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Per-share amounts
Net earnings per share of common stock $ 1.61
Dividends paid per share of common stock $ 0.745
$ 2,145,706 $ 2,061,602
904,266 904,183
1,241,440 1,157,419
778,197 721,813
463,243 435,606
19,185 17,636
(3,116) (8,812)
479,312 444,430
150,370 136,247
$ 328,942 $ 308,183
$ 1.45 $ 1.33
$ 0.70 $ 0.66
The Wim. Wrigley Jr. Company
Consolidated Balance Sheet
(in thousands of dollars)
ASSETS
Current assets:
Cash and equivalents
Short-term investments, at amortized cost
Accounts receivable
Inventories
Finished goods
Raw materials and supplies
$ 307,785 $ 300,599
25,450 29,301
239,885 191,570
75,693 64,676
203,288 188,615
278,981 253,291
46,896 39,728
14,846 14,226
913,843 828,715
25,300 28,535
115,745 83,713
26,381 26,743
39,933 39,125
359,109 344,457
857,044 756,050
1,256,086 1,139,632
571,717 532,598
684,379 607,034
$ 1,765,648 $ 1,574,740
$ 91,225 $ 73,129
128,406 113,779
42,711 39,467
68,437 60,976
1,455 859
332,234 288,210
43,206 40,144
113,921 113,489
12,646 12,558
2,850 2,938
1,153 346
1,684,337 1,492,547
(289,799) (256,478)
(134,900) (119,014)
1,276,287 1,132,897
$ 1,765,648 $ 1,574,740
$1,500
Wrigley
$1,400
$1,300
$1,200
$1,100
S&P Food
Beverage &
Tobacco Index
$1,000
$800
$700
$600
0 0 0 0 1 1 1 1 1 1 2 2 2
200 2 00 200 200 2 00 2 00 200 2 00 200 200 200 2 00 200
1/ 1/ /1
/
/1
/ 1/ 1/ 1/ 1/ /1
/
/1
/ 1/ 1/ 1/
6/ 8/ 10 12 2/ 4/ 6/ 8/ 10 12 2/ 4/ 6/
Financial Characteristics of Major Confectionary Firms
Common
Shares Market Value
Outstanding of Equity
Company Name Recent Price (millions) (millions)
Cadbury Schweppes plc $ 26.66 502.50 $ 13,397
Hershey Foods Corp. $ 65.45 136.63 $ 8,942
Kraft Foods $ 38.82 1,735.00 $ 67,353
Tootise Roll Industries Inc. $ 31.17 51.66 $ 1,610
Wm. Wrigley Jr. Co. $ 56.37 232.44 $ 13,103
S&P 500 Composite $ 1,148.08
Interest Compound
Cash Dividend Dividend Coverage Growth of EPS Firm Value/
Dividend Payout Yield Before Tax Past 5 Yrs EBITDA
$ 0.67 44.0% 2.50% 4.6x 6.50% 10.3
$ 1.16 41.0% 2.00% 11.1x 6.50% 11.4
$ 0.26 12.0% 1.50% 3.4x nmf 10.1
$ 0.28 22.0% 0.90% nmf 12.50% 14.6
$ 0.75 46.0% 1.50% nmf 9.00% 22.6
-49.57%
Key Industrial Financial Ratios (Three-year medians 2000-2002)
Investment Grade
AAA
EBIT interest coverage (x) 23.4
Funds from operations/total debt (%) 214.2
Free operating cash flow/total debt (%) 156.6
Return on capital (%) 35.0
Operating income/sales (%) 23.4
Long-term debt/capital (%) (1.1)
Total debt/capital, incl. short-term debt (%) 5.0
Definitions:
EBIT interest coverage divides earnings before interest and taxes (EBIT) by gross interest expense (before subtracting capitalized interest and interest income).
FFO/total debt divides funds from operations (FFO) by total debt. FFO is defined as net income from continuing operations, depreciation and amortization, deferred in
debt + current maturities + commercial paper, and other short-term borrowings.
Free operating cash flow/total debt. Free operating cash flow is defined as FFO - capital expenditures - (+) increase (decrease) in working capital (excluding changes
current maturities, commercial paper, and other short-term borrowings.
Total debt/EBITDA. Long-term debt + current maturities, commercial paper, and other short-term borrowings/Adjusted earnings from continuing operations before int
Return on capital. EBIT/Average of beginning of year and end of year capital, including short-term debt, current maturities, long-term debt, noncurrent deferred taxes,
Total debt/capital. Long-term debt + current maturities, commercial paper, and other short-term borrowings/Long-term debt + current maturities, commercial paper, an
stock) + minority interest.
Source: Standard & Poor’s Corporate Ratings Criteria 2005, New York: Standard & Poor’s Corporation, page 42.
Investment Grade Non-Investment Grade
AA A BBB BB B
13.3 6.3 3.9 2.2 1.0
65.7 42.2 30.6 19.7 10.4
33.6 22.3 12.8 7.3 1.5
26.6 18.1 13.1 11.5 8.0
24.0 18.1 15.5 15.4 14.7
21.1 33.8 40.3 53.6 72.6
35.9 42.6 47.0 57.7 75.1
ng operations, depreciation and amortization, deferred income taxes, and other noncash items/Long-term
crease (decrease) in working capital (excluding changes in cash, marketable securities, and short-term debt)/Long-term debt +
Adjusted earnings from continuing operations before interest, taxes, and depreciation and amortization.
nt maturities, long-term debt, noncurrent deferred taxes, minority interest, and equity (common and preferred stock).
ng-term debt + current maturities, commercial paper, and other short-term borrowings + shareholders' equity (including preferred
Capital Market Conditions, June 7, 2002
5%
Corporate debt obligations (10 year) Yield
4%
AAA 9.307%
AA 9.786% 3%
A 10.083% 2%
BBB 10.894% 1%
BB 12.753% 0%
B 14.663% 3 mos. 6 mos.
June 7, 2002
6%
5%
4%
3%
2%
1%
0%
3 mos. 6 mos. 1 yr. 2 yr. 3 yr. 5 yr. 7 yr. 10 yr. 20 yr.
EPS v. EBIT Analysis
Before recapitalization Worst case Most likely Best case After recapitalization
Operating income (EBIT) Operating income (EBIT)
Interest expense Interest expense
Taxable income Taxable income
Taxes Taxes
Net income Net income
Shares outstanding Shares outstanding
Earnings per share Earnings per share
After recapitalization
S&P 500
WRIGLEY WILLIAM COMPOSITE -
Name JR. PRICE INDEX