<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
SEC FILE NUMBER: 0-5485
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CUSIP NUMBER: 294037-20-5
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(Check One):
[ ] Form 10-K and Form 10-KSB
[ ] Form 20-F
[X] Form 11-K
[ ] Form 10-Q and Form 10-QSB
[ ] Form N-SAR
For Period Ended December 31, 1998
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
Read Attached Instruction Sheet Before Preparing Form. Please print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
--------------------
If the notification relates to a portion of the filing checked above, identify
the item(s) to which the notification relates:
--------------------
Part I - Registrant Information
Viskase Companies, Inc.
- --------------------------------------------------------------------------------
Full Name of Registrant
Envirodyne Industries, Inc.
- --------------------------------------------------------------------------------
Former Name if Applicable:
6855 West 65th Street
- --------------------------------------------------------------------------------
Address of Principal Executive Office (Street and Number)
Chicago, Illinois 60638
- --------------------------------------------------------------------------------
City, State and Zip Code
Part IV - Other Information
(1) Name and telephone number of person to contact in regard to this
notification
Gordon S. Donovan 708 496-4200
- --------------------------------------------------------------------------------
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under section 13 or 15(d) of the
Securities Exchange Act of 1934 or section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is
no, identify report(s). [X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
[ ] Yes [X] No
If so, attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
Viskase Companies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
has cause this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: July 15, 1999 By: /s/ Gordon S. Donovan
------------------------ ---------------------------------------
Vice President,
Chief Financial Officer and Treasurer
<PAGE> 2
THE SAVE PROGRAM FOR EMPLOYEES OF
VISKASE CORPORATION
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1998 AND 1997
<PAGE> 3
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGE(S)
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits,
December 31, 1998 and 1997 2-3
Statement of Changes in Net Assets Available
for Benefits, for the years ended
December 31, 1998 and 1997 4-5
Notes to Financial Statements 6-11
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes,
December 31, 1998 12
Item 27d - Schedule of Reportable Transactions, for the year ended
December 31, 1998 13
NOTE: Supplemental schedules required by the Employee Retirement Income Security
Act of 1974 that have not been included herein are not applicable to The
SAVE Program for Employees of Viskase Corporation.
<PAGE> 4
{PRICEWATERHOUSECOOPERS LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Compensation and Benefits Committee of
The SAVE Program for Employees of
Viskase Corporation
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the The SAVE Program for Employees of Viskase Corporation (the "Plan") at
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the years ended December 31, 1998 and 1997 in conformity with generally
accepted accounting principles. 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 audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for benefits and the statements 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. These supplemental
schedules and fund information are the responsibility of the Plan's management.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
July 7, 1999
<PAGE> 5
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1998
<TABLE>
<CAPTION>
Fixed Equity Aggressive International
Income Investment Balanced Equity Equity
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Assets:
Investments:
Cash $ 2,672 $ 80,765 $ 3,584 $ 11,052
Short-term investments $ 610,200 235,005 1,180 21,606
Insurance company contracts 21,370,259
Common/collective trust 9,925,458
Registered investment companies 24,441,258 3,804,816 4,749,656 1,773,353
Company stock
Loans to participants
----------- ----------- ---------- ---------- ----------
Total investments 31,905,917 24,678,935 3,886,761 4,774,846 1,784,405
----------- ----------- ---------- ---------- ----------
Receivables:
Participant contributions 86,913 9,391 2,036 3,499 1,715
Employer contributions 33,965 26,255 6,357 9,782 4,795
Investment income 16,060 109 14 22 7
Interfund receivable (payable) 110,011 (89,234) 2,384 11,523 (34,684)
----------- ----------- ---------- ---------- ----------
Total receivables 246,949 (53,479) 10,791 24,826 (28,167)
----------- ----------- ---------- ---------- ----------
Total assets 32,152,866 24,625,456 3,897,552 4,799,672 1,756,238
Liabilities:
Due to broker for security
transactions 14,269
Cash overdraft 4,931
----------- ----------
Total liabilities 14,269 4,931
----------- ----------- ---------- ---------- ----------
Net assets available for benefits $32,138,597 $24,625,456 $3,897,552 $4,799,672 $1,751,307
=========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Viskase
Stock Loan
Fund Fund Total
<S> <C> <C> <C>
Assets:
Investments:
Cash $ 98,073
Short-term investments $ 1,591 869,582
Insurance company contracts 21,370,259
Common/collective trust 9,925,458
Registered investment companies 34,769,083
Company stock 273,156 273,156
Loans to participants $1,946,878 1,946,878
-------- ---------- -----------
Total investments 274,747 1,946,878 69,252,489
-------- ---------- -----------
Receivables:
Participant contributions 1,046 104,600
Employer contributions 2,924 84,078
Investment income 26 16,238
Interfund receivable (payable)
-------- -----------
Total receivables 3,996 204,916
-------- ---------- -----------
Total assets 278,743 1,946,878 69,457,405
Liabilities:
Due to broker for security
transactions 3,227 17,496
Cash overdraft 11,872 16,803
-------- --------- -----------
Total liabilities 3,227 11,872 34,299
-------- ---------- -----------
Net assets available for benefits $275,516 $1,935,006 $69,423,106
======== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 6
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Fixed Equity Aggressive International Envirodyne
Income Investment Balanced Equity Equity Stock Loan
Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments:
Cash $ 120,629 $ (1,562) $ 9,571 $ 128,638
Short-term investments 578,382 $ 246,935 $ 18,249 71,868 $ 2,733 483 918,650
Insurance company contracts 23,049,054 23,049,054
Common/collective trust 9,956,830 9,956,830
Registered investment companies 24,377,471 4,336,099 4,023,675 2,015,998 34,753,243
Company stock 453,593 453,593
Loans to participants $2,609,646 2,609,646
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Total investments 33,704,895 24,624,406 4,354,348 4,093,981 2,018,731 463,647 2,609,646 71,869,654
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Receivables:
Participant contributions 58,864 45,464 9,790 16,694 8,673 904 140,389
Employer contributions 22,905 14,717 3,151 5,941 2,785 (539) 48,960
Investment income 247 68 8 1,583 5 46 1,957
Interfund receivable (payable) 130,799 (67,856) 18,809 50,749 (82,088) (50,413)
----------- ----------- ---------- ---------- ---------- -------- -----------
Total receivables 212,815 (7,607) 31,758 74,967 (70,625) (50,002) 191,306
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Total assets 33,917,710 24,616,799 4,386,106 4,168,948 1,948,106 413,645 2,609,646 72,060,960
Liabilities:
Due to broker for security
transactions 120,000 120,000
Cash overdraft 33,613 33,613
----------- ---------- -----------
Total liabilities 120,000 33,613 153,613
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
$33,797,710 $24,616,799 $4,386,106 $4,168,948 $1,948,106 $413,645 $2,576,033 $71,907,347
Net assets available for benefits =========== =========== ========== ========== ========== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 7
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1998
<TABLE>
<CAPTION>
Fixed Equity Aggressive International Viskase
Income Investment Balanced Equity Equity Stock Loan
Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Net gain from interest in
registered investment
companies $ 708,005 $3,709,154 $ 443,537 $1,309,228 $ 276,013 $ 6,445,937
Net unrealized depreciation in
the fair value of
investments $(185,787) (185,787)
Net increase in value of
Plan's interest in insurance
company contracts 1,253,126 1,253,126
Interest income 15,305 1,980 101 573 81 723 18,763
----------- ----------- ---------- ---------- ---------- -------- -----------
1,976,436 3,711,134 443,638 1,309,801 276,094 (185,064) 7,532,039
----------- ----------- ---------- ---------- ---------- -------- -----------
Contributions:
Participants 1,555,739 1,320,985 317,900 518,740 251,595 267,772 4,232,731
Employer 608,405 453,723 109,512 158,229 84,560 92,793 1,507,222
----------- ----------- ---------- ---------- ---------- -------- -----------
2,164,144 1,774,708 427,412 676,969 336,155 360,565 5,739,953
----------- ----------- ---------- ---------- ---------- -------- -----------
Interfund transfers 1,073,182 (314,301) (360,066) 50,327 (221,548) (265,875) $ 38,281
Participant loan repayments 561,748 440,742 77,508 119,863 47,509 42,516 (1,289,886)
----------- ----------- ---------- ---------- ---------- -------- ----------
1,634,930 126,441 (282,558) 170,190 (174,039) (223,359) (1,251,605)
----------- ----------- ---------- ---------- ---------- -------- ----------
Total additions 5,775,510 5,612,283 588,492 2,156,960 438,210 (47,858) (1,251,605) 13,271,992
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Deductions:
Benefit payments 6,923,920 5,204,006 1,013,232 1,319,621 569,975 49,236 666,035 15,746,025
Administrative expenses 10,208 10,208
Loans to participants 500,495 399,620 63,814 206,615 65,034 41,035 (1,276,613)
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Total deductions 7,434,623 5,603,626 1,077,046 1,526,236 635,009 90,271 (610,578) 15,756,233
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Net increase (decrease) in net
assets available for benefits (1,659,113) 8,657 (488,554) 630,724 (196,799) (138,129) (641,027) (2,484,241)
Net assets available for benefits,
beginning of year 33,797,710 24,616,799 4,386,106 4,168,948 1,948,106 413,645 2,576,033 71,907,347
----------- ----------- ---------- ---------- ---------- -------- ---------- -----------
Net assets available for benefits,
end of year $32,138,597 $24,625,456 $3,897,552 $4,799,672 $1,751,307 $275,516 $1,935,006 $69,423,106
=========== =========== ========== ========== ========== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 8
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Fixed Equity Aggressive International
Income Investment Balanced Equity Equity
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Net gain from interest in
registered investment
companies $ 774,550 $ 5,738,614 $ 726,796 $ 816,490 $ 138,892
Net unrealized appreciation in
the fair value of investments
Net increase in value of
Plan's interest in insurance
company contracts 1,324,285
Interest income 12,978 933 131 270 106
----------- ----------- ---------- ---------- ----------
2,111,813 5,739,547 726,927 816,760 138,998
----------- ----------- ---------- ---------- ----------
Contributions:
Participants 1,906,879 1,483,153 331,443 520,945 267,877
Employer 647,979 480,770 111,395 177,798 89,621
----------- ----------- ---------- ---------- ----------
2,554,858 1,963,923 442,838 698,743 357,498
----------- ----------- ---------- ---------- ----------
Interfund transfers (1,305,287) 1,364,922 120,174 270,973 6,459
Participant loan repayments 589,415 419,835 108,224 146,648 78,703
----------- ----------- ---------- ---------- ----------
(715,872) 1,784,757 228,398 417,621 85,162
----------- ----------- ---------- ---------- ----------
Total additions 3,950,799 9,488,227 1,398,163 1,933,124 581,658
----------- ----------- ---------- ---------- ----------
Deductions:
Benefit payments 4,901,678 1,417,585 360,463 245,037 100,201
Loans to participants 923,420 329,084 60,401 113,193 37,035
----------- ----------- ---------- ---------- ----------
Total deductions 5,825,098 1,746,669 420,864 358,230 137,236
----------- ----------- ---------- ---------- ----------
Net increase (decrease) in net
assets available for benefits (1,874,299) 7,741,558 977,299 1,574,894 444,422
Net assets available for benefits,
beginning of year 35,672,009 16,875,241 3,408,807 2,594,054 1,503,684
----------- ----------- ---------- ---------- ----------
Net assets available for benefits,
end of year $33,797,710 $24,616,799 $4,386,106 $4,168,948 $1,948,106
=========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Envirodyne
Stock Loan
Fund Fund Other Total
<S> <C> <C> <C> <C>
Additions:
Investment Income:
Net gain from interest in
registered investment
companies $8,195,342
Net unrealized appreciation in
the fair value of investments $ 33,395 33,395
Net increase in value of
Plan's interest in insurance
company contracts 1,324,285
Interest income 432 $ 184,526 199,376
-------- ---------- -----------
33,827 184,526 9,752,398
-------- ---------- -----------
Contributions:
Participants 257,298 4,767,595
Employer 90,209 1,597,772
-------- -----------
347,507 6,365,367
-------- -----------
Interfund transfers (186,542) (146,802) $ (123,897)
Participant loan repayments 50,592 (1,393,417)
-------- ---------- ----------
(135,950) (1,540,219) (123,897)
-------- ---------- ---------- -----------
Total additions 245,384 (1,355,693) (123,897) 16,117,765
-------- ---------- ---------- -----------
Deductions:
Benefit payments 34,641 7,059,605
Loans to participants 6,878 (1,470,011)
-------- ---------- -----------
Total deductions 41,519 (1,470,011) 7,059,605
-------- ---------- -----------
Net increase (decrease) in net
assets available for benefits 203,865 114,318 (123,897) 9,058,160
Net assets available for benefits,
beginning of year 209,780 2,461,715 123,897 62,849,187
-------- ---------- ---------- -----------
Net assets available for benefits,
end of year $413,645 $2,576,033 $ $71,907,347
======== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 9
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF THE PLAN
The following description of The SAVE Program for Employees of Viskase
Corporation (the "Plan") provides only general information. Participants
should refer to the plan agreement for a more complete description of the
Plan's provisions.
GENERAL
The Plan is a defined contribution plan established to provide deferred
compensation benefits to eligible employees. Under the Plan, all of the
employees of Viskase Corporation ("Employer") who have met the
eligibility requirements may elect to participate in the Plan. Employees
who are covered by a collective bargaining agreement will be eligible
only if their participation is provided for in the agreement. The Plan is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
PARTICIPATION
Regular full-time employees may become plan members ("Participants") upon
employment.
CONTRIBUTIONS
Participating employees may authorize contributions to the Plan of one
percent (1%) to six percent (6%) of their regular pay ("Eligible
Earnings") as a Basic Deduction Contribution on a before-tax or after-tax
basis. Participants who contribute the maximum six percent (6%) as a
Basic Deduction Contribution may contribute up to an additional ten
percent (10%) of Eligible Earnings as a Supplemental Deduction
Contribution on a before-tax or after-tax basis. Employer contributions
to the Plan are equal to fifty percent (50%) of the Participant's
contributions up to six percent (6%) of regular pay. Participants'
before-tax and after-tax contributions in excess of six percent (6%) of
the Participant's compensation are not eligible to receive Employer
matching contributions.
The Internal Revenue Service limits the dollar amount a Participant can
contribute to the Plan in any year on a before-tax basis. All
contributions to the Plan are also subject to the nondiscrimination tests
of the Internal Revenue Code that may also limit the contributions that
may be made to the Plan.
VESTING
Participant contributions plus the earnings thereon are fully vested.
Vesting in the Employer contributions and the earnings thereon is based
upon the number of years of credited service. A Participant is fully
vested after three years of credited service. If a Participant
voluntarily terminates before completing three years of credited service,
contributions made by the Employer and earnings thereon are forfeited. If
a Participant attains age 65, or becomes permanently and totally
disabled, dies, or is terminated by the Employer for reasons other than
cause, the full value of the Employer contribution account is immediately
vested.
6
<PAGE> 10
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF THE PLAN, CONTINUED
PAYMENT OF BENEFITS
On termination of service, Participants with account balances in excess
of $5,000 may elect to either receive a lump-sum amount or defer payment
until the April 1 following the year the Participant reaches age 70-1/2.
Participants who terminate employment with account balances less than or
equal to $5,000 receive a lump-sum payment. Participants may choose to
make a direct rollover into another qualified plan or into an Individual
Retirement Account ("IRA"). Spouse beneficiaries may make a direct
rollover into an IRA. Non-spouse beneficiaries may not make a direct
rollover into an IRA. A Participant who receives a lump-sum payment may
choose to receive a distribution of his shares invested in the Viskase
Stock Fund in the form of whole shares of common stock with fractional
shares paid in cash. Certain Participants may receive installment
payments under the Plan. Payment to any Participant must be made no later
than the April 1 following the year the Participant reaches age 70-1/2,
even if he has not retired.
PARTICIPANT LOANS
Loans up to specified amounts are available to all Participants. Each
loan must be evidenced by the Participant's collateral promissory note
with interest at a rate commensurate with the interest rate charged by
area banking institutions for loans made under similar circumstances. The
period for loan repayment cannot exceed five years from the date of the
loan, unless the loan is for the purchase of a principal residence, in
which case, the repayment period cannot exceed ten years.
WITHDRAWALS WHILE EMPLOYED
The Plan permits Participants to make withdrawals while they are
employed. The Plan sets out the limits and priority of any withdrawal.
The Plan permits hardship withdrawals of before-tax contributions in
accordance with Internal Revenue Code requirements.
FORFEITURES
Forfeitures of a terminated Participant are required to be held by the
Plan pending the Participant's possible return to employment and
reinstatement in the Plan. If reinstatement does not occur by the end of
the year following the year during which the Participant terminated
employment, such forfeitures are reallocated to Participants on a
pro-rata basis. For the years ended December 31, 1998 and 1997,
forfeitures amounted to $63,760 and $48,091, respectively.
ALLOCATION OF INVESTMENT EARNINGS
Investment earnings of an investment fund are allocated to individual
Participant accounts based on the ratio of a Participant's month-end fund
balance to the total fund balance at month-end.
7
<PAGE> 11
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF THE PLAN, CONTINUED
ADMINISTRATION EXPENSES
Expenses of the Plan, other than brokerage commissions which are included
in the cost of the investments, were paid by the Employer in 1998 and
1997. Although the Employer has elected to pay these expenses, it is not
obligated to do so. If the Employer ceases to pay all or part of these
expenses in the future, they will be paid by the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared on the accrual basis
of accounting.
INVESTMENTS
The Plan reports investments, other than insurance company contracts, at
fair value. Mutual funds and common stocks are stated at the quoted
market price on the last business day of the year. Short-term investments
are stated at cost which approximates market value. The insurance company
contracts are stated at contract value (contributions, plus earnings less
withdrawals) which approximates fair value. Crediting interest rates are
constant for the life of the contract. The average yield for the years
ended December 31, 1998 and 1997 and crediting interest rate at December
31, 1998 and 1997 for each of the insurance company contracts is
summarized below.
<TABLE>
<CAPTION>
1998 1997
Crediting Crediting
Average Interest Average Interest
Yield Rate Yield Rate
<S> <C> <C> <C> <C>
Canada Life Insurance Company
guaranteed investment contract, due 2/14/00 7.82% 7.82% 7.82% 7.82%
Hartford Life Insurance Company
guaranteed investment contract, due 2/9/98 7.50% 7.50% 7.50% 7.50%
John Hancock Mutual Life Insurance Company
guaranteed investment contract, due 5/15/01 6.82% 6.82% 6.82% 6.82%
Metropolitan Life Insurance Company
guaranteed investment contract, due 1/4/99 5.75% 5.75% 5.75% 5.75%
Safeco Life Insurance Company
guaranteed investment contract, due 1/6/02 6.72% 6.72% 6.72% 6.72%
</TABLE>
8
<PAGE> 12
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
All insurance company contracts are fully benefit responsive, with the
exception of the Metropolitan Life Insurance Company contract for which
only predetermined scheduled withdrawals were permitted.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded on an accrual basis.
Investment transactions are reflected on a trade-date basis. Realized
gains or losses on sales of securities are based on average cost. The
Plan presents in the statements of changes in net assets the net
appreciation (depreciation) in the fair value of its investments and the
net gain from interest in registered investment companies which consists
of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the changes in net
assets available for benefits during the reporting period and, when
applicable, disclosures of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those
estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various
risks, such as interest rate, market, and credit risks. Due to the level
of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
Participants' account balances and the amounts reported in the statements
of net assets available for benefits.
3. INVESTMENT PROGRAM
The Plan provides for investment election alternatives which allow
Participants to invest their contributions in six different funds.
Participants may change their investment election during any calendar
month as provided by the plan agreement. The fund options are as follows:
FIXED INCOME FUND - The assets of the Fixed Income Fund are invested
in investment contracts from a variety of high quality issuers,
primarily insurance carriers ranked "AA" or better by the national
rating agencies. The objective of the fund is to provide stable
returns and to preserve the principal investment.
9
<PAGE> 13
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENT PROGRAM, CONTINUED
EQUITY INVESTMENT FUND - The assets of the Equity Investment Fund are
exclusively invested in the Vanguard Windsor II Mutual Fund that
invests primarily in common stocks that are believed to be undervalued
by the market at the time of purchase. The fund seeks to provide
long-term growth of capital and income.
BALANCED FUND - The assets of the Balanced Fund are exclusively
invested in the American Balanced Fund that invests in a broadly
diversified portfolio of securities, including common stocks,
preferred stocks, corporate bonds or U.S. government securities and
cash. The objective of the fund is to preserve capital and provide
current income while seeking long-term growth of both capital and
income.
AGGRESSIVE EQUITY FUND - The assets of the Aggressive Equity Fund are
exclusively invested in the Twentieth Century Ultra Mutual Fund that
invests primarily in common stock of companies with accelerating
earnings and revenues. The fund seeks to provide capital growth over
time.
INTERNATIONAL EQUITY FUND - The assets of the International Equity
Fund are exclusively invested in the American Europacific Growth Fund
that invests in stocks of companies based outside the United States.
The objective of the fund is to achieve long-term capital appreciation
through international diversification.
VISKASE STOCK FUND (formerly Envirodyne Stock Fund) - The assets of
the Viskase Stock Fund are exclusively invested in Viskase Companies,
Inc. common stock. Only new contributions may be invested in this
fund. No amount in another fund may be transferred to this fund.
4. INVESTMENTS
Investments representing five percent (5%) or more of net assets
available for benefits at December 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C> <C>
Metropolitan Life Insurance Company Guaranteed investment contract $14,484,151 $13,696,596
Bank of America GIC Fund Common/collective trust 9,925,458 9,956,830
Windsor II Portfolio Open End Fund Registered investment company 24,441,258 24,377,471
American Balanced Fund, Inc. Registered investment company 3,804,816 4,336,099
American Century Mutual Funds Registered investment company 4,749,656 4,023,675
</TABLE>
10
<PAGE> 14
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Employer by
a letter dated April 10, 1995, that the Plan, and related trust, as then
designed, are in compliance with the applicable sections of the Internal
Revenue Code (the "Code"). The Plan has subsequently been amended.
However, the plan administrator believes the Plan is designed and
operated in accordance with the applicable sections of the Code.
6. PLAN TERMINATION
The Employer reserves the right to alter, amend or terminate the Plan. In
the event of Plan termination, plan accounts will become fully vested and
Participants will be entitled to a distribution. Presently, there is no
intention on the part of the Employer to terminate the Plan.
7. RECONCILIATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the draft Form 5500 for the years ended
December 31:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net assets available for benefits per $69,423,106 $71,907,347
the financial statements
Benefits payable to participants (1,650,633) (1,350,857)
------------ ------------
$67,772,473 $70,556,490
============ ============
</TABLE>
The following is a reconciliation of change in net assets per the
financial statements to the draft Form 5500 for the years ended December
31:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net increase (decrease) in net assets available
for benefits per the financial statements $(2,484,241) $ 9,058,160
Increase (decrease) in benefits payable to participants (299,776) 64,650
Increase (decrease) in other unallocated items - 123,897
------------ ------------
$(2,784,017) $ 9,246,707
============ ============
</TABLE>
11
<PAGE> 15
SUPPLEMENTAL SCHEDULES
<PAGE> 16
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE, CURRENT/
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CONTRACT
LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
<S> <C> <C> <C>
Cash Cash $ 98,073 $ 98,073
Collective Short Term Investment Fund Interest bearing cash 869,582 869,582
Insurance company general accounts:
Fixed Income Fund:
Canada Life Insurance Company Guaranteed investment contract
Contract # 45862 7.82% due 2/14/00 2,135,594 2,135,594
John Hancock Mutual Life Insurance Company Guaranteed investment contract
Contract # 8965 6.82% due 5/15/01 2,085,276 2,085,276
Metropolitan Life Insurance Company Guaranteed investment contract
Contract # 8739-9 5.75%, due 1/4/99 14,484,151 14,484,151
Safeco Life Insurance Company Guaranteed investment contract
Contract # 1056828 6.72% due 1/6/02 2,665,238 2,665,238
----------- -----------
21,370,259 21,370,259
Common/collective trusts:
Fixed Income Fund:
Bank of America GIC Fund Common/collective trust, 6.20% 8,378,591 9,925,458
Registered investment companies:
Equity Fund Registered investment company 18,044,975 24,441,258
Balanced Fund Registered investment company 3,412,550 3,804,816
Aggressive Equity Fund Registered investment company 4,007,173 4,749,656
International Equity Fund Registered investment company 1,555,100 1,773,353
Loans to participants:
* Loan Fund Participant loans, 8.00% - 8.75% 1,946,878
Company stock:
* Viskase Stock Fund Company stock, 64,272 shares 377,945 273,156
----------- -----------
Total investments
$58,114,248 $69,252,489
=========== ===========
* Represents party in interest.
</TABLE>
12
<PAGE> 17
THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1998
<TABLE>
<CAPTION>
(a) (b) (c) (d) (i)
NUMBER NUMBER
IDENTITY OF OF OF PURCHASE SELLING NET GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PURCHASES SALES PRICE PRICE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C>
Collective Short Term
Investment Fund Interest bearing cash 372 217 $19,091,195 $18,957,683
Fixed Income Fund:
Bank of America
GIC Fund Common/collective trust 2 4 2,653,086 $ 985,000 $ 114,714
Equity Fund:
Windsor II Portfolio Registered investment
Open End Fund company 58 21 5,187,734 6,354,437 2,065,952
</TABLE>
13
