  Venture Fund L.L.C.,  a subsidiary of the
parent company (the "Venture Fund"),  invests in emerging growth companies which
show an ability to provide  innovative  service  technologies to ServiceMaster's
current and new customers. The Venture Fund is managed so as not to be intrusive
to the ongoing operations of the Company's operating units.

Industry Position, Competition and Customers

         The following  information  is based solely upon  estimates made by the
management   of   ServiceMaster   and  cannot  be   verified.   In   considering
ServiceMaster's industry and competitive positions, it should be recognized that
ServiceMaster  competes  with many other  companies in the sale of its services,
franchises  and products and that some of these  competitors  are larger or have
greater financial and marketing strength than ServiceMaster.

         The principal  methods of competition  employed by ServiceMaster in the
Consumer  Services   business  are  name  recognition,   assurance  of  customer
satisfaction  and a history of providing  quality  services to  homeowners.

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The principal methods of competition  employed by  ServiceMaster  in each of the
operating  units in the  Management  Services  business  are  price,  quality of
service and experience in providing management  services.  The principal methods
of competition  employed by ServiceMaster in the Employer  Services business are
name recognition, assurance of customer satisfaction and financial strength.

Consumer Services

         Subsidiaries of Consumer  Services provide a variety of residential and
commercial  services  under  their  respective  names on the  basis of their and
ServiceMaster's  reputation, the strength of their service marks, their size and
financial  capability,  and their training and technical support  services.  The
markets served by Terminix and TruGreen-ChemLawn are seasonal in nature.

         Lawn  Care  Services.  TruGreen-ChemLawn,  both  directly  and  through
franchisees,   provides  lawn  care  services  to  residential   and  commercial
customers. Competition within the lawn care market is strong, coming mainly from
regional and local,  independently-owned  firms and from homeowners who elect to
care for their lawns through their own personal  efforts.  TruGreen-ChemLawn  is
the leading  national  lawn care company  within this market.  TruGreen-ChemLawn
also provides indoor plant maintenance to commercial customers.

         Lawn care  services are regulated by law in most of the states in which
TruGreen-ChemLawn  provides such services. These laws require licensing which is
conditional  on a showing of  technical  competence  and  adequate  bonding  and
insurance.  The lawn care  industry is regulated at the federal  level under the
Federal  Insecticide,  Fungicide and  Rodenticide  Act, and lawn care  companies
(such as TruGreen-ChemLawn)  which apply herbicides and pesticides are regulated
under the  Federal  Environmental  Pesticide  Control  Act of 1972.  Such  laws,
together  with a variety of state and local laws and  regulations,  may limit or
prohibit the use of certain herbicides and pesticides, and such restrictions may
adversely affect the business of TruGreen-ChemLawn.

         Landscaping and Tree Services.  TruGreen-ChemLawn  provides landscaping
and tree services to commercial  customers.  (See page 2 for a discussion of the
acquisition of LandCare USA, Inc.). The landscape and tree services  industry is
highly competitive.  Most of TruGreen-ChemLawn's  landscape services competitors
are small, owner-operated companies operating in a limited geographic market but
there are a few large companies  operating in multiple  markets.  Competition in
the line clearing market is  characterized by a small number of large companies.
The commercial tree services market is  characterized  by a large group of small
competitors,  most of which are owner-operated  businesses  operating in limited
geographic areas and a few larger companies operating in one or more regions.

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

         Termite and pest control  services are  regulated by law in most of the
states in which Terminix  provides such services.  These laws require  licensing
which is conditional on a showing of technical  competence and adequate  bonding
and  insurance.  The  extermination  industry is regulated at the federal  level
under the Federal  Insecticide,  Fungicide  and  Rodenticide  Act, and pesticide
applicators  (such as Terminix)  are regulated  under the Federal  Environmental
Pesticide  Control Act of 1972. Such laws,  together with a variety of state and
local laws and regulations, may limit or prohibit the use of certain pesticides,
and such restrictions may adversely affect the business of Terminix.

         House  Cleaning  Services.  The  market  for  domestic  house  cleaning
services  is highly  competitive.  In urban areas the market  involves  numerous
local companies and a few national  companies.  ServiceMaster  believes that its
share of the total potential market for such services is small and that there is
significant  potential  for  further  expansion  of its  housecleaning  business
through   continued   internal   expansion  and  greater   penetration   of  the

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housecleaning  market.  Through its company-owned  branches and its franchisees,
ServiceMaster  has a small share of the market for the  cleaning of  residential
and commercial buildings.

         Home  Systems and  Appliance  Warranty  Contracts.  The market for home
systems and  appliance  warranty  contracts  is  relatively  new.  ServiceMaster
believes  that AHS  maintains a favorable  position in its  industry  due to the
system  developed  and used by AHS for  accepting,  dispatching  and  fulfilling
service  calls from  homeowners  through a  nationwide  network  of  independent
contractors.  AHS also has a computerized information system developed and owned
by AHS, and an electronic digital voice  communication  system through which AHS
handled more than 4.9 million calls in 1998.

         Home  Inspection  Services.  AmeriSpec  is a leading  provider  of home
inspection  services  in the United  States.  Competition  within this market is
strong, coming mainly from regional and local, independently-owned firms.

         Furniture  Repair  Services.  The market for on-site  furniture  repair
services  is  relatively  new.   ServiceMaster  believes  that  Furniture  Medic
maintains  a  favorable   position  in  its   industry   due  to  its   patented
environmentally  sensitive  procedure for repairing  furniture in the customer's
home.

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

Management Services

         Health  Care.  Within the market  consisting  of  general  health  care
facilities  having 50 or more beds,  ServiceMaster  is the  leading  supplier of
plant operations and maintenance,  housekeeping, clinical equipment maintenance,
and  laundry  and  linen   management   services.   As  of  December  31,  1998,
ServiceMaster   was  serving   approximately   1,633   customers   and  managing
approximately  1,877  health  care  facilities.  The  majority  of  health  care
facilities  within  this market not  currently  served by  ServiceMaster  assume
direct responsibility for managing their own non-medical support functions.

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

         Education.  ServiceMaster is a leading provider to the education market
of maintenance,  custodial and grounds  services.  The facilities which comprise
the education market served by ServiceMaster include primary schools,  secondary
schools  and school  districts,  private  specialty  schools  and  colleges  and
universities.  As of December 31, 1998,  ServiceMaster was serving approximately
281  customers  and  managing  approximately  5,700  facilities.   ServiceMaster
believes  there is potential for  expansion in the  education  market due to its
current  relatively low  penetration of that market and the trend of educational
facilities to consider outsourcing more of their service requirements.  However,
a  majority  of  the   educational   facilities   continue   to  assume   direct
responsibility for managing their support functions.

         Business and  Industry.  ServiceMaster  is a leading  provider of plant
operations  and  maintenance,  custodial  and  grounds  management  services  to
business and industrial  customers in selected markets.  ServiceMaster  believes
that there is potential for expansion in those business and  industrial  markets
which  ServiceMaster has elected to emphasize due to ServiceMaster's low current
penetration  of those markets,  the trend of businesses to consider  outsourcing
more of  their  service  requirements  and the  trend of  governmental  units to
privatize  parts of their

                                       7
<PAGE>

operations.  The emphasized  markets include the food
processing,  transportation,  healthcare products, and automotive markets. As of
December 31, 1998,  ServiceMaster  was serving  approximately  217 customers and
managing approximately 817 business or industrial facilities.

Major Customers

         ServiceMaster  has no single  customer which accounts for more than 10%
of its total  revenues.  No part of the  Company's  business is  dependent  on a
single  customer  or a few  customers,  the loss of which  would have a material
adverse effect on the Company as a whole. Revenues from governmental sources are
not material.

Employees

         On December 31, 1998, ServiceMaster had a total of approximately 51,740
employees.

         ServiceMaster  provides its employees  with annual  vacation,  medical,
hospital and life insurance  benefits and the right to participate in additional
benefit plans which are described in the Notes to Financial  Statements included
in the Company's  Annual Report to Stockholders  for the Year Ended December 31,
1998.

Year 2000 Computer Program Compliance

         Year 2000 Compliance.  Certain computer  programs use two digits rather
than  four to define  the  applicable  year and  consequently  may not  function
properly  beyond the year 1999 unless they are  remediated.  In  addition,  some
computer  programs are unable to recognize  the year 2000 as a leap year.  These
problems may also exist in chips  embedded in various  types of  equipment.  The
Company  has long been aware of this Year 2000  (Y2K)  problem.  The  Company is
dealing with the Y2K problem in part through system upgrades, which were planned
to occur in the normal course of business.  In other cases,  the Company has put
programs into place which the Company  believes will result in the completion of
necessary remediation efforts prior to the year 2000.

         State of  Readiness.  The  Company has  initiated  a program  (the "Y2K
program")  to  address  Y2K  issues as they  affect  the  Company's  information
technology (IT) systems, electronic data interfaces and its non-IT hardware. The
Y2K  program was set up to use the  following  steps as  appropriate:  inventory
assessment - planning -renovation - testing - implementation.  In addition,  the
program  calls for  inquiries  of the  Company's  major  suppliers  of goods and
services  to  determine   their  Y2K  status  and  a  review  of  the  Company's
relationships   with  its   customers  to  determine  if  the  Company  has  any
responsibility  for the status of the  customers' IT and/or  non-IT  systems and
hardware.

         In 1998,  the Company  began to monitor its progress on the Y2K program
on a  consolidated  basis and  completed an inventory  which covered both IT and
non-IT items for all  operating  companies and  administrative  units within the
ServiceMaster enterprise.  All items in the inventory were placed in one of four
categories:  mission  critical,  critical,  important  and  ordinary  within the
context of the operating  company or administrative  unit involved.  (A "mission
critical" or "critical"  designation for an item within an operating  company or
administrative unit does not necessarily hold the same level of criticality from
the perspective of the entire ServiceMaster enterprise).

         Remediation  plans have been  developed  for the mission  critical  and
critical  matters,  with  milestones  established  for each  plan  which  enable
management  to measure the  progress  made in respect of a plan against the work
schedule  established  for  that  plan.  Although  these  plans  encompass  many
separately identifiable items, from a ServiceMaster enterprise standpoint, there
are nine projects (the "Key Projects") which management has identified as either
mission  critical  or critical  and which will  require a  measurable  amount of
attention to  remediate.  Although all of the Key  Projects  are  scheduled  for
completion  before  the end of the  year  1999,  most of the  Key  Projects  are
scheduled for completion by June 30, 1999. As of February 28, 1999, work on each
of the Key  Projects  was on  schedule  and the  Company  believes  that all Key
Projects will be completed in accordance with their scheduled completion dates.

                                       8
<PAGE>

         The Company has utilized the services of an outside  consultant for the
Y2K  program  to help  identify  Y2K  issues  and to develop a system to closely
monitor remediation work. In early 1998, the Company established a Y2K committee
in the parent unit with responsibility for monitoring the Y2K program in each of
the Company's  operating units and for providing  status reports to the Board of
Directors.

         Year 2000 Costs.  Several of the Key  Projects  are upgrades of systems
which the Company would have undertaken irrespective of the Y2K problem. In some
cases,  including a new accounting and financial reporting system for the parent
company and its Management Services  subsidiary,  work on these systems has been
accelerated  in view of Y2K issues.  Other  upgrades or new systems were already
scheduled for  completion  prior to the year 2000,  such as a new support system
for the  Company's  American Home Shield  subsidiary  and a new  accounting  and
billing system for the recently developed  commercial  landscape business within
the Company's TruGreen-ChemLawn  subsidiary.  References to "Year 2000 costs" in
this report do not include the costs of projects  for which no  acceleration  is
occurring due to Y2K issues.

         The Company's Year 2000 costs to date are not material to the Company's
results of operations or financial  position and the Company does not expect its
future Year 2000 costs to be material to the Company's  results of operations or
financial position.  All Year 2000 costs (as well as the costs of installing the
system  upgrades  referred to above) have been,  and are expected to continue to
be, funded with cash from operations.

         Year 2000  Risks.  The Company  believes  that its  greatest  Year 2000
compliance  risk,  in  terms of  magnitude  of risk,  is that  key  third  party
suppliers  of goods or  services  may fail to  complete  their  own  remediation
efforts in a timely manner and thereby provoke an interruption in the ability of
one or more of the  operating  segments of the Company to provide  uninterrupted
services  to their  customers.  Utility  services  (electrical,  water and gas),
telephone  service,  banking services and, to a much lesser degree, the delivery
of  chemical  products  are the  critical  items  in this  regard.  Based on the
Company's  inquiries to its  providers of goods and services and on the basis of
the  Company's  general  knowledge  of the  state of  readiness  of the  utility
companies and banks with which it does business,  the Company does not expect to
suffer any material interruption in the services on which the Company depends.

         The Company has reviewed its agreements  with its customers,  including
particularly the customers of its Management  Services units for whom such units
provide facility  management  services.  The Company is satisfied that it is not
responsible, contractually or otherwise, for the Y2K readiness of the customer's
IT and  non-IT  systems  and  hardware,  and the  Company  is in the  process of
notifying all of its customers to this effect where, in the Company's  judgment,
the nature of the customers' business or facility warranted such notices.

         Where the  Company  uses its own  software  in the course of  providing
management services, the Company is responsible to make such software Y2K ready.
The Company is  confident  that such  software is already,  or soon will be, Y2K
ready.  For those units of the Company which sell  franchises  and which provide
software to the  franchisees,  such software is already,  or soon will be, fully
Y2K ready or,  alternatively,  provision  has been made for making  available to
franchisees  software from  third-party  developers  from whom  appropriate  Y2K
compliance assurances have been or will be received.

         Contingency  Plans.  At this time, the Company fully expects all of its
internal key IT and non-IT systems to be Y2K ready well in advance of the end of
the year 1999.  If it appears that timely  delivery of any Key Projects  becomes
questionable,  the Company  will  immediately  develop  appropriate  contingency
plans.

         The Company presently  expects that its significant  providers of goods
and services  are or will be Y2K ready by the end of the year 1999.  The Company
will  continue to make  inquires of its key suppliers for the purpose of testing
this expectation.  Insofar as the Company is exposed to risks originating in Y2K
problems at key suppliers, the Company will utilize short-term solutions, but no
practical  long-term  contingency  plans for these  external  Y2K  problems  are
possible.

                                       9
<PAGE>

         Although the Company believes that critical remediation efforts will be
completed  prior to the Year 2000,  the  untimely  completion  of these  efforts
could,  in  certain  circumstances,  have  a  material  adverse  effect  on  the
operations of the Company.

         Definition.  As used in this Year 2000  statement,  the term "year 2000
ready"  or "Y2K  ready"  when  used  with  reference  to a item of  software  or
equipment means the capability of the software or equipment to process correctly
(including  calculating,   comparing,   sequencing,   displaying,  or  storing),
transmit,  or  receive  date data  from,  into,  and  between  the 20th and 21st
centuries,  and  during  the  years  1999  and  2000,  and  to  make  leap  year
calculations,  provided  that all  products  used with the software or equipment
properly exchange accurate date data with it.


Item 2.  Properties

         The  headquarters  facility  of  ServiceMaster,  which  also  serves as
headquarters   for   ServiceMaster   Management   Services,   is  owned  by  The
ServiceMaster  Company and is located on a ten-acre  tract at One  ServiceMaster
Way, Downers Grove,  Illinois.  The initial structure was built in 1963, and two
additions  were  completed  in 1968  and  1976.  In  early  1988,  ServiceMaster
completed  construction  of a two-story  15,000  square foot addition for office
space, food service demonstrations and dining facilities.  The building contains
approximately  118,900  square feet of air  conditioned  office  space and 2,100
square feet of laboratory space. In the Spring of 1992,  ServiceMaster completed
the conversion of  approximately  30,000 square feet of space formerly used as a
warehouse  to offices  for  Management  Services  and for The  Kenneth and Norma
Wessner Training Center.

         ServiceMaster  owns a seven-acre,  improved  tract at 2500  Warrenville
Road, Downers Grove,  Illinois,  which is adjacent to its headquarters facility.
In 1993,  ServiceMaster  substantially  remodeled  the building  and  thereafter
leased approximately half the space (50,000 square feet) to a commercial tenant.
The balance of the space is utilized by ServiceMaster personnel.

         ServiceMaster owns a 50,000 square foot facility near Aurora,  Illinois
which is used by ServiceMaster as a warehouse/distribution  center. Ownership of
this facility was acquired on February 11, 1999 by a deed in lieu of foreclosure
from the company with whom  ServiceMaster had, on August 2, 1989, entered into a
sale/leaseback arrangement.

         ServiceMaster  believes that the facilities  described in the preceding
three  paragraphs  will  satisfy  the  Company's  needs for  administrative  and
warehouse space in the Chicago area for the immediate future.

         ServiceMaster owns four properties in Cairo, Illinois,  consisting of a
36,000 square foot,  three-story building used for manufacturing and warehousing
equipment,  supplies and products used in the business;  a warehouse and package
facility   comprising   30,000   square  feet;  a   three-story   warehouse  and
manufacturing building consisting of 43,000 square feet; and a 2,500 square foot
building  used for a machine  shop.  ServiceMaster  also  leases  two  warehouse
properties,  one 14,000  square feet and the other 6,000 square feet,  in Cairo,
Illinois.  Management  believes that the foregoing  manufacturing  and warehouse
facilities are adequate to support the current needs of ServiceMaster.

         The headquarters for  ServiceMaster  Consumer Services L.P. are located
in leased  premises at 860 Ridge Lake  Boulevard,  Memphis,  Tennessee.  The 860
Ridge  Lake   Boulevard   facility   also   serves  as  the   headquarters   for
TruGreen-ChemLawn,   Terminix,  Res/Com,  Merry  Maids,  American  Home  Shield,
AmeriSpec, Furniture Medic and Rescue Rooter.

         A new call  center is located in leased  premises  at 6399  Shelby View
Drive, Memphis,  Tennessee. The center contains approximately 60,000 square feet
of air conditioned office space from which telephone sales, scheduling services,
and other business functions are conducted.

                                       10
<PAGE>

         TruGreen-ChemLawn  owns 8 buildings  which are used as branch sites for
lawn care services.  These  facilities are located in Colorado (1), Florida (1),
Georgia  (1),  Michigan  (1),  Ohio (2), and Texas (2).  TruGreen-ChemLawn  also
leases 337 facilities used as branch sites.

         Terminix  owns 22 buildings  which are used as branch sites for termite
and pest control  services.  These  properties are all one-story  buildings that
contain  both  office  and  storage  space.  These  properties  are  located  in
California  (3),  Florida  (10),  Georgia  (1),  Illinois  (1),  New Jersey (2),
Tennessee (1), and Texas (4).

         American  Home Shield has retained some leased space in the building at
90  South E  Street,  Santa  Rosa,  California,  for  administrative  and  sales
operations.  Certain of  American  Home  Shield's  service  and data  processing
departments are located in premises owned by the company in Carroll,  Iowa. This
facility consists of a 43,000 square foot building on a seven-acre site.

         American Home Shield owns approximately 17 acres of land in Santa Rosa,
California  of which  11.2 acres are under  contracts  for sales to occur in the
second quarter of 1999.  This land is held for investment  purposes and has been
and will  continue  to be  offered  for sale,  with the  timing  of sales  being
affected by, among other things,  market  demand,  zoning  regulations,  and the
availability of financing to purchasers.

         Rescue Rooter owns three  buildings and leases 23 facilities  which are
used for branch operations to provide plumbing and drain cleaning services,  and
heating  and air  conditioning  services.  The  owned  facilities  are  located,
respectively,  in  Phoenix,  Arizona;  Round  Lake,  Illinois;  and  St.  Louis,
Missouri.  The leased  facilities are located in California (11),  Colorado (1),
Indiana (2),  Ohio (1),  Oregon (1),  Tennessee  (1),  Texas (4),  Utah (1), and
Washington (1).

     The  headquarters  for Diversified  Health Services are located in a leased
facility at 3839 Forest Hill-Irene Road,  Memphis,  Tennessee.  DHS leases other
administrative  facilities in St. Augustine,  Florida;  Minneapolis,  Minnesota;
Plymouth Meeting,  Pennsylvania;  Memphis,  Tennessee;  and Irving, Texas. As of
March 1, 1999,  through a joint venture and  subsidiaries,  DHS has an ownership
interest in four nursing home facilities,  leases one nursing home facility, and
leases five assisted living facilities. These facilities are located in Alabama,
Connecticut, Florida, Michigan, Tennessee, and Texas.

         The  headquarters  for  ServiceMaster  Employer  Services and Certified
Systems,  Inc., the principal subsidiary of SES, are located at 3218 Highway 67,
Mesquite,  Texas.  SES leases other  administrative  facilities  in Little Rock,
Arkansas, and Memphis, Tennessee.


Item 3.  Legal Proceedings

         In  the  ordinary   course  of  conducting  its  business   activities,
ServiceMaster becomes involved in judicial and administrative  proceedings which
involve both private parties and governmental authorities. As of March 22, 1999,
these  proceedings  included a number of general  liability  actions  and a very
small number of environmental proceedings.

         American Home Shield Class Action. A lawsuit was instituted in November
1997 and is currently  pending in the  District  Court of Harris  County,  Texas
against ServiceMaster,  ServiceMaster's  American Home Shield subsidiary ("AHS")
and AHS'  Texas  subsidiary  ("AHS-Texas")  in  which  three  plaintiffs,  Brian
Carmichael,  Penny  Carmichael and Tanja Kortz,  claim that  AHS-Texas  violated
certain  provisions of two Texas  consumer  protection  statues in the course of
soliciting  new and renewal  service  contracts.  (A second lawsuit of a similar
nature  was filed in the same  court by Edward  Thorne  III.  This case has been
abated pending  disposition of the  certification  issue  described  below.) The
plaintiffs  have requested the court to permit the lawsuit to be maintained as a
class action on behalf of all customers who purchased  service  contracts  since
late 1993. Theoretically,  this would place some 300,000 contracts in issue. The
plaintiffs  have  further  claimed that the number of contracts in issue times a
statutory  penalty of $1,000 per  contract  represents  the  measure of damages.
ServiceMaster  believes  that  AHS-Texas  accurately  represented  the  coverage
provided  in its service  agreements  and that the changes in the wording of its

                                       11
<PAGE>

renewal contacts were routine updates or  clarifications.  In this regard, it is
noteworthy that most of the AHS-Texas  contract forms were reviewed and approved
by the Texas Real Estate commission  before the forms were  distributed.  In any
and all events,  no material actual damages have been suffered by anyone in this
matter. Furthermore, ServiceMaster believes that the lawsuit cannot be sustained
as a class  action;  the statutes in question were not intended to be applied in
the manner  advanced by the  plaintiffs  (and in fact cannot be so applied under
the federal constitution). Accordingly, ServiceMaster believes that the ultimate
outcome  of  these  cases  will not be  material  to  ServiceMaster's  financial
condition or results of operations.


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

         No matters were submitted  during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.

                                       12
<PAGE>


                                     PART II

Item 5.  Market for Registrant's Shares and Related Shareholder Matters

         Except for the  information set forth in the second and third sentences
of this Item 5, the portions of the ServiceMaster  Annual Report to Shareholders
for  1998  under  the  captions  "Shareholders'  Equity"  (page  39)  and  "Cash
Distributions  Per  Share" and  "Price  Per  Share" in the  Quarterly  Operating
Results  table (page 46) supply the  information  required by this item and such
portions are hereby incorporated herein by reference. The Registrant's shares of
common  stock are listed and  traded on the New York  Stock  Exchange  under the
symbol "SVM".  At March 1, 1999,  the  Registrant's  shares of common stock were
held of record by  approximately  28,000  persons.  The Company  estimates  that
another 53,000 persons held shares of the Registrant's common stock in the names
of nominees.


Item 6.  Selected Financial Data

         The portion of the ServiceMaster Annual Report to Shareholders for 1998
in the Financial  Statements and Management  Discussion section ("FSMD Section")
under the caption  "Eleven Year Financial  Summary" (pages 32 - 33) supplies the
information required by this item and such portion is hereby incorporated herein
by reference.


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

         Management  Discussion and Analysis of Financial  Condition and Results
of Operations  for the three years ended  December 31, 1998, is contained in the
FSMD Section of the  ServiceMaster  Annual  Report to  Shareholders  for 1998 on
pages 25-31 and is hereby incorporated herein by reference.


Item 8.  Financial Statements and Supplementary Data

         The consolidated  statements of financial  position of ServiceMaster as
of December 31, 1998 and 1997, and the consolidated  statements of income,  cash
flows and shareholders'  equity for the years ended December 31, 1998, 1997, and
1996 and notes to the  consolidated  financial  statements  are contained in the
FSMD Section of the  ServiceMaster  Annual  Report to  Shareholders  for 1998 on
pages 36-45 are incorporated herein by reference.  The report of Arthur Andersen
LLP thereon dated January 25, 1999,  and the summary of  significant  accounting
policies are contained in the FSMD Section of the ServiceMaster Annual Report to
Shareholders  for 1998 on pages  34-35  and are  hereby  incorporated  herein by
reference.


Item 9.  Disagreements on Accounting and Financial Disclosure

         None.


                                       13
<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

Directors

         The information  contained under the heading "Election of Directors" in
the definitive  proxy  statement for the Company's April 30, 1999 Annual Meeting
of the Stockholders is incorporated herein by reference.

Senior Management Advisers

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

         The Board of Directors has appointed the persons listed below as Senior
Management  Advisers effective as of the 1998 annual meeting of the shareholders
of The ServiceMaster  Company to serve in such capacity until the annual meeting
of  shareholders  of the Company in 1999 or until  otherwise  determined  by the
Board of Directors.

         Robert  D.  Erickson,  age 55,  is an  Executive  Vice  President.  Mr.
Erickson  was a  director  of  ServiceMaster  from  May  1987  to May  1993.  He
previously served as a director of ServiceMaster  from May 1981 to June 1984. He
served  as  the  President  and  Chief  Operating  Officer  of   ServiceMaster's
International business unit from October 1993 to December 1997.

         Donald K. Karnes, age 48, is Group President of  TruGreen-ChemLawn  and
Terminix.   He   served   as   President   and  Chief   Operating   Officer   of
TruGreen-ChemLawn from January 1992 to December 1995.

         Robert F. Keith, age 42, is President,  Healthcare Management Services.
He served as President and Chief  Operating  Officer,  ServiceMaster  Management
Services from January 1, 1997 to October 2, 1998;  President and Chief Operating
Officer, ServiceMaster Consumer Services from July 1994 to December 31, 1996 and
as Group President,  ServiceMaster Consumer Services, from November 1992 to July
1994.

         Ernest J. Mrozek,  age 45, is Group President,  ServiceMaster  Consumer
Services.  He served as President  and Chief  Operating  Officer,  ServiceMaster
Consumer Services from January 1, 1997 to October 2, 1998; Senior Vice President
and Chief  Financial  Officer of the Registrant from January 1, 1995 to December
31,  1996.  He  served as Vice  President  and Chief  Financial  Officer  of the
Registrant  from May 1994 to December  1994,  as Vice  President,  Treasurer and
Chief Financial Officer from November 1, 1992 to April 30, 1994.

         Steven C. Preston,  age 38, 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 1, 1997 to June 30,  1998.  From August
1993 to March 7, 1997, he was Senior Vice President and Corporate  Treasurer for
First Data Corporation, Atlanta, GA.

         David M. Slott,  age 40 is  President  and Chief  Operating  Officer of
TruGreen  Limited  Partnership.  He served as Executive Vice President and Chief
Operating Officer of Tru-Green Limited  Partnership from May 1, 1994 to December
31, 1995.

                                       14
<PAGE>

Executive Officers of ServiceMaster

         The following table shows: (i) the names and ages (as of March 1, 1999)
of  the  present  executive  officers  of the  Registrant;  (ii)  all  positions
presently  held by each  officer;  and  (iii)  the year  each  person  became an
officer.  Each person named has served as an officer of the  Registrant  and its
predecessor company 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 Position                                                     An Officer
--------------------       ---      ----------------------------------------------------               ------------

<S>                        <C>      <C>                                                                        <C>
C. William Pollard         60       Chairman and Director                                                      1977

Carlos H. Cantu            65       President and Chief Executive Officer and Director                         1986

Phillip B. Rooney          54       Vice Chairman and Director                                                 1997

Charles W. Stair           58       Vice Chairman and Director                                                 1973

Donald K. Karnes           48       Group President, Consumer Services, and a
                                    Senior Management Adviser                                                  1992

Ernest J. Mrozek           45       Group President, Consumer Services, and a
                                    Senior Management Adviser                                                  1987

Robert F. Keith            42       President, Healthcare Management Services, and                             1986
                                    a Senior Management Adviser

Robert D. Erickson         55       Executive Vice President and a Senior Management Adviser                   1976

Vernon T. Squires          64       Senior Vice President and General Counsel                                  1987

Steven C. Preston          38       Executive Vice President and Chief Financial Officer, and
                                    a Senior Management Adviser                                                1997

Eric R. Zarnikow           39       Vice President and Treasurer                                               1994

Deborah A. O'Connor        36       Vice President and Controller                                              1993
</TABLE>


     Messrs. Pollard, Cantu, Stair and Rooney are also Directors of the Company.
See "Election of Directors" in the definitive  proxy statement for the Company's
1999 Annual Meeting for biographical  information with respect to these persons.
Messrs.  Karnes,  Mrozek,  Keith,  Erickson,  and Preston are Senior  Management
Advisers.  See  page 14 for  biographical  information  with  respect  to  these
persons.

         Vernon T.  Squires,  age 64, has served as Senior  Vice  President  and
General  Counsel since January 1, 1988. He served as Vice  President and General
Counsel  from April 1, 1987 until  December 31,  1987.  He was an associate  and
partner  with the law firm of Wilson &  McIlvaine  in Chicago,  specializing  in
corporate and tax law, from 1960 to April 1, 1987.

                                       15
<PAGE>

         Eric R.  Zarnikow,  age 39, has served as Vice  President and Treasurer
since May 1, 1994.  From August 1991 to April 1994, he served as Vice  President
and Treasurer of Gaylord Container Corporation.

         Deborah  A.  O'Connor,  age  36,  has  served  as  Vice  President  and
Controller since January 1, 1993.

Compliance With Section 16(a) of The Exchange Act of 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's  officers and directors,  and persons who own more than ten percent of
ServiceMaster's  shares,  to file reports of ownership  and changes in ownership
with the Securities and Exchange  Commission (the "Commission") and the New York
Stock Exchange. The Commission's regulations require certain officers, directors
and  greater-than-ten-percent  shareholders  to furnish to the Company copies of
all  Section  16(a) forms that they file.  During  1998,  the  Company  received
Section 16(a) forms from such officers and directors. As of January 1, 1999, the
Company did not have any shareholders with an interest greater than ten percent.

         Based solely on a review of the copies of Section 16(a) forms  received
by the Company or on written representations from certain reporting persons that
no Form 5 was required for those persons,  the Company believes that during 1998
the  officers and  directors  of the Company  complied  with  applicable  filing
requirements.

Item 11.  Executive Compensation

         The information  contained under the heading  "Executive  Compensation"
(except  those  portions  relating  to Item 13  below) in the  definitive  proxy
statement for the Company's  April 30, 1999 Annual  Meeting of  Stockholders  is
incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The information  contained under the heading  "Principal  Stockholders"
and "Management  Ownership" in the definitive  proxy statement for the Company's
April 30, 1999 Annual  Meeting of the  Stockholders  is  incorporated  herein by
reference.

Item 13.  Certain Relationships and Related Miscellaneous Transactions

         The information  contained under the heading  "Executive  Compensation"
(except  those  portions   relating  to  Item  11  above)  and  the  subheadings
"Compensation of Directors" and "Ownership  Information" in the definitive proxy
statement for the Company's April 30, 1999 Annual Meeting of the Stockholders is
incorporated herein by reference.

                                       16
<PAGE>


                                     PART IV


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

(a)   Financial Statements, Schedules and Exhibits

         1.  Financial Statements

                  The  documents  shown  below are  contained  in the  Financial
                  Statements and Management  Discussion and Analysis  section of
                  the  ServiceMaster  Annual Report to Shareholders for 1998, on
                  pages 25 - 45 and are incorporated herein by reference:

                           Summary of Significant Accounting Policies

                           Report of Independent Public Accountants

                           Consolidated Statements of Income for the three years
ended December 31, 1998, 1997 and 1996

                           Consolidated Statements of Financial Position  as  of
December 31, 1998 and 1997

                           Consolidated  Statements  of Cash Flows for the three
years ended December 31, 1998, 1997 and 1996

                           Consolidated  Statements of Shareholders'  Equity for
the three years ended December 31, 1998, 1997 and 1996

                           Notes to the Consolidated Financial Statements

         2.  Financial Statements Schedules

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

                           None

                  Included in Part IV of this Report:

                         Schedule VIII--Valuation and Qualifying Accounts

                         Report of Independent Public Accountants on Schedules

                         Exhibit 11 -- Exhibit Regarding Detail of Income Per
                                       Share Computation

                         Exhibit 23 -- Consent of Independent Public Accountants

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

                                       17
<PAGE>

         3.  Exhibits

                  The  exhibits  filed with this report are listed on pages 25 -
29 herein (the "Exhibits Index").

                  The  following  entries in the Exhibits  Index are  management
                  contracts or compensatory  plans in which a director or any of
                  the named  executive  officers of the  Registrant  does or may
                  participate.  Reference is made to the Exhibits  Index for the
                  filing with the  Commission  which  contains  such contract or
                  plan.
<TABLE>
<CAPTION>

                  Exhibit                   Contract or Plan

                  <S>               <C>
                  10.2              Deferred Directors Fee Agreement

                  10.3              Incentive Reward Compensation Plan

                  10.4              ServiceMaster Profit Sharing, Savings & Retirement Plan as amended
                                    and restated effective January 1, 1987

                  10.6              ServiceMaster 10-Plus Plan.  See also Item 10.11 *

                  10.8              Directors Deferred Fees Plan (ServiceMaster Shares Alternative)

                  10.11             ServiceMaster 10-Plus Plan as amended September 3, 1991 *

                  10.13             ServiceMaster 1994 Non-Employee Directors Share Option Plan**

                  10.15             ServiceMaster 1997 Share Option Plan *

                  10.17             ServiceMaster 1998 Equity Incentive Plan

                  10.20             ServiceMaster 1998 Non-Employee Directors Discounted Stock Option Plan

                  10.21             ServiceMaster 1998 Long-Term Performance Award Plan

</TABLE>

                  ---------

                   *  Superseded by Item 10.17
                  **  Superseded by Item 10.20

                                       18
<PAGE>


(b) Reports on Form 8-K filed during the last quarter of 1998

                  None


Certain Undertakings With Respect To Registration Statements on Form S-8

         For  the  purposes  of  complying  with  the  amendments  to the  rules
governing Form S-8  (effective  July 13, 1990) under the Securities Act of 1933,
the  Registrant   hereby  undertakes  as  follows  which  undertaking  shall  be
incorporated by reference into each of the Registrant's  Registration Statements
on Form S-8, including No. 33-19763 and No. 2-75851:

         Insofar as indemnification for liabilities arising under the Securities
         Act of 1933 may be permitted  to  directors,  officers and  controlling
         persons of the  Registrant  pursuant to the  foregoing  provisions,  or
         otherwise,  the  Registrant has been advised that in the opinion of the
         Securities  and Exchange  Commission  such  indemnification  is against
         public  policy  as  expressed  in the  Securities  Act of 1933  and is,
         therefore, unenforceable. In the event that a claim for indemnification
         against such  liabilities  (other than the payment by the Registrant of
         expenses incurred or paid by a director,  officer or controlling person
         of the  Registrant  in the  successful  defense of any action,  suit or
         proceeding) is asserted by such director, officer or controlling person
         in connection  with the  securities  being  registered,  the Registrant
         will,  unless in the opinion of its counsel the matter has been settled
         by controlling precedent, submit to a court of appropriate jurisdiction
         the  question  whether  such  indemnification  by it is against  public
         policy  as  expressed  in the Act and  will be  governed  by the  final
         adjudication of such issue.


                                       19
<PAGE>
<TABLE>
<CAPTION>


                                  SCHEDULE VIII

                            THE SERVICEMASTER COMPANY

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)


 -------------------------------------------------- ------------------ ------------- ------------------ -------------
                                                                                        Deductions
                                                                        Additions             
                                                       Balance at       Charged to     Write-offs of     Balance at
                                                      Beginning of      Costs and      Uncollectible       end of
 Description                                             Period          Expenses        Accounts          Period

 -------------------------------------------------- -----------------------------------------------------------------
<S>                                                 <C>                <C>           <C>                <C>
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 AS OF DECEMBER 31, 1998:
 Allowance for doubtful accounts--
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------

 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 Accounts receivable (current)                                $27,544        25,998             19,389       $34,153
                                                              -------        ------             ------       -------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 Notes receivable (current)                                   $ 4,677           686                528       $ 4,835
                                                              -------           ---                ---       -------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------

 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 AS OF DECEMBER 31, 1997:
 Allowance for doubtful accounts--
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------

 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 Accounts receivable (current)                                $24,117        20,183             16,756       $27,544
                                                              -------        ------             ------       -------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 Notes receivable (current)                                   $ 2,170         2,507                  0       $ 4,677
                                                              -------  --     -----  ---------       -       -------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------

 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 AS OF DECEMBER 31, 1996:
 Allowance for doubtful accounts--
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------

 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 Accounts receivable (current)                                $18,029        20,517             14,429       $24,117
                                                              -------        ------             ------       -------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 Notes receivable (current)                                   $ 2,439            59                328       $ 2,170
                                                              -------  -----     --  ---------     ---       -------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------
 -------------------------------------------------- ------------------ ------------- ------------------ -------------

 -------------------------------------------------- ------------------ ------------- ------------------ -------------
</TABLE>

                                       20
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS






To the Shareholders of ServiceMaster Limited Partnership:

We have audited in accordance with generally  accepted auditing  standards,  the
financial  statements  included in The ServiceMaster  Company's annual report to
shareholders  incorporated  by reference in this Form 10-K,  and have issued our
report  thereon  dated  January 25, 1999.  Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. The schedules  included
in Part IV in the Form 10-K are the  responsibility of the Company's  management
and are presented  for purposes of complying  with the  Securities  and Exchange
Commission's  rules and are not part of the basic  financial  statements.  These
supporting  schedules have been subjected to the auditing  procedures applied in
the audit of the basic financial statements and, in our opinion, fairly state in
all material  respects the  financial  data  required to be set forth therein in
relation to the basic financial statements taken as a whole.




                                                     Arthur Andersen LLP
Chicago, Illinois
January 25, 1999



                                       21
<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereunto duly authorized.

                                             THE SERVICEMASTER COMPANY
                                                       Registrant




Date: March 18, 1999                         By:    /s/ C. WILLIAM POLLARD
                                                 -------------------------------
                                                     C. William Pollard
                                                     Chairman


         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 their capacities and on the date indicated.

<TABLE>
<CAPTION>

         Signature                               Title                                  Date
---------------------------                 ------------------------            ----------------


<S>                                         <C>                                 <C> 
/s/ C. WILLIAM POLLARD                      Chairman and Director               March 18, 1999
---------------------------
  C. William Pollard



/s/ CARLOS H. CANTU                         President and Chief Executive       March 18, 1999
---------------------------
  Carlos H. Cantu                           Officer and Director



/s/ PHILLIP B. ROONEY                       Vice Chairman and Director          March 18 1999
----------------------
   Phillip B. Rooney



/s/ CHARLES W. STAIR                        Vice Chairman and Director          March 18, 1999
----------------------
 Charles W. Stair



/s/ STEVEN C. PRESTON                       Executive Vice President and        March 18, 1999
----------------------
  Steven C. Preston                         Chief Financial Officer (Principal
                                            Financial Officer and Principal
                                            Accounting Officer)

/s/ PAUL W. BEREZNY, JR.                    Director                            March 18, 1999
------------------------
   Paul W. Berezny, Jr.

                                       22
<PAGE>

         Signature                               Title                                  Date
---------------------------                 ------------------------            ----------------

/s/ HENRY O. BOSWELL                        Director                                March 18, 1999
----------------------
   Henry O. Boswell



/s/ BRIAN GRIFFITHS                         Director                                March 18, 1999
----------------------
   Brian Griffiths



/s/SIDNEY E. HARRIS                         Director                                March 18, 1999
----------------------
   Sidney E. Harris



/s/ HERBERT P. HESS                         Director                                March 18, 1999
----------------------
   Herbert P. Hess



/s/ MICHELE M. HUNT                         Director                                March 18, 1999
---------------------------
   Michele M. Hunt



/s/ GUNTHER H. KNOEDLER                     Director                                March 18, 1999
-----------------------
   Gunther H. Knoedler



/s/ JAMES D. McLENNAN                       Director                                March 18, 1999
----------------------
   James D. McLennan



/s/ VINCENT C. NELSON                       Director                                March 18, 1999
----------------------
   Vincent C. Nelson



/s/ DALLEN W. PETERSON                      Director                                March 18, 1999
---------------------------
   Dallen W. Peterson


                                       23
<PAGE>

         Signature                               Title                                  Date
---------------------------                 ------------------------            ----------------



/s/  STEVEN S REINEMUND                     Director                                March 18, 1999
------------------------
   Steven S Reinemund



/s/ BURTON E. SORENSEN                      Director                                March 18, 1999
------------------------
   Burton E. Sorensen



/s/ DAVID K. WESSNER                        Director                                March 18, 1999
------------------------
   David K. Wessner

</TABLE>
                                       24
<PAGE>

                                 Exhibits Index


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

  1.1        Underwriting  Agreement  dated  as of  August  6,  1997  among  The
             ServiceMaster Company and J.P. Morgan, is incorporated by reference
             to  Exhibit  1.1  to the  ServiceMaster  Limited  Partnership,  The
             ServiceMaster   Company  Limited   Partnership  and   ServiceMaster
             Incorporated of Delaware  Registration  Statement on Form S-3 filed
             with the Securities  and Exchange  Commission on July 28, 1997 (the
             "July 28, 1997 Registration Statement").

  1.2        Underwriting  Agreement  dated as of  February  25,  1998 among The
             ServiceMaster  Company and J.P. Morgan Securities,  Inc.,  Goldman,
             Sachs & Co., BancAmerica Robertson Stephens,  First Chicago Capital
             Markets,  Inc. and  NationsBanc  Mongtomgery  Securities  L.L.C. is
             incorporated by reference to the Exhibit 1 to the Current Report on
             Form 8-K as filed by The ServiceMaster Company on February 27, 1998
             (the "Company February 27, 1998 8-K").

  2.1        Acquisition   Agreement   dated  December  5,  1996  by  and  among
             ServiceMaster   Limited  Partnership,   ServiceMaster   Acquisition
             Corporation and Barefoot Inc. is incorporated by reference to Annex
             A-1 to the  Offering  Circular/Prospectus  included  as part of the
             Registration  Statement  on  Form  S-4 as  filed  by  ServiceMaster
             Limited Partnership on January 17, 1997 (SEC Registration No.
             333-17759).

  2.2        Plan and  Agreement of Merger  dated  December 5, 1996 by and among
             ServiceMaster   Limited  Partnership,   ServiceMaster   Acquisition
             Corporation and Barefoot Inc. is incorporated by reference to Annex
             A-2 to the  Offering  Circular/Prospectus  included  as part of the
             Registration  Statement  on  Form  S-4 as  filed  by  ServiceMaster
             Limited Partnership on January 17, 1997 (SEC Registration No.
             333-17759).

  2.3        Merger and  Reorganization  Agreement  as amended  and  restated on
             October 3, 1997 is  incorporated  by  reference to Exhibit 5 to the
             Current  Report  on Form  8-K as  filed  by  ServiceMaster  Limited
             Partnership on December 29, 1997 (the "SMLP December 29, 1997 8-K")
             and to Exhibit 5 to the Current  Report on Form 8-K as filed by The
             ServiceMaster  Company on Form 8-K on February 26, 1998 - second of
             three 8-K reports  filed on that date (the  "Company  February  26,
             1998 8-K, No. 2").

  2.4        Certificate of Merger of NewSub B, Inc. into ServiceMaster  Limited
             Partnership  in  accordance  with  Section  17-211 of the  Delaware
             Revised  Uniform  Limited  Partnership  Act  (the  "Reincorporating
             Merger"),  the filing of which was  certified  by the  Secretary of
             State  of the  State  of  Delaware  on  December  17,  1997 and the
             effective  date and time of which was  December  26,  1997 at 11:59
             P.M., Eastern Standard Time.

  2.5        Certificate of Merger of ServiceMaster  Limited Partnership and The
             ServiceMaster   Company  Limited  Partnership  with  and  into  The
             ServiceMaster  Company, a Delaware corporation,  in accordance with
             the General Corporation Law of the State of Delaware, the filing of
             which  was  certified  by the  Secretary  of State of the  State of
             Delaware on December  18, 1997 and the  effective  date and time of
             which was January 1, 1998 at 12:01 A.M., Eastern Standard Time.

  2.6        The Plan of  Reorganization  and Agreement and Plan of Merger dated
             as of  November  1,  1998 by and  among  LandCare  USA,  Inc.,  The
             ServiceMaster   Company   and  SVM   Acquisition   Corporation   is
             incorporated   by   reference   to   Appendix   A  to   the   Proxy
             Statement/Prospectus included as part of the Registration Statement
             on Form S-4 as filed by The  ServiceMaster  Company on February 10,
             1999 (SEC Registration No. 333-70191).

                                       25
<PAGE>
Exhibit No.                       Description of Exhibit
----------   -------------------------------------------------------------------

  3.1        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 SMLP  December 29,
             1997 8-K and to Exhibit 1 to the Company February 26, 1998 8-K, No.
             2.

  3.2        Bylaws of The ServiceMaster  Company as adopted on November 3, 1997
             are incorporated by reference to Exhibit 2 to the SMLP December 29,
             1997 8-K and to Exhibit 2 to the Company February 26, 1998 8-K, No.
             2.

  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 SMLP  December 29,
             1997 8-K and to Exhibit 3 to the Company February 26, 1998 8-K, No.
             2.

  4.2        The ServiceMaster Company: Certificate of Designation,  Preferences
             and Rights of Junior  Participating  Preferred Stock,  Series A, is
             incorporated  by  reference  to Exhibit 4 to the SMLP  December 29,
             1997 8-K and to Exhibit 4 to the Company February 26, 1998 8-K, No.
             2.

  4.3        Indenture  dated as of August  15,  1997  among  The  ServiceMaster
             Company (as successor to ServiceMaster  Limited Partnership and The
             ServiceMaster Company Limited Partnership) and the Harris Trust and
             Savings Bank as trustee is incorporated by reference to Exhibit 4.1
             to the July 28, 1997 Registration Statement.

  4.4        First Supplemental  Indenture dated as of August 15, 1997 among The
             ServiceMaster   Company  (as  successor  to  ServiceMaster  Limited
             Partnership and The ServiceMaster  Company Limited Partnership) and
             the Harris  Trust and Savings  Bank as trustee is  incorporated  by
             reference to Exhibit 4.4 to the Annual  Report on Form 10-K for the
             year ended December 31, 1997 as filed by The ServiceMaster  Company
             (the "1997 10-K").

  4.5        Second Supplemental Indenture dated as of January 1, 1998 among The
             ServiceMaster   Company  (as  successor  to  ServiceMaster  Limited
             Partnership and The ServiceMaster  Company Limited Partnership) and
             the Harris  Trust and Savings  Bank as trustee is  incorporated  by
             reference  to Exhibit 2 to the Current  Report on Form 8-K as filed
             by The  ServiceMaster  Company on Form 8-K on  February  26, 1998 -
             first  of  three  8-K  reports  filed on that  date  (the  "Company
             February 26, 1998 8-K, No. 1").

  4.6        Third  Supplemental  Indenture  dated as of March 2, 1998 among The
             ServiceMaster  Company  and the Harris  Trust and  Savings  Bank as
             trustee is  incorporated by reference to Exhibit 4.3 to the Current
             Report  on  Form  8-K as  filed  by The  ServiceMaster  Company  on
             February 27, 1998 (the "Company February 27, 1998 8-K").

  4.7        Form of 6.95% Note due August 14, 2007 is incorporated by reference
             to Exhibit 4.2 to the July 28, 1997 Registration Statement.

  4.8        Form of 7.45% Note due August 14, 2027 is incorporated by reference
             to Exhibit 4.2 to the July 28, 1997 Registration Statement.

  4.9        Form of 7.10% Note due March 1, 2018 is  incorporated  by reference
             to Exhibit 4.1 to the Company February 27, 1998 8-K.

  4.10       Form of 7.25% Note due March 1, 2038 is  incorporated  by reference
             to Exhibit 4.2 to the Company February 27, 1998 8-K.

                                       26
<PAGE>
Exhibit No.                       Description of Exhibit
----------   -------------------------------------------------------------------

10.1         $750,000,000 Credit Agreement between The ServiceMaster Company
             Limited Partnership, First National Bank of Chicago and Morgan
             Guaranty Trust Company dated as of April 1, 1997 is incorporated
             by reference to Exhibit 10.2 to the 1997 10-K.

10.2         Form  of  Deferred  Directors  Fee  Agreement  as  assumed  by  The
             ServiceMaster Company in the Reincorporating Merger is incorporated
             by reference to Exhibit  10(c)(4) to the Annual Report on Form 10-K
             for the year  ended  December  31,  1980 as filed by  ServiceMaster
             Limited Partnership (the "1980 10-K").

10.3         Incentive Reward  Compensation Plan as assumed by The ServiceMaster
             Company in the Reincorporating  Merger is incorporated by reference
             to Exhibit 10(c)(6) to the 1980 10-K.

10.4         ServiceMaster  Profit  Sharing,  Savings  and  Retirement  Plan  as
             assumed by The ServiceMaster Company in the Reincorporating  Merger
             amended and restated  effective  January 1, 1987 is incorporated by
             reference to the exhibit so captioned to the Annual  Report on Form
             10-K for the year ended December 31, 1987 as filed by ServiceMaster
             Limited Partnership (the "1987 10-K").

10.5         The Terminix  International  Company LP Profit  Sharing  Retirement
             Plan (previously known as Cook  International,  Inc. Profit Sharing
             Retirement  Plan) effective  January 1, 1984;  Amendment No. One to
             The Terminix  International  Company L.P. Profit Sharing Retirement
             Plan  effective  January 1, 1986 and April 1, 1986;  Amendment  No.
             Two,  effective  April 1,  1986;  Amendment  No.  Three,  effective
             January 1, 1987 and  January 1, 1988;  The  Terminix  International
             Company L.P.  Profit  Sharing  Retirement  Trust,  all of which are
             incorporated by reference to Exhibit 10.15 to the 1987 10-K.

10.6         ServiceMaster  10-Plus Plan as assumed by The ServiceMaster Company
             in the  Reincorporating  Merger is  incorporated  by  reference  to
             Exhibit 4.2 to the ServiceMaster  Limited Partnership  Registration
             Statement on Form S-8 (No. 33-39148) filed with the SEC on February
             26, 1991 (the "10-Plus Registration Statement").

10.7         Form of Option  Agreement  for the  ServiceMaster  10-Plus  Plan is
             incorporated   by   reference   to  Exhibit   4.3  to  the  10-Plus
             Registration Statement.

10.8         Form  of  Directors  Deferred  Fees  Plan   (ServiceMaster   Shares
             Alternative)  as  assumed  by  The  ServiceMaster  Company  in  the
             Reincorporating  Merger is  incorporated  by  reference  to Exhibit
             10.18 to the Annual Report on Form 10-K for the year ended December
             31, 1990 (the "1990 10-K").

10.9         Form of Directors  Deferred Fees  Agreement  (ServiceMaster  Shares
             Alternative)  as  assumed  by  The  ServiceMaster  Company  in  the
             Reincorporating  Merger is  incorporated  by  reference  to Exhibit
             10.19 of the 1990 10-K.

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

10.11        ServiceMaster  10-Plus  Plan as  amended  September  3, 1991 and as
             assumed by The ServiceMaster Company in the Reincorporating  Merger
             is  incorporated by reference to Exhibit 10.21 to the Annual Report
             on Form  10-K for the year  ended  December  31,  1991  (the  "1991
             10-K").

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

                                       27
<PAGE>
Exhibit No.                       Description of Exhibit
----------   -------------------------------------------------------------------

10.13        ServiceMaster  1994  Non-Employee  Director  Share  Option  Plan as
             assumed by The ServiceMaster Company in the Reincorporating  Merger
             is  incorporated  by  reference  to  Exhibit  to the  ServiceMaster
             Limited Partnership  Registration  Statement on Form S-8 filed with
             the  Securities  and  Exchange  Commission  on October 5, 1994 (the
             "Directors Share Plan Registration Statement").

10.14        Form of Option Agreement for the  ServiceMaster  1994  Non-Employee
             Director Share Option Plan is  incorporated by reference to Exhibit
             4.3 to the Directors Share Plan Registration Statement.

10.15        ServiceMaster   1997   Share   Option   Plan  as   assumed  by  The
             ServiceMaster Company in the Reincorporating Merger is incorporated
             by reference to Exhibit 10.28 to the Annual Report on Form 10-K for
             the year ended December 31,1996 as filed by  ServiceMaster  Limited
             Partnership (the "1996 10-K").

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

10.17        ServiceMaster 1998 Equity Incentive Plan as adopted on December 17,
             1997  and  approved  by  the   stockholders   on  May  1,  1998  is
             incorporated by reference to Exhibit 10.15 to the 1997 10-K.

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

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

10.20        ServiceMaster 1998 Non-Employee  Directors  Discounted Stock Option
             Plan as  incorporated  by  reference  to Exhibit  10.21 to the 1997
             10-K.

10.21        ServiceMaster 1998 Long-Term Performance Award Plan as incorporated
             by reference to Exhibit 10.22 to the 1997 10-K.

11           Exhibit  regarding detail of income per share  computation for each
             of the  three  years  ended  December  31,  1998,  1997 and 1996 is
             incorporated  by  reference  to the footnote on page 44 of the 1998
             Annual Report (defined in Exhibit B).

13           The ServiceMaster  Annual Report to Shareholders for the year ended
             December 31, 1998 (the "1998 Annual Report"). The parts of the 1998
             Annual Report which are expressly  incorporated into this report by
             reference  shall be deemed filed with this report.  All other parts
             of the 1998 Annual Report are furnished for the  information of the
             Commission and are not filed with this report.

21           Subsidiaries of Registrant

23           Consent of Arthur Andersen LLP

27           Financial Data Schedule

99.1         Amended  and  Restated   Agreement  of  Limited   Partnership   for
             ServiceMaster  Consumer Services Limited Partnership dated November
             8, 1990 is  incorporated by reference to Exhibit 4.4 to the Current
             Report on Form 8-K as filed by ServiceMaster Limited Partnership on
             November 21, 1990.

99.2         Amended  and   Restated   Agreement  of  Limited   Partnership   of
             ServiceMaster   Management   Services  Limited   Partnership  dated
             December 1991 is  incorporated by reference to Exhibit 28.10 to the
             1991 10-K.

                                       28
<PAGE>
Exhibit No.                       Description of Exhibit
----------   -------------------------------------------------------------------

99.3         Amended  and   Restated   Agreement  of  Limited   Partnership   of
             ServiceMaster  Consumer Services Limited Partnership effective June
             30,  1992 is  incorporated  by  reference  to Exhibit  28.12 to the
             Annual Report on Form 10-K for the year ended  December 31, 1992 as
             filed by ServiceMaster Limited Partnership.

99.4         News release dated March 23, 1999 regarding the  announcement  of a
             cash  tender  offer by the  Registrant  for all of the  outstanding
             shares of American Residential Services, Inc.

                                       29
<PAGE>

                                Graphics Appendix


         This  appendix  describes the graphics  which will be filed  separately
with the Securities and Exchange Commission as an electronic filing.

         A  Performance  Graph is set  forth on page 18 of the  Company's  proxy
statement  for the Annual  Meeting of the  Stockholders  to be held on April 30,
1999 which consists of a line graph which compares the yearly  percentage change
in  ServiceMaster's  cumulative total shareholder return on its shares (computed
in accordance  with the Item 402(l) of Reg. S-K) with the  cumulative  return on
the  stocks  of the  companies  within  the S&P 500 Index and with the Dow Jones
Consumer  Services  Index  over the five year  period  from  January  1, 1994 to
December 31, 1998. The chart shows that  ServiceMaster  outperformed the S&P 500
Index in 1997 and 1998 and the Dow  Jones  Consumer  Services  Index in 1996 and
1997.