SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q
(Mark One)

/x/   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended October 2, 1999

/ /   TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from _______ to _______

                        Commission File Number 001-15019

                               WHITMAN CORPORATION
             (Exact name of registrant as specified in its charter)

          Delaware                                         13-6167838
-------------------------------                      ----------------------
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                      Identification Number)


3501 Algonquin Road, Rolling Meadows, Illinois                 60008
----------------------------------------------              ----------
   (Address of principal executive offices)                 (Zip Code)

        Registrant's telephone number, including area code (847) 818-5000


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                               YES   /x/     NO   / /

As of October 29,  1999,  the  Registrant  had  141,156,808  outstanding  shares
(excluding  treasury  shares) of common  stock,  par value $0.01 per share,  the
Registrant's only class of common stock.
<PAGE>
                               WHITMAN CORPORATION
                                    FORM 10-Q
                               THIRD QUARTER 1999

                                    CONTENTS

PART I     FINANCIAL INFORMATION
           Item 1.    Financial Statements
                         Condensed Consolidated Statements of Income
                         Condensed Consolidated Balance Sheets
                         Condensed Consolidated Statements of Cash Flows
                         Notes to Condensed Consolidated Financial Statements
           Item 2.    Management's Discussion and Analysis of Financial
                         Condition and Results of Operations
           Item 3.    Quantitative and Qualitative Disclosures About Market Risk

PART II    OTHER INFORMATION
           Item 5.    Other Information
           Item 6.    Exhibits and Reports on Form 8-K

SIGNATURE
<PAGE>
                              WHITMAN CORPORATION
                                   FORM 10-Q
                               THIRD QUARTER 1999
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                            Third Quarter                       Nine Months
                                                     ------------------------           ------------------------
                                                       1999            1998               1999            1998
                                                     --------        --------           --------        --------
                                                                 (in millions, except per share data)
<S>                                                  <C>             <C>                <C>             <C>
Sales                                                $  688.6        $  474.4           $1,574.1        $1,233.3
Cost of goods sold                                      392.0           283.9              909.8           732.5
                                                     --------        --------           --------        --------
   Gross profit                                         296.6           190.5              664.3           500.8
Selling, general and administrative expenses            213.8           112.1              480.7           326.0
Amortization expense                                      9.6             3.9               19.0            11.8
Special charges (Note 6)                                  4.5              --               27.9              --
                                                     --------        --------           --------        --------
   Operating income                                      68.7            74.5              136.7           163.0
Interest expense, net (Note 10)                         (19.4)           (9.1)             (44.9)          (26.9)
Other expense, net (Notes 3 and 7)                       (2.1)           (2.0)             (49.9)          (12.1)
                                                     --------        --------           --------        --------
   Income before income taxes                            47.2            63.4               41.9           124.0
Income taxes                                             22.8            29.6                6.9            56.8
                                                     --------        --------           --------        --------
   Income from continuing operations
     before minority interest                            24.4            33.8               35.0            67.2
Minority interest                                          --             7.6                6.6            16.5
                                                     --------        --------           --------        --------
Income from continuing operations                        24.4            26.2               28.4            50.7
Loss from discontinued operations after
   taxes (Note 5)                                          --              --              (27.2)           (0.5)
Extraordinary loss on early extinguishment of
   debt after taxes (Note 8)                               --              --                 --           (18.3)
                                                     --------        --------           --------        --------
Net income                                           $   24.4        $   26.2           $    1.2        $   31.9
                                                     ========        ========           ========        ========

Weighted average common shares:
   Basic                                                141.7           101.2              117.6           101.2
   Incremental effect of stock options                    0.9             1.5                1.1             1.7
                                                     --------        --------           --------        --------
   Diluted                                              142.6           102.7              118.7           102.9
                                                     ========        ========           ========        ========

Income (loss) per share - basic:
   Continuing operations                             $   0.17        $   0.26           $   0.24        $   0.50
   Discontinued operations                                 --              --              (0.23)             --
   Extraordinary loss on early extinguishment
     of debt                                               --              --                 --           (0.18)
                                                     --------        --------           --------        --------
   Net income                                        $   0.17        $   0.26           $   0.01        $   0.32
                                                     ========        ========           ========        ========

Income (loss) per share - diluted:
   Continuing operations                             $   0.17        $   0.26           $   0.24        $   0.49
   Discontinued operations                                 --              --              (0.23)             --
   Extraordinary loss on early extinguishment of debt      --              --                 --           (0.18)
                                                     --------        --------           --------        --------
   Net income                                        $   0.17        $   0.26           $   0.01        $   0.31
                                                     ========        ========           ========        ========

Cash dividends per share                             $   0.01        $   0.05           $   0.07        $   0.15
                                                     ========        ========           ========        ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.
<PAGE>
                              WHITMAN CORPORATION
                                   FORM 10-Q
                               THIRD QUARTER 1999
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                 October 2,         January 2,
                                                                                    1999               1999
                                                                                ------------       ------------
                                                                                           (in millions)
<S>                                                                             <C>                <C>

ASSETS:
Current assets:
     Cash and equivalents                                                       $      116.5       $      147.6
     Receivables                                                                       252.6              170.7
     Inventories                                                                       106.7               80.0
     Other current assets                                                               39.8               30.8
                                                                                ------------       ------------
         Total current assets                                                          515.6              429.1
Investments                                                                             60.7              160.0
Property (at cost)                                                                   1,375.9            1,006.5
Accumulated depreciation                                                              (533.6)            (507.2)
                                                                                ------------       ------------
     Net property                                                                      842.3              499.3
                                                                                ------------       ------------
Intangible assets                                                                    1,545.7              602.5
Accumulated amortization                                                              (157.6)            (155.5)
                                                                                ------------       ------------
     Net intangible assets                                                           1,388.1              447.0
                                                                                ------------       ------------
Other assets                                                                            39.3               33.9
                                                                                ------------       ------------
Total assets                                                                    $    2,846.0       $    1,569.3
                                                                                ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
     Short-term debt, including current maturities of long-term debt            $      331.9       $         --
     Accounts and dividends payable                                                    181.2              133.0
     Other current liabilities                                                         194.0              100.2
                                                                                ------------       ------------
         Total current liabilities                                                     707.1              233.2
                                                                                ------------       ------------
Long-term debt                                                                         803.0              603.6
Deferred income taxes                                                                   67.9               99.1
Other liabilities                                                                       77.9               73.3
Minority interest                                                                         --              233.7
Shareholders' equity:
     Preferred stock ($0.01 par value, 12.5 million shares authorized;
         no shares issued)                                                                --                 --
     Common stock ($0.01 par value, 350.0 million shares authorized;
         167.3 million shares issued at October 2, 1999 and 113.3 million
         shares issued at January 2, 1999)                                           1,633.8              499.8
     Retained income                                                                    88.1               94.3
     Accumulated other comprehensive loss:
         Cumulative translation adjustment                                             (18.8)             (12.0)
         Unrealized investment gain                                                      4.7                3.4
                                                                                ------------       ------------
         Accumulated other comprehensive loss                                          (14.1)              (8.6)
                                                                                ------------       ------------
     Treasury stock (26.1 million shares held at October 2, 1999
         and 12.3 million shares held at January 2, 1999)                             (517.7)            (259.1)
                                                                                ------------       ------------

Total shareholders' equity                                                           1,190.1              326.4
                                                                                ------------       ------------

Total liabilities and shareholders' equity                                      $    2,846.0       $    1,569.3
                                                                                ============       ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.
<PAGE>
                              WHITMAN CORPORATION
                                   FORM 10-Q
                               THIRD QUARTER 1999
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                               Nine Months
                                                                                     -----------------------------
                                                                                         1999              1998
                                                                                     -----------       -----------
                                                                                              (in millions)
<S>                                                                                  <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations                                                    $      28.4       $      50.7
Adjustments to reconcile to net cash provided by continuing operations:
     Depreciation and amortization                                                          88.7              57.7
     Deferred income taxes                                                                 (39.3)             18.2
     Gain on sale of franchises                                                             (8.0)               --
     Special charges (Notes 6 and 7)                                                        84.2                --
     Cash outlays related to special charges (Note 6)                                       (9.1)            (22.1)
     Other                                                                                   7.1              10.9
Changes in assets and liabilities, exclusive of acquisitions:
   Increase in receivables                                                                 (41.0)            (50.8)
   Decrease (increase) in inventories                                                        9.7              (5.6)
   Increase in payables                                                                     17.2              43.9
   Net change in other assets and liabilities                                              (19.4)              5.3
                                                                                     -----------       -----------
Net cash provided by continuing operations                                                 118.5             108.2
                                                                                     -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of franchises, net of cash divested (Note 3)                            113.6                --
Franchises acquired, net of cash acquired (Note 3)                                        (105.7)               --
Dividends from and settlement of intercompany indebtedness with
   Hussmann and Midas prior to spin-offs                                                      --             434.3
Capital investments, net of dispositions                                                  (126.5)           (103.4)
Net activity with joint ventures                                                             1.2               3.2
Purchases of investments                                                                      --             (12.6)
Proceeds from sales of investments                                                           7.0              14.7
                                                                                     -----------       -----------
   Net cash (used in) provided by investing activities                                    (110.4)            336.2
                                                                                     -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments of short-term debt                                                          (16.8)             (8.0)
Proceeds from issuance of long-term debt                                                   298.0                --
Repayment of long-term debt                                                                (33.9)           (311.2)
Common dividends                                                                            (7.4)            (15.2)
Treasury stock purchases                                                                  (261.1)            (37.7)
Issuance of common stock                                                                     2.5              20.0
                                                                                     -----------       -----------
   Net cash used in financing activities                                                   (18.7)           (352.1)
                                                                                     -----------       -----------

Net cash used in discontinued operations                                                   (19.6)            (10.6)
Effect of exchange rate changes on cash and equivalents                                     (0.9)               --
                                                                                     -----------       -----------
Change in cash and equivalents                                                             (31.1)             81.7
Cash and equivalents at beginning of year                                                  147.6              52.4
                                                                                     -----------       -----------
Cash and equivalents at end of nine months                                           $     116.5       $     134.1
                                                                                     ===========       ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.
<PAGE>
                              WHITMAN CORPORATION
                                   FORM 10-Q
                               THIRD QUARTER 1999
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    The condensed  consolidated financial statements included herein have been
      prepared,  without audit, by New Whitman (as defined below). The financial
      statements  include  the  results  of  operations  of the  former  Whitman
      Corporation  ("Old  Whitman"),  which was merged  with and into  Heartland
      Territories Holdings,  Inc.  ("Heartland") on May 20, 1999 (the "Merger"),
      following which Heartland  changed its name to Whitman  Corporation  ("New
      Whitman").  Unless the context  dictates  otherwise,  the use of the terms
      "Whitman" or "the Company"  herein shall include the results of operations
      of both Old Whitman and New  Whitman.  Certain  information  and  footnote
      disclosures   normally  included  in  financial   statements  prepared  in
      accordance  with  generally  accepted  accounting   principles  have  been
      condensed  or  omitted  pursuant  to  the  rules  and  regulations  of the
      Securities and Exchange Commission, although the Company believes that the
      disclosures  made are  adequate  to make  the  information  presented  not
      misleading.  It is suggested that these condensed  consolidated  financial
      statements be read in conjunction with the financial  statements and notes
      thereto  included in Old  Whitman's  Annual  Report on Form 10-K/A for the
      fiscal  year ended  January 2, 1999.  In the  opinion of  management,  the
      information furnished herein reflects all adjustments  (consisting only of
      normal,  recurring  adjustments) necessary for a fair statement of results
      for the interim  periods  presented.  Certain prior year amounts have been
      reclassified to conform to the current year presentation.

2.    Effective at the end of 1998,  Old Whitman  changed its fiscal year from a
      calendar  year  to a  year  consisting  of 52 or 53  weeks  ending  on the
      Saturday   closest  to  December  31.  The  Company's  third  quarter  and
      year-to-date  results were based on thirteen weeks and thirty-nine  weeks,
      respectively,  ended October 2, 1999. In the second  quarter of 1999,  the
      Company eliminated the two-month reporting lag in consolidating results of
      its existing international  territories,  resulting in additional sales of
      $11.6 million and operating losses of $0.6 million.

3.    On January 25, 1999, Old Whitman announced that its Board of Directors had
      approved a new business relationship with PepsiCo,  Inc. ("PepsiCo").  The
      new  relationship  was approved by Old Whitman's  shareholders  on May 20,
      1999. As part of the Contribution  and Merger Agreement (the  "Agreement")
      with PepsiCo and New Whitman,  on May 20, 1999 PepsiCo contributed certain
      assets of several  domestic  franchise  territories to New Whitman and Old
      Whitman  merged  into  New  Whitman.   Contributed   territories  included
      Cleveland, Ohio, Dayton, Ohio, Indianapolis,  Indiana, St. Louis, Missouri
      and southern Indiana. Pepsi-Cola General Bottlers, Inc. ("Pepsi General"),
      a wholly owned  subsidiary of Old Whitman prior to the Merger and a wholly
      owned subsidiary of the Company following the merger,  acquired  PepsiCo's
      international operations in Hungary, the Czech Republic,  Slovakia and the
      balance  of  Poland  on May 31,  1999.  In  exchange  for the  territories
      acquired/contributed  from  PepsiCo and the  elimination  of  PepsiCo's 20
      percent minority interest in Pepsi General,  New Whitman issued 54 million
      shares of common stock to PepsiCo.  In addition,  New Whitman paid PepsiCo
      cash totaling  $133.7  million,  assumed bank debt of $42.3  million,  and
      assumed $241.8 million of notes payable to PepsiCo,  which were refinanced
      on August 31, 1999 through the issuance of  commercial  paper.  As part of
      the Agreement,  the Company agreed to repurchase up to 16 million  shares,
      or $400  million  of its  common  stock,  whichever  is less,  during  the
      12-month period following the close of the transaction. Through October 2,
      1999,  the Company  repurchased  approximately  14.0 million shares of its
      common  stock  at a total  cost  of  $261.1  million,  which  reduced  New
      Whitman's remaining repurchase commitment.

      The Agreement provided for Pepsi General to sell to PepsiCo its operations
      in Marion, Virginia; Princeton, West Virginia; and the St. Petersburg area
      of Russia.  On March 19, 1999, Pepsi General completed the sale to PepsiCo
      of the franchises in Marion,  Virginia and Princeton,  West Virginia.  The
      sale of the franchise in Russia was completed on March 31, 1999.  Proceeds
      from these  sales were $117.8  million  and the Company  recorded a pretax
      gain of $11.4  million  ($8.0  million  after tax and minority  interest),
      which is reflected in other  expense,  net, on the Condensed  Consolidated
      Statements of Income. In accordance with the terms of the Agreement,  this
      gain is subject to  adjustment  pending a final  determination  of closing
      date working capital of the territories sold.

      Details of domestic and Central European territories acquired from PepsiCo
      in the second quarter of 1999 are as follows (in millions):

        Fair value of assets acquired, including
          intangible assets of $1,009.0 million                      $  1,410.7
        Liabilities assumed                                              (165.6)
                                                                     ----------
        Cost of acquisition                                             1,245.1
        Common stock issued to PepsiCo (54.0 million shares)           (1,134.0)
        Assumed notes payable to PepsiCo                                 (241.8)
        Elimination of PepsiCo's 20 percent minority
          interest in Pepsi General                                       243.2
        Cash and equivalents acquired                                      (6.8)
                                                                     ----------
        Net cash paid for acquired territories                       $    105.7
                                                                     ==========

      The  acquisitions of the domestic and Central  European  territories  have
      been accounted for under the purchase method; accordingly,  the results of
      operations of the acquired territories have been included in the Company's
      consolidated financial statements since the dates of acquisition.  The net
      cash paid for the  acquisitions  is subject to  adjustment  pending  final
      determination of the closing working capital of the territories  acquired.
      The  excess of the  aggregate  purchase  price  over the fair value of net
      assets acquired is being amortized on a straight-line basis over 40 years.
      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  intangible  assets.  The portion of the
      excess  purchase  price  allocated  to  property  is based on  preliminary
      appraisals.  The  allocation  is  subject  to  adjustment  when the  final
      appraisals  are  completed.   The  Company   anticipates  that  the  final
      appraisals will not differ significantly from the preliminary appraisals.

      The pro forma condensed consolidated results of operations presented below
      for the  third  quarter  and  nine  months  of 1999 and  1998  assume  the
      following:

      -    The  territories  described  above were  acquired  and divested as of
           January 1, 1998.

      -    The 16  million  share  repurchase  commitment  was  completed  as of
           January 1, 1998.

      -    The effective tax rate,  excluding  special charges and non-recurring
           items, was approximately 48 percent in 1998, consistent with the 1999
           effective rate.

      However,  the pro forma  information  excludes  sales of $11.6 million and
      operating losses of $0.6 million attributable to eliminating the two-month
      reporting  lag in  consolidating  results  of the  existing  international
      territories (unaudited and in millions, except per share data):
<TABLE>
<CAPTION>
                                                                   Third Quarter                   Nine Months
                                                              ---------------------          ---------------------
                                                                1999          1998             1999         1998
                                                              --------     --------          --------     --------
           <S>                                                <C>          <C>               <C>          <C>
           Sales                                              $  688.6     $  686.1          $1,834.4     $1,743.8
           Income from continuing operations                      24.4         32.9              17.2         57.6
           Net income (loss)                                      24.4         32.9             (10.0)        38.8
           Net income (loss) per common share-basic               0.17         0.24             (0.07)        0.28
           Net income (loss) per common share-diluted             0.17         0.23             (0.07)        0.28
</TABLE>

      The above pro forma  information  includes the effects of certain  special
      factors  impacting  comparability.  The  following  pro forma  information
      further adjusts for the effects of the following items:

      -    Eliminates  the impact of the $4.5 million of charges  ($2.2  million
           after  taxes  and  minority  interest) in the first  quarter  of 1999
           related to the settlement of insurance,  severance and legal matters;
           the impact of the special  charges of $27.9  million  ($19.0  million
           after taxes)  recorded in the second and third  quarters of 1999; and
           the  second   quarter   charge   recorded  for  the   write-down   of
           non-operating  real estate held by the Company in the amount of $56.3
           million ($35.9 million after taxes).

      -    Eliminates the gain on the sale of the divested  territories recorded
           in the first quarter of 1999.

      -    Eliminates  the  management  charges  allocated  by  PepsiCo  to  the
           acquired  territories.  Includes fees incurred by Whitman for support
           services related to the acquired domestic territories.

      -    Certain  1998  amounts  have been  reclassified  to  conform  to 1999
           presentation.

      -    Adjusts  for the  impact  of the  change  in the  domestic  reporting
           calendar on sales,  but does not  reflect the effect of the  calendar
           change on income from continuing operations or earnings per share.
<TABLE>
<CAPTION>
                                                                   Third Quarter                   Nine Months
                                                              ---------------------          ---------------------
                                                                1999          1998             1999         1998
                                                              --------     --------          --------     --------
           <S>                                                <C>          <C>               <C>          <C>
           Sales                                              $  688.6     $  685.4          $1,834.4     $1,798.9
           Income from continuing operations                      26.9         32.9              57.7         57.6
           Income from continuing operations
              per share - basic                                   0.19         0.24              0.41         0.41
           Income from continuing operations
              per share - diluted                                 0.19         0.23              0.41         0.41
</TABLE>

      The above pro forma results are for information  purposes only and may not
      be  indicative  of  actual  results  that  would  have  occurred  had  the
      transactions described taken place on January 1, 1998.

4.    On January 30, 1998, the Company established Hussmann International,  Inc.
      ("Hussmann")  and Midas,  Inc.  ("Midas")  as  independent  publicly  held
      companies   through   tax-free   distributions   (spin-offs)   to  Whitman
      shareholders.  Whitman  retained Pepsi General as its principal  operating
      company.  The financial  information of Hussmann and Midas is reflected as
      discontinued operations.

5.    Loss  from  discontinued  operations  in the  first  nine  months  of 1999
      includes  a  second  quarter  $12  million   settlement  of  environmental
      litigation filed against Pneumo Abex, a former  subsidiary of the Company,
      as well as a second  quarter  increase of $30.8  million in  accruals  for
      other  environmental  matters  related  to  Pneumo  Abex.  The  loss  from
      discontinued  operations  in 1998  includes the net losses of Hussmann and
      Midas through  January 30, 1998,  the date of the  spin-offs.  Losses from
      discontinued operations have been reduced by income taxes of $15.6 million
      for the first nine months of 1999 and  increased  by $0.1  million for the
      first nine months of 1998.

6.    In the third quarter of 1999,  Pepsi General  recorded a special charge of
      $4.5 million ($2.8 million after tax) for staff reduction costs in certain
      domestic markets.

      In the second quarter of 1999,  Pepsi General recorded a special charge of
      $23.4 million,  which included $18.6 million ($11.4 million after tax) for
      staff reduction costs and non-cash asset write-downs,  principally related
      to the  acquisition  of the domestic and  international  territories  from
      PepsiCo.  In addition,  the Company announced it will seek the sale of the
      Baltics  operations  to a third  party and  recorded a  write-down  of the
      Company's investment by $4.8 million to the expected net realizable value.

      In 1997,  the Company  recorded  special  charges  totaling $49.3 million,
      consisting  of $14.8 million  recorded by Pepsi  General to  consolidate a
      number of its domestic divisions, including reductions in staffing levels,
      and to  write-down  certain  assets  in  its  domestic  and  international
      operations,  and  $34.5  million  recorded  by  Whitman  relating  to  the
      severance of essentially all of the Whitman corporate management and staff
      and for  expenses  associated  with the  spin-offs.

      The  following  table   summarizes  the  remaining   accrued   liabilities
      associated  with the special  charges at January 2, 1999,  activity during
      the first nine months of 1999,  and the remaining  accrued  liabilities at
      October 2, 1999 (in millions):

      Accrued liabilities at January 2, 1999
         (all employee related costs)                                  $ 14.5

      Special charges:
         Asset write-downs associated with exit of
           plastic returnable bottle package in existing
           international territories                                      7.6
         Other asset write-downs                                          5.9
         Employee related costs                                           9.6
         Write-down of Baltics operations                                 4.8
                                                                       ------

              Total special charges                                      27.9
                                                                       ------
      Expenditures and asset write-downs:
         Asset write-downs                                              (18.3)
         Expenditures for employee related costs                         (9.1)
                                                                       ------
              Total expenditures and asset write-downs                  (27.4)
                                                                       ------
      Accrued liabilities at October 2, 1999
         (all employee related costs)                                  $ 15.0
                                                                       ======

      Employee  related costs of $4.5 million recorded in the third quarter 1999
      special  charges  include  severance  payments  for  management  and staff
      affected by changes in certain domestic markets. Employee related costs of
      $5.1 million  recorded in the second quarter 1999 special  charges include
      severance   payments  for  the   management  and  staff  affected  by  the
      consolidation of  international  headquarters and operations in Poland and
      management  changes in certain  domestic  markets.  Employee related costs
      recorded  in 1997  special  charges  include  severance  payments  for the
      management and staff affected by changes in the organizational  structure,
      as well as other headcount reduction  programs.  The 1997 charges affected
      approximately 125 positions at Pepsi General and essentially all employees
      at Whitman  Corporate,  of which 12 positions  are yet to be eliminated at
      October 2, 1999. The charges  recorded in the second and third quarters of
      1999 resulted in the elimination of approximately 310 positions,  of which
      approximately 49 positions are yet to be eliminated at October 2, 1999.

      The accrued  liabilities  remaining  at October 2, 1999 are  comprised  of
      deferred  severance  payments and certain employee  benefits.  The Company
      expects  to pay a  significant  portion of the $15.0  million of  employee
      related costs during the next twelve months; accordingly, such amounts are
      classified as other current liabilities.

7.    The Company entered into an agreement for the sale of property in downtown
      Chicago and recorded a charge of $56.3 million  ($35.9  million after tax)
      in the second  quarter  of 1999 to reduce the book value of the  property.
      This  charge  is  reflected  in  other  expense,   net  on  the  Condensed
      Consolidated  Statements  of  Income.  The close of the sale is subject to
      completion of due diligence and certain other conditions.

8.    In  January,  1998,  Whitman  made a tender  offer  for any and all of its
      outstanding  7.625% and 8.25% notes  maturing June 15, 2015,  and February
      15, 2007,  respectively.  In  connection  with the tender  offer,  Whitman
      repurchased 7.625% and 8.25% notes with principal amounts of $91.0 million
      and $88.5  million,  respectively.  The  Company  paid total  premiums  in
      connection  with  the  tender  offer of $26.4  million  and the  remaining
      unamortized  discount and issue costs  related to  repurchased  notes were
      $2.1 million. The Company also repaid a term loan and notes with principal
      amounts of $50.0 million  scheduled to mature in 1998 and 1999,  notes due
      in 2002 with  principal  amounts of $50.0 million and  industrial  revenue
      bonds of $5.0 million due 2013. Costs associated with these repayments and
      the remaining  unamortized  issue costs were not significant.  The Company
      recorded  an  extraordinary  charge of $18.3  million,  net of income  tax
      benefits of $10.4  million,  in the first quarter of 1998 related to these
      early extinguishments of debt.

9.    The Company's comprehensive income (loss) was as follows:
<TABLE>
<CAPTION>
                                                                   Third Quarter                   Nine Months
                                                              ---------------------          ---------------------
                                                                1999          1998             1999         1998
                                                              --------     --------          --------     --------
                                                                                  (in millions)
      <S>                                                     <C>          <C>               <C>          <C>
      Net income                                              $   24.4     $   26.2          $    1.2     $   31.9
      Foreign currency translation adjustment                     (1.4)        (0.2)             (6.8)         2.7
      Unrealized gains on securities                               1.2         (4.9)              1.3          0.6
                                                              --------     --------          --------     --------

      Comprehensive income (loss)                             $   24.2     $   21.1          $   (4.3)    $   35.2
                                                              ========     ========          ========     ========
</TABLE>

      Unrealized gains on securities are presented net of tax expense  (benefit)
      of  $0.8  million,   $(2.7)  million,   $0.9  million  and  $0.3  million,
      respectively.

      Prior to May 20, 1999, the Company  classified  PepsiCo's 20 percent share
      of Pepsi  General's  cumulative  translation  adjustment  within  minority
      interest. As a result of the elimination of PepsiCo's minority interest in
      Pepsi  General,  approximately  $3.7  million  of  cumulative  translation
      adjustment  has been  reclassified  from  minority  interest to cumulative
      translation  adjustment,  and therefore has been included in comprehensive
      loss for the first nine months of 1999.

10.   Interest expense, net, is comprised of the following:
<TABLE>
<CAPTION>
                                                                   Third Quarter                   Nine Months
                                                              ---------------------          ---------------------
                                                                1999         1998              1999         1998
                                                              --------     --------          --------     --------
                                                                                  (in millions)
      <S>                                                     <C>          <C>               <C>          <C>
      Interest expense                                        $   (20.0)   $   (11.6)        $  (47.6)    $  (35.1)
      Interest income from Hussmann and Midas                       --           --                --          1.6
      Interest income                                               0.6          2.5              2.7          6.6
                                                              ---------    ---------         --------     --------

      Interest expense, net                                   $   (19.4)   $    (9.1)        $  (44.9)    $  (26.9)
                                                              =========    =========         ========     ========
</TABLE>

      Interest income from Hussmann and Midas related to intercompany  loans and
      advances.  The related  interest expense recorded by Hussmann and Midas is
      included in loss from discontinued operations after taxes.

11.   Net cash  provided by operating  activities  reflected  cash  payments and
      receipts for interest and income taxes as follows:

                                                         Nine Months
                                                  ------------------------
                                                    1999            1998
                                                  --------        --------
                                                       (in millions)

      Interest paid                               $   48.0        $   48.0
      Interest received                                3.2             6.2
      Income taxes paid, net of refunds               33.1             4.0

      The  increase  in income  taxes paid in the first  nine  months of 1999 as
      compared to the comparable  period in 1998 was due primarily to the impact
      of the tax benefits  arising from the  extraordinary  loss recorded during
      the first quarter of 1998 (see Note 8).

12.   As a result of the Central European  territory  acquisitions,  the Company
      re-evaluated  certain previous tax positions  related to its international
      operations  and  eliminated  $19.8  million of  deferred  tax  liabilities
      recorded in prior  periods.  Beginning in the second  quarter of 1999, the
      Company no longer  defers the tax benefits on  international  losses.  The
      following  table  reconciles  the  income  tax  provision  for  continuing
      operations at the U.S.  federal  statutory  rate to the  Company's  actual
      income tax provision on continuing operations (dollars in millions):
<TABLE>
<CAPTION>
                                                                       Nine Months                    Nine Months
                                                                         1999                            1998
                                                                  ---------------------          ---------------------
                                                                   Amount          %              Amount          %
                                                                  --------     --------          --------     --------
      <S>                                                         <C>          <C>               <C>          <C>
      Income taxes computed at the U.S. federal statutory rate    $   40.1         35.0          $   43.4         35.0
      State income taxes, net of federal income tax benefit            5.0          4.4               6.0          4.8
      Non-U.S. losses                                                  0.6          0.5               4.5          3.6
      Non-deductible portion of amortization - intangibles             7.6          6.6               3.6          2.9
      Other items, net                                                 1.4          1.2              (0.7)        (0.5)
                                                                  --------     --------          --------     --------
      Income tax on continuing operations, excluding
        non-recurring items                                           54.7         47.7              56.8         45.8
                                                                               ========                       ========
      Tax benefit of special charges and elimination of
        deferred tax liabilities recorded in prior periods           (47.8)                            --
                                                                  --------                       --------
      Income tax expense on continuing operations                 $    6.9                       $   56.8
                                                                  ========                       ========
</TABLE>

13.   At October 2, 1999, the components of inventory  were  approximately:  raw
      materials and supplies - 43 percent; finished goods - 57 percent.

14.   The Company continues to be subject to certain indemnification obligations
      under   agreements  with  previously  sold   subsidiaries   for  potential
      environmental  liabilities.  There is significant uncertainty in assessing
      the  Company's  share of the  potential  liability  for such  claims.  The
      assessment and  determination for cleanup at the various sites involved is
      inherently difficult to estimate, and the Company's share of related costs
      is subject to various factors, including possible insurance recoveries and
      the allocation of liabilities among many other potentially responsible and
      financially viable parties.

      At October 2, 1999,  the  Company had  accruals of $36.2  million to cover
      these potential liabilities, including $12.0 million classified as current
      liabilities.  Such amounts are  determined  using  estimated  undiscounted
      future cash  requirements,  and have not been reduced by potential  future
      insurance recoveries. These estimated liabilities include expenses for the
      remediation of identified sites,  payments to third parties for claims and
      expenses,  and the expenses of on-going  evaluation  and  litigation.  The
      estimates are based upon current  technology and  remediation  techniques,
      and do not take  into  consideration  any  inflationary  trends  upon such
      claims  or  expenses,  nor  do  they  reflect  the  possible  benefits  of
      continuing  improvements in remediation  methods. The accruals also do not
      provide for any claims for  environmental  liabilities or other  potential
      issues which may be filed against the Company in the future.

      The Company also has other  contingent  liabilities  from various  pending
      claims and  litigation on a number of matters,  including  indemnification
      claims under  agreements  with previously  sold  subsidiaries  for product
      liability and toxic torts.  The ultimate  liability  for these claims,  if
      any,  cannot be determined.  In the opinion of management,  and based upon
      information  currently available,  the ultimate resolution of these claims
      and  litigation,   including  potential   environmental   exposures,   and
      considering  amounts already  accrued,  will not have a material effect on
      the Company's financial condition or the results of operations. Additional
      claims and liabilities may develop and may result in additional charges to
      income,    principally   through   discontinued    operations.    Existing
      environmental   liabilities   associated  with  the  Company's  continuing
      operations are not material.

15.   During the first nine months of 1999,  the Company  entered  into  several
      derivative  financial  instruments  to reduce the  Company's  exposure  to
      adverse  fluctuations  in  interest  rates  and  commodity  prices.  These
      financial  instruments  were   "over-the-counter"   instruments  and  were
      designated  at their  inception  as hedges of  underlying  exposures.  The
      Company does not enter into derivative  financial  instruments for trading
      purposes.

      During the first nine months of 1999,  the Company  entered  into  several
      swap  contracts  to hedge future  fluctuations  in aluminum  prices.  Each
      contract hedges price  fluctuations on a portion of the Company's domestic
      aluminum  can  requirements  over a  specified  future  six-month  period,
      including  requirements  extending into the year 2000. Because of the high
      correlation  between  aluminum  commodity prices and the Company's cost of
      aluminum cans, the Company considers these hedges to be highly effective.

16.   Basic  earnings  per share are based upon the  weighted-average  number of
      common shares outstanding.  Diluted earnings per share assume the exercise
      of all  options  which  are  dilutive,  whether  exercisable  or not.  The
      dilutive  effects of stock options are measured  under the treasury  stock
      method.

      Options  to   purchase   2,651,000   shares  and   276,000   shares  at  a
      weighted-average price of $22.27 and $19.90 per share, respectively,  that
      were outstanding at October 2, 1999 and September 30, 1998,  respectively,
      were not included in the  computation  of diluted EPS because the exercise
      price was  greater  than the  average  market  price of the common  shares
      during the related period.
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

                              RESULTS OF OPERATIONS
               1999 THIRD QUARTER COMPARED WITH 1998 THIRD QUARTER

      Due to the 1999  transaction with PepsiCo that resulted in the divestiture
of  certain  of  the  Company's  operations,  as  well  as  the  acquisition  of
significant  domestic and Central  European  territories  from PepsiCo,  as more
fully described in Note 3 to the Condensed  Consolidated  Financial  Statements,
the Company  believes that  comparable  results  provide a better  indication of
current operating trends than reported results.

      Comparable  operating results exclude results of territories  divested and
include results of territories  acquired as if such transactions  occurred as of
the beginning of 1998. With respect to the following discussion of sales volumes
and sales dollars only, adjustment has been made for the change in the Company's
reporting  calendar;  no such adjustment for this reporting  calendar change has
been made to the comparable amounts presented for operating income. In addition,
comparable  operating  results  exclude  the $4.5  million  of  special  charges
incurred  in the third  quarter of 1999;  the $23.4  million of special  charges
incurred in the second quarter of 1999; the $4.5 million of charges  incurred in
the first quarter of 1999 related to the settlement of insurance,  severance and
legal  matters;  and the impact of  eliminating  the two-month  reporting lag in
consolidating international results.

      Sales  for the third  quarter  of 1999 and 1998 are  summarized  below (in
millions):
<TABLE>
<CAPTION>
                                   Reported                                        Comparable
                           -----------------------            %            ------------------------           %
                             1999            1998          Change             1999           1998          Change
                           --------       --------         ------          ---------      ---------        ------
      <S>                  <C>            <C>              <C>             <C>            <C>                <C>

      Domestic             $  611.4       $  442.6          38.1           $   611.4      $   610.8          0.1
      International            77.2           31.8         142.8                77.2           74.6          3.5
                           --------       --------                         ---------      ---------

      Total Sales          $  688.6       $  474.4          45.2           $   688.6      $   685.4          0.5
                           ========       ========                         =========      =========
</TABLE>

      On a reported  basis,  domestic sales increased  $168.8  million,  or 38.1
percent,  in the  third  quarter  of 1999  compared  to 1998,  reflecting  sales
contributed  by the  acquired  territories  and  improved  pricing.  These  were
partially  offset by lower volumes in existing  territories,  as a result of the
divestiture of the franchises in Marion,  Virginia and Princeton,  West Virginia
and the timing of recording Fourth of July holiday sales. Fourth of July holiday
sales in existing  Whitman  markets were  recorded in the third quarter of 1998,
whereas such volume was recorded in the second quarter of 1999.

      On a comparable  basis,  domestic  sales were  essentially  flat,  with an
increase in average net selling  price per 8-ounce case of 3.3 percent and a 3.2
percent  decrease in 8-ounce  equivalent  case  volume.  Despite  lower  overall
volumes,  the vending and mass  merchandising  channels showed strong growth, as
did the water brands  Aquafina  and Avalon.  Also  providing  growth were the Dr
Pepper and Mountain Dew brands. Growth of 20-ounce non-returnable ("NR") package
sales  continued,  aided by the increased  investment in the cold drink channel,
which  includes  increasing  points  of access  through  investment  in  vending
equipment and coolers.

      Reported   international  sales  increased   significantly  due  to  sales
contributed by the newly acquired Central European territories.  On a comparable
basis, sales increased by $2.6 million, or 3.5 percent,  due, in part, to higher
sales in Poland,  driven by a mix shift to more  polyethylene  ("PET")  packing,
partially offset by year-over-year  currency  depreciation.  Increased  contract
sales in the Czech  Republic  also  contributed  to the  increase in  comparable
sales.

      The consolidated gross profit margin on a reported basis increased to 43.1
percent of sales in the third  quarter of 1999,  compared  with 40.2  percent of
sales in the  comparable  period  of 1998.  This  increase  was due to  improved
domestic margins and improved  international  margins in Poland,  as well as the
absence in the third quarter of 1999 of lower margin sales  associated  with the
previously sold Russian  operations.  The reported domestic margin increased 1.7
percentage  points,  reflecting  higher net selling prices and reduced packaging
costs,  partially  offset by the lower  margin  channel  and  package mix of the
acquired domestic territories.

      Reported selling, general and administrative ("SG&A") expenses represented
31.0 percent of sales in the third  quarter of 1999,  compared with 23.6 percent
in the comparable  period of 1998.  This increase is due, in part, to the higher
cost structure in the acquired  territories;  higher  depreciation  expense as a
result of increases in capital  spending;  higher  field  operating  expenses to
support the Company's cold drink  initiative,  which was not fully staffed until
the latter part of the third quarter of 1998, and higher  advertising  and media
expenses.   In  addition,   incremental   expense   associated  with  Year  2000
remediation,  together with the  integrated  enterprise-wide  resource  planning
("ERP")  system  implementation,  in the  third  quarter  of  1999  amounted  to
approximately   $0.9  million.   Amortization   expense  increased  due  to  the
transaction with PepsiCo.

      In the third quarter of 1999,  Pepsi General  recorded a special charge of
$4.5  million  ($2.8  million  after tax) for staff  reduction  costs in certain
domestic  markets.  As a result of the  actions  taken  leading  to the  special
charge,  the Company  expects to realize  approximately  $9-10 million in annual
pretax savings,  resulting principally from reduced employee related costs. Such
annual savings will not be fully realized until the year 2000.

      Operating  income  for the third  quarter  of 1999 and 1998 is  summarized
below (in millions):
<TABLE>
<CAPTION>
                                   Reported                                       Comparable
                           -----------------------            %            ------------------------           %
                             1999           1998           Change            1999           1998           Change
                           --------       --------         ------          --------       --------         ------
      <S>                  <C>            <C>               <C>            <C>            <C>               <C>
      Domestic             $   72.9       $   74.7          -2.4           $   77.4       $   89.2          -13.2
      International            (4.2)          (0.2)          N/M               (4.2)          (3.3)         -27.3
                           --------       --------                         --------       --------
      Total Operating
        Income             $   68.7       $   74.5          -7.8           $   73.2       $   85.9          -14.8
                           ========       ========                         ========       ========
</TABLE>

      In the third quarter of 1999, reported domestic operating income decreased
$1.8 million, or 2.4 percent.  Included in third quarter 1999 domestic operating
income are $4.5 million of special  charges,  resulting from the  elimination of
approximately  200  positions  in certain  domestic  markets  (see Note 6 to the
Condensed Consolidated Financial Statements).  Excluding these charges, reported
operating income increased $2.7 million, or 3.6 percent, to $77.4 million in the
third quarter of 1999,  reflecting  higher operating  income  contributed by the
acquired territories,  partially offset by the impact of the timing of Fourth of
July holiday sales in existing  Whitman  markets and higher SG&A expenses.  As a
result of the  change in the  Company's  reporting  calendar,  such  sales  were
reported in the second quarter of 1999 and the third quarter of 1998.

      On a comparable basis,  domestic operating income decreased $11.8 million,
or 13.2 percent,  principally due to the timing of Fourth of July holiday sales.
The domestic  operating  margin for the third  quarter of 1999, at 12.7 percent,
was 1.9 percentage points lower than a year ago, reflecting,  in part, increased
depreciation and field operating  expenses to support the cold drink initiative,
incremental  Year  2000  remediation  expenses  together  with  the  ERP  system
implementation, and higher advertising and media expense.

      Reported  international  operating  losses  increased $4.0 million to $4.2
million in the third quarter of 1999. This increase was principally attributable
to operating losses of the acquired international  territories.  On a comparable
basis,  international  operating losses increased by $0.9 million from the third
quarter of 1998,  primarily due to approximately  $2.0 million of higher duties,
which are not expected to continue.

      Net  interest  expense  increased  $10.3  million  to $19.4  million.  The
increase was due principally to an increase in average quarterly outstanding net
debt due to the acquisitions of domestic and Central  European  territories from
PepsiCo and related share repurchases.

      Other expense, net, increased to $2.1 million in the third quarter of 1999
compared  with $2.0  million in the third  quarter of 1998,  principally  due to
higher foreign currency translation losses,  partially offset by the termination
of the  management  fee  paid to  PepsiCo  and  reduced  real  estate  taxes  on
non-operating land.

                              RESULTS OF OPERATIONS
                 1999 NINE MONTHS COMPARED WITH 1998 NINE MONTHS

      See "Results of Operations - 1999 Third  Quarter  Compared with 1998 Third
Quarter"  for  discussion  of the basis  used below for  determining  comparable
results of operations.

      Sales for the first nine  months of 1999 and first nine months of 1998 are
summarized below (in millions):
<TABLE>
<CAPTION>
                                   Reported                                        Comparable
                           ------------------------           %            ------------------------           %
                             1999            1998          Change             1999           1998          Change
                           ---------      ---------        ------          ---------      ---------        ------
      <S>                  <C>            <C>               <C>            <C>            <C>               <C>

      Domestic             $1,440.1       $ 1,165.9         23.5           $ 1,645.7      $ 1,606.3          2.5
      International           134.0            67.4         98.8               188.7          192.6         -2.0
                           --------       ---------                        ---------      ---------

      Total Sales          $1,574.1       $ 1,233.3         27.6           $ 1,834.4      $ 1,798.9          2.0
                           ========       =========                        =========      =========
</TABLE>

      Reported domestic sales increased $274.2 million,  or 23.5 percent, in the
first nine  months of 1999  compared  with the same  period of 1998,  reflecting
sales  contributed by the acquired  territories and improved  pricing.  Reported
volume  including  foodservice,  in 8-ounce  equivalent  cases,  increased  21.0
percent, primarily reflecting volume contributed by the acquired territories.

      On a comparable  basis,  domestic sales  increased  $39.4 million,  or 2.5
percent,  reflecting a 0.5 percent  increase in 8-ounce  equivalent case volume,
      including foodservice, and the balance from improved pricing.

      Reported  international  sales increased  significantly  in the first nine
months of 1999,  principally  due to sales  contributed  by the  newly  acquired
Central European  territories.  On a comparable  basis,  sales decreased by $3.9
million  to $188.7  million,  primarily  reflecting  lower  sales in Poland  and
Slovakia,  as  increases  in local  currency  net selling  prices were offset by
year-over-year currency depreciation.

      The  consolidated  gross profit margin on a reported basis  increased from
40.6 percent of sales to 42.2 percent of sales, due to improved domestic pricing
combined  with  decreased  packaging  costs,  and higher  international  margins
primarily attributable to improvements in Poland and the Baltics.

      Reported SG&A expenses,  excluding  first quarter 1999 charges  related to
the  settlement of  insurance,  severance and legal  matters,  represented  30.3
percent of sales in the first nine months of 1999, compared with 26.4 percent in
the comparable period of 1998. This increase is due, in part, to the higher cost
structure in the acquired territories,  as well as higher depreciation and other
field operating  expenses to support the Company's cold drink initiative,  which
was not fully  staffed  until the latter part of the third quarter of 1998,  and
higher  advertising  and media  expenses.  In  addition,  incremental  Year 2000
expenses,  together with the ERP system  implementation in the first nine months
of 1999, amounted to approximately $2.4 million.  Amortization expense increased
due to the transaction with PepsiCo.

      See "Results of Operations - 1999 Third  Quarter  Compared with 1998 Third
Quarter" for  discussion  of special  charges  incurred in the third  quarter of
1999.

      In the second quarter of 1999,  Pepsi General recorded a special charge of
$23.4 million,  which included $18.6 million ($11.4 million after tax) for staff
reduction  costs and  non-cash  asset  write-downs,  principally  related to the
acquisition  of the domestic and  international  territories  from  PepsiCo.  In
addition,  the Company announced it will seek the sale of the Baltics operations
to a third party and wrote down its  investment  by $4.8 million to the expected
net realizable value.

      As a result of the actions taken resulting in the special charges of $27.9
million, the  Company expects to realize  approximately $18-20 million in annual
pretax savings, resulting principally from reductions in employee related costs.
Such savings will not be fully  realized until the Year 2000. In fiscal 1998 and
the first nine months of 1999,  the  Baltics had sales of $5.4  million and $5.3
million,  respectively,  and incurred  operating losses of $3.5 million and $1.1
million, respectively.

      Operating  income for the first nine  months of 1999 and first nine months
of 1998 is summarized below (in millions):
<TABLE>
<CAPTION>
                                   Reported                                       Comparable
                           ------------------------           %            ------------------------          %
                             1999            1998          Change             1999           1998          Change
                           ---------      ---------        ------          ---------      ---------        ------
      <S>                  <C>            <C>               <C>            <C>            <C>               <C>

      Domestic             $   173.0      $   174.0         -0.6           $   189.9      $   194.8         -2.5
      International            (36.3)         (11.0)         N/M               (25.8)         (31.0)        16.8
                           ---------      ---------                        ---------      ---------
      Total Operating
        Income             $   136.7      $   163.0        -16.1           $   164.1      $   163.8          0.2
                           =========      =========                        =========      =========
</TABLE>

      Reported  1999 domestic  operating  income was $173.0  million;  excluding
one-time  charges it was $184.8 million.  Excluding  one-time  charges,  the 6.2
percent  increase  reflects   operating  income   contributed  by  the  acquired
territories,   partially   offset  by  reduced   operating  income  in  existing
territories  due to higher costs  incurred to support the  Company's  cold drink
initiative,  incremental Year 2000 remediation  expenses,  together with the ERP
system  implementation,  higher  advertising  and media expenses, and  increased
amortization expense of $7.2 million.

      On a comparable basis,  domestic  operating income decreased $4.9 million,
or 2.5 percent,  in the first nine months of 1999. The domestic operating margin
for the first nine months of 1999, at 11.5 percent,  was 1.1  percentage  points
lower than the comparable period of 1998,  reflecting increased costs to support
the cold drink  initiative,  incremental  Year 2000  remediation  and ERP system
implementation expenses, and higher advertising and media expenses.

      Included  in  international  losses for the first nine  months of 1999 are
$20.6  million of special  charges  recorded in the second  quarter of 1999 (see
Note 6 to the Condensed  Consolidated  Financial  Statements).  Excluding  these
charges,  reported  operating  losses increased $4.7 million to $15.7 million in
the first nine months of 1999.  This increase is due primarily to the additional
operating  losses from the newly acquired  territories.  On a comparable  basis,
operating  losses for the first nine months of 1999  decreased  by $5.2  million
from the first nine months of 1998, due to improvements across most territories.

      Net  interest  expense  increased  $18.0  million to $44.9  million.  This
increase was due principally to an increase in average  outstanding net debt due
to the  acquisitions  of domestic and Central  European  territories  and to the
related share repurchases,  as well as the loss of interest income received from
Midas and Hussmann in the first quarter of 1998.

      Other  expense,  net,  of $49.9  million in the first nine  months of 1999
includes the $56.3 million write-down of non-operating real estate and the $11.4
million pre-tax gain related to the sale of the Company's  operations in Marion,
Princeton,  and  Russia.  Absent  these  items,  non-operating  expense was $5.0
million in the first nine months of 1999,  compared to 12.1 million in the first
nine months of 1998.  This decrease is due, in part, to the  termination  of the
management  fee paid to PepsiCo and reduced real estate  taxes on  non-operating
land, partially offset by increased foreign currency translation losses.

                         LIQUIDITY AND CAPITAL RESOURCES

      Net cash provided by continuing  operations  increased by $10.3 million to
$118.5 million in the first nine months of 1999.  This increase is due primarily
to higher operating cash flow, partially offset by increased income tax payments
in 1999; claims payments made by the Company's insurance  subsidiary,  including
claims for coverage  associated with  previously  discontinued  operations;  and
higher payments of various liabilities.

      Investing  activities  in the first nine  months of 1999  included  $113.6
million of net  proceeds  received  from the sale of the Marion,  Princeton  and
Russia  franchise  territories,  as well as $105.7  million of net cash paid for
certain  assets of the domestic  franchises  and for the purchase of the Central
European  franchises  acquired from PepsiCo.  Investing  activities in the first
nine months of 1998 included  $434.3  million  received in January,  1998,  from
Hussmann and Midas prior to their spin-offs to settle intercompany  indebtedness
and to pay special  dividends.  The Company made capital  investments  of $126.5
million, net of proceeds from dispositions,  in its operations in the first nine
months of 1999  compared  with $103.4  million in the first nine months of 1998.
The increased  spending was  principally  attributable to investment in the cold
drink  initiative,  spending by the newly  acquired  territories,  and increased
spending on fleet  vehicles.  Cash received,  net of investments  made, from the
Company's  joint  venture in Poland was $1.2 million in the first nine months of
1999 compared to $3.2 million in the first nine months of 1998.

      Purchases  and  sales of  investments  includes  activity  related  to the
Company's insurance  subsidiary,  which provides certain levels of insurance for
Pepsi General,  as well as Hussmann and Midas up to the date of their spin-offs.
Funds are invested by the  insurance  subsidiary  and proceeds  from the sale of
investments  are  used by the  insurance  subsidiary  to pay  claims  and  other
expenses.  A  substantial  portion of such  investments  are  reinvested as they
mature.  Also included in the sales of investments are miscellaneous  land sales
associated with the Company's non-operating real estate subsidiaries.

      The Company's total debt increased  $531.3 million to $1,134.9  million at
October 2, 1999,  from  $603.6  million at  January 2, 1999.  This  increase  is
primarily  attributable  to the  April,  1999  issuance  of $150  million of 6.0
percent  notes due in 2004 and $150 million of 6.375  percent notes due in 2009,
as well as commercial  paper issued to fund the August 31, 1999 repayment of the
$241.8   million  of  notes   payable  to  PepsiCo.   The  Company   repurchased
approximately 14.0 million shares and 2.0 million shares of its common stock for
$261.1  million  and $37.7  million in the first  nine  months of 1999 and 1998,
respectively.  The  Company  paid  dividends  of $7.4  million in the first nine
months of 1999, based on quarterly cash dividend rates of $0.05, $0.01 and $0.01
per common share in the first, second and third quarters of 1999,  respectively,
compared  with  $15.2  million  in the first  nine  months  of 1998,  based on a
quarterly  cash dividend rate of $0.05 per common share.  The issuance of common
stock,  including treasury shares, for the exercise of stock options resulted in
cash  inflows of $2.5  million in the first nine months of 1999,  compared  with
$20.0 million in the first nine months of 1998.

      The  Company has a  five-year  revolving  credit  agreement  with  maximum
borrowings of $500 million.  In April 1999, the Company increased its commercial
paper program to $500 million.  The revolving  credit facility acts as a back-up
for the commercial paper program;  accordingly,  the Company has a total of $500
million  available  under the  commercial  paper  program and  revolving  credit
facility  combined.  Total  commercial  paper  borrowings were $248.5 million at
October 2, 1999.  The Company  believes  that with its existing  operating  cash
flows,  available  lines of credit,  and the potential for  additional  debt and
equity offerings,  the Company will have sufficient resources to fund its future
growth and expansion, including potential domestic franchise acquisitions.

                               YEAR 2000 READINESS

     The Year 2000 ("Y2K") issue relates to computer applications being designed
using only two digits,  rather  than four,  to  represent  a year.  As a result,
computer applications could fail or create erroneous results by recognizing "00"
as the year 1900 rather than the year 2000. The Company  considers Y2K readiness
as the ability to manage and process date-related information without materially
abnormal or incorrect outcomes beyond January 1, 2000.

     Beginning in 1997, the Company  initiated a company-wide  effort to address
the Y2K issues that affect its operations and to minimize service interruptions.
This  effort  consists  of five  phases:  (1)  inventory,  (2)  assessment,  (3)
remediation,  (4) testing and (5) developing  contingency plans. The contingency
plans include addressing issues associated with any non-compliant  suppliers and
key customers in order to minimize the potential material adverse effects of any
Y2K problems.  During 1998, the Company designated one of its senior managers as
its Vice President - Y2K Planning and  Compliance.  This position is responsible
for  coordinating  all  facets  of  the  Company's  Y2K  initiative,   including
coordinating   efforts  and  responsibilities   between  corporate   Information
Technology  ("IT")  and  non-IT  personnel  and  local  division  management  to
identify,  evaluate and implement  changes to  centralized  and  non-centralized
computer systems, applications and equipment necessary to achieve Y2K readiness.
Local management has identified and evaluated major areas of potential  business
impact,  including critical suppliers and customers, to enable proper monitoring
of Y2K conversion efforts on a centralized basis.

     In the first quarter of 1998,  the Company began  implementation  of an ERP
system. The ERP system addressed the Company's financial applications during the
first phase of  implementation  and will address  manufacturing and distribution
systems  during the second  phase.  The ERP  project  was begun with the goal of
expanding  existing system  capacity for future growth and improving  processing
efficiencies,  as well as addressing any Y2K compliance  issues  associated with
the Company's  existing systems.  The first phase of the ERP  implementation was
implemented  during January,  1999, except for the asset management and accounts
receivable modules. The asset management module was implemented during the first
quarter of 1999.  The accounts  receivable  module was  implemented  in October,
1999.  Phase two of the ERP project is expected to be completed during late 1999
and first half of the Year 2000.  The stages of the second  phase  targeted  for
completion  in the  Year  2000 do not  involve  any Y2K  compliance  issues.  In
conjunction  with the  implementation  of the ERP system,  certain  hardware and
software  components have been or will be upgraded to expand existing  capacity.
Through the first nine months of 1999, costs incurred in the ERP  implementation
totaled  approximately  $17.2 million.  Implementation  costs for the entire ERP
project  currently  are expected to be $25 million to $30  million.  These costs
have been, and will be, funded  through  operating cash flows. A majority of the
costs,  as they relate to purchased  hardware,  software and the  implementation
thereof, will be capitalized.

     The Company has  conducted an inventory of its IT systems and has corrected
substantially  all of  those  critical-path  systems  that  were  found  to have
date-related  deficiencies,  excluding the financial  systems addressed by phase
one of the ERP  implementation.  In the case of non-IT systems (i.e.,  including
embedded chip technology), the Company conducted an inventory of its facilities,
which  was  completed,  for the most  part,  by the end of 1998.  Correction  of
date-deficient  systems and equipment  was virtually  complete by the end of the
second quarter of 1999.  The Company is also  surveying  selected third parties,
including  its  principal  suppliers  and  customers,  as well  as  governmental
entities, to determine the status of their Y2K compliance programs.

     The  inventory,  assessment and  remediation  phases of the Y2K project are
complete. As part of the Company's testing phase, it is conducting  verification
testing  of  selected   mainframe/network   component   upgrades  received  from
suppliers. In addition, selected critical components are undergoing testing in a
controlled   environment   that   replicates   the   current   mainframe/network
configuration  to simulate  the turn of the century and leap year dates.  In the
event these efforts do not address all potential systems  problems,  the Company
is continuing the process of developing contingency plans to ensure that it will
be able to operate the critical  areas of its  business.  This process  includes
developing alternative plans to engage in business activities with customers and
suppliers should they or the Company not be Y2K compliant,  including  resorting
to paper  records  of certain  transactions  presently  handled  electronically.
Contingency  plans  for  both   international   and  domestic   operations  were
substantially   finalized   in  the  third   quarter  of  1999.   The   ultimate
implementation of contingency plans, if necessary,  would be expected during the
fourth quarter of 1999.

     The  Company  is  continuing  its effort to address  Y2K  readiness  at its
operations  which were sold to PepsiCo in the first  quarter of 1999.  Likewise,
PepsiCo  continued  its Y2K  project at the  territories  acquired in the second
quarter of 1999.  The Company has been informed that  PepsiCo's  project,  as it
relates to their  bottling  operations,  is similar in scope and progress to the
Company's project.

     The Company's critical IT systems,  except as specifically noted elsewhere,
were Y2K compliant at the end of the first quarter of 1999. Virtually all of the
Company's  non-IT  systems and  equipment  were  compliant by  September,  1999.
Incremental  costs,  over  and  above  the  aforementioned  ERP  system  project
spending,  related to the Y2K project are being  expensed as incurred and funded
through operating cash flows. Through the third quarter of 1999, the Company had
expensed  approximately $2 million of such incremental  costs. Total incremental
costs to ensure Y2K  compliance  are  estimated  to be $3 million to $4 million,
with the majority of the costs being incurred in 1999. This expectation  assumes
that the Company will not be obligated to incur significant Y2K-related costs on
behalf of its customers or suppliers.  The  projection of  Y2K-related  costs is
based on numerous assumptions and estimates; consequently, actual costs could be
materially  greater than  anticipated.  Plans will  continue to be monitored for
completion.  Incomplete or untimely  resolution of the Y2K issue by the Company,
by  critically   important  suppliers  and  customers  of  the  Company,  or  by
governmental  entities,  could have a materially adverse impact on the Company's
business operations or financial condition in the future.

                           FORWARD-LOOKING STATEMENTS

      This  quarterly  report  on Form  10-Q  contains  certain  forward-looking
information that reflects management's expectations,  estimates and assumptions,
based on  information  available at the time this Form 10-Q was  prepared.  When
used in this document, the words "anticipate,"  "believe," "estimate," "expect,"
"plan",   "intend"   and   similar   expressions   are   intended   to  identify
forward-looking  statements.  Such  forward-looking  statements  involve  risks,
uncertainties  and other  factors  which may cause  the  actual  performance  or
achievements of the Company to be materially  different from any future results,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements, including, but not limited to, the following: competition, including
product and pricing  pressures;  changing trends in consumer tastes;  changes in
the Company's  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 the  Company,  customers  and/or
suppliers;  costs of legal  proceedings;  and  general  economic,  business  and
political  conditions  in  the  countries  and  territories  where  the  Company
operates.

      These events and  uncertainties  are  difficult or  impossible  to predict
accurately  and many are beyond the Company's  control.  The Company  assumes 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.

                     CURRENT AND PENDING ACCOUNTING CHANGES

      Statement of Financial  Accounting  Standards (SFAS) No. 133,  "Accounting
for Derivative  Instruments and Hedging Activities,"  establishes accounting and
reporting standards for derivatives and for hedging activities.  As issued, SFAS
No. 133 was  effective  for all fiscal  quarters of all fiscal  years  beginning
after  June 15,  1999.  In June  1999,  SFAS  No.  137 was  issued,  effectively
deferring  the date of required  adoption of SFAS No. 133 to fiscal  quarters of
all fiscal  years  beginning  after June 15,  2000.  The Company is studying the
statement  to  determine  its  effects,  if any, on the  consolidated  financial
position  or results of  operations.  The  Company  will adopt SFAS No.  133, as
required, in fiscal year 2001.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

      The  Company  is subject to various  market  risks,  including  risks from
changes in commodity prices, interest rates and current exchange rates.

Commodity Prices

      The risk  from  commodity  price  changes  correlates  to Pepsi  General's
ability to recover  higher  product costs through price  increases to customers,
which may be limited due to the competitive  pricing  environment that exists in
the soft drink  business.  In 1999,  the Company began to use swap  contracts to
hedge against price fluctuations for a portion of its aluminum requirements. See
Note 15 to the Condensed Consolidated Financial Statements.  Costs for other raw
material  requirements  are  managed  by  entering  into  firm  commitments  for
materials used.

Interest Rates

      In the first nine months of 1999,  the risk from changes in interest rates
was not material to the Company's  operations  because a significant  portion of
the Company's debt issues were fixed rate  obligations.  The Company's  floating
rate  exposure  relates to changes in the six month LIBOR rate and the overnight
Federal Funds rate.  Assuming consistent levels of floating rate debt with those
held by the Company on October 2, 1999, a 50 basis point (0.5 percent) change in
each of these rates would have an impact of  approximately  $1.2  million on the
Company's annual interest expense related to its floating rate  obligations.  In
possible  future  issuances  of debt,  the Company may be subject to  additional
floating rate interest  exposure and may manage those  exposures  using interest
rate  swaps.  In the first  nine  months of 1999,  the  Company  had  short-term
investments,  principally  invested in money market funds and commercial  paper,
which were most closely tied to overnight Federal Funds rates. Assuming a change
of 50  basis  points  in the rate of  interest  associated  with  the  Company's
short-term investments, interest income would have changed by approximately $0.2
million.

Currency Exchange Rates

      Because the Company operates international  franchise  territories,  it is
subject to exposure resulting from changes in currency exchange rates.  Currency
exchange rates are influenced by a variety of economic  factors  including local
inflation,  growth,  interest rates and governmental  actions,  as well as other
factors.  The  Company  currently  does  not  hedge  the  translation  risks  of
investments in its international  operations.  Any positive cash flows generated
have been  reinvested in the  operations,  excluding  loan  repayments  from the
manufacturing operations in Poland.

      Non-U.S.  operations  do  not  represent  a  significant  portion  of  the
Company's  total  operations.  Changes in  currency  exchange  rates  impact the
translation  of the  results of the  international  operations  from their local
currencies into U.S.  dollars.  If the currency  exchange rates had changed by 5
percent  in the first nine  months of 1999,  the  impact on  reported  operating
income would have been approximately  $0.6 million.  This estimate does not take
into account the possibility that rates can move in opposite directions and that
gains in one category may or may not be offset by losses from another  category.
The economy in Russia was considered highly inflationary for accounting purposes
with all transactions  being recorded at historical costs in U.S.  dollars.  All
gains  and  losses  due  to  foreign  exchange   transactions  from  the  Russia
operations,  which were sold in the first  quarter of 1999,  are included in the
consolidated results of operations.

PART II - OTHER INFORMATION

Item 5.    Other Information

           The Company's 2000 annual meeting of  stockholders  is expected to be
           held on Thursday,  May 4, 2000.  Pursuant to rules of the  Securities
           and  Exchange  Commission  ("SEC"),  in  order to be  considered  for
           inclusion  in the  Company's  proxy  statement  for the  2000  annual
           meeting,  a  stockholder  proposal  must be received by the Company a
           reasonable time before the Company begins to print and mail the proxy
           statement for the 2000 annual  meeting.  The Company  expects to mail
           its 2000 proxy statement on or about March 27, 2000.

           In  addition,  regardless  of whether a  stockholder  proposal is set
           forth  in the  Company's  2000  proxy  statement  as a  matter  to be
           considered  by  stockholders,  the  Company's  by-laws  establish  an
           advance  notice  procedure  for  stockholder  proposals to be brought
           before  any  annual  meeting  of  stockholders,   including  proposed
           nominations  of  persons  for  election  to the  Board of  Directors.
           Stockholders  at the 2000 annual  meeting may  consider a proposal or
           nomination  brought by a stockholder  of record on the record date to
           be established for the 2000 annual meeting who is entitled to vote at
           the 2000 annual  meeting and who has given the Company timely written
           notice, in proper form, of the stockholder's  proposal or nomination.
           A stockholder  proposal or nomination  intended to be brought  before
           the 2000 annual  meeting must be received by the Company's  corporate
           secretary  on or after  Friday,  February  4, 2000 and on or prior to
           Monday, March 6, 2000. If a timely and proper stockholder proposal is
           received by the Company's  corporate  secretary,  the proposal is not
           set forth in the 2000 proxy  statement as described in the  preceding
           paragraph,  and the proposal is properly presented at the 2000 annual
           meeting, the Company may exercise discretionary authority when voting
           on the proposal if in the 2000 proxy  statement  the Company  advises
           stockholders  on the  nature  of the  proposal  and how  the  Company
           intends to vote on the  proposal,  unless the  stockholder  satisfies
           certain  SEC   requirements,   including  mailing  a  separate  proxy
           statement  to  the   Company's   stockholders.   All   proposals  and
           nominations  should be  directed  to Steven R.  Andrews,  Senior Vice
           President, General Counsel and Secretary,  Whitman Corporation,  3501
           Algonquin Road, Rolling Meadows, Illinois 60008.

Item 6.    Exhibits and Reports on Form 8-K.

     (a)   Exhibits.

           12.    Statement of Calculation of Ratio
                  of Earnings to Fixed Charges                    Filed Herewith

           27.    Financial Data Schedules for the first
                  nine months of 1999 and 1998                    Filed Herewith

           99.    1998 Pro Forma Selected Quarterly Financial
                  Information                                     Filed Herewith

     (b)   Reports on Form 8-K.

           On July 28,  1999,  the  Company  filed an  amendment  to the current
           report filed on May 20, 1999 to indicate that  Heartland  Territories
           Holdings, Inc. ("New Whitman") is the successor to the former Whitman
           Corporation  ("Old  Whitman")  under Rule 12g(3)(a) of the Securities
           Act of 1934, as amended.  Old Whitman merged on May 20, 1999 into New
           Whitman,  with New Whitman as the surviving  corporation and with New
           Whitman acquiring all assets of Old Whitman.  Simultaneously with the
           merger, the name of Heartland Territories Holdings,  Inc. was changed
           to "Whitman Corporation."


<PAGE>


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                 WHITMAN CORPORATION


Date:  November 16, 1999         By: /s/ MARTIN M. ELLEN
       -----------------             ------------------------
                                     Martin M. Ellen
                                     Senior Vice President and Chief Financial
                                       Officer
                                     (As Chief Accounting Officer and Duly
                                      Authorized Officer of Whitman Corporation