SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (NO FEE REQUIRED)
For the Year Ended December 31, 1997
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: Whitman Corporation 001-04710
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
WHITMAN CORPORATION
3501 Algonquin Road
Rolling Meadows, Illinois 60008
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this Annual Report to be signed on its
behalf by the undersigned hereunto duly authorized.
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
By: /s/ RAYMOND B. WERNTZ
Raymond B. Werntz
Vice President-Benefits & Compensation
Dated: June 10, 1998
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
Report of Independent Public Accountants
Financial Statements:
Statements of Net Assets Available for Benefits, with Fund Information,
as of December 31, 1997 and 1996
Statements of Changes in Net Assets Available for Benefits, with Fund
Information, for the years ended December 31, 1997 and 1996
Notes to Financial Statements
Exhibits:
Exhibit A -- Summary Annual Report
Exhibit B -- Consent of Independent Public Accountants
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of Whitman Corporation Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of WHITMAN CORPORATION RETIREMENT SAVINGS PLAN as of December 31, 1997 and 1996,
and the related statements of changes in net assets available for benefits for
the years 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. 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 plan benefits and changes in net
assets available for plan benefits of each fund. The fund information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 10, 1998
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
As of December 31, 1997
Participant Directed
Investment Funds
<TABLE>
<CAPTION>
Aggressive Fixed
Conservative Moderate Growth Growth Income
Total Portfolio Portfolio Portfolio Portfolio Fund
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Plan interest in Whitman Corporation
Defined Contribution Master Trust $297,377,333 $9,699,952 $29,265,521 $48,294,123 $45,491,258 $65,382,857
Contributions Receivable:
Participant 14,854 494 2,090 2,955 3,721 2,453
Employer, net of forfeitures 11,597 411 1,534 2,473 2,767 2,009
------------ ---------- ----------- ----------- ----------- -----------
Total Assets 297,403,784 9,700,857 29,269,145 48,299,551 45,497,746 65,387,319
------------ ---------- ----------- ----------- ----------- -----------
Liabilities:
Expenses Payable 111,002 3,663 10,894 18,057 17,037 24,478
------------ ---------- ----------- ----------- ----------- -----------
Total Liabilities 111,002 3,663 10,894 18,057 17,037 24,478
------------ ---------- ----------- ----------- ----------- -----------
Net Assets Available for Benefits $297,292,782 $9,697,194 $29,258,251 $48,281,494 $45,480,709 $65,362,841
============ ========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Large Small Whitman Participant
Company Company International Stock Notes
Fund Fund Fund Fund Receivable Other
----------- ----------- ----------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Plan interest in Whitman Corporation
Defined Contribution Master Trust $35,670,411 $11,804,989 $6,127,963 $39,789,118 $5,760,274 $90,867
Contributions Receivable:
Participant 1,106 282 337 1,416 -- --
Employer, net of forfeitures 830 244 225 1,104 -- --
----------- ----------- ---------- ----------- ---------- -------
Total Assets 35,672,347 11,805,515 6,128,525 39,791,638 5,760,274 90,867
----------- ----------- ---------- ----------- ---------- -------
Liabilities:
Expenses Payable 13,301 4,355 2,301 14,833 2,083 --
----------- ----------- ---------- ----------- ---------- -------
Total Liabilities 13,301 4,355 2,301 14,833 2,083 --
----------- ----------- ---------- ----------- ---------- -------
Net Assets Available for Benefits $35,659,046 $11,801,160 $6,126,224 $39,776,805 $5,758,191 $90,867
=========== =========== ========== =========== ========== =======
</TABLE>
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
As of December 31, 1996
Participant Directed
Investment Funds
<TABLE>
<CAPTION>
Aggressive Fixed
Conservative Moderate Growth Growth Income
Total Portfolio Portfolio Portfolio Portfolio Fund
------------ ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Plan interest in Whitman Corporation
Defined Contribution Master Trust $251,949,152 $8,685,106 $25,702,281 $38,388,023 $33,234,290 $68,351,045
Contributions Receivable:
Participant 159,659 5,279 18,771 32,473 38,281 23,601
Employer, net of forfeitures 177,587 6,185 21,966 34,953 37,327 26,883
------------ ---------- ----------- ----------- ----------- -----------
Total Assets 252,286,398 8,696,570 25,743,018 38,455,449 33,309,898 68,401,529
------------ ---------- ----------- ----------- ----------- -----------
Liabilities:
Expenses Payable 186,867 6,368 18,721 28,464 19,027 58,715
------------ ---------- ----------- ----------- ----------- -----------
Total Liabilities 186,867 6,368 18,721 28,464 19,027 58,715
------------ ---------- ----------- ----------- ----------- -----------
Net Assets Available for Benefits $252,099,531 $8,690,202 $25,724,297 $38,426,985 $33,290,871 $68,342,814
============ ========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Large Small Whitman Participant
Company Company International Stock Notes
Fund Fund Fund Fund Receivable Other
----------- ---------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Plan interest in Whitman Corporation
Defined Contribution Master Trust $26,577,261 $7,881,045 $7,467,092 $30,019,044 $5,229,660 $414,305
Contributions Receivable:
Participant 15,089 6,781 6,287 13,097 -- --
Employer, net of forfeitures 17,728 8,135 7,343 17,067 -- --
----------- ---------- ---------- ----------- ---------- --------
Total Assets 26,610,078 7,895,961 7,480,722 30,049,208 5,229,660 414,305
----------- ---------- ---------- ----------- ---------- --------
Liabilities:
Expenses Payable 18,649 5,709 5,465 22,495 -- 3,254
----------- ---------- ---------- ----------- ---------- --------
Total Liabilities 18,649 5,709 5,465 22,495 -- 3,254
----------- ---------- ---------- ----------- ---------- --------
Net Assets Available for Benefits $26,591,429 $7,890,252 $7,475,257 $30,026,713 $5,229,660 $411,051
=========== ========== ========== =========== ========== ========
</TABLE>
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
For the Year Ended December 31, 1997
Participant Directed
Investment Funds
<TABLE>
<CAPTION>
Aggressive Fixed
Conservative Moderate Growth Growth Income
Total Portfolio Portfolio Portfolio Portfolio Fund
------------ ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Net Investment Income from
the Whitman Corporation Defined
Contribution Master Trust $ 45,359,173 $1,294,699 $ 4,935,795 $ 9,082,908 $ 9,218,220 $ 4,362,470
Contributions:
Participant 10,884,412 327,837 1,221,767 2,330,723 2,586,157 1,618,243
Employer, net of forfeitures 7,392,849 226,781 850,901 1,549,452 1,669,876 1,124,459
Transfer from prior plans 1,023,301 -- -- -- -- 863,853
------------ ---------- ----------- ----------- ----------- -----------
Total Additions 64,659,735 1,849,317 7,008,463 12,963,083 13,474,253 7,969,025
------------ ---------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 18,699,185 742,916 1,213,531 1,818,688 1,694,825 8,114,502
Administrative Expenses 767,299 15,009 47,351 76,888 70,610 214,848
------------ ---------- ----------- ----------- ----------- -----------
Total Deductions 19,466,484 757,925 1,260,882 1,895,576 1,765,435 8,329,350
------------ ---------- ----------- ----------- ----------- -----------
Interfund Transfers -- 84,400 2,213,627 1,212,998 (481,020) 2,619,648
------------ ---------- ----------- ----------- ----------- -----------
Net increase (decrease) 45,193,251 1,006,992 3,533,954 9,854,509 12,189,838 (2,979,973)
------------ ---------- ----------- ----------- ----------- -----------
Net Assets Available for Benefits:
At December 31, 1996 252,099,531 8,690,202 25,724,297 38,426,985 33,290,871 68,342,814
------------ ---------- ----------- ----------- ----------- -----------
At December 31, 1997 $297,292,782 $9,697,194 $29,258,251 $48,281,494 $45,480,709 $65,362,841
============ ========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Large Small Whitman Participant
Company Company International Stock Notes
Fund Fund Fund Fund Receivable Other
----------- ----------- ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Net Investment Income from
the Whitman Corporation Defined
Contribution Master Trust $ 9,108,150 $ 2,128,910 $ 136,173 $ 4,629,302 $ 439,363 $ 23,183
Contributions:
Participant 1,180,420 479,398 412,348 851,391 -- (123,872)
Employer, net of forfeitures 789,396 328,146 274,962 597,500 -- (18,624)
Transfer from prior plans -- -- -- -- 159,448 --
----------- ----------- ---------- ----------- ---------- --------
Total Additions 11,077,966 2,936,454 823,483 6,078,193 598,811 (119,313)
----------- ----------- ---------- ----------- ---------- --------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 2,516,693 453,647 347,525 1,522,981 260,385 13,492
Administrative Expenses 58,227 17,089 11,878 55,530 2,083 197,786
----------- ----------- ---------- ----------- ---------- --------
Total Deductions 2,574,920 470,736 359,403 1,578,511 262,468 211,278
----------- ----------- ---------- ----------- ---------- --------
Interfund Transfers (564,571) (1,445,190) 1,813,113 (5,250,410) (192,188) (10,407)
----------- ----------- ---------- ----------- ---------- --------
Net increase (decrease) 9,067,617 3,910,908 (1,349,033) 9,750,092 528,531 (320,184)
Net Assets Available for Benefits:
At December 31, 1996 26,591,429 7,890,252 7,475,257 30,026,713 5,229,660 411,051
----------- ----------- ---------- ----------- ---------- --------
At December 31, 1997 $35,659,046 $11,801,160 $6,126,224 $39,776,805 $5,758,191 $ 90,867
=========== =========== ========== =========== ========== ========
</TABLE>
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
For the Year Ended December 31, 1996
Participant Directed
Investment Funds
<TABLE>
<CAPTION>
Aggressive Fixed
Conservative Moderate Growth Growth Income
Total Portfolio Portfolio Portfolio Portfolio Fund
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Net Investment Income from
the Whitman Corporation Defined
Contribution Master Trust $ 24,617,960 $ 796,586 $ 2,881,228 $ 5,533,746 $ 4,881,352 $ 4,093,567
Contributions:
Participant 10,622,126 385,674 1,334,174 2,317,892 2,272,884 1,781,776
Employer, net of forfeitures 7,823,413 286,818 1,010,943 1,726,661 1,564,336 1,374,224
------------ ---------- ----------- ----------- ----------- -----------
Total Additions 43,063,499 1,469,078 5,226,345 9,578,299 8,718,572 7,249,567
------------ ---------- ----------- ----------- ----------- -----------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 13,541,916 667,728 1,346,438 1,305,327 1,102,634 5,751,854
Administrative Expenses 693,771 24,874 67,103 102,353 63,801 283,991
------------ ---------- ----------- ----------- ----------- -----------
Total Deductions 14,235,687 692,602 1,413,541 1,407,680 1,166,435 6,035,845
------------ ---------- ----------- ----------- ----------- -----------
Interfund Transfers -- 1,481,115 852,737 3,397,702 (2,532,320) (1,870,061)
------------ ---------- ----------- ----------- ----------- -----------
Net increase (decrease) 28,827,812 (704,639) 2,960,067 4,772,917 10,084,457 3,083,783
Net Assets Available for Benefits:
At December 31, 1995 223,271,719 9,394,841 22,764,230 33,654,068 23,206,414 65,259,031
------------ ---------- ----------- ----------- ----------- -----------
At December 31, 1996 $252,099,531 $8,690,202 $25,724,297 $38,426,985 $33,290,871 $68,342,814
============ ========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Large Small Whitman Participant
Company Company International Stock Notes
Fund Fund Fund Fund Receivable Other
------------ ---------- ------------ ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Net Investment Income from
the Whitman Corporation Defined
Contribution Master Trust $ 4,367,503 $1,045,823 $ 392,759 $ 222,121 $ 380,244 $ 23,031
Contributions:
Participant 951,490 444,387 467,964 926,395 -- (260,510)
Employer, net of forfeitures 691,583 312,658 326,714 676,195 -- (146,719)
----------- ---------- ---------- ----------- ---------- --------
Total Additions 6,010,576 1,802,868 1,187,437 1,824,711 380,244 (384,198)
----------- ---------- ---------- ----------- ---------- --------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 977,819 700,821 329,912 1,582,406 (5,117) (217,906)
Administrative Expenses 59,776 19,565 19,194 91,086 -- (37,972)
----------- ---------- ---------- ----------- ---------- --------
Total Deductions 1,037,595 720,386 349,106 1,673,492 (5,117) (255,878)
----------- ---------- ---------- ----------- ---------- --------
Interfund Transfers (4,016,981) (177,865) (558,801) 3,889,400 (413,842) (51,084)
----------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) 8,989,962 1,260,347 1,397,132 (3,738,181) 799,203 (77,236)
Net Assets Available for Benefits:
At December 31, 1995 17,601,467 6,629,905 6,078,125 33,764,894 4,430,457 488,287
----------- ---------- ---------- ----------- ---------- --------
At December 31, 1996 $26,591,429 $7,890,252 $7,475,257 $30,026,713 $5,229,660 $411,051
=========== ========== ========== =========== ========== ========
</TABLE>
<PAGE>
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
(1) Description of Plan
The following brief description of the Whitman Corporation Retirement Savings
Plan (the "Plan") provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan which covers eligible employees of
Whitman Corporation and those of its subsidiary companies which adopt the Plan,
with any company having adopted the Plan along with Whitman Corporation being
considered an Employer. Any salaried, non-union 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 1997 and
1996 to the lesser of $9,500 (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.
Forfeitures
Forfeited Employer contributions resulting from terminations of employment are
used to reduce Employer contributions after a Participant has terminated or
withdrawn from the Plan. In the event a Participant is rehired and reimburses
the amount disbursed to him or her from the Plan within the time period
specified in the Plan, the Employer is required to restore to the Participant's
account any previously forfeited amount used to reduce Employer contributions.
Plan Termination
Although it has not expressed any intent to do so, Whitman Corporation has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
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
On termination of service, a Participant may elect to receive the value of his
or her account in either a lump sum payment, in annual installments over a
period of time up to a maximum of fifteen years, in the form of an immediate or
deferred annuity, or disbursement amounts at their discretion.
Expenses
External administrative expenses for the preparation and maintenance of the Plan
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.
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, 1997 and 1996, contributions may be invested in the following funds:
o Conservative Portfolio
o Moderate Portfolio
o Growth Portfolio
o Aggressive Growth Portfolio
o Fixed Income Fund
o Large Company Fund
o Small Company Fund
o International Fund
o Whitman Stock Fund
Earnings on investments in each of the investment funds are reinvested in the
respective funds.
(2) Interest in Whitman Corporation Defined Contribution Master Trust
Certain assets of the Plan are in the Whitman Corporation Defined Contribution
Master Trust (the Trust) which was established for the investment of assets of
the plan and another Whitman Corporation sponsored retirement plan. Each plan
has an undivided interest in the Trust. The assets of the Trust are held by the
Northern Trust Company (the Trustee). The Plan's interest in the net assets of
the Trust is based on the 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, 1997 and 1996, the Plan's interest in the net assets of the Trust
was approximately 85% and 87%, respectively.
The Trust held the following classifications of investments as of December 31,
1997 and 1996:
1997 1996
------------ ------------
Investments at fair value:
Common Stock $ 40,068,461 $ 30,242,306
Collective Investment Trusts 233,152,798 175,641,362
Participant Notes Receivable 7,932,041 6,746,501
Investments at contract value:
Investment contracts 67,731,979 75,144,430
------------ ------------
Total Trust Investments $348,885,279 $287,774,599
============ ============
As of December 31, 1997 and 1996, the net assets of the Trust include the above
investments and other miscellaneous net assets totalling $249,329 and $191,837,
respectively.
Investment Income for the Trust is as follows for the years ended December 31,
1997 and 1996:
1997 1996
------------ ------------
Net appreciation (depreciation) in
fair value of investments:
Common Stock $ 4,124,603 $ (412,321)
Collective Investment Trusts 42,698,298 23,102,103
------------ ------------
46,822,901 22,689,782
Interest and Dividends 6,275,399 5,693,825
------------ ------------
Total Investment Income $ 53,098,300 $ 28,383,607
============ ============
(3) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are prepared on the accrual basis of
accounting.
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 years ended December 31, 1997 and 1996, was 6.5% and 7.0%,
respectively. The aggregate interest rate for the investment contracts as of
December 31, 1997 and 1996, was 6.7% and 6.5%, respectively. The fair value of
the investment contracts in the Trust as of December 31, 1997 and 1996, was
approximately $68,900,000 and $75,400,000, respectively.
The Trust records investment transactions on a trade date basis.
Benefits Paid to Participants
Benefits are recorded when paid.
Use of Estimates
The financial statements have been prepared in accordance with generally
accepted accounting principles and necessarily include amounts based on
estimates and assumptions by management. Actual results could differ from those
estimates.
(4) Transfer From Prior Plan
Effective January 1, 1997, the assets attributable to the salaried participants
under the Lou Gen, Ltd. Profit Sharing Plan were transferred to the Plan.
(5) Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated April 1, 1996 that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the Plan
administrator believes that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC. Therefore, the Plan
administrator believes that the Plan was qualified and the related trust was
tax-exempt as of the financial statement dates.
(6) Subsequent Event
On June 23, 1997, Whitman Corporation announced the planned spin-offs of two of
its operating subsidiaries, Midas, Inc. ("Midas) and Hussmann International,
Inc. ("Hussmann") to Whitman shareholders. Effective January 1, 1998, Midas
created the Midas Retirement Savings Plan for Salaried Employees, the Midas
Retirement Savings Plan for Hourly Employees, and the Midas Defined Contribution
Master Trust; and Hussmann created the Hussmann International, Inc. Retirement
Savings Plan for Salaried Employees, the Hussmann International, Inc. Retirement
Savings Plan for Hourly Employees, and the Hussmann International, Inc. Defined
Contribution Master Trust, to manage activity previously performed with the
Whitman Corporation Retirement Savings Plan, the Whitman Corporation Master
Retirement Savings Plan and the Whitman Corporation Defined Contribution Master
trust.
In conjunction with the spin-offs , investment management for the S&P 500,
extended market, EAFE, and U.S. debt funds was transferred from Barclays Global
Investors to State Street Global Advisors. Effective January 1, 1998, $224.7
million of Whitman Corporation Defined Contribution Master Trust assets were
transferred from Barclays Global Investors to State Street Global Advisors.
Effective January 9, 1998, the fair market value of assets attributable to the
accounts of the participants who were employees of Midas and Hussmann was
transferred by the Whitman Corporation Defined Contribution Master Trust to the
Midas Defined Contribution Master Trust and Hussmann International, Inc. Defined
Contribution Master Trust, respectively, in accordance with the Distribution and
Indemnity Agreements executed by Whitman with Midas and Hussmann. The asset
transfer was $59.6 million to the Midas Defined Contribution Master Trust and
$95.6 million to the Hussmann International, Inc. Defined Contribution Master
Trust.
On January 30, 1998, Whitman completed the dividend distribution of Midas and
Hussmann common stock to Whitman shareholders of record on January 16, 1998. On
February 3, 1998, the Whitman Corporation Defined Contribution Master Trust
transferred the Midas and Hussmann shares received in the dividend distribution
to the Midas Defined Contribution Master Trust and Hussmann International, Inc.
Defined Contribution Master Trust, respectively, in exchange for Whitman
Corporation common shares. The market value of the asset exchange was $2.1
million with the Midas Defined Contribution Master Trust and $5.7 million with
the Hussmann International, Inc. Defined Contribution Master Trust.
<PAGE>
Exhibit A
SUMMARY ANNUAL REPORT
WHITMAN CORPORATION RETIREMENT SAVINGS PLAN
This is a summary of the annual report for the Whitman Corporation Retirement
Savings Plan, EIN 36-6076573 for January 1, 1997 through December 31, 1997. The
annual report has been filed with the Internal Revenue Service, as required
under the Employee Retirement Income Security Act of 1974 (ERISA).
BASIC FINANCIAL STATEMENT
Benefits under the Plan are provided by a trust or arrangement providing
benefits partially through insurance and/or annuity contracts.
Plan expenses were $19,466,484. These expenses included $18,699,185 in benefits
paid to participants and beneficiaries and $767,299 in other expenses. A total
of 3,926 persons were participants in or beneficiaries of the plan at the end of
the plan year, although not all of these persons had yet earned the right to
receive benefits.
The value of the plan assets, after subtracting liabilities of the plan, was
$297,292,782 as of December 31, 1997, compared to $252,099,531 as of December
31, 1996. During the plan year, the plan experienced an increase in its net
assets of $45,193,251. This increase includes unrealized appreciation in the
value of plan assets; that is, the difference between the value of the plan's
assets at the end of the year and the value of assets at the beginning of the
year or the cost of assets acquired during the year. The plan had total
additions of $64,659,735 including participant contributions of $10,884,412,
employer contributions of $7,392,849, transfers from prior plans of $1,023,301,
and a gain from investments of $45,359,173.
YOUR RIGHT TO ADDITIONAL INFORMATION
You have the right to receive a copy of the full annual report, or any part
thereof, on request. The items listed below are included in that report:
1. an accountant's report;
2. assets held for investment purposes;
3. schedule of reportable transactions;
4. Form 11-K Annual Report to the Securities and Exchange Commission; and
5. insurance information.
To obtain a copy of the full annual report, or any part thereof, write or call
the office of Raymond B. Werntz, Vice President - Benefits and Compensation,
3501 Algonquin Road, Rolling Meadows, Illinois 60008, (847) 818-5000. The charge
to cover copying costs will be $10.50 for the full annual report or $.15 per
page for any part thereof.
You also have the right to receive from the plan administrator, on request and
at no charge, a statement of the net assets available for benefits, with fund
information, of the plan and accompanying notes, or a statement of changes in
net assets available for benefits, with fund information, of the plan and
accompanying notes, or both. If you request a copy of the full annual report
from the plan administrator, these two statements and accompanying notes will be
included as part of the report. The charge to cover copying costs given does not
include a charge for the copying of these portions of the report because these
portions are furnished without charge.
You also have the legally protected right to examine the annual report at the
main office of the plan at 3501 Algonquin Road, Rolling Meadows, Illinois 60008,
(847) 818-5000; the office of your personnel representative; or at the U.S.
Department of Labor in Washington, DC or to obtain a copy from the U.S.
Department of Labor upon payment of copying costs. Requests to the Department
should be addressed to: Public Disclosure Room, N4677, Pension and Welfare
Benefit Programs, Frances Perkins Department of Labor Building, 200 Constitution
Avenue NW, Washington, DC, 20216.
<PAGE>
Exhibit B
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report, included in this Form 11-K, into Whitman Corporation's previously filed
Registration Statement File No. 33-28238.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
June 10, 1998
<PAGE>
