Wrigley Brands

WM. WRIGLEY JR . COMPANY | 2002 ANNUAL REPORT

. . . woven into the fabric of

everyday life around the world

Financial Highlights 3

President’s Letter 4

Management’s Discussion and Analysis 14

Quarterly Data 20

Selected Financial Data 22

Report of Management and Report of Independent Auditors 24

Consolidated Statement of Earnings 25

Consolidated Balance Sheet 26

Consolidated Statement of Cash Flows 28

Consolidated Statement of Stockholders’ Equity 29

Accounting Policies and Notes toConsolidated Financial Statements 30

Elected Officers 39

Board of Directors 40

Stockholder Information 41

Corporate Facilities and Principal Associated Companies 43

Wrigley Brands 44

C O N T E N T S

Building Brands. For more than

a century, the Wrigley Company has been defined by

its brands. This iconic portfolio has brought fun, flavor

and quality to millions of consumers across the globe

for generations. Today, the personalities of Wrigley

brands have never been more vibrant. In the U.S.,

long-standing favorites including Wrigley’s Spearmint,

Doublemint and Juicy Fruit have been recreated with

longer-lasting taste and bold new packaging to ensure

that they will remain a vital part of the confectionery

landscape for generations to come. More recently

introduced Wrigley confections like Eclipse Flash

strips and Orbit Drops are delivering great benefits

and taste in forms completely new to Wrigley. These

non-gum brands help further define Wrigley as an

innovator in confections and an expert in delivering

what consumers want – whether its dental benefits,

fresh breath, throat soothing, or just great taste.

2002 2001

Net Sales $ 2,746,318 $ 2,401,419

Net Earnings $ 401,525 $ 362,986

– Per Share of Common Stock (basic and diluted) $ 1.78 $ 1.61

Dividends Paid $ 181,232 $ 167,922

– Per Share of Common Stock $ .805 $ .745

Additions to Property, Plant and Equipment $ 216,872 $ 181,760

Stockholders' Equity $ 1,522,576 $ 1,276,197

Return on Average Equity 28.7 % 30.1 %

Stockholders of Record at Close of Year 40,534 38,701

Average Shares Outstanding (000) 225,145 225,349

For additional historical financial data see page 22.

F I N A N C I A L H I G H L I G H T S

In thousands of dollars except per share amounts

3

It is during unsettled times like these that the clarity and

consistency of our vision, mission, values and strategies

are particularly important. Equally essential are the

unique talents of our team and their ability to work

together seamlessly to execute our plans in the global

marketplace. All of this enables us to stand out against

the competition and continue to build shareholder value.

There have been notable changes within the chewing

gum business and the broader confectionery industry

that will continue to impact the Wrigley Company.

Acceleration of sales growth for chewing gum in recent

years, largely due to our new product initiatives, has

attracted attention and spurred activity. New players are

entering our core business and various competitive

brands have been changing hands. Notably, Cadbury has

been adding chewing gum companies to its portfolio and

within the last year, acquired Dandy (a Danish gum

maker and our principal competitor in Russia) and

agreed to purchase Adams confectionery (our nearest

competitor in the United States).

Given the new field of play, it is more important than

ever to reiterate the commitment present at every level

of our organization to executing against our six core

strategic choices:

– Boosting our core business

– Expanding our business into new geographies and distribution channels

Two thousand and two was a very successful year for your Company, as we achieved

record levels of product shipments, sales and earnings worldwide. These gains were made

against a backdrop of economic and political uncertainty in a number of geographies as

well as a shifting competitive landscape within our industry.

T O O U R S T O C K H O L D E R S A N D T H E W O R L D W I D E W R I G L E Y T E A M :

– Diversifying close to home

– Maintaining a focus on innovation

– Delivering the highest quality at the lowest cost

– Growing and developing our people

Although all six remain critical, three played especially

significant roles in 2002 – diversification, core business

expansion and innovation – and so it is worthwhile to

discuss them in more detail and to understand their

importance for our continued success.

This past year, we executed against our strategic choice

to “diversify close to home” by pursuing a business

combination with Hershey Foods. While the Wrigley-

Hershey transaction did not take place, it is important to

share with you key considerations that speak to our

merger and acquisition philosophy and how these

principles will remain a steadfast component of our

approach to similar opportunities in the future.

Our motivation was pure and simple – it was a unique

opportunity that made good business sense on many

levels, and we had the talent and resources to fully

capitalize on it and deliver results. Our due diligence, our

offer and our plans for the integrated organization were

thorough, thoughtful, strategic, and extremely well-

executed. Our detailed analysis reinforced the tremendous

synergies, consumer growth opportunities and value

creation inherent in the envisioned combination of our

companies. Additionally, the many similarities in heritage,

culture and values, and the complementary nature of the

respective product lines, iconic brands and geographic

strengths, made this potential transaction very attractive.

As with any such bold business move, there was risk

involved; but measured risk-taking is one of the Wrigley

Company’s key values and is necessary to grow the business.

Going forward, we reaffirm our intention to pursue

confectionery acquisitions around the world, while

remaining dedicated to doing what is right for our

business and for our stakeholders. We will be driven

to create significant value, seeking a tight fit with our

core competencies, our strategic long-term plan and

our Company values and focusing on potential growth

synergies as opposed to just cost synergies.

The path to our successful future will never be set

in stone – we must remain flexible and continue to

explore multiple strategies and parallel initiatives to

give ourselves the best possibility of achieving robust,

generational growth. Were we disappointed that the

Wrigley-Hershey combination did not come together

as planned? Absolutely. Did it prevent us from making

substantial progress in 2002? Absolutely not. Even if the

right acquisition opportunity does not present itself, we

will move forward confident in the knowledge that our

core business is healthy and growing, as evidenced by the

significant organic growth generated by our internally

developed line extensions and new confectionery items.

Turning to our core business expansion, a key competi-

tive advantage for the Wrigley Company and central to

our success is our portfolio of iconic brands, trusted by

consumers around the world. Some have been around

for more than a century, while others have yet to reach

their first anniversary. Though different in form, taste

and function, they are all grounded in deep

consumer understanding and deliver quality, value

and meaningful consumer benefits. This past year saw

a significant increase in our already strong levels of

marketing investment in our brands – both new and old

– with impressive sales results.

In the U.S., three of our longest established brands –

Wrigley’s Spearmint®, Doublemint® and Juicy Fruit® – were

modified with improved formulas, updated packaging,

and new marketing campaigns intended to grab people’s

attention and satisfy the next generation of Wrigley

consumers. Change of this magnitude is often difficult,

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and we recognize that it may be disconcerting for some

longstanding consumers; however, ensuring the vitality

of our brands requires their thoughtful evolution and

renewal – a delicate blending of past, present and future.

These initiatives – along with our support of the vigorous

growth of Orbit® and Eclipse® in the U.S., the continuing

expansion of our international Airwaves brand franchise,

and the introduction of a new product format with

X•Cite™ – all reaffirm our commitment to our first strategic

choice of “boosting the core chewing gum business.”

Finally, our focus on innovation – in our products, processes,

and systems – is providing us with essential building blocks

for future growth. In 2002, we

unveiled Eclipse Flash™ strips (fla-

vorful, dissolvable films for instant

fresh breath) and Orbit Drops™

(sugar-free lozenges). In addition

to being innovative, they also sup-

port our strategic choice to

diversify our business “close to

home.” Both of these confectionery

expansions build upon our

existing expertise in flavor, oral

and dental benefits, imaginative packaging, wide-

spread distribution, and effective advertising. These

products are still in their relative infancy, but customer

and consumer response to date has been very positive.

Our internal development initiatives continue to add to

our new product pipeline with innovative and attractive

confectionary offerings for 2003 and beyond.

All of these opportunities and accomplishments are very

exciting and bode well for Wrigley’s future, but they also

make our business more complex. Our strategic path

dictates the need for a robust technology infrastructure

in order to remain a leader in the marketplace. Over the

past year, we took some major steps forward in our

ongoing implementation of global enterprise software,

including the conversion of our operations in Western

Europe and the Americas. As of this time, over 60% of the

worldwide Wrigley organization is operating on a unified

systems platform. This could not have been achieved

without the tremendous effort and dedication of our

people across a number of functions and regions who are

single-minded in their determination to use technology

to add value to what we offer our consumers, customers

and associates.

The global integration of our operating and financial

systems makes us a more power-

ful manufacturer and an agile

partner to both our suppliers

and our customers. It will pro-

vide us with more complete,

higher quality data on a more

timely basis. We will be in a bet-

ter position to share data and

learnings with our supply chain

partners and to squeeze ineffi-

ciencies out of the system.

Easier access to consumer behavior insights will afford

us the ability to respond to their needs in even more

meaningful ways. Finally, our associates in manufactur-

ing will achieve even greater productivity thanks to infor-

mation and shared knowledge being placed at their fin-

gertips.

It is clear to me that 2002 was a milestone year for the

Wrigley Company, and I firmly believe that our team of

talented people, who bring their passion and commit-

ment to work with them everyday, deserve the credit and

our deepest gratitude for the impressive accomplish-

ments of the past twelve months. From Chicago to

Munich to Guangzhou – from the factory floor to the

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satellite offices to the Wrigley Building – every member

of our team operates from the same foundation of ethics

and shared values, with an emphasis on treating those

with whom we interact with trust, dignity and respect.

This year has tested our mettle, and Wrigley associates

have answered the call with creativity, cooperation

and dedication.

I would also like to acknowledge the strength and

commitment of our Board of Directors. Their broad range

of experience and expertise are brought to bear on our

Company with enthusiasm and vigor. They take their

corporate governance responsibilities seriously, and

have made it their business to really know our business.

As a result, they provide valuable perspectives and keen

insights on growth opportunities and strategic direction,

while helping to preserve the Company’s values.

Our future holds many opportunities for success on a

variety of fronts, and we are committed to pursuing them

vigorously. With your continued support, we will maintain

our aggressive pace of operations and innovation to grow

and expand our business, remain top of mind with

consumers and customers, and create additional value

for all our stakeholders around the world.

Sincerely,

William Wrigley, Jr.

President and Chief Executive Officer

Wrigley Values. In our pursuit of

generational growth and prosperity for our stakeholders

the entire Wrigley organization is committed to acting

in a manner consistent with the shared values we

hold paramount:

– 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.

R E G I O N A L S A L E S G R O W T HIndex Versus 1998

R E G I O N A L S A L E SAs a Percent of Total Company Sales

'98 '99 '00 '01 '02

100 102

109

121

137

Americas

8

42%

Building on the strength and success of the Eclipse brand

and its breath-freshening benefits, Eclipse Flash strips

were introduced in the U.S. in 2002 as the first non-gum

product under the Wrigley banner. In January 2003, a

new spearmint flavor was added to the Eclipse Flash

line and the Winterfresh brand was extended to include

Winterfresh Thin Ice™.

In addition to entering new confectionery categories, the

Americas continued to boost its core chewing gum business.

Doublemint, Wrigley’s Spearmint and Juicy Fruit were

improved with longer-lasting formulas and bold, new

graphics. The Orbit brand added a new spearmint offering

and continued to build distribution, sales and consumer

loyalty. At Amurol, the popular Bubble Tape brand

continued to do well in the U.S. and was modified for a

new appearance in Europe and Canada under the

Hubba Bubba brand.

Canada is also leveraging innovations with Juicy Fruit.

The brand is enjoying a surge in popularity in a sugarfree

pellet format and, this past year, new Juicy Fruit Red

added another dimension of great fruit taste.

Excellence in executing new product launches and brand

extensions has helped spur growth in the Americas region

and driven positive business results.

Wrigley’s chewing gum business in the Americas is vital and growing. In the U.S. and

Canada, new product offerings are delivering added value, while long-standing favorites

are enjoying rejuvenation. Amurol Confections continues to capture the imagination of

children, while in Latin America, Wrigley is exploring opportunities to reach consumers.

Higher shipment volumes and new products led to a 13% sales increase in the Americas region this year.

Breaking NewGround with

Wrigley Brands

9

'98 '99 '00 '01 '02

100 101 100

112

133

R E G I O N A L S A L E S G R O W T HIndex Versus 1998

R E G I O N A L S A L E SAs a Percent of Total Company Sales

EMEAI

10

43%

EMEAI is Wrigley’s largest geographic region including

Europe, the Middle East, Africa and India. Europe

represents the majority of the region, and Wrigley’s port-

folio of brands there continues to create excitement in the

confectionery category. The popular Airwaves brand

added a new Spicy Cocktail flavor this year, and the

Hubba Bubba brand expanded to include Hubba Bubba

Bubble Tape in Germany, the U.K. and France. While

these products helped boost Wrigley’s core business, new

product offerings supported diversification into other

confectionery areas. Orbit, one of the best selling gum

brands in the region, expanded to include Orbit Drops,

sugarfree lozenges available in four great flavors. The

Extra brand also evolved with the introduction of Extra

Thin Ice films, a new entry in the breath strip arena.

Also launched in 2002 was X•Cite, a new confectionery

experience with powerful mint taste. A multi-national

team worked together to create a consumer brand that

transcended geographic boundaries and then rolled the

product out across a large portion of Europe.

The expertise of country and regional teams working

together have driven increases in consumption and

expanded Wrigley’s business in target geographies.

Delivering great-tasting, high quality brands that cross borders and appeal to consumers

in approximately 100 different countries is no small challenge. The EMEAI team continues

to deliver positive results by creating brands and strategies that generate business across

the region and help to increase chewing gum consumption.

Building WrigleyBrands that

Cross Borders

The EMEAI region delivered strong volume gains and an 18% sales increase in 2002.

11

R E G I O N A L S A L E S G R O W T HIndex Versus 1998

R E G I O N A L S A L E SAs a Percent of Total Company Sales

'98 '99 '00 '01 '02

100

112

125

149

162

15%

Asia/Pacific

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Asia’s large population and lower average chewing gum

consumption present opportunities for Wrigley. It also has

its challenges, with cultural and economic differences

across the countries that make up the region. Wrigley’s

team in Asia has increased consumption by delivering

products with tastes and benefits that meet the needs of

consumers and offering varying price points so as to

make Wrigley’s gum an affordable daily pleasure for all.

These products include Extra sugarfree gum in several

fruit flavors, and Airwaves and Cool Air brands with

vapor release formulas.

In the Pacific, consumers have enjoyed and been loyal

to Wrigley brands like P.K. for more than 80 years.

Sugarfree Extra, Wrigley’s number one brand in the region,

continues to deliver dental benefits and appeal to

consumers with its flavor variety. New products like X•Cite

and extensions of the Extra for Kids brand are creating

excitement in the chewing gum category. Keeping product

news fresh and quality high, the Pacific team has

continued to maintain a leadership position in this

important region despite aggressive competitive activity.

In both Asia and Pacific, local insights have led to

successful strategies and products that offer the right

balance of benefit, taste and value for their consumers.

Parts of Asia, like Taiwan and the Philippines, have been home to Wrigley products for

many years. Other countries in the region, particularly China, are still fairly new. The

Pacific region is one of Wrigley’s most well established international geographies. How

do you generate growth in these diverse environments? By tailoring brands to increase

consumption and Wrigley’s presence in everyday life.

This year’s sales growth of 9% in the combined Pacific and Asia regions reflects higher volume shipments, new product

contributions and growing consumption.

Tailoring WrigleyBrands to Increase

Consumption

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M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S O F R E S U L T S O F O P E R A T I O N S A N D F I N A N C I A L C O N D I T I O N

Dollar and share amounts in thousands except per share figures

In the first quarter 2002, the Company adopted the

accounting rules for Emerging Issues Task Force Issue

No. 00-14, “Accounting for Certain Sales Incentives” and

No. 00-25, “Vendor Income Statement Characterization of

Consideration Paid to a Reseller of the Vendors Products”

(“Issues”), as codified by Issue No. 01-09 “Accounting for

Consideration Given by a Vendor to a Customer or Reseller

of the Vendors Products.” In adopting these accounting

rules, the Company began reporting cash consideration

given in connection with certain consumer and trade sales

promotions such as coupon redemptions, in-store display

incentives, co-operative advertising and new product

introduction fees, as deductions from sales rather than

as selling, general and administrative expense. The

consumer and trade sales promotions applicable to these

Issues totaled $41,034, $28,227 and $19,592 for 2002, 2001

and 2000, respectively. Adoption of these accounting rules

had no impact on the Company’s financial position or

net earnings. The consumer and trade sales promotions

applicable to these Issues are reflected in net sales for

all periods presented in this discussion, the quarterly

and selected financial data, the financial statements

and related notes.

RESULTS OF OPERATIONS

Net Sales

Consolidated net sales for 2002 increased $344,899 or 14%

The Management’s Discussion and Analysis reviews the Company’s results of operations,

liquidity and capital resources, critical accounting policies and estimates, and certain

other matters. This discussion should be read in conjunction with the consolidated

financial statements and related notes contained in this Annual Report.

from 2001. Net sales for 2002 were favorably affected by

higher worldwide shipments and favorable product mix.

Higher worldwide shipments, including the introduction

of new products, increased net sales by 8%. New products

accounted for 22.9% of net sales in 2002. Favorable mix

from premium priced products increased net sales by 4%.

Translation of foreign currencies to a weaker U.S. dollar

increased reported net sales by approximately 2%.

Net sales for the Americas in 2002 increased 13%

compared to 2001. Favorable product mix increased net

sales 7%, due mainly to increased U.S. sales of Eclipse®

and Orbit® gum and the introduction of Eclipse® Flash

strips. Higher shipment volume in the U.S. and Canada,

as well as for Amurol Confections, increased net sales for

the Americas by 6%.

International 2002 net sales increased by 16% as a result of

growth in shipment volume, favorable product mix,

selected selling price changes and translation of foreign

sales to a weaker U.S. dollar. Unit volume increased net

sales by 8% over 2001, due primarily to growth in Russia,

China, France, the U.K., and numerous other international

markets. Net sales were also favorably impacted by new

product introductions in all regions. Favorable mix from

premium priced products both in Europe and Asia

increased International net sales by 3%, while selected

selling price changes primarily in Europe and Australia

14

contributed 1% to International net sales growth.

International net sales were increased by 4% as a result

of translation of foreign currencies, primarily in Europe, to

a weaker U.S. dollar.

Consolidated net sales for 2001 increased $275,305 or 13%

from 2000. Net sales for 2001 were favorably affected by

higher worldwide shipments, selected selling price

changes, and product mix. Higher worldwide shipments,

including the introduction of new products, increased net

sales by 10%. New products accounted for 19.6% of net

sales in 2001. Selected selling price changes increased net

sales by 3%, while favorable mix from premium priced

products increased net sales by 2%. Translation of foreign

currency sales to a stronger U.S. dollar reduced reported

net sales by approximately 2%.

Net sales for the Americas in 2001 increased 12% compared

to 2000. Higher shipment volume, primarily in the U.S.

and Latin American markets, as well as for Amurol

Confections, increased net sales for the Americas by 8%.

Favorable product mix increased net sales 3%, due mainly

to increased U.S. sales of Eclipse® and the introduction of

Orbit®. Net sales also increased 1% as a result of selected

selling price increases.

International 2001 net sales increased by 13% as a result of

growth in shipment volume, selected selling price changes

and favorable product mix, partially offset by translation of

foreign currencies to a stronger U.S. dollar. Unit volume

increased net sales by 11% over 2000, due primarily to

growth in China, Russia and numerous other international

markets. Net sales were also favorably impacted by new

product introductions across all regions. Selected selling

price changes increased International net sales by 4%,

while favorable mix from premium priced products both in

Europe and Asia contributed 2% to International net sales

growth. International net sales were reduced by 4% as a

result of translation of foreign currencies, primarily in

Europe and Australia, to a stronger U.S. dollar.

Cost of Sales and Gross Profit

In 2002, consolidated cost of sales increased $153,161, or

15% from 2001. Excluding the effect of foreign currency

translation, the cost of sales increase was approximately

14% from 2001. Higher worldwide shipments increased

cost of sales by 8%. Higher costs due to worldwide product

mix increased cost of sales by 5%. Slightly higher

worldwide product costs increased cost of sales by 1%.

Consolidated gross profit in 2002 was $1,596,103, an

increase of $191,738 or 14% from 2001. The consolidated

gross profit margin on net sales was 58.1% for 2002,

down 0.4 percentage points from the 2001 gross margin

of 58.5%, mainly due to slightly higher product costs.

In 2001, consolidated cost of sales increased $92,788,

or 10% from 2000. Excluding the effect of foreign currency

translation, the cost of sales increase was approximately

13% from 2000. Higher worldwide shipments increased

cost of sales by 10%. Higher costs due to worldwide

product mix increased cost of sales by 3%. Consolidated

gross profit in 2001 was $1,404,365, an increase of $182,517

or 15% from 2000. The consolidated gross profit margin

on net sales was 58.5% for 2001, up 1 percentage point

from the 2000 gross margin of 57.5%, mainly due to the

combination of higher selling prices, favorable product

mix and lower product costs.

Selling, General and Administrative Expenses

Consolidated 2002 selling, general and administrative

(SG&A) expenses were $1,011,029, up $120,020 or

13% from 2001. Excluding the impact of foreign

currency translation, consolidated selling, general and

administrative expenses were up 12% in 2002. Higher

brand support in the Americas, Europe and Pacific regions,

including spending behind new and improved products

increased SG&A by 5%. Higher selling and other marketing

expenses to support growth in the U.S., Russia, China and

other key markets increased SG&A by 3%. Finally, general

and administrative expenses increased SG&A by 4%.

15

The increase included higher investment in new technology

and research and development. Also contributing to the

increase were approximately $10,000 in costs connected

with the exploration of a business combination with

Hershey Foods Corporation.

Consolidated 2001 SG&A expenses increased $132,404 or

17% from 2000. Excluding the effects of foreign currency

translation, the increase was approximately 20% in

2001. Higher worldwide merchandising and consumer

promotion expenditures, including spending to support

new product launches, increased SG&A by 5%. Increases

in advertising spending, primarily in Europe and Asia,

increased SG&A by 3%. Selling and other marketing spend-

ing increases in the U.S., Russia, China, the U.K. and

other key markets increased SG&A by 5%. Finally, higher

worldwide general and administrative spending increased

SG&A by 4%.

As a percentage of consolidated net sales, SG&A expenses

were as follows:

2002 2001 2000

Advertising 13.2% 13.7% 14.5%

Merchandising & Promotion 4.8% 4.8% 3.5%

Total Brand Support 18.0% 18.5% 18.0%

Selling and Other Marketing 9.9% 10.0% 9.4%

General and Administrative 8.9% 8.6% 8.3%

36.8% 37.1% 35.7%

Investment Income

The Company earns investment income primarily from

the cash and cash equivalent and short-term investment

balances it maintains throughout the year. In 2002,

consolidated investment income decreased $9,635 from

2001. The decrease reflected lower worldwide yields in

2002 and interest income received from a U.S. tax refund

in the third quarter of 2001.

In 2001, consolidated investment income decreased $632

or 3% from 2000. The decrease was primarily due to lower

worldwide yields, partially offset by interest income from

a U.S. tax refund.

Other Expense

In 2002, other expense was $10,571, up $6,028 from 2001.

The increase in expense was driven primarily by foreign

currency transaction losses, mostly caused by a weaker

U.S. dollar.

In 2001, other expense was $4,543, an increase of $1,427

from 2000. The change was driven primarily by foreign

currency transaction losses in Europe.

Income Taxes

Income taxes in 2002 were $181,896, up $17,516 or 11%

from 2001. The result is due primarily to an increase in

pretax earnings of $56,055 or 11%. The consolidated

effective income tax rate in 2002 was 31.2%.

Income taxes in 2001 were $164,380, up $14,010 or 9% from

2000. The result is due primarily to an increase in pretax

earnings of $48,054 or 10%. The effective consolidated

income tax rate in 2001 was 31.2%.

Net Earnings

Consolidated net earnings in 2002 totaled $401,525,

up $38,539 or 11%. On a per share basis, net earnings

increased $.17 or 11% from 2001.

Consolidated net earnings in 2001 increased $34,044

or 10%. On a per share basis, net earnings increased

$.16 or 11% from 2000.

LIQUIDITY AND CAPITAL RESOURCES

Operating Cash Flow and Current Ratio

Net cash provided by operating activities in 2002 was

$374,435 compared with $390,491 in 2001 and $448,283

in 2000. The decrease from 2001 is primarily due to

pension and post-retirement plan contributions paid

which increased $75,800 from 2001 and higher working

capital requirements, mostly offset by increased earnings.

The decrease in 2001 compared to 2000 was mainly due

to higher working capital requirements as a result of

increased sales in 2001, combined with working capital

16

reductions in 2000. The Company had a current ratio

(current assets divided by current liabilities) in excess

of 2.6 to 1 at December 31, 2002 and in excess of 2.7 to 1

at December 31, 2001. The Company’s current ratio

has decreased as a result of higher pension and post-

retirement plan contributions in 2002.

Additions to Property, Plant and Equipment

Capital expenditures for 2002 were $216,872, an increase

of $35,112 from the 2001 capital expenditures of $181,760.

The increase was due primarily to spending in order to

increase worldwide manufacturing capacity, including

spending to support new product introductions and

expenditures on the Company’s global enterprise resource

planning (ERP) systems project. Capital expenditures for

2001 were $181,760, an increase of $56,692 from the 2000

capital expenditures of $125,068. The increase was due

primarily to spending in order to increase worldwide

manufacturing capacity and expenditures on the global

ERP systems project. Additions to property, plant and

equipment in 2003 are expected to be slightly lower than

2002 levels and are also planned to be funded from the

Company’s cash flow from operations.

Share Repurchases

In 2002, the Company repurchased 527 shares totaling

$27,759, including 483 shares totaling $25,504 under

the Board of Directors authorized Share Repurchase

Program and 44 shares totaling $2,255 under the

shareholder approved Management Incentive Plan (MIP).

At December 31, 2002, $89,258 remained unpurchased

under the Share Repurchase Program. In 2001, the

Company repurchased 744 shares totaling $36,432,

including repurchases under the Board of Directors

authorized Share Repurchase Program of 704 shares

totaling $34,652, net of proceeds received from the sale

of put options on Company stock. In 2001, the Company

also repurchased 40 shares totaling $1,780 under the

shareholder approved MIP.

Line of Credit

In September 2002, the Company renewed its $100 million,

unsecured, line of credit. There were no borrowings under

this line during 2002. Upon drawing on the line of credit,

the Company has the option to elect a fixed or floating

interest rate. The line of credit expires in September 2003.

Contractual Obligations

In its normal course of business, the Company enters into

arrangements that obligate the Company to make future

payments under contracts such as leases and unconditional

purchase obligations. The Company enters into these

arrangements in its normal course of business in order

to ensure adequate levels of raw materials, office and

warehousing space and machinery, equipment or

services for significant capital projects. Of these items,

capital leases, which total $5,149, are currently recognized

as liabilities in the Company’s consolidated balance

sheet at December 31, 2002. There were no capital lease

obligations at December 31, 2001. Operating lease

obligations and unconditional purchase obligations, which

total $647,447 and are primarily related to normal

anticipated raw material requirements for 2003, are not

recognized as liabilities in the Company’s consolidated

balance sheet in accordance with generally accepted

accounting principles.

A summary of the Company’s contractual obligations at

the end of 2002 is as follows:

Payments due by periodContractual Less than 2-3 4-5Obligations Total 1 Year Years Years Thereafter

Capital lease obligations $ 6,444 2,516 3,367 561 —

Operating leases 35,467 10,269 13,042 5,999 6,157

Purchase obligations 611,980 536,594 75,319 67 —

Total $653,891 549,379 91,728 6,627 6,157

Additionally, the Company does not have any related party

transactions that materially affect the Company’s results

of operations, cash flows or financial condition.

17

OTHER MATTERS

Critical Accounting Policies and Estimates

The Company’s significant accounting policies are

discussed in the notes to the consolidated financial

statements. The application of certain of these policies

requires significant judgments or an estimation process

that can affect the results of operations, financial position

and cash flows of the Company, as well as the related

footnote disclosures. The Company bases its estimates

on historical experience and other assumptions that it

believes are reasonable. If actual amounts are ultimately

different from previous estimates, the revisions are

included in the Company’s results of operations for

the period in which the actual amounts become known.

The accounting policies and estimates with the greatest

potential to have a significant impact on the Company’s

operating results, financial position, cash flows and

footnote disclosures are as follows:

Allowance for Doubtful Accounts — In the normal course

of business, the Company extends credit to customers

that satisfy pre-defined credit criteria. An allowance for

doubtful accounts, which is reported as part of accounts

receivable, is determined through an analysis of the aging

of accounts receivable, assessments of collectibility based

on historical trends and an evaluation of current and

projected economic conditions at the balance sheet date.

Actual collections of accounts receivable could differ

from management’s estimates due to changes in future

economic or industry conditions or specific customers’

financial condition.

Valuation of Long-lived Assets — Long-lived assets,

primarily property, plant and equipment, are reviewed

for impairment as events or changes in circumstances

occur indicating that the amount of the asset reflected

in the Company’s balance sheet may not be recoverable.

An estimate of undiscounted cash flows produced by the

asset, or the appropriate group of assets, is compared to the

carrying value to determine whether impairment exists.

The estimates of future cash flows involve considerable

management judgment and are based upon assumptions

about expected future operating performance.

The actual cash flows could differ from management’s

estimates due to changes in business conditions,

operating performance, and economic conditions.

Pension and Other Post-Retirement Plan Benefits —

The Company sponsors pension and other post-retirement

plans in various forms covering substantially all employees

who meet eligibility requirements. Independent actuaries

perform the required calculation to determine pension

and other post-retirement plan expense, in accordance

with accounting principles generally accepted in the U.S.

Several statistical and other factors which attempt to

anticipate future events are used in calculating the

expense and liability related to the plans. These factors

include assumptions about the discount rate, expected

return on plan assets, rate of future employee

compensation increases and trends in healthcare costs.

In addition, the Company also uses subjective actuarial

assumptions such as withdrawal and mortality rates

to estimate these factors. The actuarial assumptions

used by the Company may differ from actual results due

to changing market and economic conditions, higher

or lower withdrawal rates or longer or shorter life spans

of participants. These differences may impact the

amount of pension and post-retirement liability and

expense recorded by the Company.

In 2003, the Company will decrease the long-term rate

of return assumption for its domestic plan assets from

9.25% to 8.75%. The company expects pension expenses

to increase by approximately $11,000 in 2003 as a result

of the change in rate of return assumption in 2003 and

a decrease in discount rates in 2002 for the domestic

and certain foreign pension plans.

Income Taxes — Deferred taxes are recognized for the

future tax effects of temporary differences between

financial and income tax reporting using tax rates in effect

for the years in which the differences are expected to

18

reverse. Federal income taxes are provided on that portion

of the income of foreign subsidiaries that is expected

to be remitted to the United States and be taxable. The

Company, along with third-party advisers, periodically

reviews assumptions and estimates of the Company’s

probable tax obligations using historical experience in tax

jurisdictions and informed judgments.

Euro Conversion

On January 1, 1999, the exchange rates of twelve countries

(Germany, France, the Netherlands, Austria, Italy, Spain,

Finland, Ireland, Belgium, Portugal, Greece and

Luxembourg) were fixed among one another and became

the currency of the euro. The currencies of the twelve

countries remained in circulation until early 2002. The

euro bills and coinage were introduced on January 1, 2002.

In conjunction with the conversion process to the euro,

the Company took steps to convert its information

technology systems to handle the new currency, prepared

for maintaining accounting, tax and other business

records in the new currency and evaluated the ability

of all significant vendors and customers to accurately

convert to the euro. The introduction and use of the

euro has not had a material effect on the Company’s

foreign operations, foreign exchange practices, or

hedging and cash management activities. Additionally,

the introduction of the euro currency did not have a

materially adverse impact on the Company’s consolidated

financial condition, cash flows or results of operations.

Market Risk

Inherent in the Company’s operations are certain risks

related to changes in foreign currency exchange rates,

interest rates, and the equity markets. Changes in these

factors could cause fluctuations in the Company’s net

earnings and cash flows. In the normal course of business,

the Company identifies these risks and mitigates their

financial impact through its corporate policies and hedging

activities. The Company’s hedging activities include the

use of derivative financial instruments. The Company

uses derivatives only where there is an underlying exposure

and does not use them for trading or speculative purposes.

The counter parties to the hedging activities are highly

rated financial institutions. Additional information

regarding the Company’s use of derivative financial

instruments is included in the notes to the consolidated

financial statements. 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; ingredient,

labor, and other operating costs; insufficient or under-

utilization of manufacturing capacity; destruction of all

or part of manufacturing facilities; labor strikes or unrest;

political or economic instability in local markets; war or

acts of terrorism; competition and other industry trends;

retention of preferred retail space; effectiveness of 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.

19

C O N S O L I D A T E D R E S U L T S

Net Cost of Net Net EarningsSales Sales Earnings Per Share

2002

First Quarter $ 599,026 249,399 85,332 .38

Second Quarter 708,467 286,854 109,967 .49

Third Quarter 699,511 292,341 98,464 .44

Fourth Quarter 739,314 321,621 107,762 .48

Total $ 2,746,318 1,150,215 401,525 1.78

2001

First Quarter $ 556,212 228,395 81,530 .36

Second Quarter 617,640 251,096 100,033 .44

Third Quarter 589,611 247,448 91,507 .41

Fourth Quarter 637,956 270,115 89,916 .40

Total $ 2,401,419 997,054 362,986 1.61

Q U A R T E R L Y D A T A

In thousands of dollars except per share amounts

20

M A R K E T P R I C E S

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.

2002 2002 2001 2001

High Low High Low

First Quarter $ 56.90 49.89 48.44 42.94

Second Quarter 58.90 52.50 49.70 44.41

Third Quarter 56.84 44.21 52.00 46.55

Fourth Quarter 56.03 49.25 53.30 48.02

D I V I D E N D S

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. Dividends declared in a quarter are paid in the following quarter.

2002 2001

First Quarter $ .205 .190

Second Quarter .205 .190

Third Quarter .205 .190

Fourth Quarter .205 .190

Total $ .820 .760

21

2002 2001 2000 1999

O P E R A T I N G D A T A

Net Sales $ 2,746,318 2,401,419 2,126,114 2,045,227

Cost of Sales 1,150,215 997,054 904,266 904,183

Income Taxes 181,896 164,380 150,370 136,247

Earnings before cumulative effect of accounting changes in 1992* 401,525 362,986 328,942 308,183

Per Share of Common Stock (basic and diluted) 1.78 1.61 1.45 1.33

Net Earnings 401,525 362,986 328,942 308,183

Per Share of Common Stock (basic and diluted) 1.78 1.61 1.45 1.33

Dividends Paid 181,232 167,922 159,138 153,812

Per Share of Common Stock .805 .745 .701 .664

As a Percent of Net Earnings 45 % 46 % 48 % 50 %

Dividends Declared Per Share of Common Stock .820 .760 .701 .740

Average Shares Outstanding 225,145 225,349 227,037 231,722

O T H E R F I N A N C I A L D A T A

Net Property, Plant and Equipment $ 836,110 684,379 607,034 559,140

Total Assets 2,108,296 1,777,793 1,574,740 1,547,745

Working Capital 620,205 581,519 540,505 551,921

Stockholders’ Equity 1,522,576 1,276,197 1,132,897 1,138,775

Return on Average Equity 28.7 % 30.1 % 29.0 % 26.8 %

Stockholders of Record at Close of Year 40,534 38,701 37,781 38,626

Employees at Close of Year 11,250 10,800 9,800 9,300

Market Price of Stock

High 58.90 53.30 48.31 50.31

Low 44.21 42.94 29.94 33.25

*(includes amounts related to factory closure — net gain of $6,763 or $.03 per share in 1998, and net costs of $2,145 or $.01 per share and $12,990 or $.06 per share in 1997 and 1996, respectively; and nonrecurring net gain on sale of Singapore property in 1994 of $24,766 or $.11 per share)

S E L E C T E D F I N A N C I A L D A T A

In thousands of dollars and shares except per share amounts, stockholders of record and employees

22

1998 1997 1996 1995 1994 1993 1992

1,990,286 1,923,963 1,835,987 1,754,931 1,596,551 1,428,504 1,286,921

894,988 892,751 859,414 820,478 737,239 653,687 606,263

136,378 122,614 128,840 126,492 122,746 103,944 83,730

304,501 271,626 230,272 223,739 230,533 174,891 148,573

1.31 1.17 .99 .96 .99 .75 .63

304,501 271,626 230,272 223,739 230,533 174,891 141,295

1.31 1.17 .99 .96 .99 .75 .60

150,835 135,680 118,308 111,401 104,694 87,344 72,511

.650 .585 .510 .480 .450 .375 .310

50 % 50 % 51 % 50 % 45 % 50 % 51 %

.655 .595 .510 .495 .470 .375 .315

231,928 231,928 231,966 232,132 232,716 233,022 234,110

520,090 430,474 388,149 347,491 289,420 239,868 222,137

1,520,855 1,343,126 1,233,543 1,099,219 978,834 815,324 711,372

624,546 571,857 511,272 458,683 413,414 343,132 299,149

1,157,032 985,379 897,431 796,852 688,470 575,182 498,935

28.4 % 28.9 % 27.2 % 30.1 % 36.5 % 32.6 % 29.4 %

38,052 36,587 34,951 28,959 24,078 18,567 14,546

9,200 8,200 7,800 7,300 7,000 6,700 6,400

52.16 41.03 31.44 27.00 26.94 23.06 19.94

35.47 27.28 24.19 21.44 19.06 14.75 11.06

23

M A N A G E M E N T ’ S R E P O R T O N R E S P O N S I B I L I T Y F O R F I N A N C I A L R E P O R T I N G

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 below.

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, 2003

R E P O R T O F I N D E P E N D E N T A U D I T O R S

To the Stockholders and Board of Directors of the Wm. Wrigley Jr. Company:

We have audited the accompanying consolidated balance sheets of the Wm. Wrigley Jr. Company and associated

companies (the “Company”) at December 31, 2002 and 2001 and the related consolidated statements of earnings,

stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2002. 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, 2002 and 2001, and the consolidated results of their operations and their cash

flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles

generally accepted in the United States.

ERNST & YOUNG LLP

Chicago, Illinois

January 23, 2003

24

2002 2001 2000

E A R N I N G S

Net sales $ 2,746,318 2,401,419 2,126,114

Cost of sales 1,150,215 997,054 904,266

Gross profit 1,596,103 1,404,365 1,221,848

Selling, general and administrative expense 1,011,029 891,009 758,605

Operating income 585,074 513,356 463,243

Investment income 8,918 18,553 19,185

Other expense (10,571) (4,543) (3,116)

Earnings before income taxes 583,421 527,366 479,312

Income taxes 181,896 164,380 150,370

Net earnings $ 401,525 362,986 328,942

P E R S H A R E A M O U N T S

Net earnings per share of Common Stock (basic and diluted) $ 1.78 1.61 1.45

Dividends paid per share of Common Stock .805 .745 .701

See accompanying accounting policies and notes.

C O N S O L I D A T E D S T A T E M E N T O F E A R N I N G S

In thousands of dollars except per share amounts

25

2002 2001

A S S E T S

Current assets:

Cash and cash equivalents $ 279,276 307,785

Short-term investments, at amortized cost 25,621 25,450

Accounts receivable

(less allowance for doubtful accounts: 2002-$5,850; 2001-$7,712) 312,919 239,885

Inventories:

Finished goods 88,583 75,693

Raw materials and supplies 232,613 203,288

321,196 278,981

Other current assets 47,720 46,896

Deferred income taxes - current 19,560 14,846

Total current assets 1,006,292 913,843

Marketable equity securities, at fair value 19,411 25,300

Deferred charges and other assets 213,483 124,666

Deferred income taxes - noncurrent 33,000 29,605

Property, plant and equipment, at cost:

Land 48,968 39,933

Buildings and building equipment 393,780 359,109

Machinery and equipment 1,049,001 857,054

1,491,749 1,256,096

Less accumulated depreciation 655,639 571,717

Net property, plant and equipment 836,110 684,379

T O T A L A S S E T S $ 2,108,296 1,777,793

C O N S O L I D A T E D B A L A N C E S H E E T

In thousands of dollars

26

2002 2001

L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y

Current liabilities:

Accounts payable $ 97,705 91,397

Accrued expenses 172,137 128,264

Dividends payable 46,137 42,741

Income and other taxes payable 66,893 68,467

Deferred income taxes — current 3,215 1,455

Total current liabilities 386,087 332,324

Deferred income taxes — noncurrent 70,589 46,430

Other noncurrent liabilities 129,044 122,842

Stockholders’ equity:

Preferred Stock — no par valueAuthorized: 20,000 sharesIssued: None

Common Stock — no par value

Common StockAuthorized: 400,000 sharesIssued: 2002 - 190,898 shares; 2001 - 189,800 shares 12,719 12,646

Class B Common Stock — convertibleAuthorized: 80,000 sharesIssued and outstanding:2002 - 41,543 shares; 2001 - 42,641 shares 2,777 2,850

Additional paid-in capital 4,209 1,153

Retained earnings 1,902,990 1,684,337

Common Stock in treasury, at cost(2002 - 7,385 shares; 2001 - 7,491 shares) (297,156) (289,799)

Accumulated other comprehensive income:

Foreign currency translation adjustment (112,303) (149,310)

Gain (loss) on derivative contracts (853) 46

Unrealized holding gains on marketable equity securities 10,193 14,274

(102,963) (134,990)

Total stockholders’ equity 1,522,576 1,276,197

T O T A L L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y $ 2,108,296 1,777,793

See accompanying accounting policies and notes.

In thousands of dollars and shares

27

2002 2001 2000

O P E R A T I N G A C T I V I T I E S

Net earnings $ 401,525 362,986 328,942

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation 85,568 68,326 57,880

Loss on sales of property, plant and equipment 1,014 2,910 778

(Increase) Decrease in:Accounts receivable (55,288) (53,162) (18,483)

Inventories (31,858) (29,487) (2,812)

Other current assets 1,304 (8,079) 199

Deferred charges and other assets (78,585) (15,852) 30,408

Increase (Decrease) in:Accounts payable 756 20,537 12,988

Accrued expenses 33,416 16,360 18,015

Income and other taxes payable (3,715) 9,565 14,670

Deferred income taxes 19,082 5,570 2,546

Other noncurrent liabilities 1,216 10,817 3,152

Net cash provided by operating activities 374,435 390,491 448,283

I N V E S T I N G A C T I V I T I E S

Additions to property, plant and equipment (216,872) (181,760) (125,068)

Proceeds from property retirements 5,017 2,376 1,128

Purchases of short-term investments (41,177) (24,448) (125,728)

Maturities of short-term investments 44,858 26,835 115,007

Net cash used in investing activities (208,174) (176,997) (134,661)

F I N A N C I N G A C T I V I T I E S

Dividends paid (181,232) (167,922) (159,138)

Common Stock purchased, net (16,402) (34,173) (131,765)

Net cash used in financing activities (197,634) (202,095) (290,903)

Effect of exchange rate changes on cash and cash equivalents 2,864 (4,213) (10,506)

Net increase (decrease) in cash and cash equivalents (28,509) 7,186 12,213

Cash and cash equivalents at beginning of year 307,785 300,599 288,386

Cash and cash equivalents at end of year $ 279,276 307,785 300,599

S U P P L E M E N T A L C A S H F L O W I N F O R M A T I O N

Income taxes paid $ 173,010 146,858 136,311

Interest paid $ 1,636 1,101 749

Interest and dividends received $ 8,974 18,570 19,243

See accompanying accounting policies and notes.

C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W S

In thousands of dollars

28

Common Class B Additional Common Other Stock-Shares Common Common Paid-in Retained Stock In Comprehensive holders’

Outstanding Stock Stock Capital Earnings Treasury Income Equity

B A L A N C E D E C E M B E R 3 1 , 1 9 9 9 183,764 $ 12,481 3,015 273 1,322,137 (125,712) (73,419) 1,138,775

Net earnings 328,942 328,942

Other comprehensive income:Foreign currency translation adjustments (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 (3,535) (131,765) (131,765)

Stock awards granted 67 73 999 1,072

Conversion from Class B Common to Common 1,155 77 (77) —

B A L A N C E D E C E M B E R 3 1 , 2 0 0 0 181,451 $ 12,558 2,938 346 1,492,547 (256,478) (119,014) 1,132,897

Net earnings 362,986 362,986

Other comprehensive income:Foreign currency translation adjustments (12,945) (12,945)

Unrealized holding loss on marketable equitysecurities, net of $1,655 tax (3,077) (3,077)

Gain on derivative contracts, net of $21 tax 46 46

Total comprehensive income 347,010

Dividends to shareholders (171,196) (171,196)

Treasury share purchases (744) (36,432) (36,432)

Options exercised and stock awards granted 170 807 3,111 3,918

Conversion from Class B Common to Common 1,432 88 (88) —

B A L A N C E D E C E M B E R 3 1 , 2 0 0 1 182,309 $ 12,646 2,850 1,153 1,684,337 (289,799) (134,990) 1,276,197

Net earnings 401,525 401,525

Other comprehensive income:Foreign currency translation adjustments 37,007 37,007

Unrealized holding loss on marketable equitysecurities, net of $2,150 tax (4,081) (4,081)

Loss on derivative contracts, net of $363 tax (899) (899)

Total comprehensive income 433,552

Dividends to shareholders (184,628) (184,628)

Treasury share purchases (527) (27,759) (27,759)

Options exercised and stock awards granted 633 1,676 20,402 22,078

Tax benefit related to stock options exercised 1,380 1,380

Conversion from Class B Common to Common 1,098 73 (73)

ESOP tax benefit 1,756 1,756

B A L A N C E D E C E M B E R 3 1 , 2 0 0 2 183,513 $ 12,719 2,777 4,209 1,902,990 (297,156) (102,963) 1,522,576

See accompanying accounting policies and notes.

C O N S O L I D A T E D S T A T E M E N T O F S T O C K H O L D E R S ’ E Q U I T Y

In thousands of dollars and shares

29

DESCRIPTION OF BUSINESS

The principal business of the Wm. Wrigley Jr. Company

is manufacturing and selling chewing gum and other

confectionery products worldwide. All other businesses

constitute less than 10% of combined revenues, operating

income and identifiable assets.

BASIS OF PRESENTATION

The consolidated financial statements include the accounts

of the Wm. Wrigley Jr. Company and its associated companies

(the Company). Intercompany balances and transactions

have been eliminated. Preparation of financial statements in

conformity with generally accepted accounting principles

requires management to make estimates and assumptions that

affect assets, liabilities, revenues, expenses and certain financial

statement disclosures. Actual results may vary from those

estimates. Additionally, certain amounts reported in 2000 and

2001 have been reclassified to conform to the 2002 presentation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recently Adopted Accounting Policies

On January 1, 2002, the Company adopted the accounting

rules under Statement of Financial Accounting Standards (SFAS)

142, “Goodwill and Other Intangible Assets.” Under SFAS 142,

goodwill and intangible assets deemed to have indefinite lives

are no longer amortized but are subject to annual impairment

tests. Other intangible assets will continue to be amortized

for their useful lives. During 2002, the Company performed

the required impairment tests of goodwill and indefinite

lived intangible assets. There was no impairment recognized

as a result of these tests.

In the first quarter 2002, the Company adopted the accounting

rules for Emerging Issues Task Force Issue No. 00-14,

“Accounting for Certain Sales Incentives” and No. 00-25,

“Vendor Income Statement Characterization of Consideration

Paid to a Reseller of the Vendor’s Products” (“Issues”), as

codified by Issue No. 01-09 “Accounting for Consideration

Given by a Vendor to a Customer or Reseller of the Vendors

Products.” In adopting these accounting rules, the Company

began reporting cash consideration given in connection with

certain consumer and trade sales promotions such as coupon

redemptions, in-store display incentives, co-operative

advertising and new product introduction fees, as deductions

from sales rather than as selling, general and administrative

expense. The consumer and trade sales promotions applicable

to these Issues totaled $41,034, $28,227 and $19,592 for 2002,

2001 and 2000, respectively. The consumer and trade sales

promotions applicable to these Issues are reflected in net sales

for all periods. Adoption of the accounting rules had no

impact on the Company’s financial position or net earnings.

The Company also adopted SFAS 148, “Accounting for Stock-

Based Compensation — Transition and Disclosure” as of

December 31, 2002. This Statement amends SFAS No. 123,

“Accounting for Stock-Based Compensation,” to provide

alternative methods of transition for a voluntary change to

the fair value based method of accounting for stock-based

employee compensation. In addition, this Statement amends

the disclosure requirements of SFAS 123 to require prominent

disclosures in both annual and interim financial statements

about the method of accounting for stock-based employee

compensation and the effect of the method used on reported

results. A discussion of the Company’s accounting policy and

the required disclosures under SFAS 148 are included in the

Stock-Based Compensation accounting policy note on page 31.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with

original maturity of three months or less to be cash equivalents.

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 $321,196 and $278,981 at

December 31, 2002 and 2001, respectively, including $137,367

and $114,201, respectively, valued at cost on a LIFO basis. If

current costs had been used, such inventories would have

been $15,710 and $10,513 higher than reported at December 31,

2002 and 2001, respectively.

A C C O U N T I N G P O L I C I E S A N D N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

Dollar and share amounts in thousands except per share figures

30

Derivative Financial Instruments

The Company accounts for all derivatives in accordance with

SFAS 133, “Accounting for Derivatives and Hedging Activities”,

as amended. All derivatives are recognized on the balance

sheet at fair value. Changes in the fair value of derivatives are

recorded in earnings or other comprehensive income, based

on whether the instrument is designated as part of a hedge

transaction and, if so, the type of hedge transaction. Gains or

losses on derivative instruments reported in other comprehensive

income are reclassified to earnings in the period in which

earnings are affected by the underlying hedged item. The

ineffective portion of all hedges is recognized in earnings in

the current period.

Property, Plant and Equipment

Land, building and equipment are recorded at cost. Depreciation

is provided primarily by the straight-line method over the

estimated useful lives of the respective assets: buildings and

building equipment — 12 to 50 years; machinery and

equipment — 3 to 20 years. Expenditures for new property,

plant and equipment and improvements that substantially

extend the capacity or useful life of an asset are capitalized.

Ordinary repairs and maintenance are expensed as incurred.

When property is retired or otherwise disposed, the cost

and related depreciation are removed from the accounts and

any related gains or losses are included in net earnings.

Impairment of Long-Lived Assets

The Company reviews long-lived assets on at least an annual

basis to determine if there are indicators of impairment. When

indicators of impairment are present, the Company evaluates

the carrying value of the long-lived 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.

Foreign Currency Translation

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.

The Company translates the results of operations of its foreign

associated companies at the average exchange rates during

the respective periods. Foreign-currency denominated assets

and liabilities are translated into U.S. dollars at exchange rates

in effect at the respective balance sheet dates resulting in

foreign currency translation adjustments. Foreign currency

translation adjustments are recorded as a separate component

of Accumulated Other Comprehensive Income within

stockholder’s equity.

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 $362,548 in 2002, $328,346

in 2001 and $308,446 in 2000.

Stock-Based Compensation

The Company applies Accounting Principles Board Opinion

(APB) No. 25, “Accounting for Stock Issued to Employees”

and related interpretations in accounting for stock-based

compensation plans. APB No. 25 requires the use of the intrinsic

value method, which measures compensation cost as the excess

of the quoted market price of the stock at the date of grant over

the amount an employee must pay to acquire the stock. The

following table illustrates the effect on net earnings and earnings

per share if the Company had applied the fair value recognition

provisions of SFAS No. 123, “Accounting for Stock-Based

Compensation” to stock-based compensation plans.

Year Ended December 31 2002 2001 2000

Net earningsAs reported $ 401,525 362,986 328,942

Add: Stock-based compensation expense included in earnings, net of tax 6,514 5,277 4,354

Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of tax $ 17,933 12,626 8,223

Pro forma net earnings $ 390,106 355,637 325,073

Pro forma basic and diluted earnings per share

As reported $ 1.78 1.61 1.45

Pro forma $ 1.73 1.58 1.43

The Company’s stock-based compensation plans are discussed

further on page 34.

31

Income Taxes

Deferred taxes are recognized for the future tax effects of

temporary differences between financial and income tax reporting

using tax rates in effect for the years in which the differences are

expected to reverse. Federal income taxes are provided on the

portion of the income of foreign associated companies that is

expected to be remitted to the U.S. and be taxable.

INVESTMENTS IN DEBT AND 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, 2002 and December 31, 2001 were,

respectively, $24,370 and $13,206 for municipal securities,

and $1,251 and $12,244 for other debt securities. The average

yields of municipal securities held at December 31, 2002 and

December 31, 2001 were 1.85% and 3.19%, respectively.

The Company’s investments in marketable equity securities are

held for an indefinite period. Application of SFAS No. 115,

“Accounting for Certain Investments in Debt and Equity

Securities,” resulted in unrealized holding gains of $15,681 at

December 31, 2002 and $21,912 at December 31, 2001.

Unrealized holding gains, net of the related tax effect, of $10,193

and $14,274 at December 31, 2002 and 2001, respectively, are

included as components of Accumulated Other Comprehensive

Income in stockholders’ equity.

DEFERRED CHARGES AND OTHER ASSETS

Deferred charges and other assets included prepaid pension

assets of $82,200 and $13,700 and deferred compensation assets

of approximately $47,900 and $32,400 at December 31, 2002 and

2001, respectively.

ACCRUED EXPENSES

Accrued expenses at December 31, 2002 and 2001 included

$55,160 and $41,725 of payroll expenses, respectively.

LINE OF CREDIT

In September 2002, the Company renewed its $100 million,

unsecured, line of credit. There were no borrowings under this

line during 2002. Upon drawing on the line of credit, the

Company has the option to elect a fixed or floating interest rate.

The line of credit expires in September 2003.

OTHER NONCURRENT LIABILITIES

Other noncurrent liabilities at December 31, 2002, included

liabilities for approximately $70,400 of deferred compensation

and $5,600 for post-retirement benefits. At December 31, 2001,

they included liabilities for approximately $59,400 of deferred

compensation and $13,400 for post-retirement benefits.

FINANCIAL INSTRUMENTS

Derivative Financial Instruments And Hedging Activities

The Company enters into forward exchange contracts and

purchases currency options to hedge against foreign currency

exposures of forecasted purchase and sales transactions

between associated companies and purchases with outside

vendors. In addition, the Company enters into forward

exchange contracts and purchases currency options to hedge

the foreign currency exposures of forecasted future royalty

payments from, and net investments in, associated companies.

The Company generally hedges forecasted transactions over

a period of twelve months or less.

On the date a derivative contract is entered into, the Company

designates the derivative as either (1) a hedge of a recognized

asset or liability (a fair value hedge), (2) a hedge of a forecasted

transaction (a cash flow hedge), or (3) a hedge of a net

investment in a foreign operation (a net investment hedge).

The Company formally documents its hedge relationships,

including identification of the hedging instruments and the

hedged items, as well as its risk management objectives and

strategies for undertaking the hedge transaction. This process

includes linking derivatives that are designated as hedges

to specific assets, liabilities or forecasted transactions. The

Company also formally assesses both at inception and at least

quarterly thereafter, whether the derivatives that are used in

hedging transactions are highly effective in offsetting changes

in the fair value or cash flows of the hedged item. If it is

determined that a derivative ceases to be a highly effective

hedge, the Company discontinues hedge accounting.

For fair value hedges, the effective portion of the changes in

the fair value of the derivative, along with the gain or loss on

the hedged item that is attributable to the hedged risk, are

recorded in earnings. For cash flow hedges, the effective portion

of the changes in the fair value of a derivative is recorded in

Accumulated Other Comprehensive Income and reclassified

into earnings in the same period or periods during which the

32

hedged transaction affects earnings, generally within the next

twelve months. For net investment hedges, the effective portion

of the change in the fair value of derivatives used as a net

investment hedge of a foreign operation is recorded in Foreign

Currency Translation Adjustment.

The ineffective portion of the change in fair value of any

derivative designated as a hedge is immediately recognized

in earnings. Ineffectiveness recognized during 2002 and 2001

was immaterial.

At December 31, 2002, open foreign exchange contracts for a

number of currencies, primarily the Euro, British pounds and

U.S. dollars, maturing at various dates through December 2003,

had an aggregate notional amount of $304,937. The notional

amount of open foreign exchange contracts at December 31,

2001 aggregated $77,108. The fair values of open foreign

exchange contracts and currency options, as determined by bank

quotes, were a $2,328 loss recorded in current liabilities and a

$41 gain recorded in other current assets at December 31, 2002

and 2001, respectively.

Fair Value of Other Financial Instruments

The carrying amount of cash and cash equivalents, accounts

receivable, and accounts payable approximate fair value.

Marketable equity securities are carried at fair value.

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 (MIP) or under the Share Repurchase Program

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, and October 25, 2000, the

Company’s Board of Directors authorized additional share

repurchases of $200,000 and $100,000, respectively.

During 2002, 2001 and 2000, the Company purchased 483

shares, 704 shares and 3,535 shares at an aggregate price of

$25,504, $34,652, and $131,765, respectively, under the Board of

Director authorizations. No shares were repurchased prior to

1999 under the 1993 authority.

In May 2001, the Company’s Board of Directors approved a

Stockholder Rights Plan. Under the Rights Plan, each holder

of Common Stock and Class B Common Stock at the close of

business on June 6, 2001, automatically received a distribution

of one Right for each share of Common Stock or Class B

Common Stock held. Each Right entitles the holder to purchase

one one-thousandth of a share of Series A Junior Participating

Preferred Stock for $250. The Rights will trade along with, and

not separately from, the shares of Common Stock and Class B

Common Stock unless they become exercisable. The Rights

become exercisable, and they will separate, become tradable,

and entitle stockholders to buy common stock if any person or

group (“Acquiring Person”) becomes the beneficial owner of, or

announces a tender or exchange offer for, 15% or more of the

Company’s Common Stock. In such event, all Rights, except for

those held by the Acquiring Person, become Rights to purchase

$500 worth of Common Stock for $250, unless redeemed by the

Board of Directors. In case of a subsequent merger or other

acquisition of the Company after the Rights become exercisable,

holders of Rights other than the Acquiring Person may purchase

shares of the acquiring entity at a 50% discount. The Rights will

expire on June 6, 2011, unless redeemed earlier, or renewed by

the Company’s Board of Directors.

At December 31, 2002, there were authorized 20 million shares

of preferred stock with no par value, of which 1 million Series A

Junior Participating Preferred shares were reserved for issuance

upon exercise of the Rights.

33

34

STOCK-BASED COMPENSATION PLANS

On March 5, 1997, stockholders approved the Company’s MIP,

as amended by the stockholders on March 5, 2002. The 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.

The MIP authorizes the granting of up to 20,000 shares of the

Company’s new or reissued Common Stock. In accordance

with the 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. In general, options vest over a four-year period and

expire ten years from the date of grant.

The status of the Company’s Stock Option program is

summarized as follows:

Weighted-Number of Average

Shares Exercise Price

Outstanding at December 31, 1999 1,078,000 $ 43.01

Granted 1,657,000 37.53

Exercised — —

Cancelled (36,000) 40.27

Outstanding at December 31, 2000 2,699,000 $ 39.68

Granted 2,063,700 48.20

Exercised (59,250) 38.99

Cancelled (56,750) 41.67

Outstanding at December 31, 2001 4,646,700 $ 43.45

Granted 2,005,000 57.01

Exercised (316,425) 40.99

Cancelled (58,950) 48.77

Outstanding at December 31, 2002 6,276,325 $ 47.85

The following table summarizes key information about stock options at December 31, 2002:

OUTSTANDING STOCK OPT IONS EXERCISABLE STOCK OPT IONS

Weighted-Average Weighted- Weighted-Range of Remaining Average AverageExercise Prices Shares Contractual Life Exercise Price Shares Exercise Price

$32.03 40,000 7.3 32.03 40,000 32.03

$36.81 - 43.78 2,248,875 7.1 39.74 1,328,188 40.24

$45.28 - 51.22 2,059,450 8.5 48.23 528,180 48.04

$52.55 - 58.14 1,928,000 9.4 57.24 — —

As the exercise price equaled the fair market value on the date

of grant, no compensation expense has been recognized for

the Wrigley Stock Option program. The impact to net earnings

and earnings per share had compensation expense for the

Company’s stock-based compensation plans been determined

based on fair value, consistent with SFAS No. 123, is reflected in

the Summary of Significant Accounting Policies note on page 31.

In determining compensation expense under SFAS No. 123, 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 $15.61,

$13.98, and $11.59 in 2002, 2001 and 2000, respectively.

The table below summarizes the key assumptions used to

calculate the fair value:

Interest Dividend Expected ExpectedRate Yield Volatility Life

2002 4.86% 1.44% 22.3% 6 years

2001 5.85% 1.56% 23.8% 6 years

2000 4.75% 1.60% 24.6% 6 years

The fair value of other stock-based compensation plans

calculated in accordance with SFAS No. 123 was not significantly

different from the amounts reported under APB No. 25.

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:

2002 2001

Accrued Compensation, Pensionand Post-retirement Benefits $ 15,493 26,419

Depreciation (28,888) (21,898)

Unrealized Holding Gains (5,488) (7,638)

All Other -- Net (2,361) (317)

Net Deferred Tax Liability $ (21,244) (3,434)

Balance sheet classifications of deferred taxes are as follows:

2002 2001

Deferred Tax Asset

Current $ 19,560 14,846

Noncurrent 33,000 29,605

Deferred Tax Liability

Current (3,215) (1,455)

Noncurrent (70,589) (46,430)

Net Deferred Tax Liability $ (21,244) (3,434)

Applicable U.S. income and foreign withholding taxes have

not been provided on approximately $631,920 of undistributed

earnings of international associated companies at December 31,

2002. 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

$99,879 of deferred income taxes would be provided.

INCOME TAXES

Income taxes are based on pre-tax earnings which are

distributed geographically as follows:

2002 2001 2000

Domestic $ 161,646 130,140 139,086

Foreign 421,775 397,226 340,226

$ 583,421 527,366 479,312

Reconciliation of the provision for income taxes computed at

the U.S. Federal statutory rate of 35% for 2002, 2001, and 2000 to

the reported provision for income taxes is as follows:

2002 2001 2000

Provision at U.S.FederalStatutory Rate $ 204,197 184,578 167,759

State Taxes -- Net 4,922 4,401 5,351

Foreign Tax Rates (27,045) (23,832) (19,546)

Tax Credits(principally foreign) (2,438) (1,400) (1,675)

Other -- Net 2,260 633 (1,519)

$ 181,896 164,380 150,370

The components of the provision for income taxes for 2002,

2001, and 2000 are:

Current Deferred Total

2002

Federal $ 21,401 16,113 37,514

Foreign 135,901 908 136,809

State 6,786 787 7,573

$ 164,088 17,808 181,896

2001

Federal $ 30,142 2,384 32,526

Foreign 121,137 2,704 123,841

State 6,770 1,243 8,013

$ 158,049 6,331 164,380

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

35

The funded status of the defined benefit plans and post-retirement benefit plans were as follows:

Defined Benefit Plans Post-Retirement Benefit Plans

2002 2001 2002 2001

Change in Benefit Obligation

Benefit Obligation at Beginning of Year $ 385,500 342,000 $ 33,600 27,100

Service Cost 13,600 11,300 1,400 1,000

Interest Cost 27,200 25,000 2,600 2,100

Plan Participants’ Contributions 400 300 — —

Actuarial Loss 18,100 28,100 6,300 5,600

Foreign Currency Exchange 8,900 (2,900) — —

Other (200) 300 — —

Benefits Paid (18,800) (18,600) (2,400) (2,200)

Benefit Obligation at End of Year $ 434,700 385,500 $ 41,500 33,600

Change in Plan Assets

Fair Value at Beginning of Year $ 343,600 370,900 $ 13,700 13,000

Actual Return on Plan Assets (30,400) (13,000) (3,000) (1,900)

Employer Contribution 77,700 8,100 11,000 4,800

Plan Participants’ Contributions 400 — — —

Foreign Currency Exchange 8,300 (3,600) — —

Other (400) (200) — —

Benefits Paid (18,800) (18,600) (2,400) (2,200)

Fair Value at End of Year $ 380,400 343,600 $ 19,300 13,700

Funded (Underfunded) Status of the Plan $ (54,300) (41,900) $ (22,200) (19,900)

Unrecognized Net Actuarial Loss 127,900 47,200 16,600 6,500

Unrecognized Prior Service Costs 5,100 5,500 — —

Unrecognized Transition Asset (2,800) (3,400) — —

Prepaid (Accrued) Benefit Cost $ 75,900 7,400 $ (5,600) (13,400)

PENSION AND OTHER POST-RETIREMENT PLANS

The Company maintains non-contributory defined benefit

pension 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 pension 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. Plan assets for international

associated companies 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 these post-retirement benefits is provided during the

employee’s active working career.

36

A 10% annual rate of increase in the per capita cost of

covered post-retirement benefits was assumed for 2003. The

rate was assumed to decrease gradually to 5% for 2008

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-retirementBenefit Obligation 3,200 (2,800)

Effect on Total of Service andInterest Cost Components 400 (400)

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 $5,694, $4,852, and $4,535 in 2002, 2001, and

2000, respectively.

Additionally, on January 1, 2002, the Company formed an

Employee Stock Ownership Plan (ESOP) within the defined

The following table provides amounts recognized in the balance sheet as of December 31:

Defined Benefit Plans Post-Retirement Benefit Plans

2002 2001 2002 2001

Prepaid Benefit Cost $ 82,200 13,700 $ — —

Accrued Benefit Liability (6,300) (6,300) (5,600) (13,400)

Net Amount Recognized $ 75,900 7,400 $ (5,600) (13,400)

The Company’s qualified plans have plan assets in excess of the accumulated benefit obligation. The Company’s non-qualified,

unfunded, noncontributory supplemental retirement plan has a projected benefit obligation of $6,000 and $5,800 and an accumulated

benefit obligation of $5,200 and $5,500 at December 31, 2002 and 2001, respectively.

The components of net pension and net periodic post-retirement benefit costs are as follows:

Defined Benefit Plans Post-Retirement Benefit Plans

2002 2001 2000 2002 2001 2000

Service Cost $ 13,600 11,300 11,100 $ 1,400 1,000 900

Interest Cost 27,200 25,000 24,200 2,600 2,100 2,000

Expected Return on Plan Assets (29,600) (31,700) (33,200) (1,200) (1,100) (1,200)

Amortization of Unrecognized Transition Assets (700) (900) (900) — — —

Prior Service Costs Recognized 600 1,700 1,700 — — —

Recognized Net Actuarial Loss/(Gain) 700 — (1,900) 400 (200) (200)

Other Pension Plans 4,700 3,600 4,000 — — —

Net Periodic Benefit Cost $ 16,500 9,000 5,000 $ 3,200 1,800 1,500

Assumptions at the end of the year for the Company’s defined benefit and post-retirement benefit plans are as follows:

Defined Benefit Plans Post-Retirement Benefit Plans

2002 2001 2000 2002 2001 2000

Discount Rate

Domestic 6.75% 7.25% 7.75% 6.75% 7.25% 7.75%

Foreign 5.50-6.75% 6.00-6.75% 6.00-7.25% 6.75% 7.25% 7.75%

Long-term Rates of Return on Plan Assets

Domestic 9.25% 9.25% 9.25% 9.25% 9.00% 9.00%

Foreign 6.50-7.50% 6.50-7.50% 6.50-7.50% — — —

Rates of Increase in Compensation Levels

Domestic 4.25% 4.75% 4.75% — — —

Foreign 3.00-4.00% 3.00-4.00% 3.00-4.00% — — —

37

contribution plan for U.S. based employees. The primary

purpose of the ESOP is to acquire and hold Wrigley shares

credited to Wrigley Savings Plan participants’ accounts as a

result of employee contributions and Company matching

program contributions. Company matching program

contributions may be in the form of cash, treasury shares or

authorized, unissued shares. The ESOP is a non-leveraged plan

and all shares held are allocated to plan participants. Dividends

on Company shares held by the ESOP are charged to retained

earnings. The number of shares held by the ESOP at

December 31, 2002, including those shares transferred at the

formation of the ESOP, totaled 5,419. The formation of the

ESOP had no effect on the Company’s net earnings or earnings

per share.

SEGMENT INFORMATION

Management organizes the Company’s chewing gum and other

confectionery business based on geographic regions.

Information by geographic region at December 31, 2002, 2001,

and 2000 and for the years then ended is as follows:

Net Sales 2002 2001 2000

Americas, principally U.S. $ 1,131,703 1,001,074 895,299

EMEAI,principally Europe 1,191,347 1,006,680 902,169

Asia 321,914 297,263 241,892

Pacific 83,110 75,201 71,363

All Other 18,244 21,201 15,391

Net Sales $ 2,746,318 2,401,419 2,126,114

“All Other” net sales consist primarily of sales of gumbase and

sales for Wrigley Healthcare.

Operating Income 2002 2001 2000

Americas, principally U.S. $ 281,999 261,177 220,850

EMEAI,principally Europe 346,189 304,343 249,384

Asia 89,211 77,453 68,165

Pacific 21,602 24,324 22,453

All Other (153,927) (153,941) (97,609)

Total Operating Income $ 585,074 513,356 463,243

“All Other” operating income includes corporate expenses

such as costs related to research and development, information

systems and certain administrative functions and operating

results for Wrigley Healthcare. In 2002, “All Other” operating

income also includes certain costs connected with the

exploration of a business combination with Hershey Foods

Corporation.

Assets 2002 2001 2000

Americas, principally U.S. $ 878,232 700,692 547,954

EMEAI,principally Europe 774,700 667,578 623,656

Asia 199,847 178,780 154,009

Pacific 49,039 39,920 42,612

All Other 61,966 74,497 81,450

Assets Used in OperatingActivities 1,963,784 1,661,467 1,449,681

Corporate 144,512 116,326 125,059

Total Assets $ 2,108,296 1,777,793 1,574,740

Assets are categorized based upon the geographic segment

where they reside. Assets in “Corporate” consist principally of

short-term investments and marketable equity securities which

are held by the corporate office, as well as certain fixed assets.

Depreciation Expense 2002 2001 2000

Americas, principally U.S. $ 21,933 18,778 14,337

EMEAI,principally Europe 36,563 30,341 26,912

Asia 9,305 7,658 6,661

Pacific 1,695 1,167 1,149

All Other 2,630 2,487 1,874

Depreciation Expense Related to Operating Activities 72,126 60,431 50,933

Corporate 13,442 7,895 6,947

Total Depreciation Expense $ 85,568 68,326 57,880

Depreciation expense is categorized consistently with the

geographic region where the asset resides.

Capital Expenditures 2002 2001 2000

Americas, principally U.S. $ 68,991 94,808 41,688

EMEAI,principally Europe 74,098 56,340 39,762

Asia 17,108 16,266 11,635

Pacific 5,078 6,392 2,768

All Other 4,721 4,407 1,252

Capital Expenditures forOperating Activities 169,996 178,213 97,105

Corporate 49,802 5,703 28,942

Gross Capital Expenditures 219,798 183,916 126,047

Intersegment AssetTransfers (2,926) (2,156) (979)

Net Capital Expenditures $ 216,872 181,760 125,068

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.

38

39

William Wrigley, Jr.

President andChief Executive Officer

Peter R. Hempstead

Senior Vice President — International

Surinder Kumar

Chief Innovation Officer

Gary E. McCullough

Senior Vice President — Americas

Dushan Petrovich

Senior Vice President —People, Learning and Development

Darrell R. Splithoff

Senior Vice President — Supply Chain & Corporate Development

Ronald V. Waters

Senior Vice President and Chief Financial Officer

Donald E. Balster

Vice President — Worldwide Manufacturing

Vincent C. Bonica

Vice President — Organizational Development

Reuben Gamoran

Vice President and Controller

Donagh Herlihy

Vice President and Chief Information Officer

Shaun Kim

Vice President — Worldwide Engineering

Howard Malovany

Vice President, Secretary and General Counsel

Patrick D. Mitchell

Vice President — Procurement

Kathryn E. Olson

Vice President — U.S. Consumer Marketing

Jon Orving

Vice President — International and Managing Director — North Region

Stefan Pfander

Vice President — International and Managing Director — EMEAI

Wm. M. Piet

Vice President — Corporate Affairs

Alan J. Schneider

Vice President and Treasurer

Ralph P. Scozzafava

Vice President — General Manager — U.S.

Michael F. Wong

Vice President — International and Managing Director — Asia

A. Rory Finlay

Senior Director — Global Branding

Philip C. Johnson

Senior Director — Benefits & Compensation

Daniela Zaluda

Senior Director

E L E C T E D O F F I C E R S

40

COMMITTEES OF THE

BOARD OF DIRECTORS

Audit

Richard K. Smucker

Chairman

Howard B. Bernick

Melinda R. Rich

Alex Shumate

Compensation

Thomas A. Knowlton

Chairman

Howard B. Bernick

Steven B. Sample

Alex Shumate

Corporate Governance

Penny Pritzker

Chairman

Melinda R. Rich

Steven B. Sample

B O A R D O F D I R E C T O R S

WILLIAM WRIGLEY, JR.Director of the Company since 1988Joined the Wm. Wrigley Jr. Company in 1985President & Chief Executive Officer since 1999Senior Vice President (1999)Vice President (1991-98)

JOHN F. BARDDirector of the Company since 1999Executive Vice President, Wm. Wrigley Jr. Company (1999-2000)Senior Vice President, Wm. Wrigley Jr. Company (1991-99)Director, Weight Watchers International, since 2002

HOWARD B. BERNICKDirector of the Company since 2001Joined Alberto-Culver Company in 1977President and Chief Executive Officer since 1994, and Director since 1986

THOMAS A. KNOWLTONDirector of the Company since 1996Dean-Faculty of Business, Ryerson University, since 2000Executive Vice President, Kellogg Company (1992-98)President, Kellogg North America (1994-98)

PENNY PRITZKERDirector of the Company since 1994Chairman, Classic Residence by Hyatt, since 1987President, Pritzker Realty Group L.P., since 1991Director, Hyatt Corporation, since 1999Director, Hyatt International Corporation, since 1999

MELINDA R. RICHDirector of the Company since 1999Joined Rich Products Corp. in 1986, its Executive Vice President of Innovation since 1997 and Director since 1998President, Rich Entertainment Group, since 1994Director, M & T Bank Corp. (Buffalo, NY), since 1994

STEVEN B. SAMPLEDirector of the Company since 1997President, University of Southern California, since 1991President, State University of New York, Buffalo (1982-91)Director, Unova, Inc., since 1997Director, AMCAP Fund, Inc., since 2000Director, American Mutual Fund, Inc., since 2000Director, Advanced Bionics Corporation, since 2000

ALEX SHUMATEDirector of the Company since 1998Joined law firm of Squire, Sanders & Dempsey in 1988 and Managing Partner of its Columbus, Ohio Office since 1991Director, The Limited, Inc., since 1996Director, Nationwide Financial Services, Inc., since 2002

RICHARD K. SMUCKERDirector of the Company since 1988Joined The J. M. Smucker Company in 1972, its President since 1987, Director since 1975, and Co-CEO since 2001Director, Sherwin-Williams Company, since 1991

Left to right:Thomas A. Knowlton, Howard B.Bernick,

Penny Pritzker, William Wrigley, Jr.,Melinda R. Rich, Richard K. Smucker,

John F. Bard, Alex Shumate,Steven B. Sample.

41

STOCKHOLDER INQUIRIES

Any inquiries about your Wrigley stockholdings should

be directed to:

Stockholder RelationsWm. Wrigley Jr. Company410 North Michigan AvenueChicago, IL 606111-800-874-0474

You can access your Wrigley stock account information

via the Internet at the following address —

gateway.equiserve.com.

Additional information about the Wrigley Company can

be found on the Internet at www.wrigley.com.

CAPITAL STOCK

Common Stock of the Wm. Wrigley Jr. Company (WWY)

is traded on the New York and Chicago Stock Exchanges.

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 on or about 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.

Just under 30,000 or 74% 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.

S T O C K H O L D E R I N F O R M A T I O N

42

“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 under

Stockholder Services in the Investor Information section.

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 or reregistration 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 or

reregistration, 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.

TRANSFER AGENT AND REGISTRAR

EquiServe Trust Company, N.A.P. O. Box 43069Providence, RI 02940-3069Inside the U.S. — 1-800-446-2617Outside the U.S. — +1-781-575-2723TDD/TTY for hearing impaired — 1-800-952-9245Internet: www.equiserve.com

COMPANY PUBLICATIONS

The Company’s 2002 annual report to the Securities

and Exchange Commission on Form 10-K is expected

to be available on or about February 23, 2003.

Requests for this publication should be addressed to

Stockholder Relations at the main office of the Company.

It is also available for review at our Internet home page

(www.wrigley.com).

43

CORPORATE HEADQUARTERS

Wrigley Building410 North Michigan AvenueChicago, Illinois 60611

PRINCIPAL ASSOCIATED COMPANIES

DomesticWrigley Manufacturing Company, LLC

Chicago, Illinois 60609*Gainesville, Georgia 30542*Phoenix, Arizona 85004*

Amurol Confections Company*Yorkville, Illinois 60560

Four-Ten CorporationChicago, Illinois 60611

Wrigley Sales CompanyChicago, Illinois 60611

L.A. Dreyfus Company*Edison, New Jersey 08820

Northwestern Flavors, LLC*West Chicago, Illinois 60185

InternationalThe Wrigley Company Pty. Limited*Sydney, Australia

Wrigley Austria Ges.m.b.H.Salzburg, Austria

Wrigley Bulgaria EOODSofia, Bulgaria

Wrigley Canada*Don Mills, Ontario, Canada

Wrigley Chewing Gum Company Ltd.*Guangzhou, Guangdong,Peoples Republic of China

Wrigley Croatia d.o.o.Zagreb, Croatia

Wrigley s.r.o.Prague, Czech Republic

The Wrigley Company Limited*Plymouth, England, U.K.

Oy Wrigley Scandinavia AbTurku, Finland

Wrigley France S.N.C.*Biesheim, France

Wrigley G.m.b.H.Munich, Germany

Wrigley B.V.Bussum, Holland

The Wrigley Company (H.K.) LimitedHong Kong

Wrigley Hungaria, Kft.Budapest, Hungary

Wrigley India Private Limited*Bangalore, Karnataka, India

Wrigley Israel Ltd.Herzeliya-Pituach, Israel

Wrigley & Company Ltd., JapanTokyo, Japan

The Wrigley Company (East Africa) Limited*Nairobi, Kenya

The Wrigley Company (Malaysia) Sdn. Bhd.Kuala Lumpur, Malaysia

The Wrigley Company (N.Z.) LimitedAuckland, New Zealand

Wrigley Scandinavia ASOslo, Norway

The Wrigley Company (P.N.G.) Ltd.Port Moresby, Papua New Guinea

Wrigley Philippines, Inc.*Antipolo City, Philippines

Wrigley Poland Sp. zo.o.*Poznan, Poland

Wrigley Romania Produse Zaharoase SRLBucharest, Romania

OOO Wrigley Moscow, RussiaSt. Petersburg, Russia*

Wrigley Slovakia s.r.o.Banska Bystrica, Slovakia

Wrigley d.o.o.Ljubljana, Slovenia

Wrigley Co., S.A. Santa Cruz de TenerifeCanary Islands, Spain

Wrigley Scandinavia ABStockholm, Sweden

Wrigley Taiwan Limited*Taipei, Taiwan, R.O.C.

Wrigley UkraineKiev, Ukraine TzoV

Wrigley Middle East, FZCODubai, United Arab Emirates

*Denotes production facility

C O R P O R A T E F A C I L I T I E S A N D P R I N C I P A L A S S O C I A T E D C O M P A N I E S

44

The Wrigley Company markets chewing gum, bubble gum, and confectionery products around the world.

DOMESTIC BRANDS

Big Red Juicy Fruit

Doublemint Orbit

Eclipse Orbit White

Eclipse Flash Winterfresh

Extra Winterfresh Thin Ice

Freedent Wrigley’s Spearmint

INTERNATIONAL BRANDS

Airwaves Extra White

Alpine Freedent

Arrowmint Freedent for Kids

Big Boy Freedent White

Big G Hubba Bubba

Big Red Ice White

Cool Air Juicy Fruit

Cool Crunch Orbit

Doublemint Orbit Drops

Dulce 16 Orbit for Kids

Eclipse Orbit White

Excel P.K.

Extra Winterfresh

Extra Thin Ice Wrigley’s Spearmint

Extra for Kids X-Cite

Amurol Confections Co., a wholly owned subsidiary of the Wrigley Company, makes a wide range of youth-oriented andadult gum and confectionery products, which are marketed in the U.S. and internationally.

AMUROL BRANDS

Big League Chew Bubble Tape Hubba Bubba Sweet Roll

Blasters Bug City Santa’s Coal

Bubble Beeper Cluckers Squeeze Pop

Bubble Cane Dragon Fire Velamints

Bubble Jug Everest Fresh Sqeezed

The brands listed above are trademarks either owned by the Wm. Wrigley Jr. Company or Amurol Confections Co.,or used under license from the trademark owner.

Wm. Wrigley Jr. Company

Wrigley Building410 North Michigan Avenue

Chicago, Illinois 60611