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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934 (NO FEE REQUIRED)
COMMISSION FILE NO. I-922
THE GILLETTE COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
INCORPORATED IN DELAWARE 04-1366970
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
PRUDENTIAL TOWER BUILDING, BOSTON, MASSACHUSETTS 02199
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 617-421-7000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE
BOSTON STOCK EXCHANGE
MIDWEST STOCK EXCHANGE
PACIFIC STOCK EXCHANGE
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 ((S)229.405 of this chapter) is not contained herein, and
will not be contained to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K [X].
The aggregate market value of Gillette Common Stock held by non-affiliates as
of March 1, 1995 was approximately $15,555,000,000.00.*
The number of shares of Gillette Common Stock outstanding as of March 1, 1995
was 221,523,587.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the following documents have been incorporated by
reference into the 10-K Parts indicated:
DOCUMENTS 10-K PARTS
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1. The Gillette Company 1994 Annual Report to Stockholders (the
"1994 Annual Report")......................................... Parts I and II
2. The Gillette Company 1995 Proxy Statement (The "1995 Proxy
Statement")................................................... Part III
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* This amount does not include the value of 162,823.2659 shares of Series C
ESOP Convertible Preferred Stock issued for $602.875 per share. For purposes
of this calculation only, Gillette Common Stock held by Executive Officers or
directors of the Company has been treated as owned by affiliates.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
The Gillette Company was incorporated under the laws of the State of Delaware
in 1917 as the successor of a Massachusetts corporation incorporated in 1912
which corporation was the successor of a Maine corporation organized in 1901 by
King C. Gillette, inventor of the safety razor.
A description of the Company and its businesses appears in the 1994 Annual
Report at page 2, and at pages 3 through 5 under the caption "Letter to
Stockholders" and at page 44 under the caption "Principal Divisions and
Subsidiaries," the texts of which are incorporated by reference. See also Item
7, Management's Discussion.
BUSINESS SEGMENTS
The approximate percentages of consolidated net sales and segment profit from
operations during the last five years for each of the Company's business
segments appear in the 1994 Annual Report at page 42 under the caption,
"Business Segments," and are incorporated by reference.
"Financial Information by Business Segment," and "Segment and Area
Commentary" containing information on net sales, profit from operations,
identifiable assets, capital expenditures and depreciation for each of the last
three years, appear in the 1994 Annual Report at page 40 and are incorporated
by reference.
The Company's businesses range across several industry segments, including
blades and razors, toiletries and cosmetics, stationery products, electric
shavers, small household appliances, hair care appliances, oral care appliances
and oral care products. Descriptions of those businesses appear in the 1994
Annual Report at pages 6 through 15, the text of which is incorporated by
reference.
DISTRIBUTION
In the Company's major markets, traditional Gillette product lines are sold
to wholesalers, chain stores and large retailers and are resold to consumers
primarily through food, drug, discount, stationery, tobacco and department
stores. Jafra skin care products are sold directly to consumers by independent
consultants, primarily at classes in the home. Waterman and Parker products are
sold to wholesalers and retailers and are resold to consumers through fine
jewelry, fine stationery and department stores, pen specialists and other
retail outlets. Braun products are sold to wholesalers and retailers and are
resold to consumers mainly through department, discount, catalogue and
specialty stores. In many small Gillette International and Braun markets,
products are distributed through local distributors and sales agents. Oral-B
products are marketed directly to dental professionals for distribution to
patients and also are sold to wholesalers, chain stores and large retailers for
resale to consumers through food, drug and discount stores.
PATENTS
Certain of the Company's patents and licenses in the blade and razor segment
are of substantial value and importance when considered in the aggregate.
Additionally, the Company holds significant patents in the toiletries and
cosmetics, writing instruments and Braun business segments. No patent or
license held by the Company is considered to be of material importance when
judged from the standpoint of the Company's total business. Gillette has
licensed many of its blade and razor patents to other manufacturers. In all of
these categories, Gillette competitors also have significant patent positions.
The patents and licenses held by the Company are of varying remaining
durations.
TRADEMARKS
In general, the Company's principal trademarks have been registered in the
United States and throughout the world where the Company's products are sold.
Gillette products are marketed
1
outside the United States under various trademarks, many of which are the same
as those used in the United States. The trademark Gillette is of principal
importance to the Company. In addition, a number of other trademarks owned by
the Company and its subsidiaries have significant importance within their
business segments. The Company's rights in these trademarks endure for as long
as they are used or registered.
COMPETITION
The blades and razors segment is marked by competition in product
performance, innovation and price, as well as by competition in marketing,
advertising and promotion to retail outlets and to consumers. The Company's
major competitors worldwide are Warner-Lambert Company, with its Schick and
Wilkinson Sword (in North America and Europe) product lines, and Societe Bic
S.A., a French company. Additional competition in the United States is provided
by the American Safety Razor Company, Inc. under its own brands and a number of
private label brands. The toiletries and cosmetic segment is highly competitive
in terms of price, product innovation and market positioning, with frequent
introduction of new brands and marketing concepts, especially for products sold
through retail outlets, and with product life cycles typically shorter than in
the other business segments of the Company. Competition in the stationery
products segment, particularly in the writing instruments market, is marked by
a high degree of competition from domestic and foreign suppliers and low entry
barriers, and is focused on a wide variety of factors including product
performance, design and price, with price an especially important factor in the
commercial sector. Competition in the electric shaver, small household, hair
care and oral care appliances segments is based primarily on product
performance, innovation and price, with numerous competitors in the small
household and hair care appliances segments. Competition in the oral care
product segment is focused on product performance, price and dental profession
endorsement.
EMPLOYEES
At year-end, Gillette employed approximately 32,800 persons, three-quarters
of them outside the United States.
RESEARCH AND DEVELOPMENT
In 1994, research and development expenditures were $136.9 million, compared
with $133.1 million in 1993 and $123.8 million in 1992.
RAW MATERIALS
The raw materials used by Gillette in the manufacture of products are
purchased from a number of outside suppliers, and substantially all such
materials are readily available.
OPERATIONS BY GEOGRAPHIC AREA
The following table indicates the geographic sources of consolidated net
sales and profit from operations of the Company for the last three years:
1994 1993 1992
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NET NET NET
SALES PROFIT SALES PROFIT SALES PROFIT
----- ------ ----- ------ ----- ------
United States............................ 32% 30% 33% 29% 31% 30%
Foreign.................................. 68% 70% 67% 71% 69% 70%
"Financial Information by Geographic Area" and "Segment and Area Commentary"
containing information on net sales, profit from operations and identifiable
assets for each of the last three years appear in the 1994 Annual Report under
the same captions at page 40 and are incorporated by reference.
2
ITEM 2. DESCRIPTION OF PROPERTY
The Company owns and leases manufacturing facilities and other important
properties in the United States and abroad consisting of approximately
14,965,000 square feet of floor space, of which 75%, or about 11,159,000 square
feet, is devoted to the Company's principal manufacturing operations.
Additional premises, such as sales and administrative offices, research
laboratories, and warehouse, distribution and other manufacturing facilities
account for about 25% of Gillette's principal property holdings, or about
3,806,000 square feet. Gillette's executive offices are located in the
Prudential Center, Boston, Massachusetts, where the Company holds a long-term
lease covering approximately 278,000 square feet.
In the United States, Gillette's principal manufacturing facilities consist
of the following:
APPROXIMATE
AREA
BUSINESS SEGMENT LOCATION (SQUARE FEET)
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Blades and Razors Boston, Massachusetts 1,450,000
Toiletries and Cosmetics Andover, Massachusetts 593,000
St. Paul, Minnesota 959,000
Westlake Village, California 150,000
Stationery Products Santa Monica, California 320,000
Janesville, Wisconsin 215,000
Oral-B Products Iowa City, Iowa 260,000
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Total 3,947,000
=========
Approximately 88% of these U.S. manufacturing facilities and the land they
occupy are owned by Gillette. The Santa Monica property is leased in its
entirety and 258,000 square feet of the St. Paul facility is located on leased
land.
Foreign manufacturing subsidiaries of Gillette, excluding Braun and Oral-B,
operate plants with an aggregate of approximately 4,581,000 square feet of
floor space, about 84% of which is on land owned by Gillette. Many of the
international facilities are engaged in the manufacture of products for two or
more of the Company's major business segments.
Braun's executive offices are located in Kronberg, Germany, and the locations
and approximate areas of its principal manufacturing facilities are as follows:
APPROXIMATE
AREA
(SQUARE
LOCATION FEET)
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Germany (3 facilities)...................................... 1,386,000
Spain....................................................... 410,000
Ireland..................................................... 238,000
Mexico...................................................... 253,000
France...................................................... 28,000
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Total................................................... 2,315,000
=========
Approximately 90% of these facilities and 98% of the land they occupy are
owned by Braun.
Oral-B's executive offices are in leased space in Redwood City, California.
In addition to its Iowa City plant, it owns or leases approximately 236,000
square feet of manufacturing facilities in four countries outside the United
States.
Miscellaneous manufacturing operations in North Chicago, Illinois and other
locations account for approximately 82,000 square feet.
The above facilities are in good repair, adequately meet the Company's needs
and operate at reasonable levels of production capacity.
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ITEM 3. LEGAL PROCEEDINGS
The Company is subject to legal proceedings and claims arising out of its
business, which cover a wide range of matters, including antitrust and trade
regulation, product liability, contracts, environmental issues, patent and
trademark matters and taxes. Management, after review and consultation with
counsel considers that any liability from all of these legal proceedings and
claims would not materially affect the consolidated financial position, results
of operations or liquidity of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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4
EXECUTIVE OFFICERS OF REGISTRANT
Information regarding the Executive Officers of the Company as of March 16,
1995 is set out below.
NAME AND CURRENT POSITION FIVE-YEAR BUSINESS HISTORY AGE
------------------------- -------------------------- ---
Alfred M. Zeien Chairman of the Board and Chief 65
Chairman of the Board and Chief Executive Officer since February
Executive Officer 1991; President and Chief
Operating Officer, January 1991 -
February 1991; Vice Chairman of
the Board,
International/Diversified
Operations, November 1987 -
January 1991
Joseph E. Mullaney Vice Chairman of the Board since 61
Vice Chairman of the Board November 1990; Senior Vice
President, Legal, April 1977 -
November 1990; General Counsel,
September 1973 - September 1990
Michael C. Hawley Executive Vice President, 57
Executive Vice President International Group since December
1993; President, Oral-B
Laboratories, Inc., May 1989 -
November 1993
Jacques Lagarde Executive Vice President, 56
Executive Vice President Diversified Group since October
1993; Vice President, February
1990 - September 1993; Chairman,
Board of Management, Braun AG,
February 1990 - September 1993
Robert J. Murray Executive Vice President, North 53
Executive Vice President Atlantic Group since January 1991;
Vice President, October 1987 -
January 1991
Robert E. DiCenso Senior Vice President, Personnel 54
Senior Vice President and Administration, since July
1994; Vice President, Investor
Relations, January 1993 - July
1994; Vice President, Planning and
Administration, Diversified Group,
July 1988 - December 1992
Thomas F. Skelly Senior Vice President, Finance 61
Senior Vice President since May 1980
Anthony S. Lucas Vice President since July 1983; 62
Vice President and Controller Controller since June 1980
The Executive Officers hold office until the first meeting of the Board of
Directors following the annual meeting of the stockholders and until their
successors are respectively elected or appointed and qualified, unless a
shorter period shall have been specified by the terms of their election or
appointment, or until their earlier resignation, removal or death.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS
The information required by this item appears in the 1994 Annual Report on
the inside back cover under the caption "common stock" and at page 42 under the
caption, "Quarterly Financial Information," and is incorporated by reference.
As of March 1, 1995, the record date for the 1995 Annual Meeting, there were
30,821 Gillette stockholders of record.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item appears in the 1994 Annual Report at
page 43 under the caption, "Historical Financial Summary," and is incorporated
by reference.
5
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item appears in the 1994 Annual Report at
pages 25 through 27 under the caption, "Management's Discussion," and is
incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Financial Statements and Supplementary Data for The Gillette
Company and Subsidiary Companies appear in the 1994 Annual Report at the pages
indicated below and are incorporated by reference.
(1) Independent Auditor's Report.............................. Page 41
(2) Consolidated Statement of Income and Earnings Reinvested
in the Business for the Years Ended December 31, 1994,
1993 and 1992............................................. Page 28
(3) Consolidated Balance Sheet at December 31, 1994 and 1993.. Page 29
(4) Consolidated Statement of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992.......................... Page 30
(5) Notes to Consolidated Financial Statements................ Pages 31
through 40
(6) Quarterly Financial Information........................... Page 42
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
The information required by this item with respect to the Directors of the
Company appears in the 1995 Proxy Statement at pages 2 through 5 and at page 7
under the caption "Certain Transactions with Directors and Officers", the texts
of which are incorporated by reference.
The information required for Executive Officers of the Company appears at the
end of Part I of this report at page 5.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item appears in the 1995 Proxy Statement at
page 8 under the caption "Compensation of Directors", at pages 12 and 13 under
the caption "Incentive Payment and Award" and at pages 13 through 16 under the
caption "Executive Compensation" and is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item concerning the security ownership of
certain beneficial owners and management appears in the 1995 Proxy Statement at
pages 6 and 7 under the caption "Stock Ownership of Certain Beneficial Owners
and Management" and at pages 12 and 13 under the caption "Incentive Payment and
Award" and is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item appears in the 1995 Proxy Statement at
page 7 under the caption "Certain Transactions with Directors and Officers" and
at page 8 under the caption "Compensation of Directors" and is incorporated by
reference.
6
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
A. FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
FINANCIAL STATEMENTS
The following appear in the 1994 Annual Report at the pages indicated below
and are incorporated into Part II by reference.
(1) Independent Auditor's Report.............................. Page 41
(2) Consolidated Statement of Income and Earnings Reinvested
in the Business for the Years Ended December 31, 1994,
1993 and 1992............................................. Page 28
(3) Consolidated Balance Sheet at December 31, 1994 and 1993.. Page 29
(4) Consolidated Statement of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992.......................... Page 30
(5) Notes to Consolidated Financial Statements................ Pages 31
through 40
SCHEDULES
The following schedule appears at page 12 of this report:
II.
Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because they are either
not required or not applicable.
EXHIBITS
3(a) Composite Certificate of Incorporation of The Gillette Company, as
amended, filed as Exhibit 3(a) to The Gillette Company Annual
Report on Form 10-K for the year ended December 31, 1989,
Commission File No. I-922, incorporated by reference herein.
(b) The Bylaws of The Gillette Company, as amended April 15, 1993,
filed as Exhibit 3(b) to the Gillette Company Quarterly Report on
Form 10-Q for the period ended March 31, 1993, incorporated by
reference herein.
4(a) Specimen of form of certificate representing ownership of The
Gillette Company Common Stock, $1.00 par value, as adopted by the
Board of Directors of the Company on December 15, 1977, filed as
Exhibit 4(a) to The Gillette Company Annual Report on Form 10-K
for the year ended December 31, 1986, Commission File No. I-922,
incorporated by reference herein.
(b) Form of Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock of the Gillette
Company filed as Exhibit A to Exhibit 1 to The Gillette Company
Current Report on Form 8-K, dated December 30, 1985, Commission
File No. I-911, incorporated by reference herein.
(c) Rights Agreement dated as of November 26, 1986, and amended and
restated as of January 17, 1990, between The Gillette Company and
The First National Bank of Boston, filed as Exhibit 1 to The
Gillette Company Form 8, dated January 18, 1990, incorporated by
reference herein.
(d) Certificate of Designation of the Series C ESOP Convertible
Preferred Stock of The Gillette Company, dated January 17, 1990,
filed as Exhibit 4(e) to The Gillette Company Annual Report on
Form 10-K for the year ended December 31, 1989, Commission File
No. I-922, incorporated by reference herein.
(e) Certificate of Amendment relating to an increase in the amount of
authorized shares of preferred stock and common stock, filed as
Exhibit 3(e) to The Gillette Company Annual Report on Form 10-K
for the year ended December 31, 1991, Commission File No. I-922,
incorporated by reference herein.
7
(f) Instruments relating to long-term debt.
Multi-year Credit agreement dated as of June 21, 1994 among The
Gillette Company and a group of United States and international
banks, filed herewith.
Form of $150,000,000 4.75% note due August 15, 1996 issued
pursuant to Registration Statement No. 33-54974 of The Gillette
Company, filed November 24, 1992, as amended May 14, 1993 and June
24, 1993 and the Trust Indenture filed therewith as Exhibit 4.1,
filed as part of Exhibit 4(f) to The Gillette Company Annual
Report on Form 10-K for the year ended December 31, 1993,
incorporated by reference herein.
Form of $150,000,000 6.25% note due August 15, 2003, issued
pursuant to Registration Statement No. 33-54974 of The Gillette
Company, filed November 24, 1992, as amended May 14, 1993 and June
24, 1993 and the Trust Indenture filed therewith as Exhibit 4.1,
filed as part of Exhibit 4(f) to The Gillette Company Annual
Report on Form 10-K for the year ended December 31, 1993,
incorporated by reference herein.
Form of $150,000,000 and $50,000,000 5.75% notes due October 15,
2005, issued pursuant to Registration Statement No. 33-50303 of
The Gillette Company, filed September 17, 1993 and the Trust
Indenture filed as Exhibit 4.1 to Registration Statement No. 33-
54974 of The Gillette Company, as amended May 14, 1993 and June
24, 1993, filed as part of Exhibit 4(f) to The Gillette Company
Annual Report on Form 10-K for the year ended December 31, 1993,
incorporated by reference herein.
(Others not filed, but the registrant agrees to file a copy of
such instruments upon the request of the Securities and Exchange
Commission.)
10 Material Contracts
*(a) The Gillette Company 1971 Stock Option Plan, as amended, subject
to the approval of the stockholders at their annual meeting on
April 20, 1995, filed herewith.
*(b) The Gillette Company Stock Equivalent Unit Plan, as amended, filed
as Exhibit 10(b) to The Gillette Company Annual Report on Form 10-
K for the year ended December 31, 1993, incorporated by reference
herein.
*(c) The Gillette Company Incentive Bonus Plan, as amended, filed as
Exhibit 10(c) to The Gillette Company Annual Report on Form 10-K
for the year ended December 31, 1993, incorporated by reference
herein.
*(d) The Gillette Company Outside Directors' Stock Ownership Plan,
filed as Exhibit 10(d) to The Gillette Company Annual Report on
Form 10-K for the year ended December 31, 1993, incorporated by
reference herein.
*(e) Description of The Gillette Company Executive Life Insurance
Program, filed as Exhibit 10(d) to The Gillette Company Annual
Report on Form 10-K for the year ended December 31, 1991,
Commission File No. I-922, incorporated by reference herein.
(f) Directors and Officers and Company Reimbursement Indemnity
Insurance and Pension and Welfare Fund Fiduciary Responsibility
Insurance policy, filed herewith.
*(g) The Retirement Plan for Directors of The Gillette Company, as
amended, filed as Exhibit 10(f) to The Gillette Company Annual
Report on Form 10-K for the year ended December 31, 1987,
Commission File No. I-922, incorporated by reference herein.
*(h) The Deferred Compensation Plan for Directors of The Gillette
Company, as amended, filed as Exhibit 10(h) to The Gillette
Company Annual Report on Form 10-K for the year ended December 31,
1993, incorporated by reference herein.
(i) Stock Purchase Agreement dated November 24, 1986, between The
Gillette Company and a group of entities consisting of Revlon
Group Incorporated, MacAndrews & Forbes, Incorporated and certain
of their affiliates, filed as Exhibit No. 28.2 to The Gillette
Company Current Report on Form 8-K dated November 24, 1986,
Commission File No. I-922, incorporated by reference herein.
8
*(j) Description of severance pay and benefit arrangements for
employees in the event of a change in control, filed as Exhibit
10(j) to The Gillette Company Annual Report on Form 10-K for the
year ending December 31, 1989, Commission File No. I-922,
incorporated by reference herein.
(k) Letter Agreement, dated July 20, 1989, between The Gillette
Company and Berkshire Hathaway Inc., filed as Exhibit 4(a) to The
Gillette Company Current Report on Form 8-K, dated July 20, 1989,
Commission File No. I-922, incorporated by reference herein.
*(l) Description of agreement between The Gillette Company and Gaston
R. Levy dated December 27, 1993, filed as Exhibit 10(l) to The
Gillette Company Annual Report on Form 10-K for the year ended
December 31, 1993, incorporated by reference herein.
*(m) Description of agreement between The Gillette Company and Lorne R.
Waxlax dated September 30, 1993, filed as Exhibit 10(m) to The
Gillette Company Annual Report on Form 10-K for the year ended
December 31, 1993, incorporated by reference herein.
*(n) Description of The Gillette Company Estate Preservation Plan,
filed as Exhibit 10(n) to The Gillette Company Annual Report on
Form 10-K for the year ended December 31, 1993, incorporated by
reference herein.
*(o) Description of The Gillette Company Estate Planning Program, filed
as Exhibit 10(o) to The Gillette Company Annual Report on Form 10-
K for the year ended December 31, 1993, incorporated by reference
herein.
*(p) Description of incentive payment to Alfred M. Zeien, filed
herewith.
*(q) The Gillette Company Supplemental Retirement Plan, as amended and
restated June 16, 1994, filed herewith.
*(r) The Gillette Company Supplemental Savings Plan, as amended and
restated effective July 1, 1993, filed herewith.
11 Computation of per share earnings, filed herewith.
12 Computation of the ratios of current assets to current liabilities
for the years 1994, 1993 and 1992, filed herewith.
13 Portions of the 1994 Annual Report to Stockholders of The Gillette
Company incorporated by reference in this Form 10-K, filed
herewith.
22 List of subsidiaries of The Gillette Company, filed herewith.
23 Independent Auditors' Consent, filed herewith.
24 Power of Attorney, filed herewith.
27 Financial Data Schedule (not considered to be filed).
- --------
* Filed pursuant to Item 14(c).
B. REPORTS ON FORM 8-K
There were no reports on Form 8-K filed by the Company during the last
quarter of the period covered by this report.
OTHER MATTERS
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into the following Registration Statements of the
registrant on Form S-8 (1) No. 33-27916, filed April 10, 1989, and amended
thereafter, which incorporates by reference therein Registration Statements on
Form S-8 Nos. 2-90276, 2-63951 and 1-50710, and all amendments thereto, all
relating to shares issuable and deliverable under The Gillette Company 1971
Stock Option Plan and 1974 Stock Purchase Plan and on Form S-7 No. 2-41016
relating to shares issuable and deliverable under The Gillette
9
Company 1971 Stock Option Plan; (2) No. 33-9495, filed October 20, 1986, and
all amendments thereto, relating to shares and plan interests in The Gillette
Company Employees' Savings Plan; (3) No. 2-93230, filed September 12, 1984, and
all amendments thereto, relating to shares and plan interests in the Oral-B
Laboratories Savings Plan; (4) No. 33-56218, filed December 23, 1992, relating
to shares and plan interests in The Gillette Company Employees' Savings Plan;
(5) No. 33-52465, filed March 1, 1994, and all amendments thereto, relating to
shares issuable and deliverable under The Gillette Company Global Employee
Stock Ownership Plan; (6) No. 33-53257, filed April 25, 1994, and all
amendments thereto, relating to shares issuable and deliverable under The
Gillette Company Outside Director's Stock Ownership Plan; and (7) No. 33-53258,
filed April 25, 1994, and all amendments thereto, relating to shares issuable
and deliverable under The Gillette Company 1971 Stock Option Plan.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event a claim for indemnification against such
liabilities (other than the payments by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
10
INDEPENDENT AUDITORS' REPORT
The Stockholders and Board of Directors
of THE GILLETTE COMPANY:
Under date of January 26, 1995, we reported on the consolidated balance sheet
of The Gillette Company and subsidiary companies as of December 31, 1994 and
1993, and the related consolidated statements of income and earnings reinvested
in the business and cash flows for each of the years in the three-year period
ended December 31, 1994, as contained in the 1994 Annual Report to
Stockholders. These consolidated financial statements and our report thereon
are incorporated by reference in the annual report on Form 10-K for the year
1994. In connection with our audits of the aforementioned consolidated
financial statements, we also have audited the related financial statement
schedule listed on page 7 of this report. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to
express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Boston, Massachusetts
January 26, 1995
11
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(MILLIONS OF DOLLARS)
ADDITIONS DEDUCTIONS
--------------------- -----------
BALANCE AT CHARGED TO LOSSES BALANCE AT
BEGINNING PROFIT CHARGED TO CHARGED END OF
DESCRIPTION OF YEAR AND LOSS OTHER TO RESERVES YEAR
----------- ---------- ---------- ---------- ----------- ----------
1994
Reserves deducted from
assets:
Receivables........... $45.9 $22.8 $ -- $16.6 $52.1
===== ===== ===== ===== =====
1993
Reserves deducted from
assets:
Receivables........... $41.8 $18.0 $2.5* $16.4 $45.9
===== ===== ===== ===== =====
1992
Reserves deducted from
assets:
Receivables........... $50.7 $ 8.2 $ -- $17.1 $41.8
===== ===== ===== ===== =====
* Acquisition balances
12
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.
The Gillette Company
(Registrant)
Thomas F. Skelly
By ___________________________________
Thomas F. Skelly
Senior Vice President and Chief
Financial Officer
Date: March 16, 1995
Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
* Alfred M. Zeien Chairman of the Board of March 16, 1995
- ------------------------------------ Directors, Chief Executive
ALFRED M. ZEIEN Officer and Director
* Joseph E. Mullaney Vice Chairman of the Board March 16, 1995
- ------------------------------------ and Director
JOSEPH E. MULLANEY
Thomas F. Skelly Senior Vice President and March 16, 1995
- ------------------------------------ Chief Financial Officer
THOMAS F. SKELLY
* Anthony S. Lucas Vice President, Controller March 16, 1995
- ------------------------------------ and Principal Accounting
ANTHONY S. LUCAS Officer
* Warren E. Buffett Director March 16, 1995
- ------------------------------------
WARREN E. BUFFETT
* Wilbur H. Gantz Director March 16, 1995
- ------------------------------------
WILBUR H. GANTZ
* Michael B. Gifford Director March 16, 1995
- ------------------------------------
MICHAEL B. GIFFORD
* Carol R. Goldberg Director March 16, 1995
- ------------------------------------
CAROL R. GOLDBERG
* Herbert H. Jacobi Director March 16, 1995
- ------------------------------------
HERBERT H. JACOBI
* Richard R. Pivirotto Director March 16, 1995
- ------------------------------------
RICHARD R. PIVIROTTO
* Alexander B. Trowbridge Director March 16, 1995
- ------------------------------------
ALEXANDER B. TROWBRIDGE
* Joseph F. Turley Director March 16, 1995
- ------------------------------------
JOSEPH F. TURLEY
Thomas F. Skelly
By ___________________________________
* THOMAS F. SKELLY
AS ATTORNEY-IN-FACT
13
EXHIBIT 11
THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS, SHARES IN MILLIONS)
1994 1993 1992
---- ---- ----
NET INCOME PER COMMON SHARE--ASSUMING NO DILUTION
- -------------------------------------------------
Net income as reported................................ $698.3 $288.3 $513.4
Less: Preferred Stock Dividends, net of tax benefit... (4.7) (4.7) (4.8)
------ ------ ------
Net income available to Common Shareholders........... $693.6 $283.6 $508.6
====== ====== ======
Average common shares outstanding..................... 221.2 220.4 219.5
Reported net income per common share.................. $ 3.14 $ 1.29 $ 2.32
NET INCOME PER COMMON SHARE--ASSUMING FULL DILUTION
- ---------------------------------------------------
Net income available to Common Shareholders (as
above)............................................... $693.6 $283.6 $508.6
Add: Series C ESOP Preferred Stock dividend, net of
tax benefit.......................................... 4.7 4.7 4.8
Deduct: Additional ESOP costs, net of tax benefit..... (2.2) (2.7) (2.5)
------ ------ ------
Adjusted net income available to common shareholders.. $696.1 $285.6 $510.9
====== ====== ======
Average common shares outstanding..................... 221.2 220.4 219.5
Add: Conversion of Series C ESOP Preferred Stock...... 3.3 3.3 3.3
Net additional common shares upon exercise of stock
options............................................. 2.1 1.8 2.0
------ ------ ------
Adjusted average common shares outstanding............ 226.6 225.5 224.8
====== ====== ======
Net income per common share -- assuming full dilution. $ 3.07 $ 1.27 $ 2.27
14
EXHIBIT 22
THE GILLETTE COMPANY
SUBSIDIARIES OF REGISTRANT
DECEMBER 31, 1994
ORGANIZED
UNDER
NAME LAWS OF
---- ---------
Compania Gillette de Argentina..................................... Delaware
Its Subsidiaries:
Compania Gillette de Argentina S.A............................... Argentina
SylvaPen Distribuidora S.A.C.I. y F.............................. Argentina
Gillette Australia Pty Ltd......................................... Australia
Braun Inc.......................................................... Delaware
Gillette Beteiligungs -- GmbH...................................... Germany
Its subsidiaries:
Gillette Deutschland GmbH & Co................................... Germany
Helit Innovative Buroproduckte Gmbh.............................. Germany
Societe de Participations Financieres Gillette................... France
Its subsidiary:
Waterman S.A................................................... France
Braun AG......................................................... Germany
Its subsidiaries:
Braun Electric Austria Gesellschaft mbH........................ Austria
Braun Canada Ltd./Ltee......................................... Canada
Braun Espanola, S.A............................................ Spain
Braun Finland Oy............................................... Finland
Braun France S.A............................................... France
Braun Ireland Ltd.............................................. Ireland
Braun Italia S.r.l............................................. Italy
Braun Japan K.K................................................ Japan
Braun de Mexico y Cia. de C.V.................................. Mexico
Braun Nederland B.V............................................ Netherlands
Braun (U.K.) Ltd............................................... England
Gillette do Brasil, Inc. and Jafra Comercio Participacoes e
Servicos, Inc. ................................................... Delaware
Their subsidiary:
Gillette do Brasil & Cia......................................... Brazil
Its subsidiary:
Gillette da Amazonia S.A....................................... Brazil
Fabrica Amazonense de Componentes Plasticos e Metalicos Ltda... Brazil
Gillette Canada Inc................................................ Canada
Its subsidiaries:
Oral-B Laboratories Pty. Limited................................. Australia
Oral-B Laboratories Inc./Laboratories Oral-B Inc................. Canada
Oral-B Laboratories GmbH......................................... Germany
Oral-B Laboratorios, S.A. de C.V................................. Mexico
Oral-B Laboratories Limited...................................... England
Gillette de Colombia S.A........................................... Colombia
Colton Development, Inc............................................ Delaware
Colton Gulf Coast, Inc............................................. Delaware
Colton East, Inc. ................................................. Delaware
Colton North Central, Inc. ........................................ Delaware
Colton West, Inc. ................................................. Delaware
15
THE GILLETTE COMPANY
SUBSIDIARIES OF REGISTRANT--(CONTINUED)
ORGANIZED
UNDER
NAME LAWS OF
---- ---------
Gillette Capital Corporation...................................... Delaware
Its subsidiaries:
Jafra Cosmetics International, Inc. ............................ California
Silkcare, Incorporated.......................................... Minnesota
Gillette Direct Response Group, Inc............................... Massachusetts
Gillette Espanola, S.A............................................ Spain
Gillette Far East Trading Limited................................. Hong Kong
Gillette Foreign Sales Corporation Limited........................ Jamaica
Gillette France S.A............................................... France
Gilfin B.V. ...................................................... Netherlands
Parkfin Limited................................................... England
Compania Giva, S.A................................................ Delaware
Its subsidiary:
Compania Gillette de Venezuela S.A.............................. Venezuela
Indian Shaving Products Limited................................... India
Compania Interamericana Gillette, S.A............................. Panama
Gillette Egypt S.A.E.............................................. Egypt
Gillette Pakistan Limited......................................... Pakistan
Inversiones Gilco (Chile) Limitada................................ Chile
Gillette Group Italy S.p.A........................................ Italy
Grupo Jafra, S.A. de C.V. ........................................ Mexico
Gillette (Japan) Inc. ............................................ Delaware
Gillette Manufacturing (USA), Inc. ............................... Massachusetts
Gillette de Mexico, Inc. and Mexico Manufacturing Company......... Delaware
Their subsidiary:
Gillette de Mexico S.A. de C.V.................................. Mexico
Gillette del Peru, Inc. and Lima Manufacturing Company............ Delaware
Partners in:
Gillette del Peru, S.C. ........................................ Peru
Gillette (Philippines), Inc. ..................................... Philippines
Gillette Sanayi ve Ticaret A.S. .................................. Turkey
Gillette (Shanghai) Limited....................................... China
Shenmei Daily Use Products Limited Company........................ China
Gillette South Africa Limited..................................... South Africa
Gillette (Switzerland) AG......................................... Switzerland
Gillette Industries Plc........................................... England
Its subsidiaries:
Gillette U.K. Limited........................................... England
Jafra Cosmetics International Limited........................... England
Parker Pen Holdings Limited..................................... England
The Gillette Company (USA), Inc. ................................. Massachusetts
Gillette Poland S.A. ............................................. Poland
All of the voting securities of each subsidiary listed above are owned by its
parent company or parent partners except that the percentage ownership in
Indian Shaving Products Limited, Shenmei Daily Use Products Limited Company,
Gillette (Shanghai) Limited, Gillette Pakistan Limited, Gillette Egypt S.A.E.,
Gillette Poland S.A., Gillette France S.A., and the Waterman S.A. group of
companies is 51%, 50%, 70%, 75%, 83.3%, 99.9%, 99.9% and 99.8%, respectively.
There are a number of additional subsidiaries in the United States and
foreign countries which, considered in the aggregate, do not constitute a
significant subsidiary.
16
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Stockholders and Board of Directors of The Gillette Company:
We consent to incorporation by reference in the following registration
statements of The Gillette Company (1) No. 33-9495 on Form S-8, (2) No. 2-93230
on Form S-8, (3) Nos. 33-56218 and 33-27916 on Form S-8 which incorporate by
reference therein registration statements on Form S-8 Nos. 2-90276, 2-63951 and
1-50710 and No. 2-41016 on Form S-7, (4) No. 33-54974 on Form S-3, (5) No. 33-
50303 on Form S-3, (6) No. 33-52465 on Form S-8, (7) No. 33-53257 on Form S-8,
(8) No. 33-53258 on Form S-8 and (9) No. 33-55051 on Form S-3, of our reports
dated January 26, 1995, relating to the consolidated balance sheet of The
Gillette Company and subsidiary companies as of December 31, 1994 and 1993, and
the related consolidated statements of income and earnings reinvested in the
business, and cash flows and related schedule for each of the years in the
three-year period ended December 31, 1994, which reports appear or are
incorporated by reference in the December 31, 1994 Annual Report on Form 10-K
of The Gillette Company.
Our reports refer to a change in accounting for income taxes, postretirement
and medical benefits and postemployment benefits.
KPMG Peat Marwick LLP
Boston, Massachusetts
March 20, 1995
17
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned hereby constitute Thomas F. Skelly and Joseph E.
Mullaney, or either of them, our true and lawful attorneys with full power to
sign for us in our name and in the capacity indicated below the Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, filed for the Company with the Securities and Exchange Commission for the
year ended December 31, 1994, and any and all amendments and supplements
thereto, hereby ratifying and confirming our signatures as they may be signed
by our said attorneys, or either of them, to said Report and to any and all
amendments and supplements to said Report.
WITNESS Our Hand and Seal on the Date set forth below.
SIGNATURES TITLE DATE
Alfred M. Zeien Chairman of the Board of March 16, 1995
- ------------------------------------ Directors, Chief Executive
ALFRED M. ZEIEN Officer and Director
Joseph E. Mullaney Vice Chairman of the Board March 16, 1995
- ------------------------------------ and Director
JOSEPH E. MULLANEY
Thomas F. Skelly Senior Vice President and March 16, 1995
- ------------------------------------ Chief Financial Officer
THOMAS F. SKELLY
Anthony S. Lucas Vice President, Controller March 16, 1995
- ------------------------------------ and Principal Accounting
ANTHONY S. LUCAS Officer
Warren E. Buffett Director March 16, 1995
- ------------------------------------
WARREN E. BUFFETT
Wilbur H. Gantz Director March 16, 1995
- ------------------------------------
WILBUR H. GANTZ
Michael B. Gifford Director March 16, 1995
- ------------------------------------
MICHAEL B. GIFFORD
Carol R. Goldberg Director March 16, 1995
- ------------------------------------
CAROL R. GOLDBERG
Herbert H. Jacobi Director March 16, 1995
- ------------------------------------
HERBERT H. JACOBI
Richard R. Pivirotto Director March 16, 1995
- ------------------------------------
RICHARD R. PIVIROTTO
Alexander B. Trowbridge Director March 16, 1995
- ------------------------------------
ALEXANDER B. TROWBRIDGE
Joseph F. Turley Director March 16, 1995
- ------------------------------------
JOSEPH F. TURLEY
18