-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UWhkhvJkU7d04TLzv8yB3afVAYo1sui0cvdnZ6qTcjF/vwb4R0AYesuKo9Qlq4jE JT2sk9LectuJcsESzdn6yw== 0000108601-01-000001.txt : 20010206 0000108601-01-000001.hdr.sgml : 20010206 ACCESSION NUMBER: 0000108601-01-000001 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WRIGLEY WILLIAM JR CO CENTRAL INDEX KEY: 0000108601 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 361988190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-00800 FILM NUMBER: 1524969 BUSINESS ADDRESS: STREET 1: 410 N MICHIGAN AVE STREET 2: WRIGLEY BUILDING CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3126442121 10-K 1 0001.txt FORM 10-K 12/31/00 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 Commission file number 1-800 WM. WRIGLEY JR. COMPANY (Exact name of registrant as specified in its charter) DELAWARE 36-1988190 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 410 NORTH MICHIGAN AVENUE CHICAGO, ILLINOIS 60611 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 644- 2121 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange on Title of each class which registered COMMON STOCK, NO PAR VALUE NEW YORK STOCK EXCHANGE CHICAGO STOCK EXCHANGE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Title of each class CLASS B COMMON STOCK, NO PAR VALUE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No . Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of January 12, 2001, there were outstanding 90,953,118 shares of Common Stock, no par value, and the aggregate market value of the Common Stock (based upon the closing price of the stock on the New York Stock Exchange on January 11, 2001) held by non-affiliates was approximately $6,160,518,276. As of January 12, 2001, there were outstanding 21,943,247 shares of Class B Common Stock, no par value. Class B Common Stock is not traded on the exchanges, is restricted as to transfer or other disposition, and is convertible into Common Stock on a share-for- share basis. Upon such conversion, the resulting shares of Common Stock are freely transferable and publicly traded. Assuming all shares of outstanding Class B Common Stock were converted into Common Stock, the aggregate market value of Common Stock held by non-affiliates on January 12, 2001 (based upon the closing price of the stock on the New York Stock Exchange on such date) would have been approximately $6,756,277,964. 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 Portions of the Registrant's Definitive Proxy Statement, dated February 6, 2001 for the March 8, 2001 Annual Meeting of Stockholders, and of the 2000 Annual Report to Stockholders, are incorporated by reference into portions of Parts I, II, III and IV of this Report. PART I ITEM 1. BUSINESS (a) GENERAL DEVELOPMENT OF BUSINESS. (1) General information. From 1891 to 1903, the Company was operated as a partnership until its incorporation in Illinois as Wm. Wrigley, Jr. & Co. in December 1903. In November 1910, the Company was reincorporated under West Virginia law as Wm. Wrigley Jr. Company the ("Company"), and in October 1927, was reincorporated under the same name under Delaware law. Throughout its history, the Company has concentrated on one principal line of business: manufacturing and marketing quality chewing gum products. (2) Not applicable. (b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. The Company's principal business of manufacturing and selling chewing gum constitutes more than 90% of its consolidated worldwide sales and revenues. All other businesses constitute less than 10% of its consolidated revenues, operating profit and identifiable assets. Financial information on segments, as defined under generally accepted accounting principles, is set forth on pages 31 and 32 of the Company's Annual Report to Stockholder's for the fiscal year ended 2000, under the caption "Segment Information" which information is incorporated herein by reference. (c) NARRATIVE DESCRIPTION OF BUSINESS. (1) Business conducted. The following is a description of the business conducted and intended to be conducted by the Company and its wholly-owned associated companies: (i) Principal products, markets and methods of distribution. The Company's principal business is manufacturing and selling chewing gum, both in the United States and abroad. The Company's brands manufactured and available in the United States are: WRIGLEY'S SPEARMINT, DOUBLEMINT, JUICY FRUIT, BIG RED and WINTERFRESH; FREEDENT, a specially formulated chewing gum which does not stick to most types of dental work, available in three flavors; EXTRA sugarfree chewing gum, available in five flavors and as bubble gum; and ECLIPSE a sugarfree pellet gum, available in three flavors. Except for ECLIPSE, which is currently sold only in Australia, and BIG RED, which is only available in Germany, the above Wrigley brands are also commonly available in many international markets. WRIGLEY'S SPEARMINT, DOUBLEMINT and JUICY FRUIT are marketed as sugar and sugarfree chewing gum in various forms. Additional brands manufactured and marketed internationally are: ORBIT, FREEDENT, AIRWAVES, ICEWHITE and EXCEL sugarfree chewing gums in pellet, tab and stick forms in multiple flavors; ARROWMINT, COOL CRUNCH, DULCE 16, P.K and COOL AIR chewing gums in sugar coated pellet form. We also offer bubble gums, HUBBA BUBBA, BIG BOY and BIG G in various flavors. The Company's ten largest markets, by shipments, outside of the United States in 2000 were, in alphabetical order, Australia, Canada, China, France, Germany, Philippines, Poland, Russia, Taiwan and the United Kingdom. Chewing gum is manufactured in three factories in the United States and eleven factories in other countries. Three domestic wholly owned associated companies also manufacture products other than chewing gum. Amurol Confections Company, in addition to manufacturing and marketing children's bubble gum items including BUBBLE TAPE, BIG LEAGUE CHEW and other uniquely packaged confections, and adult chewing gum items like, EVEREST powerful mint gum, also has various non-gum items, such as a line of suckers, dextrose candy, liquid gel candy and hard roll candies as an important part of its total business. Amurol is also developing export markets, currently the largest being Canada, Mexico and Japan. In addition, Amurol contract packs chewing gum items for other companies. The principal business of the L.A. Dreyfus Company is the production of chewing gum base, at one domestic and one overseas factory, for the parent and wholly owned associated companies, and for other manufacturers of chewing gum and specialty gum products in the United States and abroad. Northwestern Flavors, Inc. processes flavorings and rectifies mint oil for the parent and associated companies. In 1979, the Company organized its domestic converting operations under the name of Wrico Packaging Division as a separate operating unit of the Company. This division was created to help further the Company's capability to produce improved packaging materials. Currently, Wrico produces about 26% of the Company's domestic printed and other wrapping supplies. The Company markets chewing gum primarily through distributors, wholesalers, corporate chains and cooperative buying groups that distribute the product through retail outlets. Additional direct customers are vending distributors, concessionaires and other established customers purchasing in wholesale quantities. Customer orders are usually received by mail, electronically, telephone or telefax and are generally shipped by truck from factory warehouses or leased warehousing facilities. Consumer purchases at the retail level are generated primarily through the Company's advertisements on television and radio, and in newspapers and magazines. (ii) New products. A third flavor of ECLIPSE and a fifth flavor of EXTRA, POLAR ICE was introduced in the United States in 2000. A second flavor of AIRWAVES, Honey Lemon, was simultaneously launched through Europe, and AIRWAVES was introduced in Hong Kong, Taiwan, Australia and New Zealand. Fruit flavored EXTRA/ORBIT for Kids was marketed in Germany and Eastern Europe for the first time this past year, and EXTRA for Kids was introduced in China. In Ireland, ACTIV 8, an energy chewing gum, was introduced. (iii) Sources and availability of raw materials. Raw materials blended to make chewing gum base are available from suppliers and in the open market. Sugar, corn syrup, flavoring oils, polyols and aspartame are obtained in the open market, or under contracts, from suppliers in various countries. All other ingredients and necessary packaging materials are also purchased and available on the open market. (iv) Patents and trademarks. The Company holds numerous patents relating to packaging, manufacturing processes and product formulas. Approximately fifty patents relating to product formula and sweetener encapsulation, primarily for sugarfree gum and continuous chewing gum manufacturing, are deemed of material importance to the Company. Most of these patents expire in the countries in which they are registered at various times through the year 2018. Trademarks are of material importance to the Company and are registered and maintained for all brands of the Company's chewing gum on a worldwide basis. (v) Seasonality. On a consolidated basis, sales normally are relatively consistent throughout the year. (vi) Working capital items. Inventory requirements of the Company are not materially affected by seasonal or other factors. In general, the Company does not offer its customers extended payment terms. The Company believes these conditions are not materially different from those of its competitors. (vii) Customers. The Company's products are distributed through more than 3,000 customers throughout the United States alone. No single domestic or foreign customer accounts for as much as 10% of consolidated sales or revenues. (viii) Orders. It is the general custom of the wholesale trade to purchase chewing gum requirements at intervals of approximately ten days to two weeks to assure fresh stocks and good turnover. Therefore, an order backlog is of no significance to the chewing gum business. (ix) Government business. The Company has no material portion of its business, which may be subject to renegotiation of profits or termination of contracts at the election of the Government. (x) Competitive conditions. The chewing gum business is an intensely competitive one in the United States and in most international marketplaces. Though detailed figures are not available, there are approximately 14 chewing gum manufacturers in the United States. Outside sources estimate that Wrigley brands account for approximately 50% of the total chewing gum product unit sales in the United States. The Company's principal competitors in the United States are Pfizer Corporation (recently acquired Warner-Lambert Company) and Hershey, Inc. (recently acquired the chewing gum business of RJR Nabisco Holdings Corporation). Wrigley brands are sold in over 140 countries and territories, although in some cases these areas are relatively small. In most international marketplaces, there are two or three major competitors and generally a half dozen or more other companies competing for a share of the chewing gum business in each instance. In all areas in which the Company distributes its products, principal methods of competition are a combination of competitive profit margins to the trade, superior quality, brand recognition, product benefit and a fair consumer price. (xi) Research and development. The Company has for many years maintained an active in-house research and development program, and has also contracted outside services for developing and improving Wrigley products, machinery and operations. In relation to the Company's consolidated assets, revenues and aggregate operating expenses, amounts expended in these areas during the last three fiscal years have not been material. (xii) Compliance with environmental laws. Compliance with federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has no material effect on capital expenditures, earnings or the competitive position of the Company. (xiii) Employees. As of December 31, 2000, the Company employed approximately 9,800 persons worldwide. (d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES. Information concerning the Company's operations in different geographic areas for the years ended December 31, 2000, 1999 and 1998 is hereby incorporated by reference from the 2000 Annual Report to Stockholders, on pages 31 and 32, under the caption "Segment Information," and on pages 9 through 11 under the caption "Results of Operations." ITEM 2. PROPERTIES The information below relates to the principal properties of the Company which are primarily devoted to chewing gum production or raw materials processing. The Company considers the properties listed below to be in good condition, well maintained and suitable to carry out the Company's business. All of the chewing gum factories listed below operated at least one full shift throughout the year, all but two operated a substantial second shift and eight operated a third shift for much of the year. All properties are owned by the Company unless otherwise indicated. The figures given in the table are approximate.
FLOOR AREA PROPERTY AND LOCATION (SQUARE FEET) CHEWING GUM FACTORIES Chicago, Illinois 1,279,000 Gainesville, Georgia 495,300 Yorkville, Illinois 225,000(a) Asquith, N.S.W., Australia 116,700 Don Mills, Ont., Canada 135,200 Plymouth, England 282,000 Biesheim, France 417,100 Bangalore, India 40,100 Nairobi, Kenya 79,600 Guangzhou, China, P.R.C. 199,400(b) Antipolo, Philippines 105,700 Poznan, Poland 215,600 Taipei, Taiwan, R.O.C. 70,500 St. Petersburg, Russia 111,000 RAW MATERIALS PROCESSING FACTORIES West Chicago, Illinois 40,300 Edison, New Jersey 536,000 Biesheim, France 72,000 OFFICE BUILDING Wrigley Building, Chicago, Illinois 453,400(c)
(a) Does not include a 161,000 square foot leased warehouse facility located in Aurora, Illinois. (b) In China, the Company has a 50 year lease with the Guangzhou Economic Technological Development Zone for the land upon which the factory is located. (c) This building is the Company's principal non- manufacturing property and houses the offices of the Company's corporate headquarters. In 2000, the Company's offices occupied approximately 159,000 of the 453,400 square feet of rentable space in the building. In the case of each factory listed above, the information also includes some office and warehouse facilities. Also, the Company maintains primarily leased branch sales offices and warehouse facilities in the United States and abroad. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None.
EXECUTIVE OFFICERS OF THE REGISTRANT All officers are elected for a term, which ordinarily expires on the date of the meeting of the Board of Directors following the Annual Meeting of Stockholders. The positions and ages listed below are as of January 31, 2001. There were no arrangements or understandings between any of the officers and any other person(s) pursuant to which such officers were elected. EFFECTIVE NAME AND AGE POSITION(S) WITH REGISTRANT DATE(S) William Wrigley, Jr., 37 President and Chief Executive Officer since 1999 Vice President 1991-1999 Assistant to the President 1985-1992 Peter R. Hempstead, 48 (a) Senior Vice President-International since 1999 Gary E. McCullough, 42 (b) Senior Vice President-Americas since 2000 Ronald V. Waters, 48 (c) Senior Vice President and Chief Financial Officer since 1999 Donald E. Balster, 56 Vice President-Worldwide Manufacturing since 2000 Vice President-Manufacturing 1999-2000 Vice President-Production 1994-1999 Senior Director-U.S. Production 1991-1994 Gary R. Bebee, 54 Vice President since 2000 Vice President-Customer Marketing 1993-2000 Assistant Vice President-Marketing 1989-1993 Vincent C. Bonica, 55 (d) Vice President-Organizational Development since 2000 President, L. A. Dreyfus Company 1991-2000 Various executive and management Positions within the L. A. Dreyfus Company 1970-1991 Donagh Herlihy, 37 (e) Vice President-Chief Information Officer since 2000 Shaun Kim, 57 Vice President-Worldwide Engineering since 2000 Vice President-Engineering 1994-1999 Senior Director-Engineering 1988-1994 Jon Orving, 51 Vice President-International since 1993 Managing Director, Wrigley Scandinavia AB, Sweden since 1983 Dushan Petrovich, 47 Vice President since 2000 Vice President-Organizational Development 1999-2000 Vice President-Controller 1996-1999 Vice President-Treasurer 1993-1995 Treasurer 1992 Stefan Pfander, 57 Managing Director-Europe since 1996 Vice President-International since 1992 Co-Managing Director of Wrigley GmbH, Munich, Germany since 1981 Wm. M. Piet, 57 Vice President-Corporate Affairs since 1988 Assistant to the President 1995-2000 Corporate Secretary 1984-1998 Ralph P. Scozzafava, 42 (f) Vice President-U. S. Sales & Customer Marketing since 2000 John A. Schafer, 59 Vice President-Purchasing since 1991 Philip G. Schnell, 56 Vice President-Research & Development since 1994 Senior Director-Research & Development 1988-1994 Darrell R. Splithoff, 51 (g) Vice President-Supply Chain & Corporate since 2000 Development Christafor E. Sundstrom, 52 Vice President-Product & Technical Development since 1999 Vice President-Corporate Development 1988-1999 Michael Wong, 47 (h) Vice President-International and Managing since 2000 Director - Asia A. Rory Finlay, 39 (i) Senior Director-Consumer Marketing since 2000 Reuben Gamoran, 40 (j) Controller since 1999 Controller-International 1996-1999 Philip C. Johnson, 55 Senior Director, Benefits & Compensation since 1995 Assistant Vice President-Personnel 1991-1995 Howard Malovany, 50 (k) Secretary and General Counsel since 1998 Alan J. Schneider, 55 Treasurer since 1996 Daniela Zaluda, 50 (l) Senior Director-Product & Technical Development since 2000
(a) Mr. Hempstead joined the Company in 1999 as Senior Vice President-International assuming responsibility for the Company's operations in Asia, Europe and the Pacific. Before joining the Company, Mr. Hempstead had a 23 year tenure at Procter & Gamble Company, most recently as Vice President of their European pharmaceutical operations in the U.K., Ireland, Holland, Italy and Spain. (b) Mr. McCullough joined the Company in 2000 as Senior Vice President - Americas with responsibility for the Company's operations in North, Central and South America. Before joining the Company, Mr. McCullough held various executive positions during his nearly 13 year term with Procter & Gamble, most recently as General Manager, Home Care Category, North America. (c) Mr. Waters joined the Company in 1999 as Senior Vice President and Chief Financial Officer and has responsibility for the Company's accounting, treasury, tax, internal audit, information systems, law and strategic planning functions. Before joining the Company, Mr. Waters spent the previous seven years with The Gillette Company, most recently as Corporate Controller. (d) Mr. Bonica was elected Vice President - Organizational Development in 2000 with responsibility for the development of a high performance, business focused and continuous improvement organization. Prior to being elected Vice President, he held various positions during his 30 years with the Company, most recently as President - L. A. Dreyfus Company, the Company's gum base manufacturer. (e) Mr. Herlihy joined the Company in 2000 as Vice President and Chief Information Officer with responsibility for the Company's global information services. Before joining the Company, Mr. Herlihy held various executive positions with the Gillette Company for more than five years prior to joining the Company. (f) Mr. Scozzafava joined the Company in 2000 as Vice President - U. S. Sales & Customer Marketing with responsibility for the Company's U. S. sales and customer marketing activities. Before joining the Company, Mr. Scozzafava held various executive positions with Campbell Soup Company for the prior five years, most recently as Vice President - Grocery Teams. (g) Mr. Splithoff joined the Company in 2000 as Vice President - Corporate Development and Supply Chain with responsibility for the Company's worldwide supply chain, leading the organization's e-Business strategy and identifying and evaluating new business and market opportunities. Before joining the Company, Mr. Splithoff was President and CEO of Edwards Fine Foods for nearly two years and Senior Vice President at Keebler Company for 10 years. (h) Mr. Wong was elected Vice President-International in 2000 with responsibility for the Company's business in the Asia region. Mr. Wong joined the Company in 1998 as Regional Managing Director-North Asia. Before joining the Company, Mr. Wong held various executive positions with the Campbell Soup Company, most recently as Regional Managing Director-Asia. (i) Mr. Finlay was elected Senior Director - Consumer Marketing in 2000 with responsibility for the Company's consumer marketing activities through the United States. Prior to being elected, he held various positions during his 13 years with the Company, most recently as Regional Marketing Director - Munich. (j) Mr. Gamoran was elected Controller in 1999 with responsibility for the Company's accounting functions. Prior to being elected Controller, he held various positions during his 14 years with the Company, most recently as Controller - International. (k) Mr. Malovany joined the Company in 1996 assuming responsibility for the corporate legal function. Before joining the Company from 1993-1996, Mr. Malovany was Secretary and General Counsel of Outboard Marine Corporation, a manufacturer and distributor of recreational marine products. (l) Ms. Daniela Zaluda was elected Senior Director - Product and Technical Development in 2000 with responsibilities for the Company's Graphics and Design Department, among others. Prior to being elected Senior Director, she held various positions during her 19 years with the Company. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK, DIVIDEND AND STOCKHOLDER INFORMATION At December 31, 2000, the Company had two classes of stock outstanding: Common Stock, listed on both the New York and Chicago Stock Exchanges, and Class B Common Stock, for which there is no trading market. Shares of the Class B Common Stock were issued by the Company on April 11, 1986 to stockholders of record on April 4, 1986. Class B Common Stock is entitled to ten votes per share, is subject to restrictions on transfer or other disposition and is at all times convertible, on a share-for-share basis, into shares of Common Stock. As of December 31, 2000, there were 37,321 stockholders of record holding Common Stock and 3,397 stockholders of record holding Class B Common Stock. Regular quarterly dividends and any extra cash dividends as may be deemed appropriate, which are identical on both Common Stock and Class B Common Stock, are declared at scheduled meetings of the Board of Directors and announced immediately upon declaration. Information regarding the high and low quarterly sales prices for the Common Stock on the New York Stock Exchange, and dividends declared per share on a quarterly basis for both classes of stock, for the two-year period ended December 31, 2000, is set forth in the Company's 2000 Annual Report to Stockholders, on page 13, under the captions "Market Prices" and "Dividends" and is incorporated herein by reference. On January 23, 2001, the Company declared a two-for-one stock split on the Common and Class B Common Stock outstanding as of February 6, 2001. Distribution of the split shares will occur on February 28, 2001. The share numbers set forth in this report do not reflect this stock dividend. ITEM 6. SELECTED FINANCIAL DATA An eleven-year summary of selected financial data for the Company is set forth in the Company's 2000 Annual Report to Stockholders under the following captions and page numbers: "Operating Data" and "Other Financial Data", on pages 14 and 15, and is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis of results of operations and financial condition, including a discussion of liquidity and capital resources, is set forth in the Company's 2000 Annual Report to Stockholders on pages 9 through 11 and is incorporated herein by reference. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Disclosure about market risk is set forth on page 11 of the Company's 2000 Annual Report to Stockholders under the heading "Market Risk" and is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Company's audited consolidated financial statements, accounting policies and notes to consolidated financial statements, with the report of independent auditors, at December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 are set forth in the Company's 2000 Annual Report to Stockholders on pages 16 through 32 and selected unaudited quarterly data-consolidated results, for the years ended December 31, 2000 and 1999 are set forth in the Company's 2000 Annual Report to Stockholders on page 13, and all such pages are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information regarding directors and nominees for directorship is set forth in the Company's definitive Proxy Statement, dated February 6, 2001, for the Annual Meeting of Stockholders on March 8, 2001, on pages 2 and 3, under the caption "Election of Directors" and is incorporated herein by reference. For information concerning the Company's executive officers, see "Executive Officers of the Registrant" set forth in Part I hereof. ITEM 11. EXECUTIVE COMPENSATION Information regarding the compensation of directors and executive officers is set forth in the Company's definitive Proxy Statement, dated February 6, 2001, for the Annual Meeting of Stockholders on March 8, 2001, on pages 6 and 7, and 7 through 15 under the general captions "Compensation of Directors" and "Executive Compensation", respectively, and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information regarding security ownership of certain beneficial owners, of all directors and nominees, of the named executive officers, and of directors and executive officers as a group, is set forth in the Company's definitive Proxy Statement, dated February 6, 2001, for the Annual Meeting of Stockholders on March 8, 2001, on pages 4 through 6 under the captions "Security Ownership of Directors and Executive Officers" and "Security Ownership of Certain Beneficial Owners" and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information regarding certain relationships and related transactions is hereby incorporated by reference from the Company's definitive Proxy Statement, dated February 6, 2001, for the Annual Meeting of Stockholders on March 8, 2001 on pages 5 and 6 under the heading "Security Ownership of Certain Beneficial Owners", regarding the Offield family, and on page 15 under the heading "Certain Transactions" regarding Mr. Wrigley, Jr. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K (1) 1.2. Financial Statements and Financial Statement Schedule The data listed in the accompanying Index to Financial Statements and Financial Statement Schedule, on page F-1 hereof, is filed as part of this Report. 3. EXHIBITS The exhibits listed in the accompanying Index to Exhibits, on page F-3 hereof, are filed as part of this Report or are incorporated by reference herein as indicated thereon. (B) Not Applicable. (C) Exhibits are attached hereto. (D) See (a) 1, 2 above. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Form 10-K Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 5, 2001 WM. WRIGLEY JR. COMPANY (Registrant) By: /s/ RONALD V. WATERS Ronald V. Waters Senior Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title * President, Chief William Wrigley, Jr. Executive Officer, Director /s/ RONALD V. WATERS Senior Vice President and Ronald V. Waters Chief Financial Officer /s/ REUBEN GAMORAN Controller Reuben Gamoran (Principal Accounting Officer) * Director John F. Bard * Director Thomas A. Knowlton * Director Penny Pritzker * Director Melinda R. Rich * Director *By /s/ HOWARD MALOVANY Steven B. Sample Howard Malovany Attorney-in-Fact * Director Alex Shumate Date: February 5, 2001 * Director Richard K. Smucker EXHIBIT 23. CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in this Annual Report on Form 10-K of Wm. Wrigley Jr. Company of our report dated January 23, 2001, included in the 2000 Annual Report to Stockholders of Wm. Wrigley Jr. Company. Our audits also included the financial statement schedule of Wm. Wrigley Jr. Company listed in Item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in the Registration Statements pertaining to the Special Investment and Savings Plan for Wrigley Employees (33-15061 (1987) and 33-43738 (1991)), the Wm. Wrigley Jr. Company Management Incentive Plan (33-22788 (1988)) and the 1997 Management Incentive Plan (333- 48715 (1998)), respectively, of our report dated January 23, 2001, with respect to the consolidated financial statements and consolidated financial statement schedule of Wm. Wrigley Jr. Company included or incorporated by reference in this Annual Report on Form 10-K for the year ended December 31, 2000. /s/ERNST & YOUNG LLP Ernst & Young LLP Chicago, Illinois February 2, 2001
WM. WRIGLEY JR. COMPANY INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES (ITEM 14 (a)) Reference Form Annual Report 10-K to Report Stockholders Data incorporated by reference from the 2000 Annual Report to Stockholders of Wm. Wrigley Jr. Company: Consolidated balance sheet at December 31, 2000 and 1999 20-21 For the years ended December 31, 2000, 1999 and 1998: Consolidated statement of earnings 19 Consolidated statement of cash flows 22 Consolidated statement of stockholders' equity including comprehensive income 23 Accounting policies and notes to consolidated financial statements 25-32 Consolidated financial statement schedule for the years ended December 31, 2000, 1999 and 1998 Valuation and qualifying accounts F-2
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements or accounting policies notes thereto. With the exception of the pages listed in the above index and the Items referred to in Items 1, 5, 6, 7 and 8 of this Form 10-K Report, 2000 Annual Report to Stockholders is not to be deemed filed as part of this Form 10-K Report.
WM. WRIGLEY JR. COMPANY SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998 (IN THOUSANDS) Column A Column B Column C Column D Column E Additions Balance at Charged to Beginning Costs and Charged to Balance at Description of Period Expenses Other Accounts Deductions (A) End of Period 2000: Allowance for doubtful accounts. $9,194 $2,447 -- $3,455 $8,186 1999: Allowance for doubtful accounts. $7,564 4,685 -- 3,055 9,194 1998: Allowance for doubtful accounts. $7,524 1,456 -- 1,416 7,564
(A) Uncollectable accounts written-off, net of recoveries. WM. WRIGLEY JR. COMPANY AND WHOLLY OWNED ASSOCIATED COMPANIES INDEX TO EXHIBITS (ITEM 14(A)) EXHIBIT NUMBER DESCRIPTION OF EXHIBIT Proxy Statement of the Registrant, dated February 6, 2001, for the March 8, 2001 Annual Meeting of Stockholders, is hereby incorporated by reference. 3. Articles of Incorporation and By-laws. (a). Restated Certificate of Incorporation of the Registrant. Incorporated by reference to Exhibit 3(a) of the Company's Annual Report and Form 10-K filed for the fiscal year ended December 31, 1992. (b). By-laws of the Registrant. Incorporated by reference to Exhibit 3(a) of the Company's Form 10-K filed for the fiscal year ended December 31, 1992. 10. Material Contracts 10(a). Non-Employee Directors' Death Benefit Plan. Incorporated by reference to the Company's Form 10-K filed for the fiscal year ended December 31, 1994. 10(b). Senior Executive Insurance Plan. Incorporated by reference to the Company's Form 10-K filed for the fiscal year ended December 31, 1995. 10(c). Supplemental Retirement Plan. Incorporated by reference to the Company's Form 10-K filed for the fiscal year ended December 31, 1994. 10(d). Deferred Compensation Plan for Non-Employee Directors. Incorporated by reference to the Company's Form 10-K filed for the fiscal year ended December 31, 1995. 10(e). Non-Employee Directors' Stock Retirement Plan. Incorporated by reference to the Company's Form 10-K filed for the fiscal year ended December 31, 1995. 10(f). Wm. Wrigley Jr. Company 1997 Management Incentive Plan. Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997. 13. 2000 Annual Report to Stockholders of the Registrant. 21. Subsidiaries of the Registrant. 23. Consent of Independent Auditors. (See page 12) 24. Power of Attorney. 99. Forward-Looking Statements. Copies of Exhibits are not attached hereto, but the Registrant will furnish them upon request and upon payment to the Registrant of a fee in the amount of $20.00 representing reproduction and handling costs. EX-13 2 0002.txt 2000 AR TO STKHLDRS OF THE REGISTRANT ANNUAL REPORT 2000 Spirit of Innovation [PICTURE OF GLOBE AND CHEWING GUM PRODUCTS] Wm. WRIGLEY Jr. Company CONTENTS Financial Highlights 1 Wrigley at a Glance 2 President's Letter 4 Management's Discussion and Analysis 9 Quarterly Data 12 Selected Financial Data 14 Report of Management and Report of Independent Auditors 16 Consolidated Statement of Earnings 19 Consolidated Balance Sheet 20 Consolidated Statement of Cash Flows 22 Consolidated Statement of Stockholders' Equity Including Comprehensive Income 23 Accounting Policies and Notes to Consolidated Financial Statements 25 Elected Officers 34 Board of Directors 35 Stockholder Information 36 Corporate Facilities and Principal Associated Companies 38
Wrigley brands woven into the fabric of everyday life around the world
HIGHLIGHTS OF OPERATIONS In thousands of dollars except for per share amounts 2000 1999 Net Sales $2,145,706 $2,061,602 Net Earnings $ 328,942 $ 308,183 Per Share of Common Stock (basic and diluted) $ 2.90 $ 2.66 Dividends Paid $ 159,138 $ 153,812 Per Share of Common Stock $ 1.40 $ 1.33 Additions to Property, Plant and Equipment $ 125,068 $ 127,733 Stockholders' Equity $1,132,897 $1,138,775 Return on Average Equity 29.0% 26.8% Stockholders at Close of Year 37,781 38,626 Average Shares Outstanding (000) 113,518 115,861 For additional historical financial data see page 14.
CHEWING GUM/BUBBLE GUM Company: WRIGLEY Countries Served: OVER 140 Website: WWW.WRIGLEY.COM Major Brands: WRIGLEY AT A GLANCE [Airwaves Logo] [Doublemint Logo] [Extra Logo] [Alpine Logo] [Eclipse Logo] [Freedent Logo] [Big Red Logo] [Excel Logo] [Hubba Bubba Logo] [PICTURE OF GLOBE] Don Mills, Ontario Edison, NJ Plymouth, England West Chicago, IL Chicago, IL Yorkville, IL Gainesville, GA
- BUBBLE GUM/CONFECTIONS - GUM BASE Company: AMUROL CONFECTIONS Company: L.A. DREYFUS Countries Served: OVER 50 Website: WWW.LADREYFUS.COM Websites: WWW.BUBBLEGUM.COM WWW.CONFECTIONS.COM Major Brands: - FLAVORING: Company: NORTHWESTERN FLAVORS [Wrigley's Ice White Logo] [P.K Logo] [Big League Chew Logo] [Bubble Jug Logo] [Bug City Candy Tarts Logo] [Juicy Fruit Logo] [Wrigley's Spearmint Logo] [Blasters Logo] [Bubble Tape Logo] [Everest Powerful Mint Gum Logo] [Orbit Logo] [Winterfresh Logo] [PICTURE OF GLOBE] St. Petersburg, Russia Bangalore, India Guangzhou, China Poznan, Poland Taipei, Taiwan Biesheim, France Antipolo City, Philippines Nairobi, Kenya Sydney, Australia
[PHOTO OF WILLIAM WRIGLEY, JR.] TO THE STOCKHOLDERS OF THE WM. WRIGLEY JR. COMPANY AND THE WORLDWIDE WRIGLEY TEAM A year ago, I shared with you our new vision -- Wrigley brands woven into the fabric of everyday life around the world. In order to transform that vision into reality, a roadmap was needed, and over the course of this past year, we have developed one. The key elements of that roadmap accompany this letter, including our mission statement, an expression of our shared values, and a detailing of some key strategic choices we have made. But words like those below, no matter how well crafted, do not mean anything to a business unless they are communicated to and embraced by the team charged with putting them into practice. During 2000, we took some dramatic steps to reach out to Wrigley team members around the world. In early September, we conducted a series of video broadcasts and local "town hall" meetings, reaching thousands of our - ---------------- Supporting our vision is a more concrete mission statement: Our mission is to achieve generational growth and prosperity for our stakeholders. We will continue to expand our core chewing gum business while establishing new business platforms that build on our company strengths. We will achieve our growth through internal development and strategic acquisitions. To gain sustainable global competitive advantage, we will aggressively pursue excellence in execution, innovation, brand building, product quality, worldwide distribution and merchandising. Our hallmarks will be branding that is pervasive and captures our consumers' minds and hearts; products that provide added value; and strong customer relationships built on a foundation of mutual understanding and benefit. Fundamental to our success is a high performance organization that believes in the power of our people who, in turn, embrace our shared values. people in fourteen locations, spanning four continents and a multitude of time zones. These communications provided people with more details about our plans and provided many the opportunity to engage senior management in a meaningful, face- to-face dialogue about how best to reinforce and advance our vision and mission. These discussions have moved beyond the theoretical to the practical, as our team members have come to more fully understand some of the key strategic choices we have made, including the Company's commitment to:
- boost our core chewing gum business; - expand our chewing gum business in attractive new geographies and new distribution channels; - focus on innovation in our products, processes, and systems; - deliver highest quality products and solutions at lowest cost; and - grow and develop our people.
These choices have implications for everything we do - from how we buy ingredients and make products to what products we make and sell. They point us toward increased communication, relationship building, and collaboration as a global team. Many new ideas have been put forth and new initiatives implemented over the past year that have both strengthened the performance of our current business and laid the groundwork for growth opportunities in the future. Most encouraging of all has been the energy and the spirit of innovation that have been unleashed throughout our worldwide team. Around the globe, I have witnessed examples of Wrigley team members "thinking outside the box" - breaking through barriers and refusing to be limited by how things have been done in the past. In 2000, we completed a "state of the art" production line in our Gainesville factory, giving us pellet gum making capacity in the U.S. for the first time in over 20 years. And that new capacity came in handy as we stepped up the pace of innovation with our second rollout of new products in the U.S. market in just over a year with the launch of Eclipse(R) Polar Ice(R) pellets as well as Extra(R) Polar Ice. Consumers have responded favorably to this new, unique flavor. - -------------- Underpinning our vision and mission, from a philosophical perspective, are our shared values: We treat each other with trust, dignity and respect. We create an environment where people from diverse cultures and backgrounds work together effectively. We support and have the courage to take measured risk. We act with a sense of urgency without sacrificing excellence. We foster a spirit of innovation in all areas of our business. We strive for effective communication that results in teamwork, shared knowledge and ideas. We make an extraordinary effort to attract, identify, recruit and retain the very best person for every job. We pursue lifelong learning and personal development. We encourage individual leadership, responsibility, and accountability. We demand of ourselves high standards of ethical behavior. We develop long-term relationships for mutual growth and profitability. Our innovative ways extend beyond product formulation to the way we launch and market products. The original version of our Airwaves(R) "vapor release" chewing gum was rolled out to a handful of countries at a time. We took a more aggressive approach with the launch of Honey & Lemon Airwaves this past fall. It was the first pan-European brand launch in Company history, rolling out the new brand simultaneously across thirty- seven markets. For Polar Ice, Honey & Lemon Airwaves, Alpine(R) and other new Wrigley offerings, innovation also permeated our advertising efforts. Wrigley marketing managers and the creative teams at the Company's ad agencies crafted a new look and feel for a number of our commercial executions. Some of these advertisements are a little edgier in both concept and execution than previous Wrigley fare, but they never lose sight of their "reason for being" - to connect and communicate with consumers and motivate them to purchase Wrigley brands. The potent combination of new benefits, high quality products, improved trade communication and effective advertising has helped fuel the growth of these new product lines. Airwaves and other innovative sugarfree products are beginning to make inroads in Asia as well. Strategic product launches in key markets have strengthened our position as market leader in a number of countries in that region, adding incremental value and bringing new consumers into the category. One of the most striking innovations for our company was the recently announced establishment of the Wrigley Healthcare Division. The mission of Wrigley Healthcare is to develop and market products that use chewing gum as a fast-acting, good- tasting vehicle for the delivery of active ingredients that provide functional health benefits to consumers. The division's first product was unveiled as well - Surpass(R) antacid chewing gum. In many ways, Wrigley Healthcare embodies our new corporate vision, mission, and values. It creates a new, internally developed platform for business growth showcasing the best of the old and the new, combining existing Wrigley expertise and brand equity with new technologies and a variety of outside resources. The new division builds upon our current core business, while creating innovative benefits and functionality that will help deepen our relationship with consumers and make our brands more a part of the "fabric of everyday life." The past year has seen your Company move toward increased and more effective use of technology. Our most ambitious technology project is known as WeB ESPRIT. It is a truly innovative undertaking, from the way the team was assembled from across the Wrigley organization to the unique and free-flowing workspace that has been created for them in Ismaning, Germany. This effort is designed to make our systems more compatible, responsive and efficient across all our markets and will impact most of our key business and operational processes, including sixteen production facilities and fifty sales offices around the world. Making our corporate vision a reality will require the common systems, harmonized business processes, shared data, and higher value-added work that will be made possible by this initiative. WeB ESPRIT is not just about streamlining operations to make them more efficient - it is about restructuring processes and relationships to tap into creativity and growth. In another move designed to facilitate information sharing and collaboration among our people, we have created an intranet portal known as WIN - the Wrigley Innovation Network. In place in the Americas since the fall, WIN is now having its reach extended across the entire Wrigley world as we near completion of our global wide-area network. Of course, even with all these new initiatives and ventures underway, we have a core business to run, and it has been running quite well. In 2000, the Wrigley Company achieved record shipments, sales and earnings. These gains were across all four regions and came despite our significant investments in innovation and a very difficult environment in terms of the weakness of international currencies relative to the dollar. When results are consolidated, the negative translation effect masks the continuing strength and vitality of the Company's overseas business. Additionally, value was returned to our stockholders through the repurchase of more than three million shares of Wrigley stock over the past eighteen months, using only internally generated cash. Your Company has made significant progress over the past year, both in the marketplace and behind the scenes. As I have noted on a number of occasions this past year, the strength, depth and vitality of our worldwide team have never been greater. I am confident in the power of our people to capitalize on the array of opportunities before us, expand the global reach of Wrigley brands, and realize our vision. Sincerely, [WILLIAM WRIGLEY, JR. SIGNATURE] William Wrigley, Jr. [PICTURE OF WRIGLEY CHEWING GUM PRODUCTS] MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Dollar amounts in thousands except for per share figures Results Of Operations NET SALES Consolidated net sales for 2000 increased $84,104 or 4% from 1999. Net sales for 2000 were favorably affected by higher worldwide shipments, product mix, and selected selling price changes. Higher worldwide shipments, including the introduction of new products, increased net sales by 6%. Favorable mix from premium priced products in Europe, the U.S. and Canada increased net sales by 2%, while selected selling price changes increased net sales by 2%. Translation of foreign currency sales to a stronger U.S. dollar reduced reported net sales by approximately 6%. Net sales for the Americas in 2000 increased 6% compared to 1999. Favorable product mix increased net sales 3% due primarily to increased U.S. sales of Eclipse(R) and Extra(R). Net sales also increased 3% as a result of higher unit volume, primarily from Amurol Confections and the Latin American and Canadian markets. International 2000 net sales increased by 12% excluding the effects of foreign currency translation. Higher International net sales resulted from higher unit volume, favorable product mix, and selected selling price changes. Unit volume increased net sales by 8% over 1999, due primarily to growth in China, Russia and numerous other European and Asian markets. Favorable mix from premium priced products, primarily in Europe, increased International net sales by 2% while selected selling price changes also increased International net sales by 2%. International net sales were reduced by 9% as a result of currency translation, primarily in Europe, to a stronger U.S. dollar. Consolidated net sales for 1999 increased $56,883 or 3% from 1998. Net sales for 1999 were favorably affected by product mix, higher International unit volume and selected selling price increases. Favorable mix from premium priced products in Europe, the U.S. and Canada increased net sales by 2%. In addition, higher International shipments increased net sales by 2%, while selected selling price changes increased net sales by 1%. Translation of foreign currency sales to a stronger U.S. dollar reduced reported net sales by approximately 3%. The Americas 1999 net sales increased approximately 2% compared to 1998. While the U.S. maintained volume, net sales increased 1% as a result of favorable product mix primarily due to the launch of Eclipse(R), a new product in 1999. Higher unit volume and favorable product mix at Amurol Confections along with higher unit volume in the Canadian market increased net sales 2%. International 1999 net sales increased by 8%, excluding the effects of foreign currency translation. International net sales were favorably affected by higher unit volume, product mix and selected selling price increases. Unit volume increased net sales by 3%, with higher shipments in China and certain European markets offsetting lower volume in Russia and the Philippines. Favorable mix from premium priced products in Europe, including the introduction of new products, increased International net sales by 3%. Finally, selected selling price changes increased international sales by 2%. International net sales were reduced 4% as a result of currency translation to a stronger U.S. dollar. COST OF SALES AND GROSS PROFIT In 2000, consolidated cost of sales was essentially even with 1999. Excluding the effect of foreign currency translation, the cost of sales increase was approximately 5% from 1999. Higher worldwide shipments and product mix were partially offset by lower product cost in Europe. Consolidated gross profit in 2000 was $1,241,440, an increase of $84,021 or 7% from 1999. The consolidated gross profit margin on net sales was 57.9% for 2000, up 1.8 percentage points from the 1999 gross margin of 56.1%, mainly due to the combination of lower product costs and favorable mix. In 1999, consolidated cost of sales increased $9,195, or 1% from 1998. Excluding the effect of foreign currency translation, the cost of sales increase was approximately 3% from 1998. Higher shipments in certain International markets and product mix increased cost of sales by 3%. Consolidated gross profit in 1999 was $1,157,419, an increase of $47,688 or 4% from 1998. The consolidated gross profit margin on net sales was 56.1% for 1999, up 0.7 percentage points from the 1998 gross margin of 55.4%, mainly due to a favorable mix of products in Europe. SELLING AND GENERAL ADMINISTRATIVE EXPENSES Consolidated 2000 selling and general administrative expenses increased $56,384 or 8% from 1999. Excluding the effects of foreign currency translation, the increase was approximately 13% in 2000, mainly due to increased R&D and product development spending in the U.S. and higher worldwide advertising and other marketing expenditures. Consolidated 1999 selling and general administrative expenses increased $34,066 or 5% from 1998. Excluding the effects of foreign currency translation, the increase was approximately 7% in 1999, mainly due to higher advertising and other marketing expenditures in the U.S., Europe, and China. As a percentage of consolidated net sales, the expenses were as follows:
2000 1999 1998 Advertising 14.4% 14.7% 14.5% Selling and Other Marketing 13.7% 12.6% 12.4% General and Administrative 8.2% 7.7% 7.4% 36.3% 35.0% 34.3%
INVESTMENT INCOME In 2000, consolidated investment income increased $1,549 or 9% from 1999. The increase was primarily due to higher yields on investments in the U.S. and in Europe. In 1999, consolidated investment income decreased $1,000 or 5% from 1998. The decrease was primarily due to lower yields on investments in the U.S. and in Europe. OTHER EXPENSE In 2000, other expense decreased $5,696 from 1999. The decrease was mainly the result of 1999 expenses related to the Russia factory start-up. Other expense for 1999 decreased $1,333 from 1998 due primarily to reduced foreign currency transaction losses. INCOME TAXES Income taxes in 2000 increased $14,123 or 10% from 1999. The effective consolidated income tax rate was 31.4% in 2000 and 30.7% in 1999. Income taxes in 1999 decreased $131 or less than 1% from 1998. The effective consolidated income tax rate was 30.7% in 1999 and 30.9% in 1998. NET EARNINGS Consolidated net earnings in 2000 increased $20,759 or 7%. On a per share basis, net earnings increased $.24 or 9% from 1999. Consolidated net earnings in 1999 increased $3,682 and $.03 per share or 1% from 1998. Excluding the effects of the 1998 Santa Cruz sale, 1999 net earnings increased $10,445 and $.09 per share or 4%. Liquidity and Capital Resources OPERATING CASH FLOW AND CURRENT RATIO Net cash provided by operating activities in 2000 was $448,283 compared with $358,036 in 1999 and $323,847 in 1998. The Company has a current ratio (current assets divided by current liabilities) in excess of 2.8 to 1 at December 31, 2000 and in excess of 3.1 to 1 at December 31, 1999. ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT Capital expenditures for 2000 were $125,068, a decrease of $2,665 from the 1999 capital expenditures of $127,733. The 1999 capital expenditures represented a decrease of $20,294 from the 1998 capital expenditures of $148,027. All of the capital expenditures were funded from the Company's cash flow from operations. Additions to property, plant and equipment in 2001 are expected to be above 2000 capital expenditures and are also planned to be funded from the Company's cash flow from operations. SHARE REPURCHASES In 2000, under Board of Director authorizations, 1,767,400 shares of Company stock were repurchased for an aggregate price of $131,765, net of proceeds received from the sale of put options on Company stock. In 1999, 1,608,800 shares were repurchased for an aggregate price of $118,819, net of proceeds received from the sale of put options on Company stock. Other Matters SALE OF THE SANTA CRUZ FACTORY In the first quarter of 1998, the Company sold its real estate holding in Santa Cruz, California and recorded a pretax gain of approximately $10,404 and net earnings of approximately $6,763 or $.06 per share. EURO CONVERSION On January 1, 1999, the exchange rates of eleven countries (Germany, France, the Netherlands, Austria, Italy, Spain, Finland, Ireland, Belgium, Portugal, and Luxembourg) were fixed amongst one another and became the currencies of the EURO. The currencies of the eleven countries will remain in circulation until mid-2002. The EURO currency will be introduced on January 1, 2002. The Company does not expect future balance sheets and statements of earnings and cash flows to be materially impacted by the EURO conversion. MARKET RISK Inherent in the Company's operations are certain risks related to foreign currency, interest rates, and the equity markets. The Company identifies these risks and mitigates their financial impact through its corporate policies and hedging activities. The Company has determined that movements in market values of financial instruments used to mitigate identified risks are not expected to have a material impact on future earnings, cash flows, or reported fair values. FORWARD-LOOKING STATEMENTS Statements contained in this report may be considered to be forward looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. The Company wishes to ensure that such statements are accompanied by meaningful cautionary statements to comply with the safe harbor under the Act. The Company notes that a variety of factors could cause actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Important factors that may influence the operations, performance, development and results of the Company's business include global and local business and economic conditions; currency exchange and interest rates; ingredients, labor, and other operating costs; insufficient or underutilization of manufacturing capacity; political or economic instability in local markets; competition; retention of preferred retail space; effective marketing campaigns or new product introductions; consumer preferences, spending patterns, and demographic trends; legislation and governmental regulation; and accounting policies and practices. We caution the reader that the list of factors may not be exhaustive. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
QUARTERLY DATA In thousands of dollars except for per share amounts CONSOLIDATED RESULTS NET COST OF NET NET EARNINGS SALES SALES EARNINGS PER SHARE 2000 First Quarter $ 503,291 214,966 74,605 .65 Second Quarter 570,224 235,495 92,103 .81 Third Quarter 533,294 223,816 83,842 .74 Fourth Quarter 538,897 229,989 78,392 .70 Total $2,145,706 904,266 328,942 2.90 1999 First Quarter $ 481,046 210,814 69,649 .60 Second Quarter 533,331 231,856 87,490 .75 Third Quarter 507,501 220,777 77,600 .67 Fourth Quarter 539,724 240,736 73,444 .64 Total $2,061,602 904,183 308,183 2.66
MARKET PRICES Although there is no established public trading market for the Class B Common Stock, these shares are at all times convertible into shares of Common Stock on a one-for-one basis and are entitled to identical dividend payments. The Common Stock of the Company is listed and traded on the New York and Chicago Stock Exchanges. The table below presents the high and low sales prices for the two most recent years on the New York Stock Exchange. 2000 2000 1999 1999 HIGH LOW HIGH LOW First Quarter $82.875 59.875 100.625 83.688 Second Quarter 84.500 71.250 98.000 81.625 Third Quarter 81.500 70.188 89.625 66.875 Fourth Quarter 96.625 72.875 84.438 66.500
DIVIDENDS The following table indicates the quarterly breakdown of aggregate dividends declared per share of Common Stock and Class B Common Stock for the two most recent years. There was no extra dividend payment made in 2000. Dividends declared in a quarter, with the exception of the extra dividend, are paid in the following quarter.
2000 1999 1999 1999 TOTAL REGULAR EXTRA TOTAL First Quarter $ .35 .22 .22 Second Quarter .35 .22 .22 Third Quarter .35 .22 .22 Fourth Quarter .35 .35 .47 .82 Total $1.40 1.01 .47 1.48
SELECTED FINANCIAL DATA In thousands of dollars and shares except for per share amounts
2000 1999 1998 1997 OPERATING DATA Net Sales $2,145,706 2,061,602 2,004,719 1,937,021 Cost of Sales 904,266 904,183 894,988 892,751 Income Taxes 150,370 136,247 136,378 122,614 Earnings before factory closure and sale in 1998-96, nonrecurring gain on sale of Singapore property in 1994, and cumulative effect of accounting changes in 1992 328,942 308,183 297,738 273,771 Per Share of Common Stock (basic and diluted) 2.90 2.66 2.57 2.36 Net Earnings 328,942 308,183 304,501 271,626 Per Share of Common Stock (basic and diluted) 2.90 2.66 2.63 2.34 Dividends Paid 159,138 153,812 150,835 135,680 Per Share of Common Stock 1.40 1.33 1.30 1.17 As a Percent of Net Earnings 48% 50% 50% 50% Dividends Declared Per Share of Common Stock 1.40 1.48 1.31 1.19 Average Shares Outstanding 113,518 115,861 115,964 115,964 OTHER FINANCIAL DATA Net Property, Plant and Equipment $ 607,034 559,140 520,090 430,474 Total Assets 1,574,740 1,547,745 1,520,855 1,343,126 Working Capital 540,505 551,921 624,546 571,857 Stockholders' Equity 1,132,897 1,138,775 1,157,032 985,379 Return on Average Equity 29.0% 26.8% 28.4% 28.9% Stockholders at Close of Year 37,781 38,626 38,052 36,587 Employees at Close of Year 9,800 9,300 9,200 8,200 Market Price of Stock High 96.625 100.625 104.313 82.063 Low 59.875 66.500 70.938 54.563
1996 1995 1994 1993 1992 1991 1990 1,835,987 1,754,931 1,596,551 1,428,504 1,286,921 1,148,875 1,110,639 859,414 820,478 737,239 653,687 606,263 540,591 541,284 128,840 126,492 122,746 103,944 83,730 79,362 70,897 243,262 223,739 205,767 174,891 148,573 128,652 117,362 2.10 1.93 1.77 1.50 1.27 1.09 1.00 230,272 223,739 230,533 174,891 141,295 128,652 117,362 1.99 1.93 1.98 1.50 1.21 1.09 1.00 118,308 111,401 104,694 87,344 72,511 64,609 58,060 1.02 .96 .90 .75 .62 .55 .49 51% 50% 45% 50% 51% 50% 49% 1.02 .99 .94 .75 .63 .55 .51 115,983 116,066 116,358 116,511 117,055 117,517 117,743 388,149 347,491 289,420 239,868 222,137 201,386 188,959 1,233,543 1,099,219 978,834 815,324 711,372 625,074 563,665 511,272 458,683 413,414 343,132 299,149 276,047 229,735 897,431 796,852 688,470 575,182 498,935 463,399 401,386 27.2% 30.1% 36.5% 32.6% 29.4% 29.8% 31.5% 34,951 28,959 24,078 18,567 14,546 11,086 10,497 7,800 7,300 7,000 6,700 6,400 6,250 5,850 62.875 54.000 53.875 46.125 39.875 27.000 19.750 48.375 42.875 38.125 29.500 22.125 16.375 14.583
MANAGEMENT'S REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING Management of the Wm. Wrigley Jr. Company is responsible for the preparation and integrity of the financial statements and related information presented in this Annual Report. This responsibility is carried out through a system of internal controls to ensure that assets are safeguarded, transactions are properly authorized and financial records are accurate. These controls include a comprehensive internal audit program, written financial policies and procedures, appropriate division of responsibility, and careful selection and training of personnel. Written policies include a Code of Business Conduct prescribing that all employees maintain the highest ethical and business standards. Ernst & Young LLP has conducted an independent audit of the financial statements, and its report appears on the facing page. The Board of Directors exercises its control responsibility through an Audit Committee composed entirely of independent directors. The Audit Committee meets regularly to review accounting and control matters. Both Ernst & Young LLP and the internal auditors have direct access to the Audit Committee and periodically meet privately with them. WM. WRIGLEY JR. COMPANY Chicago, Illinois January 23, 2001 REPORT OF INDEPENDENT AUDITORS TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF THE WM. WRIGLEY JR. COMPANY We have audited the accompanying consolidated balance sheet of the Wm. Wrigley Jr. Company and associated companies (the "Company") at December 31, 2000 and 1999 and the related consolidated statements of earnings, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2000 and 1999, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP Chicago, Illinois January 23, 2001 [PICTURE OF CHEWING GUM PRODUCTS] CONSOLIDATED STATEMENT OF EARNINGS In thousands of dollars except for per share amounts
2000 1999 1998 EARNINGS Net sales $ 2,145,706 2,061,602 2,004,719 Cost of sales 904,266 904,183 894,988 Gross profit 1,241,440 1,157,419 1,109,731 Selling and general administrative 778,197 721,813 687,747 Gain related to factory sale -- -- (10,404) Operating income 463,243 435,606 432,388 Investment income 19,185 17,636 18,636 Other expense (3,116) (8,812) (10,145) Earnings before income taxes 479,312 444,430 440,879 Income taxes 150,370 136,247 136,378 Net earnings $ 328,942 308,183 304,501 PER SHARE AMOUNTS Net earnings per share of Common Stock (basic and diluted) $ 2.90 2.66 2.63 Dividends paid per share of Common Stock $ 1.40 1.33 1.30
See accompanying accounting policies and notes. CONSOLIDATED BALANCE SHEET In thousands of dollars
2000 1999 ASSETS Current assets: Cash and cash equivalents $ 300,599 288,386 Short-term investments, at amortized cost 29,301 18,528 Accounts receivable (less allowance for doubtful accounts: 2000 - $8,186; 1999 - $9,194) 191,570 181,720 Inventories Finished goods 64,676 60,885 Raw materials and supplies 188,615 196,785 253,291 257,670 Other current assets 39,728 42,301 Deferred income taxes - current 14,226 15,141 Total current assets 828,715 803,746 Marketable equity securities, at fair value 28,535 43,201 Deferred charges and other assets 83,713 114,796 Deferred income taxes - noncurrent 26,743 26,862 Property, plant and equipment, at cost: Land 39,125 37,527 Buildings and building equipment 344,457 312,663 Machinery and equipment 756,050 712,585 1,139,632 1,062,775 Less accumulated depreciation 532,598 503,635 Net property, plant and equipment 607,034 559,140 TOTAL ASSETS $1,574,740 1,547,745
In thousands of dollars and shares 2000 1999 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 94,377 86,583 Accrued expenses 92,531 74,816 Dividends payable 39,467 40,073 Income and other taxes payable 60,976 49,654 Deferred income taxes - current 859 699 Total current liabilities 288,210 251,825 Deferred income taxes - noncurrent 40,144 44,963 Other noncurrent liabilities 113,489 112,182 Stockholders' equity: Preferred Stock - no par value Authorized: 20,000 shares Issued: None Common Stock - no par value Common Stock Authorized: 400,000 shares Issued: 2000 - 94,184 shares; 1999 - 93,607 shares 12,558 12,481 Class B Common Stock - convertible Authorized: 80,000 shares Issued and outstanding: 2000 - 22,037 shares; 1999 - 22,614 shares 2,938 3,015 Additional paid-in capital 346 273 Retained earnings 1,492,547 1,322,137 Common Stock in treasury, at cost (2000 - 3,459 shares; 1999 - 1,725 shares) (256,478) (125,712) Accumulated other comprehensive income Foreign currency translation adjustment (136,365) (100,270) Unrealized holding gains on marketable equity securities 17,351 26,851 (119,014) (73,419) Total stockholders' equity 1,132,897 1,138,775 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,574,740 $1,547,745
See accompanying accounting policies and notes. CONSOLIDATED STATEMENT OF CASH FLOWS In thousands of dollars
2000 1999 1998 OPERATING ACTIVITIES Net earnings $ 328,942 308,183 304,501 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 57,880 61,225 55,774 Loss on sales of property, plant and equipment 778 390 168 Gain related to factory sale -- -- (10,404) (Increase) Decrease in: Accounts receivable (18,483) (21,174) (12,297) Inventories (2,812) (9,894) (6,299) Other current assets 199 2,807 1,310 Other assets and deferred charges 30,408 (22,277) (17,350) Increase (Decrease) in: Accounts payable 11,068 13,519 4,499 Accrued expenses 19,935 9,734 (3,869) Income and other taxes payable 14,670 2,649 (4,445) Deferred income taxes 2,546 2,024 9,826 Other noncurrent liabilities 3,152 10,850 2,433 Net cash provided by operating activities 448,283 358,036 323,847 INVESTING ACTIVITIES Additions to property, plant and equipment (125,068) (127,733) (148,027) Proceeds from property retirements 1,128 7,909 10,662 Purchases of short-term investments (125,728) (32,078) (109,292) Maturities of short-term investments 115,007 150,300 92,676 Net cash used in investing activities (134,661) (1,602) (153,981) FINANCING ACTIVITIES Dividends paid (159,138) (153,812) (150,835) Common Stock purchased (131,765) (121,268) (7,679) Net cash used in financing activities (290,903) (275,080) (158,514) Effect of exchange rate changes on cash and cash equivalents (10,506) (7,540) (3,407) Net increase in cash and cash equivalents 12,213 73,814 7,945 Cash and cash equivalents at beginning of year 288,386 214,572 206,627 Cash and cash equivalents at end of year $ 300,599 288,386 214,572 SUPPLEMENTAL CASH FLOW INFORMATION Income taxes paid $ 136,311 130,562 133,530 Interest paid $ 749 709 1,164 Interest and dividends received $ 19,243 17,579 19,458
See accompanying accounting policies and notes. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY INCLUDING COMPREHENSIVE INCOME In thousands of dollars and shares
COMMON CLASS B ADDITIONAL COMMON OTHER STOCK- SHARES COMMON COMMON PAID-IN RETAINED STOCK IN COMP. HOLDERS' OUTSTANDING STOCK STOCK CAPITAL EARNINGS TREASURY INCOME EQUITY BALANCE DECEMBER 31, 1997 92,293 $12,339 3,157 226 1,032,139 (13,363) (49,119) 985,379 Net earnings 304,501 304,501 Other comprehensive income: Currency translation 3,695 3,695 Unrealized holding gain on marketable equity securities, net of $4,729 tax 8,783 8,783 Total comprehensive income 316,979 Dividends to shareholders (152,023) (152,023) Treasury share sales, net of purchases 104 4,078 4,078 Options exercised and stock awards granted 37 46 2,573 2,619 Conversion from Class B Common to Common 462 62 (62) -- BALANCE DECEMBER 31, 1998 92,896 $12,401 3,095 272 1,184,617 (6,712) (36,641) 1,157,032 Net earnings 308,183 308,183 Other comprehensive income: Currency translation (38,931) (38,931) Unrealized holding gain on marketable equity securities, net of $1,160 tax 2,153 2,153 Total comprehensive income 271,405 Dividends to shareholders (170,663) (170,663) Treasury share purchases (1,637) (120,861) (120,861) Options exercised and stock awards granted 23 1 1,861 1,862 Conversion from Class B Common to Common 600 80 (80) -- BALANCE DECEMBER 31, 1999 91,882 $12,481 3,015 273 1,322,137 (125,712) (73,419) 1,138,775 Net earnings 328,942 328,942 Other comprehensive income: Currency translation (36,095) (36,095) Unrealized holding loss on marketable equity securities, net of $5,166 tax (9,500) (9,500) Total comprehensive income 283,347 Dividends to shareholders (158,532) (158,532) Treasury share purchases (1,767) (131,765) (131,765) Options exercised and stock awards granted 33 73 999 1,072 Conversion from Class B Common to Common 577 77 (77) -- BALANCE DECEMBER 31, 2000 90,725 $12,558 2,938 346 1,492,547 (256,478) (119,014) 1,132,897
See accompanying accounting policies and notes. [PICTURE OF CHEWING GUM PRODUCTS] ACCOUNTING POLICIES AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dollar amounts in thousands except for per share figures CONSOLIDATION AND DESCRIPTION OF BUSINESS The consolidated financial statements include the accounts of the Wm. Wrigley Jr. Company and its associated companies (the Company). The Company's principal business is manufacturing and selling chewing gum. All other businesses constitute less than 10% of combined revenues, operating profit and identifiable assets. Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect assets, liabilities, revenues and expenses. Actual results may vary from those estimates. Certain amounts reported in 1998 and 1999 have been reclassified to conform to the 2000 presentation. FACTORY SALE In the first quarter of 1998, the Company sold its real estate holding in Santa Cruz, California and recorded a pretax gain of approximately $10,404 and net earnings of approximately $6,763 or $.06 per share. Proceeds from the sale of $7,434 are included in proceeds from property retirements in the consolidated statement of cash flows. CASH AND CASH EQUIVALENTS The Company considers all highly-liquid investments with original maturity of three months or less to be cash equivalents. LONG LIVED ASSETS The Company periodically reviews long lived assets to determine if there are indicators of impairment. When indicators of impairment are present, the Company evaluates the carrying value of the assets in relation to the operating performance and future undiscounted cash flows of the underlying assets. The Company adjusts the net book value of the underlying assets if the sum of the expected future cash flows is less than book value. REVENUE RECOGNITION Revenue from product sales is recognized when the goods are shipped. DISTRIBUTION COSTS The Company classifies distribution costs, including shipping and handling costs, in cost of sales. ADVERTISING The Company expenses all advertising costs in the year incurred. Advertising expense was $308,446 in 2000, $303,220 in 1999 and $291,344 in 1998. INVESTMENTS IN DEBT & EQUITY SECURITIES The Company's investments in debt securities, which typically mature in one year or less, are held to maturity and are valued at amortized cost, which approximates fair value. The aggregate fair values at December 31, 2000 and December 31, 1999 were, respectively, $21,588 and $15,567 for municipal securities, and $7,713 and $2,961 for other debt securities. The average yields of municipal securities held at December 31, 2000 and December 31, 1999 were 3.94% and 3.35%, respectively. The Company's investments in marketable equity securities are held for an indefinite period. Application of Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," resulted in unrealized holding gains of $26,644 at December 31, 2000 and $41,310 at December 31, 1999. Unrealized holding gains, net of the related tax effect, of $17,351 and $26,851 at December 31, 2000 and 1999, respectively, are included as components of accumulated other comprehensive income in stockholders' equity. INVENTORIES Inventories are valued at cost on a last-in, first-out (LIFO) basis for U.S. companies and at the lower of cost (principally first-in, first-out basis) or market for international associated companies. Inventories totaled $253,291 and $257,670 at December 31, 2000 and 1999, respectively, including $107,684 and $106,581, respectively, valued at cost on a LIFO basis. If current costs had been used, such inventories would have been $21,968 and $29,673 higher than reported at December 31, 2000 and 1999, respectively. DEPRECIATION Depreciation is provided over the estimated useful life of the respective asset: buildings and building equipment - 12 to 50 years; machinery and equipment - 3 to 20 years. Depreciation was provided primarily by the straight-line method. ACCRUED EXPENSES Accrued expenses at December 31, 2000 and 1999 included $34,129 and $29,616 of payroll expenses, respectively. OTHER NONCURRENT LIABILITIES Other noncurrent liabilities at December 31, 2000, included liabilities for approximately $54,500 of deferred compensation and $17,500 for post-retirement benefits. At December 31, 1999, they included liabilities for approximately $53,000 of deferred compensation and $17,400 for post-retirement benefits. FOREIGN CURRENCY TRANSLATION AND EXCHANGE CONTRACTS The Company has determined that the functional currency for each associated company except for certain Eastern European entities is its local currency. As some Eastern European entities operate in economies which are considered to be highly inflationary, their functional currency is the U.S. dollar. Certain foreign associated companies enter into forward exchange contracts and purchase currency options as non-speculative hedges against future purchase transactions with other associated companies and outside vendors. In addition, the Corporate headquarters enters into forward exchange contracts and purchases currency options as non-speculative hedges regarding known future royalty payments from, and net investments in, associated companies as well as known foreign currency commitments. Market value gains and losses, recognized at the expiration of the contracts, offset foreign exchange gains or losses on the related transactions being hedged. At December 31, 2000, open foreign exchange contracts for a number of currencies, primarily British pounds, Euros, and U.S. dollars, maturing at various dates through December 31, 2001, aggregated $79,853. Open foreign exchange contracts at December 31, 1999, aggregated $111,289. Unrealized gains or losses on these contracts were not significant as of either December 31, 2000 or 1999. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended in June 2000 by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," which establishes accounting and reporting standards for derivative instruments and hedging activities. It requires the Company to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. It further provides criteria for derivative instruments to be designated as fair value, cash flow, or net investment hedges, and establishes accounting standards for reporting changes in the fair value of the derivative instruments. Upon adoption, the Company will be required to record derivative instruments at fair value in the balance sheet and recognize the offsetting gains or losses as adjustments to net income or other comprehensive income, as appropriate. The Company adopted SFAS No. 133, as amended, effective January 1, 2001. The adoption of SFAS No. 133 will not have a material effect on the Company's results of operations or financial position. STOCK SPLIT On January 23, 2001, the Board of Directors approved a 2-for-1 stock split for shareholders of record on February 6, 2001. The accompanying financial statements are presented on a pre-split basis. COMMON STOCK In addition to its Common Stock, the Company has Class B Common Stock outstanding. Each share of Class B Common Stock has ten votes, is restricted as to transfer or other disposition and convertible at any time into one share of Common Stock. Additional paid-in capital primarily represents the excess of fair market value of Common Stock issued from treasury on the date the shares of stock were awarded over the average acquisition cost of the shares. Treasury Stock may be acquired for the Company's Management Incentive Plan (1997 MIP) or under a resolution adopted by the Board of Directors. On August 18, 1993, the Board of Directors authorized a share repurchase program to purchase up to $100,000 of shares in the open market. On October 27, 1999, the Company's Board of Directors authorized an additional $200,000 in share repurchases. Additionally, on October 25, 2000, the Board of Directors authorized $100,000 in share repurchases. During 2000 and 1999, the Company purchased 1,767,400 and 1,608,800 shares at an aggregate price of $131,765 and $118,819, respectively, under the 1993 and 1999 authorities. No shares were repurchased prior to 1999 under the 1993 authority. STOCK BASED COMPENSATION PLANS On March 5, 1997, stockholders approved the 1997 MIP. The 1997 MIP authorizes the granting of up to 5,000,000 shares of the Company's new or reissued Common Stock. The 1997 MIP was designed to provide key employees the opportunity to participate in the long-term growth and profitability of the Company through cash and equity-based incentives. In accordance with the 1997 MIP, shares of Wrigley stock or deferral share units may be granted under the Wrigley Stock Option program or awarded under the Long-Term Stock Grant and Stock Award programs. Deferral share units are also awarded to non-employee directors. Options outstanding have been granted at prices which are equal to the fair market value of the stock on the date of grant. Generally, options vest over a four-year period and expire ten years from the date of grant. No options were granted or outstanding during 1998. The status of the Company's Stock Option program is summarized as follows:
WEIGHTED-AVERAGE EXERCISE NUMBER OF SHARES PRICE Outstanding at December 31, 1998 -- -- Granted 551,000 $86.0600 Exercised -- -- Cancelled (12,000) $87.5625 Outstanding at December 31, 1999 539,000 $86.0266 Granted 828,500 $75.0565 Exercised -- -- Cancelled (18,000) $80.5486 OUTSTANDING AT DECEMBER 31, 2000 1,349,500 $79.3648
The Company applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for stock based compensation plans. Accordingly, as the exercise price equaled the fair market value on the date of grant, no compensation cost has been recognized for the Stock Option program. Compensation costs for other stock based compensation plans were not material. Had compensation cost for the Stock Option program been determined based on fair value of the options at the date of grant, consistent with SFAS No. 123, the Company's net earnings and earnings per share would have been reduced as follows:
YEAR ENDED DECEMBER 31 2000 1999 Net Earnings As reported $328,942 $308,183 Pro forma $324,735 $306,965 Basic and diluted earnings per share As reported $2.90 $2.66 Pro forma $2.86 $2.65
The fair value of each option on the date of grant is estimated using the Black-Scholes option-pricing model. The weighted average fair value of each option granted using the model was $23.17 and $25.29 in 2000 and 1999, respectively. The table below summarizes the key assumptions:
INTEREST DIVIDEND EXPECTED EXPECTED RATE YIELD VOLATILITY LIFE 2000 4.75% 1.60% 24.6% 6 years 1999 6.00% 1.60% 22.6% 6 years
The following table summarizes key information about stock options at December 31, 2000:
OUTSTANDING STOCK OPTIONS EXERCISABLE STOCK OPTIONS WEIGHTED-AVERAGE WEIGHTED- WEIGHTED- RANGE OF REMAINING AVERAGE AVERAGE EXERCISE PRICES SHARES CONTRACTUAL LIFE EXERCISE PRICE SHARES EXERCISE PRICE $60-69 20,000 9.3 64.0625 -- -- $70-79 862,500 9.4 75.2533 30,500 77.8268 $80-89 449,000 8.4 87.4954 112,250 87.4954 $90-99 18,000 9.9 90.5625 -- --
INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of net deferred tax balances are as follows:
2000 1999 Accrued Compensation, Pension and Postretirement Benefits $ 25,282 26,111 Depreciation (16,503) (15,583) Unrealized Holding Gains (9,293) (14,459) Factory Closure and Related Costs -- 54 All Other - Net 480 218 Net Deferred Tax Liability $ (34) (3,659)
Balance sheet classifications of deferred taxes are as follows:
2000 1999 DEFERRED TAX ASSET Current $ 14,226 15,141 Noncurrent 26,743 26,862 DEFERRED TAX LIABILITY Current (859) (699) Noncurrent (40,144) (44,963) Net Deferred Tax Liability $ (34) (3,659)
Applicable U.S. income and foreign withholding taxes have not been provided on approximately $529,285 of undistributed earnings of international associated companies at December 31, 2000. These earnings are considered to be permanently invested and, under the tax laws, are not subject to such taxes until distributed as dividends. Tax on such potential distributions would be substantially offset by foreign tax credits. If the earnings were not considered permanently invested, approximately $84,000 of deferred income taxes would be provided. Income taxes are based on pre-tax earnings which are distributed geographically as follows:
2000 1999 1998 Domestic $139,086 154,240 188,472 Foreign 340,226 290,190 252,407 $479,312 444,430 440,879
Reconciliation of the provision for income taxes computed at the U.S. Federal statutory rate of 35% for 2000, 1999, and 1998 to the reported provision for income taxes is as follows:
2000 1999 1998 Provision at U.S. Federal Statutory Rate $ 167,759 155,551 154,276 State Taxes - Net 5,351 6,414 5,588 Foreign Tax Rates (19,546) (14,835) (13,634) Tax Credits (principally foreign) (1,675) (9,189) (3,575) Other - Net (1,519) (1,694) (6,277) $ 150,370 136,247 136,378
The components of the provision for income taxes for 2000, 1999, and 1998 are:
CURRENT DEFERRED TOTAL 2000 Federal $ 30,704 961 31,665 Foreign 109,184 2,170 111,354 State 7,954 (603) 7,351 $147,842 2,528 150,370 1999 Federal $ 20,262 (1,807) 18,455 Foreign 103,253 4,674 107,927 State 10,708 (843) 9,865 $134,223 2,024 136,247 1998 Federal $ 34,083 5,116 39,199 Foreign 83,623 4,710 88,333 State 8,846 -- 8,846 $126,552 9,826 136,378
RETIREMENT AND POST-RETIREMENT PLANS The Company maintains noncontributory defined benefit plans covering substantially all of its employees in the U.S. and at certain international associated companies. Retirement benefits are a function of years of service and the level of compensation generally for the highest three consecutive salary years occurring within ten years prior to an employee's retirement date depending on the plan. The Company's policy is to fund within ERISA or other statutory limits to provide benefits earned to date and expected to be earned in the future. To the extent that an individual's annual retirement benefit under the plan exceeds the limitations imposed by the Internal Revenue Code of 1986, as amended, and the regulations thereunder, such excess benefits may be paid from the Company's non-qualified, unfunded, noncontributory supplemental retirement plan. Domestic plan assets consist primarily of marketable equity and fixed income securities. Foreign plan assets consist primarily of marketable equity and fixed income securities, and contracts with insurance companies. In addition, the Company maintains certain post-retirement plans which provide limited health care benefits on a contributory basis and life insurance benefits in the U.S. and at certain international associated companies. The cost of post-retirement benefits is provided during the employee's active working career. The funded status of the defined benefit plans and post- retirement benefit plans were as follows:
DEFINED BENEFIT PLANS POSTRETIREMENT BENEFIT PLANS 2000 1999 2000 1999 CHANGE IN BENEFIT OBLIGATION Benefit Obligation at Beginning of Year $ 321,800 345,600 $ 25,400 26,700 Service Cost 11,100 12,600 900 1,100 Interest Cost 24,200 22,800 2,000 1,900 Plan Participants' Contributions 300 400 -- -- Actuarial Loss (Gain) 10,900 (43,200) 600 (3,000) Foreign Currency Exchange (6,400) (100) -- -- Other (2,000) (200) -- -- Benefits Paid (17,900) (16,100) (1,800) (1,300) Benefit Obligation at End of Year $ 342,000 321,800 $ 27,100 25,400 CHANGE IN PLAN ASSETS Fair Value at Beginning of Year $ 390,800 373,700 $ 13,600 11,500 Actual Return on Plan Assets 3,100 28,900 (600) 1,600 Employer Contribution 1,600 1,800 1,800 1,800 Plan Participants' Contributions 1,700 2,100 -- -- Foreign Currency Exchange (7,500) 100 -- -- Other (900) 300 -- -- Benefits Paid (17,900) (16,100) (1,800) (1,300) Fair Value at End of Year $ 370,900 390,800 $ 13,000 13,600 Funded (Underfunded) Status of the Plan $ 28,900 69,000 $ (14,100) (11,800) Unrecognized Net Actuarial Gain (26,000) (71,300) (3,400) (5,600) Unrecognized Prior Service Costs 7,200 9,200 -- -- Unrecognized Transition Asset (4,400) (3,100) -- -- Prepaid (Accrued) Benefit Cost $ 5,700 3,800 $ (17,500) (17,400)
The following table provides amounts recognized in the balance sheet as of December 31:
DEFINED BENEFIT PLANS POSTRETIREMENT BENEFIT PLANS 2000 1999 2000 1999 Prepaid Benefit Cost $ 11,400 9,200 $ -- -- Accrued Benefit Liability (5,700) (5,400) (17,500) (17,400) Net Amount Recognized $ 5,700 3,800 $ (17,500) (17,400)
The Company's non-qualified, unfunded, noncontributory supplemental retirement plan has an accumulated benefit obligation in the amount of $5,600 and $5,100 at December 31, 2000 and 1999, respectively. The components of net pension and net periodic post-retirement benefit costs are as follows:
DEFINED BENEFIT PLANS POSTRETIREMENT BENEFIT PLANS 2000 1999 1998 2000 1999 1998 Service Cost $ 11,100 12,600 11,400 $ 900 1,100 900 Interest Cost 24,200 22,800 22,200 2,000 1,900 1,700 Expected Return on Plan Assets (33,200) (31,800) (30,400) (1,200) (1,000) (300) Amortization of Unrecognized Transition Assets (900) (800) (900) -- -- -- Prior Service Costs Recognized 1,700 1,600 1,500 -- -- -- Recognized Net Actuarial Loss (1,900) (500) (1,200) (200) (100) (100) Other Pension Plans 4,000 3,600 3,400 -- -- -- Net Periodic Benefit Cost $ 5,000 7,500 6,000 $ 1,500 1,900 2,200
Assumptions used to determine net pension and net periodic post- retirement benefit costs are as follows:
DEFINED BENEFIT PLANS POSTRETIREMENT BENEFIT PLANS 2000 1999 1998 2000 1999 1998 DISCOUNT RATE Domestic 7.75% 7.75% 6.75% 7.75% 7.75% 6.75% Foreign 6.0-7.25% 6.25-7.50% 6.0-8.0% 7.75% 7.75% 6.75% LONG-TERM RATES OF RETURN ON PLAN ASSETS Domestic 9.25% 9.00% 9.00% 9.00% 9.00% 5.50% Foreign 6.50-7.50% 6.5-8.0% 7.0-8.0% -- -- -- RATES OF INCREASE IN COMPENSATION LEVELS Domestic 4.75% 4.75% 4.75% -- -- -- Foreign 3.0-4.0% 3.0-6.0% 3.3-6.0% -- -- --
A 5.625% annual rate of increase in the per capita cost of covered post-retirement benefits was assumed for 2001. The rate was assumed to decrease gradually to 5% for 2002 and remain at that level thereafter. Increasing or decreasing the health care trend rates by one percentage point in each year would have the following effect:
1% INCREASE 1% DECREASE Effect on Post-retirement Benefit Obligation 2,300 (2,000) Effect on Total of Service and Interest Cost Components 300 (300)
In addition to the defined benefit plans and post-retirement benefit plans described above, the Company also sponsors defined contribution plans within the U.S. and at certain international associated companies. The plans cover full time employees and provide for contributions between 3% and 5% of salary. The Company's expense for the defined contribution plans totaled $4,535, $4,613, and $4,100 in 2000, 1999, and 1998 respectively. SEGMENT INFORMATION Management organizes the Company's chewing gum business based on geographic regions. Information by geographic region at December 31, 2000, 1999, and 1998 and for the years then ended is as follows:
NET SALES 2000 1999 1998 Americas, principally U.S. $906,006 854,374 835,151 Europe 908,624 905,137 898,954 Asia 244,224 213,096 186,961 Pacific 71,461 71,383 67,384 All Other 15,391 17,612 16,269 Net Sales $2,145,706 2,061,602 2,004,719
"All Other" revenues consists primarily of sales of gumbase to customers.
OPERATING INCOME 2000 1999 1998 Americas, principally U.S. $ 220,850 212,025 223,258 Europe 251,838 235,375 222,693 Asia 65,711 49,883 33,027 Pacific 22,453 21,158 17,969 Gains Related to Factory Closure and Sale -- -- 10,404 All Other (97,609) (82,835) (74,963) Total Operating Income $ 463,243 435,606 432,388
"All Other" operating income includes corporate expenses such as costs related to research and development, information systems and certain administrative functions.
ASSETS 2000 1999 1998 Americas, principally U.S. $547,954 514,941 448,565 Europe 618,668 609,805 562,356 Asia 158,997 153,049 148,476 Pacific 42,612 44,962 39,565 All Other 81,450 90,229 87,223 Assets Used in Operating Activities 1,449,681 1,412,986 1,286,185 Corporate 125,059 134,759 234,670 Total Assets $1,574,740 1,547,745 1,520,855
Assets are categorized based upon the geographic upon the geographic segment where they reside. Assets in "Corporate" consist principally of short-term investments and marketable equity securities which are held at the corporate office, as well as certain fixed assets.
DEPRECIATION EXPENSE 2000 1999 1998 Americas, principally U.S. $14,337 15,545 15,961 Europe 26,628 25,408 19,886 Asia 6,945 7,149 5,595 Pacific 1,149 1,153 1,189 All Other 1,874 3,194 3,415 Depreciation Expense Related to Operating Activities 50,933 52,449 46,046 Corporate 6,947 8,776 9,728 Total Depreciation Expense $57,880 61,225 55,774
Depreciation expense is categorized consistently with the geographic region where the asset resides.
CAPITAL EXPENDITURES 2000 1999 1998 Americas, principally U.S. $45,728 35,984 32,870 Europe 37,608 69,593 86,761 Asia 11,011 7,818 17,391 Pacific 2,368 2,643 1,683 All Other 1,252 3,507 6,825 Capital Expenditures for Operating Activities 97,967 119,545 145,530 Corporate 28,080 9,234 2,938 Gross Capital Expenditures 126,047 128,779 148,468 Intersegment Asset Transfers (979) (1,046) (441) Net Capital Expenditures $125,068 127,733 148,027
Capital expenditures are categorized based upon the geographic segment where the expenditure occurred. Intersegment asset transfers are primarily due to sales between production facilities worldwide. Asset sales are typically transferred at net book value. [PICTURE OF BUBBLE GUM PRODUCTS] ELECTED OFFICERS - 2000
William Wrigley, Jr. Shaun Kim Michael F. Wong President and Vice President - Vice President - Chief Executive Officer Worldwide Engineering International and Managing Director - John F. Bard Dennis R. Mally Asia Executive Vice President Vice President - (retired as of 6/1/2000) Information Services A. Rory Finlay (retired as of 12/1/2000) Senior Director - Martin J. Geraghty Consumer Marketing Group Vice President - Jon Orving Worldwide Manufacturing Vice President - Reuben Gamoran (retired as of 7/1/2000) International Controller Peter R. Hempstead Dushan Petrovich Philip C. Johnson Senior Vice President - Vice President Senior Director - International Benefits & Compensation Stefan Pfander Gary E. McCullough Vice President - Howard Malovany Senior Vice President - International and Secretary and Americas Managing Director - General Counsel Europe Ronald V. Waters Alan J. Schneider Senior Vice President and Wm. M. Piet Treasurer Chief Financial Officer Vice President - Corporate Affairs Daniela Zaluda Donald E. Balster Senior Director - Vice President - John A. Schafer Product & Technical Worldwide Manufacturing Vice President - Development Purchasing Gary R. Bebee Vice President Philip G. Schnell Vice President - Vincent C. Bonica Research & Development Vice President - Organizational Development Ralph P. Scozzafava Vice President - David E. Boxell U.S. Sales & Customer Vice President - Marketing Personnel (as of 1/1/2001) (retired as of 7/1/2000) Darrell R. Splithoff Philip G. Hamilton Vice President - Vice President - Supply Chain & Corporate International Development (retired as of 7/1/2000) Christafor E. Sundstrom Donagh Herlihy Vice President - Vice President and Product & Technical Chief Information Officer Development
BOARD OF DIRECTORS - 2000
[PHOTO OF DIRECTORS] COMMITTEES OF THE WILLIAM WRIGLEY, JR. BOARD OF DIRECTORS Director of the Company since 1988 Joined the Wm. Wrigley Jr. Company in 1985 AUDIT President & Chief Executive Officer since 1999 Richard K. Smucker Senior Vice President (1999) Chairman Vice President (1991-98) Director, The J. M. Smucker Company, since 1991 Thomas A. Knowlton Director, divineInterventures, Inc., since 2000 Melinda R. Rich JOHN F. BARD Director of the Company since 1999 Alex Shumate Executive Vice President, Wm. Wrigley Jr. Company (1999-2000) Senior Vice President, Wm. Wrigley Jr. Company (1991-99) COMPENSATION Thomas A. Knowlton THOMAS A. KNOWLTON Chairman Director of the Company since 1996 Dean-Faculty of Business, Ryerson Polytechnic University, since 2000 Penny Pritzker Executive Vice President, Kellogg Company (1992-98) President, Kellogg North America (1994-98) Steven B. Sample President, Kellogg Europe (1992-94) Alex Shumate PENNY PRITZKER Director of the Company since 1994 NOMINATING Chairman, Classic Residence by Hyatt, since 1987 Penny Pritzker President, Pritzker Realty Group L.P., since 1987 Chairman MELINDA R. RICH Steven B. Sample Director of the Company since 1999 Joined Rich Products Corp. in 1986 Richard K. Smucker Executive Vice President of Innovation since 1997 and Director since 1998 President, Rich Entertainment Group, since 1994 Director, M & T Bank Corp. (Buffalo, NY), since 1994 STEVEN B. SAMPLE Director of the Company since 1997 President, University of Southern California, since 1991 President, State University of New York, Buffalo (1982-91) Director, Unova, Inc., since 1997 Director, AMCAP Fund, Inc., since 2000 Director, American Mutual Fund, Inc., since 2000 Director, Advanced Bionics Corporation, since 2000 ALEX SHUMATE Director of the Company since 1998 Joined law firm of Squire, Sanders & Dempsey in 1988 Managing Partner of the Columbus Office since 1991 Director, The Limited, Inc., since 1996 Left to right: RICHARD K. SMUCKER Penny Pritzker, Thomas A. Director of the Company since 1988 Knowlton, Steven B. Sample, Joined The J. M. Smucker Company in 1972 Melinda R. Rich, John F. Bard, President since 1987 and Director since 1975 William Wrigley, Jr., Alex Director, Sherwin-Williams Company, since 1991 Shumate, Richard K. Smucker Director, International Multifoods, Inc., since 1997
STOCKHOLDER INFORMATION STOCKHOLDER INQUIRIES Any inquiries about your Wrigley stockholdings should be directed to: Stockholder Relations Wm. Wrigley Jr. Company 410 North Michigan Avenue Chicago, IL 60611 1-800-874-0474 You can access your Wrigley stock account information via the Internet at the following address - gateway.equiserve.com. Additional information about the Wrigley Company in general can be found on our Internet home page at the following address - www.wrigley.com. CAPITAL STOCK Common Stock of the Wm. Wrigley Jr. Company is traded on the New York and Chicago Stock Exchanges. The Company's symbol is WWY. Class B Common Stock, issued to stockholders of record on April 4, 1986, has restricted transferability and is not traded on the New York Stock Exchange. It is at all times convertible, on a share-for-share basis, into Common Stock and once converted is freely transferable and publicly traded. Class B Common Stock also has the same rights as Common Stock with respect to cash dividends and treatment upon liquidation. DIVIDENDS Regular quarterly dividends are paid in advance on the first business day of February, May, August, and November with the record date for each payment falling on or about the 15th of the prior month. DIRECT DIVIDEND DEPOSIT SERVICE The Direct Dividend Deposit Service allows stockholders to receive cash dividends through electronic deposits into their checking or savings account. DIVIDEND REINVESTMENT PLAN The Dividend Reinvestment Plan (DRP) is open to all stockholders of record. The DRP is administered by EquiServe Trust Company, N.A. and uses cash dividends on both Common Stock and Class B Common Stock, along with voluntary cash contributions, to purchase additional shares of Common Stock. Cash contributions can be made monthly for a minimum of $50 and a maximum of $5,000. All shares purchased through the DRP are retained in a DRP account, so there are no certificates that could be lost, misplaced, or stolen. Additionally, once a DRP account is established, a participant can deposit any Wrigley stock certificates held outside the DRP into the account for safekeeping. The Company pays all brokerage and administrative costs associated with the DRP. Just under 30,000 or 79% of the Company's stockholders of record currently participate in the DRP. A brochure fully describing the DRP and its enrollment procedure is available upon request. CONSOLIDATION OF MULTIPLE ACCOUNTS To avoid receiving duplicate mailings, stockholders with more than one Wrigley account may want to consolidate their shares. For more information, please contact the Company. ELECTRONIC RECEIPT OF PROXY MATERIALS AND PROXY VOTING If you are a stockholder who would like to receive your copies of the annual report and proxy statement via the Internet in the future, you need to complete an online consent form. Stockholders of record can go directly to the EquiServe form at - - www.econsent.com/wwy - or link to the form through the Wrigley web site. "Street name" stockholders, holding their shares in a bank or brokerage account, should go to the Wrigley web site - www.wrigley.com - and complete the form they find there. STOCK CERTIFICATES For security and tax purposes, stockholders should keep a record of all of their stock certificates. The record should be kept in a separate place from the certificates themselves and should contain the following information for each certificate: exact registration, number of shares, certificate number, date of certificate and the original cost of the shares. If a stock certificate is lost or stolen, notification should be sent to the Company immediately. The transfer agent has two requirements to be met before a new certificate will be issued - a completed affidavit and payment for an indemnity bond based on the current market value of the lost or stolen stock. The replacement of a certificate will take about seven to ten days. Even if a certificate is lost or stolen, the stockholder will continue to receive dividends on those shares while the new certificate is being issued. A transfer of stock is required when the shares are sold or when there is any change in name or ownership of the stock. To be accepted for transfer, the stockholder's signature on the certificate or stock power must receive a Medallion Signature Guarantee by a qualified financial institution that participates in the Medallion Guarantee program. A verification by a notary public is not sufficient. Anytime a certificate is mailed, it should be sent registered mail, return receipt requested. COMPANY PUBLICATIONS The Company's 2000 annual report to the Securities and Exchange Commission on Form 10-K is expected to be available on or about February 16, 2001. Other publications that are currently available include: The Wrigley Way: Continuing our Legacy of Social Responsibility The Story of Chewing Gum and the Wm. Wrigley Jr. Company A Historical Look at the Wrigley Building Requests for these publications should be addressed to Corporate Communications at the main office of the Company. They are also available for review at our Internet home page www.wrigley.com). TRANSFER AGENT AND REGISTRAR EquiServe Trust Company, N.A. P. O. Box 2500 Jersey City, NJ 07303-2500 1-800-446-2617 Internet: www.equiserve.com CORPORATE FACILITIES AND PRINCIPAL ASSOCIATED COMPANIES - 2000 CORPORATE FACILITIES Wrigley Zagreb d.o.o. Wrigley Philippines, Inc.* Zagreb, Croatia Antipolo City, Philippines HEADQUARTERS Wrigley Building Wrigley s.r.o. Wrigley Poland Sp. zo.o.* 410 North Michigan Avenue Prague, Czech Republic Poznan, Poland Chicago, Illinois 60611 The Wrigley Company Limited* Wrigley Romania Produse PRODUCTION FACILITIES Plymouth, England, U.K. Zaharoase SRL Chicago, Illinois Bucharest, Romania Gainesville, Georgia Oy Wrigley Scandinavia Ab Turku, Finland OOO Wrigley PRINCIPAL ASSOCIATED Moscow, Russia COMPANIES Wrigley France S.N.C.* St. Petersburg, Russia* Biesheim, France DOMESTIC Wrigley Slovakia s.r.o. Amurol Confections Company* Wrigley G.m.b.H. Banska Bystrica, Slovakia Yorkville, Illinois 60560 Munich, Germany Wrigley d.o.o. Four-Ten Corporation Wrigley B.V. Ljubljana, Slovenia Chicago, Illinois 60611 Amsterdam, Holland Wrigley Co., S.A. Wrigley Sales Company The Wrigley Company (H.K.) Santa Cruz de Tenerife Chicago, Illinois 60611 Limited Canary Islands, Spain (as of 1/1/2001) Hong Kong Wrigley Scandinavia AB Wrigley Manufacturing Wrigley Hungaria, Kft. Stockholm, Sweden Company, LLC* Budapest, Hungary Chicago, Illinois 60611 Wrigley Taiwan Limited* (as of 1/1/2001) Wrigley India Private Limited* Taipei, Taiwan, R.O.C. Bangalore, Karnataka, India L. A. Dreyfus Company* Wrigley Gida Ticaret Limited Edison, New Jersey 08820 Wrigley Israel Ltd. Sirketi Herzeliya-Pituach, Israel Istanbul, Turkey Northwestern Flavors, Inc.* West Chicago, Illinois 60185 Wrigley & Company Ltd., *Denotes production facility. Japan Tokyo, Japan INTERNATIONAL The Wrigley Company Pty. The Wrigley Company Limited* (East Africa) Limited* Sydney, Australia Nairobi, Kenya Wrigley Austria Ges.m.b.H. The Wrigley Company Salzburg, Austria (Malaysia) Sdn. Bhd. Kuala Lumpur, Malaysia Wrigley Bulgaria EOOD Sofia, Bulgaria The Wrigley Company (N.Z.) Limited Wrigley Canada* Auckland, New Zealand Don Mills, Ontario, Canada Wrigley Chewing Gum Wrigley Scandinavia AS Company Ltd.* Oslo, Norway Guangzhou, Guangdong, People's Republic of China The Wrigley Company (P.N.G.) Ltd. Port Moresby, Papua New Guinea
[PICTURE OF GLOBE AND CHEWING GUM PRODUCTS] EX-21 3 0003.txt SUBSIDIARIES OF THE REGISTRANT Parents and Subsidiaries of Registrant State or Country Name of Company of Corporation Wm. Wrigley Jr. Company Delaware Companies included in consolidation - all 100% owned by Parent Company: Northwestern Flavors, Inc. Illinois L. A. Dreyfus Company Delaware Four-Ten Corporation Illinois Amurol Confections Company Illinois Wrigley Enterprises, Inc. Delaware The Wrigley Company Pty. Limited Australia Wrigley Austria Ges.m.b.H. Austria Wrigley Bulgaria EOOD Bulgaria Wrigley Canada Canada Wrigley (Cayman) Ltd. Cayman Islands Wrigley Chewing Gum Co. Ltd. People's Republic of China Wrigley Taiwan Limited Republic of China Wrigley Zagreb d.o.o. Croatia Wrigley s.r.o. Czech Republic The Wrigley Company Limited England Wrigley France SNC France Wrigley GmbH Germany Wrigley B.V. Holland Wrigley Europa B.V. Holland The Wrigley Company (H.K.) Limited Hong Kong Wrigley Hungaria, Kft. Hungary Wrigley India Private Limited India Wrigley Israel Ltd. Israel Wrigley & Company Ltd., Japan Japan The Wrigley Company (E.A.) Ltd. Kenya The Wrigley Company (Malaysia) Sdn. Bhd. Malaysia The Wrigley Company (N.Z.) Limited New Zealand Wrigley Philippines, Inc. Philippines Wrigley Poland Sp. zo.o. Poland Wrigley Romania Produse Zaharoase SRL Romania OOO Wrigley Russia Wrigley Slovakia, s.r.o. Slovakia Wrigley d.o.o. Slovenia Wrigley Co., S.A. Spain Wrigley Gida Ticaret Limited Sirketi Turkey Wrigley Ukraine TzoV Ukraine Companies included in consolidation, which are owned by wholly-owned associated companies of the Parent Company: 100% owned by The Wrigley Company Limited, England - Wrigley Scandinavia AB Sweden 100% owned by Wrigley Scandinavia, AB Sweden-OY Wrigley Scandinavia Ab Finland Wrigley Scandinavia AS Norway 100% owned by The Wrigley Company Pty. Limited, Australia - The Wrigley Company (P.N.G.) Ltd. Papua, New Guinea
NOTE: The list above excludes 100% owned subsidiaries which are primarily inactive and taken singly, or as a group, do not constitute significant subsidiaries. EX-24 4 0004.txt POWER OF ATTORNEY POWER OF ATTORNEY I understand that the information I am furnishing to you herein will be used by the Company in the preparation of its 2001 Proxy Statement or its Annual Report to the SEC on Form 10-K for the year ended December 31, 2000, or both. If I am a nominee for director, I shall be deemed to have consented, by virtue of executing this questionnaire, to being named as such in the Proxy Statement and to serve if elected. I also understand that should I discontinue my principal position, association or other identification that existed outside of the Company at the time of my most recent election to the Board of the Company, other than by reason of disability or retirement in accordance with the policies relative to that position, I shall tender my resignation as a director for consideration by the Nominating Committee and the full Board promptly following the date of my discontinuance of such position, association or identification. Further, should I consider any new or additional association or affiliation, such as directorships or similar positions by whatever title, with public or privately- held commercial enterprises, or should any preexisting association or affiliation substantially alter the nature of its activities or purposes, I shall advise the Chairman of the Board, and if there is no Chairman, the Chief Executive Officer of the Company, so that any potential conflict of interest or obligation, potential embarrassment to the Company, or possible inconsistency with Company policies, values or standards may be identified and assessed. In addition, by signing this Questionnaire, I hereby appoint William M. Piet, Howard Malovany and each of them as my full and lawful Power of Attorney to sign on my behalf, after my review, the Annual Report on Form 10-K to be prepared and filed with the Securities and Exchange Commission for the year ended December 31, 2000. Date Signature EX-99 5 0005.txt FORWARD-LOOKING STATEMENTS FORWARD-LOOKING STATEMENTS From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects and operations, capital expenditures, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of important factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The important factors that may affect the operations, performance, development and results of the Company's business include the following: - - In those markets where the Company maintains market leadership, it will most likely retain preferred retail space allocation which enhance results. - - Availability, pricing and sourcing of raw materials has been relatively stable and a competitive advantage but failure to maintain these could negatively impact results. - - The Company has historically been successful marketing to different segments of the population. Failure to adequately anticipate and react to changing demographics and product preferences could negatively impact results. - - Both manufacturing and sales of a significant portion of the Company's products are outside the United States and could be negatively impacted by volatile foreign currencies and markets. - - The Company competes worldwide with other well established manufacturers of chewing gum. The Company's results may be negatively impacted by a failure of new or existing products to be favorably received, by ineffective advertising, or by failure to sufficiently counter aggressive competitive actions. - - Underutilization of or inadequate manufacturing capacity due to unanticipated movements in consumer demands could materially affect manufacturing efficiencies and costs. - - Discounting and other competitive actions may make it more difficult for the Company to maintain its historically strong operating margins. - - Governmental regulations with respect to import duties, tariffs and environmental controls, both in and outside the U.S., could negatively impact the Company's costs and ability to compete in domestic or foreign markets. - - The Company has not had any material labor stoppages, nevertheless, such disputes or strikes could negatively affect shipments from suppliers or shipment of finished product. - - The failure of basic infrastructure (i.e., utilities) could negatively impact the ability of the Company's factories to continue operating. -----END PRIVACY-ENHANCED MESSAGE-----