WHITMAN CORP, 424B5, 1999-04-22

WHITMAN CORP
424B5, 1999-04-22
BOTTLED & CANNED SOFT DRINKS & CARBONATED WATERS

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<PAGE>

Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-76787,
333-16355 and 33-52809

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+This prospectus supplement relates to an effective registration statement +
+under the Securities Act of 1933, but is not complete and may be changed. +
+This prospectus supplement is not an offer to sell these securities and is +
+not soliciting an offer to buy these securities in any state where the offer +
+or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 22, 1999
PRELIMINARY PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 22, 1999

$300,000,000

Whitman Corporation

$150,000,000 % Notes due 2004
$150,000,000 % Notes due 2009

-----------

We will pay interest on the notes each and . The first interest
payment will be made on , 1999. We may redeem all or any portion of each
series of notes at any time, at the redemption price described in this
prospectus supplement. There is no sinking fund for the notes. The notes are
unsecured and rank equally with all of our other unsecured, senior
indebtedness.

We have entered into an agreement to create a new business relationship with
PepsiCo, Inc. in which we will merge into a subsidiary of PepsiCo. The merger
requires the approval of our shareholders. A special meeting of our
shareholders will be held on May 20, 1999 to vote on the merger agreement. If
the merger is completed, "New" Whitman will assume our obligations under the
notes pursuant to a supplemental indenture.

This offering of notes is not conditioned upon the completion of the merger.

<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Whitman
-------- ------------- -----------
<S> <C> <C> <C>
Per note due 2004..........................
Per note due 2009..........................
Total......................................
</TABLE>

Delivery of the notes, in book-entry form only, will be made through The
Depository Trust Company on or about , 1999.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.

Sole book running manager is Credit Suisse First Boston

Credit Suisse First Boston Salomon Smith Barney
Chase Securities Inc.

Banc One Capital Markets, Inc. NationsBanc Montgomery Securities LLC

Prospectus Supplement dated , 1999
<PAGE>

------------

TABLE OF CONTENTS

Prospectus Supplement

<TABLE>
<CAPTION>
Page
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<S> <C>
Prospectus Supplement Summary....... S-4
Whitman Corporation................. S-7
The Transactions with Pepsico....... S-7
Whitman Corporation/New Whitman
Selected Historical and Pro Forma
Combined Financial Data............ S-11
PepsiCo Bottling Operations Selected
Combined Financial Information..... S-13
</TABLE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Use of Proceeds..................... S-14
Capitalization...................... S-15
Ratios of Earnings to Fixed Charges. S-15
Description of the Notes............ S-16
Underwriting........................ S-19
Experts............................. S-20
Index to Financial Statements....... F-1
</TABLE>
Prospectus

<TABLE>
<CAPTION>
Page
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<S> <C>
Whitman Corporation................. 2
About this Prospectus............... 2
Where You Can Find More Information. 3
</TABLE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Description of the Debt Securities.. 3
Plan of Distribution................ 9
Legal Matters....................... 9
Experts............................. 9
</TABLE>

------------

You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
additional information or information that is different. This document may only
be used where it is legal to sell these securities. You should assume that the
information appearing in this prospectus supplement and the accompanying
prospectus is accurate as of the date on the front cover of this prospectus
supplement and the date of the prospectus only. Our business, financial
condition, results of operations and prospects, among other things, may have
changed since those dates.

------------

This prospectus supplement and prospectus contain certain forward-looking
information with respect to financial condition, results of operations,
business strategies, operating efficiencies or synergies, competitive
positions, growth opportunities for existing products, plans and objectives of
management and other matters. Statements in this prospectus supplement and the
prospectus that are not historical facts are hereby identified as "forward-
looking statements" for the purpose of the safe harbor provided by Section 21E
of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of
1933. Such forward-looking statements, including, without limitation, those
relating to the future business prospects, revenues and income of Whitman,
wherever they occur in this prospectus supplement and the prospectus, are
necessarily estimates reflecting the best judgment of the senior management of
Whitman and involve a number of risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by the forward-
looking statements. Important factors that could cause actual results to differ
materially from estimates or projections expressed or implied in the forward-
looking statements include without limitation: the effects of competition in
the markets in which Whitman operates and will operate if the merger is
completed, including product and pricing pressures; the ability to integrate
the operations of Whitman and the PepsiCo bottling operations which would be
acquired in the merger; changing trends in consumer tastes; changes in our
relationship and/or support programs with PepsiCo and other brand owners;
market acceptance of new product offerings; weather conditions; cost and
availability of raw materials; availability of capital; labor and employee
benefit costs; unfavorable interest rate and currency fluctuations; unexpected
costs associated with Year 2000 conversions or the business risks associated
with potential Year 2000 non-compliance by Whitman customers and/or suppliers;
costs of legal proceedings; and general economic, business and political
conditions in the countries and territories where Whitman operates.

S-2
<PAGE>

Words such as "estimate," "project," "plan," "intend," "expect," "may,"
"will," "anticipate," "should," "continue," "believe" and similar expressions
are intended to identify forward-looking statements. These forward-looking
statements are found at various places throughout this prospectus supplement
and the prospectus and the other documents incorporated herein by reference,
including, but not limited to, the Whitman 1998 Form 10-K, as amended by the
Form 10-K/A dated April 16, 1999, including any amendments. Prospective
investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they were made. We assume no
obligation to publicly release the result of any revisions that may be made to
any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

S-3
<PAGE>

PROSPECTUS SUPPLEMENT SUMMARY

The following is a summary and does not contain all of the information that
may be important to you. You should read the entire prospectus and prospectus
supplement, as well as the documents incorporated by reference in the
prospectus and prospectus supplement, before deciding to purchase any notes.

The Offering

Notes Due 2004

Securities offered........ $150,000,000 aggregate principal amount of %
notes due 2004.

Maturity date............. , 2004.

Interest rate............. % per annum, accruing from , 1999.

Redemption................ The notes will be redeemable, in whole or in part,
at our option at any time at a redemption price
equal to the greater of: (i) 100% of the principal
amount of the notes; and (ii) the sum of the
present values of the remaining scheduled payments
of principal and interest on the notes being
redeemed from the redemption date to the maturity
date discounted to the redemption date on a
semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury
Rate, plus basis points.

Notes Due 2009

Securities offered........ $150,000,000 aggregate principal amount of %
notes due 2009.

Maturity date............. , 2009.

Interest rate............. % per annum, accruing from , 1999.

Common Terms of the Notes

Interest payment dates.... and of each year, commencing , 1999.

Ranking................... The notes are unsecured and rank equally with all
of our other unsecured, senior indebtedness. At
April 16, 1999, we had approximately $742.0 million
of indebtedness outstanding on a consolidated
basis.

S-4
<PAGE>

Restrictive covenants..... The indenture governing the notes contains certain
covenants that limit our ability to (i) grant liens
and (ii) enter into sale and leaseback
transactions.

Use of proceeds........... To (i) repay outstanding commercial paper, (ii)
acquire certain assets of PepsiCo after the merger
and (iii) repurchase Whitman/New Whitman common
stock.

No cross-conditionality... The offering and sale of the notes due 2004 is not
conditional on the offering and sale of the notes
due 2009, and vice versa.

Whitman Corporation

We are engaged in the production and distribution of Pepsi-Cola brand
products and a variety of other non-alcoholic beverage products through our
principal operating subsidiary, Pepsi-Cola General Bottlers ("Pepsi General").
Pepsi General is one of the world's largest franchised Pepsi-Cola bottlers,
accounting for about 12% of all Pepsi-Cola products sold in the United States.
Pepsi General currently serves a significant portion of a nine state region in
the midwestern United States. PepsiCo currently indirectly owns 20% of the
common stock of Pepsi General. That interest will be transferred to New Whitman
as part of the transactions described below. Our principal executive offices
are located at 3501 Algonquin Road, Rolling Meadows, Illinois 60008, and our
telephone number is (847) 818-5000.

On January 25, 1999 we announced that Whitman had entered into a
contribution and merger agreement with PepsiCo and Heartland Territories
Holdings ("Heartland"), a PepsiCo subsidiary. Under the merger agreement,
PepsiCo will contribute some of its midwestern United States bottling
operations and assets with a book value of $425.1 million, including associated
liabilities with a book value of $117.0 million, debt of $241.8 million and
PepsiCo's 20% equity interest in Pepsi General to Heartland and Whitman will
merge into Heartland. Immediately after the merger, Heartland will change its
name to "Whitman Corporation" and is referred to as "New Whitman" in this
prospectus supplement. After the merger, PepsiCo will sell bottling
subsidiaries located in Poland, Hungary, the Czech Republic and Slovakia, and
some domestic transportation and vending assets to New Whitman for $176.0
million in cash.

Based upon the amount of Whitman common stock outstanding as of April 16,
1999, current holders of Whitman common stock will own approximately 61.3% of
the outstanding common stock of New Whitman after the transactions and PepsiCo
and its subsidiaries will own approximately 38.7% of the outstanding common
stock of New Whitman after the transactions. The merger agreement is subject to
the approval of Whitman's shareholders and contains customary conditions to
closing. A special meeting of our shareholders will be held on May 20, 1999 to
vote on the merger agreement.

Following the transactions, New Whitman will have exclusive production and
distribution rights for Pepsi-Cola brand products in portions of nine states
and eight foreign countries worldwide. New Whitman will have nearly 40% more
revenue on a pro forma basis than Whitman currently does. Further, with PepsiCo
restructuring its bottling system, New Whitman will be one of several PepsiCo
primary bottlers, known as "anchor bottlers," worldwide. The Whitman board of
directors believes that shareholders of Whitman will benefit from the greater
size and strength of New Whitman.

If the merger is completed, New Whitman will assume our obligations under
the notes pursuant to a supplemental indenture. We cannot assure you at this
time that the merger will be completed.

Recent Developments

In anticipation of the merger, on March 19, 1999, Whitman sold its bottling
operations located in Marion, Virginia and Princeton, West Virginia, along with
related transportation assets, to PepsiCo for an aggregate price of $97.8
million in cash and on March 31, 1999, Whitman sold its bottling operations
located in the St. Petersburg area of Russia, along with related transportation
assets, to PepsiCo for $20.0 million.

S-5
<PAGE>

The merger agreement generally requires Whitman to repurchase 16 million
shares, which could result in PepsiCo's interest in New Whitman increasing to
slightly over 39%. As of April 16, 1999 we have purchased approximately
13,447,300 shares of Whitman common stock at an average price of $18.73 per
share to partially satisfy our repurchase obligation under the merger
agreement. As a result of the repurchases through April 16, 1999, PepsiCo will
own approximately 38.7% of the outstanding shares of New Whitman after the
merger.

S-6
<PAGE>

WHITMAN CORPORATION

We are engaged in the production and distribution of Pepsi-Cola brand
products and a variety of other non-alcoholic beverage products through our
principal operating subsidiary, Pepsi-Cola General Bottlers. Pepsi General is
one of the world's largest franchised Pepsi-Cola bottlers, accounting for about
12% of all Pepsi-Cola products sold in the United States. Pepsi General
currently serves a significant portion of a nine state region in the midwestern
United States. PepsiCo currently indirectly owns 20% of the common stock of
Pepsi General. That interest will be transferred to New Whitman as part of the
transactions described below. Our principal executive offices are located at
3501 Algonquin Road, Rolling Meadows, Illinois 60008, and our telephone number
is (847) 818-5000.

THE TRANSACTIONS WITH PEPSICO

On January 25, 1999, we announced that our Board of Directors approved a new
business relationship with PepsiCo, including the contribution and merger
agreement. The transactions contemplated by the merger agreement consist of
three primary steps.

The Contribution. On April 2, 1999, PepsiCo caused its subsidiaries to
contribute to Heartland:

. bottling operations and assets with a book value of $425.1 million
located principally in the central part of the United States, including
bottling assets and operations of Pepsi-Cola Operating Company of St.
Louis, Inc., Pepsi-Cola Bottling Company of Ohio, Inc. and Pepsi-Cola
Operating Company of Chesapeake and Indianapolis, Inc., and operating
liabilities associated with these assets and operations with a book
value of $117.0 million.

. PepsiCo's 20% equity interest in Pepsi General.

. $241.8 million of debt.

In exchange, Heartland issued to PepsiCo 53,999,500 shares of its common
stock. PepsiCo currently owns a total of 54,000,000 shares.

The Merger. Whititman will merge with and into Heartland, with the surviving
corporation being renamed "Whitman Corporation." A special meeting of our
shareholders will be held on May 20, 1999 to vote on the merger agreement. If
the merger is completed, the surviving corporation will acquire all of
Whitman's assets and assume all of Whitman's liabilities, including liabilities
evidenced by the notes we are now offering. In the merger, the outstanding
shares of Whitman common stock will be converted on a one-for-one basis into
shares of New Whitman common stock. Based on 88,050,948 shares of Whitman
common stock outstanding as of April 16, 1999, a total of 88,050,948 shares of
New Whitman common stock will be issued to current Whitman shareholders in the
merger.

PepsiCo currently owns 794,115 shares of Whitman common stock and thus will
be issued 794,115 shares of New Whitman common stock in the merger. Combined
with the 54,000,000 shares of Heartland common stock owned by PepsiCo prior to
the merger, following the merger PepsiCo will hold approximately 54,794,115
shares of New Whitman common stock, representing approximately 38.7% of the
total outstanding shares. Current Whitman shareholders other than PepsiCo will
hold shares of New Whitman common stock representing approximately 61.3% of the
total outstanding shares. If Whitman repurchases all 16 million shares,
PepsiCo's interest in New Whitman could increase to slightly over 39%.

Immediately following the merger, New Whitman will adopt a rights agreement.
Under this rights agreement, each share of New Whitman common stock will
receive a right to purchase one one-hundredth of a share of preferred stock of
New Whitman under specified circumstances. These rights are designed to guard
against abusive tactics to gain control of New Whitman and will not be
triggered unless someone other than PepsiCo or its affiliates acquires or seeks
to acquire 15% of New Whitman common stock.

S-7
<PAGE>

Post-Merger Acquisition from PepsiCo. Immediately following completion of
the merger, PepsiCo will sell bottling and related operations located in
Poland, Hungary, the Czech Republic and Slovakia, and domestic transportation
and vending assets related to the bottling operations contributed earlier to
Heartland, which are referred to, together with the operations contributed to
Heartland, as the "PepsiCo Bottling Operations," to New Whitman for an
aggregate of $176.0 million in cash. The purchase price attributable to any
particular operation will be reduced by any indebtedness and any capitalized
lease obligations of the operation. To the extent the aggregate amount of the
indebtedness and capitalized lease obligations owed by any operation exceeds
the purchase price attributable to such operation, PepsiCo will pay New Whitman
the amount of the excess.

Pre-Merger Sale to PepsiCo

Additionally, the merger agreement provided for us to sell bottling
operations located in Marion, Virginia, Princeton, West Virginia, and the St.
Petersburg area of Russia, along with related transportation assets, to PepsiCo
for an aggregate of $117.8 million. The purchase price attributable to any
particular operation would be reduced by any indebtedness and any capitalized
lease obligations of the operation. To the extent the aggregate amount of the
indebtedness and capitalized lease obligations owed by any operation exceeds
the purchase price attributable to such operation, Whitman would pay PepsiCo
the amount of the excess. This sale to PepsiCo was separate from the other
transactions and did not require a vote of Whitman shareholders. Under
circumstances described in the merger agreement, PepsiCo had the right to
request that this sale occur in full or in part as soon as practicable.

On March 9, 1999, PepsiCo made such a request to Whitman. On March 19, 1999,
we sold our bottling operations located in Marion, Virginia and Princeton, West
Virginia, along with related transportation assets, to PepsiCo for an aggregate
of $97.8 million in cash. On March 31, 1999, we sold our bottling operations
located in the St. Petersburg area of Russia, along with related transportation
assets, to PepsiCo for $20.0 million, reduced by indebtedness and capitalized
lease obligations owed by such operations.

Although we have completed these sales to PepsiCo, they remain covered by
the indemnification and working capital adjustment provisions of the merger
agreement.

Share Repurchase

The merger agreement provides that during the 12 months following the
closing of the merger, New Whitman will repurchase the lesser of (1) 16 million
shares of New Whitman common stock or (2) shares of New Whitman common stock
with an aggregate value of $400 million. New Whitman need not effect the
repurchase if the New Whitman board of directors determines in good faith that
the repurchase is impractical or inadvisable. PepsiCo has advised us that they
do not intend to sell their shares of New Whitman common stock during the
repurchase. As a result of the repurchase, PepsiCo's interest in New Whitman
could increase to slightly over 39%. The combination of PepsiCo's rights as a
shareholder and its position as a critical supplier will give PepsiCo
significant influence on New Whitman.

On February 5, 1999, Whitman and PepsiCo agreed that Whitman could begin
repurchasing shares of Whitman common stock. Any shares repurchased would
reduce the number of shares of New Whitman common stock to be repurchased
following the merger. As of April 16, 1999, we have repurchased 13,447,300
shares of Whitman common stock at an average price of $18.73 per share.

The Transaction Agreements

The Merger Agreement. The transactions will be consummated pursuant to the
terms of the merger agreement. The merger agreement contains customary
representations and warranties from each of Whitman, PepsiCo and Heartland. In
addition, pursuant to the merger agreement, we have agreed to conduct our
business, and PepsiCo has agreed to conduct the business of the PepsiCo
Bottling Operations, in the regular and ordinary course prior to the closing of
the merger. We have also agreed that we will not solicit, initiate or encourage
the submission of any takeover proposal or engage in negotiations or
discussions with third parties regarding their

S-8
<PAGE>

interest in making such a proposal. PepsiCo has similarly agreed not to take
any similar actions with respect to the PepsiCo Bottling Operations. The
merger agreement also contains covenants with respect to the share repurchase
and other items such as our stock plans and various employee matters.

The completion of the transactions depends upon the satisfaction or waiver
of a number of conditions, including the following:

. the adoption of the merger agreement by holders of a majority of Whitman
common stock;

. the absence of any injunction or other legal restraint preventing the
transactions;

. the receipt of an opinion from PepsiCo's counsel regarding (a) the
qualification of the contribution, and the contribution and merger
collectively, under Section 351 of the Internal Revenue Code and (b) the
qualification of the merger under Section 368 of the Internal Revenue
Code; and

. the receipt of an opinion from Whitman's counsel regarding the
applicability of Section 368 of the Internal Revenue Code to the merger.

In addition, either Whitman or PepsiCo can terminate the merger agreement
if any of the following occurs:

. the transactions are not completed before June 30, 1999;

. the holders of a majority of Whitman common stock do not adopt the
merger agreement;

. a governmental entity issues a permanent injunction or restraint
prohibiting the completion of the transactions; or

. the other party breaches or fails to comply in any material respect with
any of its representations or warranties or obligations under the merger
agreement.

The parties may also terminate the merger agreement by mutual consent. We
may also terminate the merger agreement if we receive an unsolicited superior
proposal (as described in the merger agreement), subject to the payment of a
termination fee.

The merger agreement requires us to reimburse PepsiCo's expenses up to a
maximum of $2 million if Whitman shareholders do not adopt the merger
agreement.

The merger agreement further requires us to pay a termination fee to
PepsiCo of $20 million, less any expense reimbursement paid to PepsiCo as
described in the previous paragraph, if we terminate the merger agreement and
enter into a significant transaction with a third party within twelve months.

Shareholder Agreement. New Whitman and PepsiCo will enter into a
shareholder agreement on the closing date of the transactions.

Under the shareholder agreement, PepsiCo's and its affiliates' ownership of
New Whitman common stock will be limited to an ownership threshold of 49% of
the outstanding shares. Any acquisitions in excess of the threshold must be
done with the consent of either (1) the directors of New Whitman not
affiliated with PepsiCo and not officers of New Whitman or (2) the New Whitman
shareholders not affiliated with PepsiCo, or pursuant to an offer for all
outstanding shares of New Whitman common stock at a price meeting specific
minimum-price criteria.

The shareholder agreement also restricts transfers by PepsiCo and its
affiliates that would result in a third party unaffiliated with PepsiCo owning
greater than 20% of the outstanding shares of New Whitman common stock.

S-9
<PAGE>

PepsiCo Beverage Agreements. PepsiCo will appoint New Whitman as an anchor
bottler. At the closing of the merger, New Whitman will enter into the
following bottling agreements with PepsiCo:

. a master bottling agreement for beverages bearing the "PEPSI-COLA" and
"PEPSI" trademark, including DIET PEPSI and PEPSI ONE, in the United
States;

. an allied brands master bottling agreement for bottling and distribution
of non-cola products in the United States;

. a master fountain syrup agreement and an allied brands fountain syrup
agreement for fountain syrup in the United States; and

. international bottling agreements which include terms similar to the
master bottling agreement, the allied brands master bottling agreement
and the fountain syrup agreements for countries outside of the United
States.

Ancillary Post-Closing Agreements. At the closing of the transactions,
PepsiCo and New Whitman will also enter into agreements relating to shared
services, employee benefits arrangements and registration rights for PepsiCo.

S-10
<PAGE>

WHITMAN CORPORATION/NEW WHITMAN
SELECTED HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA

The table below presents selected financial data for Whitman for the fiscal
years 1994 through 1998. These financial data should be read along with the
historical consolidated financial statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that appear in
Whitman's 1998 Form 10-K/A annual report, which is incorporated by reference in
this prospectus supplement.

The following transactions were recorded during the periods presented:

. In 1998, Whitman spun-off shares of Hussmann International, Inc. and
Midas, Inc. to its shareholders. The table is revised to reflect
Hussmann and Midas as discontinued operations.

. In 1997, Whitman recorded special charges of $49.3 million related to
the restructuring of Pepsi General's organization, the severance of
essentially all of the Whitman corporate management and staff, and
expenses associated with the spin-offs of Hussmann and Midas.

. In 1996, Whitman recorded an $8.7 million charge, principally for asset
write-downs at Pepsi General's joint venture in Poland.

. In 1994, Whitman recorded a $24.2 million unrealized loss on the
investment in Northfield Laboratories Inc.

The table also presents selected unaudited pro forma financial data for
fiscal year 1998, which has been derived from the unaudited pro forma combined
financial information of New Whitman included elsewhere in this prospectus
supplement. These pro forma financial data should be read along with the
combined financial statements of the PepsiCo Bottling Operations included
elsewhere in this prospectus supplement and with the information included under
the caption "Management's Discussion and Analysis of Operations, Cash Flows and
Liquidity and Capital Resources of the PepsiCo Bottling Operations" in our
Proxy Statement dated April 19, 1999 and incorporated by reference into this
prospectus supplement.

EBITDA is defined as income before income taxes, excluding special charges,
plus the sum of interest, depreciation and amortization. Information concerning
EBITDA has been included because it is expected to be used by some investors as
a measure of operating performance and of the ability to service potential
debt. EBITDA is not required under GAAP, and should not be considered an
alternative to income from continuing operations or any other measure of
performance required by GAAP. It also should not be used as a measure of cash
flow or liquidity under GAAP.

S-11
<PAGE>

WHITMAN CORPORATION/NEW WHITMAN
SELECTED HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA
(In Millions, Except Per Share Data)

<TABLE>
<CAPTION>
Fiscal Year
------------------------------------------------------------
Pro Forma
1998 1998 1997 1996 1995 1994
----------- -------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net sales............. $2,279.6 $1,635.0 $1,557.5 $1,501.4 $1,448.7 $1,256.1
Operating income...... $ 187.7 $ 203.8 $ 130.2 $ 194.8 $ 181.1 $ 169.1
Income (loss) from
continuing
operations........... $ 36.5 $ 62.5 $ 15.8 $ 47.8 $ 46.8 $ 26.5
Basic earnings (loss)
from continuing
operations per share. $ 0.26 $ 0.62 $ 0.16 $ 0.46 $ 0.44 $ 0.25
Basic EPS--weighted-
average common
shares............... 139.1 101.1 101.6 104.8 104.9 105.5
Cash dividends per
share................ $ 0.20 $ 0.45 $ 0.41 $ 0.37 $ 0.33
Other Financial data:
EBITDA................ $ 338.0 $ 266.0 $ 235.3 $ 244.4 $ 236.4 $ 190.0
Cash provided by (used
in):
Operating activities.. $ 230.8 $ 169.8 $ 152.9 $ 145.9 $ 116.8 $ 126.7
Investing activities.. $ (66.7) $ 283.8 $ (85.6) $ (32.4) $ (182.4) $ (67.8)
Financing activities.. $ (61.4) $ (349.2) $ (136.4) $ (113.3) $ 61.2 $ (102.0)
Capital expenditures.. $ 190.2 $ 159.1 $ 83.4 $ 87.2 $ 111.1 $ 66.0
Depreciation and
amortization......... $ 155.1 $ 77.7 $ 73.8 $ 75.2 $ 70.6 $ 64.3
Book value per share.. $ 8.46 $ 3.23 $ 5.34 $ 6.26 $ 5.97 $ 5.26
Balance Sheet Data (At
Year End):
Total assets.......... $2,907.9 $1,569.3 $2,029.7 $2,080.6 $2,050.5 $1,853.8
Long-term debt........ $1,200.7 $ 603.6 $ 604.7 $ 821.7 $ 810.3 $ 704.0
</TABLE>

S-12
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PEPSICO BOTTLING OPERATIONS
SELECTED COMBINED FINANCIAL INFORMATION

The following selected combined financial information of the PepsiCo
Bottling Operations should be read in conjunction with, and is qualified in its
entirety by reference to, the combined financial statements and the related
notes included in this prospectus supplement.

Fiscal year 1994 consisted of 53 weeks. Normally, fiscal years consist of
fifty-two weeks; however, because the fiscal year ends on the last Saturday in
December, a week is added every 5 to 6 years. The fifty-third week increased
net sales by $7.2 million and did not have a significant impact to net
operating loss.

EBITDA is computed as operating income plus the sum of depreciation and
amortization expense. We have included information concerning EBITDA as we
believe that it is useful to an investor in evaluating the PepsiCo Bottling
Operations. The PepsiCo Bottling Operations have included information
concerning EBITDA because this measure is widely used in the bottling industry
to evaluate a company's operating performance and because it is used by certain
investors as a measure of the PepsiCo Bottling Operation's ability to service
potential debt. EBITDA is not required under GAAP and should not be considered
an alternative to net income or any other measure of performance required by
GAAP and should be read in conjunction with the combined statements of cash
flows contained in the combined financial statements included elsewhere in this
registration statement. EBITDA should also not be used as a measure of
liquidity or cash flows under GAAP. In addition, the PepsiCo Bottling
Operations' EBITDA may not be comparable to similar measures reported by other
companies.

<TABLE>
<CAPTION>
As of and for the Fiscal Year Ended
----------------------------------------
1998 1997 1996 1995 1994
------ ------ ------- ------ -------
(In Millions, Except Per Case Data)
<S> <C> <C> <C> <C> <C>
Statements of Operations
Net sales.......................... $722.1 $703.7 $ 726.5 $733.8 $ 627.5
Operating loss..................... $ (1.9) $(22.1) $ (37.9) $ (2.8) $ (4.9)
Net loss........................... $(49.3) $(81.2) $ (86.3) $(57.0) $ (47.7)
Balance Sheets
Total assets....................... $801.2 $857.1 $ 917.8 $931.2 $ 885.2
Long-term debt..................... $ -- $ -- $ -- $ 7.1 $ 7.2
Net investment by PepsiCo.......... $713.8 $746.8 $ 739.6 $703.2 $ 671.1
Other
EBITDA............................. $ 62.1 $ 31.4 $ 30.7 $ 59.7 $ 43.5
Net cash (used by) provided by
operations........................ $ 9.7 $ (0.9) $ 11.6 $(24.3) $ (23.4)
Net cash used by investing
activities........................ $(51.6) $(53.3) $(102.4) $(85.5) $(128.9)
Net cash provided by financing
activities........................ $ 24.4 $ 67.6 $ 96.0 $106.8 $ 156.5
</TABLE>

S-13
<PAGE>

USE OF PROCEEDS

We currently intend to use the net proceeds from the sale of the notes to
(i) repay a portion of approximately $160.0 million of outstanding commercial
paper, (ii) to purchase the operations and assets to be acquired from PepsiCo
immediately after the merger for an aggregate of $176.0 million and (iii) to
repurchase additional shares of Whitman/New Whitman common stock. The
commercial paper currently bears interest at a weighted average rate of
approximately 5.1% per annum.

S-14
<PAGE>

CAPITALIZATION

The following table sets forth our consolidated capitalization at January 2,
1999, and as adjusted to give effect to (i) the anticipated transactions with
PepsiCo, including (A) the sale by Pepsi General of its bottling operations and
the respective assets and liabilities of the franchise territories located in
Marion, Virginia, Princeton, West Virginia, and the St. Petersburg area of
Russia to PepsiCo for an aggregate of $117.8 million, (B) the acquisition by
New Whitman of the bottling operations and the respective assets and
liabilities of the franchise territories located in Cleveland, Ohio, Dayton,
Ohio, Indianapolis, Indiana, St. Louis, Missouri, southern Indiana, Hungary,
the Czech Republic, Slovakia and a portion of Poland from PepsiCo for
approximately 54 million shares of New Whitman common stock, $176.0 million in
cash, $241.8 million of debt and the transfer of PepsiCo's 20% minority
interest in Pepsi General and (C) the repurchase of up to 16 million shares of
Whitman/New Whitman common stock, (ii) the offering of the notes and (iii) the
application of the anticipated net proceeds from the sale of the notes.

<TABLE>
<CAPTION>
January 2, As Adjusted at
1999 January 2, 1999
---------- ---------------
<S> <C> <C>
Cash and equivalents.............................. $ 147.6 $ 146.1
======== ========
Short-term debt................................... $ -- $ --
======== ========
Long-term debt:
Other long-term debt............................ $ 603.6 $ 900.7
% notes due 2004.............................. -- 150.0
% notes due 2009.............................. -- 150.0
-------- --------
Total long-term debt.......................... 603.6 1,200.7
Minority Interest................................. 233.7 --
Total shareholders' equity:
Common stock.................................... 499.8 1,633.8
Retained income................................. 94.3 104.1
Accumulated other comprehensive loss............ (8.6) (8.6)
Treasury stock.................................. (259.1) (553.9)
-------- --------
Total shareholders' equity.................... 326.4 1,175.4
-------- --------
Total capitalization........................ $1,163.7 $2,376.1
======== ========
</TABLE>

RATIOS OF EARNINGS TO FIXED CHARGES

The ratios of earnings to fixed charges for Whitman are set forth below for
the periods indicated.

<TABLE>
<CAPTION>
For Fiscal Year
------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1)............... 4.0x 1.9x 2.7x 2.5x 2.1x
</TABLE>
- --------
(1) The ratio of earnings to fixed charges for Whitman is defined as income
before taxes and minority interest plus fixed charges, divided by fixed
charges. Fixed charges include interest expense (including capitalized
interest and amortization of debt issuance expense), preferred stock
dividend requirements of the majority owned subsidiary, and the portion of
rental expense which represents interest.

S-15
<PAGE>

DESCRIPTION OF THE NOTES

The following description of the particular terms of the notes offered
hereby (referred to in the prospectus as the "debt securities") supplements,
and, to the extent inconsistent, replaces, the description of the general terms
and provisions of the securities set forth in the accompanying prospectus.

General

The notes due 2004 will be limited to an aggregate principal amount of
$150,000,000 and will mature on , 2004. The notes due 2009 will be
limited to an aggregate principal amount of $150,000,000 and will mature on
, 2009. We will issue the notes under an indenture dated as of January
15, 1993, between Whitman and The First National Bank of Chicago, as trustee,
which is described more fully in the accompanying prospectus. We have
summarized select portions of the indenture below. The summary is not complete
and is qualified by reference to the indenture.

The notes will bear interest from , 1999 at the respective rates shown
on the front cover of this prospectus supplement, payable semi-annually on
and of each year commencing on , 1999, to the person in whose name
such note is registered at the close of business on the or , as the
case may be, immediately preceding such interest payment dates.

The notes will be unsecured, senior debt of Whitman and will rank equally
with all of our other unsecured and unsubordinated indebtedness. However,
because Whitman is a holding company which conducts substantially all of its
operations through subsidiaries, the right of Whitman, and hence the right of
creditors of Whitman (including the holders of the notes), to participate in
any distribution of the assets of any subsidiary upon its liquidation or
reorganization or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent that claims of Whitman itself
as a creditor of the subsidiary may be recognized.

Upon the consummation of the merger of Whitman into Heartland, New Whitman
will assume all of Whitman's obligations under the indenture and the notes
pursuant to a supplemental indenture. The form of supplemental indenture is
included in our report on Form 8-K dated April 22, 1999 and incorporated by
reference into this prospectus supplement. The offering and sale of the notes
is not conditional upon the completion of the merger. The offering and sale of
the notes due 2004 is not conditional on the offering and sale of the notes due
2009, and vice versa.

Redemption

The notes will be redeemable, in whole or in part, at our option at any
time. The redemption price for the notes due 2004 will equal the greater of:

. 100% of the principal amount of the notes; and

. the sum of the present values of the remaining scheduled payments of
principal and interest on the notes being redeemed from the redemption
date to the maturity date discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate, plus basis points.

The redemption price for the notes due 2009 will equal the greater of:

. 100% of the principal amount of the notes; and

We will also pay the accrued and unpaid interest on the notes to the
redemption date.

S-16
<PAGE>

"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue for notes to be redeemed, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the notes to be redeemed that would be used, at the time
of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the remaining
term of the notes to be redeemed.

"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the trustee after consultation with us.

"Comparable Treasury Price" means, with respect to any redemption date, (i)
the arithmetic average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day before such redemption date, as published in the daily
statistical release (or any successor release) by the Federal Reserve Bank of
New York and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or (ii) if such release (or any successor release) is not available
or does not contain such prices on such business day, the arithmetic average of
the Reference Treasury Dealer Quotations for such redemption date.

"Reference Treasury Dealer" means Credit Suisse First Boston Corporation,
Chase Securities Inc., Salomon Smith Barney Inc., Banc One Capital Markets,
Inc. and NationsBanc Montgomery Securities LLC and their respective successors.
If any of the Reference Treasury Dealers ceases to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), we may
substitute another Primary Treasury Dealer.

"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the arithmetic average, as determined
by the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. (New York
City time) on the third business day before such redemption date.

Book-Entry, Delivery and Form

The notes will be issued in book-entry form in the form of one or more fully
registered global securities that will be deposited with the Depository Trust
Company, New York, New York or its nominee. This means that we will not issue
certificates to each holder. Each global security will be issued to DTC who
will keep a computerized record of its participants (for example, your broker)
whose clients have purchased notes. The participant will then keep a record of
its clients who purchased the notes. Unless it is exchanged in whole or in part
for a certificate, a global security may not be transferred; except that DTC,
its nominees, and their successors may transfer a global security as a whole to
one another.

Beneficial interests in global securities will be shown on, and transfers of
global securities will be made only through, records maintained by DTC and its
participants. If you are not a participant in DTC you may beneficially own
notes held by DTC only through a participant.

The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and laws
may impair the ability to transfer beneficial interests in a global security.

DTC has provided us the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the provisions of Section 17A of

S-17
<PAGE>

the Securities Exchange Act of 1934. DTC holds securities that its participants
deposit with DTC. DTC also records the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through computerized records for participants' accounts. This eliminates the
need to exchange certificates. Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.

DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
participant. The rules that apply to DTC and its participants are on file with
the SEC.

DTC is owned by a number of its participants and by the New York Stock
Exchange, The American Stock Exchange and the National Association of
Securities Dealers.

Principal and interest payments will be wired to DTC's nominee. We and the
Trustee will treat DTC's nominee as the owner of the global securities for all
purposes. Accordingly, we, the Trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on the global securities to
owners of beneficial interests in the global securities.

It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit participants' accounts on the payment date according to
their respective holdings of beneficial interests in the global securities as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to participants whose accounts are credited with
notes on a record date, by using an omnibus proxy. Payments by participants to
owners of beneficial interests in the global securities, and voting by
participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with notes held
for the account of customers registered in "street name." However, payments
will be the responsibility of the participants and not of DTC, the Trustee or
us.

So long as DTC or its nominee is the registered owner of a global security,
DTC or that nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by that global security for all purposes under
the indenture. Except as set forth in the next paragraph, owners of beneficial
interests in a global security will not be entitled to have the notes
represented by that global security registered in their names, will not receive
or be entitled to receive physical delivery of the notes in definitive form and
will not be considered the owners or holders of the notes under the indenture.

We will issue notes in definitive form in exchange for the global securities
if DTC notifies us that it is unwilling or unable to continue as depositary or
if DTC ceases to be a clearing agency registered under applicable law and a
successor depositary is not appointed by us within 90 days or we determine not
to require all of the notes to be represented by a global security.

If we issue notes in definitive form in exchange for a global security, an
owner of a beneficial interest in the global security will be entitled to have
debt securities equal in principal amount to the beneficial interest registered
in its name and will be entitled to physical delivery of those notes in
definitive form. Notes issued in definitive form will be issued in
denominations of $1,000 and any multiple of $1,000 in excess thereof and will
be issued in registered form only, without coupons.

S-18
<PAGE>

UNDERWRITING

Under the terms and subject to the conditions contained in the underwriting
agreement dated April , 1999, we have agreed to sell the underwriters named
below, for whom Credit Suisse First Boston Corporation is acting as
representative, the following respective principal amount of notes:

<TABLE>
<CAPTION>
Principal Principal
Amount of Amount of
Notes Due Notes Due
Underwriter 2004 2009
----------- ------------ ------------
<S> <C> <C>
Credit Suisse First Boston Corporation......... $ $
Chase Securities Inc...........................
Salomon Smith Barney Inc.......................
Banc One Capital Markets, Inc..................
NationsBanc Montgomery Securities LLC..........
------------ ------------
Total...................................... $150,000,000 $150,000,000
============ ============
</TABLE>

The underwriting agreement provides that the underwriters are obligated to
purchase all of the notes if any are purchased. The underwriting agreement
provides that if an underwriter defaults the purchase commitments of non-
defaulting underwriters may be increased or the offering of notes may be
terminated.

The underwriters have advised us that they propose to offer the notes
initially at the respective public offering prices on the cover page of this
prospectus supplement and to selling group members at that price less a
concession of % of the principal amount per note. The underwriters and
selling group members may allow a discount of % of such principal per note
on sales to other broker/dealers. After the initial public offering, the public
offering price and concession and discount may be changed by the
representative.

We estimate that our out of pocket expenses for this offering will be
approximately $ .

The notes are a new issue of debt securities with no established trading
market. The underwriters have advised us that one or more of the underwriters
intend to make a secondary market for the notes. However, they are not
obligated to do so and may discontinue making a secondary market for the notes
at any time without notice. No assurance can be given as to how liquid the
trading markets for the notes will be.

We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments which the underwriters may be
required to make in respect thereof.

The underwriters have from time to time engaged or may in the future engage
in transactions with and perform services for Whitman and its affiliates in the
ordinary course of business.

The underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation
M under the Securities Exchange Act of 1934. Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve the purchases of the notes in the open market
after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the notes originally sold by such
syndicate member are purchased in a syndicate covering transaction to cover
syndicate short positions. Such stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the notes to be higher
than it would otherwise be in the absence of such transactions. These
transactions, if commenced, may be discontinued at any time.

S-19
<PAGE>

EXPERTS

The consolidated financial statements of Whitman and subsidiaries as of the
end of fiscal years 1998 and 1997 and for each of the fiscal years 1998, 1997
and 1996 incorporated by reference in this prospectus supplement have been
audited by KPMG LLP, independent auditors, as indicated in their report, which
is also incorporated by reference and those consolidated financial statements
have been incorporated by reference in reliance upon the reports of said firm
given upon their authority as experts in accounting and auditing.

The combined financial statements of the PepsiCo Bottling Operations, as of
December 26, 1998 and December 27, 1997 and for each of the years in the three-
year period ended December 26, 1998 included in this prospectus supplement have
been audited by KPMG LLP, independent auditors, as indicated in their report,
and are included in reliance upon the reports of said firm given upon their
authority as experts in accounting and auditing.

S-20
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
NEW WHITMAN UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

Introduction.............................................................. F-2
Pro Forma Combined Balance Sheet--Fiscal Year End 1998.................... F-3
Pro Forma Combined Statement of Operations--Fiscal Year 1998.............. F-4
Notes to Pro Forma Combined Financial Information......................... F-5

PEPSICO BOTTLING OPERATIONS COMBINED FINANCIAL STATEMENTS
Report of Independent Auditors............................................ F-9
Combined Statements of Operations--Fiscal Years Ended December 26, 1998,
December 27, 1997 and December 28, 1996.................................. F-10
Combined Statements of Cash Flows--Fiscal Years Ended December 26, 1998,
December 27, 1997 and December 28, 1996.................................. F-11
Combined Balance Sheets--December 26, 1998 and December 27, 1997.......... F-12
Combined Statements of Shareholder's Equity and Accumulated Other
Comprehensive Loss--Fiscal Years Ended December 26, 1998, December 27,
1997 and December 28, 1996............................................... F-13
Notes to Combined Financial Statements.................................... F-14
</TABLE>

F-1
<PAGE>

NEW WHITMAN

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The unaudited pro forma combined financial information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and
accompanying notes of Whitman contained in Whitman's 1998 Form 10-K/A.
Information about the franchise territories acquired from PepsiCo should be
read in conjunction with the selected combined financial information and the
information included under the caption "Management's Discussion and Analysis of
Operations, Cash Flows and Liquidity and Capital Resources of the PepsiCo
Bottling Operations" appearing on pages 60 to 65 of our proxy statement dated
April 19, 1999, which is incorporated by reference into this prospectus
supplement and the combined financial statements of the PepsiCo Bottling
Operations appearing on pages F-9 to F-24.

The pro forma combined balance sheet gives effect to the following items
assuming they occurred as of Whitman's 1998 fiscal year end:

. The sale by Pepsi General of its bottling operations and the respective
assets and liabilities of the franchise territories located in Marion,
Virginia, Princeton, West Virginia, and the St. Petersburg area of
Russia to PepsiCo in exchange for $117.8 million.

. The acquisition by New Whitman of the bottling operations and the
respective assets and liabilities of the franchise territories located
in Cleveland, Ohio, Dayton, Ohio, Indianapolis, Indiana, St. Louis,
Missouri, southern Indiana, Hungary, the Czech Republic, Slovakia and
the balance of Poland, referred to as the PepsiCo Bottling Operations,
from PepsiCo for 54 million shares of New Whitman common stock, $176.0
million in cash, $241.8 million of debt and the transfer of PepsiCo's
20% minority interest in Pepsi General.

. The repurchase of up to 16 million shares, or $400 million of common
stock, whichever is less, of Whitman/New Whitman common stock.

The pro forma combined statement of operations gives effect to the following
transactions assuming they occurred at the beginning of Whitman's 1998 fiscal
year:

. The acquisition by New Whitman of the PepsiCo Bottling Operations from
PepsiCo and the inclusion of their respective 1998 operating results,
including amortization of goodwill associated with the purchase.

. The recognition of interest and debt issuance costs associated with debt
incurred in the acquisition of the PepsiCo Bottling Operations from
PepsiCo and debt incurred related to the repurchase of 16 million shares
of Whitman/New Whitman common stock.

. The elimination of interest expense allocated to the PepsiCo Bottling
Operations by PepsiCo on debt that will not be assumed by New Whitman.

. The elimination of corporate charges paid to PepsiCo by Pepsi General,
which by agreement will not continue.

. The elimination of PepsiCo's 20% minority interest in Pepsi General.

The acquisition of the PepsiCo Bottling Operations territories is accounted
for under the purchase method. Pro forma earnings per share is based upon an
assumed 139.1 million shares outstanding after completing all transactions.

F-2
<PAGE>

NEW WHITMAN

PRO FORMA COMBINED BALANCE SHEET
(Unaudited and in Millions)

<TABLE>
<CAPTION>
Fiscal Year End 1998
------------------------------------------------------------
Pepsico
Pepsi Bottling
General Operations
Whitman Franchise Franchise New
Corporation Territories Territories Pro Forma Whitman
as Reported Sold(A) Acquired Adjustments Pro Forma
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and equivalents.. $ 147.6 $ (1.5) $ 6.1 $ (6.1)(C) $ 146.1
Receivables, net...... 170.7 (8.8) 74.4 -- 236.3
Inventories........... 80.0 (6.8) 29.3 -- 102.5
Other current assets.. 30.8 (0.9) 5.2 -- 35.1
-------- ------- ------ -------- --------
Total current
assets............. 429.1 (18.0) 115.0 (6.1) 520.0
-------- ------- ------ -------- --------
Investments............. 160.0 -- 37.2 -- 197.2
Property, net........... 499.3 (46.4) 274.0 23.4 (C) 750.3
Intangibles, net........ 447.0 (49.4) 370.0 (370.0)(C)
1,005.3 (C) 1,402.9
Other assets............ 33.9 (1.4) 5.0 -- 37.5
-------- ------- ------ -------- --------
Total assets........ $1,569.3 $(115.2) $801.2 $ 652.6 $2,907.9
======== ======= ====== ======== ========
LIABILITIES AND EQUITY:
Current liabilities:
Short-term debt....... $ -- $ -- $ 22.8 $ (22.8)(C) $ --
Other current
liabilities.......... 233.2 (7.9) 92.9 1.9 (B)
18.7 (C) 338.8
-------- ------- ------ -------- --------
Total current
liabilities........ 233.2 (7.9) 115.7 (2.2) 338.8
-------- ------- ------ -------- --------
Long-term debt.......... 603.6 -- -- (115.5)(B)
417.8 (C)
294.8 (D) 1,200.7
Deferred income taxes... 99.1 (2.7) 9.5 -- 105.9
Other liabilities....... 73.3 (0.8) 14.6 -- 87.1
Minority interest....... 233.7 -- -- (233.7)(C) --
Net equity of operations
to be sold............. -- (103.8) -- 103.8 (B) --
Shareholders' equity.... 326.4 -- 661.4 9.8 (B)
(661.4)(C)
1,134.0 (C)
(294.8)(D) 1,175.4
-------- ------- ------ -------- --------
Total liabilities
and equity......... $1,569.3 $(115.2) $801.2 $ 652.6 $2,907.9
======== ======= ====== ======== ========
</TABLE>

See accompanying notes to pro forma combined financial information.

F-3
<PAGE>

NEW WHITMAN

PRO FORMA COMBINED STATEMENT OF OPERATIONS
(Unaudited and in Millions, Except Per Share Data)

<TABLE>
<CAPTION>
Fiscal Year 1998
----------------------------------------------------------
PepsiCo
Pepsi Bottling
General Operations
Whitman Franchise Franchise New
Corporation Territories Territories Pro Forma Whitman
as Reported Sold Acquired Adjustments Pro Forma
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Sales................... $1,635.0 $(77.5) $722.1 $ -- $2,279.6
Cost of goods sold...... 1,024.5 (52.6) 440.2 (0.1)(F) 1,412.0
-------- ------ ------ ----- --------
Gross profit.......... 610.5 (24.9) 281.9 0.1 867.6
Selling, general and
administrative
expenses............... 391.1 (21.7) 249.9 -- (E)
1.8 (F) 621.1
Allocated division and
PepsiCo corporate
costs.................. -- -- 19.7 -- (E) 19.7
Amortization expense.... 15.6 (1.6) 14.2 (14.2)(G)
25.1 (G) 39.1
-------- ------ ------ ----- --------
Operating income
(loss)............... 203.8 (1.6) (1.9) (12.6) 187.7
Interest expense, net... (36.1) 1.8 (4.8) (37.0)(H)
4.8 (I) (71.3)
Interest expense
allocated by PepsiCo... -- -- (46.1) 46.1 (I) --
Other expense, net...... (15.5) 2.3 (0.8) 9.2 (J) (4.8)
-------- ------ ------ ----- --------
Income (loss) before
income taxes......... 152.2 2.5 (53.6) 10.5 111.6
Income taxes............ 69.7 1.1 (4.3) 8.6 (K) 75.1
-------- ------ ------ ----- --------
Income (loss) from
continuing operations
before minority
interest............. 82.5 1.4 (49.3) 1.9 36.5
Minority interest....... 20.0 0.3 -- (20.3)(L) --
-------- ------ ------ ----- --------
Income (loss) from
continuing operations.. $ 62.5 $ 1.1 $(49.3) $22.2 $ 36.5
======== ====== ====== ===== ========
Weighted Average Common
Shares:
Basic................... 101.1 38.0 (M) 139.1
Incremental effect of
stock options.......... 1.8 -- 1.8
-------- ----- --------
Diluted................. 102.9 38.0 140.9
======== ===== ========
Income from Continuing
Operations Per Share:
Basic................... $ 0.62 $ 0.26
Diluted................. $ 0.61 $ 0.26
</TABLE>

See accompanying notes to pro forma combined financial information.

F-4
<PAGE>

NEW WHITMAN

NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION

(A) To record the removal of the net equity of the franchise territories to be
sold.

(B) To record the sale of Pepsi General franchise territories to PepsiCo by
removing the net equity of the franchise territories to be sold and
adjusting for the following:

. The reduction of Whitman debt by $115.5 million, using the sale proceeds
of $117.8 million reduced by transaction costs of $2.3 million. Cash
proceeds from the sale will be used immediately to repay existing
borrowings.

. The increase in shareholders' equity, resulting from the gain on the
sale of the franchise territories estimated to be $9.8 million, after
tax.

The consideration to be received from PepsiCo is subject to adjustments
based on changes in the working capital accounts of the franchise
territories sold. However, such adjustments are not expected to be
significant. The gain on sale has not been reflected in the pro forma
combined statement of operations for fiscal year 1998. Instead, the actual
gain on sale will be recorded at the time of the sale in fiscal 1999.

(C) To record the transactions related to the acquisition of the PepsiCo
Bottling Operations franchise territories and the minority interest in
Pepsi General previously held by PepsiCo, as follows (in millions):

<TABLE>
<S> <C>
Acquisition costs:
Issuance of 54 million shares of common stock................... $1,134.0
Issuance of long-term debt...................................... 417.8
Accrual of estimated transaction costs.......................... 18.7
--------
Total acquisition costs....................................... 1,570.5
--------
Allocation of acquisition costs:
Net assets of the PepsiCo Bottling Operations franchise
territories.................................................... 661.4
Less: intangible assets of the PepsiCo Bottling Operations
franchise territories.......................................... (370.0)
--------
Net tangible assets of the PepsiCo Bottling Operations
franchise territories........................................ 291.4
Recorded value of PepsiCo's minority interest in Pepsi General.. 233.7
Payoff by PepsiCo of short-term debt of the PepsiCo Bottling
Operations franchise territories............................... 22.8
Less: cash balances of the PepsiCo Bottling Operations franchise
territories remaining with PepsiCo............................... (6.1)
--------
Total allocation of acquisition costs......................... 541.8
--------
Excess of acquisition costs over recorded values of assets and
liabilities...................................................... $1,028.7
========
Allocation of acquisition costs over recorded values:
Fair value of property in excess of its recorded value, net..... $ 23.4
Intangible assets............................................... 1,005.3
--------
Total allocation of acquisition costs over recorded values.... $1,028.7
========
</TABLE>

Additional information about the acquisition costs and allocation of those
costs is as follows:

. The shares to be issued by New Whitman were valued at $21 per share,
based on the average closing market price of Whitman common stock as
reported on the NYSE during the three-day period immediately before and
after the January 25, 1999 announcement of the original merger agreement
between Whitman and PepsiCo.

. The long-term debt to be issued of $417.8 million will be used to make a
cash payment of $176.0 million to PepsiCo payable when the transactions
are closed and subsequent payments under notes payable to PepsiCo of
$241.8 million.

F-5
<PAGE>

. The accrual of estimated transaction costs is primarily attributable to
the $15.0 million financial advisory fee payable to Credit Suisse/First
Boston with the remainder associated with legal, accounting and other
advisory fees and expenses directly associated with the transaction. A
portion of these fees and expenses have been allocated to the sale of
the Pepsi General franchise territories.

. The portion of the excess purchase cost allocated to property is based
on preliminary appraisals. The allocation is subject to refinement when
the final appraisals are completed after the transactions are closed.
Whitman anticipates that the final appraisals will not differ
significantly from the preliminary appraisals.

. The remainder of the excess purchase cost has been allocated to
intangibles, which are comprised of the franchise rights acquired and
goodwill. No portion of the excess purchase cost has been allocated to
the other assets acquired or liabilities assumed. Whitman believes that
the fair values of those other assets and liabilities will approximate
their carrying values.

. The consideration to be paid to PepsiCo is subject to adjustments based
on changes in the working capital accounts of the PepsiCo Bottling
Operations franchise territories. However, such adjustments are not
expected to be significant.

(D) To record the repurchase of 16 million shares of Whitman/New Whitman
common stock, pursuant to the merger agreement, and to record the issuance
of debt to finance the repurchases (in millions):

<TABLE>
<S> <C>
Repurchase of 12.9 million shares through April 12, 1999............. $243.3
Additional repurchases of 3.1 million shares......................... 51.5
------
Debt issued to fund repurchases.................................... $294.8
======
</TABLE>

The merger agreement provides that during the 12 months following the
closing of the merger, New Whitman will repurchase up to 16 million shares
of New Whitman common stock. PepsiCo has agreed that shares repurchased by
Whitman after February 5, 1999 and prior to the closing may be used to
reduce New Whitman's repurchase obligation. New Whitman need not complete
the remaining repurchases if the New Whitman board of directors determines
in good faith that they are impractical or inadvisable.

The repurchase cost of the remaining 3.1 million shares is based on an
assumed average price of $16.62 per share, which approximates the average
price of the shares repurchased in the five business days ending on April
7, 1999. An increase or decrease in the repurchase cost of $1 per share on
the remaining 3.1 million shares would change the amount of debt issued to
fund repurchases by $3.1 million. The change in debt would change pro forma
interest expense by $0.2 million on an annual basis or $0.1 million after
tax.

(E) Adjustments have not been made to give effect to the potential reduction
in administrative expenses that may be realized by New Whitman due to
facility consolidations and other cost savings initiatives, because the
amount of such potential savings cannot be estimated with an adequate
level of certainty.

(F) To adjust depreciation expense based on the preliminary appraisals of
property, plant and equipment (Note C).

The increase in depreciation expense is based upon the following
adjustments to property, plant and equipment and estimated remaining useful
lives:

<TABLE>
<CAPTION>
Range of
Adjustment useful lives
---------- --------------
<S> <C> <C>
Land................................................ $ 0.9
Buildings and improvements.......................... (0.8) 13 to 22 years
Machinery and equipment............................. 23.3 1 to 14 years
-----
Total............................................. 23.4
=====
</TABLE>

F-6
<PAGE>

(G) To reflect the amortization of intangible assets acquired, the following
entries were made:

. The elimination of amortization expense recorded by the PepsiCo Bottling
Operations franchise territories.

. The recording of $25.1 million of amortization expense on intangible
assets of $1,005.3 million, related to the PepsiCo Bottling Operations
franchise territories, using a forty-year amortization period. The
principal factors considered in determining the use of a 40 year
amortization period include: (1) the franchise agreements with PepsiCo
are granted in perpetuity and provide the exclusive right to manufacture
and sell PepsiCo branded products within the territories prescribed in
the agreements, and (2) the existing and projected cash flows are
adequate to support the carrying values of the intangible assets to be
recorded.

(H) To record the net increase in interest expense based on the net increase in
long-term debt, as follows (in millions):

<TABLE>
<S> <C>
Debt incurred by New Whitman to fund payments to PepsiCo (Note C).. $ 417.8
Debt incurred for share repurchases (Note D)....................... 294.8
Less: net cash proceeds from sale of Pepsi General franchise
territories (Note B).............................................. (115.5)
-------
Net increase in long-term debt................................... $ 597.1
=======
Interest at an assumed effective rate of 6.2%...................... $ 37.0
=======
</TABLE>

The effective interest rate assumed in the pro forma adjustment of 6.2
percent is based upon rates available to Whitman/New Whitman under its
existing commercial paper program and rates expected through additional
public debt offerings.

A change in the interest rate of 1/8 of a percentage point would have the
effect of changing interest expense $0.7 million or $0.4 million after tax.

(I) To eliminate the interest expense, net, of $4.8 million recorded by the
PepsiCo Bottling Operations and interest expense of $46.1 million allocated
by PepsiCo to the PepsiCo Bottling Operations. The underlying debt will not
be assumed by New Whitman.

(J) To eliminate the corporate charge paid by Pepsi General to PepsiCo. Whitman
and PepsiCo have agreed to terminate this charge once the transactions are
closed.

(K) To record the estimated tax impact of the pro forma adjustments, using an
incremental tax rate of 40%, determined as follows:

<TABLE>
<S> <C>
Pretax income of pro forma adjustments................................ $10.5
Plus: additional non-deductible intangible amortization............... 10.9
-----
Total............................................................... 21.4
Incremental tax rate.................................................. X 40%
-----
Pro forma tax adjustment.............................................. $ 8.6
=====
</TABLE>

(L) To eliminate PepsiCo's 20% minority interest in the earnings of Pepsi
General, due to the transfer of that minority interest to New Whitman.

(M) To record the net increase in weighted average common shares outstanding,
giving effect to the issuance of 54 million shares to PepsiCo (Note C) less
the 16 million shares to be acquired pursuant to the merger agreement (Note
D).

F-7
<PAGE>

EBITDA is defined as income before income taxes plus the sum of interest,
depreciation and amortization. Information concerning EBITDA has been included
below because it is expected to be used by some investors as a measure of
operating performance and of the ability to service potential debt. EBITDA is
not required by GAAP and, accordingly, should not be considered an alternative
to income from continuing operations or any other measure of performance
required by GAAP. It also should not be used as a measure of cash flow or
liquidity under GAAP. Following is a summary of historical and pro forma
EBITDA, and depreciation and amortization for 1998 (in millions):

<TABLE>
<CAPTION>
Depreciation
and
EBITDA Amortization
------ ------------
<S> <C> <C>
Whitman Corporation as reported............................ $266.0 $ 77.7
Pepsi General franchise territories sold................... (5.3) (6.0)
PepsiCo Bottling Operations franchise territories.......... 62.1 64.8
Pro forma adjustments...................................... 15.2 18.6
------ ------
New Whitman--pro forma basis............................... $338.0 $155.1
====== ======
</TABLE>

F-8
<PAGE>

PEPSICO BOTTLING OPERATIONS

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders of
PepsiCo, Inc.:

We have audited the accompanying combined balance sheets of PepsiCo Bottling
Operations ("PBO") as of December 26, 1998 and December 27, 1997 and the
related combined statements of operations, cash flows and shareholder's equity
and accumulated other comprehensive loss for each of the years in the three-
year period ended December 26, 1998. These combined financial statements are
the responsibility of PBO's management. Our responsibility is to express an
opinion on these combined 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 combined financial statements referred to above present
fairly, in all material respects, the financial position of PBO as of December
26, 1998 and December 27, 1997, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 26, 1998,
in conformity with generally accepted accounting principles.

KPMG LLP

New York, New York
February 19, 1999

F-9
<PAGE>

PEPSICO BOTTLING OPERATIONS

COMBINED STATEMENTS OF OPERATIONS

Fiscal Years Ended December 26, 1998, December 27, 1997 and December 28, 1996

<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
(In Millions)
<S> <C> <C> <C>
Net Sales
United States........................................ $541.9 $517.4 $507.0
Central Europe....................................... 180.2 186.3 219.5
------ ------ ------
722.1 703.7 726.5
------ ------ ------
Cost of Sales
United States........................................ 321.3 304.2 300.2
Central Europe....................................... 118.9 126.3 148.7
------ ------ ------
440.2 430.5 448.9
------ ------ ------
Gross Profit........................................... 281.9 273.2 277.6
Selling, Delivery and Administrative Expenses
United States........................................ 171.6 170.9 169.9
Central Europe....................................... 92.5 104.6 126.8
Allocated division and PepsiCo corporate costs....... 19.7 19.8 18.8
------ ------ ------
283.8 295.3 315.5
------ ------ ------
Operating Loss......................................... (1.9) (22.1) (37.9)
Other Expense
Interest expense:
External........................................... 4.8 5.1 7.7
PepsiCo allocation................................. 46.1 46.6 48.1
------ ------ ------
50.9 51.7 55.8
Foreign exchange losses.............................. 0.8 14.4 1.9
------ ------ ------
Total other expense.............................. 51.7 66.1 57.7
------ ------ ------
Loss Before Income Taxes............................... (53.6) (88.2) (95.6)
Income tax benefit................................... 4.3 7.0 9.3
------ ------ ------
Net Loss............................................... $(49.3) $(81.2) $(86.3)
====== ====== ======
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-10
<PAGE>

PEPSICO BOTTLING OPERATIONS

COMBINED STATEMENTS OF CASH FLOWS

Fiscal Years Ended December 26, 1998, December 27, 1997 and December 28, 1996

<TABLE>
<CAPTION>
1998 1997 1996
------ ------ -------
(In Millions)
<S> <C> <C> <C>
Cash Flows--Operations
Net loss............................................. $(49.3) $(81.2) $ (86.3)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Depreciation....................................... 50.6 53.5 55.9
Amortization....................................... 14.2 14.4 14.6
Deferred income taxes.............................. (4.3) (7.0) (9.3)
Other noncash charges and credits, net............. -- 5.4 --
Equity in (income) loss of affiliate............... (2.8) (4.9) 9.4
Changes in operating working capital:
Trade accounts receivable, net................... (4.7) 5.6 8.9
Inventories...................................... 0.8 5.6 10.4
Prepaid expenses and other current assets........ 2.8 0.5 5.8
Accounts payable and other current liabilities... (2.7) 7.7 8.3
Trade accounts payable to PepsiCo................ 5.1 (0.5) (6.1)
------ ------ -------
Net change in operating working capital............ 1.3 18.9 27.3
------ ------ -------
Net Cash Provided by (Used for) Operations........... 9.7 (0.9) 11.6
------ ------ -------
Cash Flows--Investing Activities
Capital expenditures................................. (54.8) (57.6) (108.7)
Investments in and advances to affiliates............ -- (1.4) (7.9)
Proceeds from sales of property, plant and equipment. 5.4 6.3 9.8
Other, net........................................... (2.2) (0.6) 4.4
------ ------ -------
Net Cash Used for Investing Activities............... (51.6) (53.3) (102.4)
------ ------ -------
Cash Flows--Financing Activities
Short-term borrowings--three months or less, net..... 7.5 (22.9) (30.8)
Proceeds from issuance of long-term debt............. -- -- 4.0
Payments on long-term debt........................... -- (10.5) (0.6)
Net investment by PepsiCo............................ 16.9 101.0 123.4
------ ------ -------
Net Cash Provided by Financing Activities............ 24.4 67.6 96.0
------ ------ -------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents......................................... 0.4 (1.8) (0.5)
------ ------ -------
Net Increase/(Decrease) in Cash and Cash Equivalents. (17.1) 11.6 4.7
Cash and Cash Equivalents--Beginning of Year......... 23.2 11.6 6.9
------ ------ -------
Cash and Cash Equivalents--End of Year............... $ 6.1 $ 23.2 $ 11.6
====== ====== =======
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-11
<PAGE>

PEPSICO BOTTLING OPERATIONS

COMBINED BALANCE SHEETS

December 26, 1998 and December 27, 1997

<TABLE>
<CAPTION>
1998 1997
------ ------
(In Millions)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents...................................... $ 6.1 $ 23.2
Trade accounts receivable, less allowance of $5.1 and $4.7 in
1998 and 1997, respectively................................... 74.4 70.0
Inventories.................................................... 29.3 29.5
Prepaid expenses and other current assets...................... 5.2 6.6
------ ------
Total Current Assets....................................... 115.0 129.3
Property, plant and equipment, net............................. 274.0 271.3
Intangible assets, net......................................... 370.0 418.7
Other assets................................................... 42.2 37.8
------ ------
Total Assets............................................... $801.2 $857.1
====== ======
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accounts payable and other current liabilities................. $ 87.1 $122.6
Short-term borrowings.......................................... 22.8 15.6
Trade accounts payable to PepsiCo.............................. 5.8 2.3
------ ------
Total Current Liabilities.................................. 115.7 140.5
Other liabilities.............................................. 14.6 11.6
Deferred income taxes.......................................... 9.5 13.8
------ ------
Total Liabilities.......................................... 139.8 165.9
------ ------
Shareholder's Equity
Net investment by PepsiCo...................................... 713.8 746.8
Accumulated other comprehensive loss........................... (52.4) (55.6)
------ ------
Total Shareholder's Equity................................. 661.4 691.2
------ ------
Total Liabilities and Shareholder's Equity................. $801.2 $857.1
====== ======
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-12
<PAGE>

PEPSICO BOTTLING OPERATIONS

COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY
AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Fiscal Years Ended December 26, 1998, December 27, 1997
and December 28, 1996

<TABLE>
<CAPTION>
Accumulated
Total Net Other
Shareholder's Investment Comprehensive
Equity by Pepsico Loss
------------- ---------- -------------
(In Millions)
<S> <C> <C> <C>
Balance at December 30, 1995............. $676.6 $703.2 $(26.6)
Comprehensive loss:
Net loss............................... (86.3) (86.3)
Currency translation adjustment........ (13.2) (13.2)
------
Total comprehensive loss................. (99.5)
------
Net investment by PepsiCo................ 122.7 122.7
------ ------ ------
Balance at December 28, 1996............. $699.8 $739.6 $(39.8)
Comprehensive loss:
Net loss............................... (81.2) (81.2)
Currency translation adjustment........ (15.8) (15.8)
------
Total comprehensive loss................. (97.0)
------
Net investment by PepsiCo................ 88.4 88.4
------ ------ ------
Balance at December 27, 1997............. $691.2 $746.8 $(55.6)
Comprehensive loss:
Net loss............................... (49.3) (49.3)
Currency translation adjustment........ 3.2 3.2
------
Total comprehensive loss................. (46.1)
------
Net investment by PepsiCo................ 16.3 16.3
------ ------ ------
Balance at December 26, 1998............. $661.4 $713.8 $(52.4)
====== ====== ======
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-13
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS
(Tabular Dollars in Millions)

Note 1--Business Description

The accompanying financial statements reflect the combined results of
operations, cash flows and net assets of certain direct and indirect wholly-
owned bottling operations of PepsiCo, Inc. ("PepsiCo"). These bottling
operations (herein referred to as "PepsiCo Bottling Operations" or "PBO")
present the carved-out operating results and financial position of PepsiCo's
bottling operations predominantly located in the midwestern part of the United
States (the "Heartland") and in certain countries in Central Europe: the Czech
Republic, Slovakia, Poland and Hungary. The financial information in these
financial statements is not necessarily indicative of results that would have
been obtained if PBO had been a separate stand-alone entity.

PBO produces and distributes Pepsi, Diet Pepsi, Mountain Dew and other
brands of carbonated soft drinks and other non-alcoholic beverages.
Approximately 88% of PBO's 1998 net sales were derived from the distribution of
PepsiCo products.

Note 2--Summary of Significant Accounting Policies

The preparation of Combined Financial Statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of net sales and expenses during the
reporting period. Actual results could differ from those estimates.

Basis of Presentation

The accompanying Combined Financial Statements include the results of
operations and assets and liabilities directly related to PBO operations. All
intercompany amounts and transactions have been eliminated in combination.

PBO was allocated $19.7 million, $19.8 million and $18.8 million of overhead
costs related to divisional headquarters and PepsiCo corporate administrative
functions in 1998, 1997 and 1996, respectively. The allocations were based on
the specific identification of administrative costs where practicable and, to
the extent that specific identification was not practicable, based upon PBO's
sales volume as a percentage of PepsiCo's related total sales volume. Such
allocated costs are included in selling, delivery and administrative expenses
in the Combined Statements of Operations. Management believes that such
allocation methodology is reasonable. The expenses allocated to PBO for these
services are not necessarily indicative of the expenses that would have been
incurred if PBO had been a separate stand-alone entity.

PBO's operations have been financed through its operating cash flows and net
investment by PepsiCo. PBO's interest expense includes an allocation of
PepsiCo's interest expense based on PepsiCo's weighted average interest rate
applied to the average balance of net investment by PepsiCo to PBO. PBO was
allocated $46.1 million, $46.6 million and $48.1 million of interest expense
reflecting PepsiCo's average interest rates of 6.4%, 6.2% and 6.2% in 1998,
1997 and 1996, respectively. The interest expense is not necessarily indicative
of interest costs that would have been incurred if PBO had been a separate
independent entity.

Deferred taxes result from temporary differences between the financial bases
and tax bases of PBO's assets and liabilities. Deferred tax assets and
liabilities are adjusted for changes in tax rates and tax laws in the period
that such changes are enacted. Gross potential deferred tax assets are reduced
by a valuation allowance to the extent that it is not "more likely than not"
that such deferred tax assets will be realized.

Historically, PBO results have been included in the consolidated income tax
returns of PepsiCo. PepsiCo manages its tax position on a consolidated basis
which takes into account the results of all of its businesses and

F-14
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
global tax strategies. The income taxes in the Combined Financial Statements
are computed as if PBO had actually filed separate tax returns and as such, do
not include the tax benefits that may have been recognized by PepsiCo by
utilizing global tax strategies.

Income taxes payable or receivable and allocations from PepsiCo of corporate
overhead and interest costs have been deemed to have been paid by PBO to
PepsiCo, in cash, in the period in which the cost was incurred or the income
taxes were recorded. Cash paid for external interest was $4.8 million, $5.1
million and $7.7 million, for 1998, 1997 and 1996, respectively. There were no
cash payments made for income taxes in 1998, 1997 and 1996.

Fiscal Year

PBO's fiscal year ends on the last Saturday in December and, as a result, a
fifty-third week is added every five or six years. The fiscal years ending
1998, 1997 and 1996 each consisted of fifty-two weeks.

Revenue Recognition

PBO recognizes revenue when goods are delivered to customers. Sales terms
generally do not allow a right of return.

Advertising and Marketing Costs

PBO is involved in a variety of programs to promote its products.
Advertising and marketing costs included in selling, delivery and
administrative expenses are expensed in the year incurred. Advertising and
marketing costs were $38.5 million, $39.7 million and $38.9 million, in 1998,
1997 and 1996, respectively.

Bottler Incentives

PepsiCo and other brand owners, at their sole discretion, provide PBO with
various forms of marketing support. This marketing support covers a variety of
programs and initiatives, including direct marketplace support, capital
equipment funding and shared media and advertising support. Based on the
objectives of the programs and initiatives, marketing support is recorded as an
adjustment to net sales or a reduction of selling, delivery and administrative
expenses. Direct marketplace support is primarily funding by PepsiCo and other
brand owners of sales discounts and similar programs and is recorded as an
adjustment to net sales. Capital equipment funding is designed to support the
purchase and placement of marketing equipment and is recorded within selling,
delivery and administrative expenses. Shared media and advertising support is
recorded as a reduction to advertising and marketing expense within selling,
delivery and administrative expenses. There are no conditions or other
requirements which could result in a repayment of any support payments received
by PBO.

The total amount of bottler incentives received from PepsiCo and other brand
owners in the form of marketing support amounted to $51 million, $56 million,
and $59 million for 1998, 1997 and 1996, respectively. Of these amounts, $15
million, $15 million and $15 million for 1998, 1997 and 1996 were recorded in
net sales and the remainder was recorded in selling, delivery and
administrative expenses. The amount of bottler incentives received from PepsiCo
was approximately 97% of total bottler incentives in each of the three years,
with the balance received from the other brand owners.

Stock-Based Employee Compensation

PBO measures stock-based compensation cost in accordance with Accounting
Principles Board ("APB") Opinion 25, "Accounting for Stock Issued to
Employees", and its related interpretations. PepsiCo's policy is to grant stock
options at fair market value at the date of grant.

F-15
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Derivative Financial Instruments

PBO did not utilize any derivative financial instruments during 1998, 1997
and 1996.

Cash Equivalents

Cash equivalents represent funds temporarily invested with original
maturities not exceeding three months.

Inventories

Inventories are valued at the lower of cost (computed on the first-in,
first-out method) or net realizable value.

Property, Plant and Equipment

Property, plant and equipment ("PP&E") is stated at cost. Depreciation is
calculated on a straight-line basis over the estimated useful lives of the
assets as follows: 20 to 33 years for buildings and improvements and 3 to 10
years for machinery and equipment.

Intangible Assets

Intangible assets, which are primarily franchise rights and goodwill are
both amortized on a straight-line basis over a period of generally 40 years.

Recoverability of Long-Lived Assets

PBO reviews all long-lived assets, including intangible assets, when facts
and circumstances indicate that the carrying value of the asset may not be
recoverable.

An impaired asset is written down to its estimated fair value based on the
best information available. Estimated fair value is generally based on either
appraised value or measured by discounting estimated future cash flows.
Considerable management judgment is necessary to estimate discounted future
cash flows. Accordingly, actual results could vary significantly from such
estimates.

Foreign Currency Transactions

Foreign exchange gains and losses reflect (1) transaction gains and losses
and (2) when a country is considered highly inflationary, the translation
gains and losses arising from the remeasurement into United States dollars of
the net monetary assets of the businesses in that country. Transaction gains
and losses arise from foreign exchange differences on monetary assets and
liabilities that are denominated in currencies other than the business'
functional currency. Amounts recorded as transaction losses were $0.8 million,
$12.2 million and $0.2 million in 1998, 1997 and 1996, respectively. Poland
was considered a highly inflationary economy in 1996 and 1997, and
accordingly, translation losses from the remeasurement into United States
dollars of the net monetary assets related to Poland were $2.2 million and
$1.7 million in 1997 and 1996, respectively.

New Accounting Standards

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard 130, "Reporting Comprehensive
Income" ("SFAS 130"), which establishes standards for the reporting and
display of net income and other gains and losses affecting shareholders'
equity that are

F-16
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
excluded from net income. The only components of other comprehensive loss are
net loss and the foreign currency translation component of shareholder's
equity. These financial statements reflect the adoption of SFAS 130. Other
items of comprehensive income or loss are reported in the Combined Statements
of Shareholder's Equity and Accumulated Other Comprehensive Loss.

In June 1997, the FASB issued Statement of Financial Accounting Standard
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"), which establishes standards for reporting information about
operating segments and related disclosures about products and services,
geographic areas and major customers. SFAS 131 requires that the definition of
operating segments align with the measurements used internally to assess
performance. SFAS 131 is a disclosure standard and its adoption will not impact
PBO's financial condition or results of operations. These financial statements
reflect the adoption of SFAS 131.

In June 1998, the FASB issued Statement of Financial Accounting Standard
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. PBO is currently assessing the effects of adopting
SFAS 133, and has not yet made a determination of the impact of its financial
position or results of operations. SFAS 133 will be effective for PBO's first
quarter of fiscal year 2000.

Note 3--Inventories

<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Raw materials and supplies...................................... $ 13.3 $ 14.3
Finished goods.................................................. 16.0 15.2
------ ------
$29.3 $29.5
====== ======
</TABLE>

Note 4--Property, Plant and Equipment, Net

<TABLE>
<CAPTION>
1998 1997
-------- ---------
<S> <C> <C>
Land...................................................... $ 7.9 $ 7.6
Buildings and improvements................................ 83.6 82.5
Machinery and equipment................................... 398.0 371.6
Other..................................................... 12.7 4.8
-------- ---------
502.2 466.5
Accumulated depreciation.................................. (228.2) (195.2)
-------- ---------
$274.0 $271.3
======== =========
</TABLE>

F-17
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Note 5--Intangible Assets, Net

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Franchise rights and other identifiable intangibles....... $ 384.4 $ 384.4
Goodwill.................................................. 127.6 161.8
512.0 546.2
Accumulated amortization.................................. (142.0) (127.5)
-------- --------
$370.0 $418.7
======== ========
</TABLE>

Identifiable intangible assets principally arise from the allocation of the
purchase price of businesses acquired and consist primarily of territorial
franchise rights. Amounts assigned to such identifiable intangibles were based
on their estimated fair value at the date of acquisition. Goodwill represents
the residual purchase price after allocation to all identifiable net assets.

In the fourth quarter of 1998, a disputed claim was settled with the
Internal Revenue Service relating to the deductibility of the amortization of
acquired franchise rights. The settlement resulted in the reduction of goodwill
and income taxes payable by $34.0 million.

Note 6--Accounts Payable and Other Current Liabilities

<TABLE>
<CAPTION>
1998 1997
----- ------
<S> <C> <C>
Accounts payable.................................................. $30.6 $ 25.2
Income taxes...................................................... -- 34.0
Accrued compensation and benefits................................. 16.5 15.0
Accrued advertising............................................... 15.1 19.0
Other current liabilities......................................... 24.9 29.4
----- ------
$87.1 $122.6
===== ======
</TABLE>

Note 7--Short-Term Borrowings

Short-term borrowings on the Combined Balance Sheets primarily represent
loans from financial institutions and bank overdrafts. Interest rates on these
borrowings ranged from 4.0% to 18.2% in 1998 and between 4.0% to 24.3% in 1997.

Note 8--Pension Plans

United States employees of PBO participate in PepsiCo sponsored
noncontributory defined benefit pension plans which cover substantially all
full-time salaried employees, as well as certain hourly employees. Benefits
generally are based on years of service and compensation or stated amounts for
each year of service. All plans but one are funded and contributions are made
in amounts not less than minimum statutory funding requirements nor more than
the maximum amount that can be deducted for United States income tax purposes.

Net periodic United States pension expense allocated from PepsiCo's plans to
PBO was $1.0 million in 1998, 1997 and 1996. There are no defined benefit
pension plans for PBO's foreign operations.

Note 9--Financial Instruments and Risk Management

Foreign Exchange Risk

As currency exchange rates change, translation of the statements of
operations of our international business into United States dollars affects
year-over-year comparability. PBO has not historically hedged

F-18
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
translation risks because cash flows from international operations have
generally been reinvested locally, nor historically has PBO entered into hedges
to minimize the volatility of reported earnings.

Fair Value of Financial Instruments

The carrying amount of PBO's financial instruments approximates fair value
due to the short maturity of PBO's financial instruments and since interest
rates approximate fair value for long-term debt. PBO does not use any financial
instruments for trading or speculative purposes.

Note 10--Employee Stock Option Plans

PBO employees were granted stock options under PepsiCo's three long-term
incentive plans--the SharePower Stock Option Plan ("SharePower"), the Long-Term
Incentive Plan ("LTIP"), and the Stock Option Incentive Plan ("SOIP").

Prior to 1997, SharePower options were granted annually to essentially all
full-time employees. SharePower options generally become exercisable ratably
over 5 years from the grant date and must be exercised within 10 years from the
grant date. There were no SharePower options granted in 1997. All SharePower
options granted in 1998 become exercisable in 3 years from the grant date and
must be exercised within 10 years from the grant date.

Most LTIP options were granted every other year to senior management
employees. Most of these options become exercisable after 4 years and must be
exercised within 10 years from the grant date. In addition, the LTIP allows for
grants of performance share units ("PSUs"). The maximum value of a PSU is fixed
at the value of a share of PepsiCo stock at the grant date and vests 4 years
from the grant date. Payment of PSUs are made in cash and/or stock and the
payment amount is determined based on the attainment of prescribed performance
goals. There were no amounts expensed for PSUs for PBO employees.

In 1998 the LTIP was modified. Under the revised program, executives are
granted stock options which vest over a three-year period and must be exercised
within 10 years from the grant date. In addition to these option grants,
executives may receive an additional grant or cash based upon the achievement
of PepsiCo performance objectives over three years. PBO accrues compensation
expense for the cash portion of the LTIP grant.

SOIP options are granted to middle-management employees and, prior to 1997,
were granted annually. SOIP options are exercisable after one year and must be
exercised within 10 years after their grant date. In 1998, the SOIP was
combined with the LTIP.

F-19
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The amounts presented below represent options granted under PepsiCo employee
stock option plans. The pro forma amounts below are not necessarily
representative of the effects of stock-based awards on future pro forma net
income because (1) future grants of employee stock options to PBO management
may not be comparable to awards made to employees while PBO was a part of
PepsiCo, and (2) the assumptions used to compute the fair value of any stock
option awards may not be comparable to the PepsiCo assumptions used.

<TABLE>
<CAPTION>
1998 1997 1996
---------------------- ---------------------- ----------------------
Weighted Avg. Weighted Avg. Weighted Avg.
Options Exercise Price Options Exercise Price Options Exercise Price
------- -------------- ------- -------------- ------- --------------
(Options in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year................ 1,872 $19.39 2,220 $20.35 2,298 $17.91
Granted............... 613 36.50 -- -- 331 33.31
Exercised............. (496) 17.88 (340) 16.16 (271) 15.11
Forfeited............. (81) 28.60 (141) 24.21 (138) 21.12
PepsiCo
modification(a).... -- -- 133 -- -- --
----- ------ ----- ------ ----- ------
Outstanding at end of
year................... 1,908 $24.87 1,872 $19.39 2,220 $20.35
===== ====== ===== ====== ===== ======
Exercisable at end of
year................... 991 $17.83 1,180 $16.85 1,089 $15.99
===== ====== ===== ====== ===== ======
Weighted average fair
value of options
granted during the
year................... $ 9.71 $ -- $ 8.90
====== ====== ======
</TABLE>
- --------
(a) In 1997, PepsiCo spun off its restaurant businesses to its shareholders.
Immediately following this spin-off, the number of options exercisable for
PepsiCo capital stock was increased and their exercise prices were
decreased to preserve the economic value of those options that existed just
prior to the spin-off for the holders of PepsiCo stock options.

Stock options outstanding at December 26, 1998:

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------- ----------------------
Weighted Avg.
Range of Remaining Weighted Avg. Weighted Avg.
Exercise Price Options Contractual Life Exercise Price Options Exercise Price
-------------- ------- ---------------- -------------- ------- --------------
<S> <C> <C> <C> <C> <C>
$ 8.17 to $16.37 563 3.77 years $13.94 521 $13.90
$16.87 to $36.50 1,345 7.46 $29.43 470 $22.16
----- ---
1,908 6.37 $24.87 991 $17.83
===== ===
</TABLE>

PBO adopted the disclosure provisions of Statement of Financial Accounting
Standards 123 "Accounting for Stock-Based Compensation," ("SFAS 123") but
continues to measure stock-based compensation cost in accordance with APB
Opinion No. 25 and its related interpretations. If PBO had measured
compensation cost for the PepsiCo stock options granted to its employees in
1998, 1997 and 1996 under the fair value based method prescribed by SFAS 123,
the net loss would have been changed to the pro forma amounts set forth below:

<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Net loss:
Reported........................................ $(49.3) $(81.2) $(86.3)
Pro forma....................................... $(50.7) $(82.4) $(86.8)
</TABLE>

F-20
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

The fair value of PepsiCo stock options granted to PBO employees used to
compute pro forma net income disclosures were estimated on the date of grant
using the Black-Scholes option-pricing model based on the following weighted
average assumptions used by PepsiCo:

<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Risk free interest rate........................... 4.7% 5.8% 6.0%
Expected life..................................... 5 years 3 years 6 years
Expected volatility............................... 23% 20% 20%
Expected dividend yield........................... 1.14% 1.32% 1.5%
</TABLE>

Note 11--Income Taxes

The details of the income tax benefit are set forth below:

<TABLE>
<CAPTION>
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Current:
Federal............................................ $ -- $ -- $ --
Foreign............................................ -- -- --
State.............................................. -- -- --
----- ----- -----
$ -- $ -- $ --
===== ===== =====
Deferred:
Federal............................................ $(3.7) $(6.3) $(8.3)
Foreign............................................ -- -- --
State.............................................. (0.6) (0.7) (1.0)
----- ----- -----
$(4.3) $(7.0) $(9.3)
===== ===== =====
</TABLE>

United States and foreign loss before income taxes are set forth below:

<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
United States..................................... $(11.4) $(17.7) $(23.4)
Foreign........................................... (42.2) (70.5) (72.2)
------ ------ ------
Total............................................. (53.6) $(88.2) $(95.6)
====== ====== ======
</TABLE>

A reconciliation of income tax benefit calculated at the United States
federal statutory rate to PBO's effective tax benefit rate is set forth below:

<TABLE>
<CAPTION>
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Income tax benefit computed at the United States
federal statutory rate............................. 35.0% 35.0% 35.0%
State income tax, net of federal tax benefit........ 0.7 0.5 0.7
Effect of foreign tax rate differences.............. (9.0) (5.6) (5.6)
Valuation allowance--foreign........................ (13.0) (18.3) (15.3)
Nondeductible amortization of a portion of United
States intangible assets........................... (2.8) (1.7) (1.6)
Nondeductible expenses.............................. (2.8) (2.0) (3.4)
----- ----- -----
Effective income tax benefit rate................... 8.1% 7.9% 9.8%
===== ===== =====
</TABLE>

F-21
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Deferred tax liabilities and assets are attributable to temporary
differences between the financial statement bases and tax bases of certain
assets and liabilities and to net operating loss carryforwards, as set forth
below:

<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Intangible assets and property, plant and equipment...... $118.2 $106.5
Other.................................................... 3.2 2.8
------ ------
Gross deferred tax liabilities........................... 121.4 109.3
------ ------
Net operating loss carryforwards......................... 171.8 153.9
Allowance for doubtful accounts.......................... 1.2 1.1
Various liabilities and other............................ 4.3 7.0
------ ------
Gross deferred tax assets................................ 177.3 162.0
Deferred tax asset valuation allowance................... (64.2) (65.3)
Net deferred tax assets.................................. 113.1 96.7
------ ------
Net deferred income liability............................ $ 8.3 $ 12.6
====== ======
Portion recorded in:
Prepaid expenses and other current assets.............. $ (1.2) $ (1.2)
Deferred income taxes.................................. 9.5 13.8
------ ------
$ 8.3 $ 12.6
====== ======
</TABLE>

Net operating loss carryforwards are primarily generated by allocations of
interest and corporate overhead from PepsiCo as if PBO had operated on a stand-
alone basis and had actually filed a separate income tax return. The valuation
allowance related to deferred tax assets decreased by $1.1 million in 1998
primarily due to additions related to current year operating losses offset by
temporary differences in a number of foreign and state jurisdictions.

Net operating loss carryforwards totaling $125.7 million at year-end 1998
are available to reduce future taxes and are related to a number of foreign
jurisdictions. These carryforwards expire at various times between 1999 and
2005.

Note 12--Transactions with PepsiCo

PBO is a licensed producer and distributor of carbonated soft drinks and
other non-alcoholic beverages on behalf of PepsiCo. In addition, PBO has the
following relationships with PepsiCo.

PBO purchases concentrate from PepsiCo to be used in the production of
carbonated soft drinks and other non-alcoholic beverages.

PepsiCo and PBO share a business objective of increasing availability and
consumption of PepsiCo's brands. Accordingly, PepsiCo provides PBO with various
forms of marketing support to promote PepsiCo's brands. This support covers a
variety of programs and initiatives, including direct marketplace support,
marketing programs, capital equipment funding and shared media and advertising
expense. PepsiCo and PBO each record their share of the cost of marketing
programs in their financial statements. Based on the objectives of the programs
and initiatives, marketing support is recorded as an adjustment to net sales or
a reduction of selling, delivery and administrative expense.

PBO manufactures and distributes fountain products and provides fountain
equipment service to PepsiCo customers in certain territories in accordance
with the master bottling agreement. There are other products which PBO produces
and/or distributes through various arrangements with PepsiCo or partners of
PepsiCo.

F-22
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
PBO purchases finished goods and concentrate from the Lipton Tea Partnership
and finished goods from the North American Coffee Partnership. PBO pays a
royalty fee to PepsiCo for the use of the Aquafina trademark.

PepsiCo provides certain administrative support to PBO, including collection
of trade receivables, development and maintenance of information systems, and
insurance coverage.

The Combined Statements of Operations include the following income and
(expense) transactions with PepsiCo:

<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Net sales.................................. $ 13.9 $ 13.6 $ 13.4
Cost of goods sold......................... $(68.8) $(66.3) $(60.7)
Selling, delivery and administrative
expenses.................................. $ 43.2 $ 49.0 $ 51.8
</TABLE>

There are no minimum fees or payments that PBO is required to make to
PepsiCo, nor is PBO obligated to PepsiCo under any minimum purchase
requirements. There are no conditions or other requirements that could result
in the repayment of any marketing support payments received by PBO from
PepsiCo.

Note 13--Contingencies

PBO is subject to various claims and contingencies related to lawsuits,
taxes, environmental and other matters arising out of the normal course of
business. Management believes that the ultimate liability, if any, in excess of
amounts already recognized arising from such claims or contingencies is not
likely to have a material adverse effect on PBO's annual results of operations,
financial condition or liquidity.

Note 14--Business Segments

In 1998, PBO adopted Statement of Financial Accounting Standards No. 131
Disclosures about Segments of a Business Enterprise and Related Information.
PBO operates in one industry segment which is the manufacture, sale and
distribution of carbonated soft drinks and other ready-to-drink beverages. The
prior year's segment information presented has been restated to present our two
reportable operating segments which are based on geographic area: United States
and Central Europe. The relevant measure of profitability that is used to
evaluate the performance of the operating segments is operating profit before
allocation of corporate overhead charges. There are no significant intra-
segment transactions. Revenues are based upon the location of where product was
sold.

<TABLE>
<CAPTION>
1998 1997 1996
------- ------ ------
<S> <C> <C> <C>
Net Sales
United States................................. $ 541.9 $517.4 $507.0
Central Europe................................ 180.2 186.3 219.5
------- ------ ------
$ 722.1 $703.7 $726.5
======= ====== ======
Operating profit (loss)
United States................................. $ 49.0 $ 42.3 $ 36.9
United States allocated overhead.............. (14.0) (13.4) (12.2)
------- ------ ------
35.0 28.9 24.7
Central Europe................................ (31.2) (44.6) (56.0)
Central Europe allocated overhead............. (5.7) (6.4) (6.6)
------- ------ ------
(36.9) (51.0) (62.6)
------- ------ ------
$ (1.9) $(22.1) $(37.9)
======= ====== ======
</TABLE>

F-23
<PAGE>

PEPSICO BOTTLING OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Amortization of Intangible Assets
United States..................................... $ 13.9 $ 14.1 $ 14.1
Central Europe.................................... .3 .3 .5
------ ------ ------
$ 14.2 $ 14.4 $ 14.6
====== ====== ======
Depreciation Expense
United States..................................... $ 22.7 $ 22.5 $ 22.8
Central Europe.................................... 27.9 31.0 33.1
------ ------ ------
$ 50.6 $ 53.5 $ 55.9
====== ====== ======
Capital Spending
United States..................................... $ 30.4 $ 25.6 $ 29.1
Central Europe.................................... 24.4 32.0 79.6
------ ------ ------
$ 54.8 $ 57.6 $108.7
====== ====== ======
Total Assets
United States..................................... $580.9 $619.6 $628.5
Central Europe.................................... 220.3 237.5 289.3
------ ------ ------
801.2 857.1 917.8
====== ====== ======
Long-lived Assets
United States..................................... $507.4 $548.4 $560.1
Central Europe.................................... 178.8 179.4 225.6
------ ------ ------
$686.2 $727.8 $785.7
====== ====== ======
</TABLE>

Other assets on the Combined Balance Sheets include a $37.2 million, $34.6
million and $28.3 million investment in a Polish joint venture at December 26,
1998, December 27, 1997 and December 28, 1996, respectively. PBO's equity
income or loss in such joint venture was $2.8 million and $4.9 million equity
income in 1998 and 1997 and $9.4 million equity loss in 1996.

Note 15--Subsequent Events (Unaudited)

On January 25, 1999, the Board of Directors of Whitman Corporation
("Whitman") approved an agreement in which PepsiCo will consolidate certain of
its bottling territories and other assets with Whitman's existing bottling
businesses to create a new bottling company referred to as "New Whitman."
PepsiCo will transfer to the new company a number of bottling operations,
including territories in Illinois, Indiana, Missouri and Ohio in the United
States as well as in the Czech Republic, Slovakia, Hungary and Poland. PepsiCo
also will transfer to the new company the 20% stake it currently holds in
Whitman's Pepsi-Cola General Bottlers subsidiary. The agreement specified that
Whitman will transfer to PepsiCo operations in: Marion, Virginia; Princeton,
West Virginia and St. Petersburg, Russia.

New Whitman will assume liabilities associated with PepsiCo's United States
operations and will acquire PepsiCo's international operations for cash,
resulting in net proceeds to PepsiCo of $300 million. In addition, PepsiCo will
receive 54 million shares of common stock in New Whitman, giving PepsiCo
immediate ownership of approximately 35% of New Whitman.

The merger transaction is subject to the approval of the shareholders of
Whitman.

On March 19, 1999, Whitman sold its bottling operations located in Marion,
Virginia and Princeton, West Virginia along with related transportation assets
to PepsiCo for $97.8 million in cash.

F-24
<PAGE>

PROSPECTUS

$300,000,000

Whitman Corporation

Debt Securities

----------------

Whitman Corporation intends to offer at one or more times debt securities in
a total amount not to exceed $300,000,000. We will describe the terms of these
securities in supplements to this prospectus. You should read the prospectus
and the supplements carefully before you invest.

----------------

This prospectus may be used to offer and sell debt securities only if
accompanied by a prospectus supplement for those debt securities.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the debt securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

----------------

April 22, 1999
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Whitman Corporation...... 2
About this Prospectus.... 2
Where You Can Find More
Information............. 3
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Description of the Debt Securities.. 3
Plan of Distribution................ 9
Legal Matters....................... 9
Experts............................. 9
</TABLE>

WHITMAN CORPORATION

We are engaged in the production and distribution of Pepsi-Cola brand
products and a variety of other non-alcoholic beverage products through our
principal operating subsidiary, Pepsi-Cola General Bottlers. Pepsi General is
one of the world's largest franchised Pepsi-Cola bottlers, accounting for about
12% of all Pepsi-Cola products sold in the United States. It serves a
significant portion of a 9 state region in the Midwest. In the last four years,
Pepsi General has more than doubled its potential market by signing exclusive
franchise agreements with PepsiCo, Inc. for the northern and western half of
Poland during 1994, for the northwest portion of Russia, including St.
Petersburg, at the end of 1996, and for Belarus and the Baltic states (Estonia,
Latvia and Lithuania) in 1997. PepsiCo is the owner of the Pepsi-Cola trademark
and is the supplier of concentrate to Pepsi General.

In 1987, we entered into an agreement with PepsiCo whereby PepsiCo
contributed cash and assets in exchange for a 20% interest in Pepsi General.
While Pepsi General manages all phases of its operations, including pricing of
its products, Pepsi General and PepsiCo exchange production, marketing and
distribution information, benefiting both companies' respective efforts to
lower costs, improve productivity and increase product sales.

On January 25, 1999, we announced that our board of directors approved a new
business relationship with PepsiCo, including a contribution and merger
agreement, which is subject to shareholder approval. Territories to be acquired
by or contributed to Pepsi General will include domestic franchises in
Cleveland, Ohio, Dayton, Ohio, Indianapolis, Indiana, St. Louis, Missouri and
southern Indiana, and foreign franchises in Hungary, the Czech Republic,
Slovakia and a portion of Poland. In contemplation of the transaction, Pepsi
General sold its franchises in Marion, Virginia, Princeton, West Virginia and
the St. Petersburg area of Russia to PepsiCo in March, 1999.

We previously engaged in the refrigeration systems and equipment business
through Hussmann International, Inc. and in the automotive services business
through Midas, Inc. On January 30, 1998, we distributed to our shareholders all
of the common stock of Hussmann and Midas in tax-free spin-offs. Our principal
executive offices are located at 3501 Algonquin Road, Rolling Meadows, Illinois
60008, and our telephone number is (847) 818-5000.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf process, we may,
from time to time, sell the debt securities described in this prospectus in one
or more offerings in a total amount not to exceed $300,000,000. This prospectus
provides you with a general description of the debt securities. Each time we
sell debt securities, we will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus
supplement may also add, update or change information in this prospectus.
Please carefully read both this prospectus and any prospectus supplement
together with additional information described under the heading "Where You Can
Find More Information."

We are not making an offer of the debt securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of each of those documents.

2
<PAGE>

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports and other information with
the SEC. You may read and copy any document we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings are also available to the public over
the Internet at the SEC's web site at http://www.sec.gov.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference into this prospectus the following documents which we
filed or may file with the SEC (SEC file number 001-4710):

. Annual Report on Form 10-K for our fiscal year ended January 2, 1999, as
amended by the Form 10-K/A dated April 16, 1999;

. Current Reports on Form 8-K dated January 29, 1999, February 5, 1999 and
April 22, 1999;

. the portion of our proxy statement dated April 19, 1999 appearing under
the caption "Management's Discussion and Analysis of Operations, Cash
Flows and Liquidity and Capital Resources of the PepsiCo Bottling
Operations;"

. any future filings that we make under Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 until we or any underwriters sell
all of the debt securities.

You may request a copy of these filings at no cost by writing or calling
our Corporate Communications Department at the following address or telephone
number: Whitman Corporation, 3501 Algonquin Road, Rolling Meadows, Illinois
60008, telephone: (847) 818-5000.

You should only rely on the information incorporated by reference or
provided in this prospectus and any prospectus supplement. We have not
authorized anyone else to provide you with additional or different
information.

DESCRIPTION OF THE DEBT SECURITIES

We will issue the debt securities under an indenture dated as of January
15, 1993, between the Company and The First National Bank of Chicago, as
trustee. We have summarized selected provisions of the indenture below. The
summary set forth below is not complete. It does not describe certain
exceptions and qualifications contained in the indenture or the debt
securities. If you would like more information on the provisions of the
indenture, you should review the indenture, which we have incorporated by
reference as an exhibit to the registration statement relating to the debt
securities.

References to article and section numbers of the indenture are included in
the summary so that you can easily locate the provisions being summarized.

General

The debt securities will be unsecured, senior debt and will rank equally
with all of our other unsecured and unsubordinated indebtedness. The indenture
does not limit the amount of the debt securities that we may issue and permits
us to issue debt securities in one or more series. Each series of debt
securities may have different terms. The terms of any series will be
determined in accordance with a resolution of our board of directors or in a
supplement to the indenture relating to that series.

A supplement to this prospectus will describe specific terms relating to
the series of debt securities being offered. (Section 2.01) These terms will
include some or all of the following:

. the title of the series of debt securities;

. the total principal amount;

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. the interest rate or rates, if any (which may be fixed or variable), and
interest payment dates;

. the date or dates of maturity;

. whether the series can be redeemed by us or the holder;

. whether there will be a sinking fund;

. the portion of the series of debt securities due upon acceleration of
maturity in the event of a default;

. the denominations in which the debt securities will be issuable if other
than denominations of $1,000 if registered and $5,000 if unregistered;

. the form used to evidence ownership of the debt securities;

. whether the debt securities are convertible;

. the manner of payment of principal and interest;

. additional offices or agencies for registration of transfer and exchange
and for payment of the principal, premium, if any, and interest;

. whether the debt securities will be registered or unregistered, and the
circumstances, if any, upon which such debt securities may be exchanged
for debt securities issued in a different form;

. if denominated in a currency other than United States dollars, the
currency or composite currency in which the debt securities are to be
denominated, or in which payments of the principal, premium, if any, and
interest will be made and the circumstances, if any, when the currency
of payment may be changed;

. if we or a holder have the right to elect that the payments of the
principal, premium, if any, or interest are to be made in a currency or
composite currency other than that in which the debt securities are
denominated or stated to be payable, the terms and conditions upon which
that election may be made and how the exchange rate between the currency
or composite currency in which those debt securities are denominated or
stated to be payable and the currency in which the debt securities are
elected to be paid pursuant to that election will be determined;

. if the payments of principal, premium, if any, or interest may be
determined with reference to one or more securities issued by us or
another company, any currency or other index, how those amounts shall be
determined;

. whether defeasance and discharge provisions will apply; and

. any other terms consistent with the indenture.

Each series of debt securities will be a new issue with no established
trading market. There can be no assurance that there will be a liquid trading
market for the debt securities. We may purchase debt securities at any time in
the open market or otherwise. Debt securities we purchase may, in our
discretion, be held, resold, canceled or used to satisfy any sinking fund or
redemption requirements.

Debt securities bearing no interest or interest at a rate which, at the time
of issuance, is below the prevailing market rate will be sold at a substantial
discount below their stated principal amount. Special United States federal
income tax considerations applicable to any of these discounted debt securities
(or to certain other debt securities issued at par which are treated as having
been issued at a discount for United States federal income tax purposes) will
be described in a prospectus supplement.

The debt securities may be denominated in United States dollars, or in any
other currency or currency unit. If any of the debt securities are sold for any
foreign currency or currency unit or if principal, premium, if any, and
interest on any of the debt securities are payable in any foreign currency or
currency unit, the restrictions, elections, tax consequences, specific terms
and other information with respect to such issue of debt securities and such
foreign currency or currency unit will be set forth in the prospectus
supplement relating to such debt securities.

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Form and Exchange of the Debt Securities

All of the debt securities will be issued in fully registered form without
coupons or in unregistered form with or without coupons. The debt securities
may also be issued in the form of one or more temporary or definitive global
securities. Registered debt securities which are book-entry securities will be
issued as registered global securities. A debt security in global form will be
deposited with, or on behalf of, a depository, which will be named in the
applicable prospectus supplement. A global debt security may not be
transferred, except as a whole, among the depository for that debt security and
its nominees or successors. If any debt securities of a series are issuable as
global securities, the applicable prospectus supplement will describe any
circumstances when beneficial owners of any of those global securities may
exchange their interests for definitive debt securities of that series of like
tenor and principal amount in any authorized form and denomination, the manner
of payment of principal and interest on those global debt securities and the
specific terms of the depository arrangement with respect to those global debt
securities.

Unless otherwise indicated in a prospectus supplement, principal, premium,
if any, and interest will be payable, and the debt securities may be registered
for transfer or exchange, at the principal corporate trust office of the
trustee in Chicago, Illinois, provided that at our option, payment of interest
on registered debt securities may be made by check or by wire transfer.
(Sections 4.01 and 4.02) No service charge will be made for any exchange or
registration of transfer of the debt securities, but we may require payment of
a sum sufficient to cover any tax or other governmental charge. (Section 2.06)

Certain Restrictions on Whitman Corporation

The restrictions summarized in this section will apply to all debt
securities unless a prospectus supplement indicates otherwise. The following
description is not complete. The full text of these restrictions is included in
the indenture. Certain terms used in the following description of these
restrictions are defined under the caption "Certain Definitions" at the end of
this section.

Limitations on Liens. The debt securities will not be secured. If we or one
of our Restricted Subsidiaries incur debt secured by a mortgage, security
interest, lien, pledge or other encumbrance on a Principal Property, or on any
shares of capital stock or indebtedness of any Restricted Subsidiary (whether
such Principal Property, shares of stock or indebtedness are now owned or
hereafter acquired), we are required to secure the then outstanding debt
securities equally and ratably with (or prior to) our secured debt. (Section
4.07)

The indenture permits us and our Restricted Subsidiaries to create certain
liens without securing the debt securities (Section 4.05). Among the permitted
liens are:

. liens affecting property of a corporation existing at the time it
becomes a Subsidiary or at the time it is merged into or consolidated
with or purchased by us or a Subsidiary;

. liens existing at the time of acquisition of the affected property or
purchase money liens incurred within 180 days after acquisition of the
property;

. liens to secure the cost of construction of new plants or facilities,
incurred within 180 days of completion of construction;

. liens which secure indebtedness owing by a Restricted Subsidiary to us
or another Restricted Subsidiary;

. liens existing on January 15, 1993;

. liens in connection with the issuance of certain pollution control or
industrial revenue bonds or similar financings;

. certain statutory liens or similar liens arising in the ordinary course
of business;

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. certain liens in connection with legal proceedings and government
contracts and certain deposits or liens made to comply with workers'
compensation or similar legislation;

. liens existing on property acquired by us or a Restricted Subsidiary
through the exercise of rights arising out of defaults on receivables
acquired in the ordinary course of business;

. liens for certain judgments and awards;

. liens for certain taxes, assessments, governmental charges or other
liens of a similar nature, which do not materially impair the use of
such property in the operation of our or any of our Restricted
Subsidiaries' business or the value of such property for the purposes of
such business; and

. certain extensions, renewals or replacements of any liens referred to
above.

Limitations on Sale and Lease-Back Transactions. We and our Restricted
Subsidiaries may not sell or transfer any Principal Property with the intention
of entering into a lease of such facility (except for temporary leases of a
term, including renewals, not exceeding five years) unless either:

. we or the Restricted Subsidiary would be entitled (under Section 4.05)
to incur debt secured by a lien on the property to be leased without
equally and ratably securing the debt securities, or

. within 180 days after the effective date of such transaction, we apply
to the voluntary retirement of our funded debt an amount equal to the
greater of (1) the net proceeds of the sale of the property leased in
such transaction or (2) the fair value, in the opinion of our board of
directors, of the leased property at the time of such transaction.
(Section 4.06)

Exempted Indebtedness. Notwithstanding the limitations on liens and sale and
lease-back transactions we described above, we and our Restricted Subsidiaries
may issue, assume, or guarantee indebtedness secured by a lien or other
encumbrance without securing the debt securities, or may enter into sale and
lease-back transactions without retiring funded debt, or enter into a
combination of such transactions, if the sum of the principal amount of all
such indebtedness and the aggregate value of all such sale and lease-back
transactions does not at any such time exceed 10% of our consolidated total
assets as shown in the audited consolidated balance sheet contained in our
latest annual report to our shareholders. (Section 4.07)

Merger, Consolidation and Sale of Assets. We may not consolidate or merge
with or into any other corporation, or sell, lease or transfer all or
substantially all of our assets to any other entity, unless:

. we survive the merger or consolidation or the surviving or successor
corporation is a United States corporation which assumes all of our
obligations under the debt securities and under the indenture, and

. after giving effect to the merger, consolidation, sale, lease or
transfer, no Event of Default (as described below) under the indenture
or no event which, after notice or lapse of time or both, would become
an Event of Default shall have occurred and be continuing. (Section
11.01)

If we sell or transfer substantially all our assets and the purchaser
assumes our obligations under the indenture, we will be discharged from all
obligations under the indenture and the debt securities. (Section 11.02)

Unless otherwise described in a prospectus supplement, there are no
covenants or provisions contained in the indenture which may protect you in the
event of a highly leveraged transaction involving us. Accordingly, we could in
the future enter into transactions that could increase the amount of debt
outstanding at that time or otherwise affect our capital structure or credit
rating.

Certain Definitions. The terms set forth below are defined in the indenture
as follows:

"Consolidated Net Worth" means the excess of our consolidated assets over
liabilities, plus any shares of stock of any class of a Subsidiary (other than
directors' qualifying shares) that are not owned by us or one of our
Subsidiaries, as determined from time to time in accordance with generally
accepted accounting principles consistently applied. (Section 6.01)

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"Government Obligations" with respect to any series of debt securities means
direct noncallable obligations of the government which issued the currency in
which the debt securities of that series are denominated or noncallable
obligations the payment of the principal of and interest on which is fully
guaranteed by such government and which, in either case, are full faith and
credit obligations of such government. (Article One)

"Principal Property" means any manufacturing plant or warehouse owned or
leased by us or one of our Subsidiaries located within the United States, the
gross book value of which exceeds one percent of Consolidated Net Worth, other
than manufacturing plants and warehouses which, in the opinion of our board of
directors, is not of material importance to the business conducted by us and
our Restricted Subsidiaries, taken as a whole. (Article One)

"Restricted Subsidiary" means any of our Subsidiaries which (1) owns or
leases a Principal Property and (2) is incorporated under the laws of any state
in the United States or has substantially all of its property located within
the United States or carries on substantially all of its business within the
United States. (Article One)

"Subsidiary" means any corporation of which we, one or more of our
subsidiaries or we and one or more of our subsidiaries, directly or indirectly
owns or controls at a given time more than 50% of the outstanding capital stock
of such corporation having under ordinary circumstances voting power to elect a
majority of the board of directors of the corporation (whether or not any other
class of securities has or may have voting power by reason of the occurrence of
a contingency). (Article One)

Satisfaction and Discharge of the Indenture

If provision is made pursuant to the indenture for the defeasance of a
series of debt securities, we, at our option (unless otherwise provided in a
prospectus supplement), with regard to that series of offered debt securities:

(1) will be discharged from any and all obligations in respect of the
debt securities of that series (except for certain obligations to register
the transfer or exchange of debt securities of that series, to replace
stolen, lost, destroyed or mutilated debt securities of that series, to
maintain paying agencies and to hold monies for payment in trust); or

(2) may omit to comply with the provisions of the indenture described
above under the captions "Limitations on Liens," "Limitations on Sale and
Lease-Back Transactions," "Exempted Indebtedness" and "Merger,
Consolidation and Sale of Assets,"

if we deposit with the trustee, in trust, money or Government Obligations which
will provide sufficient funds to pay the principal of (and premium, if any) and
interest on the debt securities of that series on the dates those payments are
due. To exercise either of the options, we must deliver to the trustee an
opinion of counsel of recognized national standing to the effect that holders
of the debt securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, satisfaction and
discharge, or defeasance and will be subject to federal income tax on the same
amount and in the same manner and at the same times, as would have been the
case if such deposit, defeasance and discharge had not occurred. (Sections
12.02(a) and (b)) Even if we successfully exercise the option described above
in clause (2), however, our obligations under the indenture and the debt
securities of such series (other than the covenants referred to in clause (2)
and the Events of Default (as described below) not related to such covenants)
will continue. (Section 12.01)

If we choose to exercise our option not to comply with the provisions of the
indenture described above under the captions "Limitations on Liens,"
"Limitations on Sale and Lease-Back Transactions," "Exempted Indebtedness" and
"Merger, Consolidation and Sale of Assets" with respect to any series of debt
securities and the series is declared due and payable because of the occurrence
of an Event of Default other than a default

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under these provisions of the indenture, then the amount of money and
Government Obligations on deposit with the trustee will be sufficient to pay
amounts payable on the series of debt securities on the due date without
acceleration but may not be sufficient to pay amounts due at the time of the
acceleration resulting from such Event of Default. However, we would remain
liable for such payments.

Events of Default

"Event of Default" means, with respect to any series of debt securities, any
of the following (Section 6.01):

. failure to pay interest that continues for a period of 30 days after
payment is due;

. failure to make any principal or premium payment when due;

. failure to comply with any of our other agreements contained in the
indenture or in the debt securities for 90 days after the trustee
notifies us of such failure (or the holders of at least 25% of the
outstanding debt securities affected by such failure notify us and the
trustee);

. certain events of bankruptcy, insolvency or reorganization of us; or

. acceleration of any indebtedness for money borrowed by us or any of our
Restricted Subsidiaries in excess of the greater of $30,000,000 in
principal amount or 5% of Consolidated Net Worth.

In general, the trustee is required to give notice of a default with respect
to a series of debt securities to the holders of that series. The trustee may
withhold notice of any default (except a default in the payment of principal
of, and premium, if any, or interest on any debt security or in the making of
any sinking fund payment) if the trustee in good faith determines that it is in
the best interest of the holders of that series to do so. (Section 7.02) An
Event of Default for a particular series of debt securities does not
necessarily constitute an Event of Default for other series of debt securities.
Additional Events of Default may be prescribed for the benefit of holders of
certain series of debt securities and will be described in a prospectus
supplement.

If there is a continuing Event of Default with respect to any series of debt
securities, then either the trustee or the holders of at least 25% in aggregate
principal amount of that series may require us to immediately repay the
principal and accrued interest (or, if the debt securities of that series are
original issue discount securities, such portion of the principal amount as may
be specified in the terms of that series) on the affected series. Subject to
certain conditions, the requirement to pay with respect to a series of debt
securities may be annulled, and past defaults waived (except a continuing
default in payment of principal of or premium, if any, or interest on the debt
securities), by the holders of a majority in principal amount of the debt
securities of that series then outstanding. (Section 6.02)

The trustee may refuse to enforce the indenture or the debt securities
unless it first receives satisfactory security or indemnity. (Sections 7.01 and
7.03) Subject to certain limitations specified in the indenture, the holders of
a majority in principal amount of the then outstanding debt securities of an
affected series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee under the
indenture or exercising any trust or power conferred on the trustee with
respect to the debt securities of that series. (Section 6.12)

Modification of the Indenture

Under the indenture, subject to certain exceptions, our rights and
obligations and the rights of the holders of a series of debt securities may be
changed with the consent of the holders of not less than a majority in
principal amount of each series of debt securities then outstanding. However,
no change to the terms of payment of principal or interest, to the premium, if
any, payable upon redemption, to the currency in which any debt security is
payable, to the amount to be paid upon acceleration of maturity or reducing the
percentage required for changes to the indenture, is effective against any
holder without its consent. (Section 10.02)

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Reports to the Trustee

We are required to provide the trustee with an officers' certificate each
fiscal year stating that we reviewed our activities during the preceding fiscal
year and that, after reasonable investigation and inquiry by the certifying
officers, we are in compliance with the requirements of the indenture and that
no default exists or identifying the known defaults. (Section 4.08)

Regarding the Trustee

We maintain ordinary banking relationships and credit facilities with
various banks, including the trustee, The First National Bank of Chicago. Banc
One Capital Markets, Inc., an affiliate of the trustee, has from time to time
acted as a selling agent in the distribution of our debt securities.

PLAN OF DISTRIBUTION

We may sell debt securities to underwriters, dealers or agents, or directly
to other purchasers. Debt securities also may be sold by underwriters directly
to other purchasers or through other dealers, which may receive compensation
from the underwriters in the form of discounts, concessions or commissions.

If underwriters are used in the sale, the debt securities will be acquired
by the underwriters for their own account. The underwriters may resell the debt
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the debt securities will
be subject to certain conditions. Any initial public offering price and any
discounts or concessions allowed or repaid to dealers may be changed from time
to time.

We also may designate dealers, acting as our agents, to offer and sell debt
securities upon certain terms and conditions or we may sell debt securities
directly to purchasers, without the use of underwriters dealers or agents.

Underwriters, dealers and agents that participate in the distribution of the
debt securities may be underwriters as defined in the Securities Act of 1933,
and any discounts or commissions received by them from us and any profit on the
resale if the offered debt securities may be treated as underwriting discounts
and commissions under the Securities Act. We will identify any underwriters or
agents and describe their compensation from us in a supplement to this
prospectus.

We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make. Underwriters, dealers
and agents may engage in transactions with, or perform services for, us or our
subsidiaries in the ordinary course of business.

LEGAL MATTERS

Unless otherwise indicated in a prospectus supplement, the validity of the
offered debt securities will be passed upon for us by Sidley & Austin, Chicago,
Illinois, and certain legal matters relating to the offered debt securities
will be passed upon for any underwriters or agents by Kirkland & Ellis,
Chicago, Illinois.

EXPERTS

The consolidated financial statements of Whitman and subsidiaries as of the
end of fiscal years 1998 and 1997 and for each of the fiscal years 1998, 1997
and 1996 incorporated by reference in this prospectus have been audited by KPMG
LLP, independent auditors, as indicated in their report, which is also
incorporated by reference and those consolidated financial statements have been
incorporated by reference in reliance upon the reports of said firm given upon
the authority as experts in accounting and auditing.

The combined financial statements of the PepsiCo Bottling Operations, as of
December 26, 1998 and December 27, 1997 and for each of the years in the three-
year period ended December 26, 1998 included in this prospectus have been
audited by KPMG LLP, independent auditors, as indicated in their report, and
are included in reliance upon the reports of said firm given upon their
authority as experts in accounting and auditing.

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