<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 1-800
WM. WRIGLEY JR. COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-1988190
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
410 North Michigan Avenue
Chicago, Illinois 60611
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 644-2121
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, no par value New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Class B Common Stock, no par value
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 (Section 229.405 of this chapter) 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. [X]
As of January 31, 1997, there were outstanding 92,047,710
shares of Common Stock, no par value, and the aggregate market
value of the Common Stock (based upon the closing price of the
stock on the New York Stock Exchange on such date) held by
non-affiliates was approximately $3,683,278,078. As of January 31,
1997, there were outstanding 24,129,664 shares of Class B Common
Stock, no par value. Class B Common Stock is not traded on the
exchanges, is restricted as to transfer or other disposition, and
is convertible into Common Stock on a share-for-share basis. Upon
such conversion, the resulting shares of Common Stock are freely
transferable and publicly traded. Assuming all shares of
outstanding Class B Common Stock were converted into Common Stock,
the aggregate market value of Common Stock held by non-affiliates
on January 31, 1997 (based upon the closing price of the stock on
the New York Stock Exchange on such date) would have been
approximately $4,160,831,567. Determination of stock ownership by
non-affiliates was made solely for the purpose of this requirement,
and the Registrant is not bound by these determinations for any
other purpose.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Definitive Proxy Statement, dated
February 5, 1997, for the March 5, 1997 Annual Meeting of
Stockholders, and of the 1996 Annual Report to Stockholders are
incorporated by reference into portions of Parts I, II, III and IV
of this Report.
<PAGE>
PART I
Item 1. Business
(a) General Development of Business.
(1) General information. From 1891 to 1903, the Company was
operated as a partnership until its incorporation in Illinois as
Wm. Wrigley, Jr. & Co. in December, 1903. In November, 1910, the
Company was reincorporated under West Virginia law as Wm. Wrigley
Jr. Company, and in October, 1927, was reincorporated under
Delaware law.
Throughout its history, the Company has concentrated on one
principal line of business: the manufacturing and marketing of
quality chewing gum products.
(2) Not applicable.
(b) Financial Information About Industry Segments.
The Company's principal business of manufacturing and selling
chewing gum constitutes more than 90% of its consolidated worldwide
sales and revenues. All other businesses constitute less than 10%
of its consolidated revenues, operating profit and identifiable
assets.
(c) Narrative Description of Business.
(1) Business conducted. The following is a description of
the business conducted and intended to be conducted by the Company
and its wholly-owned associated companies (the Company):
(i) Principal products, markets and methods of
distribution. The Company's principal business is the
manufacture and sale of chewing gum, both in the United States
and abroad.
The Company's brands manufactured and available in the
United States are: WRIGLEY'S SPEARMINT, DOUBLEMINT, JUICY
FRUIT, BIG RED and WINTERFRESH which account for a majority of
the Company's sales volume; FREEDENT, a specially formulated
chewing gum which does not stick to most types of dental work,
available in three flavors; and EXTRA sugarfree chewing gum,
containing NUTRASWEET brand sweetener, available in four
flavors and as bubble gum.
Except for BIG RED, which has limited availability
overseas, and WINTERFRESH, which is not distributed overseas
as a brand, the above Wrigley brands are also commonly
available in many international markets. Additional brands
manufactured and marketed abroad are: ARROWMINT, COOL CRUNCH,
DULCE 16, JUICY FRUIT and P.K chewing gums in sugar coated
pellet form, FREEDENT and ORBIT sugarfree gums in various
flavors, sugarfree WRIGLEY'S SPEARMINT, DOUBLEMINT, JUICY
FRUIT and HUBBA BUBBA in various flavors, BIG BOY, and BIG G,
all bubble gum products.
The Company's ten largest markets outside of the United
States in 1996 were, in alphabetical order, Australia, Canada,
China, France, Germany, Philippines, Poland, Russia, Taiwan
and the United Kingdom.
<PAGE>
Finished chewing gum is manufactured in three factories
in the United States and eleven factories in other countries.
Three domestic wholly owned associated companies manufacture
products other than finished chewing gum. Amurol Confections
Company, in addition to manufacturing and marketing children's
bubble gum items including BIG LEAGUE CHEW, BUBBLE TAPE and
other uniquely packaged confections, also has various non-gum
items, such as a line of suckers, dextrose candy, liquid gel
candy and hard roll candies as an important part of its total
business. Amurol is also developing export markets, currently
the largest being Canada, Brazil and Japan. The principal
business of the L.A. Dreyfus Company is the production of
chewing gum base, at one domestic and one overseas factory,
for the parent and wholly owned associated companies, and for
other manufacturers of chewing gum and specialty gum products
in the United States and abroad. Northwestern Flavors, Inc.
processes flavorings and rectifies mint oil for the parent and
associated companies.
In 1979, the Company organized its domestic converting
operations, under the name of Wrico Packaging Division, as a
separate operating unit of the Company. This division was
created to help further the Company's capability to produce
improved packaging materials. Currently, Wrico produces about
35% of the Company's domestic printed and other wrapping
supplies.
The Company markets chewing gum primarily through
wholesalers, corporate chains and cooperative buying groups
that distribute the product through retail outlets.
Additional direct customers are vending distributors,
concessionaires and other established customers purchasing in
wholesale quantities. Customer orders are usually received by
mail, electronically, telephone or telefax and are shipped by
truck from factory warehouses or leased warehousing
facilities. Consumer purchases at the retail level are
generated primarily through the Company's advertisements on
television and radio, and in newspapers and magazines.
(ii) New products. Although additional flavors were
introduced for some product lines in various markets, there
were no significant new product introductions during 1996.
(iii) Sources and availability of raw materials.
Natural and synthetic raw materials blended to make chewing
gum base are available from private contractors and in the
open market.
Sugar, corn syrup, flavoring oils and aspartame are
obtained in the open market, or under contracts, from
suppliers in various countries. All other ingredients and
necessary packaging materials are also purchased and available
on the open market.
(iv) Patents and trademarks. The Company holds numerous
patents relating to packaging, manufacturing processes and
product formulas. Approximately two dozen patents relating to
product formula and sweetener encapsulation, primarily for
sugarfree gum and continuous chewing gum manufacturing are
deemed of material importance to the Company. Most of these
patents expire in the countries in which they are registered
at various times through the year 2016.
Trademarks are of material importance to the Company and
are registered and maintained for all brands of the Company's
chewing gum on a worldwide basis.
(v) Seasonality. On a consolidated basis, sales
normally are relatively consistent throughout the year,
although the combined second and third quarters generally
contribute more than half of the Company's sales.
<PAGE>
(vi) Working capital items. Inventory requirements of
the Company are not materially affected by seasonal or other
factors. In general, the Company does not offer its customers
extended payment terms. The Company believes these conditions
are not materially different from those of its competitors.
(vii) Customers. The Company's products are distributed
through more than 4,000 customers throughout the United States
alone. No single domestic or foreign customer accounts for as
much as 10% of consolidated sales or revenues.
(viii) Orders. It is the general custom of the
wholesale trade to purchase chewing gum requirements at
intervals of approximately ten days to two weeks to assure
fresh stocks and good turnover. Therefore, an order backlog
is of no significance to the chewing gum business.
(ix) Government business. The Company has no material
portion of its business which may be subject to renegotiation
of profits or termination of contracts at the election of the
Government.
(x) Competitive conditions. The chewing gum market is
an intensely competitive one in the United States and in most
international markets. Though detailed figures are not
available, there are approximately 14 chewing gum
manufacturers in the United States. Outside sources estimate
that Wrigley brands account for approximately 50% of the total
chewing gum product unit sales in the United States. The
Company's principal competitors in the United States are the
Warner-Lambert Company and RJR Nabisco.
Wrigley brands are sold in over 120 countries and
territories, although in some cases these markets are
relatively small. In most international markets, there are
two or three major competitors and generally a half dozen or
more other companies competing for a share of the gum market
in each instance.
In all markets in which the Company distributes its
products, principal methods of competition are a combination
of competitive profit margins to the trade, superior quality,
brand recognition, product benefit and a fair consumer price.
(xi) Research and development. The Company has for many
years maintained an active research and development in-house
program, and has also contracted outside services for
developing and improving Wrigley products, machinery and
operations. In relation to the Company's consolidated assets,
revenues and aggregate operating expenses, amounts expended in
these areas during the last three fiscal years have not been
material.
(xii) Compliance with environmental laws. Compliance
with federal, state and local laws regulating the discharge of
materials into the environment, or otherwise relating to the
protection of the environment, has no material effect on
capital expenditures, earnings or the competitive position of
the Company.
(xiii) Employees. During 1996, the Company employed
approximately 7,800 persons worldwide.
(d) Financial Information About Foreign and Domestic
Operations and Export Sales.
Information concerning the Company's operations in
different geographic areas for the years ended December 31,
1996, 1995 and 1994 is hereby incorporated by reference from
the 1996 Annual Report to Stockholders, on page 19, under the
caption "Operations by Geographic Areas," and on page 25 under
the caption "Results of Operations."
<PAGE>
Item 2. Properties
The information below relates to the principal properties of
the Company which are primarily devoted to chewing gum production
or raw materials processing. The Company considers the properties
listed below to be in good condition, well maintained and suitable
to carry out the Company's business. All of the finished gum
factories listed below operated at least one full shift throughout
the year, all but two operated a substantial second shift and eight
operated a third shift for much of the year. All properties are
owned by the Company unless otherwise indicated. The figures given
in the table are approximate.
Floor Area
Property and Location (Square Feet)
FINISHED GUM FACTORIES
Chicago, Illinois............................. 1,255,700
Gainesville, Georgia.......................... 461,000
Yorkville, Illinois........................... 225,000(a)
Asquith, N.S.W., Australia.................... 149,000
Salzburg, Austria............................. 22,600
Don Mills, Ont., Canada....................... 138,800
Plymouth, England............................. 310,000
Biesheim, France.............................. 626,100
Nairobi, Kenya................................ 35,000
Guangzhou, China, P.R.C....................... 69,800(b)
Manila, Philippines........................... 100,700(c)
Taipei, Taiwan, R.O.C......................... 62,300
Bangalore, India.............................. 33,300
Poznan, Poland................................ 110,000
RAW MATERIALS PROCESSING FACTORIES
Edison, New Jersey............................ 536,000
West Chicago, Illinois........................ 40,300
Biesheim, France.............................. 76,000
OFFICE BUILDING
Wrigley Building, Chicago, Illinois........... 453,400(d)
(a) Does not include a 170,000 square foot warehouse facility
located in West Naperville, Illinois.
(b) In China, the Company has a 50 year lease with the
Guangzhou Economic Technological Development Zone for the land upon
which the factory is located.
(c) In the Philippines, the Laurel-Langley Agreement expired
on May 27, 1975 and, under the terms of the Philippine
Constitution, foreign firms were required to divest themselves of
their land sites (but not the structures or improvements thereon).
Consequently, in December, 1975, Wrigley Philippines, Inc. donated
its land site, but not the buildings thereon, by deed to the
Philippine Rural Reconstruction Movement, a non-stock, non-profit
organization with no government affiliation, on a lease-back
arrangement.
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(d) This building is the Company's principal
non-manufacturing property and houses the offices of the Company's
corporate headquarters. In 1996, the Company's offices occupied
approximately 132,000 of the 453,400 square feet of rentable space
in the building.
In the case of each factory listed above, there are also
included some offices and warehouse facilities. Also, the Company
maintains branch sales offices and warehouse facilities in the
United States and abroad.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
All officers are elected for a term which ordinarily expires
on the date of the meeting of the Board of Directors following the
Annual Meeting of Stockholders. The positions and ages listed
below are as of December 31, 1996. There were no arrangements or
understandings between any of the officers and any other person(s)
pursuant to which such officers were elected.
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<TABLE>
<S> <C> <C>
Effective
Name and Age Position(s) with Registrant Date(s)
William Wrigley, 63 President and Chief Executive Officer since 1961
Douglas S. Barrie, 63 Group Vice President since 1996
Group Vice President-International 1984-1995
Ronald O. Cox, 58 Group Vice President since 1996
Group Vice President-Marketing 1985-1995
John F. Bard, 55 Senior Vice President since 1991
Martin J. Geraghty, 60 Senior Vice President-Manufacturing since 1989
William Wrigley, Jr., 33 Vice President since 1991
Assistant to the President 1985-1992
Donald E. Balster, 52 Vice President-Production since 1994
Senior Director-U.S. Production 1991-1994
Gary Bebee, 50 Vice President-Customer Marketing since 1993
Assistant Vice President-Marketing 1989-1993
David E. Boxell, 55 Vice President-Personnel since 1992
Assistant Vice President-Personnel 1980-1992
Susan S. Fox, 38 Vice President-Consumer Marketing since 1993
Assistant Vice President-Marketing 1989-1993
H. J. Kim, 53 Vice President-Engineering since 1994
Senior Director-Engineering 1988-1994
Dushan Petrovich, 43 Vice President-Controller since 1996
Vice President-Treasurer 1993-1995
Treasurer 1992
Wm. M. Piet, 53 Vice President-Corporate Affairs since 1988
Corporate Secretary since 1984
Assistant to the President Since 1995
John A. Schafer, 56 Vice President-Purchasing since 1991
Philip G. Schnell, 53 Vice President-Research & Development since 1994
Senior Director-Research &
Development 1988-1994
Christafor E. Sundstrom, 48 Vice President-Corporate Development since 1988
Jaime E. Dy-Liacco, 65 Vice President-International since 1980
President-Wrigley & Co., Ltd., Japan since 1981
President-Wrigley Philippines, Inc. since 1981
Philip G. Hamilton, 56 Vice President-International since 1993
Managing Director, The Wrigley
Company Limited, England since 1986
Jon Orving, 47 Vice President-International since 1993
Managing Director, Wrigley
Scandinavia AB, Sweden since 1983
Stefan Pfander, 53 Managing-Director-Europe since 1996
Vice President-International since 1992
Co-Managing Director of Wrigley
GmbH, Munich, Germany since 1981
Dennis R. Mally, 55 (a) Senior Director-Information Services since 1995
Director-Information Services 1993-1994
Philip C. Johnson, 51 Senior Director, Benefits &
Compensation since 1995
Assistant Vice President-Personnel 1991-1995
Alan J. Schneider, 51 (b) Treasurer since 1996
John H. Sutton, 65 General Manager-Converting Division since 1979
Dennis J. Yarbrough, 53 Controller-Corporate Accounting since 1996
Corporate Controller since 1981
</TABLE>
(a) Mr. Mally joined the Company in 1993 assuming
responsibility for the Company's worldwide information systems.
Before joining the Company, from 1989 to 1991 Mr. Mally was Vice
President Business Operations with The Cross Company in Fraser,
Michigan, a manufacturer of metal cutting and assembly machines.
Following the 1991 acquisition of The Cross Company by Giddings &
Lewis, Mr. Mally served as Vice President Systems and Quality of
its Integrated Automation Division in Fraser, Michigan.
<PAGE>
(b) Mr. Schneider joined the Company in August, 1996 as
Treasurer with responsibility for treasury, tax and credit
functions. He previously served CBI Industries, Inc. of Oak Brook,
Illinois, an international manufacturer of gases and metal plate
surfaces, as Vice President-Finance and Chief Executive Officer,
having joined that company in 1987 and serving in various financial
capacities over the years including Controller and Vice President.
At the meeting of the Board of Directors immediately
following the annual stockholders meeting of March 5, 1997, all
officers set forth in the schedule above were re-elected for a one-
year term to their positions in the Company, except the title of
Mr. Mally was changed to Vice President-Information Services from
Senior Director-Information Services. On February 7, 1997, Mr.
Yarbrough, Controller-Corporate Accounting, announced he was taking
early retirement effective March 31, 1997.
PART II
Item 5. Market for Registrant's Common Stock, Dividend and
Stockholder Information
At December 31, 1996, the Company had two classes of stock
outstanding: Common Stock, listed on both the New York and Chicago
Stock Exchanges, and Class B Common Stock, for which there is no
trading market. Shares of the Class B Common Stock were issued by
the Company on April 11, 1986 to stockholders of record on April 4,
1986. Class B Common Stock is entitled to ten votes per share, is
subject to restrictions on transfer or other disposition and is at
all times convertible, on a share-for-share basis, into shares of
Common Stock.
As of January 31, 1997, there were 34,756 stockholders of
record holding Common Stock and 4,450 stockholders of record
holding Class B Common Stock. Regular quarterly dividends and any
extra cash dividends as may be deemed appropriate, which are
identical on both Common Stock and Class B Common Stock, are
declared at scheduled meetings of the Board of Directors and
announced immediately upon declaration. Information regarding the
high and low quarterly sales prices for the Common Stock on the New
York Stock Exchange, and dividends declared per share on a
quarterly basis for both classes of stock, for the five-year period
ended December 31, 1996, is set forth in the Company's 1996 Annual
Report to Stockholders, on page 24, under the captions "Market
Prices" and "Dividends" and is incorporated herein by reference.
Item 6. Selected Financial Data
Five-year summaries of selected financial data for the Company
and discussions of accounting changes which materially affect the
comparability of the selected financial data are set forth in the
Company's 1996 Annual Report to Stockholders under the following
captions and page numbers: "Operating Data" and "Other Financial
Data", on page 22; "Income Taxes", on page 26; and "Postretirement
Benefits", on page 18 and are incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's discussion and analysis of results of operations
and financial condition, including a discussion of liquidity and
capital resources, is set forth in the Company's 1996 Annual Report
to Stockholders, on pages 25 and 26 and is incorporated herein by
reference.
<PAGE>
Item 8. Financial Statements and Supplementary Data
The Company's consolidated financial statements, accounting
policies and notes to consolidated financial statements, with the
report of independent auditors, and selected unaudited quarterly
data -- consolidated results, for the years ended December 31, 1996
and 1995 are set forth in the Company's 1996 Annual Report to
Stockholders, on pages 7 through 21 and 24, respectively and are
incorporated herein by reference.
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
Information regarding directors and nominees for directorship
is set forth in the Company's definitive Proxy Statement, dated
February 5, 1997, for the Annual Meeting of Stockholders on March
5, 1997, on pages 2 through 4, under the caption "Election of
Directors" and is incorporated herein by reference. For
information concerning the Company's executive officers, see
"Executive Officers of the Registrant" set forth in Part I hereof.
Item 11. Executive Compensation
Information regarding the compensation of directors and
executive officers is set forth in the Company's definitive Proxy
Statement, dated February 5, 1997, for the Annual Meeting of
Stockholders on March 5, 1997, on pages 7, and 15 through 22 under
the general captions "Compensation of Directors" and "Executive
Compensation", respectively and is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information regarding security ownership of certain beneficial
owners, of all directors and nominees, of the named executive
officers, and of directors and executive officers as a group, is
set forth in the Company's definitive Proxy Statement, dated
February 5, 1997, for the Annual Meeting of Stockholders on March
5, 1997, on pages 5, 6 and 7 under the captions "Security Ownership
of Directors and Executive Officers" and "Security Ownership of
Certain Beneficial Owners" and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related
transactions is hereby incorporated by reference from the Company's
definitive Proxy Statement, dated February 5, 1997, for the Annual
Meeting of Stockholders on March 5, 1997 under the following
captions and page numbers: "Election of Directors", on page 2,
regarding Mr. William Wrigley and Mr. William Wrigley, Jr. and
"Security Ownership of Certain Beneficial Owners", on page 6,
regarding the Offield family and Mr. Wrigley.
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports
on Form 8-K
(a) 1,2. Financial Statements and Financial Statement
Schedule
The data listed in the accompanying Index to Financial
Statements and Financial Statement Schedule, on page F-1 hereof, is
filed as part of this Report.
<PAGE>
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits, on
page F-3 hereof, are filed as part of this Report or are
incorporated by reference herein as indicated thereon.
(b) Not Applicable.
(c) Exhibits are attached hereto.
(d) See (a) 1, 2 above.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this Form 10-K Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: March 27, 1997 WM. WRIGLEY JR. COMPANY
(Registrant)
By: /s/ JOHN F. BARD
John F. Bard
Senior Vice President
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report on Form 10-K has been signed below by
the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
Signature Title
President, Chief
William Wrigley Executive Officer,
Director
Senior Vice President
John F. Bard (Principal Financial Officer)
Vice President-Controller
Dushan Petrovich (Principal Accounting Officer)
Director
Charles F. Allison III
Director
Douglas S. Barrie
Director
Lee Phillip Bell
Director
Robert P. Billingsley
Director By/s/ WM. M. PIET
Thomas A. Knowlton Wm. M. Piet
Attorney-in-Fact
Director
Penny Pritzker Date: March 27, 1997
Director
Richard K. Smucker
Director
William Wrigley, Jr.
<PAGE>
Exhibit 23.
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report
on Form 10-K of Wm. Wrigley Jr. Company of our report dated January
30, 1997, included in the 1996 Annual Report to Stockholders of Wm.
Wrigley Jr. Company.
Our audits also included the financial statement schedule of Wm.
Wrigley Jr. Company listed in item 14(a). This schedule is the
responsibility of the Company's management. Our responsibility is
to express an opinion based on our audits. In our opinion, the
financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the
Registration Statements (Form S-8 Nos. 33-43738 and 33-22788)
pertaining to the Special Investment and Savings Plan for Wrigley
Employees and the Wm. Wrigley Jr. Company Management Incentive
Plan, and in the related Prospectuses, of our report dated January
30, 1997, with respect to the consolidated financial statements and
consolidated financial statement schedule of Wm. Wrigley Jr.
Company included or incorporated by reference in this Annual Report
on Form 10-K for the year ended December 31, 1996.
/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Chicago, Illinois
March 27, 1997
<PAGE>
<TABLE>
WM. WRIGLEY JR. COMPANY
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a))
Reference
Form Annual Report
10-K to
Report Stockholders
<S> <C> <C>
Data incorporated by reference from the 1996 Annual Report
to Stockholders of Wm. Wrigley Jr. Company:
Consolidated balance sheet at December 31, 1996 and 1995........ 8-9
For the years ended December 31, 1996, 1995 and 1994:
Consolidated statement of earnings.......................... 7
Consolidated statement of cash flows........................ 10
Consolidated statement of stockholders' equity.............. 11
Accounting policies and notes to consolidated financial 12-19
statements..................................................
Consolidated financial statement schedule for the years ended
December 31, 1996, 1995 and 1994:
II. Valuation and qualifying accounts............................ F-2
</TABLE>
All other schedules are omitted since the required information
is not present or is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the consolidated financial statements or accounting
policies and notes thereto.
With the exception of the pages listed in the above index and
the items referred to in Items, 1,5,6,7, and 8 of this Form 10-K
Report, the 1996 Annual Report to Stockholders is not to be deemed
filed as part of this report.
<PAGE>
<TABLE>
WM. WRIGLEY JR. COMPANY
Schedule II - Valuation and Qualifying Accounts
Years ended December 31, 1996, 1995 and 1994
(In Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
Additions
<S> <C> <C> <C> <C> <C> <C>
Balance at Charged to Charged to
Beginning Costs and Other Accounts Deductions- Balance at
Description of Period Expenses Describe Describe(A) End of Period
1996:
Allowance for
doubtful accounts... $9,060 2,080 2,602 8,538
1995:
Allowance for
doubtful accounts... $6,645 2,754 339 9,060
1994:
Allowance for
doubtful accounts... $4,407 2,578 340 6,645
(A) Uncollectable accounts written-off, net of recoveries.
</TABLE>
<PAGE>
WM. WRIGLEY JR. COMPANY
AND WHOLLY OWNED ASSOCIATED COMPANIES
INDEX TO EXHIBITS
(Item 14(a))
Exhibit
Number Description of Exhibit
Proxy Statement of the Registrant, dated February 5, 1997,
for the March 5, 1997 Annual Meeting of Stockholders, is
hereby incorporated by reference.
3. Articles of Incorporation and By-laws.
3(a). Restated Certificate of Incorporation of the Registrant.
Incorporated by reference to Exhibit 3(a) of the Company's
Annual Report and Form 10-K filed for the fiscal year ended
December 31, 1992.
3(b). By-laws of the Registrant. Incorporated by reference to
Exhibit 3(a) of the Company's Form 10-K filed for the
fiscal year ended December 31, 1992.
10. Material Contracts
10(a). Non-Employee Directors' Death Benefit Plan. Incorporated
by reference to the Company's Form 10-K filed for the
fiscal year ended December 31, 1994.
10(b). Senior Executive Insurance Plan. Incorporated by reference
to the Company's Form 10-K filed for the fiscal year ended
December 31, 1995.
10(c). Supplemental Retirement Plan. Incorporated by reference to
the Company's Form 10-K filed for the fiscal year ended
December 31, 1994.
10(d). Deferred Compensation Plan for Non-Employee Directors.
Incorporated by reference to the Company's Form 10-K filed
for the fiscal year ended December 31, 1995.
10(e). Non-Employee Directors' Stock Retirement Plan. Incorporated
by reference to the Company's Form 10-K filed for the fiscal
year ended December 31, 1995.
10(f). 1996 Executive Incentive Compensation Plan.
10(g). Wm. Wrigley Jr. Company Management Incentive Plan and the
various programs thereunder. Incorporated by reference to
the Company's Form 10-K filed for the fiscal year ended
December 31, 1994, except for sub-item (i) to the Exhibit
10(g) which is incorporated by reference to the Company's
Form 10-K filed for the fiscal year ended December 31, 1995.
(i) Executive Incentive Compensation Deferral Program
(ii) Long-Term Stock Grant Program
(iii) Stock Award Program
(iv) Alternate Investment and Savings Program
(v) 1988 Stock Option Program
13. 1996 Annual Report to Stockholders of the Registrant.
21. Subsidiaries of the Registrant.
23. Consent of Independent Auditors. (See page 11.)
24. Power of Attorney.
99. Forward-Looking Statements.
- --------------------
Copies of Exhibits are not attached hereto, but the Registrant will
furnish them upon request and upon payment to the Registrant of a
fee in the amount of $20.00 representing reproduction and handling
costs.
<PAGE>
1996 EXECUTIVE INCENTIVE COMPENSATION PLAN
November, 1995
<PAGE>
The Wm. Wrigley Jr. Company has provided an Executive
Incentive Compensation Plan for selected managers since 1978. This
is not a continuing plan but is reviewed by the Compensation
Committee of the Board of Directors each year to determine if a
plan should be adopted for that year, the positions which will be
eligible to participate, and the associated companies which will be
included.
The Compensation Committee has authorized the 1996 Plan.
Participants have an opportunity to receive awards based on
corporate and individual performance during the corporate fiscal
year from January 1, 1996, through December 31, 1996. Those
selected to participate will not take part in any group achievement
fund or similar incentive plan which their particular unit may
provide for employees. Each associated company will bear the
appropriate cost of awards made to employees.
Awards are calculated on the base annual salary each
participant actually earns during the plan year. Most participants
are paid base annual salary in 12 monthly increments, but managers
of some international associated companies receive their base
salary in 13 or more increments.
Incentive awards will be distributed in the first quarter
of 1997 when the financial results of the company and the
respective units are known for the 1996 fiscal year.
To be eligible to receive an award, a participant must
be on the payroll as of their last payroll period before or
coincident with December 31, 1996. Also sharing proportionately
in awards based on corporate and individual performance will be:
- Employees on leave of absence as of December 31,
1996, including those on maternity leave;
- Employees who retire during the Plan year, on or
after reaching age 55;
- Beneficiaries of the Company's noncontributory
Group Life Insurance Plan named by eligible
employees who die during the 1996 Executive
Incentive Compensation Plan year.
<PAGE>
PURPOSES OF THE PLAN
1. Maintain a total cash compensation
package for participating managers
commensurate with accountability and
competitive with the industry.
2. Recognize and reward participating
managers in accord with current
performance.
3. Encourage and reward individual
initiative, creativity, and extra
effort which result in measurable
improvements in your company's
operations.
4. Encourage teamwork.
5. Relate incentive awards to overall
corporate or unit performance as
well as individual accomplishment.
<PAGE>
6. Encourage participating managers to
develop and carry out unit and
departmental goals which support and
enhance corporate longer range
goals.
7. Maintain an earnings opportunity for
participants which will retain and,
when necessary, attract outstanding
performers.
AWARD LEVELS
The 1996 Executive Incentive Compensation Plan has various
levels reflecting the individual accountability and impact on
company operations of the participants. Target award levels are
earned by fully meeting performance criteria on challenging and
realistic personal, unit, and/or corporate goals and by fully
effective teamwork. Higher awards up to a maximum of 150% of
target levels are earned for truly outstanding and exceptional
achievements above target performance.
All participants are assigned weightings for individual
performance elements which can include unit goals, personal goals,
and teamwork effectiveness. Based on accountability some
participants also have a corporate performance element. The sum
of each participant's element weightings total 100. Each element
is rated separately using the performance standards defined in
Exhibit I.
<PAGE>
Each personal goal and unit goal within those respective
elements is separately rated, totaled, and averaged. These average
ratings may be adjusted up to plus or minus 15 percentage points to
reflect performance not otherwise measured in the ratings for the
separate goals if, in the judgment of the person evaluating
performance, a change is justified.
The teamwork rating is based on each participant's
effectiveness as a manager in making the team work - - -
responsive, cooperative, and a positive contributor toward optimum
end results with top priority to company rather than to personal
success.
The maximum rating for any goal is 150%. The minimum rating
for any goal is 30%. If the adjusted average rating for any
element is below 50%, no award is earned for that element.
Element ratings of 50% or more are multiplied by the
respective element weightings and totaled. The total weighted
performance is multiplied by a participant's target opportunity
percent to determine the award expressed as a percent of salary.
GOAL SETTING PROCEDURE
Corporate Goals
The President and Chief Executive Officer will present 1996
corporate goals to the Compensation Committee when it evaluates
corporate performance for the prior year Plan. These goals will be
approved by the Board of Directors at its next regular scheduled
meeting. Corporate goals will include target, minimum, and
outstanding levels of performance where appropriate to serve as a
guide to the Compensation Committee when it evaluates corporate
performance for the Plan year.
Unit Goals
Each unit will set goals at the beginning of the Plan year
which are approved by appropriate managers. Units with consumer
sales will use the format outlined on Form A. Units with no
consumer sales will use the format outlined on Form B. Goals must
set target, minimum and outstanding levels of performance. The
units for the 1996 Plan are listed below:
<PAGE>
UNITS WITH CONSUMER SALES
U. S. Chewing Gum
Sales Department
Sales Divisions
Consumer Advertising
Amurol Products Company
Wrigley Canada
International Group
International Region - Germany, Austria, EMD,
Eastern Europe, Russia
International Region - U.K., Kenya, Spain,
Italy
International Region - Scandinavia, W.M.F.,
Netherlands
International Region - Philippines, Taiwan,
Hong Kong, China,
Malaysia
International Region - Latin America
Australia
UNITS WITH NO CONSUMER SALES
U. S. Manufacturing
Chicago Factory
Santa Cruz Factory
Gainesville Factory
L. A. Dreyfus Company
WRICO Packaging
Wrigley France-Biesheim
Manufacturing Pacific Orient
Personal Goals
Personal goals are established at the beginning of the Plan
year and approved by appropriate managers. The format for setting
these goals is shown on Form E. Participants are generally limited
to three personal goals which must be opportunities for significant
accomplishment that can be measured. Target, minimum, and
outstanding levels of performance must be included with each goal.
When appropriate, several participants may be assigned the
same personal goal with shared accountability for results. All
participants will receive the same accomplishment rating for a
shared personal goal.
<PAGE>
ACCOMPLISHMENTS
Corporate Award
The President and Chief Executive Officer will evaluate
corporate performance and recommend a rating for the Compensation
Committee's consideration based on the following criteria:
- How successfully the management team achieved
corporate goals approved by the Board of Directors
at the beginning of the fiscal year.
- Progress made toward longer term corporate
objectives and strategies in light of conditions
pertaining during the year.
- How well the management team responded to all
factors -- internal and external -- which affected
corporate performance during the year.
Based on this assessment, the Compensation Committee will
rate corporate performance using the standards of performance as
defined in Exhibit I.
Individual Awards
Individual performance awards are based on accomplishment of
unit goals where appropriate, personal goals, and teamwork
effectiveness. Performance is evaluated by the manager to whom
each participant reports and reviewed by a committee of senior
management with final approval by the President and Chief Executive
Officer.
Toward the end of the Plan year the Personnel Department will
distribute individual appraisal forms (Exhibit II) to the managers
who direct the work of the participants and who approved the unit
and personal goals. These managers will recommend ratings for
individual performance for each of the participants under their
direction:
Each participant with unit goals will submit unit
accomplishments using Form C for units with consumer sales and Form
D for others. All participants will submit accomplishments for
personal goals using Form F. Target, minimum, and outstanding
performance levels will be the same as established when the goals
were set. Participants will measure accomplishment of unit and
personal goals using the following formulas in the appropriate
section of the forms.
<PAGE>
A = Accomplishment
T = Target Goal
M = Minimum Acceptable Performance
O = Outstanding Performance
If accomplishment exceeds target
% Rating = 100 + A-T
X 50
O-T
If accomplishment is less than target
% Rating = 100 - T-A
X 50
T-M
Examples illustrating how these formulas are applied are
shown on Exhibit III. These formulas lend themselves to measuring
goals which can be objectively defined with numeric values. Some
personal goals will require subjective ratings because they cannot
readily be reduced to numeric values. Participants will suggest
the numeric rating which should be assigned to the accomplishment
of each of these goals. Ratings may be modified in the review
process.
Individual performance ratings will be combined with the
corporate rating where appropriate, and the total performance
rating for each participant will be established.
Exhibit IV illustrates how a typical award will be
calculated.
President and Chief Executive Officer Award
The Compensation Committee of the Board of Directors will
determine the award for this executive, and 100% weighting will be
on personal performance. When rating, the Compensation Committee
will consider the Chief Executive's effectiveness in guiding the
affairs of the company as evaluated largely by corporate
performance and progress toward longer range objectives and
strategies. The award may be at the same level as the corporate
evaluation, or may be different, in the sole discretion of the
Compensation Committee.
<PAGE>
EXHIBIT I
1996 EXECUTIVE INCENTIVE COMPENSATION PLAN
Wm. Wrigley Jr. Company
STANDARDS FOR
PERSONAL, CORPORATE/UNIT PERFORMANCE
Individual/
Unit/Corporate
Performance
Definition Rating
Outstanding performance; significantly 150
exceeded criterion.
Excellent performance; criterion exceeded. 120
Target performance; criterion fully met. 100
Good performance; criterion generally met, or 90
acceptable under the circumstances.
Reasonable performance under the circumstances; 60
criterion partially met.
Minimum acceptable performance. 50
Performance below acceptable levels. 30
<PAGE>
<TABLE>
EXHIBIT II
SUMMARY APPRAISAL
1996 EXECUTIVE INCENTIVE COMPENSATION PLAN
<CAPTION>
PARTICIPANT: APPRAISER: INITIALS: DATE:
<S> <C> <C> <C> <C> <C>
RATING X WEIGHT WEIGHTED X TARGET = AWARD
% % PERFORMANCE % %
UNIT GOALS:
#1
#2
TOTAL
AVG
ADJ + 15 pts
ADJ AVG
PERSONAL GOALS:
#1
#2
#3
TOTAL
AVG
ADJ + 15 pts
ADJ AVG 1995 Rating
TEAMWORK 10*
TOTAL INDVL. PERF.
ADJ. TO 100% BASIS
CORP. PERF.
GRAND TOTAL 100
COMMENTS:
Review Review Review
*TEAMWORK WEIGHTING IS 10% FOR ALL PARTICIPANTS
</TABLE>
<PAGE>
<TABLE>
Exhibit III
EXAMPLE
1996 ACCOMPLISHMENTS
UNITS WITH CONSUMER SALES
<CAPTION>
GOALS REV. ORIG. FORECAST GOAL 1996 ACTUAL
OVER/(UNDER)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 % O/U 1995 1996 % O/U 1995 1996 1995 1996 GOAL
1. UNIT VOLUME TO
OUTSIDE CUSTOMERS 50,000 51,000 53,000 55,000 3.8 55,000 3.8 54,500 1500 (500)
2. PROFIT FROM
OPERATIONS U.S.$ 11,089 16,289 10,760 10,800 .4 11,600 7.8 12,200 1440 600
MEASURES OF PERFORMANCE WEIGHT MINIMUM TARGET OUTSTANDING R A N G E
# %
GOAL #1 50% 53,000 55,000 57,000 2,000 3.6
GOAL #2 50% 10,000 11,600 13,200 1,600 13.8
EQUATIONS FOR DETERMINING RATING
GOAL #1
55,000-54,500
100 - X 50 = 87.5
55,000-53,000
GOAL #2
12,200-11,600
100 + X 50 = 118.8
13,200-11,600
</TABLE>
<PAGE>
<TABLE>
EXHIBIT IV
Wm. Wrigley Jr. Company
SAMPLE AWARD - 1996
<CAPTION>
HOW THE PLAN WORKS
<S> <C> <C>
ASSUME:
Participant Award Level D
Base Salary $60,000
Target Incentive Opportunity 30%
Target Award $18,000
INCLUDES: ELEMENT TARGET
WEIGHTING AWARD
ELEMENTS
Unit Goals 50 $ 9,000
Personal Goals 20 3,600
Teamwork 10 1,800
Individual Performance 80 $14,400
Corporate Performance 20 3,600
Target Award 100 $18,000
AWARD DETERMINATION: RATING WEIGHTED
% PERFORMANCE
ELEMENTS
Unit Goals 112 56.0 $10,080
Personal Goals 85 17.0 3,060
Teamwork 110 11.0 1,980
Individual Performance 84.0 $15,120
Corporate Performance 120 24.0 4,320
AWARD 108.0 $19,440
Percent of Base Salary 32.4%
</TABLE>
<PAGE>
<TABLE>
Form A
PARTICIPANT 1996 UNIT GOALS
UNIT UNITS WITH CONSUMER SALES
PAGE NO.
DATE SUBMITTED
<CAPTION>
1996 REV. ORIG. F'CAST 1996 GOAL
% O/U % O/U
<S> <C> <C> <C> <C> <C> <C> <C>
GOAL: 1993 1994 1995 1996 1995 1996 1995
1. UNIT VOLUME TO OUTSIDE CUSTOMERS:
2. PROFIT FROM OPERATIONS U.S.$:
MEASURES OF PERFORMANCE WEIGHT MINIMUM TARGET OUTSTANDING R A N G E
# %
GOAL #1
GOAL #2
PARTICIPANT'S
SIGNATURE DATE
APPROVED DATE
</TABLE>
<PAGE>
<TABLE>
Form B
PARTICIPANT 1996 UNIT GOALS
UNIT UNITS WITH NO CONSUMER SALES
PAGE NO.
DATE SUBMITTED
<CAPTION>
1996 REV. ORIG. F'CAST 1996 GOAL
% O/U % O/U
<S> <C> <C> <C> <C> <C>
GOAL: 1993 1994 1995 1996 1995 1996 1995
#1
#2
#3
MEASURES OF PERFORMANCE WEIGHT MINIMUM TARGET OUTSTANDING R A N G E
# %
GOAL #1
GOAL #2
GOAL #3
PARTICIPANT'S
SIGNATURE DATE
APPROVED DATE
</TABLE>
<PAGE>
<TABLE>
Form C
PARTICIPANT 1996 ACCOMPLISHMENTS - UNIT GOALS
UNIT UNITS WITH CONSUMER SALES
PAGE NO.
DATE SUBMITTED
<CAPTION>
GOAL REV. ORIG. F'CAST GOAL 1996 ACTUAL
OVER/(UNDER)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 % O/U 1995 1996 % O/U 1995 1996 1995 1996 GOAL
1. UNIT VOLUME TO
OUTSIDE CUSTOMERS:
2. PROFIT FROM
OPERATIONS U.S.$:
MEASURES OF PERFORMANCE WEIGHT MINIMUM TARGET OUTSTANDING R A N G E
# %
GOAL #1
GOAL #2
EQUATIONS FOR DETERMINING RATING
PARTICIPANT'S
SIGNATURE DATE
APPROVED DATE
</TABLE>
<PAGE>
<TABLE>
Form D
PARTICIPANT 1996 ACCOMPLISHMENTS - UNIT GOALS
UNIT UNITS WITH NO CONSUMER SALES
PAGE NO.
DATE SUBMITTED
<CAPTION>
GOAL REV. ORIG. F'CAST GOAL 1996 ACTUAL
OVER/(UNDER)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 % O/U 1995 1996 % O/U 1995 1996 1995 1996 GOAL
#1
#2
#3
MEASURES OF PERFORMANCE WEIGHT MINIMUM TARGET OUTSTANDING R A N G E
# %
GOAL #1
GOAL #2
GOAL #3
EQUATIONS FOR DETERMINING RATING
PARTICIPANT'S
SIGNATURE DATE
APPROVED DATE
</TABLE>
<PAGE>
<TABLE>
FORM E
1996 PERSONAL GOALS
PARTICIPANT
DEPARTMENT OR UNIT REVIEW COMMENTS:
GOAL # PAGE
DATE SUBMITTED
<S> <C> <C> <C>
GOAL: ESTIMATE
COST TO ACHIEVE GOAL:
HOW RESULTS ARE TO BE MEASURED: R A N G E ( + / - )
# %
CAPITAL EXPENDITURE:
MINIMUM
ACCOMPLISHMENT DATE:
TARGET
COMPARISON TO 3-YEAR PRIOR & REV. ORIG. F'CAST, IF APPLICABLE:
OUTSTANDING
1996 1996
1993 1994 1995 FORECAST GOAL
GOAL WEIGHT:
EXPECTED RESULTS:
PARTICIPANT'S
SIGNATURE DATE
APPROVED BY DATE
</TABLE>
<PAGE>
<TABLE>
FORM F
1996 ACCOMPLISHMENTS-PERSONAL GOALS
PARTICIPANT
DEPARTMENT OR UNIT REVIEW COMMENTS: RATING:
GOAL # PAGE
DATE SUBMITTED
<S> <C> <C> <C> <C> <C>
ESTIMATE ACTUAL
GOAL AS SUBMITTED:
COST TO ACHIEVE GOAL:
HOW RESULTS ARE TO BE MEASURED: R A N G E ( + / -) CAPITAL EXPENDITURE:
# %
MINIMUM ACCOMPLISHMENT DATE:
COMPARISON TO 3-YEAR PRIOR & REV. ORIG. FORECAST, IF APPLICABLE:
TARGET
1996 1996 1996
1993 1994 1995 FORECAST GOAL ACTUAL
OUTSTANDING
GOAL WEIGHT: EQUATION FOR DETERMINING RATING:
EXPECTED RESULTS:
PARTICIPANT'S
ACTUAL RESULTS: SIGNATURE DATE
APPROVED BY DATE
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF EARNINGS
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
YEAR ENDED DECEMBER 31 1996 1995 1994
In thousands of dollars except for per share amounts
<S> <C> <C> <C>
EARNINGS
Revenues:
Net sales $1,835,987 1,754,931 1,596,551
Investment and other income 14,614 14,811 26,597
Nonrecurring gain on sale of Singapore property -- -- 38,102
---------- --------- ---------
Total revenues 1,850,601 1,769,742 1,661,250
---------- --------- ---------
Costs and expenses:
Cost of sales 814,483 778,019 697,442
Factory closure and related costs 19,436 -- --
Selling, distribution and general administrative 656,473 639,537 609,039
Interest 1,097 1,955 1,490
---------- --------- ---------
Total costs and expenses 1,491,489 1,419,511 1,307,971
---------- --------- ---------
Earnings before income taxes 359,112 350,231 353,279
Income taxes 128,840 126,492 122,746
---------- --------- ---------
Net earnings $ 230,272 223,739 230,533
========== ========= =========
PER SHARE AMOUNTS
Net earnings per average share of common stock $ 1.99 1.93 1.98
========== ========= =========
Dividends paid per share of common stock $ 1.02 .96 .90
========== ========= =========
See accompanying accounting policies and notes.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
AS OF DECEMBER 31 1996 1995
In thousands of dollars
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 181,233 125,725
Short-term investments, at amortized cost 119,330 105,947
Accounts receivable
(less allowance for doubtful accounts:
1996--$8,538; 1995--$9,060) 165,051 170,803
Inventories--
Finished goods 52,859 54,231
Raw materials and supplies 180,338 181,116
---------- ---------
233,197 235,347
Other current assets 19,674 24,683
Deferred income taxes--current 10,939 9,591
---------- ---------
Total current assets 729,424 672,096
Marketable equity securities, at fair value 18,525 19,827
Deferred charges and other assets 69,461 39,696
Deferred income taxes--noncurrent 27,984 20,109
Property, plant and equipment, at cost:
Land 25,921 24,478
Buildings and building equipment 251,687 230,065
Machinery and equipment 530,438 475,955
---------- ---------
808,046 730,498
Less accumulated depreciation 419,897 383,007
---------- ---------
388,149 347,491
---------- ---------
Total assets $1,233,543 1,099,219
========== =========
</TABLE>
<PAGE>
<TABLE>
AS OF DECEMBER 31 1996 1995
In thousands of dollars and shares
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 75,431 75,815
Accrued expenses 66,434 67,958
Dividends payable 19,715 19,720
Income and other taxes payable 55,756 49,152
Deferred income taxes--current 816 768
---------- ---------
Total current liabilities 218,152 213,413
Deferred income taxes--noncurrent 24,390 19,536
Other noncurrent liabilities 93,570 69,418
Stockholders' equity:
Preferred stock--no par value
Authorized: 20,000 shares
Issued: None
Common stock--no par value
Common stock
Authorized: 400,000 shares
Issued: 1996--92,066 shares; 1995--91,541 shares 12,275 12,205
Class B common stock--convertible
Authorized: 80,000 shares
Issued and outstanding:
1996--24,155 shares; 1995--24,680 shares 3,221 3,291
Additional paid-in capital 238 1,625
Retained earnings 898,512 786,543
Foreign currency translation adjustment (14,716) (8,038)
Unrealized holding gains on marketable equity
securities 10,812 11,404
Common stock in treasury, at cost
(1996--251 shares; 1995--219 shares) (12,911) (10,178)
---------- ---------
Total stockholders' equity 897,431 796,852
---------- ---------
Total liabilities and stockholders' equity $1,233,543 1,099,219
========== =========
See accompanying accounting policies and notes.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
YEAR ENDED DECEMBER 31 1996 1995 1994
In thousands of dollars
<S> <C> <C> <C>
CASH FLOWS--OPERATING ACTIVITIES
Net earnings
$ 230,272 223,739 230,533
Adjustments to reconcile net earnings to net cash
flows from operating activities:
Depreciation
47,288 43,773 41,057
Gain on sales of property, plant and
equipment
(1,771) (1,090) (38,762)
(Increase) decrease in:
Accounts receivable
2,154 (28,619) (13,608)
Inventories
973 (11,422) (38,086)
Other current assets
3,777 2,164 (13,578)
Other assets and deferred charges
(24,075) (6,297) 461
Increase (decrease) in:
Accounts payable
474 6,427 3,086
Accrued expenses
3 (3,657) (525)
Income and other taxes payable
6,095 (6,889) 35,774
Deferred income taxes
(4,496) 720 (7,894)
Other noncurrent liabilities
25,149 3,702 5,078
--------- -------- --------
Net cash flows--operating activities 285,843 222,551 203,536
--------- -------- --------
CASH FLOWS--INVESTING ACTIVITIES
Additions to property, plant and equipment (101,977) (102,759) (87,013)
Proceeds from property retirements 10,785 3,690 40,855
Purchases of short-term investments (576,995) (281,065) (232,591)
Maturities of short-term investments 559,603 277,913 234,092
--------- -------- --------
Net cash flows--investing activities (108,584) (102,221) (44,657)
--------- -------- --------
CASH FLOWS--FINANCING ACTIVITIES
Dividends paid (118,308) (111,401) (104,694)
Common stock purchased (6,779) (11,811) (13,225)
--------- -------- --------
Net cash flows--financing activities (125,087) (123,212) (117,919)
Effect of exchange rate changes on cash
and cash equivalents 3,336 1,038 319
--------- -------- --------
Net increase (decrease) in cash and cash equivalents 55,508 (1,844) 41,279
Cash and cash equivalents at beginning of year 125,725 127,569 86,290
--------- -------- --------
Cash and cash equivalents at end of year $ 181,233 125,725 127,569
========= ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 130,499 133,494 94,576
========= ======== ========
Interest paid $ 631 1,957 1,508
========= ======== ========
Interest and dividends received $ 14,477 14,639 12,135
========= ======== ========
See accompanying accounting policies and notes.
</TABLE>
<TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
AS OF DECEMBER 31 1996 1995 1994
In thousands of dollars
<S> <C> <C> <C>
COMMON STOCK
At beginning of year $ 12,205 12,177 12,078
Conversion of Class B shares 70 52 99
Retirement -- (24) --
--------- -------- --------
At end of year 12,275 12,205 12,177
--------- -------- --------
CLASS B COMMON STOCK
At beginning of year 3,291 3,343 3,442
Conversion to Common Stock (70) (52) (99)
--------- -------- --------
At end of year 3,221 3,291 3,343
--------- -------- --------
ADDITIONAL PAID-IN CAPITAL
At beginning of year 1,625 1,781 1,467
Options exercised and stock awards granted (1,387) (156) 140
Expired put option -- -- 174
--------- -------- --------
At end of year 238 1,625 1,781
--------- -------- --------
RETAINED EARNINGS
At beginning of year 786,543 685,850 564,640
Net earnings 230,272 223,739 230,533
Dividends declared (118,303) (114,852) (109,323)
Treasury stock retirement -- (8,194) --
--------- -------- --------
At end of year 898,512 786,543 685,850
--------- -------- --------
TREASURY STOCK
At beginning of year (10,178) (9,034) --
Purchases (6,779) (11,811) (13,225)
Options exercised and stock awards granted 4,046 2,449 4,191
Retirement -- 8,218 --
--------- -------- --------
At end of year (12,911) (10,178) (9,034)
--------- -------- --------
FOREIGN CURRENCY TRANSLATION
At beginning of year (8,038) (13,502) (24,757)
Translation adjustment (6,678) 5,464 11,255
--------- -------- --------
At end of year (14,716) (8,038) (13,502)
--------- -------- --------
UNREALIZED HOLDING GAIN
At beginning of year 11,404 7,855 18,312
Marketable equity securities adjustment (592) 3,549 (10,457)
--------- -------- --------
At end of year 10,812 11,404 7,855
--------- -------- --------
Total stockholders' equity $ 897,431 796,852 688,470
========= ======== ========
See accompanying accounting policies and notes.
</TABLE>
<PAGE>
ACCOUNTING POLICIES AND NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
CONSOLIDATION AND
DESCRIPTION OF BUSINESS
The consolidated financial statements include the accounts of
the Wm. Wrigley Jr. Company and its associated companies (the
Company). The Company's principal business is manufacturing and
selling chewing gum. All other businesses constitute less than
10% of combined revenues, operating profit and identifiable
assets. Preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect assets, liabilities,
revenues and expenses. Actual results may vary from those
estimates. Certain amounts reported in 1995 have been
reclassified to conform to the 1996 presentation.
FACTORY CLOSURE
In April, 1996 the Company announced it intended to close its
Santa Cruz, California factory and transfer, retire or
terminate the 311 employees at that factory by the second
quarter of 1997 as part of a plan to realign U.S. production
capacity. In 1996, the Company provided $17,000,000 for related
closure costs covering employee severance and costs to maintain
and sell the property and incurred an additional $2,436,000 in
relocation, training and other transition costs related to this
plan. Net earnings per share have been reduced by $.11 per
share as a result of these charges in 1996. In addition to the
$2,436,000 of relocation and training and transition related
costs incurred to date, the Company expects to incur another
$2,100,000 in such costs during 1997.
At December 31, 1996 a total of 109 employees has been
transferred, retired or terminated and $700,000 in severance
costs for the terminated employees has been incurred and
charged to the factory closure reserve.
CASH AND CASH EQUIVALENTS
The Company considers all highly-liquid debt instruments with
a maturity of three months or less to be cash equivalents.
NONRECURRING GAIN ON
SALE OF SINGAPORE PROPERTY
On January 12, 1994, the Company sold the real estate holdings
of its wholly owned associated company in Singapore, Malayan
Guttas Private Limited, for a gain of $38,102,000. This
nonrecurring gain, reported in the first quarter of 1994,
increased net earnings by an after tax amount of $24,765,000 or
$.21 per share.
ADVERTISING
The Company expenses all advertising costs in the year
incurred. Advertising expense was $247,571,000 in 1996,
$240,925,000 in 1995 and $225,291,000 in 1994.
INVESTMENTS IN
DEBT & EQUITY SECURITIES
The Company adheres to Statement of Financial Accounting
Standards (SFAS) No. 115 "Accounting for Certain Investments in
Debt and Equity Securities". Its investments in debt
securities, which typically mature in one year or less, are
held to maturity and valued at amortized cost, which
approximates fair value. The aggregate fair values at December
31, 1996 and December 31, 1995 were, respectively, $90,323,000
and $82,740,000 for municipal securities, and $29,007,000 and
$23,207,000 for other debt
securities.
The Company's investments in marketable equity securities are
held for an indefinite period. Application of SFAS No. 115
resulted in unrealized holding gains of $16,634,000 at December
31, 1996 and $17,544,000 at December 31, 1995. The unrealized
holding gains, net of the related tax effect, added $10,812,000
and $11,404,000 to Stockholders' equity at December 31, 1996
and 1995, respectively.
A contribution of marketable equity securities having a fair
value of $14,966,000 and an original cost of $624,000 was made
to the Company's charitable foundation in 1994.
<PAGE>
INVENTORIES
Inventories at December 31, 1996 and 1995 included $101,523,000
and $108,354,000, respectively, valued at cost on a last-in,
first-out (LIFO) basis. If current costs had been used, such
inventories would have been $44,268,000 and $46,483,000 higher
than reported at December 31, 1996 and 1995, respectively. The
non-LIFO inventories are valued at the lower of cost
(principally first-in, first-out basis) or market.
DEPRECIATION
Depreciation is provided over the estimated useful lives of the
respective assets (buildings and building equipment--12 to 50
years; machinery and equipment--3 to 20 years). Depreciation is
provided primarily by the straight-line method for
international associated companies and by the accelerated
method, with a change to straight-line in the latter years of
useful life, for the U.S. companies. The amounts were:
1996 1995 1994
-----------------------------
In thousands of dollars
STRAIGHT-LINE $30,489 25,804 17,531
ACCELERATED 16,799 17,969 23,526
OTHER NONCURRENT LIABILITIES
Other noncurrent liabilities at December 31, 1996 included
liabilities for approximately $26,938,000 of deferred
compensation and $16,200,000 for postretirement benefit plans.
At December 31, 1995, they included liabilities for
approximately $19,900,000 of deferred com-
pensation and $16,100,000 for postretirement benefits.
FOREIGN CURRENCY TRANSLATION AND EXCHANGE CONTRACTS
The Company has determined that the functional currency for
each associated company except for selected Eastern European
entities is its local currency. Some Eastern European entities
are considered to be highly inflationary and their functional
currencies are remeasured to U.S. dollars.
Certain foreign associated companies enter into fixed rate
currency exchange contracts as non-speculative hedges against
future material purchase commitments among associated
companies. In addition, the Parent Company enters into such
contracts from time to time as non-speculative hedges regarding
known future commitments with associated companies. Market
value gains and losses, recognized at expiration of the
contracts, offset foreign exchange gains or losses on the
related transactions being hedged. At December 31, 1996,
foreign exchange rate contracts for a number of currencies,
primarily French francs, German marks, and U.S. dollars,
maturing at various dates through December 31, 1997 aggregated
$239,645,000. Open foreign exchange contracts at December 31,
1995 aggregated $142,003,000. Unrealized gains or losses on
these contracts were not significant as of either December 31,
1996 or 1995.
ACCRUED EXPENSES
Accrued expenses at December 31, 1996 and 1995 included
$25,972,000 and $23,617,000 of payroll expenses, respectively.
<PAGE>
COMMON STOCK
The Company's Management Incentive Plan (MIP) authorizes the
granting of up to 5,400,000 shares of the Company's new or
reissued Common Stock (including 492,222 shares issued under
the predecessor 1984 Stock Award Plan) to key managers in
various forms, including stock grants and stock appreciation
rights.
The MIP established in 1988 was designed to provide key
employees the opportunity to participate in the long-term
growth and profitability of the Company through equity-based
incentives. In accordance with the MIP, shares of Wrigley stock
or deferral share units are awarded by the Long-Term Stock
Grant, Stock Award, and Alternate Investment and Savings Plan
programs to key employees. Deferral share units are also
awarded to non-employee directors. Neither the cost to provide
share and share units nor the number of shares which may be
issued is material.
Each share of Class B Common Stock has ten votes, is restricted
as to transfer or other disposition and is convertible at any
time into one share of Common Stock.
Additional paid-in capital primarily represents the excess of
fair market value of Common Stock issued from treasury on the
date the shares of stock were awarded over the average
acquisition cost of the shares.
Treasury Stock is acquired for MIP plans or under a resolution
the Board of Directors adopted at its meeting of August 18,
1993 authorizing the Company to purchase from time to time
shares of the Company's Common Stock not to exceed $100,000,000
in aggregate price. On August 19, 1992 the Board of Directors
adopted a resolution retiring the entire balance of shares of
Common Stock held in the corporate treasury at that time and
all subsequent acquisitions to the extent not required for
issuance under the MIP programs. On December 22, 1995, 180,000
shares of Common Stock were retired.
On June 9, 1994, the Company agreed to an unsolicited offer
from the Wrigley Memorial Garden Foundation to purchase 345,072
shares of Wrigley Common Stock in four quarterly installments.
The purchase amount was based on the average New York Stock
Exchange daily closing price of the Company's Common Stock
during each quarter. Purchases during 1994 and 1995 were
172,536 shares at an average price of $44.19 and 172,536 shares
at an average price of $45.34, respectively.
Following is a summary of activity in the share balances of
Common Stock, Class B Common Stock and Treasury Stock:
COMMON CLASS B TREASURY
STOCK COMMON STOCK
---------------------------
In thousands of shares
BALANCE AT 12/31/95 91,541 24,680 219
CONVERSION OF CLASS B
SHARES 525 (525) --
TREASURY STOCK
PURCHASES -- -- 115
OPTIONS EXERCISED AND
STOCK AWARDS
GRANTED -- -- (83)
------ ------ ---
BALANCE AT 12/31/96 92,066 24,155 251
====== ====== ===
<PAGE>
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes. Components of net deferred tax
assets are as follows:
1996 1995
-----------------------
In thousands of dollars
ACCRUED COMPENSATION,
PENSION AND
POSTRETIREMENT BENEFITS $ 17,904 15,804
DEPRECIATION (11,704) (7,899)
UNREALIZED HOLDING GAIN (5,822) (6,140)
FACTORY CLOSURE AND
RELATED COSTS 5,695 --
ALL OTHER--NET 7,644 7,631
-------- ------
NET DEFERRED TAX ASSET $ 13,717 9,396
======== ======
Balance sheet classifications of deferred taxes are as follows:
1996 1995
------------------------
In thousands of dollars
DEFERRED TAX ASSET--
CURRENT $ 10,939 9,591
DEFERRED TAX ASSET--
NONCURRENT 27,984 20,109
DEFERRED TAX LIABILITY--
CURRENT (816) (768)
DEFERRED TAX LIABILITY--
NONCURRENT (24,390) (19,536)
-------- -------
NET DEFERRED TAX ASSET $ 13,717 9,396
======== =======
Applicable U.S. income and foreign withholding taxes have not
been provided on $304,993,000 of undistributed earnings of
international associated companies at December 31, 1996. These
earnings are considered to be permanently invested and, under
the tax laws, are not subject to such taxes until distributed
as dividends. If the earnings were not considered permanently
invested, approximately $22,870,000 of deferred income taxes,
consisting primarily of foreign withholding taxes, would have
been provided. Such taxes, if ultimately paid, may be
recoverable as foreign tax credits in the U.S.
Income taxes are based on pre-tax earnings which are
distributed geographically as follows:
1996 1995 1994
-------------------------------
In thousands of dollars
DOMESTIC $161,510 172,373 172,194
FOREIGN 197,602 177,858 181,085
-------- ------- -------
$359,112 350,231 353,279
======== ======= =======
Reconciliation of the provision for income taxes computed at
the U.S. Federal statutory rate of 35% for 1996, 1995 and 1994
to the reported provision for income taxes is as follows:
1996 1995 1994
-------------------------------
In thousands of dollars
PROVISION AT
STATUTORY RATE $125,690 122,581 123,648
STATE TAXES--NET 8,284 8,963 8,308
FOREIGN TAX RATES 34 2,695 361
CONTRIBUTION OF
APPRECIATED
SECURITIES -- -- (5,020)
OTHER--NET (5,168) (7,747) (4,551)
-------- ------- -------
$128,840 126,492 122,746
======== ======= =======
The components of the provision for income taxes for 1996,
1995, and 1994 were:
CURRENT DEFERRED TOTAL
-------------------------------
In thousands of dollars
1996
FEDERAL $ 47,890 (6,205) 41,685
FOREIGN 72,702 1,709 74,411
STATE 12,744 -- 12,744
-------- ------ -------
$133,336 (4,496) 128,840
======== ====== =======
1995
FEDERAL $ 45,770 (1,333) 44,437
FOREIGN 66,154 2,053 68,207
STATE 13,848 -- 13,848
-------- ------ -------
$125,772 720 126,492
======== ====== =======
1994
FEDERAL $ 63,941 (8,171) 55,770
FOREIGN 53,560 277 53,837
STATE 13,139 -- 13,139
-------- ------ -------
$130,640 (7,894) 122,746
======== ====== =======
<PAGE>
RETIREMENT PLANS
The Company maintains non-contributory defined benefit pension
plans covering substantially all of its employees. Retirement
benefits are a function of the years of service and the level
of compensation, generally for the highest three consecutive
salary years occurring within ten years prior to an employee's
retirement date, depending on the plan. The Company's policy is
to fund within ERISA or other statutory limits to provide
benefits earned to date and expected to be earned in the
future. Thecomponents of consolidated net pension cost are
presented below:
<TABLE>
1996 1995 1994
DOMESTIC FOREIGN DOMESTIC FOREIGN DOMESTIC FOREIGN
In thousands of dollars
<S> <C> <C> <C> <C> <C> <C>
SERVICE COST--
BENEFITS EARNED DURING THE YEAR $ 6,878 3,298 5,754 3,133 7,467 3,163
INTEREST COST
ON PROJECTED BENEFIT OBLIGATION 14,769 4,145 14,202 3,809 14,104 3,164
ACTUAL RETURN ON PLAN ASSETS (26,978) (4,824) (31,984) (4,258) (79) (3,820)
NET AMORTIZATION AND DEFERRAL 8,325 (501) 16,033 (301) (15,087) (437)
OTHER PENSION PLANS 551 4,223 433 3,846 500 2,984
-------- ------ ------- ------ ------- ------
NET PENSION COST $ 3,545 6,341 4,438 6,229 6,905 5,054
======== ====== ======= ====== ======= ======
</TABLE>
Assumptions used to determine net pension cost and the
actuarial present value of the projected benefit obligation
were as follows:
<TABLE>
1996 1995 1994
DOMESTIC FOREIGN DOMESTIC FOREIGN DOMESTIC FOREIGN
<S> <C> <C> <C> <C> <C> <C>
DISCOUNT RATES 7.5% 7.5-9.0% 7.25% 7.5-9.0% 8.0% 6.5-8.0%
LONG-TERM RATES
OF RETURN ON ASSETS 8.5% 7.0-9.0% 8.5% 7.0-9.0% 8.5% 6.5-8.0%
RATES OF INCREASE
IN COMPENSATION LEVELS 4.75% 5.0-6.0% 4.75% 5.0-6.0% 4.75% 3.5-7.0%
</TABLE>
<PAGE>
Domestic plan assets consist primarily of high quality
marketable fixed income and equity securities. Foreign plan
assets consist primarily of contracts with insurance companies.
The defined benefit plans' funded status and the pension
liability recorded in the consolidated balance sheet were as
follows:
<TABLE>
1996 1995
DOMESTIC FOREIGN DOMESTIC FOREIGN
In thousands of dollars
<S> <C> <C> <C> <C>
PLAN ASSETS AT FAIR VALUE $240,937 61,685 218,472 51,957
ACTUARIAL PRESENT VALUE OF BENEFIT OBLIGATION:
VESTED BENEFITS 163,489 48,109 160,944 38,261
NONVESTED BENEFITS 5,897 669 5,984 802
-------- ------ ------- ------
ACCUMULATED BENEFIT OBLIGATION 169,386 48,778 166,928 39,063
PROJECTED FUTURE SALARY INCREASES 41,015 7,450 44,237 10,279
-------- ------ ------- ------
PROJECTED BENEFIT OBLIGATION 210,401 56,228 211,165 49,342
-------- ------ ------- ------
PLAN ASSETS IN EXCESS OF
PROJECTED BENEFIT OBLIGATION 30,536 5,457 7,307 2,615
LESS ITEMS NOT YET RECOGNIZED IN EARNINGS:
UNRECOGNIZED PRIOR SERVICE COST (157) (453) (181) (435)
UNRECOGNIZED NET GAIN (LOSS) 30,624 968 7,385 (746)
UNRECOGNIZED TRANSITION ASSET 2,282 3,579 2,683 3,703
-------- ------ ------- ------
ACCRUED PENSION LIABILITY (ASSET) $ 2,213 (1,363) 2,580 (93)
======== ====== ======= ======
</TABLE>
In addition to the defined benefit plans described above, the
Company also sponsors defined contribution plans within the
U.S. and at selected foreign associated companies. The plans
cover full time employees and provide for contributions of
between 3% and 5% of salary. The Company's expense for the
defined contribution plans totaled $4,700,000, $4,850,000 and
$4,476,000 in 1996, 1995 and 1994, respectively.
<PAGE>
POSTRETIREMENT BENEFITS
The Company provides limited postretirement healthcare benefits
on a contributory basis and life insurance benefits in the U.S.
and at certain international associated companies. The cost of
postretirement benefits is provided for during the employee's
active working career.
A reconciliation of the plans' funded status to the amounts
reported in the financial statements follows:
1996 1995
-------------------
In thousands of
dollars
ACCUMULATED
POSTRETIREMENT
BENEFIT OBLIGATION:
RETIREES $ 8,000 5,500
ACTIVE EMPLOYEES 17,400 17,700
------- ------
TOTAL 25,400 23,200
PLAN ASSETS 8,000 6,200
------- ------
ACCUMULATED
POSTRETIREMENT
BENEFIT OBLIGATION
IN EXCESS OF PLAN ASSETS 17,400 17,000
UNRECOGNIZED
ACTUARIAL GAIN (LOSS) (1,200) (900)
------- ------
ACCRUED
POSTRETIREMENT LIABILITY $16,200 16,100
======= ======
The components of the net periodic postretirement benefit cost
are as follows:
1996 1995 1994
------------------------
In thousands of dollars
SERVICE COST $1,000 800 900
INTEREST COST 1,800 1,600 1,500
RETURN ON PLAN ASSETS (200) (300) (200)
------ ----- -----
NET PERIODIC EXPENSE $2,600 2,100 2,200
====== ===== =====
Actuarial assumptions used to measure the postretirement
benefit cost are as follows:
1996 1995 1994
---------------------------------
DISCOUNT RATE 7.5% 7.25% 8.0%
HEALTHCARE
TREND TO 2002 (IN
1996) 8.75-5.0% 9.375-5.0% 10.0-5.0%
RETURN ON PLAN
ASSETS 5.5% 5.5% 5.5%
Effects of increasing the healthcare trend rates by one
percentage point in each year are summarized below:
1996 1995 1994
------------------------
In thousands of dollars
INCREASE ACCUMULATED
POSTRETIREMENT
BENEFIT
OBLIGATION BY $2,400 2,300 1,900
INCREASE
POSTRETIREMENT
BENEFIT COST BY 350 300 300
<PAGE>
OPERATIONS BY GEOGRAPHIC AREAS
Information concerning the Company's operations in different
geographic areas at December 31, 1996, 1995 and 1994, and for
the years then ended is presented below.
Operating profit is revenue less all costs and expenses other
than general corporate expenses, interest expense and income
taxes.
Identifiable assets are those involved in the operations in
each geographic area and include all of the assets of
associated companies. Marketable equity securities held by the
Parent Company are not distributed to geographic areas, and the
related dividend income is included in the adjustments and
eliminations line.
<TABLE>
1996 1995 1994
In thousands of dollars
<S> <C> <C> <C>
REVENUES:
NORTH AMERICA (PRINCIPALLY U.S.) $ 909,540 922,185 938,034(2)
EUROPE 769,671 703,349 573,153
ASIA, PACIFIC & OTHER 218,043 189,619 199,638(3)
ADJUSTMENTS AND ELIMINATIONS (46,653) (45,411) (49,575)
---------- --------- ---------
TOTAL REVENUES $1,850,601 1,769,742 1,661,250
========== ========= =========
OPERATING PROFIT:
NORTH AMERICA (PRINCIPALLY U.S.) $ 166,035(1) 177,563 176,794
EUROPE 153,513 141,737 107,390
ASIA, PACIFIC & OTHER 40,866 33,975 70,390(3)
ADJUSTMENTS AND ELIMINATIONS 723 (300) 1,020
---------- --------- ---------
361,137 352,975 355,594
INTEREST AND GENERAL CORPORATE EXPENSES (2,025) (2,744) (2,315)
---------- --------- ---------
EARNINGS BEFORE INCOME TAXES $ 359,112 350,231 353,279
========== ========= =========
IDENTIFIABLE ASSETS USED IN OPERATIONS:
NORTH AMERICA (PRINCIPALLY U.S.) $ 665,172 598,214 578,952
EUROPE 409,154 353,625 264,534
ASIA, PACIFIC & OTHER 144,933 126,931 121,339
ADJUSTMENTS AND ELIMINATIONS (4,241) 622 (678)
---------- --------- ---------
1,215,018 1,079,392 964,147
CORPORATE ASSETS 18,525 19,827 14,687
---------- --------- ---------
TOTAL ASSETS $1,233,543 1,099,219 978,834
========== ========= =========
1 Includes charges of $19,436 from the closure of the Santa Cruz factory.
2 Includes nonrecurring gain of $14,342 on marketable equity securities
contributed to the Company's charitable foundation.
3 Includes nonrecurring gain of $38,102 on sale of Singapore property.
</TABLE>
<PAGE>
MANAGEMENT'S REPORT ON RESPONSIBILITY
FOR FINANCIAL REPORTING
Management of the Wm. Wrigley Jr. Company is responsible for
the preparation and integrity of the financial statements and
related information presented in this Annual Report. This
responsibility is carried out through a system of internal
controls to insure that assets are safeguarded, transactions
are properly authorized and financial records are accurate.
These controls include a comprehensive internal audit program,
written financial policies and procedures, appropriate
divisions of responsibility, and careful selection and training
of personnel. Written policies include a code of conduct
prescribing that all employees maintain the highest ethical and
business standards.
Ernst & Young LLP have conducted an independent audit of the
financial statements, and their report appears on the facing
page.
The Board of Directors exercises its control responsibility
through an Audit Committee composed entirely of outside
directors. The Audit Committee meets regularly to review
accounting and control matters. Both Ernst & Young LLP and the
internal auditors have direct access to the Audit Committee and
periodically meet privately with them.
WM. WRIGLEY JR. COMPANY
Chicago, Illinois
January 30, 1997
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Stockholders and Board of Directors
of the Wm. Wrigley Jr. Company
We have audited the accompanying consolidated balance sheet of
Wm. Wrigley Jr. Company and associated companies at December
31, 1996 and 1995, and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Wm. Wrigley Jr. Company and associated
companies at December 31, 1996 and 1995, and the consolidated
results of their operations and cash flows for each of the
three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
January 30, 1997
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
1996 1995 1994 1993
<S> <C> <C> <C> <C>
OPERATING DATA
Net Sales $1,835,987 1,754,931 1,596,551 1,428,504
Cost of Sales 833,919 778,019 697,442 617,156
Income Taxes 128,840 126,492 122,746 103,944
Earnings before factory closure in 1996,
nonrecurring gain on sale of Singapore
property in 1994 and cumulative effect
of accounting changes in 1992 243,262 223,739 205,767 174,891
--Per Share of Common Stock 2.10 1.93 1.77 1.50
Net Earnings 230,272 223,739 230,533 174,891
--Per Share of Common Stock 1.99 1.93 1.98 1.50
Dividends Paid 118,308 111,401 104,694 87,344
--Per Share of Common Stock 1.02 .96 .90 .75
--As a Percent of Net Earnings 51% 50% 45% 50%
Dividends Declared
Per Share of Common Stock 1.02 .99 .94 .75
Average Shares Outstanding 115,983 116,066 116,358 116,511
OTHER FINANCIAL DATA
Total Property, Plant and
Equipment (Net) $ 388,149 347,491 289,420 239,868
Total Assets 1,233,543 1,099,219 978,834 815,324
Working Capital 511,272 458,683 413,414 343,132
Stockholders' Equity 897,431 796,852 688,470 575,182
Return on Average Equity 27.2% 30.1% 36.5% 32.6%
Stockholders at Close of Year 34,951 28,959 24,078 18,567
Employees at Close of Year 7,800 7,300 7,000 6,700
Market Price of Stock--High 62.875 54.000 53.875 46.125
--Low 48.375 42.875 38.125 29.500
</TABLE>
<PAGE>
<TABLE>
In thousands of dollars and shares except for per share amounts
1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C>
1,286,921 1,148,875 1,110,639 992,853 891,392 781,059 698,982
572,468 507,795 508,957 451,773 392,460 338,081 318,280
83,730 79,362 70,897 64,277 53,491 52,863 49,840
148,573 128,652 117,362 106,149 87,236 70,145 53,818
1.27 1.09 1.00 0.90 0.73 0.56 0.42
141,295 128,652 117,362 106,149 87,236 70,145 53,818
1.21 1.09 1.00 0.90 0.73 0.56 0.42
72,511 64,609 58,060 53,506 43,591 35,080 27,056
0.62 0.55 0.49 0.45 0.36 0.28 0.21
51% 50% 49% 50% 50% 50% 50%
0.63 0.55 0.51 0.47 0.37 0.29 0.22
117,055 117,517 117,743 118,035 120,308 125,006 126,817
222,137 201,386 188,959 171,951 155,260 151,425 134,383
711,372 625,074 563,665 498,624 440,400 407,350 394,352
299,149 276,047 229,735 186,588 165,430 149,154 168,754
498,935 463,399 401,386 342,994 308,538 288,965 292,962
29.4% 29.8% 31.5% 32.6% 29.2% 24.1% 19.5%
14,546 11,086 10,497 10,218 9,440 9,351 8,956
6,400 6,250 5,850 5,750 5,500 5,500 5,500
39.875 27.000 19.750 17.917 13.750 11.833 8.667
22.125 16.375 14.583 11.833 10.667 6.500 4.583
</TABLE>
<PAGE>
<TABLE>
QUARTERLY DATA
WM. WRIGLEY JR. COMPANY AND ASSOCIATED COMPANIES
CONSOLIDATED RESULTS
NET EARNINGS
COST
NET OF PER
SALES SALES AMOUNT SHARE
----------------------------------------------------------------
In thousands of dollars except for per share amounts
<S> <C> <C> <C> <C>
1996
FIRST QUARTER $ 426,674 187,864 57,613 .50
SECOND QUARTER(1) 483,625 231,803 57,043 .49
THIRD QUARTER 462,425 204,708 61,207 .53
FOURTH QUARTER 463,263 209,544 54,409 .47
---------- ------- ------- ----
TOTAL $1,835,987 833,919 230,272 1.99
========== ======= ======= ====
1995
FIRST QUARTER $ 410,159 181,761 55,276 .48
SECOND QUARTER 470,648 208,076 63,896 .55
THIRD QUARTER 431,479 189,939 58,288 .50
FOURTH QUARTER 442,645 198,243 46,279 .40
---------- ------- ------- ----
TOTAL $1,754,931 778,019 223,739 1.93
========== ======= ======= ====
</TABLE>
(1) Cost of sales, net earnings, and earnings per share for the
2nd quarter 1996 included charges of $17,600,000, $11,200,000
and $0.10 respectively from the closure of the Santa Cruz
factory.
MARKET PRICES
Although there is no established public trading market for the
Class B Common Stock, these shares are at all times convertible
into shares of Common Stock on a one-for-one basis and are
entitled to identical dividend payments.
The Common Stock of the Company is listed and traded on the New
York Stock Exchange. The table below presents the high and low
sales prices for the two most recent years.
<TABLE>
1996 1995
HIGH LOW HIGH LOW
<S> <C> <C>
FIRST QUARTER
$62 7/8 52 1/4 49 1/4 43 1/2
SECOND QUARTER 49
59 5/8 47 3/8 42 7/8
THIRD QUARTER
61 3/8 48 3/8 51 1/4 43 1/2
FOURTH QUARTER 62 55 1/8 54 46 3/8
DIVIDENDS
</TABLE>
The following table indicates the breakdown of dividends
declared per share of Common Stock and Class B Common Stock for
the two most recent years.
<TABLE>
1996 1995
REGULAR EXTRA TOTAL REGULAR EXTRA TOTAL
<S> <C> <C> <C> <C>
FIRST QUARTER $ .17 .17 .14 .14
SECOND QUARTER .17 .17 .14 .14
THIRD QUARTER .17 .17 .17 .17
FOURTH QUARTER .17 .34 .51 .17 .37 .54
----- --- ---- --- --- ---
TOTAL $ .68 .34 1.02 .62 .37 .99
===== === ==== === === ===
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
NET SALES
Consolidated net sales for 1996 increased $81,056,000 or 5%
from 1995's level which was up $158,380,000 or 10% from 1994.
Net sales for both 1996 and 1995 were favorably affected by
higher overseas unit volume and selected selling price
increases mainly in Europe and North America. Translation of
foreign currency sales to U.S. dollars at lower average
exchange rates in 1996 reduced reported net sales by 2% and
generally higher rates in 1995 increased reported net sales 4%
from 1994. Higher shipments of chewing gum increased net sales
5% in 1996 and 3% in 1995. Selected selling price changes
increased net sales about 2% in 1996 and 3% in 1995.
North American 1996 net sales were down more than 1% from 1995,
while 1995 net sales were up nearly 2% from 1994. Selected
selling price increases in both years tended to offset volume
declines. In total, North American shipments decreased by 4% in
1996 and by 3% in 1995 from the previous years. Decreased sales
to Mexico lowered North American unit volume by 1% in 1996 and
by 2% in 1995. At Amurol Confections Company, lower unit
shipments reduced North American volume by 2% in 1996 and 1% in
1995.
U.S. shipments of Wrigley brands lowered the volume by 1% in
1996 from 1995 which was essentially even with 1994. Increased
shipments of Winterfresh(R), introduced in 1994, tended to
offset volume declines from other brands in the U.S. in both
1996 and 1995.
Overseas, net sales, excluding currency translation effects,
increased 15% in 1996 and 13% in 1995. Unit volume increased
10% in 1996 and 8% in 1995. Customer shipments to emerging
markets such as China and Eastern Europe accounted for most of
the volume gain in both years.
INVESTMENT AND OTHER INCOME
In 1996, consolidated investment and other income decreased
about 1% from 1995 mainly due to lower average yields.
In 1995, investment and other income decreased by $11,786,000
or 44% due to the 1994 one-time market appreciation gain of
$14,342,000 on marketable equity securities contributed to the
Company's charitable foundation. Higher invested balances and
yields in 1995 partially offset the one-time decrease from
1994.
COST OF SALES AND GROSS PROFIT
In April, 1996 the Company announced it intended to close its
Santa Cruz, California factory by the second quarter of 1997 as
part of a plan to realign U.S. production capacity. At the time
of the announcement, the Company provided $17,000,000 for
related costs including employee severance and costs to hold
and sell the factory. In addition, the Company incurred
$2,436,000 for employee relocation and training and other
transition related costs for a total charge of $19,436,000 in
1996. It is expected that another $2,100,000 in transition
costs will be incurred in 1997. With this realignment of
production and related efficiencies, U.S. operating costs are
expected to be lower than would otherwise be the case by about
$6,000,000 in 1997 and $12,000,000 to $13,000,000 annually
starting in 1998.
Excluding the Santa Cruz factory closure costs, consolidated
cost of sales increased $36,464,000 or nearly 5% in 1996 from
1995 mainly due to increased international volume and higher
product costs. Without the foreign currency translation effects
in 1996, cost of sales increased by about 8%.
In 1995, cost of sales increased $80,577,000 or 12% from 1994.
Most of this increase was from higher product costs and
international volume gains. Excluding the translation of
foreign currency effects at higher average exchange rates, the
cost of sales increase was about 8%.
Consolidated gross profit in 1996 was $1,021,504,000, an
increase of $44,592,000, excluding factory closure costs, or
nearly 5% from 1995 which had increased $77,803,000 or 9% from
1994. The consolidated gross profit margin on net sales was
55.6% for 1996, 55.7% for 1995 and 56.3% for 1994.
<PAGE>
SELLING, DISTRIBUTION AND
GENERAL ADMINISTRATIVE
EXPENSES
Consolidated selling, distribution and general administrative
expenses increased $16,936,000 or 3% in 1996 from 1995.
Excluding the effects of foreign currency translation, the
increase was about 5% in 1996.
Expenses in 1994 included the Company's contribution of
appreciated marketable equity securities to its charitable
foundation previously discussed in Investment and Other Income.
Excluding the nonrecurring amount of the 1994 contribution
resulted in an increase of $44,498,000 or 7% in 1995 from 1994.
Overseas selling and marketing expenditures were the major
factor for increases in both years.
As a percentage of consolidated net sales, these expenses were:
1996 1995 1994
---------------------
SELLING AND MARKETING 25.5% 26.0% 26.1%
DISTRIBUTION AND
GENERAL ADMINISTRATIVE 10.3% 10.4% 12.0%
----- ----- -----
35.8% 36.4% 38.1%
===== ===== =====
Excluding the Company's contribution to its charitable
foundation, the Distribution and General Administrative
percentage in 1994 would have been 11.2%.
INCOME TAXES
Income taxes in 1996 increased by $2,348,000 or 2% from 1995
which increased $3,746,000 or 3% from the prior year. The
effective consolidated income tax rates were 35.9% in 1996,
36.1% in 1995 and 34.7% in 1994. The lower effective rate in
1994 is mainly from the tax benefit of the contribution of
appreciated securities to the Company's foundation noted above.
Excluding the effect of this transaction, the 1994 effective
tax rate would have been 36.2%.
NET EARNINGS
Consolidated net earnings in 1996 increased by $6,533,000 and
$.06 per share or 3% from 1995. However, as noted in Cost of
Sales and Gross Profit, 1996 earnings include significant costs
related to the Santa Cruz factory closure. These costs resulted
in lowering 1996 reported earnings by $12,990,000 and $.11 per
share. Excluding the factory closure costs, 1996 net earnings
increased $19,523,000 and $.17 per share or 9% from 1995.
Net earnings in 1995 decreased by $6,794,000 and $.05 per share
or 3% from 1994. However, 1994 net earnings of $230,533,000 and
$1.98 per share included the gain from the nonrecurring sale of
real estate holdings in Singapore which added $24,765,000 after
taxes or $.21 per share to that year's reported results.
Excluding the nonrecurring Singapore gain in 1994, 1995 net
earnings increased $17,971,000 and $.16 per share or 9%.
LIQUIDITY AND CAPITAL RESOURCES
ADDITION TO PROPERTY,
PLANT AND EQUIPMENT
Capital expenditures for 1996 were $101,977,000; essentially
even with 1995's expenditures of $102,759,000 which increased
by $15,746,000 or 18% from 1994. All of the capital
expenditures for 1996 and 1995 were funded from the Company's
cash flow from operations. Additions to property, plant and
equipment in 1997 are expected to be above 1996 expenditures
and are also planned to be funded from the Company's cash flow
from operations.
CURRENT RATIO
The Company has maintained a strong financial position with a
current ratio (current assets divided by current liabilities)
of approximately 3 to 1 for the periods under discussion
(1994-1996).
<PAGE>
<TABLE>
Parents and Subsidiaries of Registrant
<S> <C>
State or Country
Name of Company of Corporation
Wm. Wrigley Jr. Company.............................. Delaware
Companies included in consolidation -- all 100%
owned by Parent Company:
Northwestern Flavors, Inc. .......................... Illinois
L.A. Dreyfus Company ................................ Delaware
Four-Ten Corporation ................................ Illinois
Amurol Confections Company .......................... Illinois
Wrigley Enterprises, Inc. ........................... Delaware
The Wrigley Company Pty. Limited .................... Australia
Wrigley Austria Ges.m.b.H. .......................... Austria
Wrigley Bulgaria EOOD ............................... Bulgaria
Wrigley Canada Inc. ................................. Canada
Wrigley (Cayman) Ltd. ............................... Cayman Islands
Wrigley Chewing Gum Co. Ltd. ........................ People's Republic of China
Wrigley Taiwan, Limited ............................. Republic of China
Wrigley s.r.o. ...................................... Czech Republic
The Wrigley Company Limited ......................... England
Wrigley S.A. ........................................ France
Wrigley GmbH ........................................ Germany
Wrigley N.V. ........................................ Holland
The Wrigley Company (H.K.) Limited .................. Hong Kong
Wrigley Hungaria, Kbt ............................... Hungary
Wrigley India Private Limited ....................... India
Wrigley & Company Ltd., Japan ....................... Japan
The Wrigley Company (E.A.) Ltd. ..................... Kenya
The Wrigley Company (Malaysia) Limited .............. Malaysia
The Wrigley Company (N.Z.) Limited .................. New Zealand
Wrigley Philippines, Inc. ........................... Philippines
Wrigley Poland Sp. zo.o ............................. Poland
Wrigley Romania Produse Zaharoase SRL ............... Romania
Wrigley T.O.O. ...................................... Russia
Wrigley Slovakia, s.r.o. ............................ Slovakia
Wrigley d.o.o. ...................................... Slovenia
Wrigley Co., S.A. ................................... Spain
Companies included in consolidation which are owned
by wholly-owned associated companies of the Parent
Company:
100% owned by The Wrigley Company Limited, England-
Wrigley Scandinavia AB.......................... Sweden
100% owned by Wrigley Scandinavia, AB Sweden-
OY Wrigley Scandinavia Ab....................... Finland
Wrigley Scandinavia AS.......................... Norway
100% owned by The Wrigley Company Pty.
Limited, Australia-
The Wrigley Company (P.N.G.) Pty. Ltd........... Papua, New Guinea
</TABLE>
NOTE: The list above excludes 100% owned subsidiaries which
are primarily inactive and taken singly, or as a group, do not
constitute significant subsidiaries.
William Wrigley, President, Chief Executive Officer, a
director and beneficial owner of more than 5% of both classes of
the outstanding shares of the Company, may be deemed to be a
"Parent" of the Wm. Wrigley Jr. Company under the rules and
regulations promulgated by the Securities and Exchange Commission.
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of the Wm. Wrigley
Jr. Company hereby severally constitute and appoint William
Wrigley, C.F. Allison III and Wm. M. Piet, or any of them singly,
our true and lawful attorneys and agents with full power to them
and each of them singly, to sign for us in our names in the
capacities indicated below the Annual Report on Form 10-K Report of
the Wm. Wrigley Jr. Company for the fiscal year ended December 31,
1996, and any and all amendments thereto, to file the same, with
all exhibits thereto and documents therewith, with the Securities
and Exchange Commission, hereby granting to such attorneys and
agents, and each of them, full power of substitution and revocation
in the premises, and generally to do all such things in our name
and behalf in our capacities as officers and directors to enable
the Wm. Wrigley Jr. Company to comply with the provisions of the
Securities Exchange Act of 1934, and all regulations of the
Securities and Exchange Commission thereunder, hereby ratifying and
confirming our signatures as they may be signed by our attorneys,
or any one of them, to said Form 10-K Report, and any and all
amendments thereto, and all that said attorneys and agents, or any
of them may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned have hereunto executed the
Power of Attorney this 5th day of March, 1997.
/s/ WILLIAM WRIGLEY /s/ JOHN F. BARD
William Wrigley John F. Bard
President, Chief Executive Senior Vice President
Officer, Director (Principal Financial Officer)
/s/ DUSHAN PETROVICH
Dushan Petrovich
Vice President-Controller
(Principal Accounting Officer)
/s/ CHARLES F. ALLISON III /s/ DOUGLAS S. BARRIE
Charles F. Allison III Douglas S. Barrie
Director Director
/s/ LEE PHILLIP BELL /s/ ROBERT P. BILLINGSLEY
Lee Phillip Bell Robert P. Billingsley
Director Director
/s/ THOMAS A. KNOWLTON /s/ PENNY PRITZKER
Thomas A. Knowlton Penny Pritzker
Director Director
/s/ RICHARD K. SMUCKER /s/ WILLIAM WRIGLEY, JR.
Richard K. Smucker William Wrigley, Jr.
Director Director
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
I, Trevia C. Trice, a Notary Public in and for said County, in
the aforesaid State, DO HEREBY CERTIFY that the above-named
directors and officers of the Wm. Wrigley Jr. Company, personally
known to me to be the same persons whose names are subscribed to
the foregoing instruments, appeared before me this day in person,
and severally acknowledged that they signed and delivered the said
instrument as their free and voluntary act, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this 5th day of March,
1997.
/s/ TREVIA C. TRICE
Notary Public
My Commission Expires:
09/05/00
<PAGE>
FORWARD-LOOKING STATEMENTS
From time to time, the Company may publish forward-looking
statements relating to such matters as anticipated financial
performance, business prospects, capital expenditures,
technological developments, new products, research and development
activities and similar matters. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of the safe harbor,
the Company notes that a variety of important factors could cause
the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the
Company's forward-looking statements. The important factors that
may affect the operations, performance, development and results of
the Company's business include the following:
- - In those markets where the Company maintains market
leadership, it will most likely retain preferred retail space
allocation which enhance results.
- - Availability, pricing and sourcing of raw materials has been
relatively stable and a competitive advantage but failure to
maintain these could negatively impact results.
- - The Company has historically been successful marketing to
different segments of the population. Failure to adequately
anticipate and react to changing demographics and product
preferences could negatively impact results.
- - Both manufacturing and sales of a significant portion of the
Company's products are outside the United States and could be
negatively impacted by volatile foreign currencies and
markets.
- - The Company competes worldwide with other well established
manufacturers of chewing gum. The Company's results may be
negatively impacted by a failure of new or existing products
to be favorably received, by ineffective advertising, or by
failure to sufficiently counter aggressive competitive
actions.
- - Underutilization of or inadequate manufacturing capacity due
to unanticipated movements in consumer demands could
materially affect manufacturing efficiencies and costs.
- - Discounting and other competitive actions may make it more
difficult for the Company to maintain its historically strong
operating margins.
- - Governmental regulations with respect to import duties,
tariffs and environmental controls, both in and outside the
U.S., could negatively impact the Company's costs and ability
to compete in domestic or foreign markets.
- - The Company has not had any material labor stoppages,
nevertheless, such disputes or strikes could negatively affect
shipments from suppliers or shipment of finished product.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 181,233
<SECURITIES> 137,855
<RECEIVABLES> 173,589
<ALLOWANCES> 8,538
<INVENTORY> 233,197
<CURRENT-ASSETS> 729,424
<PP&E> 808,046
<DEPRECIATION> 419,897
<TOTAL-ASSETS> 1,233,543
<CURRENT-LIABILITIES> 218,152
<BONDS> 0
0
0
<COMMON> 15,496
<OTHER-SE> 881,935
<TOTAL-LIABILITY-AND-EQUITY> 1,233,543
<SALES> 1,835,987
<TOTAL-REVENUES> 1,850,601
<CGS> 833,919
<TOTAL-COSTS> 1,491,489
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,097
<INCOME-PRETAX> 359,112
<INCOME-TAX> 128,840
<INCOME-CONTINUING> 230,272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 230,272
<EPS-PRIMARY> 1.99
<EPS-DILUTED> 1.99
</TABLE>
