-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JyzKAFFbQqc9Lx+1TZKKF+0TDfg6FcULDY505NYY4hD8IsVYDHwjHgDRByOGgqnj K11MlBVF+FQNA9wc3mewIA== 0000950137-99-002516.txt : 19990716 0000950137-99-002516.hdr.sgml : 19990716 ACCESSION NUMBER: 0000950137-99-002516 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VISKASE COMPANIES INC CENTRAL INDEX KEY: 0000033073 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 952677354 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-05485 FILM NUMBER: 99665035 BUSINESS ADDRESS: STREET 1: 6855 W. 65TH ST. CITY: CHICAGO STATE: IL ZIP: 60638 BUSINESS PHONE: 7084964200 FORMER COMPANY: FORMER CONFORMED NAME: ENVIRODYNE INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MGN INC DATE OF NAME CHANGE: 19790425 11-K 1 REPORT ON AUDITS 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K SEC FILE NUMBER: 0-5485 ---------- CUSIP NUMBER: 294037-20-5 ---------- (Check One): [ ] Form 10-K and Form 10-KSB [ ] Form 20-F [X] Form 11-K [ ] Form 10-Q and Form 10-QSB [ ] Form N-SAR For Period Ended December 31, 1998 [ ] Transition Report on Form 10-K [ ] Transition Report on Form 20-F [ ] Transition Report on Form 11-K [ ] Transition Report on Form 10-Q [ ] Transition Report on Form N-SAR For the Transition Period Ended: Read Attached Instruction Sheet Before Preparing Form. Please print or Type. Nothing in this form shall be construed to imply that the Commission has verified any information contained herein. -------------------- If the notification relates to a portion of the filing checked above, identify the item(s) to which the notification relates: -------------------- Part I - Registrant Information Viskase Companies, Inc. - -------------------------------------------------------------------------------- Full Name of Registrant Envirodyne Industries, Inc. - -------------------------------------------------------------------------------- Former Name if Applicable: 6855 West 65th Street - -------------------------------------------------------------------------------- Address of Principal Executive Office (Street and Number) Chicago, Illinois 60638 - -------------------------------------------------------------------------------- City, State and Zip Code Part IV - Other Information (1) Name and telephone number of person to contact in regard to this notification Gordon S. Donovan 708 496-4200 - -------------------------------------------------------------------------------- (Name) (Area Code) (Telephone Number) (2) Have all other periodic reports required under section 13 or 15(d) of the Securities Exchange Act of 1934 or section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such shorter period that the registrant was required to file such report(s) been filed? If the answer is no, identify report(s). [X] Yes [ ] No (3) Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof? [ ] Yes [X] No If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made. Viskase Companies, Inc. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Charter) has cause this notification to be signed on its behalf by the undersigned thereunto duly authorized. Date: July 15, 1999 By: /s/ Gordon S. Donovan ------------------------ --------------------------------------- Vice President, Chief Financial Officer and Treasurer 2 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION REPORT ON AUDITS OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998 AND 1997 3 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES PAGE(S) Report of Independent Accountants 1 Financial Statements: Statement of Net Assets Available for Benefits, December 31, 1998 and 1997 2-3 Statement of Changes in Net Assets Available for Benefits, for the years ended December 31, 1998 and 1997 4-5 Notes to Financial Statements 6-11 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes, December 31, 1998 12 Item 27d - Schedule of Reportable Transactions, for the year ended December 31, 1998 13 NOTE: Supplemental schedules required by the Employee Retirement Income Security Act of 1974 that have not been included herein are not applicable to The SAVE Program for Employees of Viskase Corporation. 4 {PRICEWATERHOUSECOOPERS LETTERHEAD] REPORT OF INDEPENDENT ACCOUNTANTS To the Compensation and Benefits Committee of The SAVE Program for Employees of Viskase Corporation In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the The SAVE Program for Employees of Viskase Corporation (the "Plan") at December 31, 1998 and 1997, and the changes in net assets available for benefits for the years ended December 31, 1998 and 1997 in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers LLP July 7, 1999 5 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1998
Fixed Equity Aggressive International Income Investment Balanced Equity Equity Fund Fund Fund Fund Fund Assets: Investments: Cash $ 2,672 $ 80,765 $ 3,584 $ 11,052 Short-term investments $ 610,200 235,005 1,180 21,606 Insurance company contracts 21,370,259 Common/collective trust 9,925,458 Registered investment companies 24,441,258 3,804,816 4,749,656 1,773,353 Company stock Loans to participants ----------- ----------- ---------- ---------- ---------- Total investments 31,905,917 24,678,935 3,886,761 4,774,846 1,784,405 ----------- ----------- ---------- ---------- ---------- Receivables: Participant contributions 86,913 9,391 2,036 3,499 1,715 Employer contributions 33,965 26,255 6,357 9,782 4,795 Investment income 16,060 109 14 22 7 Interfund receivable (payable) 110,011 (89,234) 2,384 11,523 (34,684) ----------- ----------- ---------- ---------- ---------- Total receivables 246,949 (53,479) 10,791 24,826 (28,167) ----------- ----------- ---------- ---------- ---------- Total assets 32,152,866 24,625,456 3,897,552 4,799,672 1,756,238 Liabilities: Due to broker for security transactions 14,269 Cash overdraft 4,931 ----------- ---------- Total liabilities 14,269 4,931 ----------- ----------- ---------- ---------- ---------- Net assets available for benefits $32,138,597 $24,625,456 $3,897,552 $4,799,672 $1,751,307 =========== =========== ========== ========== ==========
Viskase Stock Loan Fund Fund Total Assets: Investments: Cash $ 98,073 Short-term investments $ 1,591 869,582 Insurance company contracts 21,370,259 Common/collective trust 9,925,458 Registered investment companies 34,769,083 Company stock 273,156 273,156 Loans to participants $1,946,878 1,946,878 -------- ---------- ----------- Total investments 274,747 1,946,878 69,252,489 -------- ---------- ----------- Receivables: Participant contributions 1,046 104,600 Employer contributions 2,924 84,078 Investment income 26 16,238 Interfund receivable (payable) -------- ----------- Total receivables 3,996 204,916 -------- ---------- ----------- Total assets 278,743 1,946,878 69,457,405 Liabilities: Due to broker for security transactions 3,227 17,496 Cash overdraft 11,872 16,803 -------- --------- ----------- Total liabilities 3,227 11,872 34,299 -------- ---------- ----------- Net assets available for benefits $275,516 $1,935,006 $69,423,106 ======== ========== ===========
The accompanying notes are an integral part of the financial statements. 2 6 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION December 31, 1997
Fixed Equity Aggressive International Envirodyne Income Investment Balanced Equity Equity Stock Loan Fund Fund Fund Fund Fund Fund Fund Total Assets: Investments: Cash $ 120,629 $ (1,562) $ 9,571 $ 128,638 Short-term investments 578,382 $ 246,935 $ 18,249 71,868 $ 2,733 483 918,650 Insurance company contracts 23,049,054 23,049,054 Common/collective trust 9,956,830 9,956,830 Registered investment companies 24,377,471 4,336,099 4,023,675 2,015,998 34,753,243 Company stock 453,593 453,593 Loans to participants $2,609,646 2,609,646 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Total investments 33,704,895 24,624,406 4,354,348 4,093,981 2,018,731 463,647 2,609,646 71,869,654 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Receivables: Participant contributions 58,864 45,464 9,790 16,694 8,673 904 140,389 Employer contributions 22,905 14,717 3,151 5,941 2,785 (539) 48,960 Investment income 247 68 8 1,583 5 46 1,957 Interfund receivable (payable) 130,799 (67,856) 18,809 50,749 (82,088) (50,413) ----------- ----------- ---------- ---------- ---------- -------- ----------- Total receivables 212,815 (7,607) 31,758 74,967 (70,625) (50,002) 191,306 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Total assets 33,917,710 24,616,799 4,386,106 4,168,948 1,948,106 413,645 2,609,646 72,060,960 Liabilities: Due to broker for security transactions 120,000 120,000 Cash overdraft 33,613 33,613 ----------- ---------- ----------- Total liabilities 120,000 33,613 153,613 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- $33,797,710 $24,616,799 $4,386,106 $4,168,948 $1,948,106 $413,645 $2,576,033 $71,907,347 Net assets available for benefits =========== =========== ========== ========== ========== ======== ========== ===========
The accompanying notes are an integral part of the financial statements. 3 7 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION for the year ended December 31, 1998
Fixed Equity Aggressive International Viskase Income Investment Balanced Equity Equity Stock Loan Fund Fund Fund Fund Fund Fund Fund Total Additions: Investment Income: Net gain from interest in registered investment companies $ 708,005 $3,709,154 $ 443,537 $1,309,228 $ 276,013 $ 6,445,937 Net unrealized depreciation in the fair value of investments $(185,787) (185,787) Net increase in value of Plan's interest in insurance company contracts 1,253,126 1,253,126 Interest income 15,305 1,980 101 573 81 723 18,763 ----------- ----------- ---------- ---------- ---------- -------- ----------- 1,976,436 3,711,134 443,638 1,309,801 276,094 (185,064) 7,532,039 ----------- ----------- ---------- ---------- ---------- -------- ----------- Contributions: Participants 1,555,739 1,320,985 317,900 518,740 251,595 267,772 4,232,731 Employer 608,405 453,723 109,512 158,229 84,560 92,793 1,507,222 ----------- ----------- ---------- ---------- ---------- -------- ----------- 2,164,144 1,774,708 427,412 676,969 336,155 360,565 5,739,953 ----------- ----------- ---------- ---------- ---------- -------- ----------- Interfund transfers 1,073,182 (314,301) (360,066) 50,327 (221,548) (265,875) $ 38,281 Participant loan repayments 561,748 440,742 77,508 119,863 47,509 42,516 (1,289,886) ----------- ----------- ---------- ---------- ---------- -------- ---------- 1,634,930 126,441 (282,558) 170,190 (174,039) (223,359) (1,251,605) ----------- ----------- ---------- ---------- ---------- -------- ---------- Total additions 5,775,510 5,612,283 588,492 2,156,960 438,210 (47,858) (1,251,605) 13,271,992 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Deductions: Benefit payments 6,923,920 5,204,006 1,013,232 1,319,621 569,975 49,236 666,035 15,746,025 Administrative expenses 10,208 10,208 Loans to participants 500,495 399,620 63,814 206,615 65,034 41,035 (1,276,613) ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Total deductions 7,434,623 5,603,626 1,077,046 1,526,236 635,009 90,271 (610,578) 15,756,233 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Net increase (decrease) in net assets available for benefits (1,659,113) 8,657 (488,554) 630,724 (196,799) (138,129) (641,027) (2,484,241) Net assets available for benefits, beginning of year 33,797,710 24,616,799 4,386,106 4,168,948 1,948,106 413,645 2,576,033 71,907,347 ----------- ----------- ---------- ---------- ---------- -------- ---------- ----------- Net assets available for benefits, end of year $32,138,597 $24,625,456 $3,897,552 $4,799,672 $1,751,307 $275,516 $1,935,006 $69,423,106 =========== =========== ========== ========== ========== ======== ========== ===========
The accompanying notes are an integral part of the financial statements. 4 8 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION for the year ended December 31, 1997
Fixed Equity Aggressive International Income Investment Balanced Equity Equity Fund Fund Fund Fund Fund Additions: Investment Income: Net gain from interest in registered investment companies $ 774,550 $ 5,738,614 $ 726,796 $ 816,490 $ 138,892 Net unrealized appreciation in the fair value of investments Net increase in value of Plan's interest in insurance company contracts 1,324,285 Interest income 12,978 933 131 270 106 ----------- ----------- ---------- ---------- ---------- 2,111,813 5,739,547 726,927 816,760 138,998 ----------- ----------- ---------- ---------- ---------- Contributions: Participants 1,906,879 1,483,153 331,443 520,945 267,877 Employer 647,979 480,770 111,395 177,798 89,621 ----------- ----------- ---------- ---------- ---------- 2,554,858 1,963,923 442,838 698,743 357,498 ----------- ----------- ---------- ---------- ---------- Interfund transfers (1,305,287) 1,364,922 120,174 270,973 6,459 Participant loan repayments 589,415 419,835 108,224 146,648 78,703 ----------- ----------- ---------- ---------- ---------- (715,872) 1,784,757 228,398 417,621 85,162 ----------- ----------- ---------- ---------- ---------- Total additions 3,950,799 9,488,227 1,398,163 1,933,124 581,658 ----------- ----------- ---------- ---------- ---------- Deductions: Benefit payments 4,901,678 1,417,585 360,463 245,037 100,201 Loans to participants 923,420 329,084 60,401 113,193 37,035 ----------- ----------- ---------- ---------- ---------- Total deductions 5,825,098 1,746,669 420,864 358,230 137,236 ----------- ----------- ---------- ---------- ---------- Net increase (decrease) in net assets available for benefits (1,874,299) 7,741,558 977,299 1,574,894 444,422 Net assets available for benefits, beginning of year 35,672,009 16,875,241 3,408,807 2,594,054 1,503,684 ----------- ----------- ---------- ---------- ---------- Net assets available for benefits, end of year $33,797,710 $24,616,799 $4,386,106 $4,168,948 $1,948,106 =========== =========== ========== ========== ==========
Envirodyne Stock Loan Fund Fund Other Total Additions: Investment Income: Net gain from interest in registered investment companies $8,195,342 Net unrealized appreciation in the fair value of investments $ 33,395 33,395 Net increase in value of Plan's interest in insurance company contracts 1,324,285 Interest income 432 $ 184,526 199,376 -------- ---------- ----------- 33,827 184,526 9,752,398 -------- ---------- ----------- Contributions: Participants 257,298 4,767,595 Employer 90,209 1,597,772 -------- ----------- 347,507 6,365,367 -------- ----------- Interfund transfers (186,542) (146,802) $ (123,897) Participant loan repayments 50,592 (1,393,417) -------- ---------- ---------- (135,950) (1,540,219) (123,897) -------- ---------- ---------- ----------- Total additions 245,384 (1,355,693) (123,897) 16,117,765 -------- ---------- ---------- ----------- Deductions: Benefit payments 34,641 7,059,605 Loans to participants 6,878 (1,470,011) -------- ---------- ----------- Total deductions 41,519 (1,470,011) 7,059,605 -------- ---------- ----------- Net increase (decrease) in net assets available for benefits 203,865 114,318 (123,897) 9,058,160 Net assets available for benefits, beginning of year 209,780 2,461,715 123,897 62,849,187 -------- ---------- ---------- ----------- Net assets available for benefits, end of year $413,645 $2,576,033 $ $71,907,347 ======== ========== ========== ===========
The accompanying notes are an integral part of the financial statements. 5 9 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. DESCRIPTION OF THE PLAN The following description of The SAVE Program for Employees of Viskase Corporation (the "Plan") provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan established to provide deferred compensation benefits to eligible employees. Under the Plan, all of the employees of Viskase Corporation ("Employer") who have met the eligibility requirements may elect to participate in the Plan. Employees who are covered by a collective bargaining agreement will be eligible only if their participation is provided for in the agreement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). PARTICIPATION Regular full-time employees may become plan members ("Participants") upon employment. CONTRIBUTIONS Participating employees may authorize contributions to the Plan of one percent (1%) to six percent (6%) of their regular pay ("Eligible Earnings") as a Basic Deduction Contribution on a before-tax or after-tax basis. Participants who contribute the maximum six percent (6%) as a Basic Deduction Contribution may contribute up to an additional ten percent (10%) of Eligible Earnings as a Supplemental Deduction Contribution on a before-tax or after-tax basis. Employer contributions to the Plan are equal to fifty percent (50%) of the Participant's contributions up to six percent (6%) of regular pay. Participants' before-tax and after-tax contributions in excess of six percent (6%) of the Participant's compensation are not eligible to receive Employer matching contributions. The Internal Revenue Service limits the dollar amount a Participant can contribute to the Plan in any year on a before-tax basis. All contributions to the Plan are also subject to the nondiscrimination tests of the Internal Revenue Code that may also limit the contributions that may be made to the Plan. VESTING Participant contributions plus the earnings thereon are fully vested. Vesting in the Employer contributions and the earnings thereon is based upon the number of years of credited service. A Participant is fully vested after three years of credited service. If a Participant voluntarily terminates before completing three years of credited service, contributions made by the Employer and earnings thereon are forfeited. If a Participant attains age 65, or becomes permanently and totally disabled, dies, or is terminated by the Employer for reasons other than cause, the full value of the Employer contribution account is immediately vested. 6 10 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. DESCRIPTION OF THE PLAN, CONTINUED PAYMENT OF BENEFITS On termination of service, Participants with account balances in excess of $5,000 may elect to either receive a lump-sum amount or defer payment until the April 1 following the year the Participant reaches age 70-1/2. Participants who terminate employment with account balances less than or equal to $5,000 receive a lump-sum payment. Participants may choose to make a direct rollover into another qualified plan or into an Individual Retirement Account ("IRA"). Spouse beneficiaries may make a direct rollover into an IRA. Non-spouse beneficiaries may not make a direct rollover into an IRA. A Participant who receives a lump-sum payment may choose to receive a distribution of his shares invested in the Viskase Stock Fund in the form of whole shares of common stock with fractional shares paid in cash. Certain Participants may receive installment payments under the Plan. Payment to any Participant must be made no later than the April 1 following the year the Participant reaches age 70-1/2, even if he has not retired. PARTICIPANT LOANS Loans up to specified amounts are available to all Participants. Each loan must be evidenced by the Participant's collateral promissory note with interest at a rate commensurate with the interest rate charged by area banking institutions for loans made under similar circumstances. The period for loan repayment cannot exceed five years from the date of the loan, unless the loan is for the purchase of a principal residence, in which case, the repayment period cannot exceed ten years. WITHDRAWALS WHILE EMPLOYED The Plan permits Participants to make withdrawals while they are employed. The Plan sets out the limits and priority of any withdrawal. The Plan permits hardship withdrawals of before-tax contributions in accordance with Internal Revenue Code requirements. FORFEITURES Forfeitures of a terminated Participant are required to be held by the Plan pending the Participant's possible return to employment and reinstatement in the Plan. If reinstatement does not occur by the end of the year following the year during which the Participant terminated employment, such forfeitures are reallocated to Participants on a pro-rata basis. For the years ended December 31, 1998 and 1997, forfeitures amounted to $63,760 and $48,091, respectively. ALLOCATION OF INVESTMENT EARNINGS Investment earnings of an investment fund are allocated to individual Participant accounts based on the ratio of a Participant's month-end fund balance to the total fund balance at month-end. 7 11 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION NOTES TO FINANCIAL STATEMENTS, CONTINUED 1. DESCRIPTION OF THE PLAN, CONTINUED ADMINISTRATION EXPENSES Expenses of the Plan, other than brokerage commissions which are included in the cost of the investments, were paid by the Employer in 1998 and 1997. Although the Employer has elected to pay these expenses, it is not obligated to do so. If the Employer ceases to pay all or part of these expenses in the future, they will be paid by the Plan. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements are prepared on the accrual basis of accounting. INVESTMENTS The Plan reports investments, other than insurance company contracts, at fair value. Mutual funds and common stocks are stated at the quoted market price on the last business day of the year. Short-term investments are stated at cost which approximates market value. The insurance company contracts are stated at contract value (contributions, plus earnings less withdrawals) which approximates fair value. Crediting interest rates are constant for the life of the contract. The average yield for the years ended December 31, 1998 and 1997 and crediting interest rate at December 31, 1998 and 1997 for each of the insurance company contracts is summarized below.
1998 1997 Crediting Crediting Average Interest Average Interest Yield Rate Yield Rate Canada Life Insurance Company guaranteed investment contract, due 2/14/00 7.82% 7.82% 7.82% 7.82% Hartford Life Insurance Company guaranteed investment contract, due 2/9/98 7.50% 7.50% 7.50% 7.50% John Hancock Mutual Life Insurance Company guaranteed investment contract, due 5/15/01 6.82% 6.82% 6.82% 6.82% Metropolitan Life Insurance Company guaranteed investment contract, due 1/4/99 5.75% 5.75% 5.75% 5.75% Safeco Life Insurance Company guaranteed investment contract, due 1/6/02 6.72% 6.72% 6.72% 6.72%
8 12 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION NOTES TO FINANCIAL STATEMENTS, CONTINUED 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED All insurance company contracts are fully benefit responsive, with the exception of the Metropolitan Life Insurance Company contract for which only predetermined scheduled withdrawals were permitted. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded on an accrual basis. Investment transactions are reflected on a trade-date basis. Realized gains or losses on sales of securities are based on average cost. The Plan presents in the statements of changes in net assets the net appreciation (depreciation) in the fair value of its investments and the net gain from interest in registered investment companies which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES The Plan provides for various investment options in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect Participants' account balances and the amounts reported in the statements of net assets available for benefits. 3. INVESTMENT PROGRAM The Plan provides for investment election alternatives which allow Participants to invest their contributions in six different funds. Participants may change their investment election during any calendar month as provided by the plan agreement. The fund options are as follows: FIXED INCOME FUND - The assets of the Fixed Income Fund are invested in investment contracts from a variety of high quality issuers, primarily insurance carriers ranked "AA" or better by the national rating agencies. The objective of the fund is to provide stable returns and to preserve the principal investment. 9 13 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION NOTES TO FINANCIAL STATEMENTS, CONTINUED 3. INVESTMENT PROGRAM, CONTINUED EQUITY INVESTMENT FUND - The assets of the Equity Investment Fund are exclusively invested in the Vanguard Windsor II Mutual Fund that invests primarily in common stocks that are believed to be undervalued by the market at the time of purchase. The fund seeks to provide long-term growth of capital and income. BALANCED FUND - The assets of the Balanced Fund are exclusively invested in the American Balanced Fund that invests in a broadly diversified portfolio of securities, including common stocks, preferred stocks, corporate bonds or U.S. government securities and cash. The objective of the fund is to preserve capital and provide current income while seeking long-term growth of both capital and income. AGGRESSIVE EQUITY FUND - The assets of the Aggressive Equity Fund are exclusively invested in the Twentieth Century Ultra Mutual Fund that invests primarily in common stock of companies with accelerating earnings and revenues. The fund seeks to provide capital growth over time. INTERNATIONAL EQUITY FUND - The assets of the International Equity Fund are exclusively invested in the American Europacific Growth Fund that invests in stocks of companies based outside the United States. The objective of the fund is to achieve long-term capital appreciation through international diversification. VISKASE STOCK FUND (formerly Envirodyne Stock Fund) - The assets of the Viskase Stock Fund are exclusively invested in Viskase Companies, Inc. common stock. Only new contributions may be invested in this fund. No amount in another fund may be transferred to this fund. 4. INVESTMENTS Investments representing five percent (5%) or more of net assets available for benefits at December 31, 1998 and 1997 were as follows:
1998 1997 Metropolitan Life Insurance Company Guaranteed investment contract $14,484,151 $13,696,596 Bank of America GIC Fund Common/collective trust 9,925,458 9,956,830 Windsor II Portfolio Open End Fund Registered investment company 24,441,258 24,377,471 American Balanced Fund, Inc. Registered investment company 3,804,816 4,336,099 American Century Mutual Funds Registered investment company 4,749,656 4,023,675
10 14 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION NOTES TO FINANCIAL STATEMENTS, CONTINUED 5. FEDERAL INCOME TAX STATUS The Internal Revenue Service has determined and informed the Employer by a letter dated April 10, 1995, that the Plan, and related trust, as then designed, are in compliance with the applicable sections of the Internal Revenue Code (the "Code"). The Plan has subsequently been amended. However, the plan administrator believes the Plan is designed and operated in accordance with the applicable sections of the Code. 6. PLAN TERMINATION The Employer reserves the right to alter, amend or terminate the Plan. In the event of Plan termination, plan accounts will become fully vested and Participants will be entitled to a distribution. Presently, there is no intention on the part of the Employer to terminate the Plan. 7. RECONCILIATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the draft Form 5500 for the years ended December 31:
1998 1997 Net assets available for benefits per $69,423,106 $71,907,347 the financial statements Benefits payable to participants (1,650,633) (1,350,857) ------------ ------------ $67,772,473 $70,556,490 ============ ============
The following is a reconciliation of change in net assets per the financial statements to the draft Form 5500 for the years ended December 31:
1998 1997 Net increase (decrease) in net assets available for benefits per the financial statements $(2,484,241) $ 9,058,160 Increase (decrease) in benefits payable to participants (299,776) 64,650 Increase (decrease) in other unallocated items - 123,897 ------------ ------------ $(2,784,017) $ 9,246,707 ============ ============
11 15 SUPPLEMENTAL SCHEDULES 16 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 1998
(A) (B) (C) (D) (E) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, CURRENT/ IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CONTRACT LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE Cash Cash $ 98,073 $ 98,073 Collective Short Term Investment Fund Interest bearing cash 869,582 869,582 Insurance company general accounts: Fixed Income Fund: Canada Life Insurance Company Guaranteed investment contract Contract # 45862 7.82% due 2/14/00 2,135,594 2,135,594 John Hancock Mutual Life Insurance Company Guaranteed investment contract Contract # 8965 6.82% due 5/15/01 2,085,276 2,085,276 Metropolitan Life Insurance Company Guaranteed investment contract Contract # 8739-9 5.75%, due 1/4/99 14,484,151 14,484,151 Safeco Life Insurance Company Guaranteed investment contract Contract # 1056828 6.72% due 1/6/02 2,665,238 2,665,238 ----------- ----------- 21,370,259 21,370,259 Common/collective trusts: Fixed Income Fund: Bank of America GIC Fund Common/collective trust, 6.20% 8,378,591 9,925,458 Registered investment companies: Equity Fund Registered investment company 18,044,975 24,441,258 Balanced Fund Registered investment company 3,412,550 3,804,816 Aggressive Equity Fund Registered investment company 4,007,173 4,749,656 International Equity Fund Registered investment company 1,555,100 1,773,353 Loans to participants: * Loan Fund Participant loans, 8.00% - 8.75% 1,946,878 Company stock: * Viskase Stock Fund Company stock, 64,272 shares 377,945 273,156 ----------- ----------- Total investments $58,114,248 $69,252,489 =========== =========== * Represents party in interest.
12 17 THE SAVE PROGRAM FOR EMPLOYEES OF VISKASE CORPORATION ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS for the year ended December 31, 1998
(a) (b) (c) (d) (i) NUMBER NUMBER IDENTITY OF OF OF PURCHASE SELLING NET GAIN PARTY INVOLVED DESCRIPTION OF ASSET PURCHASES SALES PRICE PRICE OR (LOSS) Collective Short Term Investment Fund Interest bearing cash 372 217 $19,091,195 $18,957,683 Fixed Income Fund: Bank of America GIC Fund Common/collective trust 2 4 2,653,086 $ 985,000 $ 114,714 Equity Fund: Windsor II Portfolio Registered investment Open End Fund company 58 21 5,187,734 6,354,437 2,065,952
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