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
MASTER 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
MASTER RETIREMENT SAVINGS PLAN
By: /s/ RAYMOND B. WERNTZ
Raymond B. Werntz
Vice Present - Benefits & Compensation
Dated: June 10, 1998
<PAGE>
WHITMAN CORPORATION
MASTER RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE>
WHITMAN CORPORATION
MASTER 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 Master Retirement Savings
Plan:
We have audited the accompanying statements of net assets available for benefits
of WHITMAN CORPORATION MASTER 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
MASTER 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 $51,757,275 $1,342,930 $5,740,648 $9,908,515 $14,346,076 $9,460,189
Contributions Receivable:
Participant 69,855 2,124 8,420 14,033 22,907 10,756
Employer, net of forfeitures 22,696 843 2,808 4,488 6,988 4,495
----------- ---------- ---------- ---------- ----------- ----------
Total Assets 51,849,826 1,345,897 5,751,876 9,927,036 14,375,971 9,475,440
----------- ---------- ---------- ---------- ----------- ----------
Liabilities:
Expenses Payable 19,347 508 2,141 3,711 5,383 3,547
----------- ---------- ---------- ---------- ----------- ----------
Total Liabilities 19,347 508 2,141 3,711 5,383 3,547
----------- ---------- ---------- ---------- ----------- ----------
Net Assets Available for Benefits $51,830,479 $1,345,389 $5,749,735 $9,923,325 $14,370,588 $9,471,893
=========== ========== ========== ========== =========== ==========
</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 $ 4,871,034 $1,264,844 $ 813,814 $1,818,847 $ 2,171,767 $ 18,611
Contributions Receivable:
Participant 5,694 1,884 1,554 2,483 -- --
Employer, net of forfeitures 1,311 558 417 788 -- --
----------- ---------- ---------- ---------- ----------- ----------
Total Assets 4,878,039 1,267,286 815,785 1,822,118 2,171,767 18,611
----------- ---------- ---------- ---------- ----------- ----------
Liabilities:
Expenses Payable 1,819 468 306 679 785 --
----------- ---------- ---------- ---------- ----------- ----------
Total Liabilities 1,819 468 306 679 785 --
----------- ---------- ---------- ---------- ----------- ----------
Net Assets Available for Benefits $ 4,876,220 $1,266,818 $ 815,479 $1,821,439 $ 2,170,982 $ 18,611
=========== ========== ========== ========== =========== ==========
</TABLE>
<PAGE>
WHITMAN CORPORATION
MASTER 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 $36,017,284 $ 935,634 $4,017,234 $6,637,779 $9,087,377 $8,497,980
Contributions Receivable:
Participant 148,573 4,716 17,647 27,914 45,185 21,122
Employer, net of forfeitures 37,009 1,366 4,223 7,819 10,612 5,677
----------- ---------- ---------- ---------- ---------- ----------
Total Assets 36,202,866 941,716 4,039,104 6,673,512 9,143,174 8,524,779
----------- ---------- ---------- ---------- ---------- ----------
Liabilities:
Expenses Payable 25,405 690 2,937 4,940 5,223 7,318
----------- ---------- ---------- ---------- ---------- ----------
Total Liabilities 25,405 690 2,937 4,940 5,223 7,318
----------- ---------- ---------- ---------- ---------- ----------
Net Assets Available for Benefits $36,177,461 $ 941,026 $4,036,167 $6,668,572 $9,137,951 $8,517,461
=========== ========== ========== ========== ========== ==========
</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 $2,647,372 $ 685,057 $ 695,941 $1,234,160 $1,516,841 $ 61,909
Contributions Receivable:
Participant 12,452 4,470 4,214 10,853 -- --
Employer, net of forfeitures 2,980 1,173 864 2,295 -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Assets 2,662,804 690,700 701,019 1,247,308 1,516,841 61,909
---------- ---------- ---------- ---------- ---------- ----------
Liabilities:
Expenses Payable 1,866 499 512 934 -- 486
---------- ---------- ---------- ---------- ---------- ----------
Total Liabilities 1,866 499 512 934 -- 486
---------- ---------- ---------- ---------- ---------- ----------
Net Assets Available for Benefits $2,660,938 $ 690,201 $ 700,507 $1,246,374 $1,516,841 $ 61,423
========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
WHITMAN CORPORATION
MASTER 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 $ 7,739,127 $ 176,250 $ 904,642 $1,732,605 $ 2,694,011 $ 589,927
Contributions:
Participant 5,572,377 186,905 635,191 1,095,673 1,850,896 773,099
Employer, net of forfeitures 2,013,014 76,053 222,377 401,367 635,771 322,094
Transfer from prior plans 2,892,720 -- -- -- -- 2,892,720
----------- ---------- ---------- ---------- ----------- ----------
Total Additions 18,217,238 439,208 1,762,210 3,229,645 5,180,678 4,577,840
----------- ---------- ---------- ---------- ----------- ----------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 2,428,369 81,488 231,764 368,660 614,478 769,622
Administrative Expenses 135,851 2,082 9,305 15,803 22,311 31,134
----------- ---------- ---------- ---------- ----------- ----------
Total Deductions 2,564,220 83,570 241,069 384,463 636,789 800,756
----------- ---------- ---------- ---------- ----------- ----------
Interfund Transfers -- (48,725) (192,427) (409,571) (688,748) 2,822,652
----------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) 15,653,018 404,363 1,713,568 3,254,753 5,232,637 954,432
Net Assets Available for Benefits
At December 31, 1996 36,177,461 941,026 4,036,167 6,668,572 9,137,951 8,517,461
----------- ---------- ---------- ---------- ----------- ----------
At December 31, 1997 $51,830,479 $1,345,389 $5,749,735 $9,923,325 $14,370,588 $9,471,893
=========== ========== ========== ========== =========== ==========
</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 $ 1,045,844 $ 227,494 $ 12,597 $ 205,287 $ 146,379 $ 4,091
Contributions:
Participant 464,613 148,695 135,257 292,728 -- (10,680)
Employer, net of forfeitures 168,001 54,860 40,331 92,160 -- --
Transfer from prior plans -- -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Total Additions 1,678,458 431,049 188,185 590,175 146,379 (6,589)
----------- ---------- ---------- ---------- ---------- ----------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 195,895 112,136 44,479 86,489 (66,539) (10,103)
Administrative Expenses 7,962 1,835 1,581 2,543 785 40,510
----------- ---------- ---------- ---------- ---------- ----------
Total Deductions 203,857 113,971 46,060 89,032 (65,754) 30,407
----------- ---------- ---------- ---------- ---------- ----------
Interfund Transfers (740,681) (259,539) 27,153 (73,922) (442,008) 5,816
----------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) 2,215,282 576,617 114,972 575,065 654,141 (42,812)
Net Assets Available for Benefits
At December 31, 1996 2,660,938 690,201 700,507 1,246,374 1,516,841 61,423
----------- ---------- ---------- ---------- ---------- ----------
At December 31, 1997 $ 4,876,220 $1,266,818 $ 815,479 $1,821,439 $2,170,982 $ 18,611
=========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
WHITMAN CORPORATION
MASTER 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 (Loss) from
the Whitman Corporation Defined
Contribution Master Trust $ 3,765,647 $ 78,695 $ 437,612 $ 837,340 $1,262,885 $ 477,043
Contributions:
Participant 4,728,551 167,319 598,361 904,891 1,279,938 874,758
Employer, net of forfeitures 1,327,538 53,526 163,483 273,400 327,159 292,589
------------ -------- ---------- ---------- ---------- ----------
Total Additions 9,821,736 299,540 1,199,456 2,015,631 2,869,982 1,644,390
------------ -------- ---------- ---------- ---------- ----------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 1,435,775 20,043 154,078 148,795 265,883 458,101
Administrative Expenses 91,487 2,693 10,528 17,762 17,512 35,393
------------ -------- ---------- ---------- ---------- ----------
Total Deductions 1,527,262 22,736 164,606 166,557 283,395 493,494
------------ -------- ---------- ---------- ---------- ----------
Interfund Transfers -- 111,205 312,567 216,075 (531,313) 569,384
------------ -------- ---------- ---------- ---------- ----------
Net increase (decrease) 8,294,474 165,599 722,283 1,632,999 3,117,900 581,512
Net Assets Available for Benefits
At December 31, 1995 27,882,987 775,427 3,313,884 5,035,573 6,020,051 7,935,949
------------ -------- ---------- ---------- ---------- ----------
At December 31, 1996 $36,177,461 $941,026 $4,036,167 $6,668,572 $9,137,951 $8,517,461
=========== ======== ========== ========== ========== ==========
</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 (Loss) from
the Whitman Corporation Defined
Contribution Master Trust $ 462,719 $ 86,229 $ 37,626 $ (11,778) $ 93,835 $ 3,441
Contributions:
Participant 336,942 131,131 139,542 293,314 -- 2,355
Employer, net of forfeitures 91,436 31,291 28,967 65,687 -- --
----------- -------- -------- ---------- ---------- --------
Total Additions 891,097 248,651 206,135 347,223 93,835 5,796
----------- -------- -------- ---------- ---------- --------
DEDUCTIONS FROM NET ASSETS:
Participants' Withdrawals 111,759 14,987 7,148 45,216 5,117 204,648
Administrative Expenses 5,982 1,711 1,799 3,781 -- (5,674)
----------- -------- -------- ---------- ---------- --------
Total Deductions 117,741 16,698 8,947 48,997 5,117 198,974
----------- -------- -------- ---------- ---------- --------
Interfund Transfers (126,269) (32,013) 103,998 (17,002) (542,779) (63,853)
----------- -------- -------- ---------- ---------- --------
Net increase (decrease) 899,625 263,966 93,190 315,228 631,497 (129,325)
Net Assets Available for Benefits
At December 31, 1995 1,761,313 426,235 607,317 931,146 885,344 190,748
----------- -------- -------- ---------- ---------- --------
At December 31, 1996 $ 2,660,938 $690,201 $700,507 $1,246,374 $1,516,841 $ 61,423
=========== ======== ======== ========== ========== ========
</TABLE>
<PAGE>
WHITMAN CORPORATION
MASTER RETIREMENT
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
(1) Description of Plan
The following brief description of the Whitman Corporation Master 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 hourly employee who is a member of a group of
employees to whom the Plan has been made available through collective
bargaining, or through other unilateral employment requirements, and has elected
to participate in the Plan is considered a Participant. During 1997 and 1996,
three operating companies participated in this Plan Hussmann International, Inc.
(Hussmann), Midas, Inc. (Midas) and Pepsi-Cola General Bottlers, Inc. (Pepsi).
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
Contributions
The Plan permits participating Employers to select from a variety of features to
offer a custom- tailored Plan to employee groups. The Employer may offer the
Plan in the form of a Pre-tax 401(k) Savings Plan or an After-tax Savings Plan.
A variety of employee/employer contribution arrangements are available and are
in effect for various employee groups.
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 participants 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 will be 100% vested in Employer contributions made after completion
of 5 years of vesting service, if permanently disabled, upon attainment of age
65, upon death, or if terminated by an Employer for specific reasons.
Participants are immediately vested in their voluntary contributions and actual
earnings thereon.
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 fifteen years, in the form of immediate or
deferred annuity, or disbursement amounts at their discretion.
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.
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 15% and 13%, 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 totaling $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 year 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 hourly employees 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 January 8, 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 and 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 MASTER RETIREMENT SAVINGS PLAN
This is a summary of the annual report for the Whitman Corporation Master
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 $ 2,564,220. These expenses included $2,428,369 in benefits
paid to participants and beneficiaries and $135,851 in other expenses. A total
of 3,476 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
$51,830,479 as of December 31, 1997, compared to $36,177,461 as of December 31,
1996. During the plan year, the plan experienced an increase in its net assets
of $15,653,018. 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
$18,217,238, including participant contributions of $5,572,377, employer
contributions of $2,013,014, transfers from prior plans of $2,892,720, and a
gain from investments of $7,739,127.
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. 33-53427.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
June 10, 1998
