-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LnUPL1tiLiskrnVGfWu/nOpBmZEffaRwFdncrvUE2u5Ep716F+iHJUkCYFPICYVj 4K0Z88dMbVn9hAc/XzoFVQ== 0001008654-98-000036.txt : 19980325 0001008654-98-000036.hdr.sgml : 19980325 ACCESSION NUMBER: 0001008654-98-000036 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19971227 FILED AS OF DATE: 19980324 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TUPPERWARE CORP CENTRAL INDEX KEY: 0001008654 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 364062333 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-11657 FILM NUMBER: 98571813 BUSINESS ADDRESS: STREET 1: 14901 S ORANGE BLOSSOM TRAIL CITY: ORLANDO STATE: FL ZIP: 32802-2353 BUSINESS PHONE: 4078265050 MAIL ADDRESS: STREET 1: P O BOX 2353 CITY: ORLANDO STATE: FL ZIP: 32802 10-K 1 LIVE FILING OF 10K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 27, 1997 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition period from ________to ___________ Commission file number 1-11657 ______________________________________________________________________________ TUPPERWARE CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-4062333 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 14901 South Orange Blossom Trail, Orlando, Florida 32837 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (407)826-5050 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock, $0.01 par value New York Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Aggregate market value of the Registrant's voting stock held by non-affiliates, based upon the closing price of said stock on the New York Stock Exchange-Composite Transaction Listing on March 10, 1998 ($28.125 per share): $1,636,252,228. As of March 10, 1998, 59,200,241 shares of the Common Stock, $0.01 par value, of the Registrant were outstanding. Documents Incorporated by Reference: Portions of the Annual Report to Shareholders for the year ended December 27, 1997 are incorporated by reference into Parts I, II and IV of this Report. Portions of the Proxy Statement relating to the Annual Meeting of Shareholders to be held May 8, 1998 are incorporated by reference into Part III of this Report. PART I Item 1. Business (a) General Development of Business Tupperware Corporation (the "Registrant" or "Tupperware") is a multinational consumer products company. The Registrant is a Delaware corporation which was organized on February 8, 1996 in connection with the corporate reorganization of Premark International, Inc. ("Premark"). In the reorganization, the businesses of the Registrant and certain other assets and liabilities of Premark and its subsidiaries were transferred to the Registrant. On May 31, 1996, the Registrant became a publicly-held company through the pro-rata distribution by Premark to its shareholders of all of the outstanding shares of common stock of the Registrant. BUSINESS OF TUPPERWARE CORPORATION Tupperware is a worldwide direct selling consumer products company engaged in the manufacture and sale of Tupperware products. Principal Products. Tupperware conducts its business through a single business segment, manufacturing and marketing a broad line of high-quality consumer products for the home. The core of Tupperware's product line consists of food storage containers which preserve freshness through the well-known Tupperware seals. Tupperware also has an established line of children's educational toys, serving products and gifts. The line of products has expanded over the years into kitchen, home storage and organizing uses with products such as Modular Mates* containers, Fridge Stackables* containers, OneTouch* canisters, the Rock N'Serve* line, Meals in Minutes* line, Legacy Serving line and TupperMagic* line, and many specialized containers. In recent years, Tupperware has expanded its offerings in the food preparation and servicing areas through the addition of a number of products, including double colanders, tumblers and mugs, mixing and serving bowls, serving centers, microwaveable cooking and serving products, and kitchen utensils. Tupperware continues to introduce new designs and colors in its product lines, and to extend existing products into new markets around the world. The development of new products varies in different markets in order to address differences in cultures, lifestyles, tastes and needs of the markets. New products introduced in 1997 included a wide range of products in all four geographic areas; including many using Disney movie and cartoon characters under a license. New product development and introduction will continue to be an important part of Tupperware's strategy. Products sold by Tupperware are primarily produced by Tupperware in its manufacturing facilities around the world. In some markets, Tupperware sources certain products from third parties and/or contracts with local manufacturers to manufacture its products, utilizing high- quality molds which are generally supplied by Tupperware. Promotional items provided at product demonstrations include items obtained from outside sources. (Words followed by * are Trademarks of the Registrant.) Markets. Tupperware's business is operated on the basis of four geographic segments: Europe, Africa and Middle East; Asia Pacific; Latin America; and the United States. Tupperware has operations in more than 74 countries and its products are sold in more than 100 foreign countries and in the United States. For the past five fiscal years, sales in foreign countries represented, on average, 84 percent of total Tupperware revenues. During 1997, Tupperware entered several new international markets, including Russia and Turkey. Market penetration varies throughout the world. Several "developing" areas which have low penetration, such as Latin America, Asia and Eastern (Central) Europe, provide significant growth potential for Tupperware. Tupperware's strategy continues to include aggressive expansion into new markets throughout the world. Distribution of Tupperware Products. Tupperware's products are distributed worldwide through the "direct selling" method of distribution, in which products are sold to consumers outside traditional retail store channels. The distributorship system is intended to facilitate the timely distribution of products to the consumer, and to establish uniform practices regarding the use of Tupperware trademarks and the administrative arrangements with Tupperware, such as order entering and delivering, paying and recruiting, and training of dealers. Tupperware products are sold directly to distributors or dealers throughout the world. Distributors are granted the right to market Tupperware products using the demonstration method and utilizing the Tupperware trademark. The vast majority of Tupperware's distributorship system is composed of distributors, managers and dealers (known in the United States as consultants) who are independent contractors and not employees of Tupperware. In certain limited circumstances, Tupperware acquires ownership of distributor- ships for a period of time, until an independent distributor can be installed, in order to maintain market presence. In addition to the introduction of new products and development of new geographic markets, a key element of Tupperware's strategy is expanding its business by enlarging the number of distributors and consultants. Under the Tupperware system, distributors recruit, train and motivate a large sales force to cover the distributor's geographic area. Managers are developed and promoted by distributors to assist the distributor in recruiting, training and motivating dealers, as well as continuing to hold their own demonstrations. As of December 27, 1997, the Tupperware distribution system had over 1800 distributors, over 50,400 managers and over 950,000 consultants worldwide. Tupperware relies primarily on the "demonstration" method of sales, which is designed to enable the purchaser to appreciate through demonstration the features and benefits of Tupperware products. Demonstrations, which are sometimes referred to as "Tupperware parties," are held in homes, offices, social clubs and other locations. In excess of 17,250,000 demonstrations were held in 1997 worldwide. Tupperware products are also promoted through brochures mailed to persons invited to attend Tupperware parties and various other types of demonstrations. Sales of Tupperware products are supported by Tupperware through a program of sales promotions, sales and training aids and motivational conferences for the independent sales force. In addition, to support its sales force, Tupperware utilizes catalogs, magazine advertising and toll-free telephone ordering, which helps increase its sales levels with hard-to-reach customers. The distribution of products to consumers is primarily the responsibility of distributors, who often maintain their own inventory of Tupperware products, the necessary warehouse facilities and delivery systems. In certain markets, Tupperware offers distributors the use of a delivery system of direct product shipment to consumers or dealers, which is intended to reduce the distributor's investment in inventory and enable distributors to be more cost-efficient. Competition. There are two primary competitive factors which affect Tupperware's business: (i) competition with other "direct sales" companies for sales personnel and demonstration dates; and (ii) competition in the markets for food storage and serving containers, toys, and gifts in general. Tupperware believes that it holds a significant market share in each of these markets in many countries. This has been facilitated by innovative product development and a large, dedicated worldwide sales force. Tupperware's competitive strategies are to continue to expand its direct selling distribution system, and to provide high-quality, high-value products throughout the world. Employees. Tupperware employs approximately 6,800 people, of whom approximately 900 are based in the United States. Tupperware's United States work force is not unionized. In certain countries, Tupperware's work force is covered by collective arrangements decreed by statute. The terms of most of these arrangements are determined on an annual basis. Additionally, approximately 60 Tupperware manufacturing employees in the Australian mold manufacturing operation are covered by a collective bargaining agreement which is negotiated annually and Philippine manufacturing employees have negotiated a collective bargaining agreement which will remain in effect for a three-year period. There have been no work stoppages or threatened work stoppages in over three years and Tupperware believes its relations with its employees to be good. The independent consultants, dealers, managers and distributors engaged in the direct sale of Tupperware products are not employees of Tupperware. Research and Development. For fiscal years ended 1997, 1996 and 1995, Tupperware incurred expenses of approximately $12.8 million, $7.2 million and $6.3 million respectively, on research and development activities for new products. Raw Materials. Products manufactured by Tupperware require plastic resins meeting its specifications. These resins are purchased through various arrangements with a number of large chemical companies located throughout Tupperware's markets. As a result, Tupperware has not experienced difficulties in obtaining adequate supplies and generally has been successful in mitigating the effects of increases in resin market prices. Research and development relating to resins used in Tupperware products is performed by both Tupperware and its suppliers. Trademarks and Patents. Tupperware considers its trademarks and patents to be of material importance to its business; however, except for the Tupperware trademark, Tupperware is not dependent upon any single patent or trademark, or group of patents or trademarks. The trademark on the Tupperware name is registered on a country-by-country basis. The current duration for such registration ranges from seven years to fifteen years; however, each such registration may be renewed an unlimited number of times. The patents and trademarks used in Tupperware's business are registered and maintained on a worldwide basis, with a variety of durations. Tupperware has followed the practice of applying for design and utility patents with respect to most of the significant patentable developments. Environmental Laws. Compliance with federal, state and local environmental protection laws has not in the past had, and is not expected to have in the future, a material effect upon Tupperware's capital expenditures, liquidity, earnings or competitive position. Other. Tupperware sales do not vary significantly on a quarterly basis; however, third quarter sales are generally lower than the other quarters in any year due to vacations by Tupperware's sales consultants and their customers, as well as Tupperware's reduced promotional activities during such quarter. Sales generally increase in the fourth quarter as it includes traditional gift giving occasions in many of Tupperware's markets and as children return to school and households refocus on activities that include the use of Tupperware's products. There are no working capital practices or backlog conditions which are material to an understanding of Tupperware's business. Tupperware's business is not dependent on a small number of customers, nor is any of its business subject to renegotiation of profits or termination of contracts or subcontracts at the election of the United States government. Executive Officers of the Registrant. Following is a list of the names and ages of all the Executive Officers of the Registrant, indicating all positions and offices with the Registrant held by each such person, and each such person's principal occupations or employment during the past five years. Each such person has been elected to serve until the next annual election of officers of the Registrant (expected to occur on May 8, 1998). Positions and Offices Held and Principal Occupations of Employment During Past Five Years Name and Age Office and Experience Brian R. Biggin, age 52 Vice President, Internal Audit since March 1996. Mr. Biggin previously served as Director, Computer Systems Audit, for Premark since 1986. Gerald M. Crompton, age 54 Senior Vice President, Product Marketing, Worldwide since November 1997, after serving as Vice President, Product Marketing, Worldwide since November 1996. Prior thereto, Mr. Crompton served as Vice President, Product Management for Tupperware Europe, Africa and Middle East since 1992. Alberto Giovannini, age 58 President, Latin America since August 1997, after serving in various executive positions in Tupperware's European operations. E.V. Goings, age 52 Chairman and Chief Executive Officer since October, 1997. Prior thereto, he was President and Chief Operating Officer since 1996. Mr. Goings served as Executive Vice President of Premark and President of Tupperware Worldwide from November 1992 to 1996. David T. Halversen, age 53 Senior Vice President, Business Development and Communications since November, 1996. Prior thereto, he served as Senior Vice President, Planning, Business Development and Financial Relations since May 1996. He previously served as Vice President, Business Development and Planning since February 1995, after serving in various planning and strategy positions with Avon Products, Inc. Christine J. Hanneman, age 42 Vice President, Financial Relations since March 1996. Ms. Hanneman served as Director, Investor Relations for Premark from June 1994 until joining Tupperware. Prior thereto, she served as Manager Investor Relations of Premark. Carol A. Kiryluk, age 51 Senior Vice President, Human Resources, Worldwide since March 1996. From March 1992 until March 1996, Ms. Kiryluk served as Vice President, Human Resources, Worldwide for Tupperware. Jennifer M. Moline, age 40 Vice President and Treasurer since February 1998, after serving in various business development and financial management positions within the Corporation. Gaylin L. Olson, age 52 Senior Vice President, Emerging Markets, Tupperware Worldwide. Mr. Olson has served in various executive positions for Tupperware over the years, including President of Asia Pacific and most recently President of U.S. Operations. Thomas P. O'Neill, Jr., age 44 Senior Vice President and Chief Financial Officer since March 1997. Prior thereto, Mr. O'Neill served as Vice President and Chief Financial Officer, Tupperware Europe, Africa and Middle East since April 1994. Prior thereto Mr. O'Neill served as Vice President and Treasurer of Premark International, Inc. Michael S. Poteshman, age 34 Vice President and Controller since January 1998, after serving as Assistant Controller since March 1996. Prior thereto, Mr. Poteshman served as Director, Accounting and Reporting Standards for Premark International, Inc. since September 1993, after serving as an audit manager with Price Waterhouse. Thomas M. Roehlk, age 47 Senior Vice President, General Counsel and Secretary since December 1995. Prior thereto, Mr. Roehlk served as Assistant General Counsel and Assistant Secretary of Premark. James E. Rose, Jr., age 55 Senior Vice President Taxes and Government Affairs. Mr. Rose served as Vice President, Tax and Government Affairs since March 1996. From 1994 to March 1996, Mr. Rose served as Vice President, Taxes and Government Affairs for Premark. Prior thereto, Mr. Rose served as Vice President, Taxes for Premark. Hans Joachim Schwenzer, age 61 Senior Vice President, Tupperware, Worldwide. Mr. Schwenzer is currently President, Tupperware Germany; President, Sales Programs and Promotions, Tupperware Europe, Africa and Middle East; and Regional General Manager, Austria and Eastern Europe Region and has been since May 1995, Senior Vice President, Tupperware, Worldwide. Prior to assuming those positions, Mr. Schwenzer served as President, Tupperware Europe, Africa and Middle East. Christian E. Skroeder, age 49 President, Tupperware Europe, Africa and Middle East since May 1995. Prior thereto, Mr. Skroeder served in various executive positions with Tupperware. William E. Spears, age 52 President, Tupperware North America since January 1998, after serving as President, Tupperware U.S. since February 1997. Prior thereto, Mr. Spears served as Executive Vice President and Chief Operating Officer of Nature's Sunshine Products, Inc. Prior to 1994, Mr. Spears served in various managerial positions with Avon Products, Inc. Jose R. Timmerman, age 49 Senior Vice President, Operations, Tupperware, Worldwide since August 1997. Prior thereto, he was Vice President Operations, Worldwide since 1993 after serving as Vice President, Manufacturing, Tupperware Asia Pacific. Paul B. Van Sickle, age 58 Executive Vice President since March 1997. Prior thereto, Mr. Van Sickle served as Senior Vice President, Finance and Operations. Robert W. Williams, age 54 President, Tupperware Asia Pacific from April 1995. Prior to assuming that position, Mr. Williams served in various management positions in Tupperware Asia Pacific starting in August 1993. From 1991 until joining Tupperware, Mr. Williams served as Vice President, Marketing for Cameo, Inc. Item 2. Properties The principal executive office of the Registrant is owned by the Registrant and located in Orlando, Florida. The Registrant owns and maintains manufacturing plants in Argentina, Belgium, Brazil, France, Greece, Japan, Korea, Mexico, the Philippines, Portugal, South Africa, Spain and the United States, and leases manufacturing facilities in Venezuela and China. Tupperware conducts a continuing program of new product design and development at its facilities in Florida, Japan and Belgium. None of the owned principal properties is subject to any encumbrance material to the consolidated operations of the Registrant. The Registrant considers the condition and extent of utilization of its plants, warehouses and other properties to be good, the capacity of its plants and warehouses generally to be adequate for its needs, and the nature of the properties to be suitable for its needs. Item 3. Legal Proceedings A number of ordinary course legal and administrative proceedings against Tupperware are pending. In addition to such proceedings, there are certain proceedings which involve the discharge of materials into or otherwise relating to the protection of the environment. Certain of such proceedings involve federal environmental laws such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as well as state and local laws. Tupperware establishes reserves with respect to certain of such proceedings. Because of the involvement of other parties and the uncertainty of potential environmental impacts, the eventual outcomes of such actions and the cost and timing of expenditures cannot be estimated with certainty. It is not expected that the outcome of such proceedings, either individually or in the aggregate, will have a materially adverse effect upon Tupperware. As part of the 1986 reorganization involving the formation of Premark, Premark was spun-off by Dart & Kraft, Inc. and Kraft, Inc. assumed any liabilities arising out of any legal proceedings in connection with certain divested or discontinued former businesses of Dart Industries Inc., a subsidiary of Tupperware, including matters alleging product liability, environmental liability and infringement of patents. The assumption of liabilities by Kraft, Inc. remains effective subsequent to the distribution of the equity of the Registrant to Premark shareholders. Item 4. Submission of Matters to a Vote of Security Holders None. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters The stock price information set forth in Note 12 ("Quarterly Financial Summary (Unaudited)") appearing on page 35 of the Annual Report to Shareholders for the year ended December 27, 1997 is incorporated by reference into this Report. The information set forth in Note 13 ("Rights Agreement") on page 35 of the Annual Report to Shareholders for the year ended December 27, 1997 is incorporated by reference into this Report. As of March 10, 1998, the Registrant had 19,323 shareholders of record. Item 6. Selected Financial Data The information set forth under the caption "Selected Financial Data" on pages 2 and 3 of the Annual Report to Shareholders for the year ended December 27, 1997 is incorporated by reference into this Report. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The information entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth on pages 4 through 13 of the Annual Report to Shareholders for the year ended December 27, 1997 is incorporated by reference into this Report. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The information set forth under the caption "Market Risk and Impact of Inflation" on page 13, and under the sub-caption "Derivative Financial Instruments" in Note 6 ("Financing Arrangements") on pages 24 and 25, of the Annual Report to Shareholders for the year ended December 27, 1997 is incorporated by reference into this Report. Item 8. Financial Statements and Supplementary Data (a) The following Consolidated Financial Statements of Tupperware Corporation and Report of Independent Certified Public Accountants set forth on pages 14 through 35, and on page 36 respectively, of the Annual Report to Shareholders for the year ended December 27, 1997 are incorporated by reference into this Report: Consolidated Statements of Income, Cash Flows and Shareholders' Equity--Years ended December 27, 1997, December 28, 1996 and December 30, 1995. Consolidated Balance Sheet--December 27, 1997 and December 28, 1996. Notes to the Consolidated Financial Statements; and Report of Independent Certified Public Accountants dated February 20, 1998. (b) The supplementary data regarding quarterly results of operations contained in Note 12 ("Quarterly Financial Summary (Unaudited)") of the Notes to the Consolidated Financial Statements of Tupperware Corporation on page 35 of the Annual Report to Shareholders for the year ended December 27, 1997 is incorporated by reference into this Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None PART III Item 10. Directors and Executive Officers of the Registrant The information as to the Directors of the Registrant set forth under the sub-caption "Board of Directors" appearing under the caption "Election of Directors" on pages 3 through 5 of the Proxy Statement relating to the Annual Meeting of Shareholders to be held on May 8, 1998 is incorporated by reference into this Report. The information as to the Executive Officers of the Registrant is included in Part I hereof under the caption "Executive Officers of the Registrant" in reliance upon General Instruction G to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K. Item 11. Executive Compensation The information set forth under the caption "Compensation of Directors" on page 18 of the Proxy Statement relating to the Annual Meeting of Shareholders to be held on May 8, 1998 and the information on pages 13 through 17 of such Proxy Statement relating to executive officers' compensation is incorporated by reference into this Report. Item 12. Security Ownership of Certain Beneficial Owners and Management The information set forth under the captions "Security Ownership of Certain Beneficial Owners" on page 7 and "Security Ownership of Management" on page 6 of the Proxy Statement relating to the Annual Meeting of Shareholders to be held on May 8, 1998 is incorporated by reference into this Report. Item 13. Certain Relationships and Related Transactions None PART IV Item 14. Exhibits, Financial Statement Schedules and Reports On Form 8-K (a) (1) List of Financial Statements The following Consolidated Financial Statements of Tupperware Corporation and Report of Independent Certified Public Accountants set forth on pages 14 through 35 and on page 36, respectively, of the Annual Report to Shareholders for the year ended December 27, 1997 are incorporated by reference into this Report by Item 8 hereof: Consolidated Statements of Income, Cash Flows and Shareholders' Equity--Years ended December 27, 1997, December 28, 1996, and December 30, 1995; Consolidated Balance Sheet-- December 27, 1997, and December 28, 1996; Notes to the Consolidated Financial Statements; and Report of Independent Certified Public Accountants dated February 20, 1998. (a) (2) List of Financial Statement Schedules The following consolidated financial statement schedule (numbered in accordance with Regulation S-X) of Tupperware Corporation is included in this Report: Report of Independent Certified Public Accountants on Financial Statement Schedule, page 16 of this Report; and Schedule II--Valuation and Qualifying Accounts for the three years ended December, 27, 1997, page 17 of this Report. All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are inapplicable, or the information called for therein is included elsewhere in the financial statements or related notes contained or incorporated by reference herein. (a) (3) List of Exhibits: (numbered in accordance with Item 601 of Regulation S-K) Exhibit Number Description *1 Underwriting Agreement (Attached to Form S-3 (No. 33-12125) Registration Statement as Exhibit 1 and incorporated herein by reference). *2 Distribution Agreement by and among Premark International, Inc., Tupperware Corporation and Dart Industries Inc. (Attached as Exhibit 2 to Tupperware Corporation's Registration Statement on Form 10 (No. 1-11657) filed with the Commission on March 4, 1996 and incorporated herein by reference). *3.1 Amended and Restated Certificate of Incorporation of Tupperware Corporation (Attached as Exhibit 3.1 to Form 10 (No. 1-11657) and incorporated herein by reference). *3.2 Amended and Restated By-laws of Tupperware Corporation (Attached as Exhibit 3.2 to Form 10 (No. 1-11657) and incorporated herein by reference). *4.1 Rights Agreement, by and between Tupperware Corporation and the rights agent named therein (Attached as Exhibit 4 to Form 10 (No. 1-11657) and incorporated herein by reference). *4.2 Indenture dated as of October 1, 1996, among Tupperware Corporation and The First National Bank of Chicago, as Trustee, (Attached as Exhibit 4(a) to Tupperware Corporation's Registration Statement on Form S-3 (No. 33-12125) filed with the Commission on September 25, 1996 and incorporated herein by reference). *4.3 Form of Debt Securities (Attached as Exhibit 4(b) to Tupperware Corporation's Registration Statement on Form S-3 (No. 33-12125) filed with the Commission on September 25, 1996 and incorporated herein by reference). *4.4 Form of Warrant Agreement, including form of Warrant Certificate (Attached as Exhibit 4(a) to Tupperware Corporation's Registration Statement on Form S-3 (No. 33-12125) filed with the Commission on September 25, 1996 and incorporated herein by reference). *10.1 Tupperware Corporation 1996 Incentive Plan (Attached to Form 10 (No. 1-11657) as Annex C and incorporated herein by reference). *10.2 Tupperware Corporation Directors Stock Plan (Attached to Form 10 (No. 1-11657) as Annex D and incorporated herein by reference). *10.3 Tax Sharing Agreement between Tupperware Corporation and Premark International, Inc. (Attached as Exhibit 10.3 to Form 10 (No. 1-11657) and incorporated herein by reference). *10.4 Employee Benefits and Compensation Allocation Agreement between Tupperware Corporation and Premark International, Inc. (Attached as Exhibit 10.4 to Form 10 (No. 1-11657) and incorporated herein by reference). *10.5 Form of Change of Control Agreement (Attached as Exhibit 10.5 to Form 10 (No. 1-11657) and incorporated herein by reference). *10.6 Employment Agreement for Mr. Schwenzer. (Attached as Exhibit 10.8 to Form 10 (No. 1-11657) and incorporated herein by reference). *10.7 Credit Agreement dated May 16, 1996 (Attached to the Registrant's Registration Statement on Form 10 (No. 1-11657) as Exhibit 10.8 and incorporated herein by reference). *10.8 Form of Franchise Agreement between a subsidiary of the Registrant and distributors of Tupperware products in the United States (Attached as Exhibit 10.10 to the Registrant's Annual Report on Form 10-K for the year ended December 28, 1996 and incorporated herein by reference). 10.9 First Amendment dated August 8, 1997 to Credit Agreement dated May 16, 1996. 13 Pages 2 through 36 of the Annual Report to Shareholders of the Registrant for the year ended December 27, 1997. 21 Subsidiaries of Tupperware Corporation as of March 10, 1998. 23 Manually signed Consent of Independent Certified Public Accountants to the incorporation of their report by reference into the prospectus contained in specified registration statements on Form S-8 and Form S-3. 24 Powers of Attorney 27 Financial Data Schedule *Document has heretofore been filed with the Commission and is incorporated by reference and made a part hereof. The Registrant agrees to furnish, upon request of the Commission, a copy of all constituent instruments defining the rights of holders of long- term debt of the Registrant and its consolidated subsidiaries. (b) Reports on Form 8-K During the quarter ended December 27, 1997, the Registrant did not file any reports on Form 8-K. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors and Shareholders of Tupperware Corporation Our audits of the consolidated financial statements referred to in our report dated February 20, 1998 appearing on page 36 of the 1997 Annual Report to Shareholders of Tupperware Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Price Waterhouse LLP Orlando, Florida February 20, 1998 TUPPERWARE CORPORATION SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS FOR THE THREE YEARS ENDED DECEMBER 27, 1997 (In millions)
Col. A Col. B Col. C Col. D Col. E - ---------------------- ---------- ----------------- ----------- -------- Balance at Charged Charged Balance Beginning to Costs to Other at End of Description of Period Expenses Accounts Deductions of Period - ---------------------- ---------- -------- -------- ---------- --------- Allowance for doubtful accounts, current and long term: Year ended December 27, 1997 $ 67.9 $ 27.5 $0.8 $(12.1) $81.9 ( 2.2) Year ended December 28, 1996 $ 50.9 $ 20.9 -- $ (3.7) $67.9 (0.2) Year ended December 30, 1995 $ 48.0 $ 7.7 -- $ (4.7) $50.9 (0.1) Valuation allowance for deferred tax assets: Year ended December 27, 1997 $ 25.8 $(11.4) -- -- $14.4 Year ended December 28, 1996 $ 25.9 $ (0.1) -- -- $25.8 Year ended December 30, 1995 $ 28.7 $ (2.8) -- -- $25.9 Represents write-offs less recoveries. Foreign currency translation adjustment.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Signature Title E.V. Goings Chairman of the Board of Directors, Chief Executive Officer and Director (Principal Executive Officer) Thomas P. O'Neill, Jr. Senior Vice President and Chief Financial Officer (Principal Financial Officer) Michael S. Poteshman Vice President and Controller (Principal Accounting Officer) * Director Rita Bornstein, Ph.D * Director Ruth M. Davis, Ph.D * Director Lloyd C. Elam, M.D. * Director Clifford J. Grum * Director Joe R. Lee * Director Bob Marbut * Director David R. Parker * Director Robert M. Price * Director Joyce M. Roche *By: Thomas M. Roehlk Attorney-in-fact March 24, 1998 EXHIBIT INDEX Exhibit No. Description 10.9 First Amendment dated August 8, 1997 to Credit Agreement dated May 16, 1996 13 Pages 2 through 36 of the Annual Report to Shareholders of the Registrant for the year ended December 27, 1997 21 Subsidiaries of Tupperware Corporation as of March 10, 1998 23 Manually signed Consent of Independent Certified Public Accountants to the incorporation of their report by reference into the prospectus contained in specified registration statements on Form S-8 and Form S-3 24 Powers of Attorney 27 Financial Data Schedule EX-10.9 2 FIRST AMENDMENT EXHIBIT 10.9 FIRST AMENDMENT dated as of August 8, 1997 (this "Amendment"), to the COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT dated as of May 16, 1996 (the "Agreement"), among TUPPERWARE CORPORATION, the BORROWING SUBSIDIARIES (as defined in the Agreement), the LENDERS (as defined in the Agreement) and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), a New York banking corporation, as agent for the Lenders (in such capacity, the "Agent"). A. Tupperware Corporation has requested that the Lenders amend certain provisions of the Agreement. The Lenders are willing to enter into this Amendment, subject to the terms and conditions of this Amendment. B. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Agreement. Accordingly, in consideration of the mutual agreements contained in this Amendment and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Amendment to Article I. The following amendments are made to the definitions contained in Article I of the Agreement: (a) The definition of "Applicable Margin" is hereby amended to read as follows: "Applicable Margin" shall mean on any date, with respect to Eurocurrency Standby Loans or, as the case may be, L/C Participation Fees, the applicable percentage set forth below based upon the Ratings most recently announced by the Rating Agencies as of such date: Category 1 Percentage Aa3 or higher by Moody's; .1150% AA- or higher by S&P Category 2 A2 or higher by Moody's; .1350% A or higher by S&P Category 3 A3 by Moody's; .1500% A- by S&P Category 4 Baa1 by Moody's; .1850% BBB+ by S&P Category 5 Baa2 by Moody's; .2000% BBB by S&P Category 6 Baa3 by Moody's; .2500% BBB- by S&P Category 7 Ba1 or lower by Moody's; .4500% BB+ or lower by S&P For purposes of the foregoing, (i) if either Moody's or S&P shall not have in effect a Rating, then such Rating Agency shall be deemed to have established a rating in Category 7; (ii) if the Ratings established or deemed to have been established shall fall within different Categories, then (x) if such Ratings shall differ by only one Category or if one of such Ratings shall be deemed to be in Category 7 because the applicable Rating Agency shall not yet have established a Rating, the Applicable Margin shall be based upon the higher of the two Ratings, (y) if such Ratings shall differ by only two Categories, the Applicable Margin shall be determined by reference to the Category that falls between the two Categories in which the Ratings shall fall and (z) otherwise, the Applicable Margin shall be determined by reference to the Category one level above that in which the lower of the two Ratings shall fall (and for these purposes one Category is above another if the Ratings it contains are superior to those in such other Category), and (iii) if any Rating shall be changed (other than as a result of a change in the rating system of the applicable Rating Agency), such change shall be effective as of the date on which it is first announced by the Rating Agency making such change. Each such change in the Applicable Margin shall apply to all outstanding Eurocurrency Standby Loans during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of any Rating Agency shall change, or if any Rating Agency shall cease to be in the business of rating corporate debt obligations or shall have terminated its Rating for reasons outside the control of the Company, the parties hereto shall negotiate in good faith to amend this definition to reflect such changed rating system or the absence of such Rating, and pending the effectiveness of any such amendment, the Applicable Margin shall be determined by reference to the Rating from the other Rating Agency. (b) The definition of "Borrowing Subsidiary" is hereby amended to read as follows: "Borrowing Subsidiary" shall mean any Subsidiary of the Company designated as a Borrowing Subsidiary by the Company pursuant to Section 2.21. (c) The definition of "Excluded Taxes" is hereby amended by adding the following sentence to the end thereof: "It is understood and agreed that any withholding tax attributable to the designation of a Borrowing Subsidiary or the making of any payment from a location outside the United States of America after such time shall not be an Excluded Tax." (d) The definition of "Facility Fee Percentage" is hereby amended to read as follows: "Facility Fee Percentage" shall mean on any date the applicable percentage set forth below based upon the Ratings most recently announced by the Rating Agencies as of such date: Category 1 Percentage Aa3 or higher by Moody's; .0600% AA- or higher by S&P Category 2 A2 or higher by Moody's; .0650% A or higher by S&P Category 3 A3 by Moody's; .0750% A- by S&P Category 4 Baa1 by Moody's; .0900% BBB+ by S&P Category 5 Baa2 by Moody's; .1000% BBB by S&P Category 6 Baa3 by Moody's; .1500% BBB- by S&P Category 7 Ba1 or lower by Moody's; .1750% BB+ or lower by S&P For purposes of the foregoing, (i) if either Moody's or S&P shall not have in effect a Rating, then such Rating Agency shall be deemed to have established a rating in Category 7; (ii) if the Ratings established or deemed to have been established shall fall within different Categories, then (x) if such Ratings shall differ by only one Category or if one of such Ratings shall be deemed to be in Category 7 because the applicable Rating Agency shall not yet have established a Rating, the Facility Fee Percentage shall be based upon the higher of the two Ratings, (y) if such Ratings shall differ by only two Categories, the Facility Fee Percentage shall be determined by reference to the Category that falls between the two Categories in which the Ratings shall fall and (z) otherwise, the Facility Fee Percentage shall be determined by reference to the Category one level above that in which the lower of the two Ratings shall fall (and for these purposes one Category is above another if the Ratings it contains are superior to those in such other Category), and (iii) if any Rating shall be changed (other than as a result of a change in the rating system of the applicable Rating Agency), such change shall be effective as of the date on which it is first announced by the Rating Agency making such change. Each such change in the Facility Fee Percentage shall apply at any time during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of any Rating Agency shall change, or if any Rating Agency shall cease to be in the business of rating corporate debt obligations or shall have terminated its Rating for reasons outside the control of the Company, the parties hereto shall negotiate in good faith to amend this definition to reflect such changed rating system or the absence of such Rating, and pending the effectiveness of any such amendment, the Facility Fee Percentage shall be determined by reference to the Rating from the other Rating Agency. (e) The definition of "Guarantor" is hereby amended to read as follows: "Guarantor" shall mean (a) the Company and (b) each Domestic Borrowing Subsidiary (other than any Domestic Borrowing Subsidiary (i) that has no significant assets or operations or (ii) that has not directly or indirectly borrowed Loans or obtained Letters of Credit in an aggregate principal and/or face amount of $1,000,000 or more). (f) The definition of "Maturity Date" is hereby amended to read as follows: "Maturity Date" shall mean August 8, 2002. SECTION 2. Amendment to Section 2.19. Section 2.19 of the Agreement is hereby amended by adding the following clause (f) to the end thereof: "(f) If the Agent, any Lender or any Fronting Bank (as the case may be) receives a refund of any Taxes or Other Taxes for which the Agent, such Lender, or such Fronting Bank (as the case may be) has received payment from any Borrower hereunder, it shall promptly notify such Borrower thereof and shall promptly repay such refund, without interest and net of any expenses incurred; provided that such Borrower, upon the request of the Agent, such Lender or such Fronting Bank (as the case may be), agrees to return the amount of such refund (plus any penalties, interest or other charges required to be paid) to the Agent, such Lender or such Fronting Bank (as the case may be) in the event the Agent, such Lender or such Fronting Bank (as the case may be) is required to repay such amount to the relevant Governmental Authority." SECTION 3. Amendment to Section 5.01.(d). Section 5.01.(d) of the Agreement is hereby amended as of the Effective Date by deleting the phrase "5.03(b), 5.03(c), 5.03(i), 5.03(k), 5.06," from the seventh line thereof. SECTION 4. Amendment to Section 5.06. Section 5.06. of the Agreement is hereby amended as of the Effective Date to read as follows: "The Subsidiaries will not issue any preferred stock or create, incur, assume or permit to exist any Debt except (i) preferred stock of Subsidiaries in an aggregate stated value not in excess of $25,000,000, (ii) Debt created hereunder and under the Multicurrency Addenda, (iii) Debt of Foreign Finance Subsidiaries in an aggregate amount for all such Foreign Finance Subsidiaries not in excess of the amount of any Debt of such Foreign Finance Subsidiaries outstanding as of August 8, 1997, plus $300,000,000, (iv) preferred stock or Debt of a Wholly-Owned Consolidated Subsidiary issued or payable to the Company or another Wholly-Owned Consolidated Subsidiary; provided that the Company or such other Wholly-Owned Consolidated Subsidiary may not suffer to exist any Lien on any instrument representing such preferred stock or Debt or the right to payment on such preferred stock or Debt, as the case may be and (v) other Debt in an aggregate amount for all Subsidiaries not in excess of $200,000,000." Section 5. Purchase and Sale of Commitments and Loans. (a) Upon the satisfaction of the conditions set forth in Section 7 hereof on the Effective Date, but immediately prior to any borrowing on such date under the Agreement, without the necessity of further action by any party, the Lenders specified on Schedule 1 hereto as "Selling Lenders" shall sell, transfer and assign to the Lenders specified on Schedule 1 hereto as "Purchasing Lenders" all of such Selling Lender's right, title and interest in and to its Commitment, to the extent set forth on Schedule 1 hereto, together with its L/C Commitment, its outstanding Loans and participations in Letters of Credit, so as to reflect such transfer, and each Purchasing Lender shall purchase, take and acquire from the Selling Lenders a portion of the Selling Lenders' right, title and interest in and to its Commitment together with its L/C Commitment, its outstanding Loans and participations in Letters of Credit, so that after giving effect to all such transfers, the Commitments of each of the Lenders (including Lenders which are not Selling Lenders or Purchasing Lenders) shall be as specified on Schedule 1 hereto. (b) Prior to the Effective Date, the Agent shall notify each Purchasing Lender and each Selling Lender of the amounts to be funded and received, respectively, by each Purchasing Lender and Selling Lender in order to give effect to the foregoing transfers and to ensure that the outstanding Loans and Letter of Credit participations of each of the Lenders properly reflect such transfers. Each Selling Bank shall, to the extent provided in this Amendment, relinquish its rights and be released from its obligations under the Agreement. (c) Each Selling Lender hereby agrees that any unpaid Facility Fee owed to it as of the Effective Date shall be paid by the Borrower to the Agent on September 30, 1997, and distributed to such Lender on such date. SECTION 6. Representations, Warranties and Agreements. Tupperware Corporation hereby represents and warrants to and agrees with each Lender and the Agent, before and after the Effective Date (as defined below), that: (a) The representations and warranties set forth in Article IV of the Agreement are true and correct in all material respects with the same effect as if made on the Effective Date (as defined below), except to the extent such representations and warranties expressly relate to an earlier date. (b) Tupperware Corporation has the requisite power and authority to execute, deliver and perform its obligations under this Amendment. (c) The execution, delivery and performance by Tupperware Corporation of this Amendment (i) have been duly authorized by all requisite action and (ii) will not (I) violate (x) any provision of law, statute, rule or regulation, or of the certificate of incorporation, by-laws or other constitutive documents of Tupperware Corporation, (y) any order of any governmental court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign or (z) any provision of any indenture, any agreement for borrowed money, or any other material agreement or instrument to which Tupperware Corporation is a party or by which Tupperware Corporation or any of its property is or may be bound, (II) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any such indenture, agreement for borrowed money or other material agreement or instrument or (III) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by Tupperware Corporation or any Subsidiary. (d) This Amendment has been duly executed and delivered by Tupperware Corporation. Each of this Amendment and the Agreement as amended hereby constitutes a legal, valid and binding obligation of Tupperware Corporation, enforceable against Tupperware Corporation in accordance with its terms, except as enforceability may be limited by (i) any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and (ii) general principals of equity. (e) No Event of Default or Default has occurred and is continuing. SECTION 7. Conditions to Effectiveness. This Amendment shall become effective only upon the satisfaction in full of the following conditions precedent on or prior to August 8, 1997 (such date, in the event that each of the conditions has been satisfied on or prior thereto, being called herein the "Effective Date"): (a) The Agent shall have received duly executed counterparts hereof which, when taken together, bear the authorized signatures of Tupperware Corporation, the Agent and each Lender. (b) All legal matters incident to this Amendment shall be satisfactory to the Lenders, the Agent and Cravath, Swaine & Moore, counsel for the Agent. (c) The Agent shall have received such other documents, instruments and certificates as it or its counsel shall reasonably request. SECTION 8. Agreement. Except as specifically amended hereby, the Agreement shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. After the date hereof, any reference to the Agreement shall mean the Agreement as amended hereby. SECTION 9. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 10. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first written above. TUPPERWARE CORPORATION By Name: Mark H. Bobek Title: Vice President and Treasurer THE CHASE MANHATTAN BANK, individually and as Agent By Name: Title: ABN AMRO BANK N.V., ATLANTA AGENCY By Name: Title: By Name: Title: BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, individually and as Co-Agent By Name: Title: BANKERS TRUST COMPANY By Name: Title: CITIBANK, N.A., individually and as Co-Agent By Name: Title: COMMERZBANK AG, ATLANTA AGENCY By Name: Title: By Name: Title: CREDIT LYONNAIS CHICAGO BRANCH By Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By Name: Title: THE FUJI BANK AND TRUST COMPANY By Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By Name: Title: NORTHERN TRUST COMPANY By Name: Title: ROYAL BANK OF CANADA By Name: Title: THE SANWA BANK, LIMITED, ATLANTA AGENCY By Name: Title: THE SUMITOMO BANK, LIMITED, ATLANTA AGENCY By Name: Title: SCHEDULE 1
INSTITUTION PRE-FIRST AMENDMENT POST-FIRST AMENDMENT COMMITMENT COMMITMENT The Chase Manhattan $30,000,000.00 $35,000,000.00 Bank, as a Purchasing Lender Bank of America $25,000,000.00 $30,000,000.00 National Trust & Savings Association, as a Purchasing Lender Citibank, N.A., as a $25,000,000.00 $30,000,000.00 Purchasing Lender Bankers Trust Company, $20,000,000.00 $25,000,000.00 as a Purchasing Lender Commerzbank AG, Atlanta $20,000,000.00 $25,000,000.00 Agency, as a Purchasing Lender The First National Bank $20,000,000.00 $25,000,000.00 of Chicago, as a Purchasing Lender Morgan Guaranty Trust $20,000,000.00 $25,000,000.00 Company of New York, as a Purchasing Lender Royal Bank of Canada, $20,000,000.00 $25,000,000.00 as a Purchasing Lender ABN AMRO Bank N.V., $20,000,000.00 $20,000,000.00 Atlanta Agency The Fuji Bank and Trust $20,000,000.00 $20,000,000.00 Company Northern Trust Company $20,000,000.00 $20,000,000.00 The Sanwa Bank, $20,000,000.00 $20,000,000.00 Limited, Atlanta Agency Credit Lyonnais Chicago $20,000,000.00 $0.00 Branch, as a Selling Lender The Sumitomo Bank, $20,000,000.00 $0.00 Limited, Atlanta Agency, as a Selling Lender --------------- --------------- Total $300,000,000.00 $300,000,000.00 =============== ===============
EX-13 3 SELECTED PAGES FROM ANNUAL REPORT TO SHAREHOLDERS Selected Financial Data
1997 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- -------- (Dollars in millions, except per share amounts) Operating results Net sales: Europe $ 546.6 $ 581.7 $ 595.1 $ 540.1 $ 505.1 $ 490.7 Asia Pacific 279.0 338.0 355.1 329.3 286.9 268.3 Latin America 247.2 268.5 200.6 176.4 154.4 138.7 United States 156.5 181.1 208.6 228.8 225.4 207.1 -------- -------- -------- -------- -------- -------- Total net sales $1,229.3 $1,369.3 $1,359.4 $1,274.6 $1,171.8 $1,104.8 ======== ======== ======== ======== ======== ======== Operating profit (loss): Europe $ 144.6 $ 153.0 $ 156.8 $ 125.0 $ 110.3 $ 92.4 Asia Pacific 37.2 61.0 59.4 46.3 40.3 32.9 Latin America (5.7) 43.3 19.4 15.7 15.7 5.9 United States (29.5) 10.4 10.3 16.0 12.5 (139.6) -------- -------- -------- -------- -------- -------- Total operating profit (loss) 146.6 267.7 245.9 203.0 178.8 (8.4) -------- -------- -------- -------- -------- -------- Unallocated expenses (18.0) (16.1) (22.9) (12.0) (17.8) (24.1) Costs associated with becoming an independent company -- (9.1) -- -- -- -- Interest (expense) income, net (17.8) (8.0) 1.9 0.2 (12.6) (9.3) -------- -------- -------- -------- -------- -------- Income (loss) before income taxes and cumulative effect of accounting changes 110.8 234.5 224.9 191.2 148.4 (41.8) Provision for income taxes 28.8 59.8 53.5 42.0 30.5 1.9 -------- -------- -------- -------- -------- -------- Income (loss) before cumulative effect of accounting changes $ 82.0 $ 174.7 $ 171.4 $ 149.2 $ 117.9 $ (43.7) ======== ======== ======== ======== ======== ======== Net income (pre-1997 pro forma) $ 82.0 $ 170.4 $ 161.1 ======== ======== ======== Earnings per common share (pre-1997 pro forma):, Basic $ 1.34 $ 2.75 $ 2.60 ======== ======== ======== Diluted $ 1.32 $ 2.71 $ 2.57 ======== ======== ======== See footnote explanations on following page.
Selected Financial Data
1997 1996 1995 1994 1993 1992 ------ ------ ------ ------ ------ ------ (Dollars in millions, except per share amounts) Profitability ratios Operating profit as a percent of sales: Europe 26.5% 26.3% 26.3% 23.1% 21.8% 18.8% Asia Pacific 13.3 18.0 16.7 14.1 14.1 12.3 Latin America nm 16.1 9.7 8.9 10.2 4.3 United States nm 5.7 4.9 7.0 5.6 nm Total operating profit 11.9 19.5 18.1 15.9 15.3 nm Return on average equity, 30.5 65.0 Return on average invested capital, 17.1 32.6 Financial Condition Working capital $103.3 $156.2 $88.1 $72.9 $(49.6) $(11.3) Property, plant, and equipment, net 293.0 331.0 317.7 310.2 277.2 250.8 Total assets 847.2 978.5 944.0 882.6 785.1 661.1 Short-term borrowings and current portion of long-term debt - 25.3 83.8 58.3 139.9 19.3 Long-term debt 236.7 215.3 0.4 0.5 45.6 153.3 Shareholders' equity 214.2 305.5 415.6 395.1 163.3 68.2 Current ratio 1.34 1.43 1.20 1.18 0.90 0.97 Long-term debt- to-equity 110.5% 70.5% Total debt- to-capital 52.5% 44.1% Other Data Net cash provided by operating activities $161.8 $150.5 $179.2 $142.7 $150.3 $152.0 Capital expenditures 67.5 96.0 69.3 72.9 85.6 80.0 Depreciation 66.1 65.3 61.3 55.7 44.7 50.1 Common Stock Data Diviends declared per share $0.88 $0.44 Dividend payout ratio 66.7% 32.5% Average common shares outstanding (thousands): Basic 61,334 62,016 Diluted 61,827 62,806 Year-end book value per share $3.51 $ 4.90 Year-end price/ earnings ratio 20.7 20.1 Year-end market/ book ratio 7.8 11.1 Year-end shareholders (thousands) 20.5 21.6 Includes a $42.4 million fourth quarter pretax charge ($31.3 million after tax): $22.2 million in Latin America, primarily for bad debts in Brazil; $16.0 million in United States, primarily for inventory obsolescence; and $4.2 million in unallocated, primarily for corporate downsizing. Pro forma net income is based on historical net income adjusted for interest expense related to the increase in borrowings incurred in connection with the distribution of the company's equity to Premark International, Inc.'s shareholders in May 1996. Information is not applicable prior to 1995. For all periods prior to the Distribution, the number of shares used was the 62.0 million (basic) and 62.8 million (diluted) shares as of the date of the Distribution. Due to the change in the company's capital structure in connection with the Distribution, this information is not applicable or not meaningful for the omitted periods. Returns on average equity and invested capital are calculated using net income or pro forma net income and the monthly balances of equity and invested capital beginning at the date of the Distribution. Invested capital equals equity plus debt. In 1992, the company recorded a $136.7 million pretax charge ($111.4 million after tax) primarily related to consolidation of manufacturing capacity and restructuring the U.S. distribution system. The company initiated regular quarterly dividends of $0.22 per share beginning in the third quarter of 1996. The dividend payout ratio is dividends declared per share divided by diluted earnings per share. 1996 assumes four quarterly dividend declarations. Includes $105.0 million of the $150.0 million of 8.375 percent notes that were called at par on February 1, 1994. nm - not meaningful (/TABLE) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion of the results of operations for 1997 compared with 1996, and of 1996 compared with 1995, and changes in financial condition during 1997. This information should be read in conjunction with the consolidated financial information provided on pages 14 to 35 of this Annual Report. The Distribution On May 31, 1996, Tupperware Corporation (Tupperware, the company) became an independent company through the distribution by Premark International, Inc. (Premark) to its shareholders of the equity of the company (the Distribution). The Distribution was effected through a 1-for-1 distribution of stock, which was tax free to Premark's shareholders pursuant to a ruling received from the Internal Revenue Service. Results of Operations Net Sales and Net Income Net sales in 1997 of $1.2 billion were 10 percent lower than 1996 net sales, reflecting decreases from operations in all areas except Europe, which had a modest improvement. In addition, foreign exchange had a significant negative impact on the comparison of $105.2 million, or 7 percentage points. In 1996, sales increased 0.7 percent over 1995 sales of $1.4 billion, reflecting a substantial increase from operations in Latin America and slight improvements in Europe and Asia Pacific. These increases were mostly offset by the unfavorable impact of foreign exchange and lower U.S. sales. Net income decreased 52 percent to $82.0 million in 1997 from pro forma 1996 net income of $170.4 million. Europe had a strong improvement in operating profit, before the impact of foreign exchange, but the other three areas had significantly lower results and foreign exchange had a negative impact of $20.9 million, or 7 percentage points, on the comparison. The 1997 results include a fourth quarter pretax charge totaling $42.4 million ($31.3 million after tax), primarily for provisions for bad debts in Brazil, inventory obsolescence in the United States, and to a lesser extent, corporate downsizing. Only a small portion of the charge involves cash outlays by the company. Unallocated corporate expenses increased $1.9 million in 1997 compared with 1996, primarily reflecting the amount recorded as part of the fourth quarter charge, which was offset by lower provisions for annual executive incentive payments. Additionally, during 1996, the company incurred $9.1 million of pretax costs associated with becoming an independent company. Pro forma net income increased 6 percent to $170.4 million in 1996, compared with $161.1 million in 1995. All areas had operational improvements, but foreign exchange had an $11.3 million negative impact on the comparison. Corporate expenses decreased substantially compared with 1995, which included an allocation of overhead from Premark for the full year. In both 1997 and 1996, 87 percent of sales, and in 1997 and 1996, 100 percent and 96 percent, respectively, of the company's operating profit were generated by international operations. Costs and Expenses The cost of products sold in relation to sales was 38.6 percent, 35.6 percent, and 35.4 percent in 1997, 1996, and 1995, respectively. The higher ratio in 1997 compared with 1996 reflects lower manufacturing capacity utilization, along with the inventory obsolescence provision recorded in the United States in the fourth quarter. Delivery, sales, and administrative expense as a percentage of sales was 50.5 percent, 45.8 percent, and 48.1 percent in 1997, 1996, and 1995, respectively. Expenses decreased slightly in 1997, but the impact on the ratio was not as great as the impact of lower sales. A significant reason for this was the bad debt provision recorded in Brazil in the fourth quarter. The ratio improved in 1996 compared with 1995 as costs were contained while sales rose, particularly in Latin America. Tax Rate The effective tax rates for 1997, 1996, and 1995, were 26.0 percent, 25.5 percent, and 23.8 percent, respectively. The 1997 rate did not change significantly from the 1996 rate as the impact of a higher foreign effective tax rate and the absence of the 1996 benefit of a capital loss carryforward was largely offset by the impact of lower pretax income and the generation of a higher level of foreign tax credits. The increase in 1996 compared with 1995 was due to a lower benefit from repatriating foreign earnings and the absence of the 1995 benefit from the resolution of certain international and domestic tax audit contingencies. These factors were only partially offset by the 1996 benefit of a capital loss carryforward and from reducing the valuation allowance for U.S. federal deferred tax assets. Net Interest The company had $17.8 million of net interest expense in 1997, compared with net interest expense of $8.0 million in 1996, and net interest income of $1.9 million in 1995. Until immediately before the Distribution, the company was capitalized primarily through Premark's net investment. No interest was charged to the company for this funding, which is the reason for the lower net interest expense in 1996 and the net interest income in 1995. In future years, the company expects to incur net interest expense at a level closer to 1997 than in prior years, since in 1997, net borrowings were outstanding for the entire year.
Regional Results 1997 vs. 1996
Negative Percent of Decrease Restated foreign total --------------- increase exchange ---------- 1997 1996 Dollar Percent (decrease) impact 1997 1996 ------- -------- ------- ------- ---------- -------- ---- ---- (Dollars in millions) Sales Europe $ 546.6 $ 581.7 $ (35.1) (6)% 7% $ (68.8) 44% 42% Asia Pacific 279.0 338.0 (59.0) (18) (8) (35.6) 23 25 Latin America 247.2 268.5 (21.3) (8) (8) (0.8) 20 20 United States 156.5 181.1 (24.6) (14) (14) - 13 13 ------- -------- ------- ------- ---- ---- $1,229.3 $1,369.3 $(140.0) (10)% (3)% $(105.2) 100% 100% ======== ======== ======= ======= ==== ==== Operating Profit Europe $ 144.6 $ 153.0 $ (8.4) (6)% 8% $ (19.3) 99% 57% Asia Pacific 37.2 61.0 (23.8) (39) (28) (9.2) 25 23 Latin America (5.7) 43.3 (49.0) nm nm (0.2) nm 16 United States (29.5) 10.4 (39.9) nm nm - nm 4 -------- ------- ------- ------- ---- ---- $ 146.6 $ 267.7 $(121.1) (45)% (39)% $ (28.7) nm 100% ======== ======== ======= ======= ==== ==== Includes fourth quarter charge: $22.2 million in Latin America, primarily for bad debt expense in Brazil; and $16.0 million in the United States, primarily for inventory obsolescence. 1997 actual compared with 1996 translated at 1997 exchange rates. nm - not meaningful
Europe The 1997 sales improvement before the impact of foreign exchange was attributable to higher volume in Germany and Italy, along with the sale of a better mix of product in South Africa. Partially offsetting these factors were decreases in the United Kingdom and France due to lower volume. In Germany, which accounts for a substantial portion of the region's sales and operating profit, the higher volume resulted from successful recruiting programs that led to a larger sales force. Italy's sales force also increased due to better recruiting results. In the United Kingdom, the reduced volume reflected the inability to recruit a dynamic sales organization, while the shortfall in France resulted from the difficult consumer market and recruiting environment given the country's social welfare system, which can incent people to stay out of the work force. The 1997 operating profit increase before the impact of foreign exchange reflected the net improvement in sales volume along with more efficient promotional spending, which were partially offset by other higher operating expenses throughout the area. The negative impact of foreign exchange on both sales and operating profit related to currencies throughout the region. Asia Pacific Excluding the negative impact of foreign exchange, which was due to the dollar's strength against currencies throughout the region, sales decreased primarily due to lower volume in Japan and the Philippines. In both countries, the number of demonstrations fell reflecting smaller sales forces. Operating profit fell more significantly, due to higher per unit manufacturing costs, in addition to the lower sales volume, which was only partially offset by a volume-related decline in promotional spending. Latin America The 1997 results reflected significant sales decreases due to lower volume in Brazil and Argentina, which were partially offset by higher volume in Mexico. The decreases in Brazil and Argentina were due to significantly lower sales force productivity and activity levels, which are being addressed through training of distributors and the sales forces in direct selling fundamentals and by refocusing on group demonstration versus one-on-one selling. In Mexico the number of sellers increased substantially. The operating profit decrease resulted from the impact of the net sales decline, along with $22.2 million of the fourth quarter charge, which was primarily for bad debt reserves in Brazil. The higher reserve position became necessary in the fourth quarter due to a decision to significantly reduce the number of distributors and due to sales and past due receivables levels. United States The U.S. sales decline resulted from implementation of higher sales force standards in the latter half of 1996. The new standards led to a smaller active sales force, compared with 1996, although fourth quarter sales exceeded those of 1996 as a result of an improvement in sales force productivity. New programs, including a two-tiered vehicle program, have been implemented to increase recruiting and activity. Excluding the $16.0 million of the fourth quarter charge that relates to the United States, the operating loss was $13.5 million, or $23.9 million worse than 1996, reflecting the lower sales volume and higher per unit manufacturing costs due to lower production volume. These factors were only partially offset by a reduction in operating expenses that reflected the effort to improve profitability. The fourth quarter charge was primarily for inventory obsolescence, due to a decision to undertake a rationalization of the product line after exhausting opportunities to reduce inventories through normal channels. Regional Results 1996 vs. 1995
Increase Negative Percent of (decrease) Restated foreign total --------------- increase exchange ---------- 1996 1995 Dollar Percent (decrease) impact 1996 1995 ------- -------- ------- ------- ---------- -------- ---- ---- (Dollars in millions) Sales Europe $ 581.7 $ 595.1 $(13.4) (2)% 2% $(25.5) 42% 44% Asia Pacific 338.0 355.1 (17.1) (5) 3 (27.6) 25 26 Latin America 268.5 200.6 67.9 34 41 (9.6) 20 15 United States 181.1 208.6 (27.5) (13) (13) - 13 15 ------- -------- ------ ------ ---- ---- $1,369.3 $1,359.4 $ 9.9 1% 6% $(62.7) 100% 100% ======== ======== ====== ====== ==== ==== Operating Profit Europe $ 153.0 $ 156.8 $ (3.8) (2)% 3% $ (7.7) 57% 64% Asia Pacific 61.0 59.4 1.6 3 13 (5.1) 23 24 Latin America 43.3 19.4 23.9 122 148 (2.0) 16 8 United States 10.4 10.3 0.1 1 1 - 4 4 -------- ------- ------ ------ ---- ---- $ 267.7 $ 245.9 $ 21.8 9% 16% $(14.8) 100% 100% ======== ======= ====== ====== ==== ==== 1996 actual compared with 1995 translated at 1996 exchange rates.
Europe The sales improvement in Europe, excluding the negative impact of foreign exchange, was from higher volume in Italy and certain smaller markets and was only partially offset by lower volume in France. Italy's increase in volume was attributable to its success in recruiting and motivating a larger active sales force, while the lower volume in France was attributable to a smaller active sales force and the weak economic environment. In Germany, 1996 sales were even with 1995 sales, after considering the unfavorable impact of foreign exchange. Lower sales in Germany in the first quarter of 1996 were offset by higher volume during the remainder of the year, particularly the second and third quarters. In the first quarter, a weak economy, together with lower sales during an important promotional period, led to the poor comparison with the first quarter of 1995. The impact of strong sales force recruiting for the remainder of the year offset the sales shortfall in the first quarter. The higher operating profit in 1996, excluding the impact of foreign exchange, reflected the sales fluctuations addressed above, along with lower promotional costs in Germany and a lower cost structure in the United Kingdom, partially offset by higher costs in Spain. The negative impact of foreign exchange on both sales and operating profit reflected the dollar's strength against the currencies throughout the region. Asia Pacific Excluding the impact of a weak Japanese yen, Asia Pacific's higher sales were from significant volume improvements in Korea and Malaysia, which were only partially offset by decreases in volume in Taiwan and the Philippines. For Korea, Malaysia, and Taiwan, the variations from 1995 reflected the sizes of the active sales forces. The lower sales in the Philippines were mainly due to the effect of an inventory liquidation program in 1995. Operating profit increased as a result of the higher volume in Korea, partially offset by lower profit in Japan due to the weak yen and a lower gross margin because of sales of a higher percentage of third party sourced product. Operating profit in Malaysia did not increase in line with the higher sales due to the costs associated with importing a greater proportion of products. Operating profit in Taiwan and the Philippines fell as a result of the lower sales. Latin America In Latin America, more than 100 new distributors were added, leading to a 77 percent increase in the average active sales force. The resulting improvements in sales and operating profit were due to higher volume in Mexico, Brazil, and Argentina. In addition to the positive impact of higher volume, operating profit also improved due to a lower operating expense structure in relation to the higher sales and more focused promotional spending. The negative impact of foreign exchange on the region's sales and operating profit comparisons was primarily from weakness in the Mexican peso. United States The decline in U.S. sales was the result of a transition to distributors that do not stock inventory and the impact of implementing higher sales force standards. The new sales force standards led to a considerable decrease in the number of managers and therefore a reduced number of dealers recruited. The slightly higher U.S. operating profit in 1996 compared with 1995, in spite of the lower sales, was due to improved manufacturing efficiencies and lower administrative expenses. Financial Condition Liquidity and Capital Resources Working capital decreased to $103.3 million as of December 27, 1997, compared with $156.2 million as of December 28, 1996, and $88.1 million as of December 30, 1995. The current ratio was 1.3 to 1 at the end of 1997, 1.4 to 1 at the end of 1996, and 1.2 to 1 at the end of 1995. The 1997 decrease in working capital resulted primarily from a lower level of inventories reflecting the company's reduction initiative, as well as provisions for obsolescence. Other significant factors contributing to the decrease were a lower cash balance resulting from efforts to reduce overseas deposits, and a reduction in accounts receivable reflecting lower sales and higher reserves for doubtful accounts. Partially offsetting these factors were lower accounts payable and accrual balances due to lower levels of production, employee incentives earned, and promotional awards earned by the sales forces. Also, as of the end of 1997, the company classified all of its borrowings that were current by their terms as long-term debt due to its ability and intent that they be outstanding throughout 1998. In 1996, a portion of these borrowings remained in current liabilities. In addition, working capital decreased from the impact of a stronger U.S. dollar versus foreign currencies at the end of 1997 compared with the end of 1996. The 1996 increase in working capital was due to a reduction in the amount of debt classified as current, and an increase in inventories because of substantial sales growth in Latin America and lower than planned fourth quarter sales in certain markets. These factors were only partially offset by a decrease in cash and cash equivalents, as part of the effort to reduce overseas deposits. On May 28, 1997, a subsidiary of the company sold to the public $15.0 million of 6.84 percent fixed rate notes, which mature on June 2, 2000 (Notes). The proceeds of the Notes were used to refinance a portion of the company's outstanding commercial paper borrowings. On August 8, 1997, the company amended its $300 million unsecured multicurrency credit facility to extend its maturity date from May 16, 2001, to August 8, 2002. The total debt-to-capital ratio at the end of 1997 was 52.5 percent compared with 44.1 percent at the end of 1996. As of December 27, 1997, the company had $300 million available under the multicurrency credit facility. The multicurrency credit facility, along with $189 million of foreign uncommitted lines of credit, and cash generated by operating activities, are expected to be adequate to finance any additional working capital needs and capital expenditures. Operating Activities Cash provided by operating activities was $161.8 million in 1997, compared with $150.5 million in 1996, and $179.2 million in 1995. In 1997, the benefit of improved working capital management was only partially offset by the decrease in net income. The primary reason for the lower 1996 amount compared with 1995 was a more significant increase in inventories. Investing Activities For 1997, 1996, and 1995, respectively, capital expenditures totaled $67.5 million, $96.0 million, and $69.3 million. The most significant individual component of capital spending was new molds. The higher 1996 expenditures, compared with 1997 and 1995, primarily relate to the increase of manufacturing capacity in Latin America and higher spending on molds. Capital expenditures are expected to be about $70 million in 1998. Dividends Quarterly dividends were initiated in August 1996 at $0.22 per share. During 1997 and 1996, respectively, the company declared dividends of $0.88 and $0.44 per share of common stock. Share Repurchases In November 1996, the company announced it would repurchase up to 5 million shares of its common stock, with volume and timing to depend on market conditions. Shares are being acquired for general corporate needs. In 1997, the company repurchased 1.5 million shares in the open market for a total cost of $57.6 million or an average of $39 per share. On January 12, 1998, the company announced that it would accelerate its repurchases under the program, subject to market conditions. Through February 27, 1998, 3.1 million shares had been repurchased under the program since its initiation, for a total of $98.9 million or an average of $32 per share. New Accounting Standards In February 1997, the Financial Accounting Standards Board (FASB) adopted Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share," which has caused the company to change beginning with these financial statements, the way that it calculates and displays per share information. Under the new rules, the company displays "basic" earnings per share, which is net income divided by weighted average shares outstanding during the period. Also displayed is "diluted" earnings per share, which considers the impact of common stock equivalents. Based on the company's capital structure, its common stock equivalents are employee and director stock options and restricted stock. The difference between basic and diluted earnings per share is not significant for the company, nor is the difference between per share earnings computed under the new and previous methods. Earnings per share presented for prior periods has been restated to the new method. In June 1997, the FASB adopted two standards, SFAS Nos. 130 and 131, "Reporting Comprehensive Income" and "Disclosures about Segments of an Enterprise and Related Information," respectively. Both of these new standards relate to the display of financial information rather than impacting the computation of net income or earnings per share, and both will be effective for the company beginning with its 1998 annual financial statements. SFAS 130 requires that companies display "comprehensive income," which in addition to the current definition of net income includes certain amounts currently recorded directly in equity. For the company, the only such item is foreign currency translation adjustments. The new standard will be adopted by adding a column, which will show comprehensive income, to the statement of changes in shareholders' equity. SFAS 131 mandates the management approach to identifying business segments. Under the management approach, segments are defined as the organizational units that have been established for internal performance evaluation purposes. For the company, this will mean that the four areas currently identified in Note 10 to the consolidated financial statements on geographic information will be defined as business segments. Since this information is already displayed as geographic information in the company's financial statement notes and since the information included in management's discussion and analysis of results of operations is also organized in this manner, adoption of this standard will not have a significant impact on the company's financial statements. Year 2000 Issues The company has studied the "Year 2000" issues affecting its operations and has prepared a plan to address them. That plan is now being implemented and the issues are not expected to have a material adverse effect on the company's operations. Furthermore, the cost of addressing Year 2000 issues has not been material to the company to date and is not expected to be in future periods. Market Risk and Impact of Inflation One of the company's market risks is its exposure to the impact of interest rate changes. The company has elected to manage this risk through the maturity structure of its borrowings. Under its present policy, the company has set a target of having approximataely half of its borrowings with extended terms. A significant portion of the company's sales and profits comes from its international operations. Although these operations are geographically dispersed, which partially mitigates the risks associated with operating in particular countries, the company is subject to the usual risks associated with international operations. These risks include local political and economic environments, and relations between foreign and U.S. governments. Another economic risk of the company, which is associated with its operating internationally, is the exposure to fluctuations in foreign currency exchange rates on the earnings, cash flows, and financial position of the company's international operations. The company is not able to project in any meaningful way the possible effect of these fluctuations on translated amounts or future earnings. This is due to the large number of currencies involved, the constantly changing exposure in these currencies, and the fact that all foreign currencies do not react in the same manner in relation to the U.S. dollar. In response to the fact that a strengthening U.S. dollar generally has a negative impact on the company, the company uses financial instruments, such as forward contracts, to hedge its exposure to certain foreign exchange risks associated with non-permanent intercompany borrowings and a portion of its investment in international operations. In addition to hedging against the balance sheet impact of changes in exchange rates, the hedge of investments in international operations also has the effect of hedging a portion of the cash flows from those operations. See Note 6 to the consolidated financial statements for a description of the nature of the risks associated with the company's derivative financial instruments and for information on the company's year-end open forward contract positions. Inflation as measured by consumer price indices has continued at a low level in most of the countries in which the company operates, notwithstanding the recent economic problems in Asia. TUPPERWARE CORPORATION CONSOLIDATED STATEMENT OF INCOME
Year Ended ------------------------------------ Dec. 27, Dec, 28, Dec. 30, 1997 1996 1995 --------- -------- -------- (In millions, except per share amounts) Net sales $1,229.3 $1,369.3 $1,359.4 -------- -------- -------- Costs and expenses: Cost of products sold 473.9 487.3 481.5 Delivery, sales, and administrative expense 620.7 627.2 653.5 Interest expense 24.1 13.2 3.1 Interest income (6.3) (5.2) (5.0) Costs associated with becoming an independent company -- 9.1 -- Other expense, net 6.1 3.2 1.4 -------- -------- -------- Total costs and expenses 1,118.5 1,134.8 1,134.5 -------- -------- -------- Income before income taxes 110.8 234.5 224.9 Provision for income taxes 28.8 59.8 53.5 -------- -------- -------- Net income $ 82.0 $ 174.7 $ 171.4 ======== ======== ======== Net income per common share (pre 1997 pro forma and unaudited): Basic $ 1.34 $ 2.75 $ 2.60 ======== ======== ======== Diluted $ 1.32 $ 2.71 $ 2.57 ======== ======== ======== See Notes to the Consolidated Financial Statements.
TUPPERWARE CORPORATION CONSOLIDATED BALANCE SHEET
Dec. 27, Dec. 28, 1997 1996 -------- -------- (Dollars in millions, except per share amounts) Assets Cash and cash equivalents $ 22.1 $ 53.0 Accounts receivable, less allowances of $40.4 in 1997 and $25.9 in 1996 97.0 121.3 Inventories 184.2 252.8 Deferred income tax benefits 44.4 35.1 Prepaid expenses and other 55.4 61.0 ------- ------ Total current assets 403.1 523.2 ------- ------ Deferred income tax benefits 82.7 56.4 Property, plant, and equipment, net 293.0 331.0 Long-term receivables, net of allowances of $39.3 in 1997 and $38.0 in 1996 36.4 33.5 Other assets 32.0 34.4 ------- ------- Total assets $ 847.2 $ 978.5 ======= ======= Liabilities and shareholders' equity Accounts payable $ 75.4 $ 95.6 Short-term borrowings and current portion of long-term debt -- 25.3 Accrued liabilities 224.4 246.1 ------- ------- Total current liabilities 299.8 367.0 ------- ------- Long-term debt 236.7 215.3 Accrued postretirement benefit cost 38.0 36.9 Other liabilities 58.5 53.8 Shareholders' equity: Preferred stock, $0.01 par value, 200,000,000 shares authorized; none issued -- -- Common stock, $0.01 par value, 600,000,000 shares authorized; 62,367,289 and 62,359,824 shares issued at December 27, 1997, and December 28, 1996, respectively 0.6 0.6 Capital surplus 19.5 19.1 Retained earnings 441.4 418.2 Treasury stock, 1,400,207 at cost (54.0) -- Unearned portion of restricted stock issued for future service (2.4) (3.9) Cumulative foreign currency adjustments (190.9) (128.5) ------- ------- Total shareholders' equity 214.2 305.5 ------- ------- Total liabilities and shareholders' equity $ 847.2 $ 978.5 ======= ======= See Notes to the Consolidated Financial Statements.
TUPPERWARE CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Net Cumulative Common Common Treasury Treasury investment foreign stock stock stock stock by Capital Retained currency shares Dollars shares Dollars Premark surplus earnings adjustments ------ ------- -------- ------- --------- ------- -------- ----------- (In millions, except per share amounts) December 31, 1994 -- -- -- -- $ 508.1 -- -- $(113.0) Net income 171.4 Net transactions with Premark (146.0) Translation adjustments (4.9) ------ ---- ---- ----- ------- ----- ------- ------- December 30, 1995 -- -- -- -- 533.5 -- -- (117.9) Net Income 31.6 $ 143.1 Shares issued to Premark 62.1 $0.6 (0.6) Net transactions with Premark other than special dividend 31.7 Special dividend to Premark (293.7) $ 8.8 Distribution of equity of the company to Premark's shareholders (302.5) 302.5 Cash dividends declared ($0.44 per share) (27.4) Stock issued for incentive plans and related tax benefits 0.3 -- 10.3 Translation adjustments (10.6) ---- ---- ---- ------ -------- ----- ------- ------- December 28, 1996 62.4 0.6 -- -- -- 19.1 418.2 (128.5) Net income 82.0 Distribution of equity of the company to Premark's shareholders (2.7) Cash dividends declared ($0.88 per share) (53.9) Purchase of treasury stock 1.5 $(57.6) Stock issued for incentive plans and related tax benefits (0.1) 3.6 0.4 (2.2) Translation adjustments (62.4) ---- ---- ----- ------ -------- ----- ------- ------- December 27, 1997 62.4 $0.6 1.4 $(54.0) -- $19.5 $ 441.4 $(190.9) ==== ==== ===== ====== ======== ===== ======= ======= See Notes to the Consolidated Financial Statements.
TUPPERWARE CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended --------------------------------------- Dec. 27, Dec. 28, Dec. 30, 1997 1996 1995 -------- -------- ---------- (In millions) Cash flows from operating activities Net Income $ 82.0 $ 174.7 $ 171.4 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 66.1 65.3 61.3 Loss on sale of assets 2.7 5.2 5.3 Foreign exchange loss, net 1.2 1.3 0.6 Changes in assets and liabilities: Decrease (increase) in accounts and notes receivable 15.5 (14.1) (25.7) Decrease (increase) in inventories 44.7 (54.0) (24.5) (Decrease) increase in accounts payable and accrued liabilities (13.6) 2.0 4.1 (Decrease) increase in income taxes payable 5.1 0.6 2.0 (Increase) decrease in net deferred income taxes (33.2) (16.3) 7.8 Other, net (8.7) (14.2) (23.1) ------ ------- ------- Net cash provided by operating activities 161.8 150.5 179.2 ------ ------- ------- Cash flows from investing activities Capital expenditures (67.5) (96.0) (69.3) ------ ------- ------- Cash flows from financing activities Special dividend to Premark -- (284.9) -- Net transactions with Premark other than special dividend -- 37.6 (146.0) Dividend payments to shareholders (54.2) (13.7) -- Payments to acquire treasury stock (57.1) -- -- Proceeds from exercise of stock options 3.4 6.3 -- Net (decrease) increase in short-term debt (14.8) (54.1) 31.4 Proceeds from issuance of long-term debt 15.0 315.5 0.7 Repayment of long-term debt -- (100.6) (0.7) ------ ------- ------- Net cash used in financing activities (107.7) (93.9) (114.6) ------ ------- ------- Effect of exchange rate changes on cash and cash equivalents (17.5) (4.9) (0.3) ------ ------- ------- Net decrease in cash and cash equivalents (30.9) (44.3) (5.0) Cash and cash equivalents at beginning of year 53.0 97.3 102.3 ------ ------- ------- Cash and cash equivalents at end of year $ 22.1 $ 53.0 $ 97.3 ====== ======= ======= See Notes to the Consolidated Financial Statements.
TUPPERWARE CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1: Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of Tupperware Corporation and all of its subsidiaries (the company or Tupperware). All significant intercompany accounts and transactions have been eliminated. Certain prior year amounts have been reclassified to conform with the current year's presentation. The company's fiscal year ends on the last Saturday of December. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Cash and Cash Equivalents The company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of December 27, 1997 and December 28, 1996, $13.5 million and $28.1 million, respectively, of the cash and cash equivalents included on the consolidated balance sheet were held in the form of time deposits or certificates of deposit. Inventories Inventories are valued at the lower of cost or market. Inventory cost includes cost of raw material, labor, and overhead. Domestic inventories, approximately 15 percent and 25 percent of total inventories, at December 27, 1997, and December 28, 1996, respectively are valued on the last-in, first-out (LIFO) cost method. The first-in, first-out (FIFO) cost method is generally used for the remaining inventories. If inventories valued on the LIFO method had been valued using the FIFO method,they would have been $16.0 million higher at the end of 1997 and $20.6 million higher at the end of 1996. Property and Depreciation Properties are initially stated at cost. Depreciation is determined on a straight-line basis over estimated useful lives. Generally, the estimated useful lives are 10 to 45 years for buildings and improvements and 3 to 20 years for machinery and equipment. Upon the sale or retirement of property, plant, and equipment, a gain or loss is recognized. If the carrying value of an asset, including associated intangibles, exceeds the sum of estimated undiscounted future cash flows, then an impairment loss is recognized for the difference between estimated fair value and carrying value. Expenditures for maintenance and repairs are charged to expense. Revenue Recognition Revenue is recognized when product is shipped. Advertising and Research and Development Costs Advertising and research and development costs are charged to expense as incurred. Advertising expense totaled $6.2 million, $7.3 million, and $8.7 million in 1997, 1996, and 1995, respectively. Research and development costs totaled $12.8 million, $7.2 million, and $6.3 million in 1997, 1996, and 1995, respectively. Accounting for Stock-Based Compensation The company measures compensation expense for employee and director stock options as the aggregate difference between the market and exercise prices of the options on the date that both the number of shares the grantee is entitled to receive and the purchase price are known. Compensation expense associated with restricted stock grants is equal to the market value of the shares on the date of grant and is recorded pro rata over the required holding period. Pro forma information relating to the fair value of stock-based compensation is presented in Note 9 to the consolidated financial statements. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets also are recognized for credit carryforwards. Deferred tax assets and liabilities are measured using the rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse and the credits are expected to be used. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. An assessment is made as to whether or not a valuation allowance is required to offset deferred tax assets. This assessment includes anticipating future income. The results of the company's domestic operations were included in Premark International, Inc.'s (Premark) consolidated U.S. federal tax return through May 31, 1996, the date of the Distribution. The provisions for income taxes included in these financial statements for periods prior to the Distribution are the company's allocated share of Premark's domestic income tax expense, representing the expense that the company would have incurred on a separate return basis, and the actual income tax provisions of its foreign subsidiaries. As part of the plan of Distribution, Tupperware and Premark entered into a tax sharing agreement. This agreement generally provides that for periods prior to the Distribution, the two companies will retain the liability for any unpaid taxes attributable to their respective operations. Net Income Per Common Share In 1997, the company adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share." Accordingly, these financial statements include "basic" and "diluted" per share information for all periods presented. Basic per share information is calculated by dividing net income by the weighted average number of shares outstanding. Diluted per share information is calculated by also considering the impact of common stock equivalents on both net income and the weighted average number of shares outstanding. The weighted average number of shares used in the basic earnings per share computations were 61.3 million, 62.0 million, and 62.0 million, in 1997, 1996, and 1995, respectively. The only difference in the computation of basic and diluted earnings per share is the inclusion of 0.5 million in 1997 and 0.8 million in 1996 and 1995 of common stock equivalents. The company's common stock equivalents consist of employee and director stock options and restricted stock. Per share information pertaining to 1996 and 1995 has been restated to conform with the current year's presentation. Pro forma net income per common share is calculated for periods prior to the Distribution as if the Distribution had occurred at the beginning of fiscal 1995. The pro forma amounts assume that the company used $25.0 million of available cash and $271.9 million of additional borrowings to fund a special dividend payment to Premark of $284.9 million, and $12.0 million for the amount that the company paid in July 1996 related to the quarterly dividend declared on Premark's common stock on May 1, 1996. Pro forma net income is based on the company's historical net income adjusted in 1996 and 1995 for $7.0 million and $16.9 million of additional interest expense, net of $2.7 million and $6.6 million of tax benefits, respectively, related to the increase in borrowings at an assumed weighted average interest rate of 6.2 percent. Pro forma net income per share includes pro forma net income divided by an assumed average common shares of 62.0 million for basic and 62.8 million for diluted, respectively, for all periods prior to the Distribution and actual net income per share for the period subsequent to the Distribution. Derivative Financial Instruments The company uses derivative financial instruments, principally over-the-counter forward exchange contracts with major international financial institutions, to offset the effects of exchange rate changes on net investments in certain foreign subsidiaries, firm purchase commitments, and certain intercompany loan transactions. Gains and losses on contracts designated as hedges of net investments in a foreign subsidiary or intercompany transactions that are permanent in nature are accrued as exchange rates change, and are recognized in shareholders' equity as foreign currency translation adjustments. Gains and losses on contracts designated as hedges of intercompany transactions that are not permanent in nature are accrued as exchange rates change and are recognized in income. Gains and losses on contracts designated as hedges of identifiable foreign currency firm commitments are deferred and included in the measurement of the related foreign currency transaction. Contracts hedging non-permanent intercompany transactions and identifiable foreign currency firm commitments are held to maturity. Fair Value of Financial Instruments Due to their short maturity or their insignificance, the carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, accrued liabilities, short-term borrowings, and outstanding forward exchange contracts approximated their fair values at December 27, 1997, and December 28, 1996. The approximate fair value of the company's $100 million of 7.25 percent notes due in 2006, determined through reference to market yields, was $105.5 million and $102.2 million as of December 27, 1997, and December 28, 1996, respectively. The fair value of the remaining long-term debt approximated its book value at the end of 1997 and 1996. Foreign Currency Translation Results of operations for foreign subsidiaries are translated into U.S. dollars using the average exchange rates during the year. The assets and liabilities of those subsidiaries, other than those of operations in highly inflationary countries, are translated into U.S. dollars using the exchange rates at the balance sheet date. The related translation adjustments are recorded in a separate component of shareholders' equity, "Cumulative foreign currency adjustments." Foreign currency transaction gains and losses, as well as translation of financial statements of subsidiaries in highly inflationary countries, are included in income. Note 2: Relationship and Transactions with Premark International, Inc. On May 31, 1996, Tupperware became an independent company through the distribution by Premark to its shareholders of the equity of the company (the Distribution). The distribution was effected through a 1-for-1 distribution of stock, which was tax free to Premark's shareholders pursuant to a ruling received from the Internal Revenue Service. Under a Distribution Agreement, with Premark on May 24, 1996, Dart Industries Inc. (Dart), which is now a wholly-owned subsidiary of Tupperware, paid a $284.9 million special dividend (the Dividend Payment) to Premark. Dart funded the Dividend Payment with new bank borrowings and available cash. In addition, the company paid Premark $12.0 million in July 1996 to fund a portion of the quarterly dividend on Premark's common stock declared in May 1996. Included in the consolidated statement of income is an allocation of general corporate expenses related to services provided for the company by Premark in the amounts of $4.4 million for 1996 through the date of the Distribution and $14.5 million in 1995. This allocation was based on an estimate of the proportion of corporate expenses related to the company for the periods presented and, in the opinion of management, has been made on a reasonable basis and approximates the incremental costs that would have been incurred had the company been operating on a stand-alone basis. Prior to the Distribution, there were no material intercompany purchase or sale transactions between Premark and the company. Under Premark's centralized cash management system, short-term advances from Premark and excess cash sent to Premark were reflected as "Net transactions with Premark" during the periods prior to the Distribution. No interest was charged or otherwise allocated by Premark to the company. Note 3: Inventories (In millions) 1997 1996 -------- -------- Finished goods $ 86.2 $127.5 Work in process 43.3 49.0 Raw materials and supplies 54.7 76.3 ------ ------ Total inventories $184.2 $252.8 ====== ====== Note 4: Property, Plant, and Equipment (In millions) 1997 1996 -------- -------- Land $ 11.8 $ 11.9 Buildings and improvements 172.2 175.4 Machinery and equipment 738.2 760.8 Construction in progress 21.8 26.1 ------- ------- Total property, plant, and equipment 944.0 974.2 Less accumulated depreciation (651.0) (643.2) ------- ------- Property, plant, and equipment, net $ 293.0 $ 331.0 ======= ======= Note 5: Accrued Liabilities (In millions) 1997 1996 -------- -------- Compensation and employee benefits $ 52.7 $ 64.0 Advertising and promotion 36.5 53.5 Taxes other than income taxes 34.2 29.5 Income taxes 27.3 27.1 Other 73.7 72.0 ------- ------- Total accrued liabilities $ 224.4 $ 246.1 ======= ======= Note 6: Financing Arrangements Short-term Borrowings (Dollars in millions) 1997 1996 1995 -------- -------- -------- Total short-term borrowings at year-end $105.0 $123.7 $83.8 Weighted average interest rate at year-end 6.4% 5.3% 3.6% Average borrowings during the year $166.2 $186.4 $75.3 Weighted average interest rate for the year 5.5% 5.0% 3.3% Maximum borrowings during the year $212.5 $316.6 $95.8
The average borrowings and weighted average interest rates were determined using month-end borrowings and the interest rates applicable to them. Of total year-end borrowings, $7.0 million was in the form of U.S. commercial paper. The remaining $98.0 million of short-term borrowings was from several banks, with $35.0 million payabale in French francs, $17.6 million in German Marks, and $10.0 million in Japanese yen. As of December 27, 1997, all of the company's outstanding borrowings that were due within one year by their terms were classified as non-current due to the company's ability and intent that those borrowings be outstanding throughout 1998. Operating Leases Rental expense for operating leases totaled $40.5 million in 1997, $32.8 million in 1996, and $37.9 million in 1995. Approximate minimum rental commitments under noncancellable operating leases in effect at December 27, 1997, were: 1998 -- $7.7 million; 1999 -- $5.6 million; 2000 -- $3.0 million; 2001 -- $2.6 million; 2002 -- $2.2 million; after 2002 -- $3.1 million. Long-term Debt (In millions) 1997 1996 -------- -------- 6.84% Series Notes due 2000 $ 15.0 $ -- 7.05% Series Notes due 2003 15.0 15.0 7.25% Notes due 2006 100.0 100.0 Short-term borrowings classified as non-current 105.0 98.8 Other 1.7 1.5 ------ ------ Total long-term debt $236.7 $215.3 ====== ====== On May 28, 1997, a subsidiary of the company sold to the public $15.0 million of 3-year 6.84 percent unsecured notes that are due in June 2000. The proceeds from these borrowings were used to refinance a portion of the company's commercial paper borrowings. As of December 27, 1997, the company had $489.4 million of unused lines of credit, including $300.0 million under an unsecured multicurrency facility that was entered into in May 1996 and amended in August 1997. This facility supports the company's commercial paper borrowing capability and expires in August 2002. Interest paid on total debt in 1997, 1996, and 1995 was $23.7 million, $10.8 million, and $2.8 million, respectively. Derivative Financial Instruments
1997 1996 ---------------------- --------------------------- Weighted Weighted average average contract contract rate of rate of (Dollars in millions) Buy Sell exchange Buy Sell exchange ------ ------ --------- ----- ------ --------- French francs with U.S. dollars $ 31.9 5.9278 Belgian francs with U.S. dollars 31.6 36.5482 $14.2 31.7642 British pounds with U.S. dollars 13.5 0.6044 Swiss francs with U.S. dollars 10.9 1.4343 4.8 1.3292 Philippine pesos with U.S. dollars 8.1 40.2700 15.1 26.5000 Portuguese escudos with U.S. dollars 7.6 180.6614 Italian lira with U.S. dollars 7.5 1,741.340 5.3 1,526.452 Austrian shillings with U.S. dollars 7.2 12.4690 Netherlands guilders with U.S. dollars 5.7 1.9948 German marks with U.S. dollars 1.1 1.7419 9.7 1.5584 Belgian francs for U.S. dollars $ 41.0 35.1055 $ 44.9 30.7505 Argentine pesos for U.S. dollars 20.6 1.0090 French francs for U.S. dollars 19.2 5.7896 26.2 5.0888 Spanish pesetas for U.S. dollars 10.9 150.0700 Portuguese escudos for U.S. dollars 8.9 175.4878 9.9 155.7788 Swiss francs for U.S. dollars 7.2 1.3849 6.5 1.2436 Netherlands guilders for U.S. dollars 4.5 1.9376 4.9 1.6787 Spanish pesetas for Belgian francs 12.1 32.0513 French francs for Swiss francs 5.4 1.3461 British pounds for Netherlands guilders 5.1 1.7464 Other currencies 13.2 3.0 various 19.3 10.3 various ------ ------ ----- ------ Total $138.3 $115.3 $68.4 $125.3 ====== ====== ===== ======
The company's derivative financial instruments at December 27, 1997, and December 28, 1996, consisted solely of the forward exchange contracts summarized on page 24. All of the contracts mature within 12 months. The "buy" amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies and the "sell" amounts represent the U.S. dollar equivalent of commitments to sell foreign currencies, all translated at the year-end market exchange rates for the U.S. dollar. The contracts to sell Belgian, French and Swiss francs; Portuguese escudos; and Netherlands guilders for U.S. dollars are hedging a portion of the company's net investments in those countries. All other contracts are hedging cross-currency intercompany loans that are not permanent in nature. The company's theoretical credit risk for each forward exchange contract is its replacement cost, but management believes that the risk of incurring credit losses is remote and that such losses, if any, would not be material. The company also is exposed to market risk on its forward exchange contracts due to potential changes in foreign exchange rates; however, such market risk would be substantially offset by changes in the valuation of the underlying items being hedged. At December 27, 1997, and December 28, 1996, the net accrued gains on all forward exchange contracts were $1.6 million and $2.3 million, respectively. The aggregate impact of all foreign currency transactions was not material to the company's income. Note 7: Income Taxes For income tax purposes, the domestic and foreign components of income before taxes were as follows: (In millions) 1997 1996 1995 --------- -------- -------- Domestic $ 59.9 $ 97.8 $106.4 Foreign 50.9 136.7 118.5 ------ ------ ------ Total $110.8 $234.5 $224.9 ====== ====== ======
The provision for income taxes was as follows: (In millions) 1997 1996 1995 --------- -------- -------- Current: Federal $ (1.3) $ 7.7 $(40.6) Foreign 55.1 63.3 84.4 State 2.8 3.4 -- ------ ------ ------ 56.6 74.4 43.8 ------ ------ ------ Deferred: Federal (10.5) (6.8) 38.3 Foreign (16.1) (6.6) (30.6) State (1.2) (1.2) 2.0 ------ ------ ------ (27.8) (14.6) 9.7 ------ ------ ------ Total $ 28.8 $ 59.8 $ 53.5 ====== ====== ======
The differences between the provision for income taxes and income taxes computed using the U.S. federal statutory rate were as follows: (In millions) 1997 1996 1995 --------- -------- -------- Amount computed using statutory rate $ 38.8 $ 82.1 $ 78.7 Increase (reduction) in taxes resulting from: Net benefit from repatriating foreign earnings (22.7) (6.8) (22.6) Foreign income taxes 21.3 -- 5.7 Changes in valuation allowance for federal deferred tax assets (10.0) (9.9) -- Benefit of capital loss carryforward -- (10.0) -- Resolution of tax audit contingencies -- -- (10.4) Other 1.4 4.4 2.1 ------ ------- ------ $ 28.8 $ 59.8 $ 53.5 ====== ======= ======
In 1997, 1996, and 1995, the company recognized $0.3 million, $3.1 million, and $5.7 million, respectively, of benefits for deductions associated with the exercise of employee stock options. These benefits were added directly to capital surplus in 1997 and 1996 and to "Net Investment by Premark" in 1995, and are not reflected in the provision for income taxes. Deferred tax assets (liabilities) are composed of the following: (In millions) 1997 1996 ---------- ---------- Depreciation $(16.8) $(29.0) Deferred costs (2.2) (4.9) Other (9.3) (3.4) ------ ------ Gross deferred tax liabilities (28.3) (37.3) ------ ------ Credit carryforwards 42.4 31.7 Fixed assets basis differences 24.6 23.8 Employee benefits accruals 19.8 18.2 Inventory reserves 17.8 10.3 Postretirement benefits 15.7 14.3 Bad debt reserves 6.0 14.9 Computer leasing transactions 3.1 7.6 Other accruals 33.6 28.8 ------ ------ Gross deferred tax assets 163.0 149.6 ------ ------ Valuation allowances (14.4) (25.8) ------ ------ Net deferred tax assets $120.3 $ 86.5 ====== ====== At December 27, 1997, the company had a domestic capital loss carryforward of $40.7 million and foreign net operating loss carryforwards of $61.2 million. The capital loss carryforward expires in 2001. Of the total net operating loss carryforwards, $48.9 million expire at various dates from 1998 to 2005, while the remainder have unlimited lives. During 1997, the company recognized net benefits of $6.4 million related to foreign net operating loss carryforwards. Repatriation of foreign earnings would not result in a significant incremental cost to the company. At December 27, 1997, and December 28, 1996, the company had valuation allowances against certain deferred tax assets totaling $14.4 million and $25.8 million, respectively. These valuation allowances relate to tax assets in jurisdictions where it is management's best estimate that there is not a greater than 50 percent probability that the benefit of the assets will be realized in the associated tax returns. The likelihood of realizing the benefit of deferred tax assets is assessed on an ongoing basis. Consequently, future material changes in the valuation allowance are possible. The company paid income taxes in 1997, 1996, and 1995, of $50.5 million, $76.5 million, and $75.2 million, respectively. For periods prior to the Distribution when the company's domestic operations were included in Premark's U.S. tax returns, income tax payments were made only by foreign subsidiaries of the company. Note 8: Retirement Benefit Plans Pension Plans The company has various pension plans covering substantially all domestic employees and certain employees in other countries. Prior to the Distribution, the participants in the domestic plan were covered by a pension plan with similar benefits, sponsored by Premark (the Premark Plan). Under an agreement with Premark, the company has assumed or retained pension liabilities related to substantially all Tupperware participants. Assets of the Premark Plan have been allocated in accordance with ERISA rules between the Premark Plan and the company's plan for domestic participants. The actuarial cost method used in determining pension expense is the projected unit credit method. Generally, annual cash contributions are equal to the minimum funding amounts required by ERISA for the U.S. plan. Net pension expense included the following components: (In millions) 1997 1996 1995 --------- -------- -------- Service cost on benefits earned during the year $ 4.4 $ 5.2 $ 4.8 Interest cost on benefits earned in prior years 5.0 5.4 5.8 Return on plan assets: Actual gain (5.0) (4.2) (6.7) Deferred gain 1.7 0.8 3.2 ----- ----- ----- Net gain recognized (3.3) (3.4) (3.5) Net amortization 0.6 0.8 0.8 ----- ----- ----- Net pension expense $ 6.7 $ 8.0 $ 7.9 ===== ===== =====
The assumed long-term rates of return on assets used in determining net pension expense were: U.S. plan -- 9.0 percent; foreign plans -- various rates from 4.0 percent to 9.0 percent. The assumed discount rates used in determining the actuarial present value of the projected benefit obligations were: U.S. plan -- 7.25 percent at December 27, 1997, and December 30, 1995; and 7.75 percent at December 28, 1996; foreign plans -- various rates from 3.5 percent to 8.0 percent. The assumed rates of increase in future compensation levels were: U.S. plan -- 6.0 percent; foreign plans -- various rates from 2.0 percent to 5.0 percent. The funded status of the plans was as follows: (In millions) U.S. Plans Foreign Plans ------------------ ------------------ 1997 1996 1997 1996 -------- -------- -------- -------- Actuarial present value of benefit obligations: Vested benefits $ 22.6 $ 20.3 $ 42.7 $ 49.2 Nonvested benefits 0.1 1.0 7.0 5.6 ------ ------ ------ ------ Accumulated benefit obligation 22.7 21.3 49.7 54.8 Effect of projected future salary increases 3.0 3.0 10.8 13.4 ------ ------ ------ ------ Projected benefit obligations 25.7 24.3 60.5 68.2 Plan assets at fair value -- primarily equity securities and corporate and government bonds 23.1 21.7 27.3 29.4 ------ ------ ------ ------ Plan assets less than projected benefit obligations (2.6) (2.6) (33.2) (38.8) Unrecognized prior service cost -- -- 0.1 0.1 Unrecognized net (gain) loss (1.3) (0.5) 2.6 7.4 Unrecognized net transition (assets) obligations (0.3) (0.4) 2.5 3.2 ------ ------ ------ ------ Accrued pension cost $ (4.2) $ (3.5) $(28.0) $(28.1) ====== ====== ======= ======
At December 27, 1997, and December 28, 1996, the accumulated benefit obligations of certain foreign plans exceeded plan assets. For those plans, the accumulated benefit obligations were $40.3 million and $45.0 million and the projected benefit obligations were $48.2 million and $54.7 million for 1997 and 1996, respectively. The fair values of those plans' assets at the end of 1997 and 1996 were $15.9 million and $17.5 million, respectively. The company also has several savings, thrift, and profit-sharing plans. Its contributions to these plans are based upon various levels of employee participation. The total cost of these plans was $4.9 million in 1997, $3.5 million in 1996, and $2.8 million in 1995. Medical and Life Insurance Benefits In addition to providing pension benefits, the company provides certain postretirement health care and life insurance benefits for selected U.S. and Canadian employees. Most employees and retirees outside the United States are covered by government health care programs. Employees may become eligible for these benefits if they reach normal retirement age while working for the company and satisfy certain years of service requirements. The medical plans are contributory, with retiree contributions adjusted annually, and contain other cost-sharing features, such as deductibles and coinsurance. The medical plans include an allowance for Medicare for post-65 retirees. The net periodic postretirement benefit costs for 1997, 1996, and 1995 were: (In millions) 1997 1996 1995 --------- -------- -------- Service cost $ 0.3 $ 0.5 $ 0.3 Interest on accumulated postretirement benefit obligation 2.7 2.8 3.0 Net amortization (0.2) (0.1) (0.2) ----- ----- ----- Total $ 2.8 $ 3.2 $ 3.1 ===== ===== =====
The projected liabilities, which are not funded, are reconciled with the amounts recognized in the company's consolidated balance sheet, as follows: (In millions) 1997 1996 ---------- ---------- Accumulated postretirement benefit obligations: Retirees $34.8 $34.4 Other fully eligible participants 0.1 0.1 Other active participants 3.2 3.9 ----- ----- 38.1 38.4 Unrecognized prior service benefit 2.0 2.1 Unrecognized loss (gain) 0.2 (1.2) ----- ----- Accrued postretirement benefit cost 40.3 39.3 Less current portion 2.3 2.4 ----- ----- Total long-term accrued postretirement benefit cost $38.0 $36.9 ===== ===== The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.25 percent at December 27, 1997 and December 30, 1995, and 7.75 percent at December 28, 1996. The assumed health care cost trend rate is 9 percent for the pre-65 plan and 6 percent for the post-65 plan for 1997. The pre-65 plan rate is assumed to decrease by one percentage point per year until an ultimate level of 6 percent is reached. For the post-65 plan the rate is assumed to remain at 6 percent. The health care cost trend rate assumption has a significant effect on the amounts reported. For example, increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 27, 1997, by $3.6 million. The effect of a one percentage point increase on the aggregate of the service and interest cost components of net periodic postretirement benefit cost for 1997 would be $0.3 million. Note 9: Incentive Compensation Plans Certain officers and other key employees of the company participate in the Tupperware Corporation 1996 Incentive Plan (the Incentive Plan). Annual and long-term performance awards and awards of options to purchase Tupperware shares and of restricted stock are made under the Incentive Plan. Performance Awards Earned performance awards of $7.5 million, $19.3 million, and $12.9 million are included in the consolidated statement of income for 1997, 1996, and 1995, respectively. Stock Awards The total number of shares initially available for grant under the Incentive Plan was 6,100,000; however, that amount has been increased to 7,600,000 (7,584,000 as of December 27, 1997) as a result of company repurchases of shares. Of the total number of shares available for grant, up to 300,000 may be used for restricted stock awards. As of December 27, 1997, shares available for award under the Incentive Plan totaled 3,812,236 of which 134,604 could be granted in the form of restricted stock. In connection with the Distribution, options to purchase Premark shares and restricted shares of Premark stock that were held by Tupperware officers and employees were cancelled and reissued under the Incentive Plan as options to purchase Tupperware shares and restricted shares of Tupperware stock. The reissuances were in amounts and at exercise prices that maintained the amount of unrealized stock appreciation. The vesting dates and exercise periods of these options and restricted shares were not affected by the cancellation and reissuance. The exercise prices of all outstanding options that were granted prior to 1997 have been set at the fair market value of the shares on the date of grant. In 1997, options to purchase 684,500 shares were granted with exercise prices equal to the grant-date market value of the shares. For the remaining 405,500 of options granted in 1997, the exercise price is 10 percent greater than the grant-date market value of the shares. Under the options outstanding as of December 27, 1997, 59,191 shares may be purchased at prices less than $10.00 per share; 618,176 shares at prices between $10.01 and $20.00 per share; 1,352,641 shares at prices between $20.01 and $30.00 per share; 672,812 shares at prices between $30.01 and $40.00 per share; and 644,050 shares at prices greater than $40.00 per share. All outstanding options that have exercise prices equal to grant-date market value have vesting dates that are three years from the date of grant. Options that have exercise prices in excess of the grant- date market price will vest in three equal tranches if the price of the company's stock exceeds $32.05, $36.05, and $40.05 per share for 45 of 60 consecutive trading days over the five-year period beginning on the date of grant. All outstanding options have exercise periods that are 10 years from the date of grant. Outstanding restricted shares have initial vesting periods ranging from 1 to 5 years. Options outstanding as of December 27, 1997, will expire during the period 1999 through 2007, and have a weighted-average remaining life of 7.6 years. As of December 27, 1997, options to purchase 1,308,544 shares were exercisable. No compensation expense has been reflected in the consolidated income statement under the company's accounting policy. As required by FASB Statement 123, "Accounting for Stock-Based Compensation," the company has estimated the fair value of its option grants beginning with 1995. If these fair value estimates had been used to record compensation expense in the consolidated income statement, net income/pro forma net income would have been reduced by $2.5 million, $1.6 million, and $0.1 million to $79.5 million, $168.8 million, and $161.0 million, or $1.29, $2.69, and $2.56 per diluted common share ($1.30, $2.72, and 2.60 per basic share) in 1997, 1996, and 1995, respectively. The fair value of the stock option grants were estimated using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 2.0 percent for all years; expected volatility of 35.0 percent for 1997 and 30.0 percent for 1996 and 1995; risk-free interest rates of 5.8 percent for 1997 and 1995, and 6.4 percent for 1996; and expected lives of 5 years for all years. Compensation expense associated with restricted stock grants is equal to the fair market value of the shares on the date of grant and is recognized ratably over the required holding period. Compensation expense associated with restricted stock grants was not significant. Under the Tupperware Corporation Director Stock Plan (Director Plan), non-employee directors may elect to receive their annual retainers in the form of stock or stock options. Options granted to directors become exercisable on the last day of the fiscal year in which they are granted, have a term of 10 years, and have an exercise price that compensates for the foregone cash retainer. This amount and the value of stock grants on the date of award have been recognized as an expense by the company. The number of shares initially available for grant under the Director Plan and the number of shares available as of December 27, 1997, were 300,000 and 238,994, respectively. As of December 27, 1997, options to purchase 56,508 shares were exercisable. For Tupperware directors with options under the Premark Director Stock Option Plan (Premark Plan) who were Premark directors prior to the Distribution, the options were cancelled and reissued in a manner similar to employee awards. For outside Tupperware directors who continued as Premark directors as of the date of the Distribution, one-half of the unvested options under the Premark plan were cancelled and reissued and the other half remained as Premark stock options. Stock option and restricted stock activity for the Incentive Plan and the Director Plan is summarized below: Average Shares subject option price Stock Options to option per share - ---------------------------- -------------- ------------ Balance at December 30, 1995 -- -- Options granted to replace Premark options 2,006,566 $22.60 Options granted 685,500 42.22 Options cancelled (19,737) 33.57 Options exercised (235,186) 13.45 --------- Balance at December 28, 1996 2,437,143 28.91 Options granted 1,090,000 25.24 Options cancelled (96,748) 36.98 Options exercised (83,525) 15.91 --------- Balance at December 27, 1997 3,346,870 27.81 =========
Shares Shares available Restricted Stock outstanding for issuance - ---------------------------- -------------- ------------ Balance at December 30, 1995 -- -- Increase in shares available due to adoption of Incentive Plan -- 300,000 Shares awarded to replace Premark shares 61,311 (61,311) Shares awarded 87,000 (87,000) ------- ------- Balance at December 28, 1996 148,311 151,689 Shares awarded 20,329 (20,329) Shares cancelled (3,244) 3,244 Shares vested (38,055) -- ------- ------- Balance at December 27, 1997 127,341 134,604 ======= =======
Note 10: Geographic Information The company operates worldwide in one business segment: the manufacture and distribution, through independent direct sales forces, of plastic food storage and serving containers, microwave cookware, and educational toys. (In millions) 1997 1996 1995 --------- -------- -------- Net sales: Europe $ 546.6 $ 581.7 $ 595.1 Asia Pacific 279.0 338.0 355.1 Latin America 247.2 268.5 200.6 United States 156.5 181.1 208.6 -------- -------- -------- Total net sales $1,229.3 $1,369.3 $1,359.4 ======== ======== ======== Operating profit: Europe $ 144.6 $ 153.0 $ 156.8 Asia Pacific 37.2 61.0 59.4 Latin America (5.7) 43.3 19.4 United States (29.5) 10.4 10.3 ------- -------- -------- Total operating profit 146.6 267.7 245.9 ------- -------- -------- Unallocated expenses (18.0) (16.1) (22.9) Costs associated with becoming an independent company -- (9.1) -- Interest (expense) income, net (17.8) (8.0) 1.9 -------- ------- -------- Income before income taxes $ 110.8 $ 234.5 $ 224.9 ======== ======== ======== Identifiable assets: Europe $ 287.1 $ 315.6 $ 327.7 Asia Pacific 144.9 198.5 187.9 Latin America 170.2 181.1 115.6 United States 157.1 176.3 159.1 Corporate 87.9 107.0 153.7 --------- -------- -------- Total identifiable assets $ 847.2 $ 978.5 $ 944.0 ======== ======== ========= Includes a fourth quarter pretax charge totaling $42.4 million ($31.3 million after tax): $22.2 million in Latin America, primarily for bad debts in Brazil; $16.0 million in the United States, primarily for inventory obsolescence; and $4.2 million in unallocated, primarily for corporate downsizing.
Sales to a single customer did not exceed 10 percent of total sales. Export sales were insignificant. Unallocated expenses are corporate expenses and other items not directly related to the operations of any particular geographic area. Corporate assets consist of cash and assets maintained for general corporate purposes. As of December 27, 1997, and December 28, 1996, the company's net investment in international operations was $210.0 million and $316.9 million, respectively. The company is subject to the usual economic risks associated with international operations; however, these risks are partially mitigated by the broad geographic dispersion of the company's operations. Note 11: Contingencies The company and certain subsidiaries are involved in litigation and various legal matters that are being defended and handled in the ordinary course of business. Included among these matters are environmental issues. None of the company's contingencies are expected to have a material adverse effect on its financial position, results of operations, or cash flow. Kraft Foods, Inc., which was formerly affiliated with Premark and Tupperware, has assumed any liabilities arising out of any legal proceedings in connection with certain divested or discontinued businesses. The liabilities assumed include matters alleging product liability, environmental liability, and infringement of patents. Note 12: Quarterly Financial Summary (Unaudited) Following is a summary of the unaudited interim results of operations for each quarter in the years ended December 27, 1997, and December 28, 1996. (In millions, except per share amounts) First Second Third Fourth quarter quarter quarter quarter ------- ------- -------- -------- Year ended December 27, 1997: Net sales $315.3 $342.5 $251.4 $320.1 Cost of products sold 114.0 131.1 95.7 133.1 Net income 24.9 38.0 3.4 15.7 Net income per common share: Basic 0.40 0.62 0.06 0.26 Diluted 0.40 0.61 0.06 0.25 Dividends declared per share 0.22 0.22 0.22 0.22 Composite stock price range: High 54 1/2 40 5/8 38 9/16 28 9/16 Low 33 5/8 29 7/8 26 5/8 22 1/2 Close 33 3/4 37 1/4 27 3/16 27 3/8 Year ended December 28, 1996: Net sales $329.0 $379.0 $290.6 $370.7 Cost of products sold 120.4 134.3 104.6 128.0 Net income 31.6 50.6 18.1 74.4 Net income per share (first and second quarters pro forma): Basic 0.47 0.79 0.29 1.20 Diluted 0.46 0.78 0.29 1.18 Dividends declared per share -- -- 0.22 0.22 Composite stock price range: High N/A 46 3/8 49 7/8 55 1/2 Low N/A 38 3/4 38 1/4 45 7/8 Close N/A 42 1/4 49 54 3/8 The fourth quarter of 1997 includes a pretax charge totaling $42.4 million ($31.3 million after tax), primarily for provisions for bad debts in Brazil, inventory obsolecence in the United States, and, to a lesser extent, corporate downsizing.
Note 13: Rights Agreement In 1996, the company adopted a shareholders' rights plan with a duration of 10 years, under which shareholders received a right to purchase one one-hundredth of a share of preferred stock for each right owned. The rights are exercisable if 15 percent of the company's common stock is acquired or threatened to be acquired, and the rights are redeemable by the company if exercisability has not been triggered. Under certain circumstances, if 50 percent or more of the company's consolidated assets or earning power are sold, a right entitles the holder to buy shares of the company equal in value to twice the exercise price of each right. Upon acquisition of the company by a third party, a holder could receive the right to purchase stock in the acquirer. The foregoing percentage thresholds may be reduced to not less than 10 percent. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors and Shareholders of Tupperware Corporation: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of cash flows and of shareholders' equity present fairly, in all material respects, the financial position of Tupperware Corporation and its subsidiaries at December 27, 1997 and December 28, 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 27, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Tupperware Corporation's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Price Waterhouse LLP Orlando, Florida February 20, 1998 REPORT OF MANAGEMENT The management of Tupperware is responsible for the preparation of the financial statements and other information contained in this Annual Report. The financial statements were prepared in accordance with generally accepted accounting principles and include amounts that are based upon management's best estimate and judgements, as appropriate. Price Waterhouse LLP has audited these financial statements and has expressed an independent opinion thereon. The company maintains internal control systems, policies, and procedures designed to provide reasonable assurances that assets are safeguarded, that transactions are executed in accordance with management's authorization and properly recorded, and that accounting records may be relied upon for the preparation of financial information. There are inherent limitations in all internal controls systems based on the fact that the cost of such systems should not exceed the benefits derived. Management believes that the company's systems provide the appropriate balance of costs and benefits. The company also maintains an internal auditing function that evaluates and reports on the adequacy and effectiveness of internal accounting controls, policies, and procedures. The Audit and Corporate Responsibility Committee of the Board of Directors is composed entirely of outside directors. The Committee meets periodically and independently with management, the internal auditors, and Price Waterhouse LLP to discuss the company's internal accounting controls, auditing, and financial reporting matters. The internal auditors and Price Waterhouse LLP have unrestricted access to the Audit and Corporate Responsibility Committee. Management recognizes its responsibility for conducting the company's affairs in a manner that is responsive to the interest of its shareholders and its employees. This responsibility is characterized in the Code of Conduct, which provides that the company will fully comply with laws, rules and regulations of every country in which it operates and will observe the rules of ethical business conduct. Employees of the company are expected and directed to manage the business of the company accordingly. Rick Goings Thomas P. O'Neill, Jr. Chairman of the Board Senior Vice President and Chief Executive Officer and Chief Financial Officer EX-21 4 LIST OF SUBSIDIARIES EXHIBIT 21 Tupperware Corporation Active Subsidiaries The following subsidiaries are wholly-owned by the Registrant or another subsidiary of the Registrant. Subsidiary Location Deerfield Land Corporation Delaware Tupperware Financial Corporation Delaware Dart Industries Inc. Delaware Tupperware Far East, Inc. Delaware Tupperware Polska Sp.zo.o Poland Tupperware Turkey, Inc. Delaware Dart Far East Sdn. Bhd. Malaysia Dart Argentina S.A. Argentina Dart de Venezuela, C.A. Venezuela Tupperware Colombia S.A. Colombia Dart do Brasil Industria e Comercio Ltda. Brazil Daypar Participacoes Ltda Brazil Academia Negocios S/C Ltda. Brazil Adota Artigos Domesticos Ltda. Brazil Tupperware Hellas, S.A.I.C. Greece Tupperware Israel Ltd. Israel Tupperware Espana, S.A. Spain Tupperware Belgium N.V. Belgium Tupperware France S.A. France Tupperware Deutschland G.m.b.H. Germany Tupperware Del Ecuador Tupperware Cia. Ltda. Ecuador Tupperware Osterreich G.m.b.H. Austria Dart Industries Hong Kong Limited Hong Kong Tupperware India Private Limited India Tupperware Asia Pacific Holdings Private Limited Mauritius Tupperware China, LLC. Delaware Tupperware (China) Company Limited PRC Tupperware Nederland Properties B.V. Netherlands Tupperware Nederland B.V. Netherlands Tupperware Southern Africa (Proprietary) Limited South Africa Dart Industries (New Zealand) Limited New Zealand Tupperware East Africa Limited Kenya Tupperware Italia S.p.A. Italy Dart (Philippines), Inc. Philippines Tupperware Realty Corporation Philippines Dart, S.A. de C.V. Mexico Servicios Especializados de Arrendamiento en Latinoamerica S.A. de C.V Mexico Tupperware (Suisse) S.A. Switzerland Dartco Manufacturing Inc. Delaware Tupperware Industria Lusitana de Artigos Domesticos, Lda. Portugal Tupperware (Portugal) Artigos Domesticos, Lda. Portugal Premiere Products, Inc. Delaware Tupperware Holdings, B.V. Netherlands Tupperware Service G.m.b.H. Germany Tupperware, Ltd. Russia Tupperware Products, B.V. Netherlands Tupperware Products S.A. Switzerland Premiere Korea Ltd. Korea Tupperware General Services N.V. Belgium Premiere Manufacturing, Inc. Delaware Premiere Marketing Company Korea Tupperware U.S., Inc. Delaware Tupperware Distributors, Inc. Delaware Tupperware Factors Inc. Delaware Tupperware Canada Inc. Canada Japan Tupperware Co., Ltd. Japan Tupperware Australia Pty. Ltd. Australia Tupperware Commercial Ltd. Hungary Importadora Y Distribuidora Importupp Limitada Chile Tupperware Czech Republic, spol. s.r.o. Czech Republic Tupperware Iberica S.A. Spain Tupperware Singapore Pte. Ltd. Singapore Tupperware (Thailand) Limited Thailand Tupperware Uruguay S.A. Uruguay Tupperware Home Parties Corporation Delaware Tupperware U.K. Holdings, Inc. Delaware Tupperware United Kingdom & Ireland Limited United Kingdom Tupperware Scandinavia A/S Denmark The Tupperware Foundation Delaware Tupperware Products, Inc. Delaware Tupperware Finance Holding Company, B.V.Netherlands Tupperware Finance Company, B.V. Netherlands Tupperware Export Sales, Ltd. Barbados Tupperware Services, Inc. Delaware EX-23 5 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS EXHIBIT 23 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-04871), the Registration Statement on Form S-8 (No. 33-04869), the Registration Statement on Form S-8 (No. 33-18331) and the Prospectus constituting part of the Registration Statement on Form S-3 (No. 33-12125) of Tupperware Corporation of our report dated February 20, 1998 appearing on page 36 of the Annual Report to Shareholders which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 16 of this Form 10-K. Price Waterhouse LLP Orlando, Florida March 24, 1998 EX-24 6 POWERS OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Tupperware Corporation, a Delaware corporation, (the "Corporation"), hereby constitutes and appoints Thomas M. Roehlk and Charles L. Dunlap, true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign the Annual Report on Form 10-K of the Corporation for its fiscal year ended December 27, 1997, and any and all amendments thereto, and to file or cause to be filed the same, together with any and all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and substitutes, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and substitutes, may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and seal this 5th day of March, 1998. Rita Bornstein Ruth M. Davis Lloyd C. Elam Clifford J. Grum Joe R. Lee Bob Marbut David R. Parker Robert M. Price Joyce M. Roche EX-27 7 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TUPPERWARE CORPORATION'S 1997 FINANCIAL STATEMENTS AS INCORPORATED BY REFERENCE IN ITS ANNUAL REPORT ON FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 12-MOS DEC-27-1997 DEC-29-1996 DEC-27-1997 22100 0 137400 40400 184200 403100 944000 651000 847200 299800 236700 0 0 600 213600 847200 1229300 1229300 473900 473900 6100 27500 24100 110800 28800 82000 0 0 0 82000 1.34 1.32
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