UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 27, 1997
OR
[ ] 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 1-11657
______________________________________________________________________________
TUPPERWARE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-4062333
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14901 South Orange Blossom Trail, Orlando, Florida 32837
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407)826-5050
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on
Which Registered
Common Stock, $0.01 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 .
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.
Aggregate market value of the Registrant's voting stock held by
non-affiliates, based upon the closing price of said stock on the
New York Stock Exchange-Composite Transaction Listing on March 10,
1998 ($28.125 per share): $1,636,252,228.
As of March 10, 1998, 59,200,241 shares of the Common Stock, $0.01
par value, of the Registrant were outstanding.
Documents Incorporated by Reference:
Portions of the Annual Report to Shareholders for the year ended
December 27, 1997 are incorporated by reference into Parts I, II
and IV of this Report.
Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held May 8, 1998 are incorporated by reference
into Part III of this Report.
PART I
Item 1. Business
(a) General Development of Business
Tupperware Corporation (the "Registrant" or "Tupperware") is a
multinational consumer products company. The Registrant is a
Delaware corporation which was organized on February 8, 1996 in
connection with the corporate reorganization of Premark International,
Inc. ("Premark"). In the reorganization, the businesses of the
Registrant and certain other assets and liabilities of Premark and its
subsidiaries were transferred to the Registrant. On May 31, 1996, the
Registrant became a publicly-held company through the pro-rata
distribution by Premark to its shareholders of all of the outstanding
shares of common stock of the Registrant.
BUSINESS OF TUPPERWARE CORPORATION
Tupperware is a worldwide direct selling consumer products company
engaged in the manufacture and sale of Tupperware products.
Principal Products. Tupperware conducts its business through a
single business segment, manufacturing and marketing a broad line of
high-quality consumer products for the home. The core of Tupperware's
product line consists of food storage containers which preserve
freshness through the well-known Tupperware seals. Tupperware also
has an established line of children's educational toys, serving
products and gifts. The line of products has expanded over the years
into kitchen, home storage and organizing uses with products such as
Modular Mates* containers, Fridge Stackables* containers, OneTouch*
canisters, the Rock N'Serve* line, Meals in Minutes* line, Legacy
Serving line and TupperMagic* line, and many specialized containers.
In recent years, Tupperware has expanded its offerings in the food
preparation and servicing areas through the addition of a number of
products, including double colanders, tumblers and mugs, mixing and
serving bowls, serving centers, microwaveable cooking and serving
products, and kitchen utensils.
Tupperware continues to introduce new designs and colors in its
product lines, and to extend existing products into new markets around
the world. The development of new products varies in different markets
in order to address differences in cultures, lifestyles, tastes and
needs of the markets. New products introduced in 1997 included a
wide range of products in all four geographic areas; including many
using Disney movie and cartoon characters under a license. New product
development and introduction will continue to be an important part of
Tupperware's strategy.
Products sold by Tupperware are primarily produced by Tupperware in
its manufacturing facilities around the world. In some markets,
Tupperware sources certain products from third parties and/or contracts
with local manufacturers to manufacture its products, utilizing high-
quality molds which are generally supplied by Tupperware. Promotional
items provided at product demonstrations include items obtained from
outside sources. (Words followed by * are Trademarks of the Registrant.)
Markets. Tupperware's business is operated on the basis of four
geographic segments: Europe, Africa and Middle East; Asia Pacific;
Latin America; and the United States. Tupperware has operations in more
than 74 countries and its products are sold in more than 100 foreign
countries and in the United States. For the past five fiscal years,
sales in foreign countries represented, on average, 84 percent of total
Tupperware revenues.
During 1997, Tupperware entered several new international markets,
including Russia and Turkey. Market penetration varies throughout the
world. Several "developing" areas which have low penetration, such as
Latin America, Asia and Eastern (Central) Europe, provide significant
growth potential for Tupperware. Tupperware's strategy continues to
include aggressive expansion into new markets throughout the world.
Distribution of Tupperware Products. Tupperware's products are
distributed worldwide through the "direct selling" method of
distribution, in which products are sold to consumers outside
traditional retail store channels. The distributorship system is
intended to facilitate the timely distribution of products to the
consumer, and to establish uniform practices regarding the use of
Tupperware trademarks and the administrative arrangements with
Tupperware, such as order entering and delivering, paying and
recruiting, and training of dealers.
Tupperware products are sold directly to distributors or dealers
throughout the world. Distributors are granted the right to market
Tupperware products using the demonstration method and utilizing
the Tupperware trademark. The vast majority of Tupperware's
distributorship system is composed of distributors, managers and
dealers (known in the United States as consultants) who are
independent contractors and not employees of Tupperware. In certain
limited circumstances, Tupperware acquires ownership of distributor-
ships for a period of time, until an independent distributor can be
installed, in order to maintain market presence.
In addition to the introduction of new products and development of
new geographic markets, a key element of Tupperware's strategy is
expanding its business by enlarging the number of distributors and
consultants. Under the Tupperware system, distributors recruit, train
and motivate a large sales force to cover the distributor's geographic
area. Managers are developed and promoted by distributors to assist
the distributor in recruiting, training and motivating dealers, as
well as continuing to hold their own demonstrations.
As of December 27, 1997, the Tupperware distribution system had
over 1800 distributors, over 50,400 managers and over 950,000
consultants worldwide.
Tupperware relies primarily on the "demonstration" method of sales,
which is designed to enable the purchaser to appreciate through
demonstration the features and benefits of Tupperware products.
Demonstrations, which are sometimes referred to as "Tupperware
parties," are held in homes, offices, social clubs and other locations.
In excess of 17,250,000 demonstrations were held in 1997 worldwide.
Tupperware products are also promoted through brochures mailed to
persons invited to attend Tupperware parties and various other types
of demonstrations. Sales of Tupperware products are supported by
Tupperware through a program of sales promotions, sales and training
aids and motivational conferences for the independent sales force.
In addition, to support its sales force, Tupperware utilizes catalogs,
magazine advertising and toll-free telephone ordering, which helps
increase its sales levels with hard-to-reach customers.
The distribution of products to consumers is primarily the
responsibility of distributors, who often maintain their own inventory
of Tupperware products, the necessary warehouse facilities and
delivery systems. In certain markets, Tupperware offers distributors
the use of a delivery system of direct product shipment to consumers
or dealers, which is intended to reduce the distributor's investment
in inventory and enable distributors to be more cost-efficient.
Competition. There are two primary competitive factors which affect
Tupperware's business: (i) competition with other "direct sales"
companies for sales personnel and demonstration dates; and (ii)
competition in the markets for food storage and serving containers,
toys, and gifts in general. Tupperware believes that it holds a
significant market share in each of these markets in many countries.
This has been facilitated by innovative product development and a
large, dedicated worldwide sales force. Tupperware's competitive
strategies are to continue to expand its direct selling distribution
system, and to provide high-quality, high-value products throughout
the world.
Employees. Tupperware employs approximately 6,800 people, of whom
approximately 900 are based in the United States. Tupperware's United
States work force is not unionized. In certain countries, Tupperware's
work force is covered by collective arrangements decreed by statute.
The terms of most of these arrangements are determined on an annual
basis. Additionally, approximately 60 Tupperware manufacturing
employees in the Australian mold manufacturing operation are covered
by a collective bargaining agreement which is negotiated annually and
Philippine manufacturing employees have negotiated a collective
bargaining agreement which will remain in effect for a three-year
period. There have been no work stoppages or threatened work
stoppages in over three years and Tupperware believes its relations
with its employees to be good. The independent consultants, dealers,
managers and distributors engaged in the direct sale of Tupperware
products are not employees of Tupperware.
Research and Development. For fiscal years ended 1997, 1996 and 1995,
Tupperware incurred expenses of approximately $12.8 million, $7.2
million and $6.3 million respectively, on research and development
activities for new products.
Raw Materials. Products manufactured by Tupperware require plastic
resins meeting its specifications. These resins are purchased through
various arrangements with a number of large chemical companies located
throughout Tupperware's markets. As a result, Tupperware has not
experienced difficulties in obtaining adequate supplies and generally
has been successful in mitigating the effects of increases in resin
market prices. Research and development relating to resins used in
Tupperware products is performed by both Tupperware and its suppliers.
Trademarks and Patents. Tupperware considers its trademarks and
patents to be of material importance to its business; however, except
for the Tupperware trademark, Tupperware is not dependent upon any
single patent or trademark, or group of patents or trademarks. The
trademark on the Tupperware name is registered on a country-by-country
basis. The current duration for such registration ranges from seven
years to fifteen years; however, each such registration may be renewed
an unlimited number of times. The patents and trademarks used in
Tupperware's business are registered and maintained on a worldwide
basis, with a variety of durations. Tupperware has followed the
practice of applying for design and utility patents with respect to
most of the significant patentable developments.
Environmental Laws. Compliance with federal, state and local
environmental protection laws has not in the past had, and is not
expected to have in the future, a material effect upon Tupperware's
capital expenditures, liquidity, earnings or competitive position.
Other. Tupperware sales do not vary significantly on a quarterly
basis; however, third quarter sales are generally lower than the
other quarters in any year due to vacations by Tupperware's sales
consultants and their customers, as well as Tupperware's reduced
promotional activities during such quarter. Sales generally increase
in the fourth quarter as it includes traditional gift giving occasions
in many of Tupperware's markets and as children return to school and
households refocus on activities that include the use of Tupperware's
products. There are no working capital practices or backlog conditions
which are material to an understanding of Tupperware's business.
Tupperware's business is not dependent on a small number of
customers, nor is any of its business subject to renegotiation of
profits or termination of contracts or subcontracts at the election
of the United States government.
Executive Officers of the Registrant. Following is a list of the
names and ages of all the Executive Officers of the Registrant,
indicating all positions and offices with the Registrant held by each
such person, and each such person's principal occupations or employment
during the past five years. Each such person has been elected to serve
until the next annual election of officers of the Registrant (expected
to occur on May 8, 1998).
Positions and Offices Held and Principal Occupations
of Employment During Past Five Years
Name and Age Office and Experience
Brian R. Biggin, age 52 Vice President, Internal Audit since
March 1996. Mr. Biggin previously
served as Director, Computer Systems
Audit, for Premark since 1986.
Gerald M. Crompton, age 54 Senior Vice President, Product
Marketing, Worldwide since November
1997, after serving as Vice President,
Product Marketing, Worldwide since
November 1996. Prior thereto,
Mr. Crompton served as Vice President,
Product Management for Tupperware
Europe, Africa and Middle East since
1992.
Alberto Giovannini, age 58 President, Latin America since August
1997, after serving in various executive
positions in Tupperware's European
operations.
E.V. Goings, age 52 Chairman and Chief Executive Officer
since October, 1997. Prior thereto, he
was President and Chief Operating
Officer since 1996. Mr. Goings served
as Executive Vice President of Premark
and President of Tupperware Worldwide
from November 1992 to 1996.
David T. Halversen, age 53 Senior Vice President, Business
Development and Communications since
November, 1996. Prior thereto, he
served as Senior Vice President,
Planning, Business Development and
Financial Relations since May 1996.
He previously served as Vice President,
Business Development and Planning since
February 1995, after serving in various
planning and strategy positions with
Avon Products, Inc.
Christine J. Hanneman, age 42 Vice President, Financial Relations
since March 1996. Ms. Hanneman served
as Director, Investor Relations for
Premark from June 1994 until joining
Tupperware. Prior thereto, she served
as Manager Investor Relations of Premark.
Carol A. Kiryluk, age 51 Senior Vice President, Human Resources,
Worldwide since March 1996. From March
1992 until March 1996, Ms. Kiryluk served
as Vice President, Human Resources,
Worldwide for Tupperware.
Jennifer M. Moline, age 40 Vice President and Treasurer since
February 1998, after serving in various
business development and financial
management positions within the
Corporation.
Gaylin L. Olson, age 52 Senior Vice President, Emerging Markets,
Tupperware Worldwide. Mr. Olson has
served in various executive positions
for Tupperware over the years, including
President of Asia Pacific and most
recently President of U.S. Operations.
Thomas P. O'Neill, Jr., age 44 Senior Vice President and Chief
Financial Officer since March 1997.
Prior thereto, Mr. O'Neill served as
Vice President and Chief Financial
Officer, Tupperware Europe, Africa and
Middle East since April 1994. Prior
thereto Mr. O'Neill served as Vice
President and Treasurer of Premark
International, Inc.
Michael S. Poteshman, age 34 Vice President and Controller since
January 1998, after serving as Assistant
Controller since March 1996. Prior
thereto, Mr. Poteshman served as
Director, Accounting and Reporting
Standards for Premark International, Inc.
since September 1993, after serving as
an audit manager with Price Waterhouse.
Thomas M. Roehlk, age 47 Senior Vice President, General Counsel
and Secretary since December 1995.
Prior thereto, Mr. Roehlk served as
Assistant General Counsel and Assistant
Secretary of Premark.
James E. Rose, Jr., age 55 Senior Vice President Taxes and
Government Affairs. Mr. Rose served
as Vice President, Tax and Government
Affairs since March 1996. From 1994
to March 1996, Mr. Rose served as Vice
President, Taxes and Government Affairs
for Premark. Prior thereto, Mr. Rose
served as Vice President, Taxes for
Premark.
Hans Joachim Schwenzer, age 61 Senior Vice President, Tupperware,
Worldwide. Mr. Schwenzer is currently
President, Tupperware Germany;
President, Sales Programs and
Promotions, Tupperware Europe, Africa
and Middle East; and Regional General
Manager, Austria and Eastern Europe
Region and has been since May 1995,
Senior Vice President, Tupperware,
Worldwide. Prior to assuming those
positions, Mr. Schwenzer served as
President, Tupperware Europe, Africa
and Middle East.
Christian E. Skroeder, age 49 President, Tupperware Europe, Africa
and Middle East since May 1995. Prior
thereto, Mr. Skroeder served in
various executive positions with
Tupperware.
William E. Spears, age 52 President, Tupperware North America
since January 1998, after serving as
President, Tupperware U.S. since
February 1997. Prior thereto,
Mr. Spears served as Executive Vice
President and Chief Operating Officer
of Nature's Sunshine Products, Inc.
Prior to 1994, Mr. Spears served in
various managerial positions with
Avon Products, Inc.
Jose R. Timmerman, age 49 Senior Vice President, Operations,
Tupperware, Worldwide since August 1997.
Prior thereto, he was Vice President
Operations, Worldwide since 1993 after
serving as Vice President, Manufacturing,
Tupperware Asia Pacific.
Paul B. Van Sickle, age 58 Executive Vice President since March
1997. Prior thereto, Mr. Van Sickle
served as Senior Vice President,
Finance and Operations.
Robert W. Williams, age 54 President, Tupperware Asia Pacific from
April 1995. Prior to assuming that
position, Mr. Williams served in various
management positions in Tupperware Asia
Pacific starting in August 1993. From
1991 until joining Tupperware, Mr.
Williams served as Vice President,
Marketing for Cameo, Inc.
Item 2. Properties
The principal executive office of the Registrant is owned by the
Registrant and located in Orlando, Florida. The Registrant owns and
maintains manufacturing plants in Argentina, Belgium, Brazil, France,
Greece, Japan, Korea, Mexico, the Philippines, Portugal, South Africa,
Spain and the United States, and leases manufacturing facilities in
Venezuela and China. Tupperware conducts a continuing program of new
product design and development at its facilities in Florida, Japan and
Belgium. None of the owned principal properties is subject to any
encumbrance material to the consolidated operations of the Registrant.
The Registrant considers the condition and extent of utilization of its
plants, warehouses and other properties to be good, the capacity of its
plants and warehouses generally to be adequate for its needs, and the
nature of the properties to be suitable for its needs.
Item 3. Legal Proceedings
A number of ordinary course legal and administrative proceedings
against Tupperware are pending. In addition to such proceedings, there
are certain proceedings which involve the discharge of materials into or
otherwise relating to the protection of the environment. Certain of such
proceedings involve federal environmental laws such as the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as well
as state and local laws. Tupperware establishes reserves with respect to
certain of such proceedings. Because of the involvement of other parties
and the uncertainty of potential environmental impacts, the eventual
outcomes of such actions and the cost and timing of expenditures cannot
be estimated with certainty. It is not expected that the outcome of such
proceedings, either individually or in the aggregate, will have a
materially adverse effect upon Tupperware.
As part of the 1986 reorganization involving the formation of
Premark, Premark was spun-off by Dart & Kraft, Inc. and Kraft, Inc.
assumed any liabilities arising out of any legal proceedings in
connection with certain divested or discontinued former businesses of
Dart Industries Inc., a subsidiary of Tupperware, including matters
alleging product liability, environmental liability and infringement of
patents. The assumption of liabilities by Kraft, Inc. remains
effective subsequent to the distribution of the equity of the Registrant
to Premark shareholders.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
The stock price information set forth in Note 12 ("Quarterly
Financial Summary (Unaudited)") appearing on page 35 of the Annual Report
to Shareholders for the year ended December 27, 1997 is incorporated by
reference into this Report. The information set forth in Note 13
("Rights Agreement") on page 35 of the Annual Report to Shareholders for
the year ended December 27, 1997 is incorporated by reference into this
Report. As of March 10, 1998, the Registrant had 19,323 shareholders of
record.
Item 6. Selected Financial Data
The information set forth under the caption "Selected Financial Data"
on pages 2 and 3 of the Annual Report to Shareholders for the year ended
December 27, 1997 is incorporated by reference into this Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" set forth on pages 4
through 13 of the Annual Report to Shareholders for the year ended
December 27, 1997 is incorporated by reference into this Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The information set forth under the caption "Market Risk and Impact
of Inflation" on page 13, and under the sub-caption "Derivative Financial
Instruments" in Note 6 ("Financing Arrangements") on pages 24 and 25, of
the Annual Report to Shareholders for the year ended December 27, 1997 is
incorporated by reference into this Report.
Item 8. Financial Statements and Supplementary Data
(a) The following Consolidated Financial Statements of Tupperware
Corporation and Report of Independent Certified Public Accountants set
forth on pages 14 through 35, and on page 36 respectively, of the Annual
Report to Shareholders for the year ended December 27, 1997 are
incorporated by reference into this Report:
Consolidated Statements of Income, Cash Flows and Shareholders'
Equity--Years ended December 27, 1997, December 28, 1996 and December 30,
1995.
Consolidated Balance Sheet--December 27, 1997 and December 28, 1996.
Notes to the Consolidated Financial Statements; and
Report of Independent Certified Public Accountants dated February 20,
1998.
(b) The supplementary data regarding quarterly results of operations
contained in Note 12 ("Quarterly Financial Summary (Unaudited)") of the
Notes to the Consolidated Financial Statements of Tupperware Corporation
on page 35 of the Annual Report to Shareholders for the year ended
December 27, 1997 is incorporated by reference into this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
The information as to the Directors of the Registrant set forth under
the sub-caption "Board of Directors" appearing under the caption "Election
of Directors" on pages 3 through 5 of the Proxy Statement relating to the
Annual Meeting of Shareholders to be held on May 8, 1998 is incorporated
by reference into this Report. The information as to the Executive
Officers of the Registrant is included in Part I hereof under the caption
"Executive Officers of the Registrant" in reliance upon General
Instruction G to Form 10-K and Instruction 3 to Item 401(b) of
Regulation S-K.
Item 11. Executive Compensation
The information set forth under the caption "Compensation of
Directors" on page 18 of the Proxy Statement relating to the Annual Meeting
of Shareholders to be held on May 8, 1998 and the information on pages 13
through 17 of such Proxy Statement relating to executive officers'
compensation is incorporated by reference into this Report.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the captions "Security Ownership of
Certain Beneficial Owners" on page 7 and "Security Ownership of Management"
on page 6 of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held on May 8, 1998 is incorporated by reference into
this Report.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports On Form 8-K
(a) (1) List of Financial Statements
The following Consolidated Financial Statements of Tupperware
Corporation and Report of Independent Certified Public Accountants set
forth on pages 14 through 35 and on page 36, respectively, of the Annual
Report to Shareholders for the year ended December 27, 1997 are
incorporated by reference into this Report by Item 8 hereof:
Consolidated Statements of Income, Cash Flows and Shareholders'
Equity--Years ended December 27, 1997, December 28, 1996, and
December 30, 1995;
Consolidated Balance Sheet-- December 27, 1997, and
December 28, 1996;
Notes to the Consolidated Financial Statements; and
Report of Independent Certified Public Accountants dated
February 20, 1998.
(a) (2) List of Financial Statement Schedules
The following consolidated financial statement schedule (numbered in
accordance with Regulation S-X) of Tupperware Corporation is included in
this Report:
Report of Independent Certified Public Accountants on Financial
Statement Schedule, page 16 of this Report; and
Schedule II--Valuation and Qualifying Accounts for the three years
ended December, 27, 1997, page 17 of this Report.
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions, are inapplicable, or the
information called for therein is included elsewhere in the financial
statements or related notes contained or incorporated by reference herein.
(a) (3) List of Exhibits: (numbered in accordance with Item 601 of
Regulation S-K)
Exhibit
Number Description
*1 Underwriting Agreement (Attached to Form S-3
(No. 33-12125) Registration Statement as Exhibit
1 and incorporated herein by reference).
*2 Distribution Agreement by and among Premark
International, Inc., Tupperware Corporation and
Dart Industries Inc. (Attached as Exhibit 2 to
Tupperware Corporation's Registration Statement
on Form 10 (No. 1-11657) filed with the
Commission on March 4, 1996 and incorporated
herein by reference).
*3.1 Amended and Restated Certificate of
Incorporation of Tupperware Corporation
(Attached as Exhibit 3.1 to Form 10 (No. 1-11657)
and incorporated herein by reference).
*3.2 Amended and Restated By-laws of Tupperware
Corporation (Attached as Exhibit 3.2 to Form 10
(No. 1-11657) and incorporated herein by
reference).
*4.1 Rights Agreement, by and between Tupperware
Corporation and the rights agent named therein
(Attached as Exhibit 4 to Form 10 (No. 1-11657)
and incorporated herein by reference).
*4.2 Indenture dated as of October 1, 1996, among
Tupperware Corporation and The First National
Bank of Chicago, as Trustee, (Attached as
Exhibit 4(a) to Tupperware Corporation's
Registration Statement on Form S-3 (No. 33-12125)
filed with the Commission on September 25, 1996
and incorporated herein by reference).
*4.3 Form of Debt Securities (Attached as Exhibit
4(b) to Tupperware Corporation's Registration
Statement on Form S-3 (No. 33-12125) filed with
the Commission on September 25, 1996 and
incorporated herein by reference).
*4.4 Form of Warrant Agreement, including form of
Warrant Certificate (Attached as Exhibit 4(a) to
Tupperware Corporation's Registration Statement
on Form S-3 (No. 33-12125) filed with the
Commission on September 25, 1996 and
incorporated herein by reference).
*10.1 Tupperware Corporation 1996 Incentive Plan
(Attached to Form 10 (No. 1-11657) as Annex C
and incorporated herein by reference).
*10.2 Tupperware Corporation Directors Stock Plan
(Attached to Form 10 (No. 1-11657) as Annex D
and incorporated herein by reference).
*10.3 Tax Sharing Agreement between Tupperware
Corporation and Premark International, Inc.
(Attached as Exhibit 10.3 to Form 10 (No. 1-11657)
and incorporated herein by reference).
*10.4 Employee Benefits and Compensation Allocation
Agreement between Tupperware Corporation and
Premark International, Inc. (Attached as Exhibit
10.4 to Form 10 (No. 1-11657) and incorporated
herein by reference).
*10.5 Form of Change of Control Agreement (Attached as
Exhibit 10.5 to Form 10 (No. 1-11657) and
incorporated herein by reference).
*10.6 Employment Agreement for Mr. Schwenzer.
(Attached as Exhibit 10.8 to Form 10 (No. 1-11657)
and incorporated herein by reference).
*10.7 Credit Agreement dated May 16, 1996 (Attached to
the Registrant's Registration Statement on Form
10 (No. 1-11657) as Exhibit 10.8 and
incorporated herein by reference).
*10.8 Form of Franchise Agreement between a subsidiary
of the Registrant and distributors of Tupperware
products in the United States (Attached as
Exhibit 10.10 to the Registrant's Annual Report
on Form 10-K for the year ended December 28,
1996 and incorporated herein by reference).
10.9 First Amendment dated August 8, 1997 to Credit
Agreement dated May 16, 1996.
13 Pages 2 through 36 of the Annual Report to
Shareholders of the Registrant for the year
ended December 27, 1997.
21 Subsidiaries of Tupperware Corporation as of
March 10, 1998.
23 Manually signed Consent of Independent Certified
Public Accountants to the incorporation of their
report by reference into the prospectus
contained in specified registration statements
on Form S-8 and Form S-3.
24 Powers of Attorney
27 Financial Data Schedule
*Document has heretofore been filed with the Commission and is incorporated
by reference and made a part hereof.
The Registrant agrees to furnish, upon request of the Commission, a
copy of all constituent instruments defining the rights of holders of long-
term debt of the Registrant and its consolidated subsidiaries.
(b) Reports on Form 8-K
During the quarter ended December 27, 1997, the Registrant did not
file any reports on Form 8-K.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareholders
of Tupperware Corporation
Our audits of the consolidated financial statements referred to in our
report dated February 20, 1998 appearing on page 36 of the 1997 Annual
Report to Shareholders of Tupperware Corporation (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedule listed in Item 14(a)(2) of this Form 10-K. In our
opinion, this Financial Statement Schedule presents fairly, in all
material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
Price Waterhouse LLP
Orlando, Florida
February 20, 1998
<TABLE>
TUPPERWARE CORPORATION
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 27, 1997
(In millions)
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
- ---------------------- ---------- ----------------- ----------- --------
Balance at Charged Charged Balance
Beginning to Costs to Other at End of
Description of Period Expenses Accounts Deductions of Period
- ---------------------- ---------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts, current and
long term:
Year ended
December 27, 1997 $ 67.9 $ 27.5 $0.8 $(12.1)<F1> $81.9
( 2.2)<F2>
Year ended
December 28, 1996 $ 50.9 $ 20.9 -- $ (3.7)<F1> $67.9
(0.2)<F2>
Year ended
December 30, 1995 $ 48.0 $ 7.7 -- $ (4.7)<F1> $50.9
(0.1)<F2>
Valuation allowance
for deferred tax assets:
Year ended
December 27, 1997 $ 25.8 $(11.4) -- -- $14.4
Year ended
December 28, 1996 $ 25.9 $ (0.1) -- -- $25.8
Year ended
December 30, 1995 $ 28.7 $ (2.8) -- -- $25.9
<FN>
<F1> Represents write-offs less recoveries.
<F2> Foreign currency translation adjustment.
</FN>
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Signature Title
E.V. Goings Chairman of the Board of Directors,
Chief Executive Officer and Director
(Principal Executive Officer)
Thomas P. O'Neill, Jr. Senior Vice President and Chief Financial
Officer (Principal Financial Officer)
Michael S. Poteshman Vice President and Controller
(Principal Accounting Officer)
* Director
Rita Bornstein, Ph.D
* Director
Ruth M. Davis, Ph.D
* Director
Lloyd C. Elam, M.D.
* Director
Clifford J. Grum
* Director
Joe R. Lee
* Director
Bob Marbut
* Director
David R. Parker
* Director
Robert M. Price
* Director
Joyce M. Roche
*By:
Thomas M. Roehlk
Attorney-in-fact
March 24, 1998
EXHIBIT INDEX
Exhibit No. Description
10.9 First Amendment dated
August 8, 1997 to Credit
Agreement dated May 16, 1996
13 Pages 2 through 36 of the
Annual Report to Shareholders
of the Registrant for the year
ended December 27, 1997
21 Subsidiaries of Tupperware
Corporation as of March 10, 1998
23 Manually signed Consent of
Independent Certified Public
Accountants to the incorporation
of their report by reference into the
prospectus contained in specified
registration statements on Form S-8
and Form S-3
24 Powers of Attorney
27 Financial Data Schedule
EXHIBIT 10.9
FIRST AMENDMENT dated as of August 8, 1997 (this "Amendment"), to
the COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT dated
as of May 16, 1996 (the "Agreement"), among TUPPERWARE CORPORATION, the
BORROWING SUBSIDIARIES (as defined in the Agreement), the LENDERS (as
defined in the Agreement) and THE CHASE MANHATTAN BANK (formerly known
as Chemical Bank), a New York banking corporation, as agent for the
Lenders (in such capacity, the "Agent").
A. Tupperware Corporation has requested that the Lenders amend
certain provisions of the Agreement. The Lenders are willing to enter
into this Amendment, subject to the terms and conditions of this Amendment.
B. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in the Agreement.
Accordingly, in consideration of the mutual agreements contained
in this Amendment and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION 1. Amendment to Article I.
The following amendments are made to the definitions contained in Article I
of the Agreement:
(a) The definition of "Applicable Margin" is hereby amended to
read as follows: "Applicable Margin" shall mean on any date, with respect
to Eurocurrency Standby Loans or, as the case may be, L/C Participation
Fees, the applicable percentage set forth below based upon the Ratings
most recently announced by the Rating Agencies as of such date:
Category 1 Percentage
Aa3 or higher by Moody's; .1150%
AA- or higher by S&P
Category 2
A2 or higher by Moody's; .1350%
A or higher by S&P
Category 3
A3 by Moody's; .1500%
A- by S&P
Category 4
Baa1 by Moody's; .1850%
BBB+ by S&P
Category 5
Baa2 by Moody's; .2000%
BBB by S&P
Category 6
Baa3 by Moody's; .2500%
BBB- by S&P
Category 7
Ba1 or lower by Moody's; .4500%
BB+ or lower by S&P
For purposes of the foregoing, (i) if either Moody's or S&P shall not have
in effect a Rating, then such Rating Agency shall be deemed to have
established a rating in Category 7; (ii) if the Ratings established or
deemed to have been established shall fall within different Categories,
then (x) if such Ratings shall differ by only one Category or if one of
such Ratings shall be deemed to be in Category 7 because the applicable
Rating Agency shall not yet have established a Rating, the Applicable
Margin shall be based upon the higher of the two Ratings, (y) if such
Ratings shall differ by only two Categories, the Applicable Margin shall
be determined by reference to the Category that falls between the two
Categories in which the Ratings shall fall and (z) otherwise, the
Applicable Margin shall be determined by reference to the Category one
level above that in which the lower of the two Ratings shall fall (and
for these purposes one Category is above another if the Ratings it
contains are superior to those in such other Category), and (iii) if any
Rating shall be changed (other than as a result of a change in the rating
system of the applicable Rating Agency), such change shall be effective
as of the date on which it is first announced by the Rating Agency making
such change. Each such change in the Applicable Margin shall apply to
all outstanding Eurocurrency Standby Loans during the period commencing
on the effective date of such change and ending on the date immediately
preceding the effective date of the next such change. If the rating
system of any Rating Agency shall change, or if any Rating Agency shall
cease to be in the business of rating corporate debt obligations or shall
have terminated its Rating for reasons outside the control of the Company,
the parties hereto shall negotiate in good faith to amend this definition
to reflect such changed rating system or the absence of such Rating, and
pending the effectiveness of any such amendment, the Applicable Margin
shall be determined by reference to the Rating from the other Rating
Agency.
(b) The definition of "Borrowing Subsidiary" is hereby amended
to read as follows: "Borrowing Subsidiary" shall mean any Subsidiary of
the Company designated as a Borrowing Subsidiary by the Company pursuant
to Section 2.21.
(c) The definition of "Excluded Taxes" is hereby amended by
adding the following sentence to the end thereof: "It is understood and
agreed that any withholding tax attributable to the designation of a
Borrowing Subsidiary or the making of any payment from a location outside
the United States of America after such time shall not be an Excluded Tax."
(d) The definition of "Facility Fee Percentage" is hereby
amended to read as follows: "Facility Fee Percentage" shall mean on any
date the applicable percentage set forth below based upon the Ratings
most recently announced by the Rating Agencies as of such date:
Category 1 Percentage
Aa3 or higher by Moody's; .0600%
AA- or higher by S&P
Category 2
A2 or higher by Moody's; .0650%
A or higher by S&P
Category 3
A3 by Moody's; .0750%
A- by S&P
Category 4
Baa1 by Moody's; .0900%
BBB+ by S&P
Category 5
Baa2 by Moody's; .1000%
BBB by S&P
Category 6
Baa3 by Moody's; .1500%
BBB- by S&P
Category 7
Ba1 or lower by Moody's; .1750%
BB+ or lower by S&P
For purposes of the foregoing, (i) if either Moody's or S&P shall not have
in effect a Rating, then such Rating Agency shall be deemed to have
established a rating in Category 7; (ii) if the Ratings established or
deemed to have been established shall fall within different Categories,
then (x) if such Ratings shall differ by only one Category or if one of
such Ratings shall be deemed to be in Category 7 because the applicable
Rating Agency shall not yet have established a Rating, the Facility Fee
Percentage shall be based upon the higher of the two Ratings, (y) if
such Ratings shall differ by only two Categories, the Facility Fee
Percentage shall be determined by reference to the Category that falls
between the two Categories in which the Ratings shall fall and (z)
otherwise, the Facility Fee Percentage shall be determined by reference
to the Category one level above that in which the lower of the two
Ratings shall fall (and for these purposes one Category is above another
if the Ratings it contains are superior to those in such other Category),
and (iii) if any Rating shall be changed (other than as a result of a
change in the rating system of the applicable Rating Agency), such change
shall be effective as of the date on which it is first announced by the
Rating Agency making such change. Each such change in the Facility Fee
Percentage shall apply at any time during the period commencing on the
effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the rating system of any
Rating Agency shall change, or if any Rating Agency shall cease to be in
the business of rating corporate debt obligations or shall have terminated
its Rating for reasons outside the control of the Company, the parties
hereto shall negotiate in good faith to amend this definition to reflect
such changed rating system or the absence of such Rating, and pending the
effectiveness of any such amendment, the Facility Fee Percentage shall be
determined by reference to the Rating from the other Rating Agency.
(e) The definition of "Guarantor" is hereby amended to read as
follows: "Guarantor" shall mean (a) the Company and (b) each Domestic
Borrowing Subsidiary (other than any Domestic Borrowing Subsidiary (i) that
has no significant assets or operations or (ii) that has not directly or
indirectly borrowed Loans or obtained Letters of Credit in an aggregate
principal and/or face amount of $1,000,000 or more).
(f) The definition of "Maturity Date" is hereby amended to read
as follows: "Maturity Date" shall mean August 8, 2002.
SECTION 2. Amendment to Section 2.19.
Section 2.19 of the Agreement is hereby amended by adding the following
clause (f) to the end thereof:
"(f) If the Agent, any Lender or any Fronting Bank (as the case
may be) receives a refund of any Taxes or Other Taxes for which the
Agent, such Lender, or such Fronting Bank (as the case may be) has
received payment from any Borrower hereunder, it shall promptly
notify such Borrower thereof and shall promptly repay such refund,
without interest and net of any expenses incurred; provided that
such Borrower, upon the request of the Agent, such Lender or such
Fronting Bank (as the case may be), agrees to return the amount of
such refund (plus any penalties, interest or other charges required
to be paid) to the Agent, such Lender or such Fronting Bank (as the
case may be) in the event the Agent, such Lender or such Fronting
Bank (as the case may be) is required to repay such amount to the
relevant Governmental Authority."
SECTION 3. Amendment to Section 5.01.(d).
Section 5.01.(d) of the Agreement is hereby amended as of the Effective
Date by deleting the phrase "5.03(b), 5.03(c), 5.03(i), 5.03(k), 5.06,"
from the seventh line thereof.
SECTION 4. Amendment to Section 5.06.
Section 5.06. of the Agreement is hereby amended as of the Effective Date
to read as follows:
"The Subsidiaries will not issue any preferred stock or create,
incur, assume or permit to exist any Debt except (i) preferred stock
of Subsidiaries in an aggregate stated value not in excess of
$25,000,000, (ii) Debt created hereunder and under the Multicurrency
Addenda, (iii) Debt of Foreign Finance Subsidiaries in an aggregate
amount for all such Foreign Finance Subsidiaries not in excess of
the amount of any Debt of such Foreign Finance Subsidiaries
outstanding as of August 8, 1997, plus $300,000,000, (iv) preferred
stock or Debt of a Wholly-Owned Consolidated Subsidiary issued or
payable to the Company or another Wholly-Owned Consolidated
Subsidiary; provided that the Company or such other Wholly-Owned
Consolidated Subsidiary may not suffer to exist any Lien on any
instrument representing such preferred stock or Debt or the
right to payment on such preferred stock or Debt, as the case may be
and (v) other Debt in an aggregate amount for all Subsidiaries not
in excess of $200,000,000."
Section 5. Purchase and Sale of Commitments and Loans.
(a) Upon the satisfaction of the conditions set forth in
Section 7 hereof on the Effective Date, but immediately prior to any
borrowing on such date under the Agreement, without the necessity of
further action by any party, the Lenders specified on Schedule 1
hereto as "Selling Lenders" shall sell, transfer and assign to the
Lenders specified on Schedule 1 hereto as "Purchasing Lenders" all
of such Selling Lender's right, title and interest in and to its
Commitment, to the extent set forth on Schedule 1 hereto, together
with its L/C Commitment, its outstanding Loans and participations
in Letters of Credit, so as to reflect such transfer, and each
Purchasing Lender shall purchase, take and acquire from the Selling
Lenders a portion of the Selling Lenders' right, title and interest
in and to its Commitment together with its L/C Commitment, its
outstanding Loans and participations in Letters of Credit, so that
after giving effect to all such transfers, the Commitments of each
of the Lenders (including Lenders which are not Selling Lenders or
Purchasing Lenders) shall be as specified on Schedule 1 hereto.
(b) Prior to the Effective Date, the Agent shall notify each
Purchasing Lender and each Selling Lender of the amounts to be
funded and received, respectively, by each Purchasing Lender and
Selling Lender in order to give effect to the foregoing transfers
and to ensure that the outstanding Loans and Letter of Credit
participations of each of the Lenders properly reflect such transfers.
Each Selling Bank shall, to the extent provided in this Amendment,
relinquish its rights and be released from its obligations under
the Agreement.
(c) Each Selling Lender hereby agrees that any unpaid Facility
Fee owed to it as of the Effective Date shall be paid by the Borrower
to the Agent on September 30, 1997, and distributed to such Lender
on such date.
SECTION 6. Representations, Warranties and Agreements.
Tupperware Corporation hereby represents and warrants to and agrees with
each Lender and the Agent, before and after the Effective Date (as
defined below), that:
(a) The representations and warranties set forth in Article IV
of the Agreement are true and correct in all material respects with
the same effect as if made on the Effective Date (as defined below),
except to the extent such representations and warranties expressly
relate to an earlier date.
(b) Tupperware Corporation has the requisite power and authority
to execute, deliver and perform its obligations under this Amendment.
(c) The execution, delivery and performance by Tupperware
Corporation of this Amendment (i) have been duly authorized by all
requisite action and (ii) will not (I) violate (x) any provision of
law, statute, rule or regulation, or of the certificate of
incorporation, by-laws or other constitutive documents of Tupperware
Corporation, (y) any order of any governmental court or governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign or (z) any provision of any indenture, any
agreement for borrowed money, or any other material agreement or
instrument to which Tupperware Corporation is a party or by which
Tupperware Corporation or any of its property is or may be bound,
(II) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any such
indenture, agreement for borrowed money or other material agreement
or instrument or (III) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or
hereafter acquired by Tupperware Corporation or any Subsidiary.
(d) This Amendment has been duly executed and delivered by
Tupperware Corporation. Each of this Amendment and the Agreement as
amended hereby constitutes a legal, valid and binding obligation of
Tupperware Corporation, enforceable against Tupperware Corporation in
accordance with its terms, except as enforceability may be limited by
(i) any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principals of equity.
(e) No Event of Default or Default has occurred and is continuing.
SECTION 7. Conditions to Effectiveness. This Amendment shall
become effective only upon the satisfaction in full of the following
conditions precedent on or prior to August 8, 1997 (such date, in the event
that each of the conditions has been satisfied on or prior thereto, being
called herein the "Effective Date"):
(a) The Agent shall have received duly executed counterparts
hereof which, when taken together, bear the authorized signatures of
Tupperware Corporation, the Agent and each Lender.
(b) All legal matters incident to this Amendment shall be
satisfactory to the Lenders, the Agent and Cravath, Swaine & Moore,
counsel for the Agent.
(c) The Agent shall have received such other documents,
instruments and certificates as it or its counsel shall reasonably request.
SECTION 8. Agreement. Except as specifically amended hereby,
the Agreement shall continue in full force and effect in accordance with
the provisions thereof as in existence on the date hereof. After the date
hereof, any reference to the Agreement shall mean the Agreement as amended
hereby.
SECTION 9. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed by their respective authorized officers as of the day
and year first written above.
TUPPERWARE CORPORATION
By
Name: Mark H. Bobek
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually
and as Agent
By
Name:
Title:
ABN AMRO BANK N.V., ATLANTA AGENCY
By
Name:
Title:
By
Name:
Title:
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, individually and as Co-Agent
By
Name:
Title:
BANKERS TRUST COMPANY
By
Name:
Title:
CITIBANK, N.A., individually and as Co-Agent
By
Name:
Title:
COMMERZBANK AG, ATLANTA AGENCY
By
Name:
Title:
By
Name:
Title:
CREDIT LYONNAIS CHICAGO BRANCH
By
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By
Name:
Title:
THE FUJI BANK AND TRUST COMPANY
By
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By
Name:
Title:
NORTHERN TRUST COMPANY
By
Name:
Title:
ROYAL BANK OF CANADA
By
Name:
Title:
THE SANWA BANK, LIMITED, ATLANTA AGENCY
By
Name:
Title:
THE SUMITOMO BANK, LIMITED, ATLANTA AGENCY
By
Name:
Title:
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
INSTITUTION PRE-FIRST AMENDMENT POST-FIRST AMENDMENT
COMMITMENT COMMITMENT
<S> <C> <C>
The Chase Manhattan $30,000,000.00 $35,000,000.00
Bank, as a Purchasing
Lender
Bank of America $25,000,000.00 $30,000,000.00
National Trust &
Savings Association, as
a Purchasing Lender
Citibank, N.A., as a $25,000,000.00 $30,000,000.00
Purchasing Lender
Bankers Trust Company, $20,000,000.00 $25,000,000.00
as a Purchasing Lender
Commerzbank AG, Atlanta $20,000,000.00 $25,000,000.00
Agency, as a Purchasing
Lender
The First National Bank $20,000,000.00 $25,000,000.00
of Chicago, as a
Purchasing Lender
Morgan Guaranty Trust $20,000,000.00 $25,000,000.00
Company of New York, as
a Purchasing Lender
Royal Bank of Canada, $20,000,000.00 $25,000,000.00
as a Purchasing Lender
ABN AMRO Bank N.V., $20,000,000.00 $20,000,000.00
Atlanta Agency
The Fuji Bank and Trust $20,000,000.00 $20,000,000.00
Company
Northern Trust Company $20,000,000.00 $20,000,000.00
The Sanwa Bank, $20,000,000.00 $20,000,000.00
Limited, Atlanta Agency
Credit Lyonnais Chicago $20,000,000.00 $0.00
Branch, as a Selling
Lender
The Sumitomo Bank, $20,000,000.00 $0.00
Limited, Atlanta
Agency, as a Selling
Lender
--------------- ---------------
Total $300,000,000.00 $300,000,000.00
=============== ===============
</TABLE>
<TABLE>
Selected Financial Data
<CAPTION>
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
(Dollars in millions,
except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Operating results
Net sales:
Europe $ 546.6 $ 581.7 $ 595.1 $ 540.1 $ 505.1 $ 490.7
Asia Pacific 279.0 338.0 355.1 329.3 286.9 268.3
Latin America 247.2 268.5 200.6 176.4 154.4 138.7
United States 156.5 181.1 208.6 228.8 225.4 207.1
-------- -------- -------- -------- -------- --------
Total net
sales $1,229.3 $1,369.3 $1,359.4 $1,274.6 $1,171.8 $1,104.8
======== ======== ======== ======== ======== ========
Operating profit (loss):
Europe $ 144.6 $ 153.0 $ 156.8 $ 125.0 $ 110.3 $ 92.4
Asia Pacific 37.2 61.0 59.4 46.3 40.3 32.9
Latin America (5.7)<F1> 43.3 19.4 15.7 15.7 5.9
United States (29.5)<F1> 10.4 10.3 16.0 12.5 (139.6)
-------- -------- -------- -------- -------- --------
Total operating
profit (loss) 146.6 267.7 245.9 203.0 178.8 (8.4)<F6>
-------- -------- -------- -------- -------- --------
Unallocated
expenses (18.0)<F1> (16.1) (22.9) (12.0) (17.8) (24.1)
Costs associated
with becoming
an independent
company -- (9.1) -- -- -- --
Interest (expense)
income, net (17.8) (8.0) 1.9 0.2 (12.6) (9.3)
-------- -------- -------- -------- -------- --------
Income (loss)
before income
taxes and
cumulative effect
of accounting
changes 110.8<F1> 234.5 224.9 191.2 148.4 (41.8)
Provision for
income taxes 28.8 59.8 53.5 42.0 30.5 1.9
-------- -------- -------- -------- -------- --------
Income (loss)
before
cumulative
effect of
accounting
changes $ 82.0<F1> $ 174.7 $ 171.4 $ 149.2 $ 117.9 $ (43.7)
======== ======== ======== ======== ======== ========
Net income
(pre-1997
pro forma) $ 82.0<F1> $ 170.4 $ 161.1
======== ======== ========
Earnings per
common share
(pre-1997
pro forma):<F2>,<F3>
Basic $ 1.34 $ 2.75 $ 2.60
======== ======== ========
Diluted $ 1.32 $ 2.71 $ 2.57
======== ======== ========
See footnote explanations on following page.
</TABLE>
<TABLE>
Selected Financial Data
<CAPTION>
1997 1996 1995 1994 1993 1992
------ ------ ------ ------ ------ ------
(Dollars in millions, except
per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Profitability ratios
Operating profit
as a percent
of sales:
Europe 26.5% 26.3% 26.3% 23.1% 21.8% 18.8%
Asia Pacific 13.3 18.0 16.7 14.1 14.1 12.3
Latin America nm 16.1 9.7 8.9 10.2 4.3
United States nm 5.7 4.9 7.0 5.6 nm
Total operating
profit 11.9 19.5 18.1 15.9 15.3 nm
Return on average
equity<F4>,<F5> 30.5 65.0
Return on average
invested
capital<F4>,<F5> 17.1 32.6
Financial Condition
Working capital $103.3 $156.2 $88.1 $72.9 $(49.6) $(11.3)
Property, plant,
and equipment,
net 293.0 331.0 317.7 310.2 277.2 250.8
Total assets 847.2 978.5 944.0 882.6 785.1 661.1
Short-term
borrowings
and current
portion of
long-term debt - 25.3 83.8 58.3 139.9<F8> 19.3
Long-term debt 236.7 215.3 0.4 0.5 45.6 153.3
Shareholders'
equity 214.2 305.5 415.6 395.1 163.3 68.2
Current ratio 1.34 1.43 1.20 1.18 0.90 0.97
Long-term debt-
to-equity<F4> 110.5% 70.5%
Total debt-
to-capital<F4> 52.5% 44.1%
Other Data
Net cash provided
by operating
activities $161.8 $150.5 $179.2 $142.7 $150.3 $152.0
Capital
expenditures 67.5 96.0 69.3 72.9 85.6 80.0
Depreciation 66.1 65.3 61.3 55.7 44.7 50.1
Common Stock Data<F4>
Diviends declared
per share $0.88 $0.44<F7>
Dividend payout
ratio<F7> 66.7% 32.5%
Average common
shares outstanding
(thousands):
Basic 61,334 62,016
Diluted 61,827 62,806
Year-end book
value per share $3.51 $ 4.90
Year-end price/
earnings ratio 20.7 20.1
Year-end market/
book ratio 7.8 11.1
Year-end
shareholders
(thousands) 20.5 21.6
<FN>
<F1>Includes a $42.4 million fourth quarter pretax charge
($31.3 million after tax): $22.2 million in Latin America,
primarily for bad debts in Brazil; $16.0 million in United
States, primarily for inventory obsolescence; and $4.2
million in unallocated, primarily for corporate downsizing.
<F2>Pro forma net income is based on historical net income
adjusted for interest expense related to the increase in
borrowings incurred in connection with the distribution of
the company's equity to Premark International, Inc.'s
shareholders in May 1996. Information is not applicable
prior to 1995.
<F3>For all periods prior to the Distribution, the number of
shares used was the 62.0 million (basic) and 62.8 million
(diluted) shares as of the date of the Distribution.
<F4>Due to the change in the company's capital structure in
connection with the Distribution, this information is not
applicable or not meaningful for the omitted periods.
<F5>Returns on average equity and invested capital are
calculated using net income or pro forma net income and the
monthly balances of equity and invested capital beginning at
the date of the Distribution. Invested capital equals
equity plus debt.
<F6>In 1992, the company recorded a $136.7 million pretax
charge ($111.4 million after tax) primarily related to
consolidation of manufacturing capacity and restructuring
the U.S. distribution system.
<F7>The company initiated regular quarterly dividends of $0.22
per share beginning in the third quarter of 1996. The dividend
payout ratio is dividends declared per share divided by diluted
earnings per share. 1996 assumes four quarterly dividend
declarations.
<F8>Includes $105.0 million of the $150.0 million of 8.375
percent notes that were called at par on February 1, 1994.
nm - not meaningful
(/TABLE)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the results of operations
for 1997 compared with 1996, and of 1996 compared with 1995, and
changes in financial condition during 1997. This
information should be read in conjunction with the
consolidated financial information provided on pages 14 to
35 of this Annual Report.
The Distribution
On May 31, 1996, Tupperware Corporation (Tupperware, the company)
became an independent company through the distribution by Premark
International, Inc. (Premark) to its shareholders of the equity of
the company (the Distribution). The Distribution was effected
through a 1-for-1 distribution of stock, which was tax
free to Premark's shareholders pursuant to a ruling received
from the Internal Revenue Service.
Results of Operations
Net Sales and Net Income
Net sales in 1997 of $1.2 billion were 10 percent lower than
1996 net sales, reflecting decreases from operations in all
areas except Europe, which had a modest improvement. In
addition, foreign exchange had a significant negative impact
on the comparison of $105.2 million, or 7 percentage points.
In 1996, sales increased 0.7 percent over 1995 sales of $1.4
billion, reflecting a substantial increase from operations
in Latin America and slight improvements in Europe and Asia
Pacific. These increases were mostly offset by the
unfavorable impact of foreign exchange and lower U.S. sales.
Net income decreased 52 percent to $82.0 million in 1997 from
pro forma 1996 net income of $170.4 million. Europe had a
strong improvement in operating profit, before the impact of
foreign exchange, but the other three areas had
significantly lower results and foreign exchange had a
negative impact of $20.9 million, or 7 percentage points,
on the comparison. The 1997 results include a fourth
quarter pretax charge totaling $42.4 million ($31.3 million
after tax), primarily for provisions for bad debts in
Brazil, inventory obsolescence in the United States, and to
a lesser extent, corporate downsizing. Only a small portion
of the charge involves cash outlays by the company. Unallocated
corporate expenses increased $1.9 million in 1997 compared
with 1996, primarily reflecting the amount recorded as part of
the fourth quarter charge, which was offset by lower provisions
for annual executive incentive payments. Additionally, during
1996, the company incurred $9.1 million of pretax costs
associated with becoming an independent company.
Pro forma net income increased 6 percent to $170.4 million
in 1996, compared with $161.1 million in 1995. All areas
had operational improvements, but foreign exchange had an
$11.3 million negative impact on the comparison. Corporate
expenses decreased substantially compared with 1995, which
included an allocation of overhead from Premark for the full
year. In both 1997 and 1996, 87 percent of sales, and in
1997 and 1996, 100 percent and 96 percent, respectively, of
the company's operating profit were generated by
international operations.
Costs and Expenses
The cost of products sold in relation to sales was 38.6
percent, 35.6 percent, and 35.4 percent in 1997, 1996, and
1995, respectively. The higher ratio in 1997 compared with
1996 reflects lower manufacturing capacity utilization, along
with the inventory obsolescence provision recorded in the
United States in the fourth quarter. Delivery, sales, and
administrative expense as a percentage of sales was 50.5 percent,
45.8 percent, and 48.1 percent in 1997, 1996, and 1995, respectively.
Expenses decreased slightly in 1997, but the impact on the
ratio was not as great as the impact of lower sales. A
significant reason for this was the bad debt provision
recorded in Brazil in the fourth quarter. The ratio
improved in 1996 compared with 1995 as costs were contained
while sales rose, particularly in Latin America.
Tax Rate
The effective tax rates for 1997, 1996, and 1995, were 26.0
percent, 25.5 percent, and 23.8 percent, respectively. The
1997 rate did not change significantly from the 1996 rate as
the impact of a higher foreign effective tax rate and the
absence of the 1996 benefit of a capital loss carryforward was
largely offset by the impact of lower pretax income and the
generation of a higher level of foreign tax credits. The
increase in 1996 compared with 1995 was due to a lower
benefit from repatriating foreign earnings and the absence
of the 1995 benefit from the resolution of certain
international and domestic tax audit contingencies. These
factors were only partially offset by the 1996 benefit of
a capital loss carryforward and from reducing the valuation
allowance for U.S. federal deferred tax assets.
Net Interest
The company had $17.8 million of net interest expense in
1997, compared with net interest expense of $8.0 million in
1996, and net interest income of $1.9 million in 1995.
Until immediately before the Distribution, the company was
capitalized primarily through Premark's net investment. No
interest was charged to the company for this funding, which
is the reason for the lower net interest expense in 1996 and
the net interest income in 1995. In future years, the
company expects to incur net interest expense at a level
closer to 1997 than in prior years, since in 1997, net
borrowings were outstanding for the entire year.
</TABLE>
<TABLE>
Regional Results
1997 vs. 1996
<CAPTION>
Negative Percent of
Decrease Restated<F2> foreign total
--------------- increase exchange ----------
1997 1996 Dollar Percent (decrease) impact 1997 1996
------- -------- ------- ------- ---------- -------- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales
Europe $ 546.6 $ 581.7 $ (35.1) (6)% 7% $ (68.8) 44% 42%
Asia Pacific 279.0 338.0 (59.0) (18) (8) (35.6) 23 25
Latin America 247.2 268.5 (21.3) (8) (8) (0.8) 20 20
United States 156.5 181.1 (24.6) (14) (14) - 13 13
------- -------- ------- ------- ---- ----
$1,229.3 $1,369.3 $(140.0) (10)% (3)% $(105.2) 100% 100%
======== ======== ======= ======= ==== ====
Operating Profit
Europe $ 144.6 $ 153.0 $ (8.4) (6)% 8% $ (19.3) 99% 57%
Asia Pacific 37.2 61.0 (23.8) (39) (28) (9.2) 25 23
Latin America (5.7)<F1> 43.3 (49.0) nm nm (0.2) nm 16
United States (29.5)<F1> 10.4 (39.9) nm nm - nm 4
-------- ------- ------- ------- ---- ----
$ 146.6 $ 267.7 $(121.1) (45)% (39)% $ (28.7) nm 100%
======== ======== ======= ======= ==== ====
<FN>
<F1>Includes fourth quarter charge: $22.2 million in Latin America,
primarily for bad debt expense in Brazil; and $16.0 million in the
United States, primarily for inventory obsolescence.
<F2>1997 actual compared with 1996 translated at 1997 exchange rates.
nm - not meaningful
</TABLE>
Europe
The 1997 sales improvement before the impact of foreign
exchange was attributable to higher volume in Germany and
Italy, along with the sale of a better mix of product in
South Africa. Partially offsetting these factors were
decreases in the United Kingdom and France due to lower
volume. In Germany, which accounts for a substantial
portion of the region's sales and operating profit, the
higher volume resulted from successful recruiting programs
that led to a larger sales force. Italy's sales force also
increased due to better recruiting results. In the United
Kingdom, the reduced volume reflected the inability to
recruit a dynamic sales organization, while the shortfall
in France resulted from the difficult consumer market and
recruiting environment given the country's social welfare
system, which can incent people to stay out of the work force.
The 1997 operating profit increase before the impact of
foreign exchange reflected the net improvement in sales
volume along with more efficient promotional spending, which
were partially offset by other higher operating expenses
throughout the area. The negative impact of foreign exchange
on both sales and operating profit related to currencies
throughout the region.
Asia Pacific
Excluding the negative impact of foreign exchange, which
was due to the dollar's strength against currencies
throughout the region, sales decreased primarily due to
lower volume in Japan and the Philippines. In both
countries, the number of demonstrations fell reflecting
smaller sales forces. Operating profit fell more
significantly, due to higher per unit manufacturing
costs, in addition to the lower sales volume, which was only
partially offset by a volume-related decline in promotional
spending.
Latin America
The 1997 results reflected significant sales decreases due to
lower volume in Brazil and Argentina, which were partially
offset by higher volume in Mexico. The decreases in Brazil
and Argentina were due to significantly lower sales
force productivity and activity levels, which are being
addressed through training of distributors and the sales
forces in direct selling fundamentals and by refocusing on
group demonstration versus one-on-one selling. In Mexico
the number of sellers increased substantially. The
operating profit decrease resulted from the impact of the net
sales decline, along with $22.2 million of the fourth
quarter charge, which was primarily for bad debt reserves
in Brazil. The higher reserve position became
necessary in the fourth quarter due to a decision to
significantly reduce the number of distributors and due to
sales and past due receivables levels.
United States
The U.S. sales decline resulted from implementation of
higher sales force standards in the latter half of 1996.
The new standards led to a smaller active sales force,
compared with 1996, although fourth quarter sales exceeded
those of 1996 as a result of an improvement in sales force
productivity. New programs, including a two-tiered vehicle
program, have been implemented to increase recruiting and
activity. Excluding the $16.0 million of the fourth quarter
charge that relates to the United States, the operating loss
was $13.5 million, or $23.9 million worse than 1996,
reflecting the lower sales volume and higher per unit
manufacturing costs due to lower production volume. These
factors were only partially offset by a reduction in
operating expenses that reflected the effort to improve
profitability. The fourth quarter charge was primarily for
inventory obsolescence, due to a decision to undertake a
rationalization of the product line after exhausting
opportunities to reduce inventories through normal channels.
<TABLE>
Regional Results
1996 vs. 1995
<CAPTION>
Increase Negative Percent of
(decrease) Restated<F1> foreign total
--------------- increase exchange ----------
1996 1995 Dollar Percent (decrease) impact 1996 1995
------- -------- ------- ------- ---------- -------- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales
Europe $ 581.7 $ 595.1 $(13.4) (2)% 2% $(25.5) 42% 44%
Asia Pacific 338.0 355.1 (17.1) (5) 3 (27.6) 25 26
Latin America 268.5 200.6 67.9 34 41 (9.6) 20 15
United States 181.1 208.6 (27.5) (13) (13) - 13 15
------- -------- ------ ------ ---- ----
$1,369.3 $1,359.4 $ 9.9 1% 6% $(62.7) 100% 100%
======== ======== ====== ====== ==== ====
Operating Profit
Europe $ 153.0 $ 156.8 $ (3.8) (2)% 3% $ (7.7) 57% 64%
Asia Pacific 61.0 59.4 1.6 3 13 (5.1) 23 24
Latin America 43.3 19.4 23.9 122 148 (2.0) 16 8
United States 10.4 10.3 0.1 1 1 - 4 4
-------- ------- ------ ------ ---- ----
$ 267.7 $ 245.9 $ 21.8 9% 16% $(14.8) 100% 100%
======== ======= ====== ====== ==== ====
<FN>
<F1>1996 actual compared with 1995 translated at 1996 exchange rates.
</TABLE>
Europe
The sales improvement in Europe, excluding the negative
impact of foreign exchange, was from higher volume in Italy
and certain smaller markets and was only partially offset by
lower volume in France. Italy's increase in volume was
attributable to its success in recruiting and motivating a
larger active sales force, while the lower volume in France
was attributable to a smaller active sales force and the
weak economic environment. In Germany, 1996 sales were even
with 1995 sales, after considering the unfavorable impact of
foreign exchange. Lower sales in Germany in the first
quarter of 1996 were offset by higher volume during the
remainder of the year, particularly the second and third
quarters. In the first quarter, a weak economy, together
with lower sales during an important promotional period, led
to the poor comparison with the first quarter
of 1995. The impact of strong sales force recruiting for
the remainder of the year offset the sales shortfall in the
first quarter.
The higher operating profit in 1996, excluding the impact of
foreign exchange, reflected the sales fluctuations addressed
above, along with lower promotional costs in Germany and a
lower cost structure in the United Kingdom, partially offset
by higher costs in Spain. The negative impact of foreign
exchange on both sales and operating profit reflected the
dollar's strength against the currencies throughout the
region.
Asia Pacific
Excluding the impact of a weak Japanese yen, Asia Pacific's
higher sales were from significant volume improvements in
Korea and Malaysia, which were only partially offset by
decreases in volume in Taiwan and the Philippines. For
Korea, Malaysia, and Taiwan, the variations from 1995
reflected the sizes of the active sales forces. The lower
sales in the Philippines were mainly due to the effect of an
inventory liquidation program in 1995.
Operating profit increased as a result of the higher volume
in Korea, partially offset by lower profit in Japan due to
the weak yen and a lower gross margin because of sales of a
higher percentage of third party sourced product. Operating
profit in Malaysia did not increase in line with the higher
sales due to the costs associated with importing a greater
proportion of products. Operating profit in
Taiwan and the Philippines fell as a result of the lower
sales.
Latin America
In Latin America, more than 100 new distributors were added,
leading to a 77 percent increase in the average active sales
force. The resulting improvements in sales and operating
profit were due to higher volume in Mexico, Brazil, and
Argentina. In addition to the positive impact of higher
volume, operating profit also improved due to a lower
operating expense structure in relation to the higher sales
and more focused promotional spending. The negative impact
of foreign exchange on the region's sales and operating
profit comparisons was primarily from weakness in the
Mexican peso.
United States
The decline in U.S. sales was the result of a transition to
distributors that do not stock inventory and the impact of
implementing higher sales force standards. The new sales
force standards led to a considerable decrease in the number
of managers and therefore a reduced number of dealers
recruited. The slightly higher U.S. operating profit in
1996 compared with 1995, in spite of the lower sales, was
due to improved manufacturing efficiencies and lower
administrative expenses.
Financial Condition
Liquidity and Capital Resources
Working capital decreased to $103.3 million as of December
27, 1997, compared with $156.2 million as of December 28,
1996, and $88.1 million as of December 30, 1995. The
current ratio was 1.3 to 1 at the end of 1997, 1.4 to 1
at the end of 1996, and 1.2 to 1 at the end of 1995.
The 1997 decrease in working capital resulted primarily
from a lower level of inventories reflecting the company's
reduction initiative, as well as provisions for obsolescence.
Other significant factors contributing to the decrease were
a lower cash balance resulting from efforts to reduce
overseas deposits, and a reduction in accounts receivable
reflecting lower sales and higher reserves for doubtful
accounts. Partially offsetting these factors were lower
accounts payable and accrual balances due to lower levels
of production, employee incentives earned, and promotional
awards earned by the sales forces. Also, as of the end of
1997, the company classified all of its borrowings that
were current by their terms as long-term debt due to
its ability and intent that they be outstanding
throughout 1998. In 1996, a portion of these borrowings
remained in current liabilities. In addition, working
capital decreased from the impact of a stronger U.S. dollar
versus foreign currencies at the end of 1997 compared
with the end of 1996.
The 1996 increase in working capital was due to a reduction
in the amount of debt classified as current, and an increase
in inventories because of substantial sales growth in Latin
America and lower than planned fourth quarter sales in
certain markets. These factors were only partially offset
by a decrease in cash and cash equivalents, as part of the
effort to reduce overseas deposits.
On May 28, 1997, a subsidiary of the company sold to the
public $15.0 million of 6.84 percent fixed rate notes, which
mature on June 2, 2000 (Notes). The proceeds of the Notes
were used to refinance a portion of the company's
outstanding commercial paper borrowings. On August 8, 1997,
the company amended its $300 million unsecured multicurrency
credit facility to extend its maturity date from May 16, 2001,
to August 8, 2002. The total debt-to-capital ratio at the end
of 1997 was 52.5 percent compared with 44.1 percent at the end
of 1996. As of December 27, 1997, the company had $300 million
available under the multicurrency credit facility. The
multicurrency credit facility, along with $189 million of
foreign uncommitted lines of credit, and cash generated by
operating activities, are expected to be adequate to finance
any additional working capital needs and capital
expenditures.
Operating Activities
Cash provided by operating activities was $161.8 million in
1997, compared with $150.5 million in 1996, and $179.2
million in 1995. In 1997, the benefit of improved working
capital management was only partially offset by the decrease
in net income. The primary reason for the lower 1996 amount
compared with 1995 was a more significant increase in
inventories.
Investing Activities
For 1997, 1996, and 1995, respectively, capital expenditures
totaled $67.5 million, $96.0 million, and $69.3 million.
The most significant individual component of capital
spending was new molds. The higher 1996 expenditures,
compared with 1997 and 1995, primarily relate to the
increase of manufacturing capacity in Latin America
and higher spending on molds. Capital expenditures are
expected to be about $70 million in 1998.
Dividends
Quarterly dividends were initiated in August 1996 at $0.22
per share. During 1997 and 1996, respectively, the company
declared dividends of $0.88 and $0.44 per share of common stock.
Share Repurchases
In November 1996, the company announced it would repurchase
up to 5 million shares of its common stock, with volume and
timing to depend on market conditions. Shares are being
acquired for general corporate needs. In 1997, the company
repurchased 1.5 million shares in the open market for a
total cost of $57.6 million or an average of $39 per share.
On January 12, 1998, the company announced that it would
accelerate its repurchases under the program, subject to
market conditions. Through February 27, 1998, 3.1 million shares
had been repurchased under the program since its initiation,
for a total of $98.9 million or an average of $32 per share.
New Accounting Standards
In February 1997, the Financial Accounting Standards Board
(FASB) adopted Statement of Financial Accounting Standards
(SFAS) No. 128, "Earnings per Share," which has caused the
company to change beginning with these financial statements,
the way that it calculates and displays per share
information. Under the new rules, the company displays
"basic" earnings per share, which is net income divided by
weighted average shares outstanding during the period. Also
displayed is "diluted" earnings per share, which considers
the impact of common stock equivalents. Based on the
company's capital structure, its common stock equivalents
are employee and director stock options and restricted
stock. The difference between basic and diluted earnings
per share is not significant for the company, nor is the
difference between per share earnings computed under the new
and previous methods. Earnings per share presented for
prior periods has been restated to the new method.
In June 1997, the FASB adopted two standards, SFAS Nos. 130
and 131, "Reporting Comprehensive Income" and "Disclosures
about Segments of an Enterprise and Related Information,"
respectively. Both of these new standards relate to the
display of financial information rather than impacting the
computation of net income or earnings per share, and both
will be effective for the company beginning with its 1998
annual financial statements. SFAS 130 requires that
companies display "comprehensive income," which in addition
to the current definition of net income includes certain
amounts currently recorded directly in equity. For the
company, the only such item is foreign currency translation
adjustments. The new standard will be adopted by adding a
column, which will show comprehensive income, to the statement
of changes in shareholders' equity.
SFAS 131 mandates the management approach to identifying
business segments. Under the management approach, segments
are defined as the organizational units that have been
established for internal performance evaluation purposes.
For the company, this will mean that the four areas
currently identified in Note 10 to the consolidated financial
statements on geographic information will be defined
as business segments. Since this information is
already displayed as geographic information in the company's
financial statement notes and since the information included
in management's discussion and analysis of results of
operations is also organized in this manner, adoption of
this standard will not have a significant impact on the
company's financial statements.
Year 2000 Issues
The company has studied the "Year 2000" issues affecting
its operations and has prepared a plan to address them.
That plan is now being implemented and the issues are not
expected to have a material adverse effect on the company's
operations. Furthermore, the cost of addressing Year 2000
issues has not been material to the company to date and is
not expected to be in future periods.
Market Risk and Impact of Inflation
One of the company's market risks is its exposure to the
impact of interest rate changes. The company has elected
to manage this risk through the maturity structure of its
borrowings. Under its present policy, the company has set
a target of having approximataely half of its borrowings
with extended terms.
A significant portion of the company's sales and profits
comes from its international operations. Although these
operations are geographically dispersed, which partially
mitigates the risks associated with operating in particular
countries, the company is subject to the usual risks
associated with international operations. These risks
include local political and economic environments, and
relations between foreign and U.S. governments.
Another economic risk of the company, which is associated
with its operating internationally, is the exposure to
fluctuations in foreign currency exchange rates on the
earnings, cash flows, and financial position of the
company's international operations. The company is not
able to project in any meaningful way the possible effect
of these fluctuations on translated amounts or future
earnings. This is due to the large number of currencies
involved, the constantly changing exposure in these
currencies, and the fact that all foreign currencies do
not react in the same manner in relation to the U.S. dollar.
In response to the fact that a strengthening U.S. dollar
generally has a negative impact on the company, the company
uses financial instruments, such as forward contracts, to
hedge its exposure to certain foreign exchange risks
associated with non-permanent intercompany borrowings and
a portion of its investment in international operations.
In addition to hedging against the balance sheet impact of
changes in exchange rates, the hedge of investments in
international operations also has the effect of hedging a
portion of the cash flows from those operations. See
Note 6 to the consolidated financial statements for a
description of the nature of the risks associated with
the company's derivative financial instruments and for
information on the company's year-end open forward contract
positions.
Inflation as measured by consumer price indices has continued at a
low level in most of the countries in which the company
operates, notwithstanding the recent economic
problems in Asia.
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Year Ended
------------------------------------
Dec. 27, Dec, 28, Dec. 30,
1997 1996 1995
--------- -------- --------
(In millions, except per share amounts)
<S> <C> <C> <C>
Net sales $1,229.3 $1,369.3 $1,359.4
-------- -------- --------
Costs and expenses:
Cost of products sold 473.9 487.3 481.5
Delivery, sales, and
administrative expense 620.7 627.2 653.5
Interest expense 24.1 13.2 3.1
Interest income (6.3) (5.2) (5.0)
Costs associated with
becoming an
independent company -- 9.1 --
Other expense, net 6.1 3.2 1.4
-------- -------- --------
Total costs
and expenses 1,118.5 1,134.8 1,134.5
-------- -------- --------
Income before
income taxes 110.8 234.5 224.9
Provision for
income taxes 28.8 59.8 53.5
-------- -------- --------
Net income $ 82.0 $ 174.7 $ 171.4
======== ======== ========
Net income
per common share
(pre 1997 pro forma
and unaudited):
Basic $ 1.34 $ 2.75 $ 2.60
======== ======== ========
Diluted $ 1.32 $ 2.71 $ 2.57
======== ======== ========
See Notes to the Consolidated Financial Statements.
</TABLE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
<CAPTION>
Dec. 27, Dec. 28,
1997 1996
-------- --------
(Dollars in millions, except per share amounts)
<S> <C> <C>
Assets
Cash and cash equivalents $ 22.1 $ 53.0
Accounts receivable,
less allowances
of $40.4 in 1997 and
$25.9 in 1996 97.0 121.3
Inventories 184.2 252.8
Deferred income
tax benefits 44.4 35.1
Prepaid expenses
and other 55.4 61.0
------- ------
Total current assets 403.1 523.2
------- ------
Deferred income tax benefits 82.7 56.4
Property, plant, and
equipment, net 293.0 331.0
Long-term receivables,
net of allowances of $39.3
in 1997 and $38.0 in 1996 36.4 33.5
Other assets 32.0 34.4
------- -------
Total assets $ 847.2 $ 978.5
======= =======
Liabilities and
shareholders' equity
Accounts payable $ 75.4 $ 95.6
Short-term borrowings
and current portion of
long-term debt -- 25.3
Accrued liabilities 224.4 246.1
------- -------
Total current
liabilities 299.8 367.0
------- -------
Long-term debt 236.7 215.3
Accrued postretirement
benefit cost 38.0 36.9
Other liabilities 58.5 53.8
Shareholders' equity:
Preferred stock,
$0.01 par value,
200,000,000 shares
authorized; none issued -- --
Common stock, $0.01
par value, 600,000,000
shares authorized;
62,367,289 and 62,359,824
shares issued at December 27,
1997, and December 28, 1996,
respectively 0.6 0.6
Capital surplus 19.5 19.1
Retained earnings 441.4 418.2
Treasury stock, 1,400,207
at cost (54.0) --
Unearned portion of
restricted stock issued
for future service (2.4) (3.9)
Cumulative foreign
currency adjustments (190.9) (128.5)
------- -------
Total shareholders'
equity 214.2 305.5
------- -------
Total liabilities
and shareholders'
equity $ 847.2 $ 978.5
======= =======
See Notes to the Consolidated Financial Statements.
</TABLE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<CAPTION>
Net Cumulative
Common Common Treasury Treasury investment foreign
stock stock stock stock by Capital Retained currency
shares Dollars shares Dollars Premark surplus earnings adjustments
------ ------- -------- ------- --------- ------- -------- -----------
(In millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1994 -- -- -- -- $ 508.1 -- -- $(113.0)
Net income 171.4
Net transactions
with Premark (146.0)
Translation
adjustments (4.9)
------ ---- ---- ----- ------- ----- ------- -------
December 30, 1995 -- -- -- -- 533.5 -- -- (117.9)
Net Income 31.6 $ 143.1
Shares issued
to Premark 62.1 $0.6 (0.6)
Net transactions
with Premark
other than
special dividend 31.7
Special dividend
to Premark (293.7) $ 8.8
Distribution of
equity of the
company to
Premark's
shareholders (302.5) 302.5
Cash dividends
declared
($0.44
per share) (27.4)
Stock issued for
incentive plans
and related
tax benefits 0.3 -- 10.3
Translation
adjustments (10.6)
---- ---- ---- ------ -------- ----- ------- -------
December 28, 1996 62.4 0.6 -- -- -- 19.1 418.2 (128.5)
Net income 82.0
Distribution of
equity of the
company to
Premark's
shareholders (2.7)
Cash dividends
declared
($0.88 per share) (53.9)
Purchase of
treasury stock 1.5 $(57.6)
Stock issued for
incentive plans
and related tax
benefits (0.1) 3.6 0.4 (2.2)
Translation
adjustments (62.4)
---- ---- ----- ------ -------- ----- ------- -------
December 27, 1997 62.4 $0.6 1.4 $(54.0) -- $19.5 $ 441.4 $(190.9)
==== ==== ===== ====== ======== ===== ======= =======
See Notes to the Consolidated Financial Statements.
</TABLE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
Year Ended
---------------------------------------
Dec. 27, Dec. 28, Dec. 30,
1997 1996 1995
-------- -------- ----------
(In millions)
<S> <C> <C> <C>
Cash flows from
operating activities
Net Income $ 82.0 $ 174.7 $ 171.4
Adjustments to
reconcile net
income to net
cash provided
by operating
activities:
Depreciation 66.1 65.3 61.3
Loss on sale
of assets 2.7 5.2 5.3
Foreign exchange
loss, net 1.2 1.3 0.6
Changes in assets
and liabilities:
Decrease (increase)
in accounts and
notes receivable 15.5 (14.1) (25.7)
Decrease (increase)
in inventories 44.7 (54.0) (24.5)
(Decrease) increase
in accounts payable
and accrued
liabilities (13.6) 2.0 4.1
(Decrease) increase
in income taxes
payable 5.1 0.6 2.0
(Increase) decrease
in net deferred
income taxes (33.2) (16.3) 7.8
Other, net (8.7) (14.2) (23.1)
------ ------- -------
Net cash provided
by operating
activities 161.8 150.5 179.2
------ ------- -------
Cash flows from
investing activities
Capital expenditures (67.5) (96.0) (69.3)
------ ------- -------
Cash flows from
financing activities
Special dividend
to Premark -- (284.9) --
Net transactions with
Premark other than
special dividend -- 37.6 (146.0)
Dividend payments
to shareholders (54.2) (13.7) --
Payments to acquire
treasury stock (57.1) -- --
Proceeds from
exercise of
stock options 3.4 6.3 --
Net (decrease)
increase in
short-term debt (14.8) (54.1) 31.4
Proceeds from
issuance of
long-term debt 15.0 315.5 0.7
Repayment of
long-term debt -- (100.6) (0.7)
------ ------- -------
Net cash used
in financing
activities (107.7) (93.9) (114.6)
------ ------- -------
Effect of exchange
rate changes on cash
and cash equivalents (17.5) (4.9) (0.3)
------ ------- -------
Net decrease
in cash and
cash equivalents (30.9) (44.3) (5.0)
Cash and cash
equivalents at
beginning of year 53.0 97.3 102.3
------ ------- -------
Cash and cash
equivalents at
end of year $ 22.1 $ 53.0 $ 97.3
====== ======= =======
See Notes to the Consolidated Financial Statements.
</TABLE>
TUPPERWARE CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of
Tupperware Corporation and all of its subsidiaries (the
company or Tupperware). All significant intercompany accounts
and transactions have been eliminated. Certain prior year
amounts have been reclassified to conform with the current year's
presentation. The company's fiscal year ends on the last
Saturday of December.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, as well
as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these
estimates.
Cash and Cash Equivalents
The company considers all highly liquid investments with
a maturity of three months or less when purchased to be cash
equivalents. As of December 27, 1997 and December 28, 1996,
$13.5 million and $28.1 million, respectively, of the cash and
cash equivalents included on the consolidated balance sheet
were held in the form of time deposits or certificates of
deposit.
Inventories
Inventories are valued at the lower of cost or market.
Inventory cost includes cost of raw material, labor, and
overhead. Domestic inventories, approximately 15 percent
and 25 percent of total inventories, at December 27, 1997,
and December 28, 1996, respectively are valued on the
last-in, first-out (LIFO) cost method. The first-in,
first-out (FIFO) cost method is generally used for the
remaining inventories. If inventories valued on the LIFO
method had been valued using the FIFO method,they would
have been $16.0 million higher at the end of 1997 and $20.6
million higher at the end of 1996.
Property and Depreciation
Properties are initially stated at cost. Depreciation is
determined on a straight-line basis over estimated useful
lives. Generally, the estimated useful lives are 10 to 45
years for buildings and improvements and 3 to 20 years for
machinery and equipment. Upon the sale or retirement of
property, plant, and equipment, a gain or loss is recognized.
If the carrying value of an asset, including associated
intangibles, exceeds the sum of estimated undiscounted future
cash flows, then an impairment loss is recognized for the
difference between estimated fair value and carrying value.
Expenditures for maintenance and repairs are charged to
expense.
Revenue Recognition
Revenue is recognized when product is shipped.
Advertising and Research and Development Costs
Advertising and research and development costs are charged to
expense as incurred. Advertising expense totaled $6.2
million, $7.3 million, and $8.7 million in 1997, 1996, and
1995, respectively. Research and development costs totaled
$12.8 million, $7.2 million, and $6.3 million in 1997, 1996,
and 1995, respectively.
Accounting for Stock-Based Compensation
The company measures compensation expense for employee and
director stock options as the aggregate difference between the
market and exercise prices of the options on the date that
both the number of shares the grantee is entitled to receive
and the purchase price are known. Compensation expense
associated with restricted stock grants is equal to the market
value of the shares on the date of grant and is recorded pro
rata over the required holding period. Pro forma information
relating to the fair value of stock-based compensation is
presented in Note 9 to the consolidated financial statements.
Income Taxes
Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to temporary differences
between the financial statement carrying amounts of assets and
liabilities and their respective tax bases. Deferred tax
assets also are recognized for credit carryforwards. Deferred
tax assets and liabilities are measured using the rates
expected to apply to taxable income in the years in which the
temporary differences are expected to reverse and the credits
are expected to be used. The effect on deferred tax assets
and liabilities of the change in tax rates is recognized in
income in the period that includes the enactment date. An
assessment is made as to whether or not a valuation allowance
is required to offset deferred tax assets. This assessment
includes anticipating future income.
The results of the company's domestic operations were
included in Premark International, Inc.'s (Premark)
consolidated U.S. federal tax return through May 31, 1996, the
date of the Distribution. The provisions for income taxes
included in these financial statements for periods prior to
the Distribution are the company's allocated share of
Premark's domestic income tax expense, representing the
expense that the company would have incurred on a separate
return basis, and the actual income tax provisions of its
foreign subsidiaries.
As part of the plan of Distribution, Tupperware and Premark
entered into a tax sharing agreement. This agreement
generally provides that for periods prior to the Distribution,
the two companies will retain the liability for any unpaid
taxes attributable to their respective operations.
Net Income Per Common Share
In 1997, the company adopted Statement of Financial Accounting
Standards No. 128, "Earnings Per Share." Accordingly, these
financial statements include "basic" and "diluted" per share
information for all periods presented. Basic per share
information is calculated by dividing net income by the
weighted average number of shares outstanding. Diluted per
share information is calculated by also considering the impact
of common stock equivalents on both net income and the
weighted average number of shares outstanding. The weighted
average number of shares used in the basic earnings per share
computations were 61.3 million, 62.0 million, and 62.0 million,
in 1997, 1996, and 1995, respectively. The only difference
in the computation of basic and diluted earnings per
share is the inclusion of 0.5 million in 1997 and 0.8 million
in 1996 and 1995 of common stock equivalents. The company's
common stock equivalents consist of employee and director
stock options and restricted stock. Per share information
pertaining to 1996 and 1995 has been restated to conform with
the current year's presentation.
Pro forma net income per common share is calculated for
periods prior to the Distribution as if the Distribution
had occurred at the beginning of fiscal 1995. The pro
forma amounts assume that the company used $25.0 million
of available cash and $271.9 million of additional
borrowings to fund a special dividend payment to Premark
of $284.9 million, and $12.0 million for the
amount that the company paid in July 1996 related to the
quarterly dividend declared on Premark's common stock on May
1, 1996. Pro forma net income is based on the company's
historical net income adjusted in 1996 and 1995 for $7.0
million and $16.9 million of additional interest expense, net
of $2.7 million and $6.6 million of tax benefits, respectively,
related to the increase in borrowings at an assumed
weighted average interest rate of 6.2 percent. Pro forma net
income per share includes pro forma net income divided by an
assumed average common shares of 62.0 million for basic and
62.8 million for diluted, respectively, for all periods prior
to the Distribution and actual net income per share for the
period subsequent to the Distribution.
Derivative Financial Instruments
The company uses derivative financial instruments, principally
over-the-counter forward exchange contracts with major
international financial institutions, to offset the effects of
exchange rate changes on net investments in certain foreign
subsidiaries, firm purchase commitments, and certain
intercompany loan transactions. Gains and losses on contracts
designated as hedges of net investments in a foreign subsidiary
or intercompany transactions that are permanent in nature are
accrued as exchange rates change, and are recognized in
shareholders' equity as foreign currency translation adjustments.
Gains and losses on contracts designated as hedges of intercompany
transactions that are not permanent in nature are accrued as
exchange rates change and are recognized in income. Gains and
losses on contracts designated as hedges of identifiable
foreign currency firm commitments are deferred and included in
the measurement of the related foreign currency transaction.
Contracts hedging non-permanent intercompany transactions and
identifiable foreign currency firm commitments are held to
maturity.
Fair Value of Financial Instruments
Due to their short maturity or their insignificance, the
carrying amounts of cash and cash equivalents, accounts and
notes receivable, accounts payable, accrued liabilities,
short-term borrowings, and outstanding forward exchange
contracts approximated their fair values at December 27, 1997,
and December 28, 1996. The approximate fair value of the
company's $100 million of 7.25 percent notes due in 2006,
determined through reference to market yields, was $105.5
million and $102.2 million as of December 27, 1997, and
December 28, 1996, respectively. The fair value of the
remaining long-term debt approximated its book value at the
end of 1997 and 1996.
Foreign Currency Translation
Results of operations for foreign subsidiaries are translated
into U.S. dollars using the average exchange rates during the
year. The assets and liabilities of those subsidiaries, other
than those of operations in highly inflationary countries, are
translated into U.S. dollars using the exchange rates at the
balance sheet date. The related translation adjustments are
recorded in a separate component of shareholders' equity,
"Cumulative foreign currency adjustments." Foreign currency
transaction gains and losses, as well as translation of
financial statements of subsidiaries in highly inflationary
countries, are included in income.
Note 2: Relationship and Transactions with Premark
International, Inc.
On May 31, 1996, Tupperware became an independent company
through the distribution by Premark to its shareholders of
the equity of the company (the Distribution). The distribution
was effected through a 1-for-1 distribution of stock, which
was tax free to Premark's shareholders pursuant to a ruling
received from the Internal Revenue Service.
Under a Distribution Agreement, with Premark on May 24, 1996,
Dart Industries Inc. (Dart), which is now a
wholly-owned subsidiary of Tupperware, paid a $284.9 million
special dividend (the Dividend Payment) to Premark. Dart
funded the Dividend Payment with new bank borrowings and
available cash. In addition, the company paid Premark $12.0
million in July 1996 to fund a portion of the quarterly
dividend on Premark's common stock declared in May 1996.
Included in the consolidated statement of income is an
allocation of general corporate expenses related to services
provided for the company by Premark in the amounts of $4.4
million for 1996 through the date of the Distribution and
$14.5 million in 1995. This allocation was based on an
estimate of the proportion of corporate expenses related to
the company for the periods presented and, in the opinion
of management, has been made on a reasonable basis and
approximates the incremental costs that would have been
incurred had the company been operating on a stand-alone
basis.
Prior to the Distribution, there were no material intercompany
purchase or sale transactions between Premark and the company.
Under Premark's centralized cash management system, short-term
advances from Premark and excess cash sent to Premark were
reflected as "Net transactions with Premark" during the periods
prior to the Distribution. No interest was charged or otherwise
allocated by Premark to the company.
Note 3: Inventories
(In millions)
1997 1996
-------- --------
Finished goods $ 86.2 $127.5
Work in process 43.3 49.0
Raw materials and supplies 54.7 76.3
------ ------
Total inventories $184.2 $252.8
====== ======
Note 4: Property, Plant, and Equipment
(In millions)
1997 1996
-------- --------
Land $ 11.8 $ 11.9
Buildings and improvements 172.2 175.4
Machinery and equipment 738.2 760.8
Construction in progress 21.8 26.1
------- -------
Total property, plant,
and equipment 944.0 974.2
Less accumulated depreciation (651.0) (643.2)
------- -------
Property, plant,
and equipment, net $ 293.0 $ 331.0
======= =======
Note 5: Accrued Liabilities
(In millions)
1997 1996
-------- --------
Compensation and
employee benefits $ 52.7 $ 64.0
Advertising and promotion 36.5 53.5
Taxes other than income taxes 34.2 29.5
Income taxes 27.3 27.1
Other 73.7 72.0
------- -------
Total accrued liabilities $ 224.4 $ 246.1
======= =======
Note 6: Financing Arrangements
<TABLE>
Short-term Borrowings
(Dollars in millions)
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Total short-term
borrowings at year-end $105.0 $123.7 $83.8
Weighted average
interest rate at year-end 6.4% 5.3% 3.6%
Average borrowings
during the year $166.2 $186.4 $75.3
Weighted average
interest rate
for the year 5.5% 5.0% 3.3%
Maximum borrowings
during the year $212.5 $316.6 $95.8
</TABLE>
The average borrowings and weighted average interest rates
were determined using month-end borrowings and the interest
rates applicable to them. Of total year-end borrowings, $7.0
million was in the form of U.S. commercial paper. The
remaining $98.0 million of short-term borrowings was from
several banks, with $35.0 million payabale in French francs,
$17.6 million in German Marks, and $10.0 million in Japanese
yen. As of December 27, 1997, all of the company's
outstanding borrowings that were due within one year by
their terms were classified as non-current due to the
company's ability and intent that those borrowings be
outstanding throughout 1998.
Operating Leases
Rental expense for operating leases totaled $40.5 million
in 1997, $32.8 million in 1996, and $37.9 million in 1995.
Approximate minimum rental commitments under noncancellable
operating leases in effect at December 27, 1997, were: 1998 --
$7.7 million; 1999 -- $5.6 million; 2000 -- $3.0 million;
2001 -- $2.6 million; 2002 -- $2.2 million; after 2002 --
$3.1 million.
Long-term Debt
(In millions)
1997 1996
-------- --------
6.84% Series Notes due 2000 $ 15.0 $ --
7.05% Series Notes due 2003 15.0 15.0
7.25% Notes due 2006 100.0 100.0
Short-term borrowings
classified as non-current 105.0 98.8
Other 1.7 1.5
------ ------
Total long-term debt $236.7 $215.3
====== ======
On May 28, 1997, a subsidiary of the company sold to the
public $15.0 million of 3-year 6.84 percent unsecured notes
that are due in June 2000. The proceeds from these borrowings
were used to refinance a portion of the company's commercial
paper borrowings. As of December 27, 1997, the company had
$489.4 million of unused lines of credit, including
$300.0 million under an unsecured multicurrency facility
that was entered into in May 1996 and amended in August 1997.
This facility supports the company's commercial paper
borrowing capability and expires in August 2002. Interest
paid on total debt in 1997, 1996, and 1995 was $23.7 million,
$10.8 million, and $2.8 million, respectively.
<TABLE>
Derivative Financial Instruments
<CAPTION>
1997 1996
---------------------- ---------------------------
Weighted Weighted
average average
contract contract
rate of rate of
(Dollars in millions) Buy Sell exchange Buy Sell exchange
------ ------ --------- ----- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
French francs
with U.S. dollars $ 31.9 5.9278
Belgian francs
with U.S. dollars 31.6 36.5482 $14.2 31.7642
British pounds
with U.S. dollars 13.5 0.6044
Swiss francs
with U.S. dollars 10.9 1.4343 4.8 1.3292
Philippine pesos
with U.S. dollars 8.1 40.2700 15.1 26.5000
Portuguese escudos
with U.S. dollars 7.6 180.6614
Italian lira
with U.S. dollars 7.5 1,741.340 5.3 1,526.452
Austrian shillings
with U.S. dollars 7.2 12.4690
Netherlands guilders
with U.S. dollars 5.7 1.9948
German marks
with U.S. dollars 1.1 1.7419 9.7 1.5584
Belgian francs
for U.S. dollars $ 41.0 35.1055 $ 44.9 30.7505
Argentine pesos
for U.S. dollars 20.6 1.0090
French francs
for U.S. dollars 19.2 5.7896 26.2 5.0888
Spanish pesetas
for U.S. dollars 10.9 150.0700
Portuguese escudos
for U.S. dollars 8.9 175.4878 9.9 155.7788
Swiss francs
for U.S. dollars 7.2 1.3849 6.5 1.2436
Netherlands guilders
for U.S. dollars 4.5 1.9376 4.9 1.6787
Spanish pesetas
for Belgian francs 12.1 32.0513
French francs
for Swiss francs 5.4 1.3461
British pounds
for Netherlands guilders 5.1 1.7464
Other currencies 13.2 3.0 various 19.3 10.3 various
------ ------ ----- ------
Total $138.3 $115.3 $68.4 $125.3
====== ====== ===== ======
</TABLE>
The company's derivative financial instruments at December
27, 1997, and December 28, 1996, consisted solely of the
forward exchange contracts summarized on page 24. All of
the contracts mature within 12 months. The "buy" amounts
represent the U.S. dollar equivalent of commitments to
purchase foreign currencies and the "sell" amounts
represent the U.S. dollar equivalent of commitments
to sell foreign currencies, all translated at the
year-end market exchange rates for the U.S. dollar.
The contracts to sell Belgian, French and Swiss francs;
Portuguese escudos; and Netherlands guilders for U.S.
dollars are hedging a portion of the company's net
investments in those countries. All other contracts are
hedging cross-currency intercompany loans that are not
permanent in nature.
The company's theoretical credit risk for each forward
exchange contract is its replacement cost, but management
believes that the risk of incurring credit losses is remote
and that such losses, if any, would not be material. The
company also is exposed to market risk on its forward exchange
contracts due to potential changes in foreign exchange rates;
however, such market risk would be substantially offset by
changes in the valuation of the underlying items being hedged.
At December 27, 1997, and December 28, 1996, the net accrued
gains on all forward exchange contracts were $1.6 million and
$2.3 million, respectively. The aggregate impact of all
foreign currency transactions was not material to the
company's income.
Note 7: Income Taxes
For income tax purposes, the domestic and foreign
components of income before taxes were as follows:
<TABLE>
(In millions)
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Domestic $ 59.9 $ 97.8 $106.4
Foreign 50.9 136.7 118.5
------ ------ ------
Total $110.8 $234.5 $224.9
====== ====== ======
</TABLE>
The provision for income taxes was as follows:
<TABLE>
(In millions)
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Current:
Federal $ (1.3) $ 7.7 $(40.6)
Foreign 55.1 63.3 84.4
State 2.8 3.4 --
------ ------ ------
56.6 74.4 43.8
------ ------ ------
Deferred:
Federal (10.5) (6.8) 38.3
Foreign (16.1) (6.6) (30.6)
State (1.2) (1.2) 2.0
------ ------ ------
(27.8) (14.6) 9.7
------ ------ ------
Total $ 28.8 $ 59.8 $ 53.5
====== ====== ======
</TABLE>
The differences between the provision for income taxes and
income taxes computed using the U.S. federal statutory rate
were as follows:
<TABLE>
(In millions)
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Amount computed
using statutory
rate $ 38.8 $ 82.1 $ 78.7
Increase (reduction)
in taxes resulting
from:
Net benefit from
repatriating
foreign earnings (22.7) (6.8) (22.6)
Foreign income
taxes 21.3 -- 5.7
Changes in
valuation allowance
for federal deferred
tax assets (10.0) (9.9) --
Benefit of capital
loss carryforward -- (10.0) --
Resolution of tax
audit contingencies -- -- (10.4)
Other 1.4 4.4 2.1
------ ------- ------
$ 28.8 $ 59.8 $ 53.5
====== ======= ======
</TABLE>
In 1997, 1996, and 1995, the company recognized $0.3
million, $3.1 million, and $5.7 million, respectively, of
benefits for deductions associated with the exercise of
employee stock options. These benefits were added directly to
capital surplus in 1997 and 1996 and to "Net Investment by
Premark" in 1995, and are not reflected in the provision for
income taxes.
Deferred tax assets (liabilities) are composed of the
following:
(In millions)
1997 1996
---------- ----------
Depreciation $(16.8) $(29.0)
Deferred costs (2.2) (4.9)
Other (9.3) (3.4)
------ ------
Gross deferred
tax liabilities (28.3) (37.3)
------ ------
Credit carryforwards 42.4 31.7
Fixed assets basis differences 24.6 23.8
Employee benefits accruals 19.8 18.2
Inventory reserves 17.8 10.3
Postretirement benefits 15.7 14.3
Bad debt reserves 6.0 14.9
Computer leasing transactions 3.1 7.6
Other accruals 33.6 28.8
------ ------
Gross deferred tax assets 163.0 149.6
------ ------
Valuation allowances (14.4) (25.8)
------ ------
Net deferred tax assets $120.3 $ 86.5
====== ======
At December 27, 1997, the company had a domestic capital
loss carryforward of $40.7 million and foreign net operating
loss carryforwards of $61.2 million. The capital loss
carryforward expires in 2001. Of the total net operating loss
carryforwards, $48.9 million expire at various dates from 1998
to 2005, while the remainder have unlimited lives. During
1997, the company recognized net benefits of $6.4 million
related to foreign net operating loss carryforwards.
Repatriation of foreign earnings would not result in a
significant incremental cost to the company. At December 27,
1997, and December 28, 1996, the company had valuation
allowances against certain deferred tax assets totaling $14.4
million and $25.8 million, respectively. These valuation
allowances relate to tax assets in jurisdictions where it is
management's best estimate that there is not a greater than 50
percent probability that the benefit of the assets will be
realized in the associated tax returns. The likelihood of
realizing the benefit of deferred tax assets is assessed on
an ongoing basis. Consequently, future material changes in
the valuation allowance are possible.
The company paid income taxes in 1997, 1996, and 1995, of
$50.5 million, $76.5 million, and $75.2 million, respectively.
For periods prior to the Distribution when the company's
domestic operations were included in Premark's U.S. tax
returns, income tax payments were made only by foreign
subsidiaries of the company.
Note 8: Retirement Benefit Plans
Pension Plans
The company has various pension plans covering
substantially all domestic employees and certain employees in
other countries. Prior to the Distribution, the participants
in the domestic plan were covered by a pension plan with
similar benefits, sponsored by Premark (the Premark Plan).
Under an agreement with Premark, the company has assumed or
retained pension liabilities related to substantially all
Tupperware participants. Assets of the Premark Plan have been
allocated in accordance with ERISA rules between the Premark
Plan and the company's plan for domestic participants.
The actuarial cost method used in determining pension
expense is the projected unit credit method. Generally,
annual cash contributions are equal to the minimum funding
amounts required by ERISA for the U.S. plan.
Net pension expense included the following components:
<TABLE>
(In millions)
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Service cost on
benefits earned
during the year $ 4.4 $ 5.2 $ 4.8
Interest cost on
benefits earned
in prior years 5.0 5.4 5.8
Return on plan assets:
Actual gain (5.0) (4.2) (6.7)
Deferred gain 1.7 0.8 3.2
----- ----- -----
Net gain recognized (3.3) (3.4) (3.5)
Net amortization 0.6 0.8 0.8
----- ----- -----
Net pension
expense $ 6.7 $ 8.0 $ 7.9
===== ===== =====
</TABLE>
The assumed long-term rates of return on assets used in
determining net pension expense were: U.S. plan -- 9.0
percent; foreign plans -- various rates from 4.0 percent to
9.0 percent. The assumed discount rates used in determining
the actuarial present value of the projected benefit
obligations were: U.S. plan -- 7.25 percent at December
27, 1997, and December 30, 1995; and 7.75 percent at December
28, 1996; foreign plans -- various rates from 3.5 percent
to 8.0 percent. The assumed rates of increase in
future compensation levels were: U.S. plan -- 6.0 percent;
foreign plans -- various rates from 2.0 percent to 5.0
percent.
The funded status of the plans was as follows:
<TABLE>
(In millions)
U.S. Plans Foreign Plans
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Actuarial present
value of benefit
obligations:
Vested benefits $ 22.6 $ 20.3 $ 42.7 $ 49.2
Nonvested benefits 0.1 1.0 7.0 5.6
------ ------ ------ ------
Accumulated benefit
obligation 22.7 21.3 49.7 54.8
Effect of projected
future salary
increases 3.0 3.0 10.8 13.4
------ ------ ------ ------
Projected benefit
obligations 25.7 24.3 60.5 68.2
Plan assets at fair
value -- primarily
equity securities
and corporate and
government bonds 23.1 21.7 27.3 29.4
------ ------ ------ ------
Plan assets less
than projected
benefit obligations (2.6) (2.6) (33.2) (38.8)
Unrecognized prior
service cost -- -- 0.1 0.1
Unrecognized net
(gain) loss (1.3) (0.5) 2.6 7.4
Unrecognized net
transition (assets)
obligations (0.3) (0.4) 2.5 3.2
------ ------ ------ ------
Accrued pension cost $ (4.2) $ (3.5) $(28.0) $(28.1)
====== ====== ======= ======
</TABLE>
At December 27, 1997, and December 28, 1996, the accumulated
benefit obligations of certain foreign plans exceeded plan
assets. For those plans, the accumulated benefit obligations
were $40.3 million and $45.0 million and the projected benefit
obligations were $48.2 million and $54.7 million for 1997 and
1996, respectively. The fair values of those plans' assets at
the end of 1997 and 1996 were $15.9 million and $17.5 million,
respectively.
The company also has several savings, thrift, and
profit-sharing plans. Its contributions to these plans are
based upon various levels of employee participation. The
total cost of these plans was $4.9 million in 1997, $3.5
million in 1996, and $2.8 million in 1995.
Medical and Life Insurance Benefits
In addition to providing pension benefits, the company
provides certain postretirement health care and life insurance
benefits for selected U.S. and Canadian employees. Most
employees and retirees outside the United States are covered
by government health care programs. Employees may become
eligible for these benefits if they reach normal retirement
age while working for the company and satisfy certain years of
service requirements. The medical plans are contributory,
with retiree contributions adjusted annually, and contain
other cost-sharing features, such as deductibles and
coinsurance. The medical plans include an allowance for
Medicare for post-65 retirees.
The net periodic postretirement benefit costs for 1997, 1996,
and 1995 were:
<TABLE>
(In millions)
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Service cost $ 0.3 $ 0.5 $ 0.3
Interest on
accumulated
postretirement
benefit obligation 2.7 2.8 3.0
Net amortization (0.2) (0.1) (0.2)
----- ----- -----
Total $ 2.8 $ 3.2 $ 3.1
===== ===== =====
</TABLE>
The projected liabilities, which are not funded, are
reconciled with the amounts recognized in the company's
consolidated balance sheet, as follows:
(In millions)
1997 1996
---------- ----------
Accumulated
postretirement
benefit
obligations:
Retirees $34.8 $34.4
Other fully
eligible
participants 0.1 0.1
Other active
participants 3.2 3.9
----- -----
38.1 38.4
Unrecognized prior
service benefit 2.0 2.1
Unrecognized loss
(gain) 0.2 (1.2)
----- -----
Accrued
postretirement
benefit cost 40.3 39.3
Less current portion 2.3 2.4
----- -----
Total long-term
accrued
postretirement
benefit cost $38.0 $36.9
===== =====
The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 7.25 percent
at December 27, 1997 and December 30, 1995, and 7.75 percent at
December 28, 1996. The assumed health care cost trend rate
is 9 percent for the pre-65 plan and 6 percent for the
post-65 plan for 1997. The pre-65 plan rate is assumed
to decrease by one percentage point per year until
an ultimate level of 6 percent is reached. For the post-65
plan the rate is assumed to remain at 6 percent. The health
care cost trend rate assumption has a significant effect on
the amounts reported. For example, increasing the assumed
health care cost trend rates by one percentage point in each
year would increase the accumulated postretirement benefit
obligation as of December 27, 1997, by $3.6 million. The
effect of a one percentage point increase on the aggregate of
the service and interest cost components of net periodic
postretirement benefit cost for 1997 would be $0.3 million.
Note 9: Incentive Compensation Plans
Certain officers and other key employees of the company
participate in the Tupperware Corporation 1996 Incentive Plan
(the Incentive Plan). Annual and long-term performance awards
and awards of options to purchase Tupperware shares and of
restricted stock are made under the Incentive Plan.
Performance Awards
Earned performance awards of $7.5 million, $19.3 million,
and $12.9 million are included in the consolidated statement
of income for 1997, 1996, and 1995, respectively.
Stock Awards
The total number of shares initially available for grant under
the Incentive Plan was 6,100,000; however, that amount
has been increased to 7,600,000 (7,584,000 as of December
27, 1997) as a result of company repurchases of shares. Of
the total number of shares available for grant, up to 300,000
may be used for restricted stock awards. As of December 27,
1997, shares available for award under the Incentive Plan
totaled 3,812,236 of which 134,604 could be granted in
the form of restricted stock.
In connection with the Distribution, options to purchase
Premark shares and restricted shares of Premark stock that
were held by Tupperware officers and employees were cancelled
and reissued under the Incentive Plan as options to purchase
Tupperware shares and restricted shares of Tupperware stock.
The reissuances were in amounts and at exercise prices that
maintained the amount of unrealized stock appreciation. The
vesting dates and exercise periods of these options and
restricted shares were not affected by the cancellation and
reissuance. The exercise prices of all outstanding options
that were granted prior to 1997 have been set at the fair
market value of the shares on the date of grant.
In 1997, options to purchase 684,500 shares were granted with
exercise prices equal to the grant-date market value of
the shares. For the remaining 405,500 of options granted in
1997, the exercise price is 10 percent greater than the
grant-date market value of the shares. Under the options
outstanding as of December 27, 1997, 59,191 shares may be
purchased at prices less than $10.00 per share; 618,176 shares
at prices between $10.01 and $20.00 per share; 1,352,641
shares at prices between $20.01 and $30.00 per share;
672,812 shares at prices between $30.01 and $40.00
per share; and 644,050 shares at prices greater than
$40.00 per share. All outstanding options that have
exercise prices equal to grant-date market value have
vesting dates that are three years from the date of grant.
Options that have exercise prices in excess of the grant-
date market price will vest in three equal tranches if the
price of the company's stock exceeds $32.05, $36.05,
and $40.05 per share for 45 of 60 consecutive trading
days over the five-year period beginning on the date
of grant.
All outstanding options have exercise periods
that are 10 years from the date of grant. Outstanding
restricted shares have initial vesting periods ranging from
1 to 5 years. Options outstanding as of December 27, 1997,
will expire during the period 1999 through 2007, and have
a weighted-average remaining life of 7.6 years. As of
December 27, 1997, options to purchase 1,308,544
shares were exercisable.
No compensation expense has been reflected in the consolidated
income statement under the company's accounting policy. As
required by FASB Statement 123, "Accounting for Stock-Based
Compensation," the company has estimated the fair value of its
option grants beginning with 1995. If these fair value
estimates had been used to record compensation expense in the
consolidated income statement, net income/pro forma net
income would have been reduced by $2.5 million, $1.6 million,
and $0.1 million to $79.5 million, $168.8 million, and $161.0
million, or $1.29, $2.69, and $2.56 per diluted common
share ($1.30, $2.72, and 2.60 per basic share) in 1997, 1996,
and 1995, respectively.
The fair value of the stock option grants were estimated
using the Black-Scholes option-pricing model with the
following assumptions: dividend yield of 2.0 percent for all
years; expected volatility of 35.0 percent for 1997 and
30.0 percent for 1996 and 1995; risk-free interest rates of
5.8 percent for 1997 and 1995, and 6.4 percent for 1996;
and expected lives of 5 years for all years. Compensation
expense associated with restricted stock grants is equal to
the fair market value of the shares on the date of grant and
is recognized ratably over the required holding period.
Compensation expense associated with restricted stock
grants was not significant.
Under the Tupperware Corporation Director Stock Plan (Director
Plan), non-employee directors may elect to receive their
annual retainers in the form of stock or stock options.
Options granted to directors become exercisable on the last
day of the fiscal year in which they are granted, have a term
of 10 years, and have an exercise price that compensates for
the foregone cash retainer. This amount and the value of
stock grants on the date of award have been recognized as an
expense by the company. The number of shares initially
available for grant under the Director Plan and the number of
shares available as of December 27, 1997, were 300,000 and
238,994, respectively. As of December 27, 1997, options to
purchase 56,508 shares were exercisable.
For Tupperware directors with options under the Premark
Director Stock Option Plan (Premark Plan) who were Premark
directors prior to the Distribution, the options were cancelled
and reissued in a manner similar to employee awards. For
outside Tupperware directors who continued as Premark
directors as of the date of the Distribution, one-half of the
unvested options under the Premark plan were cancelled and
reissued and the other half remained as Premark stock options.
Stock option and restricted stock activity for the Incentive
Plan and the Director Plan is summarized below:
<TABLE>
Average
Shares subject option price
Stock Options to option per share
- ---------------------------- -------------- ------------
<S> <C> <C>
Balance at December 30, 1995 -- --
Options granted to replace
Premark options 2,006,566 $22.60
Options granted 685,500 42.22
Options cancelled (19,737) 33.57
Options exercised (235,186) 13.45
---------
Balance at December 28, 1996 2,437,143 28.91
Options granted 1,090,000 25.24
Options cancelled (96,748) 36.98
Options exercised (83,525) 15.91
---------
Balance at December 27, 1997 3,346,870 27.81
=========
</TABLE>
<TABLE>
Shares
Shares available
Restricted Stock outstanding for issuance
- ---------------------------- -------------- ------------
<S> <C> <C>
Balance at December 30, 1995 -- --
Increase in shares available
due to adoption of Incentive
Plan -- 300,000
Shares awarded to replace
Premark shares 61,311 (61,311)
Shares awarded 87,000 (87,000)
------- -------
Balance at December 28, 1996 148,311 151,689
Shares awarded 20,329 (20,329)
Shares cancelled (3,244) 3,244
Shares vested (38,055) --
------- -------
Balance at December 27, 1997 127,341 134,604
======= =======
</TABLE>
Note 10: Geographic Information
The company operates worldwide in one business segment: the
manufacture and distribution, through independent direct sales
forces, of plastic food storage and serving containers,
microwave cookware, and educational toys.
<TABLE>
(In millions)
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Net sales:
Europe $ 546.6 $ 581.7 $ 595.1
Asia Pacific 279.0 338.0 355.1
Latin America 247.2 268.5 200.6
United States 156.5 181.1 208.6
-------- -------- --------
Total net sales $1,229.3 $1,369.3 $1,359.4
======== ======== ========
Operating profit:
Europe $ 144.6 $ 153.0 $ 156.8
Asia Pacific 37.2 61.0 59.4
Latin America (5.7)<F1> 43.3 19.4
United States (29.5)<F1> 10.4 10.3
------- -------- --------
Total operating
profit 146.6 267.7 245.9
------- -------- --------
Unallocated expenses (18.0)<F1> (16.1) (22.9)
Costs associated with
becoming an
independent company -- (9.1) --
Interest (expense)
income, net (17.8) (8.0) 1.9
-------- ------- --------
Income before
income taxes $ 110.8 $ 234.5 $ 224.9
======== ======== ========
Identifiable assets:
Europe $ 287.1 $ 315.6 $ 327.7
Asia Pacific 144.9 198.5 187.9
Latin America 170.2 181.1 115.6
United States 157.1 176.3 159.1
Corporate 87.9 107.0 153.7
--------- -------- --------
Total identifiable
assets $ 847.2 $ 978.5 $ 944.0
======== ======== =========
<FN>
<F1>Includes a fourth quarter pretax charge totaling $42.4 million
($31.3 million after tax): $22.2 million in Latin America,
primarily for bad debts in Brazil; $16.0 million in the
United States, primarily for inventory obsolescence; and
$4.2 million in unallocated, primarily for corporate downsizing.
</TABLE>
Sales to a single customer did not exceed 10 percent of total
sales. Export sales were insignificant. Unallocated expenses
are corporate expenses and other items not directly related to
the operations of any particular geographic area. Corporate
assets consist of cash and assets maintained for general
corporate purposes. As of December 27, 1997, and December 28,
1996, the company's net investment in international operations
was $210.0 million and $316.9 million, respectively. The company
is subject to the usual economic risks associated with
international operations; however, these risks are partially
mitigated by the broad geographic dispersion of the company's
operations.
Note 11: Contingencies
The company and certain subsidiaries are involved in
litigation and various legal matters that are being defended
and handled in the ordinary course of business. Included
among these matters are environmental issues. None of the
company's contingencies are expected to have a material
adverse effect on its financial position, results of
operations, or cash flow.
Kraft Foods, Inc., which was formerly affiliated with Premark
and Tupperware, has assumed any liabilities arising out of any
legal proceedings in connection with certain divested or
discontinued businesses. The liabilities assumed include
matters alleging product liability, environmental liability,
and infringement of patents.
Note 12: Quarterly Financial Summary (Unaudited)
Following is a summary of the unaudited interim results of
operations for each quarter in the years ended December 27,
1997, and December 28, 1996.
<TABLE>
(In millions, except per share amounts)
First Second Third Fourth
quarter quarter quarter quarter
------- ------- -------- --------
<S> <C> <C> <C> <C>
Year ended December 27, 1997:
Net sales $315.3 $342.5 $251.4 $320.1
Cost of products sold 114.0 131.1 95.7 133.1
Net income 24.9 38.0 3.4 15.7
Net income per common share:
Basic 0.40 0.62 0.06 0.26
Diluted 0.40 0.61 0.06 0.25
Dividends declared per share 0.22 0.22 0.22 0.22
Composite stock price range:
High 54 1/2 40 5/8 38 9/16 28 9/16
Low 33 5/8 29 7/8 26 5/8 22 1/2
Close 33 3/4 37 1/4 27 3/16 27 3/8
Year ended December 28, 1996:
Net sales $329.0 $379.0 $290.6 $370.7
Cost of products sold 120.4 134.3 104.6 128.0
Net income 31.6 50.6 18.1 74.4
Net income per share
(first and second
quarters pro forma):
Basic 0.47 0.79 0.29 1.20
Diluted 0.46 0.78 0.29 1.18
Dividends declared per share -- -- 0.22 0.22
Composite stock price range:
High N/A 46 3/8 49 7/8 55 1/2
Low N/A 38 3/4 38 1/4 45 7/8
Close N/A 42 1/4 49 54 3/8
The fourth quarter of 1997 includes a pretax charge totaling
$42.4 million ($31.3 million after tax), primarily for provisions
for bad debts in Brazil, inventory obsolecence in the United States,
and, to a lesser extent, corporate downsizing.
</TABLE>
Note 13: Rights Agreement
In 1996, the company adopted a shareholders' rights plan with
a duration of 10 years, under which shareholders received a
right to purchase one one-hundredth of a share of preferred
stock for each right owned. The rights are exercisable if 15
percent of the company's common stock is acquired or
threatened to be acquired, and the rights are redeemable by
the company if exercisability has not been triggered. Under
certain circumstances, if 50 percent or more of the company's
consolidated assets or earning power are sold, a right
entitles the holder to buy shares of the company equal in
value to twice the exercise price of each right. Upon
acquisition of the company by a third party, a holder could
receive the right to purchase stock in the acquirer. The
foregoing percentage thresholds may be reduced to not less
than 10 percent.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Tupperware Corporation:
In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of income, of cash
flows and of shareholders' equity present fairly, in all
material respects, the financial position of Tupperware
Corporation and its subsidiaries at December 27, 1997 and
December 28, 1996, and the results of their operations
and their cash flows for each of the three years in the period
ended December 27, 1997, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of Tupperware Corporation's management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted
auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Orlando, Florida
February 20, 1998
REPORT OF MANAGEMENT
The management of Tupperware is responsible for the
preparation of the financial statements and other information
contained in this Annual Report. The financial statements
were prepared in accordance with generally accepted accounting
principles and include amounts that are based upon
management's best estimate and judgements, as appropriate.
Price Waterhouse LLP has audited these financial statements
and has expressed an independent opinion thereon.
The company maintains internal control systems, policies, and
procedures designed to provide reasonable assurances that
assets are safeguarded, that transactions are executed in
accordance with management's authorization and properly
recorded, and that accounting records may be relied upon for
the preparation of financial information. There are inherent
limitations in all internal controls systems based on the fact
that the cost of such systems should not exceed the benefits
derived. Management believes that the company's systems
provide the appropriate balance of costs and benefits. The
company also maintains an internal auditing function that
evaluates and reports on the adequacy and effectiveness of
internal accounting controls, policies, and procedures.
The Audit and Corporate Responsibility Committee of the Board
of Directors is composed entirely of outside directors. The
Committee meets periodically and independently with
management, the internal auditors, and Price Waterhouse LLP to
discuss the company's internal accounting controls, auditing,
and financial reporting matters. The internal auditors and
Price Waterhouse LLP have unrestricted access to the Audit and
Corporate Responsibility Committee.
Management recognizes its responsibility for conducting the
company's affairs in a manner that is responsive to the
interest of its shareholders and its employees. This
responsibility is characterized in the Code of Conduct, which
provides that the company will fully comply with laws, rules
and regulations of every country in which it operates and will
observe the rules of ethical business conduct. Employees of
the company are expected and directed to manage the business
of the company accordingly.
Rick Goings Thomas P. O'Neill, Jr.
Chairman of the Board Senior Vice President
and Chief Executive Officer and Chief Financial Officer
EXHIBIT 21
Tupperware Corporation
Active Subsidiaries
The following subsidiaries are wholly-owned by the Registrant or
another subsidiary of the Registrant.
Subsidiary Location
Deerfield Land Corporation Delaware
Tupperware Financial Corporation Delaware
Dart Industries Inc. Delaware
Tupperware Far East, Inc. Delaware
Tupperware Polska Sp.zo.o Poland
Tupperware Turkey, Inc. Delaware
Dart Far East Sdn. Bhd. Malaysia
Dart Argentina S.A. Argentina
Dart de Venezuela, C.A. Venezuela
Tupperware Colombia S.A. Colombia
Dart do Brasil Industria e
Comercio Ltda. Brazil
Daypar Participacoes Ltda Brazil
Academia Negocios S/C Ltda. Brazil
Adota Artigos Domesticos Ltda. Brazil
Tupperware Hellas, S.A.I.C. Greece
Tupperware Israel Ltd. Israel
Tupperware Espana, S.A. Spain
Tupperware Belgium N.V. Belgium
Tupperware France S.A. France
Tupperware Deutschland G.m.b.H. Germany
Tupperware Del Ecuador Tupperware
Cia. Ltda. Ecuador
Tupperware Osterreich G.m.b.H. Austria
Dart Industries Hong Kong Limited Hong Kong
Tupperware India Private Limited India
Tupperware Asia Pacific Holdings
Private Limited Mauritius
Tupperware China, LLC. Delaware
Tupperware (China) Company Limited PRC
Tupperware Nederland Properties B.V. Netherlands
Tupperware Nederland B.V. Netherlands
Tupperware Southern Africa
(Proprietary) Limited South Africa
Dart Industries (New Zealand) Limited New Zealand
Tupperware East Africa Limited Kenya
Tupperware Italia S.p.A. Italy
Dart (Philippines), Inc. Philippines
Tupperware Realty Corporation Philippines
Dart, S.A. de C.V. Mexico
Servicios Especializados de
Arrendamiento en Latinoamerica
S.A. de C.V Mexico
Tupperware (Suisse) S.A. Switzerland
Dartco Manufacturing Inc. Delaware
Tupperware Industria Lusitana de
Artigos Domesticos, Lda. Portugal
Tupperware (Portugal) Artigos
Domesticos, Lda. Portugal
Premiere Products, Inc. Delaware
Tupperware Holdings, B.V. Netherlands
Tupperware Service G.m.b.H. Germany
Tupperware, Ltd. Russia
Tupperware Products, B.V. Netherlands
Tupperware Products S.A. Switzerland
Premiere Korea Ltd. Korea
Tupperware General Services N.V. Belgium
Premiere Manufacturing, Inc. Delaware
Premiere Marketing Company Korea
Tupperware U.S., Inc. Delaware
Tupperware Distributors, Inc. Delaware
Tupperware Factors Inc. Delaware
Tupperware Canada Inc. Canada
Japan Tupperware Co., Ltd. Japan
Tupperware Australia Pty. Ltd. Australia
Tupperware Commercial Ltd. Hungary
Importadora Y Distribuidora
Importupp Limitada Chile
Tupperware Czech Republic, spol. s.r.o. Czech Republic
Tupperware Iberica S.A. Spain
Tupperware Singapore Pte. Ltd. Singapore
Tupperware (Thailand) Limited Thailand
Tupperware Uruguay S.A. Uruguay
Tupperware Home Parties Corporation Delaware
Tupperware U.K. Holdings, Inc. Delaware
Tupperware United Kingdom &
Ireland Limited United Kingdom
Tupperware Scandinavia A/S Denmark
The Tupperware Foundation Delaware
Tupperware Products, Inc. Delaware
Tupperware Finance Holding Company, B.V.Netherlands
Tupperware Finance Company, B.V. Netherlands
Tupperware Export Sales, Ltd. Barbados
Tupperware Services, Inc. Delaware
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (No. 33-04871), the Registration
Statement on Form S-8 (No. 33-04869), the Registration Statement on
Form S-8 (No. 33-18331) and the Prospectus constituting part of the
Registration Statement on Form S-3 (No. 33-12125) of Tupperware
Corporation of our report dated February 20, 1998 appearing on page 36
of the Annual Report to Shareholders which is incorporated in this
Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report on the Financial Statement Schedule, which
appears on page 16 of this Form 10-K.
Price Waterhouse LLP
Orlando, Florida
March 24, 1998
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director
of Tupperware Corporation, a Delaware corporation, (the "Corporation"),
hereby constitutes and appoints Thomas M. Roehlk and Charles L. Dunlap,
true and lawful attorneys-in-fact and agents of the undersigned, with
full power of substitution and resubstitution, for and in the name, place
and stead of the undersigned, in any and all capacities, to sign the
Annual Report on Form 10-K of the Corporation for its fiscal year ended
December 27, 1997, and any and all amendments thereto, and to file or
cause to be filed the same, together with any and all exhibits thereto
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents
and substitutes, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises as fully to all intents and purposes as the undersigned might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or
her hand and seal this 5th day of March, 1998.
Rita Bornstein
Ruth M. Davis
Lloyd C. Elam
Clifford J. Grum
Joe R. Lee
Bob Marbut
David R. Parker
Robert M. Price
Joyce M. Roche
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM TUPPERWARE CORPORATION'S 1997 FINANCIAL STATEMENTS AS INCORPORATED
BY REFERENCE IN ITS ANNUAL REPORT ON FORM 10-K AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> DEC-27-1997
<CASH> 22100
<SECURITIES> 0
<RECEIVABLES> 137400
<ALLOWANCES> 40400
<INVENTORY> 184200
<CURRENT-ASSETS> 403100
<PP&E> 944000
<DEPRECIATION> 651000
<TOTAL-ASSETS> 847200
<CURRENT-LIABILITIES> 299800
<BONDS> 236700
0
0
<COMMON> 600
<OTHER-SE> 213600
<TOTAL-LIABILITY-AND-EQUITY> 847200
<SALES> 1229300
<TOTAL-REVENUES> 1229300
<CGS> 473900
<TOTAL-COSTS> 473900
<OTHER-EXPENSES> 6100
<LOSS-PROVISION> 27500
<INTEREST-EXPENSE> 24100
<INCOME-PRETAX> 110800
<INCOME-TAX> 28800
<INCOME-CONTINUING> 82000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82000
<EPS-PRIMARY> 1.34
<EPS-DILUTED> 1.32
</TABLE>
