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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED) for the fiscal year ended
December 31, 1998 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED) for the transition period
from _______ to ________
Commission file number 01-13407
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
HUSSMANN INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN FOR SALARIED EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
HUSSMANN INTERNATIONAL, INC.
12999 ST. CHARLES ROCK ROAD
BRIDGETON, MISSOURI 63044
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REQUIRED INFORMATION
HUSSMANN INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN FOR SALARIED EMPLOYEES
Financial Statements as of December 31, 1998
together with Independent Auditor's Report
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TABLE OF CONTENTS
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Page
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Independent Auditors' Report 1
Financial Statements:
Statement of Net Assets Available for Benefits,
with Fund Information, as of December 31, 1998 2
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, for the year ended December 31, 1998 3
Notes to Financial Statements 4
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INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of
Hussmann International, Inc. Retirement Savings Plan for Salaried
Employees:
We have audited the accompanying statement of net assets available for
benefits of the Hussmann International, Inc. Retirement Savings Plan for
Salaried Employees (the Plan) as of December 31, 1998, and the related
statement of changes in net assets available for benefits for the year
then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits
as of December 31, 1998, and the changes in net assets available for
benefits for the year then ended, in conformity with generally accepted
accounting principles.
Our audit was performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The Fund Information in
the statement of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes
of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each
fund. The Fund Information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
KPMG LLP
June 28, 1999
1
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HUSSMANN INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN FOR SALARIED EMPLOYEES
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
<CAPTION>
AGGRESSIVE FIXED LARGE
CONSERVATIVE MODERATE GROWTH GROWTH INCOME COMPANY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND FUND
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Plan interest in
Hussmann International, Inc.
Defined Contribution
Master Trust $3,062,952 11,259,594 19,179,765 19,366,174 23,781,758 12,415,532
Liabilities -- expenses payable 1,672 5,574 9,476 10,034 12,264 6,132
---------- ---------- ---------- ---------- ---------- ----------
Net assets available
for benefits $3,061,280 11,254,020 19,170,289 19,356,140 23,769,494 12,409,400
========== ========== ========== ========== ========== ==========
<CAPTION>
SMALL HUSSMANN PARTICIPANT
COMPANY INTERNATIONAL STOCK NOTES
FUND FUND FUND RECEIVABLE TOTAL
--------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Plan interest in
Hussmann International, Inc.
Defined Contribution
Master Trust 3,129,948 1,750,844 15,551,789 1,903,535 111,401,891
Liabilities -- expenses payable 1,672 1,115 7,804 -- 55,743
--------- --------- ---------- --------- -----------
Net assets available
for benefits 3,128,276 1,749,729 15,543,985 1,903,535 111,346,148
========= ========= ========== ========= ===========
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
HUSSMANN INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN FOR SALARIED EMPLOYEES
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year ended December 31, 1998
<CAPTION>
AGGRESSIVE FIXED LARGE
CONSERVATIVE MODERATE GROWTH GROWTH INCOME COMPANY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND FUND
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Net investment income from
the Hussmann International, Inc.
Defined Contribution
Master Trust $ 424,163 1,738,388 3,321,953 3,393,196 1,264,576 2,704,818
Contributions:
Participant 93,217 447,034 827,318 1,094,026 505,297 543,202
Employer, net of forfeitures 68,817 323,181 599,852 760,852 381,327 328,422
---------- ---------- ---------- ---------- ---------- ----------
Total additions 586,197 2,508,603 4,749,123 5,248,074 2,151,200 3,576,442
---------- ---------- ---------- ---------- ---------- ----------
Deductions from net assets:
Participants' withdrawals 301,560 795,091 1,169,746 1,141,111 1,463,397 731,652
Administrative expenses 13,906 44,916 77,206 76,188 114,743 47,275
---------- ---------- ---------- ---------- ---------- ----------
Total deductions 315,466 840,007 1,246,952 1,217,299 1,578,140 778,927
---------- ---------- ---------- ---------- ---------- ----------
Interfund transfers (261,357) 26,112 (806,552) 656,623 4,049,542 (50,001)
---------- ---------- ---------- ---------- ---------- ----------
Net increase 9,374 1,694,708 2,695,619 4,687,398 4,622,602 2,747,514
Transfer from prior plans 3,051,906 9,559,312 16,474,670 14,668,742 19,146,892 9,661,886
Net assets available for benefits:
December 31, 1997 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
December 31, 1998 $3,061,280 11,254,020 19,170,289 19,356,140 23,769,494 12,409,400
========== ========== ========== ========== ========== ==========
<CAPTION>
SMALL HUSSMANN PARTICIPANT
COMPANY INTERNATIONAL STOCK NOTES
FUND FUND FUND RECEIVABLE TOTAL
--------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Net investment income from
the Hussmann International, Inc.
Defined Contribution
Master Trust 238,403 323,464 4,758,492 140,115 18,307,568
Contributions:
Participant 252,188 129,413 309,606 -- 4,201,301
Employer, net of forfeitures 120,050 96,431 232,986 -- 2,911,918
--------- --------- ---------- --------- -----------
Total additions 610,641 549,308 5,301,084 140,115 25,420,787
--------- --------- ---------- --------- -----------
Deductions from net assets:
Participants' withdrawals 250,920 126,556 542,082 (857,936) 5,664,179
Administrative expenses 12,815 7,752 56,317 -- 451,118
--------- --------- ---------- --------- -----------
Total deductions 263,735 134,308 598,399 (857,936) 6,115,297
--------- --------- ---------- --------- -----------
Interfund transfers (238,173) (412,850) (2,116,342) (847,002) --
--------- --------- ---------- --------- -----------
Net increase 108,733 2,150 2,586,343 151,049 19,305,490
Transfer from prior plans 3,019,543 1,747,579 12,957,642 1,752,486 92,040,658
Net assets available for benefits:
December 31, 1997 -- -- -- -- --
--------- --------- ---------- --------- -----------
December 31, 1998 3,128,276 1,749,729 15,543,985 1,903,535 111,346,148
========= ========= ========== ========= ===========
See accompanying notes to financial statements.
</TABLE>
3
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HUSSMANN INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN FOR SALARIED EMPLOYEES
Notes to Financial Statements
December 31, 1998
(1) DESCRIPTION OF PLAN
The following brief description of the Hussmann International,
Inc. Retirement Savings Plan for Salaried Employees (the Plan)
provides only general information. Participants should refer to
the plan document for a more complete description of the Plan's
provisions.
On January 1, 1998, Hussmann International Inc. (Hussmann or the
Company) created the Plan and the Hussmann International Inc.
Defined Contribution Master Trust (the Trust) to manage retirement
activity of active Hussmann employees which was formerly managed
by the Whitman Corporation Defined Contribution Master Trust and
the Whitman Corporation Retirement Savings Plan. Effective
January 1, 1998, assets related to the active Hussmann employees
were transferred from the Whitman Corporation Defined Contribution
Master Trust to the Trust. The Plan created by Hussmann
maintained the same investing options as those offered by the
Whitman Corporation Retirement Savings Plan except that the
Whitman Corporation stock investment option was replaced on
January 30, 1998 with the Hussmann stock investment option as a
result of Hussmann being spun-off from Whitman Corporation.
GENERAL
The Plan is a defined contribution plan which covers
eligible employees of Hussmann. Any salaried, nonunion
employee who has met limited employment requirements and has
elected to participate in the Plan is considered a
Participant. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participant contributions are made to the Plan through
periodic payroll deductions in amounts ranging from 2% to
10% of base salary, in 1% increments. Participant
contributions made via periodic payroll deductions are
matched in equal amounts by Employer contributions up to a
6% limit.
The total annual pre-tax contributions by a Participant were
limited in 1998 to the lesser of $10,000 (as adjusted to
reflect changes in the cost of living pursuant to Section
402(g) of the Internal Revenue Code) or the appropriate
percentage of the Participant's total compensation during
the year.
PLAN TERMINATION
Although it has not expressed any intent to do so, Hussmann
has the right under the Plan to discontinue its contributions
at any time and to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, Participants will
become 100% vested in their accounts.
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PARTICIPANT ACCOUNTS
Each Participant's account is credited with the Participant's
contribution, Employer contributions, and an allocation of
plan earnings. Allocations of earnings are based on
Participant account balances. The benefit to which
a Participant is entitled is the benefit that can be
provided from the Participant's account.
PARTICIPANT NOTES RECEIVABLE
In accordance with plan provisions, loans are made to
Participants in amounts not to exceed the lesser of one-half
of the Participant's vested account balance or $50,000. The
loans bear interest at the trustee's current prime rate in
effect on Monday of the week the loan is requested and are
payable through Participant payroll withholdings under a
reasonable repayment schedule of not more than five years.
VESTING
Participants are immediately vested in their voluntary
contributions, actual earnings thereon, and in all prior and
future Employer matching contributions.
PAYMENT OF BENEFITS
Upon termination of service, a Participant may elect to
receive the value of his or her account in either a lump sum
payment, in periodic installments over a period of time up
to a maximum of fifteen years, in the form of a single or
joint life annuity, or periodic distributions of at least
$500, each in an amount designated by the Participant but
not to exceed two distributions per Plan year.
EXPENSES
External administrative expenses for the preparation and
maintenance of the Plan's financial records and Participant
statements, and service fees on insurance contracts are paid
from Plan assets. Trustee, legal, and all other external
expenses are also paid from plan assets to the extent that
those expenses of the Plan are not paid by the Plan Sponsor.
5
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INVESTMENT OPTIONS
Participants in the Plan have the right to direct that their
contributions and account balance be invested in one or more
funds designated by the Plan's Administrative Committee as
available for investment purposes. As of December 31, 1998,
contributions may be invested in the following funds:
* Conservative Portfolio
* Moderate Portfolio
* Growth Portfolio
* Aggressive Growth Portfolio
* Fixed Income Fund
* Large Company Fund
* Small Company Fund
* International Fund
* Hussmann Stock Fund
Earnings on investments in each of the investment funds are
reinvested in the respective funds.
TwentyTwenty Advisors is the portfolios'/funds' investment
manager and invests in funds that are managed by State
Street Global Advisors. The portfolios' investment
strategies or the funds' composition and investment sub-
advisor, if applicable, of each investment option is as
follows:
* Conservative Portfolio - The portfolio maintains 60%
of its assets in bonds and 40% in a blend of three
U.S. and international stock index funds.
* Moderate Portfolio - The portfolio maintains 40% of its
assets in bonds and 60% in a blend of three U.S. and
international stock index funds.
* Growth Portfolio - The portfolio maintains 20% of its
assets in bonds and 80% in a blend of three U.S. and
international stock index funds.
* Aggressive Growth Portfolio - The portfolio maintains
100% of its assets in a blend of three U.S. and
international stock index funds.
* Fixed Income Fund - The fund invests in a diversified
group of investment contracts issued by insurance
companies, banks, and other financial institutions.
PRIMCO Capital Management is the sub-advisor to the
Fund.
* Large Company Fund - The fund invests in the 500
stocks in the S&P 500 Index (the Index) in proportion
to their weighting in the Index. The Fund may also
hold 2-5% of its value in future contracts.
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* Small Company Fund - The fund invests in the stocks
represented in a special index of approximately 2,500
small to medium size companies (the Russell 3000 index
minus the 500 companies that appear in the Index). The
Fund may also hold 2-5% of its value in future
contracts.
* International Fund - The fund invests in stocks listed
on stock markets of the world's developed countries.
* Hussmann Stock Fund - The fund invests primarily in
shares of Hussmann common stock. The fund requires
enough liquidity to process participant transactions
on a daily basis. In order to meet this liquidity
requirement, the fund holds investments other than
Hussmann stock. The amount of investments in funds
other than Hussmann stock is very minimal.
The stock formerly held by this fund at the beginning
of the year was that of Whitman Corporation. After
the January 30, 1998 dividend of Hussmann and Midas
shares to Whitman stockholders of record on January
16, 1998 as a result of the spin-off of Hussmann and
Midas from Whitman Corporation, the Plan held shares
of Whitman Corporation, Hussmann, and Midas. Due to
the terms of the Plan, the stock fund for the Plan
could only hold shares of stock for the company that
sponsored the particular trust. Thus, the shares of
Whitman Corporation and Midas held by the Plan were
exchanged with Whitman Corporation and Midas for
Hussmann shares of equivalent value on February 3,
1998. The exchange was based upon the average New
York Stock Exchange share value for the preceding four
business days.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements are prepared on the
accrual basis of accounting except for benefit payments.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Trust's investments are stated at fair value. The fair
values of marketable securities are based on quotations
obtained from national securities exchanges. Where
marketable securities are not listed on an exchange,
quotations are obtained from brokerage firms.
Fully benefit-responsive investment contracts are valued at
contract value, which represents the principal balance of
the investment contracts, plus accrued interest at the
stated contract rate, less payments received and contract
charges by the insurance company. The aggregate average
yield of the investment contracts for the year ended
December 31, 1998 was approximately 6.2%. The aggregate
interest rate for the investment contracts as of
December 31, 1998 was approximately 5.8%.
The Trust records investment transactions on a trade date
basis.
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BENEFITS PAID TO PARTICIPANTS
Benefits are recorded when paid.
USE OF ESTIMATE
The financial statements have been prepared in accordance
with generally accepted accounting principles and include
amounts based on estimates and assumptions by the Plan's
management. Actual results could differ from those
estimates.
(3) TRUST FUND MANAGED BY THE TRUSTEE
Plan assets are maintained in the Trust managed by The Northern
Trust Company (the Trustee) on behalf of the Plan. The Trustee is
directed by the Plan's Participants or the Company as to the
specific fund(s) to be acquired or redeemed. The Trustee executes
the sales or purchases necessary to comply with the Plan
Participant's or Company's direction. The investments and changes
therein of the Trust have been reported to the Plan Administrator
by the Trustee.
(4) INTEREST IN HUSSMANN CORPORATION DEFINED CONTRIBUTION MASTER TRUST
All assets of the Plan are in the Trust, which was established for
the investment of assets of the Plan and another Hussmann-
sponsored retirement plan. Each plan has an undivided interest in
the Trust. The assets of the Trust are held by the Trustee. The
Plan's interest in the net assets of the Trust is based on
individual Plan Participants' investment balances. Investment
income is allocated on a daily basis through a valuation performed
by the Trustee. Administrative expenses relating to the Trust are
allocated to the individual funds based upon average monthly
balances invested by each plan. At December 31, 1998, the Plan's
interest in the net assets of the Trust was approximately 92%.
The Trust held the following classifications of investments as of
December 31, 1998:
Investments at fair value:
Common stock $ 16,333,104
Collective investment portfolios/funds 77,597,635
Participant notes receivable 2,303,656
Investment at contract value -
investment contracts 24,435,212
------------
Total Trust investments $120,669,607
============
8
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Investment income for the Trust is as follows for the year ended
December 31, 1998:
Net appreciation in value of investments:
Common stock $ 4,966,253
Collective investment portfolios/funds 13,461,023
-----------
18,427,276
Interest and dividends 1,350,693
-----------
Total Trust investment income $19,777,969
===========
(5) TAX STATUS
The Plan Administrator has submitted but not received a
determination letter for the Plan. In the opinion of the Plan
Administrator, the Plan and its underlying trust have operated
within the terms of the Plan and are qualified under the
applicable provisions of the Internal Revenue Code.
(6) CHANGE IN TRUSTEE
The Company replaced The Northern Trust Company with State Street
Bank & Trust Company as the Plan's Trustee effective January 1,
1999. In addition, in May 1999, the Company's record keeper, State
Street Global Advisors, outsourced its services to First Data Investor
Services Group.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUSSMANN INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN
FOR SALARIED EMPLOYEES
By: /s/ HELEN NELLING
Helen Nelling
Director - Compensation and Benefits
Services
Date: June 29, 1999
Exhibits:
Exhibit A -- Consent of Independent Public Accountants
10
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Exhibit A
INDEPENDENT AUDITORS' CONSENT
The Administrative Committee
Hussmann International, Inc.
Retirement Savings Plan for Salaried Employees:
We consent to incorporation by reference in the Registration Statement
No. 333-44623 on Form S-8 of Hussmann International, Inc. of our report
dated June 28, 1999, relating to the statement of net assets available
for benefits of the Hussmann International, Inc. Retirement Savings Plan
for Salaried Employees as of December 31, 1998 and the related statement
of changes in net assets available for benefits for the year then ended,
which report appears in the December 31, 1998 annual report on Form 11-K
of the Hussmann International, Inc. Retirement Savings Plan for Salaried
Employees.
/s/ KPMG LLP
St. Louis, Missouri
June 28, 1999
