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<SEC-DOCUMENT>0000912057-01-008695.txt : 20010330
<SEC-HEADER>0000912057-01-008695.hdr.sgml : 20010330
ACCESSION NUMBER:		0000912057-01-008695
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010329

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TOOTSIE ROLL INDUSTRIES INC
		CENTRAL INDEX KEY:			0000098677
		STANDARD INDUSTRIAL CLASSIFICATION:	SUGAR & CONFECTIONERY PRODUCTS [2060]
		IRS NUMBER:				221318955
		STATE OF INCORPORATION:			VA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-01361
		FILM NUMBER:		1584520

	BUSINESS ADDRESS:	
		STREET 1:		7401 S CICERO AVE
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60629
		BUSINESS PHONE:		3128383400

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SWEETS CO OF AMERICA INC
		DATE OF NAME CHANGE:	19660921
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>a2043218z10-k.txt
<DESCRIPTION>10-K
<TEXT>

<PAGE>

                       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 31, 2000

                                       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 1-1361

- -------------------------------------------------------------------------------

                          TOOTSIE ROLL INDUSTRIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

- -------------------------------------------------------------------------------


                VIRGINIA                                   22-1318955
                --------                                   ----------
        (STATE OR OTHER JURISDICTION OF        (IRS EMPLOYER IDENTIFICATION NO.)
        INCORPORATION OR ORGANIZATION)

                7401 SOUTH CICERO AVENUE, CHICAGO, ILLINOIS 60629
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                  REGISTRANT'S TELEPHONE NUMBER: (773) 838-3400
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                         NAME OF EACH EXCHANGE
           TITLE OF EACH CLASS                            ON WHICH REGISTERED
           -------------------                            -------------------
  COMMON STOCK - PAR VALUE $.69-4/9 PER SHARE          NEW YORK STOCK EXCHANGE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
           -----------------------------------------------------------
               CLASS B COMMON STOCK - PAR VALUE $.69-4/9 PER SHARE

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.   / /

<PAGE>

As of March 6, 2001, 33,018,174 shares of Common Stock, par value $.69-4/9 per
share, were outstanding and the aggregate market value of the Common Stock
(based upon the closing price of the stock on the New York Stock Exchange on
such date) held by non-affiliates was approximately $913,533,690. As of March 6,
2001, 16,024,015 shares of Class B Common Stock, par value $.69-4/9 per share,
were outstanding. Class B Common Stock is not traded on any exchange, is
restricted as to transfer or other disposition, but is convertible into Common
Stock on a share-for-share basis. Upon such conversion, the resulting shares of
Common Stock are freely transferable and publicly traded. Assuming all
16,024,015 shares of outstanding Class B Common Stock were converted into Common
Stock, the aggregate market value of Common Stock held by non-affiliates on
March 6, 2001 (based upon the closing price of the stock on the New York Stock
Exchange on such date) would have been approximately $980,298,590. Determination
of stock ownership by non-affiliates was made solely for the purpose of this
requirement, and the Registrant is not bound by these determinations for any
other purpose.

                       DOCUMENTS INCORPORATED BY REFERENCE

         1. Portions of the Company's Annual Report to Shareholders for the year
ended December 31, 2000 (the "2000 Report") are incorporated by reference in
Parts I and II of this report.

         2. Portions of the Company's Definitive Proxy Statement for the
Company's 2001 Annual Meeting of Shareholders (the "2001 Proxy Statement") are
incorporated by reference in Part III of this report.

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS

<S>                                                                          <C>
ITEM 1.  Business..............................................................1

ITEM 2.  Properties............................................................2

ITEM 3.  Legal Proceedings.....................................................3

ITEM 4.  Submission of Matters to a Vote of Security Holders...................3

ITEM 5.  Market for Registrant's Common Equity and Related Stockholder
         Matters...............................................................4

ITEM 6.  Selected Financial Data...............................................4

ITEM 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.................................................4

ITEM 8.  Financial Statements and Supplementary Data...........................4

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure..................................................5

ITEM 10.  Directors and Executive Officers of the Registrant...................5

ITEM 11.  Executive Compensation...............................................6

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management.......6

ITEM 13.  Certain Relationships and Related Transactions.......................6

ITEM 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K......6
</TABLE>


                                      -i-
<PAGE>

                                     PART I

ITEM 1.  BUSINESS.

         Tootsie Roll Industries, Inc. and its consolidated subsidiaries (the
"Company") have been engaged in the manufacture and sale of candy for over 100
years. This is the only industry segment in which the Company operates and is
its only line of business. The majority of the Company's products are sold under
the registered trademarks TOOTSIE ROLL, TOOTSIE ROLL POPS, CHILD'S PLAY, CARAMEL
APPLE POPS, CHARMS, BLOW-POP, BLUE RAZZ, ZIP-A-DEE-DOO-DA POPS, CELLA'S, MASON
DOTS, MASON CROWS, JUNIOR MINT, CHARLESTON CHEW, SUGAR DADDY, SUGAR BABIES,
ANDES AND FLUFFY STUFF. The Company acquired the trademarks for Junior Mint,
Charleston Chew, Sugar Daddy and Sugar Babies in 1993 along with the
manufacturing assets of the former Chocolate/Caramel Division of Warner Lambert
Company. In 2000, the Company acquired the trademarks for Andes and Fluffy Stuff
along with their corresponding manufacturing assets for an aggregate purchase
price of $74,293,000.

         The Company's products are marketed in a variety of packages designed
to be suitable for display and sale in different types of retail outlets. They
are distributed through approximately 100 candy and grocery brokers and by the
Company itself to approximately 15,000 customers throughout the United States.
These customers include wholesale distributors of candy and groceries,
supermarkets, variety stores, chain grocers, drug chains, discount chains,
cooperative grocery associations, warehouse and membership club stores, vending
machine operators, and fund-raising charitable organizations.

         The Company's principal markets are in the United States, Canada and
Mexico. The Company's Mexican plant supplies a very small percentage of the
products marketed in the United States and Canada.

         The Company has advertised nationally for many years. Although nearly
all advertising media have been used at one time or another, at present most of
the Company's advertising expenditures are for the airing of network and
syndicated television and cable and spot television in major markets throughout
the country.

         The domestic candy business is highly competitive. The Company competes
primarily with other manufacturers of bar candy and bagged candy of the type
sold in variety, grocery, mass merchandisers, drug chains and convenience
stores. Although accurate statistics are not available, the Company believes it
is among the ten largest domestic manufacturers in this field. In the markets
in which the Company competes, the main forms of competition comprise brand
recognition as well as a fair price for our products at various retail price
points.

         The Company did not have a material backlog of firm orders at the end
of the calendar years 2000 or 1999.

         Packaging materials and ingredients used by the Company are readily
obtainable from a number of suppliers at competitive prices. Packaging material
costs, including films, cartons, corrugated containers and waxed paper, were
stable in 2000. The Company continues to seek competitive bids to leverage the
high volume of annual purchases it makes of these items and to lower per unit
costs. The Company has engaged in hedging transactions primarily in

<PAGE>

sugar and corn syrup and may do so in the future if and when advisable. From
time to time the Company changes the size of certain of its products, which are
usually sold at standard retail prices, to reflect significant changes in raw
material costs.

         The Company does not hold any material patents, licenses, franchises or
concessions. The Company's major trademarks are registered in the United States
and in many other countries. Continued trademark protection is of material
importance to the Company's business as a whole.

         The Company does not expend significant amounts of money on research or
development activities.

         The Company's compliance with Federal, State and local regulations
which have been enacted or adopted regulating the discharge of materials into
the environment, or otherwise relating to the protection of the environment, has
not had a material effect on the capital expenditures, earnings or competitive
position of the Company nor does the Company anticipate any such material
effects from presently enacted or adopted regulations.

         The Company employs approximately 1,950 persons.

         The Company has found that its sales normally maintain a consistent
level throughout the year except for a substantial upsurge in the third quarter
which reflects sales associated with Halloween. In anticipation of this high
sales period, the Company generally begins its Halloween inventory build up in
the second quarter of each year. The Company historically offers extended credit
terms for sales made under Halloween sales programs. Each year, after Halloween
receivables have been collected, the Company invests such funds in various
temporary cash investments.

         Revenues from a major customer aggregated approximately 17.8%, 17.9%
and 17.2% of total net sales during the years ended December 31, 2000, 1999 and
1998, respectively.

         For a summary of sales, net earnings and assets of the Company by
geographic area and additional information regarding the foreign subsidiaries of
the Company, see Note 12 of the Notes to Consolidated Financial Statements on
Page 15 of the Company's Annual Report to Shareholders for the year ended
December 31, 2000 (the "2000 Report") and on Page 4 of the 2000 Report under the
section entitled "International." Note 12 and the aforesaid section are
incorporated herein by reference. Portions of the 2000 Report are filed as an
exhibit to this report.

ITEM 2.  PROPERTIES.

         The Company owns its principal plant and offices which are located in
Chicago, Illinois in a building consisting of approximately 2,225,000 square
feet. The Company utilizes approximately 1,825,000 square feet for offices,
manufacturing and warehousing facilities and leases, or has available to lease
to third parties, approximately 400,000 square feet.

         In addition to owning the principal plant and warehousing facilities
mentioned above, the Company leases manufacturing and warehousing facilities at
a second location in


                                      -2-
<PAGE>

Chicago which comprises 138,000 square feet. The lease is renewable by the
Company every five years through June, 2011. The Company also periodically
leases additional warehousing space at this second location as needed on a month
to month basis.


The Company's other principal manufacturing facilities, all of which are
owned, are:

         LOCATION                         SQUARE FEET (a)
         --------                         -----------
         New York, New York                  60,000
         Covington, Tennessee               485,000
         Cambridge, Massachusetts           142,000
         Delevan, Wisconsin                 162,000
         Mexico City, Mexico                 57,000
     (a) Square footage is approximate and includes production, warehousing
         and office space.

         The Company owns substantially all of the production machinery and
equipment located in its plants and considers that all of its facilities are
well maintained, in good operating condition and adequately insured.

ITEM 3.  LEGAL PROCEEDINGS.

         There are no material pending legal proceedings known to the Company to
which the Company or any of its subsidiaries is a party or of which any of their
property is the subject.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to a vote of the Company's shareholders
through the solicitation of proxies or otherwise during the fourth quarter of
2000.

ADDITIONAL ITEM.  EXECUTIVE OFFICERS OF THE REGISTRANT.

         See the information on Executive Officers set forth in the table in
Part III, Item 10, Page 5 of this report, which is incorporated herein by
reference.


                                       -3-
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Company's Common Stock is traded on the New York Stock Exchange.
The Company's Class B Common Stock is subject to restrictions on transferability
and no market exists for such shares of Class B Common Stock. The Class B Common
Stock is convertible at the option of the holder into shares of Common Stock on
a share for share basis. As of March 6, 2001, there were approximately 9,500
holders of record of Common and Class B Common Stock. For information on the
market price of, and dividends paid with respect to, the Company's Common Stock,
see the section entitled "2000-1999 Quarterly Summary of Tootsie Roll
Industries, Inc. Stock Prices and Dividends" which appears on Page 16 of the
2000 Report. This section is incorporated herein by reference and filed as an
exhibit to this report.

ITEM 6.  SELECTED FINANCIAL DATA.

         See the section entitled "Five Year Summary of Earnings and Financial
Highlights" which appears on Page 17 of the 2000 Report. This section is
incorporated herein by reference and filed as an exhibit to this report.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

         See the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on Pages 5-7 of the 2000 Report.
This section is incorporated herein by reference and filed as an exhibit to this
report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         See the section entitled "Quantitative and Qualitative Disclosure of
Market Risk and Other Matters" in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on page 7 of the 2000 Report.
This section is incorporated herein by reference and filed as an exhibit to this
report.

         See Note 1 of the Notes of Consolidated Financial Statements on Page 12
of the 2000 Report, which is incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 12, 2001, appearing on Pages 8-15 of
the 2000 Report and the Quarterly Financial Data on Page 16 of the 2000 Report
are incorporated by reference in this report. With the exception of the
aforementioned information and the information incorporated in Items 1, 5, 6 and
7, the 2000 Report is not to be deemed filed as part of this report.


                                       -4-
<PAGE>

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.

         See the information with respect to the Directors of the Company which
is set forth in the section entitled "Election of Directors" of the Company's
Definitive Proxy Statement to be used in connection with the Company's 2001
Annual Meeting of Shareholders (the "2001 Proxy Statement"). Except for the last
paragraph of this section relating to the compensation of Directors, this
section is incorporated herein by reference. See the information in the section
entitled "Section 16(a) Beneficial Ownership Reporting Compliance" of the
Company's 2001 Proxy Statement, which section is incorporated herein by
reference.

         The following table sets forth the information with respect to the
executive officers of the Company:

<TABLE>
<CAPTION>
Name                        Position (1)                         Age
- ----                        ------------                         ---
<S>                         <C>                                  <C>
Melvin J. Gordon*           Chairman of the Board and
                              Chief Executive Officer (2)         81

Ellen R. Gordon*            President and Chief
                              Operating Officer (2)               69

G. Howard Ember Jr.         Vice President/Finance                48

John W. Newlin Jr.          Vice President/Manufacturing          64

Thomas E. Corr              Vice President/Marketing and
                              Sales                               52

James M. Hunt               Vice President/Distribution           58

Barry P. Bowen              Treasurer                             45
</TABLE>

*A member of the Board of Directors of the Company

(1)      Mr. and Mrs. Gordon and Messrs. Newlin, Corr, Ember and Bowen have
         served in the positions set forth in the table as their principal
         occupations for more than the past eight years. Mr. Hunt has served in
         his position for the past eight years and in the fifteen years prior to
         that, served the Company in the positions of Director of Distribution
         and Assistant Vice President of Distribution. Mr. and Mrs. Gordon have
         also served as


                                       -5-
<PAGE>

         President and Vice President, respectively of HDI Investment Corp.,
         a family investment company.

(2)      Melvin J. Gordon and Ellen R. Gordon are husband and wife.

ITEM 11. EXECUTIVE COMPENSATION.

         See the information set forth in the section entitled "Executive
Compensation and Other Information" of the Company's 2001 Proxy Statement.
Except for the "Report on Executive Compensation" and "Performance Graph," this
section of the 2001 Proxy Statement is incorporated herein by reference. See the
last paragraph of the section entitled "Election of Directors" of the 2001 Proxy
Statement, which paragraph is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         For information with respect to the beneficial ownership of the
Company's Common Stock and Class B Common Stock by the beneficial owners of more
than 5% of said shares and by the management of the Company, see the sections
entitled "Ownership of Common Stock and Class B Common Stock by Certain
Beneficial Owners" and "Ownership of Common Stock and Class B Common Stock by
Management" of the 2001 Proxy Statement. These sections of the 2001 Proxy
Statement are incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         None.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.

         (a)      Financial Statements.

         The following financial statements and schedules are filed as part of
this report:

         (1)      Financial Statements (filed herewith as part of Exhibit 13):

                  Report of Independent Accountants

                  Consolidated Statements of Earnings, Comprehensive Earnings
                  and Retained Earnings for the three years ended December 31,
                  2000

                  Consolidated Statements of Financial Position at December 31,
                  2000 and 1999

                  Consolidated Statements of Cash Flows for the three years
                  ended December 31, 2000

                                       -6-
<PAGE>

                  Notes to Consolidated Financial Statements

         (2)      Financial Statement Schedule:

                  Report on Independent Accountants on Financial Statement
                  Schedule

                  For the three years ended December 31, 2000 - Valuation and
                  Qualifying Accounts

                  All other schedules are omitted because they are not
                  applicable or the required information is shown in the
                  financial statements or notes thereto.

         (3)      Exhibits required by Item 601 of Regulation S-K:

                  See Index to Exhibits which appears following Financial
                  Schedule II.

                  No reports on Form 8-K were filed during the quarter ended
                  December 31, 2000.

                           FORWARD-LOOKING INFORMATION

From time to time, in the Company's statements and written reports, including
this report, the Company discusses its expectations regarding future performance
by making certain "forward-looking statements." These forward-looking statements
are based on currently available competitive, financial and economic data and
management's views and assumptions regarding future events. Such forward-looking
statements are inherently uncertain, and actual results may differ materially
from those expressed or implied herein. Consequently, the Company wishes to
caution readers not to place undue reliance on any forward-looking statements.
In connection with the "safe harbor provisions" of the Private Securities
Litigation Reform Act of 1995, the Company notes the following factors which,
among others, could cause future results to differ materially from the
forward-looking statements, expectations and assumptions expressed or implied
herein. Among the factors that could impact the Company's ability to achieve its
stated goals are the following: (i) significant competitive activity, including
advertising, promotional and price competition, and changes in consumer demand
for the Company's products; (ii) fluctuations in the cost and availability of
various raw materials; and (iii) inherent risks in the marketplace associated
with new product introductions, including uncertainties about trade and consumer
acceptance. In addition, the Company's results may be affected by general
factors, such as economic conditions, political developments, currency exchange
rates, interest and inflation rates, accounting standards, taxes, and laws and
regulations affecting the Company in markets where it competes.


                                       -7-
<PAGE>

                                   SIGNATURES

                  Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, Tootsie Roll Industries, Inc., has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   TOOTSIE ROLL INDUSTRIES, INC.


                                   By:           Melvin J. Gordon
                                         --------------------------------------
                                            Melvin J. Gordon, Chairman
                                            of the Board of Directors
                                            and Chief Executive Officer

                                   Date:           MARCH 27, 2001
                                         --------------------------------------

                  Pursuant to the requirements 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.

Melvin J. Gordon              Chairman of the Board
- -------------------------     of Directors and Chief
Melvin J. Gordon              Executive Officer (principal
                              executive officer)                  March 27, 2001

Ellen R. Gordon               Director, President
- -------------------------     and Chief Operating Officer         March 27, 2001
Ellen R. Gordon

Charles W. Seibert            Director
- -------------------------
Charles W. Seibert                                                March 27, 2001

Lana Jane Lewis-Brent         Director                            March 27, 2001
- -------------------------
Lana Jane Lewis-Brent

Richard P. Bergeman           Director                            March 27, 2001
- -------------------------
Richard P. Bergeman

G. Howard Ember Jr.           Vice President, Finance             March 27, 2001
- -------------------------     (principal financial
G. Howard Ember Jr.           officer and principal
                              accounting officer)


                                       -8-
<PAGE>

                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE

To the Board of Directors of
Tootsie Roll Industries, Inc.


                  Our audits of the consolidated financial statements referred
to in our report dated February 12, 2001 appearing in the 2000 Annual Report to
Shareholders of Tootsie Roll Industries, Inc. (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.

PricewaterhouseCoopers LLP

Chicago, Illinois
February 12, 2001

<PAGE>


                          TOOTSIE ROLL INDUSTRIES, INC.
                            AND SUBSIDIARY COMPANIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                        DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                       Additions
                                                    Balance at         charged to                           Balance at
                                                    beginning           costs and                             End of
Description                                         of year             expenses         Deductions(1)         Year
- -----------                                        ------------        -----------      --------------     --------------
<S>                                                <C>                <C>                <C>               <C>
2000:
        Reserve for bad debts                      $1,751,000           $298,228           $250,228        $1,799,000
        Reserve for cash discounts                    281,000          7,761,472          7,694,472           348,000
                                                      -------          ---------          ---------           -------
                                                   $2,032,000         $8,059,700         $7,944,700        $2,147,000
                                                   ==========         ==========         ==========        ==========

1999:
        Reserve for bad debts                      $1,898,000           $275,289           $422,289        $1,751,000
        Reserve for cash discounts                    286,000          7,116,112          7,121,112           281,000
                                                      -------          ---------          ---------           -------

                                                   $2,184,000         $7,391,401         $7,543,401        $2,032,000
                                                   ==========         ==========         ==========        ==========

1998:
        Reserve for bad debts                      $1,811,000           $275,920           $188,920        $1,898,000
        Reserve for cash discounts                    274,000          7,599,163          7,587,163           286,000
                                                      -------          ---------          ---------           -------

                                                   $2,085,000         $7,875,083         $7,776,083        $2,184,000
                                                   ==========         ==========         ==========        ==========
</TABLE>

(1) Deductions against reserve for bad debts consist of accounts receivable
written off net of recoveries and exchange rate movements. Deductions against
reserve for cash discounts consist of allowances to customers.

<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<S>      <C>
2.1      Asset Sale Agreement dated September 29, 1993 between Warner-Lambert
         Company and the Company, including a list of omitted exhibits and
         schedules. Incorporated by reference to Exhibit 2 to the Company's
         Report on Form 8-K dated October 15, 1993; Commission File No. 1-1361.

         The Company hereby agrees to provide the Commission, upon request,
         copies of any omitted exhibits or schedules required by Item 601(b)(2)
         of Regulation S-K.

3.1      Restated Articles of Incorporation. Incorporated by reference to
         Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the
         quarterly period ended June 30, 1997; Commission File No. 1-1361.

3.2      Amendment to Restated Articles of Incorporation. Incorporated by
         reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K
         for the year ended December 31, 1999; Commission File No. 1-1361.

3.3      Amended and Restated By-Laws . Incorporated by reference to Exhibit 3.2
         of the Company's Annual Report on Form 10-K for the year ended December
         31, 1996; Commission File No. 1-1361.

3.4      Specimen Class B Common Stock Certificate. Incorporated by reference to
         Exhibit 1.1 of the Company's Registration Statement on Form 8-A dated
         February 29, 1988.

10.8.1*  Excess Benefit Plan. Incorporated by reference to Exhibit 10.8.1 of the
         Company's Annual Report on Form 10-K for the year ended December 31,
         1990; Commission File No. 1-1361.

10.8.2*  Amended and Restated Career Achievement Plan of the Company.
         Incorporated by reference to Exhibit 10.8.2 of the Company's Annual
         Report on Form 10-K for the year ended December 31, 1998; Commission
         File No. 1-1361.

10.8.3*  Amendment to the Amended and Restated Career Achievement Plan of the
         Company. Incorporated by reference to Exhibit 10.8.3 of the Company's
         Annual Report on Form 10-K for the year ended December 31, 1999;
         Commission File No. 1-1361.

10.12*   Restatement of Split Dollar Agreement (Special Trust) between the
         Company and the trustee of the Gordon Family 1993 Special Trust dated
         January 31, 1997. Incorporated by reference to Exhibit 10.12 of the
         Company's Annual Report on Form 10-K for the year ended December 31,
         1996; Commission File No. 1-1361.

10.21*   Executive Split Dollar Insurance and Collateral Assignment Agreement
         between the Company and G. Howard Ember Jr. dated July 30, 1994.
         Incorporated by reference to Exhibit 10.21 of the Company's Annual
         Report on Form 10-K for the year ended December 31, 1994; Commission
         File No. 1-1361.


<PAGE>

10.22*   Executive Split Dollar Insurance and Collateral Assignment Agreement
         between the Company and John W. Newlin dated July 30, 1994.
         Incorporated by reference to Exhibit 10.22 of the Company's Annual
         Report on Form 10-K for the year ended December 31, 1994; Commission
         File No. 1-1361.

10.23*   Executive Split Dollar Insurance and Collateral Assignment Agreement
         between the Company and Thomas E. Corr dated July 30, 1994.
         Incorporated by reference to Exhibit 10.23 of the Company's Annual
         Report on Form 10-K for the year ended December 31, 1994; Commission
         File No. 1-1361.

10.24*   Executive Split Dollar Insurance and Collateral Assignment Agreement
         between the Company and James Hunt dated July 30, 1994. Incorporated by
         reference to Exhibit 10.24 of the Company's Annual Report on Form 10-K
         for the year ended December 31, 1994; Commission File No. 1-1361.

10.25*   Form of Change In Control Agreement dated August, 1997 between the
         Company and certain executive officers. Incorporated by reference to
         Exhibit 10.25 of the Company's Annual Report on Form 10-K for the year
         ended December 31, 1997; Commission File No. 1-1361.

10.26*   Executive Split Dollar Insurance and Collateral Assignment Agreement
         between the Company and Barry Bowen dated April 1, 1997. Incorporated
         by reference to Exhibit 10.26 of the Company's Annual Report on Form
         10-K for the year ended December 31, 1997; Commission File No. 1-1361.

10.27*   Amendment to Split Dollar Agreement (Special Trust) dated April 2, 1998
         between the Company and the trustee of the Gordon Family 1993 Special
         Trust, together with related Collateral Assignments. Incorporated by
         reference to Exhibit 10.27 of the Company's Annual Report on Form 10-K
         for the year ended December 31, 1998; Commission File No. 1-1361.

10.28*   Tootsie Roll Industries, Inc. Bonus Incentive Plan. Incorporated by
         reference to Exhibit A of the Company's Proxy Statement dated March 27,
         1997; Commission File No. 1-1361.

10.29*   Tootsie Roll Industries, Inc. 2001 Bonus Incentive Plan. Incorporated
         by reference to Exhibit A of the Company's Proxy Statement dated March
         30, 2001; Commission File No. 1-1361.

13       The following items incorporated by reference herein from the Company's
         2000 Annual Report to Shareholders for the year ended December 31, 2000
         (the "2000 Report"), are filed as Exhibits to this report:

         (i)      Information under the section entitled "International" set
                  forth on Page 4 of the 2000 Report;

<PAGE>

         (ii)     Information under the section entitled "Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations" set forth on Pages 5-7 of the 2000 Report;

         (iii)    Consolidated Statements of Earnings, Comprehensive Earnings
                  and Retained Earnings for the three years ended December 31,
                  2000 set forth on Page 8 of the 2000 Report;

         (iv)     Consolidated Statements of Financial Position at December 31,
                  2000 and 1999 set forth on Pages 9-10 of the 2000 Report;

         (v)      Consolidated Statements of Cash Flow for the three years ended
                  December 31, 2000 set forth on Page 11 of the 2000 Report;

         (vi)     Notes to Consolidated Financial Statements set forth on Pages
                  12-15 of the 2000 Report;

         (vii)    Report of Independent Accountants set forth on Page 15 of the
                  2000 Report;

         (viii)   Quarterly Financial Data set forth on Page 16 of the 2000
                  Report;

         (ix)     Information under the section entitled "2000-1999 Quarterly
                  Summary of Tootsie Roll Industries, Inc. Stock Prices and
                  Dividends" set forth on Page 16 of the 2000 Report; and

         (x)      Information under the section entitled "Five Year Summary of
                  Earnings and Financial Highlights" set forth on Page 17 of the
                  2000 Report.

21       List of Subsidiaries of the Company.
</TABLE>

- --------------------------------------
*Executive compensation plan or arrangement.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>2
<FILENAME>a2043218zex-13.txt
<DESCRIPTION>ANNUAL REPORT
<TEXT>

<PAGE>
CORPORATE PROFILE

Tootsie Roll Industries, Inc. has been engaged in the manufacture and
sale of candy for 104 years. Our products are primarily sold under the
familiar brand names, Tootsie Roll, Tootsie Roll Pops, Caramel Apple
Pops, Child's Play, Charms, Blow Pop, Blue Razz, Cella's, Mason Dots,
Mason Crows, Junior Mints, Charleston Chew, Sugar Daddy, Sugar Babies,
Andes and Fluffy Stuff.

CORPORATE PRINCIPLES

We believe that the differences among companies are attributable to the
caliber of their people, and therefore we strive to attract and retain
superior people for each job.

We believe that an open family atmosphere at work combined with
professional management fosters cooperation and enables each individual
to maximize his or her contribution to the company and realize the
corresponding rewards.

We do not jeopardize long-term growth for immediate, short-term results.

We maintain a conservative financial posture in the deployment and
management of our assets.

We run a trim operation and continually strive to eliminate waste,
minimize cost and implement performance improvements.

We invest in the latest and most productive equipment to deliver the best
quality product to our customers at the lowest cost.

We seek to outsource functions where appropriate and to vertically
integrate operations where it is financially advantageous to do so.

We view our well known brands as prized assets to be aggressively
advertised and promoted to each new generation of consumers.

    [PHOTO]
     MELVIN J. GORDON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER AND
     ELLEN R. GORDON, PRESIDENT AND CHIEF OPERATING OFFICER.

                                [TOOTSIE ROLL LOGO]

1
<PAGE>
       TO OUR SHAREHOLDERS
- ------------------------------------------------------------------------

We are pleased to report that Tootsie Roll Industries once again posted record
operating results in 2000.

Sales reached $427 million, a record high for the twenty-fourth consecutive year
and an 8% increase over 1999 sales of $397 million. Sales growth is attributed
to a strong Halloween selling season and successful promotional programs, as
well as additional sales from businesses that were acquired during the year.

Earnings per share reached $1.53, an increase of 9% over 1999 earnings per share
of $1.41. Net earnings reached $76 million, an increase of 6% over 1999 net
earnings of $71 million. This was the nineteenth consecutive year of record
earnings. Earnings per share increased by a higher percentage than net earnings
due to the lower number of average shares outstanding in 2000.

The financial resources we have carefully cultivated through the years enabled
us to take several key actions in 2000:

    - Cash dividends were paid for the fifty-eighth consecutive year, and
- --------------------------------------------------------------------------------
 FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                                                              December 31,
                                                                       2000                   1999
- -------------------------------------------------------------------------------------------------------
                                                                  (in thousands except per share data)
<S>                                                               <C>                    <C>

Net Sales...................................................            $427,054               $396,750
Net Earnings................................................              75,737                 71,310

Working Capital.............................................             145,765                168,423
Net Property, Plant and
   Equipment................................................             131,118                 95,897
Shareholders' Equity........................................             458,696                430,646

Average Shares Outstanding*.................................              49,434                 50,412
Per Share Items*
 Net Earnings...............................................               $1.53                  $1.41
 Shareholders' Equity.......................................                9.36                   8.62
 Cash Dividends Paid........................................                 .27                    .23
<CAPTION>
- -------------------------------------------------------------------------------------------------------
<S>                                                               <C>                    <C>
</TABLE>

 *Based on average shares outstanding adjusted for stock dividends.

- --------------------------------------------------------------------------------
       the quarterly rate was increased by 15%.

    - Our thirty sixth consecutive stock dividend was distributed.

    - 957,450 of the company's common shares were repurchased in the open
      market.

    - Significant capital was invested in plant and equipment to improve
      efficiency and to support future sales growth.

    - Two branded candy businesses were acquired.

While we anticipate that the investments we undertook this year will contribute
to our operations in years to come, our financial position remains strong,
giving us the flexibility to react to new investment opportunities, including
acquisitions, which may arise in the future.

SALES AND MARKETING

Record sales levels reached in 2000 were largely the result of acquisitions and
continued execution of sales and marketing programs that have proven successful
in recent years. These efforts and the acquired product lines helped us gain
access to new distribution opportunities for our product lines. They also helped
us to sustain the traditionally high sell-through that makes our products
appealing to retailers and distributors alike across all trade classes.

A significant portion of our sales and marketing effort was again directed at
Halloween, which has long been our most significant selling period, and remained
so this year. Our bagged goods, including variety packs comprised of popular
product assortments offered at value oriented price points, continued to move
well through supermarket, mass merchandise, drug and warehouse club channels.

In the area of merchandising, we expanded our use of display ready cases at
Halloween and throughout the year. These cases are printed in vivid colors and
feature convenient, removable side panels that improve product visibility and
brand recognition at the retail level. We also expanded distribution of
freestanding floor displays, both with mixed assortments and with straight
goods. Specialized, retailer-oriented merchandising adaptations such as these
ensure that our venerable brands retain their place in the contemporary retail
environment.

Another way we have worked to retain a contemporary market for

- ------------------------------------------------------------------------

                                                                               2
<PAGE>
- ------------------------------------------------------------------------

our products is through product extensions. This year we introduced Wild Berry
Dots, a new flavor profile in the Dots line that features tart berry flavors
sprinkled with super-sour flavor crystals.

                                   [PICTURE]

We also extended the Charleston Chew brand with the expansion of Mini Charleston
Chews, a bite-sized version that consumers can share with friends or save for
later in the convenient, recloseable box.

                                   [PICTURE]

We have further grown our business through seasonal offerings of bagged goods at
Valentine's Day, Easter and Christmas. Festive graphics and attractive price
points increasingly make these holidays occasions for consumers to bring home
Tootsie Roll products. Additionally, sales in our seasonal line came from our
2000 Christmas tin, the latest in a collectable series. Collectable tins help to
create an important and nostalgic impression of our brands.

                                   [PICTURE]

Lastly, sales growth in 2000 was positively impacted by two acquisitions
completed during the first half of the year.

ACQUISITIONS

Both children and adults have long enjoyed cotton candy at special events
such as fairs, carnivals and the circus. In February we acquired the assets
of a small manufacturer that, after many years of research and development,
perfected a way to mass produce commercial quantities of this
melt-in-your-mouth treat in attractive, shelf-stable packages. Sold under the
brand name Charms Fluffy Stuff, we hope to expand distribution of this unique
confection to the range of outlets and trade classes where our other products
are sold, and make Fluffy Stuff a special treat that is available every day.
This acquisition included a production facility in Maryland.

                                   [PICTURE]

In May we acquired Andes Candies, a more familiar, but equally unique
confection, along with its production facility located in Wisconsin. Andes
products are easily recognizable for their attractive foil wrappers and
distinctive rectangular shape. The most popular flavor in the Andes line is
Cream de Menthe, a 50 year old confection. It consists of a thin layer of
refreshing green mint, sandwiched between two layers of chocolaty goodness and
is wrapped in green foil.

During the last half of the year we successfully absorbed both the Fluffy Stuff
and the Andes businesses into our own. Our sales and marketing organizations
quickly integrated both product lines and we are well along in the task of
developing appropriate promotional strategies for these new items.

                                   [PICTURE]

ADVERTISING AND PUBLIC RELATIONS

We continued to utilize television to bring our advertising message to children
and adults during 2000. Network, spot and cable T. V. carried a variety of
targeted themes including the classic "How Many Licks?" featuring Tootsie Pops,
along with "That's a Blow Pop" and several other commercials that were run on
prominent cartoon, game and adventure shows.

Tootsie Rolls have been included in military rations for many years, and in 2000
we were honored to participate in a reunion marking the 50th anniversary of the
Korean War Battle of the Chosin Reservoir. This battle was noteworthy both
because our 15,000 Marine and Army troops were outnumbered by 120,000 Chinese
enemy troops and because of the harsh, 36 degree below zero temperatures our men
had to endure. Time and
- --------------------------------------------------------------------------------
3
<PAGE>
- ------------------------------------------------------------------------
again we heard poignant stories from Marine veterans who survived for days on
Tootsie Rolls and Charms squares because their regular food rations were frozen
solid. It was gratifying to participate in the events honoring the "Chosin Few"
brave survivors of one of the most famous military battles ever fought by the
U.S. armed forces.

Numerous articles and stories appeared during the year in recognition of the
company and its accomplishments. Most notably, our Chairman and Chief Executive
Officer was ranked as the top performing executive in the food/ beverage
category by Chief Executive magazine, and our President and Chief Operating
Officer shared her management insights in a number of publications including
Fortune and Executive Excellence magazines. Tootsie Roll was also honored as one
of the "100 Best Corporate Citizens" by Business Ethics magazine.

CAPITAL EXPENDITURES

Our capital expenditure program continues to focus on initiatives that increase
capacity, improve product quality, or reduce cost. Capital expenditures in 2000
were $16 million, encompassing a variety of projects including enhanced
environmental air control, additional kitchen capacity and state of the art
inspection systems to keep up with increased throughput.

Also during 2000 we completed our first headquarters expansion and renovation in
14 years and commenced construction to increase the size of our Tennessee
distribution center. Both of these projects provide infrastructure needed to
support the integration of recent acquisitions as well as general growth in our
business.

INFORMATION TECHNOLOGY

With the Year 2000 software issue behind us, we focused on two key initiatives
this year. First was the successful integration of the two acquisitions into our
business systems. Secondly, we commenced projects involving several critical
business applications. Although these do not impact our general operating
system, these subsystems must evolve in order to take full advantage of current
technologies and to keep pace with the ever-changing environment in which we do
business.

Methodologies that were quite acceptable even a few years ago can quickly become
outdated. We are committed to deploying leading edge practices and technologies
in every aspect of our operations and view our information technologies as a
prime strategic tool for future growth.

PURCHASING

Prices for key raw materials were generally favorable during the year, although
savings in this category were partially offset by increased costs for packaging
materials. Management tools such as our commodity hedging program and
competitive bidding process help to ensure that the company's purchases are
sourced as economically as possible.

Also during 2000 we successfully incorporated the purchasing of ingredients and
packaging for Andes and Fluffy Stuff into our centralized purchasing systems.

INTERNATIONAL

Sales grew in our Mexican operation as a result of marketing improvements,
successful promotions and strong second half seasonal sales. Profits increased
by an even greater percentage as a result of intensified cost control measures.

Canadian sales were steady, with continued strength in bagged items at
Halloween. Export sales grew due to the foreign sales of the companies acquired
and accelerated sales and marketing efforts in selected markets for our existing
core brands. We hope to build upon this base and develop synergies across
product lines to further improve international distribution.

IN APPRECIATION...

We wish to thank the many loyal employees, customers, suppliers, sales brokers
and foreign distributors with whom we work, as well as our shareholders who have
been supportive through the years. While we are pleased with the record results
achieved in 2000, we are committed to build upon them for the future.

[SIGNATURE]
Melvin J Gordon
Chairman of the Board and
Chief Executive Officer

[SIGNATURE]
Ellen R. Gordon
President and
Chief Operating Officer

- ------------------------------------------------------------------------

                                                                               4
<PAGE>
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
   CONDITION AND RESULTS OF OPERATIONS
       (in thousands except per share, percentage and ratio figures)
- --------------------------------------------------------------------------------

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

NET SALES
Millions of dollars

<TABLE>
<CAPTION>
1996  1997  1998  1999  2000
<S>   <C>   <C>   <C>   <C>
$341  $376  $389  $397  $427
</TABLE>

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

NET EARNINGS
Millions of dollars

<TABLE>
<CAPTION>
1996   1997   1998   1999   2000
<S>    <C>    <C>    <C>    <C>
$47.2  $60.7  $67.5  $71.3  $75.7
</TABLE>

FINANCIAL REVIEW

This financial review discusses the company's financial condition, results of
operations, liquidity and capital resources. It should be read in conjunction
with the Consolidated Financial Statements and related footnotes that follow
this discussion.

FINANCIAL CONDITION

Our financial condition remained strong in 2000, bolstered by another year of
record profits. Net earnings rose from $71,310 in 1999 to $75,737 in 2000.
Shareholders' equity increased by 6.5% from $430,646 in 1999 to $458,696 in
2000, due principally to the addition of these earnings, partially offset by
stock repurchases of $32,945 and cash dividends declared of $13,350.

The company has paid cash dividends for fifty-eight consecutive years.
Shareholders also received a 3% stock dividend in 2000, the thirty-sixth
consecutive year that one has been distributed.

The company responded to several investment opportunities during the year. In
February we acquired substantially all of the assets of a small manufacturer of
shelf stable cotton candy. This product is sold under the brand name Charms
Fluffy Stuff and is suitable for national distribution.

In May we acquired substantially all of the assets of Andes Candies. Andes is
best known as the maker of Andes Creme de Menthe Thins, a three layered,
chocolaty rectangular mint sold nationally through a variety of outlets
including supermarkets, drug chains and mass merchandisers.

The combined $74,293 purchase price for these acquisitions was financed by a
combination of cash and short term borrowings, which were paid off prior to year
end.   In addition, cash outflows during the year related to capital
expenditures were $16,189. The company continues to be financed principally by
funds generated from operations rather than with borrowed funds.

The investments made in 2000 are reflected in the following ratios: current
ratio declined from 4.0 to1 to 3.5 to 1; quick ratio declined from 3.2 to 1 to
2.7 to 1; current liabilities to net worth declined from 13.0% to 12.5% and debt
to equity remained negligible at 1.6% compared to 1.7% a year ago.

The company retains a conservative financial posture and sufficient capital
to respond to future investment opportunities. Accordingly, we continue to
seek appropriate acquisitions to complement our existing business.

RESULTS OF OPERATIONS

2000 vs. 1999

Net sales increased in 2000 to $427,054, a record level for the twenty-fourth
consecutive year and a 7.6% increase over 1999 sales of $396,750. Sales remained
at the highest level in the third quarter, due to successful Halloween and Back
to School promotions.

Other factors contributing to sales increases during the year were growth across
many of our core brands, gains in our seasonal lines, incremental business from
product line extensions, increases in certain international markets and sales
from acquired brands.

Comparing quarterly sales in 2000 to those of 1999, increases were seen in each
quarter. The third quarter showed the largest increase in dollar terms due to
Halloween, and the fourth quarter showed the greatest growth in percentage terms
due to $14,457 in sales from acquired brands. In the fourth quarter we
experienced both increased competitive pressures and general softness throughout
the segment of the industry in which we principally operate.

5

<PAGE>

Cost of goods sold as a percentage of sales remained consistent at 48.5% in 2000
versus 48.5% in 1999. Raw material prices were generally favorable during the
year but were offset by higher packaging costs and product mix variations, some
of which are related to the acquired brands. The company continues to focus on
cost control throughout all levels of its operations.

Gross margin grew by 7.7% to $219,954 due to increased sales. As a percentage of
sales, gross margin remained constant at 51.5% in 2000 versus 51.5% in 1999.
Gross margins in the third and fourth quarters continue to be somewhat lower due
to the seasonal nature of our business and the product mix sold in those
quarters.

Operating expenses, comprised of marketing, selling, advertising, physical
distribution, general and administrative expenses, as a percentage of sales,
increased slightly from 24.4% to 24.8%. Amortization of intangible assets
increased from $2,706 to $3,420 reflecting the partial year impact of two
acquisitions. Earnings from operations increased from $104,519 to $110,729, a
5.9% increase.

Other income, consisting primarily of interest and dividend income net of
interest expense was, $7,079 versus $6,928 last year. The effective tax rate of
35.7% was comparable to the prior year rate of 36.0%.

Consolidated net earnings rose 6.2% to a new company record of $75,737. Our net
earnings were 17.7% of sales in 2000 and 18.0% of sales in 1999. Earnings per
share increased by 8.5% to a record $1.53 from the previous record of $1.41
reached in 1999. Earnings per share increased by a greater percentage than net
earnings due to lower average shares outstanding during 2000 as a result of
share repurchases made during the year.

2000 was the nineteenth year of record earnings achievement for the company.

1999 vs. 1998

1999 was our twenty-third consecutive year of record sales achievement. Sales of
$396,750 were up 2.1% over 1998 sales of $388,659. The third quarter, driven by
Halloween sales, continued to be our largest selling period and surpassed levels
attained in previous years. Also in 1999, the timing of certain Halloween
shipments had a favorable effect on the third quarter and a corresponding
unfavorable impact on the fourth quarter as compared to the prior year.

Throughout the year, sales were attributable to successful promotional programs
as we continued to broaden distribution in mass merchandisers and other select
trade classes with our core product offerings. Line extensions, new products and
seasonal packs all contributed to added sales.

Sales growth occurred in our two most significant foreign operations as well. In
Mexico, stabilizing local conditions and aggressive new marketing and
promotional programs complemented the already strong business we have developed
for the Christmas holiday season in that market.

Sales growth in our Canadian operation was attributable to another strong
Halloween season coupled with further distribution gains in the mass
merchandiser and grocery trade classes. Also, the new Way 2 Sour Blow Pop was
successfully introduced in this market.

Cost of goods sold, as a percentage of sales, remained steady at 48.5% versus
48.3%. This reflected generally stable cost levels for packaging and minor
ingredients, although certain of our raw material costs did increase somewhat.
These increases were largely offset by higher production efficiencies associated
with increased volumes in relation to fixed costs.

Gross margin dollars grew by 1.6% to $204,189, and remained steady as a
percent of sales at 51.5% versus 51.7% in 1998, due to the factors cited
above.

Operating expenses as a percentage of sales, declined slightly from 25.7% to
25.1%. This improvement was due to effective expense control programs aimed at
holding down costs. Earnings from operations increased by 3.2% to $104,519, or
26.3% of sales, as a result of favorable gross margins and operating expenses.

Other income increased by $2,130 to $6,928, primarily reflecting significantly
lower foreign exchange losses in Mexico where local economic conditions
improved. Also, interest expense was lower and interest income was higher due to
lower average borrowings and increased investments in marketable securities,
respectively, during 1999. Interest income was also higher in 1999 due to higher
interest rates. The effective tax rate was 36.0% in 1999 versus 36.3% in 1998.

Consolidated net earnings rose 5.6% to a new company record of $71,310. Earnings
per share increased by 6.0% to $1.41 from the previous record of $1.33 reached
in 1998. Earnings per share increased by a greater percent than net earnings due
to lower average shares outstanding during 1999 as a result of share repurchases
made during the year.

- -------------------------------------------------------------------------
6
<PAGE>
- ------------------------------------------------------------------------

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

NET EARNINGS
AS a % of Sales

<TABLE>
<CAPTION>
1996  1997  1998  1999  2000
<S>   <C>   <C>   <C>   <C>
13.8  16.2  17.4  18.0  17.7
</TABLE>

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

NET EARNINGS
Per Share

<TABLE>
<CAPTION>
1996   1997   1998   1999   2000
<S>    <C>    <C>    <C>    <C>
$0.92  $1.19  $1.33  $1.41  $1.53
</TABLE>

Our net earnings as a percent of sales increased to 18.0% from 17.4%. 1999 was
the eighteenth consecutive year of record earnings achievement for the company.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities increased to $84,881 in 2000 from $72,935
in 1999 and $77,735 in 1998. The increase in 2000 was principally attributable
to higher net earnings, and the additional depreciation and amortization related
to the acquired businesses.

In 1999, the decrease in cash flows from operating activities was principally
attributable to increases in other receivables and prepaid expenses and other
assets. Also, depreciation expense was lower in 1999 due to foreign currency
translation.

Cash flows from investing activities in 2000 reflect $74,293 for the purchase of
Fluffy Stuff and Andes Candies, capital expenditures of $16,189 and a net
decrease in marketable securities of $24,015 which was used to help finance
those expenditures.

In 1999 capital expenditures were $20,283 and there was a net increase in
marketable securities of $6,710. In 1998, capital expenditures were $14,878
and there was a net increase in marketable securities of $19,951.

Cash flows from financing activities reflect share repurchases of $32,945,
$26,869 and $13,445 in 2000, 1999 and 1998, respectively. Short term borrowings
in 2000 were primarily related to the Andes acquisition which were subsequently
repaid. In 1998 there was also a short term borrowing which was subsequently
repaid during that same year.

Cash dividends of $13,091, $11,313 and $9,150 were paid in 2000, 1999 and 1998,
respectively. The increase in 2000 was 15.7% over 1999 and 2000 represented the
fifty-eighth consecutive year in which we have paid cash dividends.

QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK AND OTHER MATTERS

The company is exposed to various market risks, including fluctuations in sugar,
corn, edible oils, cocoa and packaging costs. The company also invests in
securities with maturities of up to three years, the majority of which are held
to maturity, which limits the company's exposure to interest rate fluctuations.
There has been no material change in the company's market risks during 2000.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial

Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS No. 133). SFAS No. 133 establishes accounting and reporting
standards requiring that every derivative instrument be recorded in the balance
sheet as either an asset or liability measured at its fair value. The company
has concluded that adoption of SFAS No. 133 will not have a material impact on
the company's results of operations.

The results of our operations and our financial condition are expressed in the
following financial statements.

- ------------------------------------------------------------------------

7
<PAGE>
- ------------------------------------------------------------------------


- --------------------------------------------------------------------------------
                                                                               8
<PAGE>
CONSOLIDATED STATEMENT OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(in thousands except per share data)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                              For the year ended December 31,

                                                                 2000                       1999                       1998
                                                           ----------------           ----------------           ----------------
         <S>                                               <C>                        <C>                        <C>
         Net sales..............................                   $427,054                   $396,750                   $388,659
         Cost of goods sold.....................                    207,100                    192,561                    187,617
                                                           ----------------           ----------------           ----------------
         Gross margin...........................                    219,954                    204,189                    201,042
                                                           ----------------           ----------------           ----------------
         Selling, marketing and administrative
           expenses.............................                    105,805                     96,964                     97,071
         Amortization of intangible assets......                      3,420                      2,706                      2,706
                                                           ----------------           ----------------           ----------------
         Earnings from operations...............                    110,729                    104,519                    101,265
         Other income, net......................                      7,079                      6,928                      4,798
                                                           ----------------           ----------------           ----------------
         Earnings before income taxes...........                    117,808                    111,447                    106,063
         Provision for income taxes.............                     42,071                     40,137                     38,537
                                                           ----------------           ----------------           ----------------
         Net earnings...........................                   $ 75,737                   $ 71,310                   $ 67,526
                                                           ================           ================           ================

         Net earnings...........................                   $ 75,737                   $ 71,310                   $ 67,526
         Other comprehensive earnings (loss),
           net of tax
             Unrealized gains (losses) on
               securities.......................                       (856)                       930                        976
             Foreign currency translation
               adjustments......................                       (394)                       653                        (30)
                                                           ----------------           ----------------           ----------------
             Other comprehensive earnings
               (loss)...........................                     (1,250)                     1,583                        946
                                                           ----------------           ----------------           ----------------
         Comprehensive earnings.................                   $ 74,487                   $ 72,893                   $ 68,472
                                                           ================           ================           ================

         Retained earnings at beginning of
           year.................................                   $158,619                   $164,652                   $159,124
             Net earnings.......................                     75,737                     71,310                     67,526
             Cash dividends ($.27, $.23 and $.19
               per share).......................                    (13,350)                   (11,654)                    (9,484)
             Stock dividends....................                    (40,883)                   (65,689)                   (52,514)
                                                           ----------------           ----------------           ----------------
         Retained earnings at end of year.......                   $180,123                   $158,619                   $164,652
                                                           ================           ================           ================
         Earnings per share.....................                   $   1.53                   $   1.41                   $   1.33
                                                           ================           ================           ================
         Average common and class B common
           shares outstanding...................                     49,434                     50,412                     50,920
                                                           ================           ================           ================
</TABLE>

         (The accompanying notes are an integral part of these statements.)
- --------------------------------------------------------------------------------

                                                                               8
<PAGE>
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(in thousands)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
         ASSETS                                                                                December 31,

                                                                                      2000                       1999
                                                                                ----------------           ----------------
         <S>                                                                    <C>                        <C>
         CURRENT ASSETS:
             Cash and cash equivalents...............................                   $ 60,882                   $ 88,504
             Investments.............................................                     71,605                     71,002
             Accounts receivable trade, less allowances of $2,147 and
              $2,032.................................................                     23,568                     19,032
             Other receivables.......................................                      1,230                      5,716
             Inventories:
                 Finished goods and work-in-process..................                     24,984                     20,689
                 Raw materials and supplies..........................                     16,906                     14,396
             Prepaid expenses........................................                      2,685                      3,124
             Deferred income taxes...................................                      1,351                      2,069
                                                                                ----------------           ----------------
                     Total current assets............................                    203,211                    224,532
                                                                                ----------------           ----------------
         PROPERTY, PLANT AND EQUIPMENT, at cost:
             Land....................................................                      8,327                      7,981
             Buildings...............................................                     36,937                     30,330
             Machinery and equipment.................................                    183,858                    145,789
                                                                                ----------------           ----------------
                                                                                         229,122                    184,100
             Less--Accumulated depreciation..........................                     98,004                     88,203
                                                                                ----------------           ----------------
                                                                                         131,118                     95,897
                                                                                ----------------           ----------------
         OTHER ASSETS:
             Intangible assets, net of accumulated amortization of
              $26,917 and $23,497....................................                    121,263                     85,137
             Investments.............................................                     62,548                     87,167
             Cash surrender value of life insurance and other
              assets.................................................                     44,302                     36,683
                                                                                ----------------           ----------------
                                                                                         228,113                    208,987
                                                                                ----------------           ----------------
                                                                                        $562,442                   $529,416
                                                                                ================           ================
</TABLE>

         (The accompanying notes are an integral part of these statements.)
- --------------------------------------------------------------------------------

9
<PAGE>
(in thousands except per share data)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
         LIABILITIES AND SHAREHOLDERS' EQUITY                                                  December 31,

                                                                                      2000                       1999
                                                                                ----------------           ----------------
         <S>                                                                    <C>                        <C>
         CURRENT LIABILITIES:
             Accounts payable........................................                   $ 10,296                   $ 12,845
             Dividends payable.......................................                      3,436                      3,035
             Accrued liabilities.....................................                     33,336                     31,945
             Income taxes payable....................................                     10,378                      8,284
                                                                                ----------------           ----------------
                     Total current liabilities.......................                     57,446                     56,109
                                                                                ----------------           ----------------
         NONCURRENT LIABILITIES:
             Deferred income taxes...................................                     12,422                      9,520
             Postretirement health care and life insurance
              benefits...............................................                      6,956                      6,557
             Industrial development bonds............................                      7,500                      7,500
             Deferred compensation and other liabilities.............                     19,422                     19,084
                                                                                ----------------           ----------------
                     Total noncurrent liabilities....................                     46,300                     42,661
                                                                                ----------------           ----------------
         SHAREHOLDERS' EQUITY:
             Common stock, $.69-4/9 par value--
               120,000 and 120,000 shares authorized--
               32,986 and 32,854, respectively, issued...............                     22,907                     22,815
             Class B common stock, $.69-4/9 par value--
               40,000 and 40,000 shares authorized--
               16,056 and 15,707, respectively, issued...............                     11,150                     10,908
             Capital in excess of par value..........................                    256,698                    249,236
             Retained earnings, per accompanying statement...........                    180,123                    158,619
             Accumulated other comprehensive earnings (loss).........                    (10,190)                    (8,940)
             Treasury stock (at cost)--
               52 shares and 50 shares, respectively.................                     (1,992)                    (1,992)
                                                                                ----------------           ----------------
                                                                                         458,696                    430,646
                                                                                ----------------           ----------------
                                                                                        $562,442                   $529,416
                                                                                ================           ================
</TABLE>

- --------------------------------------------------------------------------------

                                                                              10
<PAGE>
CONSOLIDATED STATEMENT OF
CASH FLOWS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(in thousands)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                              For the year ended December 31,

                                                                 2000                       1999                       1998
                                                           ----------------           ----------------           ----------------
         <S>                                               <C>                        <C>                        <C>
         CASH FLOWS FROM OPERATING ACTIVITIES:
             Net earnings.......................                    $75,737                    $71,310                    $67,526
             Adjustments to reconcile net
               earnings to net cash provided
               by operating activities:
                 Depreciation and
                   amortization.................                     13,314                      9,979                     12,807
                 (Gain) loss on retirement of
                   fixed assets.................                        (46)                       (43)                       118
                 Changes in operating assets and
                   liabilities, excluding
                   acquisitions:
                     Accounts receivable........                     (4,460)                       400                       (915)
                     Other receivables..........                      4,486                     (2,392)                     1,358
                     Inventories................                       (768)                     1,592                       (106)
                     Prepaid expenses and other
                       assets...................                     (7,903)                   (15,672)                    (7,723)
                     Accounts payable and
                       accrued liabilities......                     (1,717)                       968                       (596)
                     Income taxes payable and
                       deferred.................                      5,691                      2,232                       (625)
                     Postretirement health care
                       and life insurance
                       benefits.................                        399                        412                        241
                     Deferred compensation and
                       other liabilities........                        337                      4,162                      5,004
                     Other......................                       (189)                       (13)                       646
                                                           ----------------           ----------------           ----------------
             Net cash provided by operating
               activities.......................                     84,881                     72,935                     77,735
                                                           ----------------           ----------------           ----------------
         CASH FLOWS FROM INVESTING ACTIVITIES:
             Acquisitions of businesses, net of
               cash acquired....................                    (74,293)                        --                         --
             Capital expenditures...............                    (16,189)                   (20,283)                   (14,878)
             Purchase of held to maturity
               securities.......................                   (156,322)                  (238,949)                  (259,112)
             Maturity of held to maturity
               securities.......................                    176,576                    235,973                    240,195
             Purchase of available for sale
               securities.......................                    (78,993)                  (117,694)                  (217,799)
             Sale and maturity of available for
               sale securities..................                     82,754                    113,960                    216,765
                                                           ----------------           ----------------           ----------------
             Net cash used in investing
               activities.......................                    (66,467)                   (26,993)                   (34,829)
                                                           ----------------           ----------------           ----------------
         CASH FLOWS FROM FINANCING ACTIVITIES:
             Issuance of notes payable..........                     43,625                         --                      7,000
             Repayments of notes payable........                    (43,625)                        --                     (7,000)
             Treasury stock purchases...........                         --                     (1,019)                      (973)
             Shares repurchased and retired.....                    (32,945)                   (25,850)                   (12,472)
             Dividends paid in cash.............                    (13,091)                   (11,313)                    (9,150)
                                                           ----------------           ----------------           ----------------
             Net cash used in financing
               activities.......................                    (46,036)                   (38,182)                   (22,595)
                                                           ----------------           ----------------           ----------------
         Increase (decrease) in cash and cash
           equivalents..........................                    (27,622)                     7,760                     20,311
         Cash and cash equivalents at beginning
           of year..............................                     88,504                     80,744                     60,433
                                                           ----------------           ----------------           ----------------
         Cash and cash equivalents at end of
           year.................................                    $60,882                    $88,504                    $80,744
                                                           ================           ================           ================
         Supplemental cash flow information:
             Income taxes paid..................                    $35,750                    $38,827                    $40,000
                                                           ================           ================           ================
             Interest paid......................                    $ 1,067                     $  453                     $  803
                                                           ================           ================           ================
</TABLE>

         (The accompanying notes are an integral part of these statements.)
- --------------------------------------------------------------------------------

11
<PAGE>
   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($ IN THOUSANDS EXCEPT PER SHARE
   DATA)
       TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF CONSOLIDATION:

  The consolidated financial statements include the accounts of Tootsie Roll
Industries, Inc. and its wholly-owned subsidiaries (the company), which are
primarily engaged in the manufacture and sale of candy products. All significant
intercompany transactions have been eliminated.

  The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

REVENUE RECOGNITION AND OTHER ACCOUNTING PRONOUNCEMENTS:

  Revenues are recognized when products are shipped and delivered to customers.
Shipping and handling costs of $26,661, $24,260 and $24,342 in 2000, 1999, 1998,
respectively, are included in selling, marketing and administrative expenses.
Accounts receivable are unsecured. The Company adopted Securities and Exchange
Commission Staff Accounting Bulletin No. 101, which clarifies the existing
guidance on the recognition, presentation and disclosure of revenue in the
financial statements, during the fourth quarter of 2000 with no material effect
on its financial position or results of operations.

  As of January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (SFAS No. 133), which was issued by the Financial Accounting
Standards Board in 1998. The adoption of SFAS No. 133 will not have a material
effect on the Company's results of operations or financial position.

CASH AND CASH EQUIVALENTS:

  The company considers temporary cash investments with an original maturity of
three months or less to be cash equivalents.

INVESTMENTS:

  Investments consist of various marketable securities with maturities of
generally less than one year. In accordance with Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting For Certain Investments in Debt
and Equity Securities," the company's debt and equity securities are considered
as either held to maturity, available for sale or trading. Held to maturity
securities represent those securities that the company has both the positive
intent and ability to hold to maturity and are carried at amortized cost.
Available for sale securities represent those securities that do not meet the
classification of held to maturity, are not actively traded and are carried at
fair value. Unrealized gains and losses on these securities are excluded from
earnings and are reported as a separate component of shareholders' equity, net
of applicable taxes, until realized. Trading securities relate to deferred
compensation arrangements and are carried at fair value.

INVENTORIES:

  Inventories are stated at cost, not in excess of market. The cost of domestic
inventories ($37,505 and $29,111 at December 31, 2000 and 1999, respectively)
has been determined by the last-in, first-out (LIFO) method. The excess of
current cost over LIFO cost of inventories approximates $2,993 and $5,008 at
December 31, 2000 and 1999, respectively. The cost of foreign inventories
($4,385 and $5,974 at December 31, 2000 and 1999, respectively) has been
determined by the first-in, first-out (FIFO) method.

  From time to time, the company enters into commodity futures and option
contracts in order to fix the future price of certain key ingredients which may
be subject to price volatility (primarily sugar and corn syrup). Gains or
losses, if any, resulting from these contracts are considered as a component of
the cost of the ingredients being hedged. At December 31, 2000 the company had
open contracts to purchase most of its expected 2001 sugar usage.

PROPERTY, PLANT AND EQUIPMENT:

  Depreciation is computed for financial reporting purposes by use of both the
straight-line and accelerated methods based on useful lives of 20 to 35 years
for buildings and 12 to 20 years for machinery and equipment. For income tax
purposes the company uses accelerated methods on all properties. Depreciation
expense was $10,069, $7,663 and $10,101 in 2000, 1999 and 1998, respectively.

CARRYING VALUE OF LONG-LIVED ASSETS:

  In the event that facts and circumstances indicate that the company's
long-lived assets may be impaired, an evaluation of recoverability would be
performed. Such an evaluation entails comparing the estimated future
undiscounted cash flows associated with the asset to the asset's carrying amount
to determine if a write down to market value or discounted cash flow value is
required. The company considers that no circumstances exist that would require
such an evaluation.

POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS:

  The company provides certain postretirement health care and life insurance
benefits. The cost of these postretirement benefits is accrued during employees'
working careers.

INCOME TAXES:

  The company uses the liability method of computing deferred income taxes.

INTANGIBLE ASSETS:

  Intangible assets represent the excess of cost over the acquired net tangible
assets of operating companies and is amortized on a straight-line basis over a
15 to 40 year period. The company assesses the recoverability of its intangible
assets using undiscounted future cash flows.

FOREIGN CURRENCY TRANSLATION:

  During 1997, management determined that the Mexican economy was
hyper-inflationary. Accordingly, the US dollar was used as the functional
currency for the company's Mexican operations, and translation gains and losses
were included in the determination of 1998 earnings. Effective January 1, 1999,
management determined that the Mexican economy was no longer hyper-inflationary
and designated the local currency as the functional currency. Accordingly, the
net effect of translating the Mexican operations' financial statements was
reported in a separate component of shareholders' equity beginning on
January 1, 1999.

COMPREHENSIVE EARNINGS:

  Comprehensive earnings includes net earnings, foreign currency translation
adjustments and unrealized gains/losses on marketable securities.

EARNINGS PER SHARE:

  A dual presentation of basic and diluted earnings per share is not required
due to the lack of potentially dilutive securities under the company's simple
capital structure. Therefore, all earnings per share amounts represent basic
earnings per share.

NOTE 2--ACQUISITIONS:
  During 2000, the company acquired the assets of two confectionery companies
for $74,293 in cash, which was funded through existing cash and $38,800 of short
term borrowings. The acquisition cost has been allocated to the assets acquired
and liabilities assumed based on their respective appraised values as follows:

<TABLE>
<S>                                                    <C>
Current assets.......................................  $ 6,304
Property, plant and equipment........................   29,400
Intangible assets, primarily trademarks..............   39,546
Liabilities..........................................     (957)
                                                       -------
Total purchase price.................................  $74,293
                                                       =======
</TABLE>

                                                                              12
<PAGE>
  The acquisitions were accounted for by the purchase method. Accordingly, the
operating results of the acquired businesses have been included in the
consolidated financial statements since the date of acquisition. The operating
results of the acquired businesses did not have a material effect on the
company's financial statements.

NOTE 3--ACCRUED LIABILITIES:
  Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                                                        December 31,
                                                                   ----------------------
                                                                     2000          1999
                                                                   --------       -------
    <S>                                                            <C>            <C>
    Compensation..........................................         $10,069        $ 8,993
    Other employee benefits...............................           4,107          4,067
    Taxes, other than income..............................           2,174          2,248
    Advertising and promotions............................           9,038          8,508
    Other.................................................           7,948          8,129
                                                                   -------        -------
                                                                   $33,336        $31,945
                                                                   =======        =======
</TABLE>

NOTE 4--INCOME TAXES:
  The domestic and foreign components of pretax income are as follows:

<TABLE>
<CAPTION>
                                                    2000            1999           1998
                                                  ---------       --------       --------
    <S>                                           <C>             <C>            <C>
    Domestic...............................       $115,823        $110,052       $106,667
    Foreign................................          1,985           1,395           (604)
                                                  --------        --------       --------
                                                  $117,808        $111,447       $106,063
                                                  ========        ========       ========
</TABLE>

  The provision for income taxes is comprised of the following:

<TABLE>
<CAPTION>
                                                        2000          1999          1998
                                                      --------       -------       -------
    <S>                                               <C>            <C>           <C>
    Current:
      Federal..................................       $33,908        $34,290       $34,373
      Foreign..................................           426            783           618
      State....................................         3,613          4,294         4,286
                                                      -------        -------       -------
                                                       37,947         39,367        39,277
                                                      -------        -------       -------
    Deferred:
      Federal..................................         3,500          1,039          (250)
      Foreign..................................           346           (388)         (479)
      State....................................           278            119           (11)
                                                      -------        -------       -------
                                                        4,124            770          (740)
                                                      -------        -------       -------
                                                      $42,071        $40,137       $38,537
                                                      =======        =======       =======
</TABLE>

  Deferred income taxes are comprised of the following:

<TABLE>
<CAPTION>
                                                                        December 31,
                                                                   ----------------------
                                                                     2000          1999
                                                                   --------       -------
    <S>                                                            <C>            <C>
    Workers' compensation...................................       $   405        $   396
    Reserve for uncollectible accounts......................           455            467
    Other accrued expenses..................................         1,397          1,214
    VEBA funding............................................          (370)          (347)
    Other, net..............................................          (536)           339
                                                                   -------        -------
    Net current deferred income tax asset...................       $ 1,351        $ 2,069
                                                                   =======        =======
</TABLE>

<TABLE>
<CAPTION>
                                                                       December 31,
                                                                  ----------------------
                                                                    2000          1999
                                                                  --------       -------
    <S>                                                           <C>            <C>
    Depreciation...........................................       $12,076        $10,563
    Postretirement benefits................................        (2,345)        (2,220)
    Deductible goodwill....................................         7,855          5,647
    Deferred compensation..................................        (6,174)        (4,947)
    Accrued commissions....................................         2,232          2,011
    Foreign subsidiary tax loss carryforward...............          (521)        (1,898)
    Other, net.............................................          (701)           364
                                                                  -------        -------
    Net long-term deferred income tax liability............       $12,422        $ 9,520
                                                                  =======        =======
</TABLE>

  At December 31, 2000, gross deferred tax assets and gross deferred tax
liabilities were $14,876 and $25,947, respectively.

  The effective income tax rate differs from the statutory rate as follows:

<TABLE>
<CAPTION>
                                                            2000         1999        1998
                                                          --------       -----       -----
    <S>                                                   <C>            <C>         <C>
    U.S. statutory rate............................        35.0%         35.0%       35.0%
    State income taxes, net........................         2.2           2.6         2.6
    Amortization of intangible assets..............         0.4           0.4         0.4
    Other, net.....................................        (1.9)         (2.0)       (1.7)
                                                           ----          ----        ----
    Effective income tax rate......................        35.7%         36.0%       36.3%
                                                           ====          ====        ====
</TABLE>

  The company has not provided for U.S. federal or foreign withholding taxes on
$5,864 of foreign subsidiaries' undistributed earnings as of December 31, 2000
because such earnings are considered to be permanently reinvested. When excess
cash has accumulated in the company's foreign subsidiaries and it is
advantageous for tax or foreign exchange reasons, subsidiary earnings may be
remitted, and income taxes will be provided on such amounts. It is not
practicable to determine the amount of income taxes that would be payable upon
remittance of the undistributed earnings.

NOTE 5--SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE:

<TABLE>
<CAPTION>
                                                         Class B                            Capital in
                                  Common Stock        Common Stock       Treasury Stock       excess
                                -----------------   -----------------   -----------------     of par
                                Shares    Amount    Shares    Amount    Shares    Amount      value
                                -------   -------   -------   -------   -------   -------   ----------
                                (000's)             (000's)             (000's)
<S>                             <C>       <C>       <C>       <C>       <C>       <C>       <C>
Balance at January 1, 1998....  15,851    $11,008    7,547    $ 5,241      --     $    --    $187,259
Issuance of 3% stock
 dividend.....................     473        329      225        156      --          --      51,780
Purchase of shares for the
 treasury.....................      --         --       --         --     (20)       (973)         --
Issuance of 2-for-1 stock
 split........................  16,305     11,323    7,748      5,381      (5)         --     (16,704)
Conversion of Class B common
 shares to common shares......      98         68      (98)       (68)     --          --          --
Purchase and retirement of
 common shares................    (288)      (201)      --         --      --          --     (12,271)
                                ------    -------   ------    -------     ---     -------    --------
Balance at December 31, 1998..  32,439     22,527   15,422     10,710     (25)       (973)    210,064
Issuance of 3% stock
 dividend.....................     971        674      461        320      (1)         --      64,514
Purchase of shares for the
 treasury.....................      --         --       --         --     (24)     (1,019)         --
Conversion of Class B common
 shares to common shares......     176        122     (176)      (122)     --          --          --
Purchase and retirement of
 common shares................    (732)      (508)      --         --      --          --     (25,342)
                                ------    -------   ------    -------     ---     -------    --------
Balance at December 31, 1999..  32,854     22,815   15,707     10,908     (50)     (1,992)    249,236
Issuance of 3% stock
 dividend.....................     969        673      470        326      (2)         --      39,742
Conversion of Class B common
 shares to common shares......     121         84     (121)       (84)     --          --          --
Purchase and retirement of
 common shares................    (958)      (665)      --         --      --          --     (32,280)
                                ------    -------   ------    -------     ---     -------    --------
Balance at December 31, 2000..  32,986    $22,907   16,056    $11,150     (52)    $(1,992)   $256,698
                                ======    =======   ======    =======     ===     =======    ========
</TABLE>

  The Class B Common Stock has essentially the same rights as Common Stock,
except that each share of Class B Common Stock has ten votes per share (compared
to one vote per share of Common Stock), is not traded on any exchange, is
restricted as to transfer and is convertible on a share-for-share basis, at any
time and at no cost to the holders, into shares of Common Stock which are traded
on the New York Stock Exchange.

  Average shares outstanding and all per share amounts included in the financial
statements and notes thereto have been adjusted retroactively to reflect annual
three percent stock dividends and the two-for-one stock split distributed in
1998.

NOTE 6--INDUSTRIAL DEVELOPMENT BONDS:
  Interest on industrial development bonds is payable at various times during
the year based upon the interest calculation option (fixed, variable or
floating) selected by the company. As of December 31, 2000 and 1999, interest
was calculated under the floating option (4.7% in each of these years) which
requires monthly payments of interest. Principal on the bonds is due in its
entirety in the year 2027.

  In connection with the issuance of the bonds, the company entered into a
letter of credit agreement with a bank for the amount of principal outstanding
plus 48 days' accrued interest. The

13
<PAGE>
letter of credit, which expires in January 2002, carries an annual fee of
32 1/2 basis points on the outstanding principal amount of the bonds.

NOTE 7--EMPLOYEE BENEFIT PLANS:
PENSION PLANS:
  The company sponsors defined contribution pension plans covering certain
nonunion employees with over one year of credited service. The company's policy
is to fund pension costs accrued based on compensation levels. Total pension
expense for 2000, 1999 and 1998 approximated $2,535, $2,062 and $1,951,
respectively. The company also maintains certain profit sharing and
savings-investment plans. Company contributions in 2000, 1999 and 1998 to these
plans were $754, $616 and $582, respectively.

  The company also contributes to multi-employer defined benefit pension plans
for its union employees. Such contributions aggregated $787, $713 and $680 in
2000, 1999 and 1998, respectively. The relative position of each employer
associated with the multi-employer plans with respect to the actuarial present
value of benefits and net plan assets is not determinable by the company.

POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFIT PLANS:
  The company provides certain postretirement health care and life insurance
benefits for corporate office and management employees. Employees become
eligible for these benefits if they meet minimum age and service requirements
and if they agree to contribute a portion of the cost. The company has the right
to modify or terminate these benefits. The company does not fund postretirement
health care and life insurance benefits in advance of payments for benefit
claims.

  The changes in the accumulated postretirement benefit obligation at
December 31, 2000 and 1999 consist of the following:

<TABLE>
<CAPTION>
                                                                        December 31,
                                                                   -----------------------
                                                                     2000            1999
                                                                   --------         ------
    <S>                                                            <C>              <C>
    Benefit obligation, beginning of year...............            $6,557          $6,163
    Net periodic postretirement benefit cost............               518             531
    Benefits paid.......................................              (119)           (137)
                                                                    ------          ------
    Benefit obligation, end of year.....................            $6,956          $6,557
                                                                    ======          ======
</TABLE>

  Net periodic postretirement benefit cost included the following components:

<TABLE>
<CAPTION>
                                                                    2000        1999      1998
                                                                  --------      ----      ----
    <S>                                                           <C>           <C>       <C>
    Service cost--benefits attributed to
      service during the period.............................        $286        $306      $258
    Interest cost on the accumulated postretirement
      benefit obligation....................................         341         302       279
    Amortization of unrecognized net gain...................        (109)        (77)      (99)
                                                                    ----        ----      ----
    Net periodic postretirement benefit cost................        $518        $531      $438
                                                                    ====        ====      ====
</TABLE>

  For measurement purposes, an 7.5% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 2000; the rate was assumed
to decrease gradually to 5.5% for 2004 and remain at that level thereafter. The
health care cost trend rate assumption has a significant effect on the amounts
reported. The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% at December 31, 2000 and 1999.

  Increasing or decreasing the health care trend rates by one percentage point
in each year would have the following effect:

<TABLE>
<CAPTION>
                                                            1% Increase       1% Decrease
                                                            ------------      ------------
    <S>                                                     <C>               <C>
    Effect on postretirement benefit obligation.......          $800             $(657)
    Effect on total of service and interest cost
      components......................................          $109             $ (87)
</TABLE>

NOTE 8--OTHER INCOME, NET:
  Other income (expense) is comprised of the following:

<TABLE>
<CAPTION>
                                                            2000            1999        1998
                                                          --------         ------      ------
    <S>                                                   <C>              <C>         <C>
    Interest income................................        $7,636          $7,449      $6,934
    Interest expense...............................          (866)           (453)       (756)
    Dividend income................................           421             611         822
    Foreign exchange losses........................           (42)           (126)     (2,140)
    Royalty income.................................           225             263         155
    Miscellaneous, net.............................          (295)           (816)       (217)
                                                           ------          ------      ------
                                                           $7,079          $6,928      $4,798
                                                           ======          ======      ======
</TABLE>

NOTE 9--COMMITMENTS:

  Rental expense aggregated $580, $457 and $432 in 2000, 1999 and 1998,
respectively.

  Future operating lease commitments are not significant.

NOTE 10--COMPREHENSIVE INCOME:

  Components of accumulated other comprehensive earnings (loss) are shown as
follows:

<TABLE>
<CAPTION>
                                                                           Accumulated
                                             Foreign      Unrealized          Other
                                            Currency    Gains (Losses)    Comprehensive
                                              Items     on Securities    Earnings/(Loss)
                                            ---------   --------------   ---------------
    <S>                                     <C>         <C>              <C>
    Balance at January 1, 1998............  $(11,052)      $  (417)          $(11,469)
    Change during period..................       (30)          976                946
                                            --------       -------           --------
    Balance at December 31, 1998..........   (11,082)          559            (10,523)
    Change during period..................       653           930              1,583
                                            --------       -------           --------
    Balance at December 31, 1999..........   (10,429)        1,489             (8,940)
    Change during period..................      (394)         (856)            (1,250)
                                            --------       -------           --------
    Balance at December 31, 2000..........  $(10,823)      $   633           $(10,190)
                                            ========       =======           ========
</TABLE>

  The individual tax effects of each component of other comprehensive earnings
(loss) for the year ended December 31, 2000 are shown as follows:

<TABLE>
<CAPTION>
                                                      Before       Tax
                                                       Tax      (Expense)   Net-of-Tax
                                                      Amount     Benefit    Tax Amount
                                                     --------   ---------   ----------
    <S>                                              <C>        <C>         <C>
    Foreign currency translation adjustment........  $  (394)     $  --      $  (394)
    Unrealized gains (losses) on securities:
      Unrealized holding gains (losses) arising
        during 2000................................     (914)       339         (575)
      Less: reclassification adjustment for gains
        (losses) realized in earnings..............      446       (165)         281
                                                     -------      -----      -------
        Net unrealized gains.......................   (1,360)       504         (856)
                                                     -------      -----      -------
    Other comprehensive earnings...................  $(1,754)     $ 504      $(1,250)
                                                     =======      =====      =======
</TABLE>

NOTE 11--DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS:

CARRYING AMOUNT AND FAIR VALUE:
  The carrying amount approximates fair value of cash and cash equivalents
because of the short maturity of those instruments. The fair values of
investments are estimated based on quoted market prices. The fair value of the
company's industrial development bonds approximates their carrying value because
they have a floating interest rate. The carrying amount and estimated fair
values of the company's financial instruments are as follows:

<TABLE>
<CAPTION>
                                                  2000                      1999
                                          ---------------------      -------------------
                                          CARRYING      FAIR         Carrying     Fair
                                           AMOUNT       VALUE         Amount     Value
                                          ---------   ---------      --------   --------
    <S>                                   <C>         <C>            <C>        <C>
    Cash and cash equivalents...........  $ 60,882    $ 60,882       $ 88,504   $ 88,504
    Investments held to maturity........    98,164     100,127        110,245    111,151
    Investments available for sale......    22,565      22,565         37,390     37,390
    Investments in trading securities...    13,424      13,424         10,534     10,534
    Industrial development bonds........     7,500       7,500          7,500      7,500
</TABLE>

                                                                              14
<PAGE>
A summary of the aggregate fair value, gross unrealized gains, gross unrealized
losses and amortized cost basis of the company's investment portfolio by major
security type is as follows:

<TABLE>
<CAPTION>
                                            DECEMBER 31, 2000                                   December 31, 1999
                             ------------------------------------------------   -------------------------------------------------
                                                              UNREALIZED                                          Unrealized
                             AMORTIZED      FAIR         --------------------   Amortized                    --------------------
Held to Maturity:               COST        VALUE         GAINS       LOSSES       Cost      Fair Value       Gains       Losses
- -----------------            ----------   ---------      --------    --------   ----------   ----------      --------    --------
<S>                          <C>          <C>            <C>         <C>        <C>          <C>             <C>         <C>
Unit investment trusts of
  preferred stocks.........  $   1,462    $   3,381      $ 1,919     $    --    $   2,592    $   4,618       $ 2,026     $    --
Municipal bonds............     97,744       97,807           63          --      109,256      108,160            --      (1,096)
Unit investment trusts of
  municipal bonds..........        941          932           --          (9)         959          935            --         (24)
Private export funding
  securities...............      4,115        4,104           --         (11)       4,933        4,933            --          --
                             ---------    ---------      -------     -------    ---------    ---------       -------     -------
                             $ 104,262    $ 106,224      $ 1,982     $   (20)   $ 117,740    $ 118,646       $ 2,026     $(1,120)
                             =========    =========      =======     =======    =========    =========       =======     =======
Available for Sale:
- -------------------
Municipal bonds............  $  32,487    $  32,221      $    --     $  (266)   $  40,930    $  40,603       $    --     $  (327)
Mutual funds...............      2,454        3,724        1,270          --        3,007        5,698         2,691          --
                             ---------    ---------      -------     -------    ---------    ---------       -------     -------
                             $  34,941    $  35,945      $ 1,270     $  (266)   $  43,937    $  46,301       $ 2,691     $  (327)
                             =========    =========      =======     =======    =========    =========       =======     =======
</TABLE>

Held to maturity securities of $6,097 and $7,495 and available for sale
securities of $13,380 and $8,911 were included in cash and cash equivalents at
December 31, 2000 and 1999, respectively. There were no securities with
maturities greater than three years and gross realized gains and losses on the
sale of available for sale securities in 2000 and 1999 were not significant.

NOTE 12--GEOGRAPHIC AREA AND SALES INFORMATION:
SUMMARY OF SALES, NET EARNINGS AND ASSETS BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
                                                        2000                                      1999
                                       --------------------------------------      -----------------------------------
                                                       MEXICO                                    Mexico
                                        UNITED          AND         CONSOLI-        United         and        Consoli-
                                        STATES         CANADA         DATED         States       Canada        dated
                                       ---------      --------      ---------      --------      -------      --------
<S>                                    <C>            <C>           <C>            <C>           <C>          <C>
Sales to unaffiliated customers....    $394,545       $32,509       $427,054       $365,975      $30,775      $396,750
                                                                    ========                                  ========
Sales between geographic areas.....       3,626         3,343                         3,787        1,794
                                       --------       -------                      --------      -------
                                       $398,171       $35,852                      $369,762      $32,569
                                       ========       =======                      ========      =======
Net earnings.......................    $ 73,929       $ 1,808       $ 75,737       $ 69,917      $ 1,393      $ 71,310
Total assets.......................    $540,697       $21,745       $562,442       $505,152      $24,264      $529,416
Net assets.........................    $439,685       $19,011       $458,696       $409,160      $21,486      $430,646

<CAPTION>
                                                    1998
                                     -----------------------------------
                                                   Mexico
                                      United         and        Consoli-
                                      States       Canada        dated
                                     --------      -------      --------
<S>                                  <C>           <C>          <C>
Sales to unaffiliated customers....  $363,569      $25,090      $388,659
                                                                ========
Sales between geographic areas.....     2,805        4,374
                                     --------      -------
                                     $366,374      $29,464
                                     ========      =======
Net earnings.......................  $ 68,521      $  (995)     $ 67,526
Total assets.......................  $467,265      $20,158      $487,423
Net assets.........................  $378,892      $17,565      $396,457
</TABLE>

Total assets are those assets associated with or used directly in the respective
geographic area, excluding intercompany advances and investments.

MAJOR CUSTOMER

  Revenues from a major customer aggregated approximately 17.8%, 17.9% and 17.2%
of total net sales during the years ended December 31, 2000, 1999 and 1998,
respectively.

- --------------------------------------------------------------------------------

REPORT OF INDEPENDENT ACCOUNTANTS  [LOGO]
To the Board of Directors and Shareholders of Tootsie Roll Industries, Inc.

In our opinion, the accompanying consolidated statement of financial position
and the related consolidated statements of earnings, comprehensive earnings and
retained earnings and of cash flows present fairly, in all material respects,
the financial position of Tootsie Roll Industries, Inc. and its subsidiaries at
December 31, 2000 and 1999, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, 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 our opinion expressed above.

[SIGNATURE]

Chicago, Illinois
February 12, 2001

15
<PAGE>
QUARTERLY FINANCIAL DATA (UNAUDITED)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                      (Thousands of dollars except per share data)
                           2000                           First         Second           Third          Fourth           Total
         ------------------------------------------------------------------------------------------------------------------------
         <S>                                            <C>            <C>            <C>              <C>            <C>
         Net sales................................        $78,015        $90,376         $165,873        $92,790         $427,054
         Gross margin.............................         41,067         48,209           83,225         47,453          219,954
         Net earnings.............................         13,063         15,652           31,514         15,508           75,737
         Net earnings per share...................            .26            .32              .64            .31             1.53

         1999
         ------------------------------------------------------------------------------------------------------------------------
         Net sales................................        $74,200        $88,265         $152,667        $81,618         $396,750
         Gross margin.............................         38,815         45,902           77,651         41,821          204,189
         Net earnings.............................         12,325         14,751           29,283         14,951           71,310
         Net earnings per share...................            .24            .29              .58            .30             1.41

         1998
         ------------------------------------------------------------------------------------------------------------------------
         Net sales................................        $69,701        $85,931         $144,230        $88,797         $388,659
         Gross margin.............................         36,966         45,133           73,251         45,692          201,042
         Net earnings.............................         11,217         13,910           27,216         15,183           67,526
         Net earnings per share...................            .22            .28              .53            .30             1.33

         Net earnings per share is based upon average outstanding shares as adjusted for 3% stock dividends
         issued during the second quarter of each year.

         ------------------------------------------------------------------------------------------------------------------------
</TABLE>

       2000-1999 QUARTERLY SUMMARY OF TOOTSIE ROLL INDUSTRIES, INC. STOCK PRICE
AND DIVIDENDS PER SHARE
<TABLE>
<CAPTION>
         STOCK PRICES*                                                                                 DIVIDENDS
                                        2000                                1999
         -----------------------------------------------------------------------------------
                               HIGH               LOW              High              Low                                      2000
         -----------------------------------------------------------------------------------           ----------------------------
         <S>                <C>               <C>               <C>              <C>                   <C>                   <C>
         1st Qtr.....       32-7/8            28-5/16           46-15/16         39-3/4                1st Qtr............   $.0608
         2nd Qtr.....       38                30-3/8            46-3/4           38-1/8                2nd Qtr............   $.0700
         3rd Qtr.....       42-7/16           34-7/8            39-7/16          30                    3rd Qtr............   $.0700
         4th Qtr.....       47-13/16          35-5/8            33-7/16          29-13/16              4th Qtr............   $.0700








         *NYSE -- Composite Quotations
         Estimated Number of shareholders at December 31, 2000 ....................... 9,500

<CAPTION>
                       DIVIDENDS


                        1999
         ------------  ---------------------
         <S>           <C>      <C>
         1st Qtr.....  $.0495
         2nd Qtr.....  $.0607
         3rd Qtr.....  $.0608
         4th Qtr.....  $.0608

         NOTE: In addition to the
         above cash dividends, a 3%
         stock dividend was issued on
         April 19, 2000 and April 21,
         1999. Cash dividends are
         restated to reflect 3% stock
         dividends.
</TABLE>

                                                                       18
<PAGE>
FIVE YEAR SUMMARY OF EARNINGS AND FINANCIAL HIGHLIGHTS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
(Thousands of dollars except per share, percentage and ratio figures)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

             (See Management's Comments
                 starting on page 5)                   2000                1999                1998                1997
                                                    -----------         -----------         -----------         -----------
         <S>                                        <C>                 <C>                 <C>                 <C>
         Sales and Earnings Data
                 Net sales.................         $   427,054         $   396,750         $   388,659         $   375,594
                 Gross margin..............             219,954             204,189             201,042             187,281
                 Interest expense..........                 866                 453                 756                 483
                 Provision for income
                   taxes...................              42,071              40,137              38,537              34,679
                 Net earnings..............              75,737              71,310              67,526              60,682
                     % of sales............               17.7%               18.0%                17.4%               16.2%
                     % of shareholders'
                       equity..............               16.5%               16.6%                17.0%               17.3%

         Per Common Share Data (1)
                 Net sales.................         $      8.64         $      7.87         $      7.63         $      7.34
                 Net earnings..............                1.53                1.41                1.33                1.19
                 Shareholders' equity......                9.36                8.62                7.82                6.88
                 Cash dividends declared...                 .27                 .23                 .19                 .15
                 Stock dividends...........                   3%                  3%                  3%                  3%

         Additional Financial Data
                 Working capital...........         $   145,765         $   168,423         $   175,155         $   153,355
                 Net cash provided by
                   operating activities....              84,881              72,935              77,735              68,176
                 Net cash used in investing
                   activities..............              66,467              26,993              34,829              31,698
                 Net cash used in financing
                   activities..............              46,036              38,182              22,595              21,704
                 Property, plant &
                   equipment additions.....              16,189              20,283              14,878               8,611
                 Net property, plant &
                   equipment...............             131,118              95,897              83,024              78,364
                 Total assets..............             562,442             529,416             487,423             436,742
                 Long term debt............               7,500               7,500               7,500               7,500
                 Shareholders' equity......             458,696             430,646             396,457             351,163
                 Average shares outstanding
                   (1).....................              49,434              50,412              50,920              51,163


                                                        1996
                                                    -----------
         Sales and Earnings Data
                 Net sales.................         $   340,909
                 Gross margin..............             162,420
                 Interest expense..........               1,498
                 Provision for income
                   taxes...................              27,891
                 Net earnings..............              47,207
                     % of sales............                13.8%
                     % of shareholders'
                       equity..............                15.1%

         Per Common Share Data (1)
                 Net sales.................         $      6.64
                 Net earnings..............                 .92
                 Shareholders' equity......                6.10
                 Cash dividends declared...                 .12
                 Stock dividends...........                   3%

         Additional Financial Data
                 Working capital...........         $   153,329
                 Net cash provided by
                   operating activities....              76,710
                 Net cash used in investing
                   activities..............              52,364
                 Net cash used in financing
                   activities..............              26,211
                 Property, plant &
                   equipment additions.....               9,791
                 Net property, plant &
                   equipment...............              81,687
                 Total assets..............             391,456
                 Long term debt............               7,500
                 Shareholders' equity......             312,881
                 Average shares outstanding
                   (1).....................              51,310
</TABLE>

(1)  Adjusted for annual 3% stock dividends and the 2-for-1 stock split
     effective July 13, 1998.

17
<PAGE>

<TABLE>
         <S>                       <C>
         BOARD OF DIRECTORS

         Melvin J. Gordon(1)       Chairman of the Board and
                                   Chief Executive Officer
         Ellen R. Gordon(1)        President and Chief Operating Officer
         Charles W. Seibert(2)(3)  Retired Banker
         Lana Jane                 President, Paul Brent Designer, Inc.
         Lewis-Brent(2)(3)
         Richard P.                Retired Senior Vice President, Bestfoods
         Bergeman(2)(3)
         (1)Member of the Executive Committee
         (2)Member of the Audit Committee
         (3)Member of the Compensation Committee

         OFFICERS

         Melvin J. Gordon          Chairman of the Board and
                                   Chief Executive Officer
         Ellen R. Gordon           President and Chief Operating Officer
         G. Howard Ember, Jr.      Vice President, Finance & Asst. Secy.
         John W. Newlin, Jr.       Vice President, Manufacturing
         Thomas E. Corr            Vice President, Marketing & Sales
         James M. Hunt             Vice President, Physical Distribution
         Barry P. Bowen            Treasurer & Asst. Secy.
         Daniel P. Drechney        Controller

         OFFICES, PLANTS

         Executive Offices         7401 S. Cicero Ave.
                                   Chicago, Illinois 60629
                                   www.tootsie.com
         Plants                    Illinois
                                   Tennessee
                                   Massachusetts
                                   Wisconsin
                                   Maryland
                                   New York
                                   Mexico City
         Foreign Sales Offices     Mexico City, Mexico
                                   Mississauga, Ontario
</TABLE>

<TABLE>
         <S>                                           <C>
         SUBSIDIARIES

         Andes Candies L.P.                            Tootsie Roll of Canada Ltd.
         Andes Manufacturing LLC                       Tootsie Roll Central Europe Ltd.
         Andes Services LLC                            The Tootsie Roll Company, Inc.
         C.C. L.P., Inc.                               Tootsie Roll Management, Inc.
         C.G.C. Corporation                            Tootsie Roll Mfg., Inc.
         C.G.P., Inc.                                  Tootsie Rolls--Latin America,
         Cambridge Brands, Inc.                        Inc.
         Cambridge Brands Mfg., Inc.                   Tootsie Roll Worldwide Ltd.
         Cambridge Brands Services, Inc.               The Sweets Mix Company, Inc.
         Cella's Confections, Inc.                     TRI de Latino America S.A. de
         Charms Company                                C.V.
         Charms L.P.                                   TRI Finance, Inc.
         Charms Marketing Company                      TRI International Co.
         Henry Eisen Advertising Agency, Inc.          TRI-Mass., Inc.
         J.T. Company, Inc.                            TRI Sales Co.
         O'Tec Industries, Inc.                        Tutsi S.A. de C.V.
                                                       World Trade & Marketing Ltd.
</TABLE>

<TABLE>
         <S>                     <C>
         OTHER INFORMATION

         Stock Exchange          New York Stock Exchange, Inc.
                                 (Since 1922)
         Stock Identification    Ticker Symbol: TR
                                 CUSIP No. 890516 10-7
         Stock Transfer Agent    Mellon Investor Services LLC
         and Stock Registrar     Overpeck Centre
                                 85 Challenger Road
                                 Ridgefield Park, NJ 07660
                                 1-800-851-9677
                                 www.mellon-investor.com
         Independent             PricewaterhouseCoopers LLP
         Accountants             200 East Randolph Drive
                                 Chicago, IL 60601
         General Counsel         Becker Ross Stone DeStefano & Klein
                                 317 Madison Avenue
                                 New York, NY 10017
         Annual Meeting          May 7, 2001
                                 Mutual Building, Room 1200
                                 909 East Main Street
         [LOGO]                  Richmond, VA 23219
</TABLE>

                                        M Printed on recycled paper.
                                                                              18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>3
<FILENAME>a2043218zex-21.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>

<PAGE>

                                                                      EXHIBIT 21


                       LIST OF SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>

NAME                                                                   JURISDICTION OF INCORPORATION
- ----                                                                   -----------------------------
<S>                                                                   <C>
Andes Candies L.P.                                                     Illinois
Andes Manufacturing LLC                                                Illinois
Andes Services LLC                                                     Illinois
C.C. L.P., Inc.                                                        Delaware
C.G.C. Corporation                                                     Delaware
C.G.P., Inc.                                                           Delaware
Cambridge Brands, Inc.                                                 Delaware
Cambridge Brands Mfg., Inc.                                            Delaware
Cambridge Brands Services, Inc.                                        Delaware
Cella's Confections, Inc.                                              Virginia
Charms Company                                                         Delaware
Charms L.P.                                                            Delaware
Charms Marketing Company                                               Illinois
Henry Elsen Advertising Agency, Inc.                                   New Jersey
J.T. Company, Inc.                                                     Delaware
O'Tec Industries, Inc.                                                 Delaware
Tootsie Roll of Canada Ltd.                                            Canada
Tootsie Roll Central Europe Ltd.                                       Delaware
The Tootsie Roll Company, Inc.                                         Illinois
Tootsie Roll Management, Inc.                                          Illinois
Tootsie Roll Mfg., Inc.                                                Illinois
Tootsie Rolls - Latin America, Inc.                                    Delaware
Tootsie Roll Worldwide Ltd.                                            Illinois
The Sweets Mix Company, Inc.                                           Illinois
TRI de Latino America S.A. de C.V.                                     Mexico
TRI Finance, Inc.                                                      Delaware
TRI International Co.                                                  Illinois
TRI-Mass., Inc.                                                        Massachusetts
TRI Sales Co.                                                          Delaware
Tutsi S.A. de C.V.                                                     Mexico
World Trade & Marketing Ltd.                                           British West Indies

</TABLE>


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
