Table_Of_Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the quarterly period ended March 31, 2004

o   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to           

For the Quarter Ended March 31, 2004          Commission file number 1-800

WM. WRIGLEY JR. COMPANY

(Exact name of registrant as specified in its charter)

Delaware

36-1988190

(State of other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

410 North Michigan Avenue
Chicago, Illinois

60611

(Address of principal executive office)

(Zip Code)

(312) 644-2121
(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

YES   x         NO   o

Indicate by check mark whether the Registrant is an accelerated filer
(as defined under Rule 12b-2 of the Securities and Exchange Act of 1934).

YES   x         NO   o

186,949,574 shares of Common Stock and 37,651,114 shares of Class B Common Stock were
outstanding as of April 30, 2004.

Table of Contents

WM. WRIGLEY JR. COMPANY
INDEX TO FORM 10-Q

Page

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Consolidated Statement of Earnings (Condensed) for the Three Months Ended March 31, 2004 and 2003

2

Consolidated Statement of Cash Flows (Condensed) for the Three Months Ended March 31, 2004 and 2003

3

Consolidated Balance Sheet (Condensed) as of March 31, 2004 and
December 31, 2003

4

Notes to Consolidated Financial Statements (Condensed)

5 - 8

Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition

9 - 10

Item 2e - Repurchases of Equity Securities

11

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

12

Item 4 - Controls and Procedures

12

PART II - OTHER INFORMATION

Item 4 - Submission of Matters to Vote of Security

13

Item 6 - Exhibits and Reports on Form 8-K

13

SIGNATURES

14

INDEX TO EXHIBITS

15

Table of Contents

FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1
WM. WRIGLEY JR. COMPANY
CONSOLIDATED STATEMENT OF EARNINGS (CONDENSED)
(Unaudited)

Three Months Ended
March 31,

2004

2003

Net sales

$

812,151

672,393

Cost of sales

353,766

281,974

Gross profit

458,385

390,419

Selling, general and administrative expense

296,716

249,055

Operating income

161,669

141,364

Investment income

2,495

1,530

Other expense

(954)

(220)

Earnings before income taxes

163,210

142,674

Income taxes

52,227

45,655

Net earnings

$

110,983

97,019

Net earnings per average share

of common stock (basic and diluted)

$

0.49

0.43

Dividends declared per share

of common stock

$

0.235

0.220

Average number of shares

outstanding for the period

224,795

225,054

All amounts in thousands except for per share values.

Notes to financial statements beginning on page 5 are an integral part of these statements.

2

Table of Contents

FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (CONDENSED)
(Unaudited)

Three Months Ended
March 31,

2004

2003

OPERATING ACTIVITIES

Net earnings

$

110,983

97,019

Adjustments to reconcile net earnings to net

cash provided by operating activities:

Depreciation

31,257

25,416

Loss on retirements of property, plant,

and equipment

5,465

33

(Increase) decrease in:

Accounts receivable

(10,202)

(4,738)

Inventories

(17,740)

(29,143)

Other current assets

(25,287)

(20,981)

Deferred charges and other assets

129

10,610

Increase (decrease) in:

Accounts payable

(2,907)

15,714

Accrued expenses

419

(11,576)

Income and other taxes payable

15,546

8,809

Deferred taxes

(440)

1,965

Other noncurrent liabilities

6,778

3,929

Net cash provided by operating activities

$

114,001

97,057

INVESTING ACTIVITIES

Additions to property, plant, and equipment

$

(32,038)

(29,402)

Proceeds from retirements of property, plant, and equipment

1,055

586

Purchases of short-term investments

(10,012)

(6,495)

Maturities of short-term investments

10,173

9,449

Net cash used in investing activities

$

(30,822)

(25,862)

FINANCING ACTIVITIES

Dividends paid

$

(49,473)

(46,145)

Common stock purchased, net

(27,231)

(7,134)

Net cash used in financing activities

(76,704)

(53,279)

Effect of exchange rate changes on cash and

cash equivalents

2,537

(1,376)

Net increase in cash and cash equivalents

9,012

16,540

Cash and cash equivalents at beginning of period

505,217

279,276

Cash and cash equivalents at end of period

$

514,229

295,816

SUPPLEMENTAL CASH FLOW INFORMATION

Income taxes paid

$

42,072

31,971

Interest paid

$

493

553

Interest and dividends received

$

2,495

1,535

All amounts in thousands.

Notes to financial statements beginning on page 5 are an integral part of these statements.

3

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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
CONSOLIDATED BALANCE SHEET (CONDENSED)

(Unaudited)
March 31,
2004

December 31,
2003

Current assets:

Cash and cash equivalents

$

514,229

505,217

Short term investments, at amortized cost

22,565

22,509

Accounts receivable

(less allowance for doubtful accounts;

3/31/04 - $9,241; 12/31/03 - $9,232)

338,212

328,862

Inventories -

Finished goods

131,300

127,839

Raw materials and supplies

235,446

222,129

366,746

349,968

Other current assets

85,772

60,209

Deferred income taxes - current

22,960

23,826

Total current assets

1,350,484

1,290,591

Marketable equity securities, at fair value

15,956

16,239

Deferred charges and other assets

228,021

224,252

Deferred income taxes - noncurrent

32,647

33,148

Property, plant, and equipment, at cost

1,761,978

1,745,193

Less accumulated depreciation

815,346

789,013

Net property, plant, and equipment

946,632

956,180

Total assets

$

2,573,740

2,520,410

Current liabilities:

Accounts payable

$

131,524

134,888

Accrued expenses

206,267

206,360

Dividends payable

52,847

49,469

Income and other taxes payable

83,743

68,650

Deferred income taxes - current

5,818

5,427

Total current liabilities

480,199

464,794

Deferred income taxes - noncurrent

81,743

82,919

Other noncurrent liabilities

157,793

151,876

Stockholders' equity:

Preferred stock (no par value)

Authorized - 20,000 shares

Issued - None

Common stock (no par value)

Authorized - 400,000 shares

Issued -

194,757 shares at 3/31/04;

191,964 shares at 12/31/03

12,977

12,790

Class B common stock (convertible)

Authorized - 80,000 shares

Issued and outstanding -

37,684 shares at 3/31/04;

40,477 shares at 12/31/03

2,519

2,706

Additional paid-in capital

9,838

8,342

Retained earnings

2,210,697

2,152,566

Common stock in treasury, at cost -

(3/31/04 - 7,906 shares; 12/31/03 - 7,581 shares)

(343,447)

(320,450)

Accumulated other comprehensive income:

Foreign currency translation adjustment

(45,618)

(42,692)

Loss on derivative contracts

(2,238)

(1,902)

Unrealized holding gains on marketable equity securities

9,277

9,461

Total accumulated other comprehensive income

(38,579)

(35,133)

Total stockholders' equity

1,854,005

1,820,821

Total liabilities & stockholders' equity

$

2,573,740

2,520,410

All amounts in thousands.

Notes to financial statements beginning on page 5 are an integral part of these statements.

4

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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONDENSED)
(Unaudited)

1.

The Consolidated Statement of Earnings (Condensed) for the three-month period ended March 31, 2004 and 2003, the Consolidated Statement of Cash Flows (Condensed) for the three-month period ended March 31, 2004 and 2003, and the Consolidated Balance Sheet (Condensed) at March 31, 2004, are unaudited. In the Company's opinion, the accompanying financial statements reflect all normal and recurring adjustments necessary to present fairly the results for the periods and have been prepared on a basis consistent with the 2003 audited consolidated financial statements. These condensed financial statements should be read in conjunction with the 2003 audited consolidated financial statements and related notes which are an integral part thereof. Certain amounts recorded in 2003 have been reclassified to conform to the 2004 presentation.

2.

Conformity with generally accepted accounting principles requires management to make estimates and assumptions when preparing financial statements that affect assets, liabilities, revenues and expenses. Actual results may vary from those estimates.

3.

On April 1, 2004, the Company completed its transaction with Agrolimen, a privately-held Spanish conglomerate, to purchase certain confectionery businesses of the Joyco Group. The purchase price of 215 million Euro (approximately $260 million) was funded from the Company's available cash and a $130 million draw on the $300 million line of credit the Company negotiated for purposes of this transaction.

This transaction strengthens the Company's operations in key geographies such as Spain, India, and China through a broader confectionery brand portfolio, access to additional distribution channels and increased confectionery and gum base manufacturing capacity. These opportunities, along with the efficiencies from combining the operations of the Company with those of the Joyco Group, were key factors associated with the determination of the purchase price.

4.

In connection with the acquisition, the Company entered into a $300 million unsecured line of credit. The interest rate on the line of credit is variable and is indexed to the LIBOR rate. The Company will pay an annual facility fee and additional fees based on amounts drawn. The line of credit matures on March 19, 2007. Upon entering into this line of credit, the Company terminated the $100 million unsecured line of credit, which had been renewed in September 2003.

5.

In the first quarter 2004, the Company continued to apply Accounting Principles Board Opinion (APB) No. 25 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 that amount an employee must pay to acquire the stock. 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 following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions of the Statement of Financial Accounting Standards (SFAS) No. 123, to stock compensation plans.

First Quarter
Three Months Ended

3/31/2004

3/31/2003

Net earnings as reported

$

110,983

97,019

Add:

Stock-based compensation expense included
in net earnings, net of tax

3,067

2,272

Deduct:

Total stock-based compensation expense determined
under fair value method for all awards, net of tax

(6,796)

(5,555)

Pro forma net earnings

$

107,254

93,736

Basic and diluted earnings per share

As reported

$

0.49

0.43

Pro forma