TOOTSIE ROLL INDUSTRIES INC, 10-K405, 1995-03-27

TOOTSIE ROLL INDUSTRIES INC
10-K405, 1995-03-27
SUGAR & CONFECTIONERY PRODUCTS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1994
OR

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

For the transition period from ____________ to _____________

Commission file number 1-1361

- -------------------------------------------------------------------------------
TOOTSIE ROLL INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
- -------------------------------------------------------------------------------

Virginia 22-1318955
--------------------------------- ----------------------------------
(State of other jurisdiction (IRS Employer Identification No.)
of Incorporation or organization)

7401 South Cicero Avenue, Chicago, Illinois 60629
(Address of principal executive offices) (ZIP Code)

Registrant's Telephone Number: (312) 838-3400
Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
------------------------------------------ -----------------------
Common Stock - Par Value $.69-4/9 Per Share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock - Par Value $.69-4/9 Per Share
---------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No
------- -------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
-------
- -------------------------------------------------------------------------------

<PAGE>

As of March 10, 1995, 7,313,555 shares of Common Stock par value $.69-4/9
per share were outstanding 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 $308,000,000. As of March
10, 1995, 3,530,908 shares of Class B Common Stock, par value $.69-4/9 per share
were outstanding. Class B Common Stock is not traded on any exchange, is
restricted as to transfer or other disposition, but 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
3,530,908 shares of outstanding Class B Common Stock were converted into Common
Stock, the aggregate market value of Common Stock held by non-affiliates on
March 10, 1995 (based upon the closing price of the stock on the New York Stock
Exchange on such date) would have been approximately $365,000,000.
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.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the Company's Annual Report to Shareholders for the year ended
December 31, 1994 (the "1994 Report") are incorporated by reference in Parts I
and II of this report.

2. Portions of the Company's Definitive Proxy Statement which will be
distributed on or before April 30, 1995 in connection with the Company's 1995
Annual Meeting of Shareholders (the "1995 Proxy Statement") is incorporated by
reference in Part III of this report.

Cover Page 2 of 2 pages
<PAGE>

PART I

ITEM 1. BUSINESS.

Tootsie Roll Industries, Inc. and its consolidated subsidiaries
(the "Company") are engaged in the manufacture and sale of candy. This is the
only industry segment in which the Company operates and is its only line of
business. A majority of the Company's products are sold under the registered
trademarks "Tootsie," "Tootsie Roll," or "Tootsie Pop." The principal product
of the Company is the familiar "Tootsie Roll," a chocolate-flavored candy of a
chewy consistency, which is sold in several sizes and which is also used as a
center for other products in the line including "Tootsie Pops," a spherical
fruit or chocolate-flavored shell of hard candy with a center of "Tootsie Roll"
candy on a paper safety stick. The Company and its predecessors have
manufactured the "Tootsie Roll" product to substantially the same formula and
sold it under the same name for almost 100 years. The Company's products also
include "Tootsie Roll Flavor Rolls" and "Tootsie Frooties," multiflavored
candies of chewy consistency.

The Company also manufactures and sells molded candy drop
products under the registered trademark "Mason" and "Tootsie," including "Mason
Dots," and "Mason Crows."

The Company's wholly owned subsidiary, Cella's Confections Inc.,
produces a chocolate covered cherry under the registered trademark "Cella's."

In 1988, the Company acquired the Charms Company. This candy
manufacturer produces lollipops, including bubble gum-filled lollipops, and hard
candy. The majority of the Company's products are sold under the registered
trademarks "Charms," "Blow-Pop," "Blue Razz," and "Zip-A-Dee-Doo-Da-Pops."

In 1993, the Company acquired Cambridge Brands, Inc. which was
the former Chocolate/Caramel Division of Warner Lambert. Cambridge Brands, Inc.
manufactures various confectionery products under the registered trademarks
"Junior Mint," "Charleston Chew," "Sugar Babies," and "Sugar Daddy".

The Company's products are marketed in a variety of packages
designed to be suitable for display and sale in different types of retail
outlets and vending machines and fund-raising religious and charitable
organizations. They are distributed through approximately 100 candy and grocery
brokers and by the Company itself to approximately 15,000 customers throughout
the United States. These customers include wholesale distributors of candy and
groceries, supermarkets, variety stores, chain grocers, drug chains, discount
chains, cooperative grocery associations, warehouse and membership club stores,
vending machine operators, and fund-raising religious and charitable
organizations.
<PAGE>

The Company's principal markets are in the United States, Canada
and Mexico. The Company's Mexican plant supplies a very small percentage of the
products marketed in the United States and Canada.

The Company has advertised nationally for many years. Although
nearly all advertising media have been used at one time or another, at present
most of the Company's advertising expenditures are for the airing of network and
syndicated TV and cable and spot television on major markets throughout the
country.

The domestic candy business is highly competitive. The Company
competes primarily with other manufacturers of bar candy and candy of the type
sold in variety, grocery and convenience stores. Although accurate statistics
are not available, the Company believes it is the sixth largest domestic
manufacturer. In the markets in which the Company competes, the main forms of
competition comprise brand recognition as well as a fair price for our products
at various retail price points.

Sale of candy products may be influenced to some extent by
discussions of and effect on dental health and weight.

The Company did not have a material backlog of firm orders at the
end of the calendar years 1994 or 1993.

All raw materials used by the Company are readily obtainable from
a number of suppliers at competitive prices. The average cost of most major raw
materials remained relatively stable in the first half of 1994. However, as a
result of the capacity of packaging material suppliers coming under pressure
during the second half of 1994 due to strong export demand for U.S. materials,
prices for paper, board, foil and other materials increased dramatically. The
Company was protected to some degree from these increases by having previously
negotiated fixed price contracts for many of the materials. It is not possible
to project future changes in the price of raw materials. The Company has
engaged in hedging transactions in sugar, corn and other commodities and may do
so in the future if and when advisable. From time to time the Company changes
the size of certain of its products, which are usually sold at standard retail
prices, to reflect significant changes in raw material costs.

The Company does not hold any material patents, licenses,
franchises or concessions. The Company's major trademarks are registered in the
United States and in many other countries. Continued trademark protection is of
material importance to the Company's business as a whole.

The Company does not expend significant amounts on research or
development activities.

Compliance with Federal, State and local provisions which have
been enacted or adopted regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment, has not
had a material effect on the capital expenditures, earnings or competitive
position of the Company nor does the Company anticipate any such material
effects from presently enacted or adopted regulations.

The Company employs approximately 1,700 persons.

2
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The Company has found that its sales normally maintain a
consistent level throughout the year except for a substantial upsurge in the
third quarter which reflects sales in anticipation of Halloween. In
anticipation of this high sales period, the Company generally begins its
Halloween inventory build up in the second quarter of each year. The Company
historically offers extended credit terms for sales made under Halloween sales
programs. Each year, after Halloween receivables have been collected, the
Company invests funds in various temporary cash investments.

Revenues from a major customer of the Company aggregated approximately
16.8%, 13.6% and 12.5% of total net sales during the years ended December 31,
1994, 1993 and 1992, respectively.

For a summary of sales, net earnings and assets of the Company by
geographic area and additional information regarding the foreign subsidiaries of
the Company, see Note 11 of the Notes to Consolidated Financial Statements on
Page 15 of the Company's Annual Report to Shareholders for the year ended
December 31, 1994 (the "1994 Report") and on Page 4 of the 1994 Report under the
section entitled "International." Note 11 and the aforesaid section are
incorporated herein by reference. Portions of the 1994 Report are filed as an
exhibit to this report.

ITEM 2. PROPERTIES.

The Company owns its principal plant and offices which are
located in Chicago, Illinois in a building consisting of approximately 2,200,000
square feet. The Company utilizes approximately 1,800,000 square feet for
offices, manufacturing and warehousing facilities and leases, or has available
to lease to third parties, approximately 400,000 square feet.

In addition to owning the principal plant and warehousing
facilities mentioned above, the Company leases manufacturing and warehousing
facilities at a second location in Chicago which comprises 80,600 square feet.
The lease is renewable by the Company every five years through June, 2011. The
Company also periodically leases additional warehousing space at this second
location as needed on a month to month basis.

Cella's Confections, Inc., a subsidiary, owns a facility in New
York City, containing approximately 43,000 square feet. This facility consists
of manufacturing, warehousing and office space on three floors containing
approximately 33,200 square feet with a below surface level of approximately
9,800 square feet.

Charms Company, a subsidiary, owns a facility in Covington,
Tennessee, containing approximately 267,000 square feet of manufacturing,
warehousing and office space.

Cambridge Brands, Inc., a subsidiary, owns a facility in
Cambridge, Massachusetts, containing approximately 145,000 square feet. The
facility consists of manufacturing, warehousing and office space on five floors.

The Company also owns property and a plant with manufacturing,
warehousing and office space in Mexico City, Mexico, consisting of approximately
57,000 square feet plus parking lot and yard area comprising approximately
25,000 square feet.

3
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The Company owns the production machinery and equipment located
in the plants in Chicago, New York, Covington (Tennessee), Cambridge
(Massachusetts) and Mexico City, except for approximately $7 million of
equipment in Covington, Tennessee, under an operating lease. The Company
considers that all of its facilities are well maintained, in good operating
condition and adequately insured.

ITEM 3. LEGAL PROCEEDINGS.

There are no material pending legal proceedings known to the
Company to which the Company or any of its subsidiaries is a party or of which
any of their property is the subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of the Company's shareholders
through the solicitation of proxies or otherwise during the fourth quarter of
1994.

ADDITIONAL
ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.

See the information on Executive Officers set forth in the table
in Part III, Item 10, Page 6 of this report, which is incorporated herein by
reference.

4
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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

The Company's Common Shares are traded on the New York Stock Exchange.
The Company's Class B Common Shares are subject to restrictions on transfer and
no market exists for such shares. The Class B Common Shares are convertible at
the option of the holder into Common Shares on a share for share basis. As of
March 10, 1995, there were approximately 9,500 holders of record of Common and
Class B Common Shares. For information on the market price of, and dividends
paid with respect to, the Company's Common Shares, see the section entitled
"1994-1993 Quarterly Summary of Tootsie Roll Industries, Inc. Stock Price and
Dividends Per Share" which appears on Page 16 of the 1994 Report. This section
is incorporated herein by reference and filed as an exhibit to this report.

ITEM 6. SELECTED FINANCIAL DATA.

See the section entitled "Five Year Summary of Earnings and Financial
Highlights" which appears on Page 17 of the 1994 Report. This section is
incorporated herein by reference and filed as an exhibit to this report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

See the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on Pages 5-7 of the 1994 Report.
This section is incorporated herein by reference and filed as an exhibit to this
report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements, together with the report thereon of Price
Waterhouse LLP dated February 15, 1995, appearing on Pages 8-15 of the 1994
Report and the Quarterly Financial Data on Page 16 of the 1994 Report are
incorporated by reference in this report. With the exception of the
aforementioned information and the information incorporated in Items 1, 5, 6 and
7, the 1994 Report is not to be deemed filed as part of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

5
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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

See the information with respect to the Directors of the Company which
is set forth in the section entitled "Election of Directors" of the Company's
Definitive Proxy Statement to be used in connection with the Company's 1995
Annual Meeting of Shareholders (the "1995 Proxy Statement"). Except for the
last paragraph of this section relating to the compensation of Directors, this
section is incorporated herein by reference. The 1995 Proxy Statement will be
filed with the Securities and Exchange Commission on or before April 30, 1995.

The following table sets forth the information with respect to the
executive officers of the Company:

NAME POSITION (1) AGE
- ---- ------------ ---
Melvin J. Gordon* Chairman of the Board
and Chief Executive Officer (2) 75

Ellen R. Gordon* President and Chief
Operating Officer (2) 63

G. Howard Ember Jr. Vice President/Finance 42

John W. Newlin Jr. Vice President/Manufacturing 58

Thomas E. Corr Vice President/Marketing and
Sales 46

James M. Hunt Vice President/Distribution 52

*A member of the Board of Directors of the Company.

1) Mr. and Mrs. Gordon and Messrs. Newlin and Corr have served in the
positions set forth in the table as their principal occupations for more
than the past five years. Mr. Ember has served in his position for the
past four years, and in the seven years prior to that, has served the
Company in the position of Treasurer and Assistant Vice President of
Finance. Mr. Hunt has served in his position for the past two years and in
the fifteen years prior to that, has served the Company in the positions of
Director of Distribution and Assistant Vice President of Distribution. Mr.
and Mrs. Gordon have also served as President and Vice President,
respectively, of HDI Investment Corp., a family investment company.

2) Melvin J. Gordon and Ellen R. Gordon are husband and wife.

6
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ITEM 11. EXECUTIVE COMPENSATION.

See the information set forth in the section entitled "Executive
Compensation and Other Information" of the Company's 1995 Proxy Statement.
Except for the "Report on Executive Compensation" and "Performance Graph," this
section of the 1995 Proxy Statement is incorporated herein by reference. See
the last paragraph of the section entitled "Election of Directors" of the 1995
Proxy Statement, which paragraph is incorporated herein by reference. The 1995
Proxy Statement will be filed with the Securities and Exchange Commission on or
before April 30, 1995.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.

For information with respect to the beneficial ownership of the
Company's Common Shares and Class B Common Shares by the beneficial owners of
more than 5% of said shares and by the management of the Company, see the
sections entitled "Ownership of Common Stock and Class B Common Stock by
Certain Beneficial Owners" and "Ownership of Common Stock and Class B Common
Stock by Management" of the 1995 Proxy Statement. These sections of the 1995
Proxy Statement are incorporated herein by reference. The 1995 Proxy Statement
will be filed with the Securities and Exchange Commission on or before April 30,
1995.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Daniel G. Ross, a director of the Company through May 1994, is a
member of the law firm of Becker, Ross, Stone, DeStefano & Klein, which has
served as general counsel to the Company for many years. Mr. Ross retired as of
the 1994 annual meeting of shareholders in May 1994.

7
<PAGE>

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) Financial Statements.

The following financial statements and schedules are filed as part of
this report:

(1) Financial Statements (filed herewith as part of Exhibit 13):

Report of Independent Accountants

Consolidated Statements of Earnings and
Retained Earnings for the three years
ended December 31, 1994

Consolidated Statements of Cash Flows
for the three years ended December 31,
1994

Consolidated Statements of Financial
Position at December 31, 1994 and 1993

Notes to Consolidated Financial
Statements

(2) Financial Statement Schedule:

Report of Independent Accountants on
Financial Statement Schedules

Valuation and Qualifying Accounts for the three years
ended December 31, 1994

All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

(3) Exhibits required by Item 601 of Regulation S-K:

See Index to Exhibits which appears following
Financial Schedule X.

No reports on Form 8-K were filed during the quarter ended
December 31, 1994.

8
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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, Tootsie Roll Industries, Inc. has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

TOOTSIE ROLL INDUSTRIES, INC.

By /s/ MELVIN J. GORDON
----------------------------
Melvin J. Gordon, Chairman
of the Board of Directors
and Chief Executive Officer

Date: March 28, 1995
-------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

/s/ MELVIN J. GORDON Chairman of the Board March 28, 1995
- -------------------- of Directors and Chief
Melvin J. Gordon Executive Office
(principal executive
officer)

/s/ ELLEN R. GORDON Director, President, March 28, 1995
- -------------------- and Chief Operating
Ellen R. Gordon Officer

Director March 28, 1995
- --------------------
Charles W. Seibert

/s/ WILLIAM TOURETZ Director & Secretary March 28, 1995
- --------------------
William Touretz

Director March 28, 1995
- --------------------
Lana Jane Lewis-Brent

/s/ G.HOWARD EMBER JR Vice President, Finance March 28, 1995
- --------------------- (principal financial
G. Howard Ember Jr. officer and principal
accounting officer)

9
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REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Shareholders of
Tootsie Roll Industries, Inc.

Our audits of the consolidated financial statements referred to in our
report dated February 15, 1995 appearing on Page 15 of the 1994 Annual Report to
Shareholders of Tootsie Roll Industries, Inc. (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the financial statement schedule listed in Item
14(a) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.

PRICE WATERHOUSE LLP
Chicago, Illinois
February 15, 1995

10
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FINANCIAL SCHEDULE

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
AND SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 31, 1994, 1993 AND 1992

Additions
Balance at charged to Balance at
beginning costs and end of
Classification of year expenses Deductions year
- -------------- ---------- ---------- ---------- ----------
<S> <S> <C> <C> <C>
1994:
Reserve for bad
debts $ 1,835,000 $ 350,935 $ 1,012,935 (1) $ 1,173,000
Reserve for cash
discounts 240,000 5,972,711 5,919,711 (2) 293,000
---------- ---------- ---------- ----------
$ 2,075,000 $ 6,323,646 $ 6,932,646 $ 1,466,000
---------- ---------- ---------- ----------

1993:
Reserve for bad
debts $ 1,110,000 $ 894,790 $ 169,790 (1) $ 1,835,000
Reserve for cash
discounts 109,000 4,962,551 4,831,551 (2) 240,000
---------- ---------- ---------- ----------
$ 1,219,000 $ 5,857,341 $ 5,001,341 $ 2,075,000
---------- ---------- ---------- ----------

1992:
Reserve for bad
debts $ 981,000 $ 939,448 $ 810,448 (1) $ 1,110,000
Reserve for cash
discounts 118,000 4,557,058 4,566,058 (2) 109,000
---------- ---------- ---------- ----------
$ 1,099,000 $ 5,496,506 $ 5,376,506 $ 1,219,000
---------- ---------- ---------- ----------
<FN>
(1) Accounts receivable written off net of recoveries and exchange rate movements.

(2) Allowances to customers.
</TABLE>

12
<PAGE>
INDEX TO EXHIBITS

2.1 Asset Sale Agreement dated September 29, 1993
between Warner-Lambert Company and the Company,
including a list of omitted exhibits and
schedules. Incorporated by reference to Exhibit
2 to the Company's Report on Form 8-K dated
October 15, 1993; Commission File No. 1-1361.

The Company hereby agrees to provide the Commission,
upon request, copies of any omitted exhibits or schedules required
by Item 601(b)(2) of Regulation S-K.

3.1 Articles of Incorporation. Incorporated by
reference to Exhibit 2.1 to Company's
Registration Statement on Form 8-A dated February
29, 1988.

3.1.1 Articles of Amendment of the Articles of
Incorporation dated May 2, 1988. Incorporated by
reference to Exhibit 3.1.1 of the Company's
Annual Report on Form 10-K for the year ended
December 31, 1988; Commission File No. 1-1361.

3.1.2 Articles of Amendment of the Articles of
Incorporation dated May 7, 1990. Incorporated by
reference to Exhibit 3.1.2 of the Company's
Annual Report on Form 10-K for the year ended
December 31, 1990; Commission File No. 1-1361.

3.2 By-Laws. Incorporated by reference to Exhibit
2.2 to Company's Registration Statement of Form
8-A dated February 29, 1988.

3.3 Specimen Class B Common Stock Certificate.
Incorporated by reference to Exhibit 1.1 to
Company's Registration Statement on Form 8-A
dated February 29, 1988.

10.5* Consultation Agreement between the Company and
William Touretz dated December 21, 1979.
Incorporated by reference to Exhibit 10.5 of the
Company's Annual Report on Form 10-K for the year
ended December 31, 1992; Commission File No.
1-1361.

13
<PAGE>

10.5.1* Modification Agreement between the Company and
William Touretz dated as of December 5, 1984.
Incorporated by reference to Exhibit 10.5.1 to
the Company's Annual Report on Form 10-K for the
year ended December 31, 1984; Commission File No.
1-1361.

10.5.2* Modification Agreement between the Company and
William Touretz dated as of December 13, 1985.
Incorporated by reference to Exhibit 10.5.2 of
the Company's Annual Report on Form 10-K for the
year ended December 31, 1985; Commission File No.
1-1361.

10.5.3* Modification Agreement between the Company and
William Touretz dated as of December 17, 1986.
Incorporated by reference to Exhibit 10.5.3 of
the Company's Annual Report on Form 10-K for the
year ended December 31, 1986; Commission File No.
1-1361.

10.8.1* Excess Benefit Plan. Incorporated by reference
to Exhibit 10.8.1 of the Company's Annual Report
on Form 10-K for the year ended December 31,
1990; Commission File No. 1-1361.

10.8.2* Career Achievement Plan of the Company.
Incorporated by reference to Exhibit 10.8.2 of
the Company's Annual Report on Form 10-K for the
year ended December 31, 1993; Commission File No.
1-1361.

10.12* Split Dollar Agreements (Special Trust and
Daughters Revocable Trust) between the Company
and trustee of Trust dated July 10, 1993.
Incorporated by reference to Exhibit 10.12 of the
Company's Annual Report on Form 10-K for the year
ended December 31, 1993; Commission File No.
1-1361.

10.21* Executive Split Dollar Insurance and Collateral
Assignment Agreement between the Company and
G. Howard Ember Jr. dated July 30, 1994.

10.22* Executive Split Dollar Insurance and Collateral
Assignment Agreement between the Company and
John W. Newlin dated July 30, 1994.

14
<PAGE>

10.23* Executive Split Dollar Insurance and Collateral
Assignment Agreement between the Company and Thomas E.
Corr dated July 30, 1994.

10.24* Executive Split Dollar Insurance and Collateral
Assignment Agreement between the Company and James Hunt
dated July 30, 1994.

13 The following items incorporated by reference
herein from the Company's 1994 Annual Report to
Shareholders for the year ended December 31, 1994
(the "1994 Report"), are filed as Exhibits to
this report:

(i) Information under the section entitled
"International" set forth on Page 4 of the 1994
Report;

(ii) Information under the section entitled
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" set forth on
Pages 5-7 of the 1994 Report;

(iii) Consolidated Statements of Earnings and Retained
Earnings for the three years ended December 31,
1994 set forth on Page 8 of the 1994 Report;

(iv) Consolidated Statements of Financial Position at
December 31, 1994 and 1993 set forth on Pages 9-10
of the 1994 Report;

(v) Consolidated Statements of Cash Flow for the three
years ended December 31, 1994 set forth on Page 11
of the 1994 Report;

(vi) Notes to Consolidated Financial Statements set
forth on Pages 12-15 of the 1994 Report;

(vii) Report of Independent Accountants set forth on
Page 15 of the 1994 Report;

(viii) Quarterly Financial Data set forth on Page 16 of
the 1994 Report;

15
<PAGE>

(ix) Information under the section entitled "1994-1993
Quarterly Summary of Tootsie Roll Industries, Inc.
Stock Prices and Dividends" set forth on Page 16
of the 1994 Report; and

(x) Information under the section entitled "Five Year
Summary of Earnings and Financial Highlights" set
forth on Page 17 of the 1994 Report.

21 List of Subsidiaries of the Company.

- -----------------------------
*Executive compensation plan or arrangement.

<PAGE>

EXHIBIT 10.21

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
EXECUTIVE SPLIT DOLLAR INSURANCE AGREEMENT

AGREEMENT, between Tootsie Roll Industries, Inc., a Virginia
corporation (the "Corporation"), and G. Howard Ember, Jr.

WHEREAS, G. Howard Ember, Jr. (the "Employee") is presently employed
by the Corporation, his services have contributed to the successful operation of
the Corporation, and the Corporation's board of directors believes it is in the
best interest of the Corporation to retain the services of the Employee; and

WHEREAS, the Corporation is desirous of transferring to G. Howard
Ember, Jr. (the "Owner") Policy No. 1A2252333-0 issued by Pacific Mutual Life
Insurance Company on the Employee's life (the "policy") now owned by the
Corporation pursuant to this "split dollar" arrangement, subject to the Owner's
agreement to assign the policy to the Corporation as collateral for the "current
value" (defined below) of the policy and the premium payments to be made by the
Corporation under this agreement by an instrument of collateral assignment
attached as Exhibit A (the "assignment") and to record the assignment with the
"Insurer" (defined below).

NOW, THEREFORE, in consideration of the premises, and the services to
be rendered to the Corporation by the Employee, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Corporation and the
Owner hereby mutually covenant and agree as follows:

ARTICLE I -- PAYMENT OF PREMIUMS AND ECONOMIC BENEFIT

1.1 As long as this agreement is in force, the Owner and the
Corporation agree to pay the amounts and in the manner set forth below.

1.2 The Owner shall pay each year to the Corporation an amount equal to
the economic benefit that would be taxable as gross income for federal income
tax purposes to the Employee but for the payment by the Owner of such amount.
The Owner shall have the option, exercisable upon 30 days' written notice
delivered to the Corporation, to pay a greater amount to the Corporation.

1.3 For purposes of Section 1.2 above, the economic benefit that would
be taxable to the Employee shall be computed in accordance with Revenue Rulings
64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, and the Corporation shall be
responsible for computing such amount. The Corporation will advise the Owner of
the amount payable by the Owner pursuant to Section 1.2, and the Owner shall pay
that amount directly to the Corporation.

1.4 In order to facilitate the payment of premiums on the policy, the
Owner and the Corporation agree that the Corporation will forward to the Insurer
the entire premiums due on the policy, if any.

<PAGE>

ARTICLE II -- POLICY OWNERSHIP AND RESTRICTIONS

2.1 The Owner shall be the sole owner of the policy. The Corporation's
payment of premiums hereunder shall constitute a liability of the Owner subject
to repayment as provided herein.

2.2 The Owner agrees to assign the policy to the Corporation as
collateral for such liabilities and the Corporation shall have those rights
granted to it under the assignment and this agreement. The Owner agrees that
while this agreement is in force, the Owner may not borrow or withdraw from or
surrender any part of the policy prior to the 15th anniversary of this
agreement. As between the Owner and the Corporation, this agreement shall take
precedence over any provision of the assignment in case of a conflict between
the terms of this agreement and the assignment.

ARTICLE III -- DEATH OF EMPLOYEE

3.1 On the Employee's death while this agreement is in force, the Owner
will pay to the Corporation an amount equal to the sum of (i) the terminal
reserve value of the policy plus unearned premiums on the date the policy is
transferred to the Owner (the "current value") and (ii) the total premiums paid
by the Corporation from the date of this agreement to the date of the Employee's
death, reduced by the total payments made to the Corporation by the Owner
pursuant to Section 1.2 above.

ARTICLE IV -- TERMINATION OF AGREEMENT

4.1 This agreement shall automatically terminate upon the happening of
any of the following events:

(a) At the option of the Corporation, if the Employee
terminates employment for any reason other than death or a "change of
control" (defined below). The Employee shall be deemed to be employed
by the Corporation during any period in which he is "permanently
disabled" (defined below).

(b) At the surrender, lapse or termination of the policy.

(d) Upon failure of the Owner to make a payment required by
Section 1.2 above.

(e) Upon agreement of the parties.

4.2 In the event of a termination under Section 4.1(a) above, the Owner
will pay to the Corporation not later than the 15th anniversary of this
agreement an amount equal

<PAGE>

to the lesser of (i) the cash surrender value of the policy on the date of such
termination, not reduced by any loan or withdrawal and not less than the current
value or (ii) the amount the Corporation would have been entitled to receive at
the Employee's death under Section 3.1 determined as if such death occurred on
the date of such termination (the "repayment amount"). The Owner acknowledges
that, until the repayment amount has been paid in full to the Corporation, the
Owner must continue to pay the amounts required under Section 1.2 above
notwithstanding the termination of the Employee's employment and the termination
of the Corporation's obligation to pay further premiums.

4.3 In the event of any other termination under Section 4.1 above, the
Owner will pay the repayment amount to the Corporation within 60 days after such
termination.

ARTICLE V -- OTHER PROVISIONS

5.1 The Corporation agrees that it will not merge or consolidate with
another corporation or organization, or permit its business activities to be
taken over by any other organization unless and until the succeeding or
continuing corporation or other organization shall expressly assume the rights
and obligations of the Corporation herein set forth.

5.2 This agreement will be governed by and construed in accordance with
the laws of Illinois, where it is made and to be performed. It sets forth the
entire agreement between the parties concerning the subject matter thereof, and
any amendment or discharge will be made only in writing. This agreement will
bind and benefit the parties and their legal representatives and successors.

5.3 This agreement shall not be deemed to constitute a contract of
employment between the Corporation and the Employee, nor shall any provision
restrict the right of the Corporation to discharge the Employee, or restrict the
Employee's right to terminate employment.

5.4 The provisions required by the Employee Retirement Income Security
Act of 1974 (ERISA).

5.5 The Owner may assign his interest in this agreement at any time by
filing with the Corporation the statement attached as Exhibit C signed by his
assignee. This agreement may be amended or modified in whole or in part by the
Owner and the Corporation in writing at any time.

5.6 A "change of control" of the Corporation shall occur when: (1) any
person, including a "group," as described in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, acquires after the effective date of this
agreement the beneficial ownership of, and the right to vote, shares having the
right to cast at least 20% of the votes permitted to be cast in any election of
members to the Corporation's board of directors; or (2) as the result of any
tender or exchange offer, substantial purchase of the Corporation's equity
securities, merger, consolidation, sale of assets or contested election, or any
combination of the foregoing transactions, the persons who were directors of the
Corporation immediately prior to such transaction or transactions do not
constitute a

<PAGE>

majority of the Corporation's board of directors (or of the board of directors
of any successor to or assignee of the Corporation) immediately after the next
meeting of stockholders of the Corporation (or any successor or assignee)
following such transaction; except that no event described in clause (1) or (2)
above shall constitute a "change of control" if immediately after such event
Melvin J. Gordon, Ellen R. Gordon, their descendants (and spouses of such
descendants) and any trusts or estates in which such persons have an interest
own, directly or indirectly, shares having the right to cast at least 50% of the
votes permitted to be cast in any election of members of the Corporation's board
of directors. The Employee shall be deemed to be "permanently disabled" if he
is unable to perform his stated duties with the Corporation by reason of
illness, accident or other incapacity and is not engaged in any occupation or
employment for wage or profit for which he is reasonably qualified by education,
training, or experience; provided however, that in the event the Corporation
maintains a long-term disability plan in which the Employee is entitled to
receive benefits, the Employee shall be deemed to be permanently disabled when
he suffers a physical illness, injury or other impairment in respect to which he
is entitled to receive benefits under such long-term disability plan.

5.7 Notwithstanding the provisions of this agreement, the life
insurance company (the "Insurer") which has issued the policy is hereby
authorized to act in accordance with the terms of the policy as if this
agreement did not exist, and the payment or other performance of the contractual
obligations by the Insurer, in accordance with the terms of the policy, shall
completely discharge the Insurer from all claims, suits and demands of all
persons whatsoever.

IN WITNESS WHEREOF, the parties hereto have signed this agreement on
July 30, 1994.

G. Howard Ember, Jr.

TOOTSIE ROLL INDUSTRIES, INC.

<PAGE>

EXHIBIT A (G. HOWARD EMBER)

COLLATERAL ASSIGNMENT

1. G. Howard Ember (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to time
from Assignor to Assignee under the Executive Split Dollar Insurance Agreement
dated July 30, 1994, between the Assignor and the Assignee (the "Assignee's
Interest"), Policy No. 1A2252333-0 issued by Pacific Mutual Life Insurance
Company on the life of G. Howard Ember, Jr., subject to all the terms and
conditions of the policy and to all superior liens, if any, which the insurer
may have against the policy. The Assignor by this instrument agrees and the
Assignee by the acceptance of this assignment agrees to the conditions and
provisions herein set forth.

2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:

(a) The right to prohibit the Assignor's borrowing or withdrawal
from or surrender of any part of the policy prior to the 15th anniversary
of the Executive Split Dollar Insurance Agreement.

(b) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of the
Assignee's Interest in the policy.

(c) The right to collect, upon the insured's death, the net
proceeds of the policy up to the amount of the Assignee's Interest in the
policy.

3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by the
Assignee, or the giving of any notice, or the application to be made by the
Assignee of any amounts to be paid to the Assignee. The sole signature of the
Assignee shall be sufficient for the exercise of its rights under the policy and
the sole receipt of the Assignee for any sums received shall be a full discharge
and release therefor to the insurer.

Dated: July 30, 1994.

G. Howard Ember Jr.
Assignor

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
Assignee

Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.

PACIFIC MUTUAL LIFE INSURANCE COMPANY

<PAGE>

EXHIBIT 10.22

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
EXECUTIVE SPLIT DOLLAR INSURANCE AGREEMENT

AGREEMENT, between Tootsie Roll Industries, Inc., a
Virginia corporation (the "Corporation"), and John W. Newlin.

WHEREAS, John W. Newlin (the "Employee") is presently
employed by the Corporation, his services have contributed to the successful
operation of the Corporation, and the Corporation's board of directors believes
it is in the best interest of the Corporation to retain the services of the
Employee; and

WHEREAS, the Corporation is desirous of transferring to
John W. Newlin (the "Owner") Policy No. 1A2276857-0 issued by Pacific Mutual
Life Insurance Company on the Employee's life (the "policy") now owned by the
Corporation pursuant to this "split dollar" arrangement, subject to the Owner's
agreement to assign the policy to the Corporation as collateral for the "current
value" (defined below) of the policy and the premium payments to be made by the
Corporation under this agreement by an instrument of collateral assignment
attached as Exhibit A (the "assignment") and to record the assignment with the
"Insurer" (defined below).

NOW, THEREFORE, in consideration of the premises, and
the services to be rendered to the Corporation by the Employee, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Corporation and the Owner hereby mutually covenant and agree as follows:

ARTICLE I -- PAYMENT OF PREMIUMS AND ECONOMIC BENEFIT

1.1. As long as this agreement is in force, the Owner and
the Corporation agree to pay the amounts and in the manner set forth below.

1.2. The Owner shall pay each year to the Corporation an
amount equal to the economic benefit that would be taxable as gross income for
federal income tax purposes to the Employee but for the payment by the Owner of
such amount. The Owner shall have the option, exercisable upon 30 days' written
notice delivered to the Corporation, to pay a greater amount to the Corporation.

<PAGE>

1.4. In order to facilitate the payment of premiums on the
policy, the Owner and the Corporation agree that the Corporation will forward to
the Insurer the entire premiums due on the policy, if any.

ARTICLE II -- POLICY OWNERSHIP AND RESTRICTIONS

2.1. The Owner shall be the sole owner of the policy. The
Corporation's payment of premiums hereunder shall constitute a liability of the
Owner subject to repayment as provided herein.

2.2. The Owner agrees to assign the policy to the
Corporation as collateral for such liabilities and the Corporation shall have
those rights granted to it under the assignment and this agreement. The Owner
agrees that while this agreement is in force, the Owner may not borrow or
withdraw from or surrender any part of the policy prior to the 15th anniversary
of this agreement. As between the Owner and the Corporation, this agreement
shall take precedence over any provision of the assignment in case of a conflict
between the terms of this agreement and the assignment.

ARTICLE III -- DEATH OF EMPLOYEE

3.1. On the Employee's death while this agreement is in
force, the Owner will pay to the Corporation an amount equal to the sum of (i)
the terminal reserve value of the policy plus unearned premiums on the date the
policy is transferred to the Owner (the "current value") and (ii) the total
premiums paid by the Corporation from the date of this agreement to the date of
the Employee's death, reduced by the total payments made to the Corporation by
the Owner pursuant to Section 1.2 above.

ARTICLE IV -- TERMINATION OF AGREEMENT

4.1. This agreement shall automatically terminate upon the
happening of any of the following events:

(a) At the option of the Corporation, if the
Employee terminates employment for any reason other than death or a
"change of control" (defined below). The Employee shall be deemed to
be employed by the Corporation during any period in which he is
"permanently disabled" (defined below).

(b) At the surrender, lapse or termination of the
policy.

<PAGE>

(d) Upon failure of the Owner to make a payment
required by Section 1.2 above.

(e) Upon agreement of the parties.

4.2. In the event of a termination under Section 4.1(a)
above, the Owner will pay to the Corporation not later than the 15th anniversary
of this agreement an amount equal to the lesser of (i) the cash surrender value
of the policy on the date of such termination, not reduced by any loan or
withdrawal and not less than the current value or (ii) the amount the
Corporation would have been entitled to receive at the Employee's death under
Section 3.1 determined as if such death occurred on the date of such termination
(the "repayment amount"). The Owner acknowledges that, until the repayment
amount has been paid in full to the Corporation, the Owner must continue to pay
the amounts required under Section 1.2 above notwithstanding the termination of
the Employee's employment and the termination of the Corporation's obligation to
pay further premiums.

4.3. In the event of any other termination under Section 4.1
above, the Owner will pay the repayment amount to the Corporation within 60 days
after such termination.

ARTICLE V -- OTHER PROVISIONS

5.1. The Corporation agrees that it will not merge or
consolidate with another corporation or organization, or permit its business
activities to be taken over by any other organization unless and until the
succeeding or continuing corporation or other organization shall expressly
assume the rights and obligations of the Corporation herein set forth.

5.2. This agreement will be governed by and construed in
accordance with the laws of Illinois, where it is made and to be performed. It
sets forth the entire agreement between the parties concerning the subject
matter thereof, and any amendment or discharge will be made only in writing.
This agreement will bind and benefit the parties and their legal representatives
and successors.

5.3. This agreement shall not be deemed to constitute a
contract of employment between the Corporation and the Employee, nor shall any
provision restrict the right of the Corporation to discharge the Employee, or
restrict the Employee's right to terminate employment.

5.4. The provisions required by the Employee Retirement
Income Security Act of 1974 (ERISA).

5.5. The Owner may assign his interest in this agreement at
any time by filing with the Corporation the statement attached as Exhibit C
signed by his assignee. This agreement may be amended or modified in whole or
in part by the Owner and the Corporation in writing at any time.

<PAGE>

5.6. A "change of control" of the Corporation shall occur
when: (1) any person, including a "group," as described in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, acquires after the effective
date of this agreement the beneficial ownership of, and the right to vote,
shares having the right to cast at least 20% of the votes permitted to be cast
in any election of members to the Corporation's board of directors; or (2) as
the result of any tender or exchange offer, substantial purchase of the
Corporation's equity securities, merger, consolidation, sale of assets or
contested election, or any combination of the foregoing transactions, the
persons who were directors of the Corporation immediately prior to such
transaction or transactions do not constitute a majority of the Corporation's
board of directors (or of the board of directors of any successor to or assignee
of the Corporation) immediately after the next meeting of stockholders of the
Corporation (or any successor or assignee) following such transaction; except
that no event described in clause (1) or (2) above shall constitute a "change of
control" if immediately after such event Melvin J. Gordon, Ellen R. Gordon,
their descendants (and spouses of such descendants) and any trusts or estates in
which such persons have an interest own, directly or indirectly, shares having
the right to cast at least 50% of the votes permitted to be cast in any election
of members of the Corporation's board of directors. The Employee shall be
deemed to be "permanently disabled" if he is unable to perform his stated duties
with the Corporation by reason of illness, accident or other incapacity and is
not engaged in any occupation or employment for wage or profit for which he is
reasonably qualified by education, training, or experience; provided however,
that in the event the Corporation maintains a long-term disability plan in which
the Employee is entitled to receive benefits, the Employee shall be deemed to be
permanently disabled when he suffers a physical illness, injury or other
impairment in respect to which he is entitled to receive benefits under such
long-term disability plan.

5.7. Notwithstanding the provisions of this agreement, the
life insurance company (the "Insurer") which has issued the policy is hereby
authorized to act in accordance with the terms of the policy as if this
agreement did not exist, and the payment or other performance of the contractual
obligations by the Insurer, in accordance with the terms of the policy, shall
completely discharge the Insurer from all claims, suits and demands of all
persons whatsoever.

IN WITNESS WHEREOF, the parties hereto have signed this
agreement on July 30, 1994.

John W. Newlin

TOOTSIE ROLL INDUSTRIES, INC.

<PAGE>

EXHIBIT A (JOHN W. NEWLIN)

COLLATERAL ASSIGNMENT

1. John W. Newlin (the "Assignor"), hereby assigns, transfers and sets
over to Tootsie Roll Industries, Inc., a Virginia corporation (the "Assignee"),
to the extent of the amounts defined in and owing from time to time from
Assignor to Assignee under the Executive Split Dollar Insurance Agreement dated
30, 1994, between the Assignor and the Assignee (the "Assignee's Interest"),
Policy No. 1A2276857-0 issued by Pacific Mutual Life Insurance Company on the
life of John W. Newlin, subject to all the terms and conditions of the policy
and to all superior liens, if any, which the insurer may have against the
policy. The Assignor by this instrument agrees and the Assignee by the
acceptance of this assignment agrees to the conditions and provisions herein set
forth.

2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:

(a) The right to prohibit the Assignor's borrowing or withdrawal from
or surrender of any part of the policy prior to the 15th anniversary of the
Executive Split Dollar Insurance Agreement.

(b) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of the
Assignee's Interest in the policy.

(c) The right to collect, upon the insured's death, the net proceeds
of the policy up to the amount of the Assignee's Interest in the policy.

3. The insurer hereby is authorized to recognize the Assignee's claim to
rights hereunder without investigating the reason for any action taken by the
Assignee, or the giving of any notice, or the application to be made by the
Assignee of any amounts to be paid to the Assignee. The sole signature of the
Assignee shall be sufficient for the exercise of its rights under the policy and
the sole receipt of the Assignee for any sums received shall be a full discharge
and release therefor to the insurer.

Dated: July 30, 1994.

John W. Newlin, Assignor

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
Assignee

Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.

PACIFIC MUTUAL LIFE INSURANCE COMPANY

<PAGE>

EXHIBIT 10.23

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
EXECUTIVE SPLIT DOLLAR INSURANCE AGREEMENT

AGREEMENT, between Tootsie Roll Industries, Inc., a
Virginia corporation (the "Corporation"), and Thomas E. Corr.

WHEREAS, Thomas E. Corr (the "Employee") is presently
employed by the Corporation, his services have contributed to the successful
operation of the Corporation, and the Corporation's board of directors believes
it is in the best interest of the Corporation to retain the services of the
Employee; and

WHEREAS, the Corporation is desirous of transferring to
Thomas E. Corr (the "Owner") Policy No. 1A2277915-0 issued by Pacific Mutual
Life Insurance Company on the Employee's life (the "policy") now owned by the
Corporation pursuant to this "split dollar" arrangement, subject to the Owner's
agreement to assign the policy to the Corporation as collateral for the "current
value" (defined below) of the policy and the premium payments to be made by the
Corporation under this agreement by an instrument of collateral assignment
attached as Exhibit A (the "assignment") and to record the assignment with the
"Insurer" (defined below).

NOW, THEREFORE, in consideration of the premises, and
the services to be rendered to the Corporation by the Employee, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Corporation and the Owner hereby mutually covenant and agree as follows:

ARTICLE I -- PAYMENT OF PREMIUMS AND ECONOMIC BENEFIT

1.1. As long as this agreement is in force, the Owner and
the Corporation agree to pay the amounts and in the manner set forth below.

<PAGE>

1.4. In order to facilitate the payment of premiums on the
policy, the Owner and the Corporation agree that the Corporation will forward to
the Insurer the entire premiums due on the policy, if any.

ARTICLE II -- POLICY OWNERSHIP AND RESTRICTIONS

2.1. The Owner shall be the sole owner of the policy. The
Corporation's payment of premiums hereunder shall constitute a liability of the
Owner subject to repayment as provided herein.

ARTICLE III -- DEATH OF EMPLOYEE

ARTICLE IV -- TERMINATION OF AGREEMENT

4.1. This agreement shall automatically terminate upon the
happening of any of the following events:

(b) At the surrender, lapse or termination of the
policy.

<PAGE>

(d) Upon failure of the Owner to make a payment
required by Section 1.2 above.

(e) Upon agreement of the parties.

4.3. In the event of any other termination under Section 4.1
above, the Owner will pay the repayment amount to the Corporation within 60 days
after such termination.

ARTICLE V -- OTHER PROVISIONS

5.4. The provisions required by the Employee Retirement
Income Security Act of 1974 (ERISA).

<PAGE>

IN WITNESS WHEREOF, the parties hereto have signed this
agreement on July 30, 1994.

Thomas E. Corr

TOOTSIE ROLL INDUSTRIES, INC.

<PAGE>

EXHIBIT A (THOMAS E. CORR)

COLLATERAL ASSIGNMENT

1. Thomas E. Corr (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to time
from Assignor to Assignee under the Executive Split Dollar Insurance Agreement
dated July 30, 1994, between the Assignor and the Assignee (the "Assignee's
Interest"), Policy No. 1A2277915-0 issued by Pacific Mutual Life Insurance
Company on the life of Thomas E. Corr, subject to all the terms and conditions
of the policy and to all superior liens, if any, which the insurer may have
against the policy. The Assignor by this instrument agrees and the Assignee by
the acceptance of this assignment agrees to the conditions and provisions herein
set forth.

2. It is expressly agreed that only the following specific rights
are included in this assignment and may be exercised solely by the Assignee:

(a) The right to prohibit the Assignor's borrowing or withdrawal
from or surrender of any part of the policy prior to the 15th
anniversary of the Executive Split Dollar Insurance Agreement.

(b) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount
of the Assignee's Interest in the policy.

(c) The right to collect, upon the insured's death, the net
proceeds of the policy up to the amount of the Assignee's Interest in
the policy.

3. The insurer hereby is authorized to recognize the Assignee's
claim to rights hereunder without investigating the reason for any action taken
by the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature of
the Assignee shall be sufficient for the exercise of its rights under the policy
and the sole receipt of the Assignee for any sums received shall be a full
discharge and release therefor to the insurer.

Dated: July 30, 1994.

Thomas E. Corr, Assignor

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
Assignee

Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.

PACIFIC MUTUAL LIFE INSURANCE COMPANY

<PAGE>

EXHIBIT 10.24
<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
EXECUTIVE SPLIT DOLLAR INSURANCE AGREEMENT

AGREEMENT, between Tootsie Roll Industries, Inc., a Virginia
corporation (the "Corporation"), and James M. Hunt.

WHEREAS, James M. Hunt (the "Employee") is presently
employed by the Corporation, his services have contributed to the successful
operation of the Corporation, and the Corporation's board of directors believes
it is in the best interest of the Corporation to retain the services of the
Employee; and

WHEREAS, the Corporation is desirous of transferring to
James M. Hunt (the "Owner") Policy No. 1A2282449-0 issued by Pacific Mutual Life
Insurance Company on the Employee's life (the "policy") now owned by the
Corporation pursuant to this "split dollar" arrangement, subject to the Owner's
agreement to assign the policy to the Corporation as collateral for the "current
value" (defined below) of the policy and the premium payments to be made by the
Corporation under this agreement by an instrument of collateral assignment
attached as Exhibit A (the "assignment") and to record the assignment with the
"Insurer" (defined below).

NOW, THEREFORE, in consideration of the premises, and the
services to be rendered to the Corporation by the Employee, and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
Corporation and the Owner hereby mutually covenant and agree as follows:

ARTICLE I -- PAYMENT OF PREMIUMS AND ECONOMIC BENEFIT

1.1. As long as this agreement is in force, the Owner and
the Corporation agree to pay the amounts and in the manner set forth below.

1.3. For purposes of Section 1.2 above, the economic benefit
that would be taxable to the Employee shall be computed in accordance with
Revenue Rulings 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, and the
Corporation shall be responsible for computing such amount. The Corporation
will advise the Owner of the amount payable by the Owner pursuant to Section
1.2, and the Owner shall pay that amount directly to the Corporation.
<PAGE>
1.4. In order to facilitate the payment of premiums on the
policy, the Owner and the Corporation agree that the Corporation will forward to
the Insurer the entire premiums due on the policy, if any.

ARTICLE II -- POLICY OWNERSHIP AND RESTRICTIONS

2.1. The Owner shall be the sole owner of the policy. The
Corporation's payment of premiums hereunder shall constitute a liability of the
Owner subject to repayment as provided herein.

ARTICLE III -- DEATH OF EMPLOYEE

ARTICLE IV -- TERMINATION OF AGREEMENT

4.1. This agreement shall automatically terminate upon the
happening of any of the following events:

(b) At the surrender, lapse or termination of the
policy.

<PAGE>

(d) Upon failure of the Owner to make a payment
required by Section 1.2 above.

(e) Upon agreement of the parties.

4.3. In the event of any other termination under Section 4.1
above, the Owner will pay the repayment amount to the Corporation within 60 days
after such termination.

ARTICLE V -- OTHER PROVISIONS

5.4. The provisions required by the Employee Retirement
Income Security Act of 1974 (ERISA).

<PAGE>

IN WITNESS WHEREOF, the parties hereto have signed this
agreement on July 30, 1994.

James M. Hunt

TOOTSIE ROLL INDUSTRIES, INC.

<PAGE>

EXHIBIT A (JAMES M. HUNT)

COLLATERAL ASSIGNMENT

1. James M. Hunt (the "Assignor"), hereby assigns, transfers and sets over
to Tootsie Roll Industries, Inc., a Virginia corporation (the "Assignee"), to
the extent of the amounts defined in and owing from time to time from Assignor
to Assignee under the Executive Split Dollar Insurance Agreement dated July 30,
1994, between the Assignor and the Assignee (the "Assignee's Interest"), Policy
No. 1A2282449-0 issued by Pacific Mutual Life Insurance Company on the life of
James M. Hunt, subject to all the terms and conditions of the policy and to all
superior liens, if any, which the insurer may have against the policy. The
Assignor by this instrument agrees and the Assignee by the acceptance of this
assignment agrees to the conditions and provisions herein set forth.

1. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:

(a) The right to prohibit the Assignor's borrowing or withdrawal from
or surrender of any part of the policy prior to the 15th anniversary of the
Executive Split Dollar Insurance Agreement.

(b) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of the
Assignee's Interest in the policy.

(c) The right to collect, upon the insured's death, the net proceeds
of the policy up to the amount of the Assignee's Interest in the policy.

2. The insurer hereby is authorized to recognize the Assignee's claim to
rights hereunder without investigating the reason for any action taken by the
Assignee, or the giving of any notice, or the application to be made by the
Assignee of any amounts to be paid to the Assignee. The sole signature of the
Assignee shall be sufficient for the exercise of its rights under the policy and
the sole receipt of the Assignee for any sums received shall be a full discharge
and release therefor to the insurer.

Dated: July 30, 1994.

James M. Hunt Assignor

<PAGE>

TOOTSIE ROLL INDUSTRIES, INC.
Assignee

Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.

PACIFIC MUTUAL LIFE INSURANCE COMPANY

<PAGE>

EXHIBIT 13

(PORTIONS OF ANNUAL REPORT)

<PAGE>
OPERATING REPORT
- ------------------------------------------------------------------------

International

Our Mexican and Canadian subsidiaries each reported increased sales and profits
over the prior year. In Mexico, an especially strong fourth quarter was posted,
reflecting another successful Christmas selling season. The majority of our
Mexican sales were recorded prior to the large devaluation of the peso that
occurred during the last two weeks of December, 1994.

At the year-end exchange rate our 1994 Mexican sales would have translated into
approximately $9 million fewer U.S. dollars. Stabilization of the peso in the
future or anticipated peso selling price increases for our goods could tend to
offset this sales decline somewhat in 1995.

The peso devaluation had the further effect of reducing the stated U.S. dollar
value of our net Mexican assets by approximately $5 million. In accordance with
generally accepted accounting principles, whereby all assets and liabilities are
translated at the year-end exchange rate, this amount was recorded as a direct
reduction in shareholders' equity.

Canadian sales growth came from distribution gains for existing products and the
new chocolate/ caramel product lines. We also completed the realignment of our
broker network there.

Our sales office in the Far East continued to expand and refine distribution and
to test and advertise our products in various countries in the Pacific Rim,
however, development of sales in this region is costly and will be approached
cautiously.

The company is exploring markets throughout the world with great interest. Our
President, Ellen R. Gordon, was recently appointed by the President of the
United States to the President's Export Council.

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

3
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(in thousands except per share, percentage and ratio figures)
- --------------------------------------------------------------------------------

FINANCIAL REVIEW

This financial review discusses the company's financial condition, results of
operations, liquidity and capital resources. It should be read in conjunction
with the Consolidated Financial Statements and related footnotes beginning on
pages 8 and 12, respectively.

FINANCIAL CONDITION

We further strengthened our financial condition in 1994 by achieving record
operating results. Net earnings grew from $35,442 in 1993 to $37,931 in 1994, a
7.0% increase. As a result of using cash from operations to pay off short-term
debt, working capital grew from $61,052 to $92,626, an increase of 51.7%.

Cash from operations was also used to fund $8,179 of capital expenditures and
for the payment of $4,514 in dividends. This represented an increase of 22.4% in
dividends paid over the prior year and marked the fifty-second consecutive year
that cash dividends have been paid.

A 3% stock dividend was also distributed to shareholders in 1994. This was the
thirtieth consecutive year that a stock dividend has been distributed.

The improvement in our financial position in 1994 over 1993 is reflected in the
following ratios: current ratio rose from 2.2:1 to 4.5:1; quick ratio rose from
1.5:1 to 3.2:1; current liabilities to net worth decreased from 24.0% to 10.9%
and debt to equity fell from 23.6% to 11.4%. Shareholders' equity increased by
13.2% to $240,461. These statistics are indicative of the company's conservative
financial posture in the deployment of its assets.

RESULTS OF OPERATIONS

1994 vs. 1993

1994 represented the eighteenth consecutive year of record sales. Reaching
$296,932, 1994 net sales were up 14.4% over 1993 sales of $259,593. The highest
quarter, both in terms of sales dollars and in terms of dollar and percentage
increase over the prior year, was the third quarter with traditionally strong
Back to School and Halloween promotions.

The sales increase in 1994 was due largely to the full year impact of the new
chocolate/caramel brands, Junior Mints, Charleston Chew, Sugar Daddy and Sugar
Babies. Sales for these brands were, however, lower than they had been in the
twelve months preceding the acquisition, as we kept with our plan of emphasizing
profitable sales.

Other factors contributing to sales increases were a strong year in Mexico and
growth in other established Tootsie Roll brands, offset by decreases in several
newer, trend setting items which returned to more normal sales levels from their
previous year peaks.

Cost of goods sold as a percentage of sales increased slightly from 51.6% to
52.4%, reflecting higher ingredient and packaging costs and increased indirect
costs. Consequently, gross margin, which was $141,367 or 12.5% higher than 1993,
declined slightly as a percentage of sales from 48.4% to 47.6%.

Gross margins have historically been lower in the fourth quarter due to the
seasonal nature of our business and to the product mix

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

5
<PAGE>
- --------------------------------------------------------------------------------
sold at that time of year. This effect was lessened in 1994, with improved
margins on foreign operations and due to changing sales patterns resulting from
the new chocolate/caramel brands.

Operating expenses, comprising marketing, selling, physical distribution,
general and administrative expenses and goodwill amortization, as a percentage
of sales, were 27.4%, a decrease of .4% versus 1993. While the synergies
realized through integrating the chocolate/ caramel brands caused marketing and
administrative costs to decline as a percent of sales, increased use of
refrigerated storage and transportation caused per unit distribution costs to
increase. Goodwill amortization was also higher as a result of the
chocolate/caramel brands acquisition.

Other income declined by $3,014 due to lower investment income and higher
interest expense. These changes had been anticipated and were the result of
financing the chocolate/caramel brands acquisition and the purchase of our
Chicago plant, both of which occurred toward the end of 1993. The 1994 effective
tax rate was comparable to that of 1993 at 38.0% versus 38.6%.

Consolidated net earnings rose 7.0% to a new company record of $37,931 or $3.50
per share in 1994 from the previous record of $35,442 or $3.27 per share in
1993. This represents the thirteenth consecutive year of record earnings
achievement.

1993 vs. 1992

Net sales increased in 1993 to $259,593, a record level for the seventeenth
consecutive year and 5.8% over 1992 sales of $245,424. Factors contributing to
sales growth during the year were the chocolate/caramel brands acquisition in
October, 1993, continued success of our traditional product lines, favorable
results with seasonal lines and line extensions, as well as growth in our
Mexican and Canadian subsidiaries.

Sales remained at the highest level in the third quarter due to successful
Halloween and Back to School promotions, but declined in the fourth quarter from
the prior year level due to softness in certain market segments, partially
offset by sales of the new chocolate/caramel brands.

Cost of goods sold, as a percentage of sales, was consistent with 1992 at 51.6%
versus 51.8%. Raw material prices remained stable throughout the year and
productivity improvements continued to mitigate modest changes in the cost of
other factors of production. Gross margin grew by 6.2% to $125,615 because of
increased sales and as a percentage of sales it remained constant at 48.4%
versus 48.2% in 1992. Fourth quarter gross margin was lower than that of the
other three quarters due to seasonality and sales mix factors.

Operating expenses declined slightly as a percentage of sales to 27.8% from
28.7% in the prior year. This favorable result demonstrates the effect of
expense control programs that keep costs in check.

The effective tax rate was comparable to the 1992 rate at 38.6% versus 38.3% and
other income, consisting primarily of interest and dividend income,

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

6
<PAGE>
- --------------------------------------------------------------------------------

remained essentially even with the prior year as the decrease in our short-term
investment portfolio to partially finance the acquisition, did not occur until
later in the year. Consolidated earnings rose 10.6% to $35,442, a record high
for the twelfth consecutive year.

Liquidity and Capital Resources

Cash flows from operating activities increased by $7,098 to $40,495 in 1994 from
$33,397 in 1993 and $35,623 in 1992. Higher profits and depreciation and
amortization in 1994 were partially offset by increases in working capital.

Cash flows from investing activities in 1994 reflect a net reduction in our
investment portfolio, which was applied toward the repayment of debt. Capital
expenditures were $19,813 lower in 1994 than in 1993 which had included the
purchase of our Chicago plant, the Cambridge acquisition and the Charms
expansion.

Cash flows from financing activities in 1994 include a net reduction of $22,601
in interest bearing debt. These borrowings had occurred in 1993 in connection
with the purchase of the chocolate/caramel business.

Cash dividends were declared and paid in 1994 for the fifty-second consecutive
year. Cash dividends declared were increased by 21.5% to $.42 per share during
1994.

Our operating results and financial condition are expressed in the following
financial statements.

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

7
<PAGE>
CONSOLIDATED STATEMENT OF
EARNINGS AND RETAINED EARNINGS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(in thousands except per share data)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the year ended December 31,

1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>

Net sales................................................................. $296,932 $259,593 $245,424
Cost of goods sold........................................................ 155,565 133,978 127,123
------------ ------------ ------------
Gross margin.............................................................. 141,367 125,615 118,301
------------ ------------ ------------
Operating expenses:
Marketing, selling and advertising.................................... 44,974 40,096 38,958
Distribution and warehousing.......................................... 20,682 17,655 16,959
General and administrative............................................ 13,017 12,837 13,186
Amortization of the excess of cost over acquired net tangible
assets............................................................... 2,706 1,510 1,265
------------ ------------ ------------
81,379 72,098 70,368
------------ ------------ ------------
Earnings from operations.................................................. 59,988 53,517 47,933
Other income, net (Note 8)................................................ 1,179 4,193 3,989
------------ ------------ ------------
Earnings before income taxes.............................................. 61,167 57,710 51,922
Provision for income taxes (Notes 1 and 4)................................ 23,236 22,268 19,890
------------ ------------ ------------
Net earnings.............................................................. 37,931 35,442 32,032
Retained earnings at beginning of year.................................... 96,647 90,285 83,507
------------ ------------ ------------
134,578 125,727 115,539
------------ ------------ ------------
Deduct (Note 5):
Cash dividends ($.42, $.35 and $.27 per share)........................ 4,580 3,769 2,947
Stock dividends....................................................... 22,235 25,311 22,307
------------ ------------ ------------
26,815 29,080 25,254
------------ ------------ ------------
Retained earnings at end of year.......................................... $107,763 $ 96,647 $ 90,285
------------ ------------ ------------
------------ ------------ ------------
Earnings per common share................................................. $ 3.50 $ 3.27 $ 2.95
------------ ------------ ------------
------------ ------------ ------------
Average common and class B common shares outstanding (Note 5)............. 10,848 10,848 10,848
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

(The accompanying notes are an integral part of these statements.)
- --------------------------------------------------------------------------------

8
<PAGE>
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(in thousands)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS December 31,

1994 1993
------------ ------------
<S> <C> <C>

CURRENT ASSETS:
Cash and cash equivalents (Notes 1 and 10).............................................. $ 16,509 $ 1,986
Investments held to maturity (Notes 1 and 10)........................................... 45,861 54,217
Accounts receivable, less allowances of $1,466 and $2,075............................... 22,087 20,656
Inventories (Note 1):
Finished goods and work-in-process.................................................. 16,704 17,186
Raw materials and supplies.......................................................... 12,464 12,108
Prepaid expenses........................................................................ 3,094 3,667
Deferred income taxes (Notes 1 and 4)................................................... 2,168 2,094
------------ ------------
Total current assets............................................................ 118,887 111,914
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost (Note 1):
Land.................................................................................... 6,672 4,231
Buildings............................................................................... 26,982 25,347
Machinery and equipment................................................................. 109,438 107,685
Leasehold improvements.................................................................. 6 10
------------ ------------
143,098 137,273
Less--Accumulated depreciation and amortization......................................... 57,450 50,574
------------ ------------
85,648 86,699
------------ ------------
OTHER ASSETS:
Excess of cost over acquired net tangible assets, net of accumulated
amortization of $9,966 and $7,260 (Notes 1 and 2)..................................... 98,668 101,375
Other assets............................................................................ 6,880 3,952
------------ ------------
105,548 105,327
------------ ------------
$310,083 $303,940
------------ ------------
------------ ------------
</TABLE>

(The accompanying notes are an integral part of these statements.)
- --------------------------------------------------------------------------------

9
<PAGE>
(in thousands except per share data)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY December 31,

1994 1993
------------ ------------
<S> <C> <C>

CURRENT LIABILITIES:
Notes payable to banks (Notes 2, 6 and 10).............................................. $ -- $ 22,601
Accounts payable........................................................................ 6,124 6,259
Dividends payable....................................................................... 1,219 1,026
Accrued liabilities (Note 3)............................................................ 17,046 17,919
Income taxes payable.................................................................... 1,872 3,057
------------ ------------
Total current liabilities....................................................... 26,261 50,862
------------ ------------
NONCURRENT LIABILITIES:
Deferred income taxes (Notes 1 and 4)................................................... 7,716 6,364
Postretirement health care and life insurance benefits (Notes 1 and 7).................. 4,993 4,498
Industrial Development Bonds (Notes 6 and 10)........................................... 7,500 7,500
Term notes payable (Notes 6 and 10)..................................................... 20,000 20,000
Other long term liabilities............................................................. 3,152 2,373
------------ ------------
Total noncurrent liabilities.................................................... 43,361 40,735
------------ ------------
SHAREHOLDERS' EQUITY (Notes 1 and 5):
Common stock, $.69-4/9 par value--
25,000 shares authorized--
7,306 and 7,069, respectively, issued................................................. 5,074 4,909
Class B common stock, $.69-4/9 par value--
10,000 shares authorized--
3,542 and 3,465, respectively, issued................................................. 2,459 2,406
Capital in excess of par value.......................................................... 132,997 111,108
Retained earnings, per accompanying statement........................................... 107,763 96,647
Foreign currency translation adjustment account (Note 1)................................ (7,832) (2,727)
------------ ------------
240,461 212,343
------------ ------------
COMMITMENTS (Note 9)........................................................................ -- --
------------ ------------
$310,083 $303,940
------------ ------------
------------ ------------
</TABLE>

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

10
<PAGE>
CONSOLIDATED STATEMENT OF
CASH FLOWS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(in thousands)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the year ended December 31,

1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings.......................................................... $37,931 $35,442 $32,032
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization..................................... 10,478 8,814 6,071
Loss on retirement of fixed assets................................ 190 34 152
Translation loss.................................................. -- -- 124
Changes in operating assets and liabilities:
Accounts receivable........................................... (5,158) (7,941) 113
Inventories................................................... (1,091) (2,727) (3,443)
Prepaid expenses and other assets............................. (3,952) (2,827) (724)
Accounts payable and accrued liabilities...................... (107) 3,179 2,964
Income taxes payable and deferred............................. 1,075 214 (3,536)
Postretirement health care and life insurance benefits........ 495 522 450
Other long-term liabilities................................... 778 (432) 1,420
Other......................................................... (144) (881) --
------------ ------------ ------------
Net cash provided by operating activities............................. 40,495 33,397 35,623
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Cambridge Brands....................................... -- (81,317) --
Capital expenditures.................................................. (8,179) (27,992) (10,956)
Investment purchases.................................................. (72,394) (22,854) (86,357)
Investment sales...................................................... 81,650 61,096 52,752
------------ ------------ ------------
Net cash provided by (used in) investing activities................... 1,077 (71,067) (44,561)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuances of industrial development bonds and notes payable........... 25,000 92,000 7,500
Repayments of notes payable........................................... (47,000) (50,000) --
Borrowings under line of credit agreements, net of repayments......... (535) 348 --
Dividends paid in cash................................................ (4,514) (3,687) (2,965)
------------ ------------ ------------
Net cash provided by (used in) financing activities................... (27,049) 38,661 4,535
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents.......................... 14,523 991 (4,403)
Cash and cash equivalents at beginning of year............................ 1,986 995 5,398
------------ ------------ ------------
Cash and cash equivalents at end of year.................................. $16,509 $ 1,986 $ 995
------------ ------------ ------------
------------ ------------ ------------
Supplemental cash flow information:
Income taxes paid..................................................... $22,817 $22,111 $23,733
------------ ------------ ------------
------------ ------------ ------------
Interest paid......................................................... $ 1,798 $ 653 $ 116
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

(The accompanying notes are an integral part of these statements.)
- --------------------------------------------------------------------------------

11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($ IN THOUSANDS EXCEPT PER SHARE
DATA)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

Basis of consolidation:

The consolidated financial statements include the accounts of Tootsie Roll
Industries, Inc. and its wholly-owned subsidiaries (the company), which are
primarily engaged in the manufacture and sale of candy products. All significant
intercompany transactions have been eliminated.

Revenue recognition:

Revenues are recognized when products are shipped. Accounts receivable are
unsecured.

Cash and cash equivalents:

The company considers temporary cash investments with a maturity of three
months or less to be cash equivalents.

Investments:

Investments consist of various marketable securities that have maturities of
less than one year. As of January 1, 1994, the company has adopted the
provisions of Statement of Financial Accounting Standards (SFAS) No. 115,
"Accounting For Certain Investments in Debt and Equity Securities" which
requires the company to classify each of its debt and equity securities into one
of three categories: held to maturity, available for sale or trading. The
company has concluded that its investments should be classified as held to
maturity due to the existence of positive intent and ability to hold these
securities to maturity. Accordingly, all investments have been measured at
amortized cost in the statement of financial position. There was no effect on
the company's consolidated financial statements from adoption of this statement.

Inventories:

Inventories are stated at cost, not in excess of market. The cost of domestic
inventories ($26,571 and $26,500 at December 31, 1994 and 1993, respectively)
has been determined by the last-in, first-out (LIFO) method. The excess of
current cost over LIFO cost of inventories approximates $4,005 and $4,316 at
December 31, 1994 and 1993, respectively. The cost of foreign inventories
($2,597 and $2,794 at December 31, 1994 and 1993, respectively) has been
determined by the first-in, first-out (FIFO) method.

From time to time, the company enters into commodity futures and option
contracts in order to fix the price, on a short-term basis, of certain future
ingredient purchases which are integral to the company's manufacturing process
and which may be subject to price volatility (primarily sugar and corn syrup).
Gains or losses, if any, resulting from these contracts are considered as a
component of the cost of the ingredients being hedged. Open contracts at
December 31, 1994 and 1993 were not material.
Property, plant and equipment:

Depreciation is computed for financial reporting purposes by use of both the
straight-line and accelerated methods based on useful lives of 5 to 35 years for
both buildings and machinery and equipment. For income tax purposes the company
uses accelerated methods on all properties.
Postretirement health care and life insurance benefits:

The company provides certain postretirement health care and life insurance
benefits. The cost of these postretirement benefits is accrued during employees'
working careers in accordance with SFAS No. 106, "Employers' Accounting for
Postretirement Benefits other than Pensions."

Income taxes:

The company uses the liability method of computing deferred income taxes in
accordance with SFAS No. 109 "Accounting For Income Taxes."

Excess of cost over acquired net tangible assets:

The excess of cost over the acquired net tangible assets of operating
companies is amortized on a straight-line basis over a 40 year period. The
company assesses the recoverability of its intangible assets using undiscounted
future cash flows.

Foreign currency translation:

During 1992 management classified Mexico as a hyper-inflationary economy, as
defined by SFAS No. 52, "Foreign Currency Translation." Under this
classification, the dollar is used as the functional currency, and translation
gains and losses are included in the determination of earnings. A translation
loss of $124 related to the company's Mexican operations was charged to expense
in 1992.

Effective January 1, 1993 management determined that the Mexican economy was
no longer hyper-inflationary. Accordingly, the local currency is used as the
functional currency and the net effect of translating the Mexican operation's
financial statements is reported in a separate component of shareholders'
equity.

NOTE 2--ACQUISITION:

On October 15, 1993, the company purchased certain tangible and intangible
assets of a candy manufacturer (Cambridge Brands) for approximately $81,300.
Funds for the acquisition were provided from $9,300 of the company's own funds
and $72,000 in bank borrowings (Note 6). The acquisition was accounted for as a
purchase and the net assets and the results of operations and cash flows of
Cambridge Brands have been included in the company's consolidated financial
statements from October 15, 1993.

The following unaudited pro forma information shows the results of the
company's operations as though the purchase of Cambridge Brands had been
consummated as of the beginning of each year:

<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Net sales........................................... $ 306,584 $ 303,576
Net earnings........................................ 36,592 32,763
Net earnings per common share....................... 3.37 3.02
</TABLE>

The pro forma results of operations are not necessarily indicative of the
actual results of operations that would have occurred had the purchase actually
been made at the beginning of periods presented or of future operations.

NOTE 3--ACCRUED LIABILITIES:

Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
December 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
Compensation and employee benefits.................... $ 5,512 $ 5,989
Commissions........................................... 736 856
Advertising and promotions............................ 4,766 4,413
Workers' compensation................................. 1,271 973
Other................................................. 4,761 5,688
--------- ---------
$ 17,046 $ 17,919
--------- ---------
--------- ---------
</TABLE>

12
<PAGE>
NOTE 4--INCOME TAXES:

The domestic and foreign components of pretax income are as follows:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Domestic................................... $ 58,439 $ 56,159 $ 48,450
Foreign.................................... 2,728 1,551 3,472
--------- --------- ---------
$ 61,167 $ 57,710 $ 51,922
--------- --------- ---------
--------- --------- ---------
</TABLE>

The provision for income taxes is comprised of the following:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal.................................. $ 18,096 $ 19,052 $ 17,820
Foreign.................................. 1,455 534 1,073
State.................................... 2,407 2,406 2,469
--------- --------- ---------
21,958 21,992 21,362
--------- --------- ---------
Deferred:
Federal.................................. 1,972 514 (1,318)
Foreign.................................. (963) (281) (25)
State.................................... 269 43 (129)
--------- --------- ---------
1,278 276 (1,472)
--------- --------- ---------
$ 23,236 $ 22,268 $ 19,890
--------- --------- ---------
--------- --------- ---------
</TABLE>

Deferred income taxes are comprised of the following:

<TABLE>
<CAPTION>
December 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
Workers' compensation................................... $ 435 $ 331
Reserve for returns..................................... 438 445
Reserve for uncollectible accounts...................... 174 230
Other accrued expenses.................................. 1,842 1,705
VEBA funding............................................ (756) (526)
Other, net.............................................. 35 (91)
--------- ---------
Net current deferred income tax asset................... $ 2,168 $ 2,094
--------- ---------
--------- ---------
</TABLE>

<TABLE>
<CAPTION>
December 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
Depreciation............................................ $ 7,229 $ 6,878
Post employment benefits................................ (1,709) (1,536)
Deductible goodwill..................................... 2,071 1,342
Deferred compensation................................... (739) (473)
DISC commissions........................................ 849 724
Other, net.............................................. 15 (571)
--------- ---------
Net long-term deferred income tax liability............. $ 7,716 $ 6,364
--------- ---------
--------- ---------
</TABLE>

The effective income tax rate differs from the statutory rate as follows:

<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
U.S. statutory rate............................ 35.0% 35.0% 34.0%
State income taxes, net........................ 2.8 2.8 3.0
Amortization of excess of cost over acquired
net tangible assets........................... 0.7 0.7 0.8
Other, net..................................... (0.5) 0.1 0.5
--- --- ---
Effective income tax rate...................... 38.0% 38.6% 38.3%
--- --- ---
--- --- ---
</TABLE>

The company has not provided for U.S. federal or foreign withholding taxes on
$2,701 of foreign subsidiaries' undistributed earnings as of December 31, 1994
because such earnings are considered to be permanently reinvested. When excess
cash has accumulated in the company's foreign subsidiaries and it is
advantageous for tax or foreign exchange reasons, subsidiary earnings may be
remitted, and income taxes are provided on such amounts. It is not practicable
to determine the amount of income taxes that would be payable upon remittance of
the undistributed earnings.

NOTE 5--SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE:

<TABLE>
<CAPTION>
Class B
Common Stock Common Stock Capital in
------------------------ ------------------------ excess of
Amount Amount par value
Shares ----------- ----------- -----------
----------- Shares
(000's) -----------
(000's)
<S> <C> <C> <C> <C> <C>
Balance at
January 1, 1992........ 6,554 $ 4,552 3,378 $ 2,346 $ 64,200
Issuance of 3%
stock dividend......... 197 136 100 69 21,962
Conversion of Class B
common shares to common
shares................. 83 58 (83) (58) --
----- ----------- ----- ----------- -----------
Balance at
December 31, 1992...... 6,834 4,746 3,395 2,357 86,162
Issuance of 3%
stock dividend......... 204 142 101 70 24,946
Conversion of Class B
common shares to common
shares................. 31 21 (31) (21) --
----- ----------- ----- ----------- -----------
Balance at
December 31, 1993...... 7,069 4,909 3,465 2,406 111,108
Issuance of 3%
stock dividend......... 211 147 103 71 21,889
Conversion of Class B
common shares to common
shares................. 26 18 (26) (18) --
----- ----------- ----- ----------- -----------
Balance at
December 31, 1994...... 7,306 $ 5,074 3,542 $ 2,459 $ 132,997
----- ----------- ----- ----------- -----------
----- ----------- ----- ----------- -----------
</TABLE>

The Class B Common Stock has essentially the same rights as Common Stock,
except that each share of Class B Common Stock has ten votes per share (compared
to one vote per share of Common Stock), is not traded on any exchange, is
restricted as to transfer and is convertible on a share-for-share basis, at any
time and at no cost to the holders, into shares of Common Stock which are traded
on the New York Stock Exchange.

Average shares outstanding and all per share amounts included in the financial
statements and notes thereto have been adjusted retroactively to reflect the
three percent stock dividend distributed in 1994.

NOTE 6--NOTES PAYABLE AND INDUSTRIAL DEVELOPMENT BONDS:

In October 1993, the company executed notes payable with three banks in the
aggregate amount of $72,000 to provide funds for the acquisition of Cambridge
Brands (Note 2). As of December 31, 1994 these notes have been repaid.

Additionally, in 1993, the company entered into two 3-year term notes
aggregating $20,000 the proceeds of which were used to purchase the company's
Chicago manufacturing facility and headquarters. These term notes bear interest
payable monthly at 3.55% and mature entirely in 1996.

At December 31, 1994, the company had outstanding a three year interest rate
swap agreement with a notional amount of $20,000. Under the agreement, the
company exchanged a fixed rate of 4.24% for a variable rate adjusted monthly
based upon 30 day LIBOR (6% at December 31, 1994). The company anticipates the
counterparty to the swap agreement (a large financial institution) will fully
perform on its obligations. The company accounts for the agreement using hedge
accounting, and does not anticipate any circumstances, such as the early
repayment of the underlying debt, which would cause a change in the accounting
method used.

13
<PAGE>
During 1992, the company entered into an industrial development bond agreement
with the City of Covington, Tennessee. The bond proceeds of $7.5 million are
being used to finance the expansion of the company's existing facilities.
Interest is payable at various times during the year based upon the interest
calculation option (fixed, variable or floating) selected by the company. As of
December 31, 1994 and 1993, interest was calculated under the floating option
(4.1% and 3.4%, respectively) which requires monthly payments of interest.
Principal on the bonds is due in its entirety in the year 2027.

At December 31, 1994 and 1993, unexpended bond proceeds of $162 and $1,061
were restricted for use on the capital expenditure projects discussed above.
These funds, which are included as other assets in the accompanying consolidated
balance sheet, are invested in short-term securities until expended.

In connection with the issuance of the bonds, the company entered into a
letter of credit agreement with a bank for the amount of principal outstanding
plus 48 days' accrued interest. The letter of credit, which expires in March
1996, carries an annual fee of 32 1/2 basis points on the outstanding principal
amount of the bonds.
NOTE 7--EMPLOYEE BENEFIT PLANS:
Pension plans:

The company sponsors defined contribution pension plans covering certain
nonunion employees with over one year of credited service. The company's policy
is to fund pension costs accrued based on compensation levels. Total pension
expense for 1994, 1993 and 1992 approximated $1,426, $1,202 and $1,075,
respectively. The company also maintains certain profit sharing and
savings-investment plans. Company contributions in 1994, 1993 and 1992 to these
plans were $420, $321 and $291, respectively.

The company also contributes to multi-employer defined benefit pension plans
for its union employees. Such contributions aggregated $352, $407 and $474 in
1994, 1993 and 1992, respectively. The relative position of each employer
associated with the multi-employer plans with respect to the actuarial present
value of benefits and net plan assets is not determinable by the company.

Postretirement health care and life insurance benefit plans:

The company provides certain postretirement health care and life insurance
benefits for corporate office and management employees. Employees become
eligible for these benefits if they meet minimum age and service requirements
and if they agree to contribute a portion of the cost. The company has the right
to modify and terminate these benefits and increase future participant
contributions. The company does not fund postretirement health care and life
insurance benefits in advance of payments for benefit claims.

The accrual for the accumulated postretirement benefit obligation at December
31, 1994 and 1993 consists of the following:

<TABLE>
<CAPTION>
December 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
Retirees............................................ $ 1,287 $ 1,285
Active employees.................................... 3,706 3,213
--------- ---------
$ 4,993 $ 4,498
--------- ---------
--------- ---------
</TABLE>

Net periodic postretirement benefit cost for 1994, 1993 and 1992 included the
following components:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Service cost--benefits attributed to
service during the period.............................. $ 318 $ 241 $ 246
Interest cost on the accumulated postretirement
benefit obligation..................................... 291 259 288
--------- --------- ---------
Net periodic postretirement benefit cost................. $ 609 $ 500 $ 534
--------- --------- ---------
--------- --------- ---------
</TABLE>

For measurement purposes, a 13.5% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 1995; the rate was assumed
to decrease gradually to 6.5% for 2002 and remain at that level thereafter. The
health care cost trend rate assumption has a significant effect on the amounts
reported. To illustrate, increasing the assumed health care cost trend rates by
1 percentage point in each year would increase the accumulated postretirement
benefit obligation as of December 31, 1994 by approximately $485 and the
aggregate of the service and interest cost components of net periodic
postretirement benefit cost for the year then ended by approximately $116. The
weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 8% and 7% at December 31, 1994 and 1993,
respectively.

NOTE 8--OTHER INCOME, NET:

Other income (expense) is comprised of the following:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Interest income................................ $ 1,288 $ 1,975 $ 2,376
Interest expense............................... (1,649) (642) (440)
Dividend income................................ 1,509 1,992 1,624
Foreign exchange losses........................ (225) (4) (155)
Royalty income................................. 149 634 289
Miscellaneous, net............................. 107 238 295
--------- --------- ---------
$ 1,179 $ 4,193 $ 3,989
--------- --------- ---------
--------- --------- ---------
</TABLE>

NOTE 9--COMMITMENTS:

Future minimum rental commitments under non-cancelable operating leases are
$2,395, $222, $42, $42 and $53 in the years 1995, 1996, 1997, 1998 and
thereafter, respectively.

During 1993 and 1994, the company entered into operating leases for certain
manufacturing equipment. These leases expire in 1998 but provide the company
with the option to terminate the lease in 1996 and to purchase the equipment at
its fair market value.

Rental expense aggregated $2,314, $1,015, and $1,243 in 1994, 1993 and 1992,
respectively.

NOTE 10--DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and cash equivalents and investments

The carrying amount approximates fair value of cash and cash equivalents
because of the short maturity of those instruments. The fair values of
investments are estimated based on quoted market prices.

Notes payable and industrial development bonds

The fair values of the company's notes payable and industrial development
bonds are estimated based on the quoted market prices for the same or similar
issues.

Interest rate swap agreement

The fair value of the company's interest rate swap agreement is calculated
using a valuation model based on well recognized financial principles and
current market information to provide a reasonable approximation of fair value.

Fair value

The estimated fair values of the company's financial instruments are as
follows:

<TABLE>
<CAPTION>
1994 1993
------------------------ ------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash and cash equivalents............. $ 16,509 $ 16,509 $ 1,986 $ 1,986
Investments held to maturity.......... 45,861 47,073 54,217 56,272
Notes payable and
industrial development bonds........ 27,500 27,500 50,101 50,101
Interest rate swap agreement.......... 0 (1,214) 0 2,279
</TABLE>

14
<PAGE>
A summary of the aggregate fair value, gross unrealized holding gains, gross
unrealized losses and amortized cost basis of the company's investments held to
maturity by major security type is as follows:

<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------
Unrealized
Amortized Fair ----------------------
Cost Value Gains Losses
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
Unit investment trusts of preferred
stocks.................................. $ 7,836 $ 8,653 $ 849 ($ 32)
Tax-free commercial paper................ 9,996 10,000 4 --
Municipal bonds.......................... 11,773 11,711 1 (63)
Unit investment trusts of municipal
bonds................................... 4,547 5,033 546 (60)
US gov't/gov't agency obligations........ 9,901 9,872 -- (29)
Private export funding securities........ 1,808 1,804 -- (4)
----------- --------- --------- -----------
$ 45,861 $ 47,073 $ 1,400 ($ 188)
----------- --------- --------- -----------
----------- --------- --------- -----------
</TABLE>

<TABLE>
<CAPTION>
December 31, 1993
----------------------------------------------
Unrealized
Amortized Fair ----------------------
Cost Value Gains Losses
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
Unit investment trusts of preferred
stocks................................... $ 11,250 $ 12,698 $ 1,482 ($ 34)
Tax-free commercial paper................. 19,803 19,802 5 (6)
Municipal bonds........................... 14,314 14,428 114 --
Unit investment trusts of municipal
bonds.................................... 7,139 7,633 650 (156)
Private export funding securities......... 1,711 1,711 -- --
----------- --------- --------- -----------
$ 54,217 $ 56,272 $ 2,251 ($ 196)
----------- --------- --------- -----------
----------- --------- --------- -----------
</TABLE>

NOTE 11--GEOGRAPHIC AREA AND SALES INFORMATION:
Summary of sales, net earnings and assets by geographic area

<TABLE>
<CAPTION>
1994 1993 1992
------------------------------ ------------------------------ ------------------------------
Mexico Mexico Mexico
United and Consoli- United and Consoli- United and Consoli-
States Canada dated States Canada dated States Canada dated
--------- -------- --------- --------- -------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales to unaffiliated customers... $268,582 $28,350 $296,932 $234,460 $25,133 $259,593 $225,001 $20,423 $245,424
--------- --------- ---------
--------- --------- ---------
Sales between geographic areas.... 1,382 2,204 2,186 3,219 806 1,649
--------- -------- --------- -------- --------- --------
$269,964 $30,554 $236,646 $28,352 $225,807 $22,072
--------- -------- --------- -------- --------- --------
--------- -------- --------- -------- --------- --------
Net earnings...................... $ 36,139 $ 1,792 $ 37,931 $ 34,144 $ 1,298 $ 35,442 $ 29,478 $ 2,554 $ 32,032
Total assets...................... $297,981 $12,102 $310,083 $288,506 $15,434 $303,940 $211,099 $13,371 $224,470
Net assets........................ $229,066 $11,395 $240,461 $199,862 $12,481 $212,343 $171,838 $ 9,866 $181,704
</TABLE>

Total assets are those assets associated with or used directly in the respective
geographic area, excluding intercompany advances and investments.

Major customer

Revenues from a major customer aggregated approximately 16.8%, 13.6% and 12.5%
of total net sales during the years ended December 31, 1994, 1993 and 1992,
respectively.

- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Tootsie Roll Industries, Inc.

In our opinion, the accompanying consolidated statement of financial position
and the related consolidated statement of earnings and retained earnings and of
cash flows present fairly, in all material respects, the financial position of
Tootsie Roll Industries, Inc. and its subsidiaries at December 31, 1994 and
1993, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

Chicago, Illinois
February 15, 1995

15
<PAGE>
QUARTERLY FINANCIAL DATA
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
(Thousands of dollars except per share data)
1994 First Second Third Fourth Total
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net sales....................................................... $56,370 $62,891 $111,014 $66,657 $296,932
Gross margin.................................................... 28,121 31,306 51,195 30,745 141,367
Net earnings.................................................... 6,962 7,860 15,386 7,723 37,931
Net earnings per share.......................................... .64 .72 1.42 .72 3.50

1993
- -----------------------------------------------------------------------------------------------------------------------
Net sales....................................................... $50,017 $53,923 $93,239 $62,414 $259,593
Gross margin.................................................... 25,281 27,232 45,318 27,784 125,615
Net earnings.................................................... 6,696 7,345 14,380 7,021 35,442
Net earnings per share.......................................... .62 .68 1.32 .65 3.27

1992
- -----------------------------------------------------------------------------------------------------------------------
Net sales....................................................... $42,798 $51,494 $86,856 $64,276 $245,424
Gross margin.................................................... 21,691 26,104 41,979 28,527 118,301
Net earnings.................................................... 5,563 6,733 13,076 6,660 32,032
Net earnings per share.......................................... .51 .62 1.21 .61 2.95

Net earnings per share is based upon average outstanding shares as adjusted for 3% stock dividends issued
during the second quarter of each year.

- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

1994-1993 QUARTERLY SUMMARY OF TOOTSIE ROLL INDUSTRIES, INC. STOCK PRICE
AND DIVIDENDS PER SHARE

<TABLE>
<CAPTION>
STOCK PRICES* DIVIDENDS*
1994 1993
----------------------------------------------------
Hi Lo Hi Lo 1994 1993
---------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1st Qtr... 76-1/2 69-1/4 83-3/8 74 1st Qtr............. $ .0923 $ .0707
2nd Qtr... 70 59-1/8 82-1/2 71-1/8 2nd Qtr............. $ .1100 $ .0923
3rd Qtr... 63-3/4 59-1/2 74-1/4 65 3rd Qtr............. $ .1100 $ .0923
4th Qtr... 63-3/4 54-1/8 79-1/4 69-1/4 4th Qtr............. $ .1100 $ .0923

NOTE: In addition to the above cash dividends, a 3%
stock dividend was issued on 4/22/94 and 4/22/93.
*Cash dividends are restated to reflect 3% stock
dividends.
*NYSE -- Composite Quotations.
Estimated Number of shareholders at 12/31/94 ... 9,500
</TABLE>

16
<PAGE>
FIVE YEAR SUMMARY OF EARNINGS AND FINANCIAL HIGHLIGHTS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(Thousands of dollars except per share, percentage and ratio figures)
- --------------------------------------------------------------------------------

(See Management's Comments starting on page 5) 1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>

Sales and Earnings Date
Net Sales........................................ $ 296,932 $ 259,593 $ 245,424 $ 207,875 $ 194,299
Gross Margin..................................... 141,367 125,615 118,301 100,595 91,094
Interest Expense................................. 1,649 642 440 196 527
Provision for Income Taxes....................... 23,236 22,268 19,890 17,641 14,563
Earnings before cumulative effect of accounting
changes......................................... 37,931 35,442 32,032 26,533 22,556
Cumulative effect of accounting changes (1)...... -- -- -- (1,038) --
Net Earnings..................................... 37,931 35,442 32,032 25,495 22,556
% of Sales................................... 12.8% 13.7% 13.1% 12.3% 11.6%
% of Shareholders' Equity.................... 15.8% 16.7% 17.6% 16.7% 17.4%

Per Common Share Data (2)
Net Sales........................................ $ 27.37 $ 23.93 $ 22.62 $ 19.16 $ 17.91
Earnings before cumulative effect of accounting
changes......................................... 3.50 3.27 2.95 2.45 2.08
Cumulative effect of accounting changes (1)...... -- -- -- (.10) --
Net Earnings..................................... 3.50 3.27 2.95 2.35 2.08
Shareholders' Equity............................. 22.17 19.57 16.75 14.08 11.97
Cash Dividends................................... .42 .35 .27 .23 .20
Stock Dividends.................................. 3% 3% 3% 3% 3%

Additional Financial Data
Working Capital.................................. $ 92,626 $ 61,052 $ 110,714 $ 80,569 $ 55,378
Current Ratio.................................... 4.5 2.2 5.9 4.8 3.5
Net Cash Provided by Operating Activities........ 40,495 33,397 35,623 35,826 26,685
Property, Plant & Equipment Additions (3)........ 8,179 52,492 10,956 3,985 5,155
Net Property, Plant & Equipment.................. 85,648 86,699 40,257 34,019 32,099
Total Assets..................................... 310,083 303,940 224,470 184,427 159,702
Long Term Debt................................... 27,500 27,500 7,500 -- --
Shareholders' Equity............................. 240,461 212,343 181,704 152,759 129,845
Average Shares Outstanding (2)................... 10,848 10,848 10,848 10,848 10,848
<FN>
(1) Reflects adoption of new accounting standards for income taxes
and postretirement health care and life insurance benefits (see
Notes 1, 4 and 7 to financial statements).
(2) Adjusted for stock dividends.
(3) 1993 includes $44,500 relating to the Cambridge Brands
acquisition and the purchase of the Chicago office and plant
facilities.
</TABLE>

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

<PAGE>

EXHIBIT 21

<PAGE>

SUBSIDIARIES OF TOOTSIE ROLL INDUSTRIES, INC.
AND STATE OF INCORPORATION

Arrendadora Gorvac S.A. De C.V.
Mexico City, Mexico

C.G.C. Corporation
Delaware

Cambridge Brands, Inc.
Delaware

Cambridge Mfg., Inc.
Delaware

Cambridge Services, Inc.
Delaware

Cella's Confections, Inc.
Virginia

Charms Company
Delaware

Charms Marketing Company
Illinois

Henry Eisen Advertising Agency, Inc.
New Jersey

J.T. Company, Inc.
Delaware

Tootsie Roll of Canada, Ltd.
Canada

Tootsie Roll Central Europe, Ltd.
Delaware

The Tootsie Roll Company, Inc.
Illinois

Tootsie Roll Management, Inc.
Illinois

<PAGE>

Tootsie Roll Mfg., Inc.
Illinois

Tootsie Rolls-Latin America, Inc.
Delaware

Tootsie Roll Worldwide, Ltd.
Illinois

The Sweets Mix Company, Inc.
Ilinois

TRI de Latino America
Mexico

TRI-Finance, Inc.
Delaware

TRI International Co.
Illinois

TRI-MASS, Inc.
Massachusetts

TRI Sales Co.
Delaware

Tutsi S.A. de C.V.
Mexico City, Mexico

World Trade & Marketing Ltd.
Grand Cayman, BWI

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AND CONSOLIDATED STATEMENTS
OF EARNINGS AND RETAINED EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 16509
<SECURITIES> 45861
<RECEIVABLES> 23553
<ALLOWANCES> 1466
<INVENTORY> 29168
<CURRENT-ASSETS> 118887
<PP&E> 143098
<DEPRECIATION> 57450
<TOTAL-ASSETS> 310083
<CURRENT-LIABILITIES> 26261
<BONDS> 7500
<COMMON> 7533
0
0
<OTHER-SE> 232928
<TOTAL-LIABILITY-AND-EQUITY> 310083
<SALES> 296932
<TOTAL-REVENUES> 296932
<CGS> 155565
<TOTAL-COSTS> 81379
<OTHER-EXPENSES> (1179)
<LOSS-PROVISION> 351
<INTEREST-EXPENSE> 1649
<INCOME-PRETAX> 61167
<INCOME-TAX> 23236
<INCOME-CONTINUING> 37931
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37931
<EPS-PRIMARY> 3.50
<EPS-DILUTED> 3.50

</TABLE>