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Philip Morris Incorporated Annual Report 1972 

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http://legacy.library.ucsf.edu/tid/deg12a00/pdf

Philip Morris Incorporated Annual Report 197 2 

Financial High/Jghts . 1972 1971 197 0 

Operating Revenues . . .. . . . .. . . . .. . . . .. . . . . . .. . . . . .. . . . . . .. . . .._ . ... $2,131,224,000 51,852,4954000 $1,509,540,000 

Net Earnings .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . .. . . . .. 124,466,000 101,498,000 77,498,00 0 

PerShare of Common Stock : 

Net Earnings : 

Primary . . . . .. . . . .. . . . .. . . . .. . . . . . .. . . . .. . . . .. .. . . . . . .. . . .. . . . . .. . . . .. $4.67 $4.02 $3.36 

Fu1ly Diluted . .. . . . .. . . . .. . . . . . .. . .. .. . . . .. . . . . . .. . . . . . . . .. . . . . ... 4.37 3.64 2.8 5 

Dividends Declared . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . .. . . . .. 1.262 1.21 1 .0 5 

Percent Increase Over Prior Year : 

Operating Revenues . . . .. . . . . . .. . . . .. . . . . . . .. . . . . .. . . 15.017c 22.77c 32.1% 

Net Earnings ._ .. . . . . .. . . .. . . . . . .. . . . .. . . . . . .. .__ ..- 22.66'd 31_017c 32.8% 

Net Earnings Per Common Share : 

Primary . . . . .. . . . .. . . . . .. . . . . .. . . .. . . . . . . . . _ .. 16,2_°0 19:6% 30:2% 

Fully Diluted . . . . .. . . . .. . . . . . .. . . . .. . . . . . 2011`b 27.7% 18 .8% 

Operating Companies Revenues : 

Philip Morris U .S.A . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . ... $1,164,550,000 51,035,1784000 S 920,323,00 0 

Philip Morris International . . .. . . . .. .. . . . . . .. . . .. . . . . .. . . . .. 623,699'000 517,670,000 424,800,000 

Philip Morris Industrial . . ._ . . . . .. . _ .. .._ . .. . . . . .. . . .. . . . . . . . 113,136,000 95,513,000 85,875,000 

Miller Brewing Company (1) ~ ._ . .. . . . . . . .. . . . .. . _ . .. . . . .. 2111,262;000 204,134,000 78,542,000 

Mission Viejo Company (2) . . . .. . . . .. .. . . . . . .. . . .. . . .. .. . . . .. 18,577 ;000 

Consolidated Operating Revenues . . . . .. . . .. . . .. $2,131,224,000 $1,852,495,000 $1,509,540,00 0 

Operating Companies Income : 


Philip Morris U .S.A. . . . .. . . . . .. . . .. . . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. $ 194,072;000 $ 166,734,000 3 138,051,000 

Philip Morris International . . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . .. 84,095,000 66;968,000 54,167,000 

Philip Morris Industrial _ . .. . .. . . . . . .. . . . . . .. . . _ .. . . . . .. . . . .. 7,7354000 6,135,000 6,049,000 

Miller Brewing Company (1) :. . .. . . .. .. . . . . .. . . . .. . . .. .. . . . . . 228,000 1,300,000 4,913,000 

Mission Viejo Company (2) . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . .. 1,331,000 - - 

Consolidated Operating Income (3) . . . . . . .. . . . . . .. $ 287,461,000 $ 241,137,000 $ 203,180,00 0 

(2)Operating revenuesfrom August I . 1970. E4uityo053'kin netincome in period l/l/70-7/31/70 andl00'", of operating income thereafter . 

(2)Operating revenues and operating income from September 30, 1972. . 

(3)Corporate eapense, interest, other items and income laaes, which are not directly attrib'utable to the opetxingtompanits, are not allocated sincean r 

allocation thereof would be arbitrary . 

The notes to consolidated financial statements should be read in conjunctionwith the above data . 

_,a . .: . .9ii►~rw1 .~~jy~:, .t .- . .

Joseph ECullman lyd 

Chairman 

George w'eissmam 

President 


Review of the Year 

In 1972, your company reported 

record operating revenues and profits 

andJ for the 19th consecutive year, 

increased earnines per share ove r 

the previous year . Consolidated 

operating revenues for 1972 

increased more than 15 .0%, and net 

income rose22 :6% . Ful1y diluted 

earnings per share increased,20 .1 %n ; 

and'primary per share earnings 

16 .2% . 

Philip Morris in 1972 continued to 

gain a larger share ofthe world-wide 

cigarette industry: In unit sales, 

Philip Morris became the second 

largest publicly-held cigarette 

company in the world. Marlboro 

became the numberione brand in the 

world and'continued as the number 

two brand in the United States. Philip 

Morris continued as the second 

rankingcigarette company in the U .S . 

World,wide cigarette sales climbed 

4% to approximately 3;450 billion 

units . Philip Morris's total unit sales, 

including U .S. and international , 

are now 6 .5% of the world~+wide total . 

U .S . industry sales increased in 1972 

for the third consecutive year to 

approximately 554 billion units, a, 

rise of over 3% . In the United States, 

Philip Morris's cigarette unit sales 

increased more than 13%n during the 

year, and our market share increased 

to more than 20% atyear end . 

Philip,Morris's consolidated 

operating revenues have grown over 

the past five years atan average 

annual compoundid rate of 18 .7 % . 

Net earnings for this period grew at 

aniaverage annual compounded rate 

of 23 .3%, and fully diluted earnings 

per share rose 17 :6%a a year . For the 

45th year in a row, your company 

paid dividends on its common stock . 

For the fifth straightyear, dividends 

were increased ;the 1972 increase 

was the maximum permitted under 

the Phase II dividendguidelines . 

The current annual dividend is now 

$ 11296 per common share . 

United States Sales 

Philip Morris U .S .A .'s sales gains 

were led by the continuing growth of 

Marlboro which has attained a share 

of more than 12 .517c of the U.S . 

market, compared with 6 .6% five 

years ago . Marlboro has narrowed 

the distance betweercit and the 

number one brand in the U.S. and 

continues to increase the gap between 

it and the brands ranked below . 

Philip Morris U .S .A. further 

strenethenedits position as the leader 

in the 100mm cateeorv with llenson, 

& Hedges I00's, which became the 

leadine I00mm brand in the U .S. in 

I972,aswell as Marlboro 100's . 

Parliament 100's, and Vir¢iniaSlims. 

The 100mm seemenris the 

fastest-erowing category in the U .S. 

market with total I00mm unit sales 

accounting for more than 2 t 9i o f 

the market for the year 1972 : . 

Internalional 

In 1955, when Philip Morris initiated 

its international affiliate activitie s 

to supplement expons, your company 

sold 4 .3billion cigarettes in 

international markets, In 1972, Philip 

Morris International sold 113 billion 

units in more than 160 countries and 

territories tnrough exports of over 

14 bidlionciearettes and local 

manufacture by al£iliates and'licensees . 

Philip Morris International's 

manufacturing affiliates are located 

in Argentina, Australia, Belgium, 

Canada. Canary Islands„Dominica n 

Republic . Germany, Guatemalh, 

Holland, India, Indonesia, Mexico, 

Nigeria, Pakistan, Panama, 

Switzerland, United Kingdom, and 

Venezuela. Marketing affiliates 

exist'in Ecuador, France, Greece, 

New Zealand ; , Puerto Rico„and' 

Sweden. Licensees include 

manufacturers in Austria4 Bolivia, 

Finland, Haiti, Hong Kong, Italy, 

Malaysia, Netherlands Antilles, The 

Philippines, and Yugoslavia . 

Philip Morris Europe, the largest 

International region in sales and 

profits, maintained its rapidgrowth, 

putting into production a new factory 

in SVest Berlin and expanding the 

Philip Morris Holland B .V. planrin 

Bergen op Zoom . Marlboro is among 

the leading brands in Austria, Finland, 

Italy and Switzerland and has 

substantial sales in other European 

countries . Muratti Ambassador is 

anothenleading Philip Morris entry in 

European cigarette markcts. 

Philip Morris International's Asia/ 

Pacific, Canada, and Latin America- 

Iberia regions also strengthened 

their respective market positions in 

1972 and reported improved sales an d 

earnings.

Miller Brewing 

Miller Brewing devoted substantial 

effort and resources to reorganizing 

and strengthening its operations, 

while experiencing a difficult year . 

Although barrel sales and operating 

revenues increased in 1972, Miller's 

operating income declined . This 

decline reflected the intensified price 

competition in the brewing industry 

and the rising costs for raw materials, 

labor and packaging materials . 

Miller has undertaken to strengthen 

its sales and profitability by 

instituting far-reaching changes 

which are not yet reflected in the 

company's finaneiat'results: Senior 

management has been substantially 

reinforced, marketing has been 

reorganized, and the distributor 

organization~is being strengthened. 

In 1972, Miller's productline was 

expanded throughmewproducts and' 

acquisitions. Several packaging 

innovations were well received _ 

The continuingeoncentration of,the 

brewing industry offers promise of 

long-term opportunity for Miller 

since it is one of the three nationally 

distributed-brands of premium beer, 

the fast-growingsegtrtent of the 

market . In 1972, the premium beer 

segment aecountedfor 307c of the 

market compared with 23 r7o in 1967 . 

Pliillp Morrislndustrial 

Philip Morris Industrial's operating 

revenue exceeded S 100 million for 

the first time, an increase of 18 % 

over 1971, and the increase in 

operating income was even 1greater- 

26% . Our industrial companies 

benefited from the improvement in 

the U.S . economy in 1972, butmore 

important is the fact that the sales 

strateeies of these companies have 

been sharply re-focused, with 

satisfactory results in terms ofsales 

and profitability . The orientation of 

marketing stratecies around high, 

technology-high margin products 

produced substantial increases in 

revenues and income at Nicolet 

Paper Company and Polymer 

Industries, Inc., a specialty chemical 

manufacturer . Milprint Inc ., the 

nation's leading producer of flexible 

packaging, recorded higher revenues, 

but income dipped slightly belo w 

the 1971 level . 

Mission Viejp 

In September, we acquired 100% of 

Mission Viejo Company, a new 

community development and home 

building concern . Mission Viejo's 

largestoperations are located in 

Orange County, California, and it is 


also building homes in Phoeniac, 

Arizona, and a new community in 

Denver, Colorado. Mission Viejo's 

sales and earnings were consolidated 

with those of Philip Morris's other 

operations in the fourth quarter 

of 1972 . 

Capital Expansion 

We are in the initial stages ofa major 

capital expenditure program. In 

1972 ;our expenditures reached 

S120 million, a substantial increase 

over the $68 million spent in 1971 . 

During the next five-year period . 

we expeettto spend more than $500 

million for new and expanded' 

manufacturing facilities . These will 

be constructed notonlyin the UIS. 

but overseas as well, and principally 

for tobacco operations. These plans 

emphasize our confidence in the 

continued'long-range expansion and 

profitability of the cigarette industry 

around the globe . 

The most significant component of 

this program is a cigarette 

manufacturing complex now under 

construction in Richmond . Virginia, 

planned as the world's largest and 

most efficient facility of its kind . When 

this project is completed in 1977, its 

total icost ; including land. buildings, 

equipment and machinery, will 

exceed $200 million . Itis anticipated 

That the first cigarettes will be 

produced in this facility in 1973 and 

that construction of the buildings 

wilfbe completed in 1974 . 

The new 8-story Research Tower in 

Riehmond; housing some 300 

seientists, will be dedicated this April . 

Smoking and Health 

The tobacco industry continues to 

broaden its support of research 

directed to findine answers to the 

many, unresolved questions about 

smoking andhealth . At year end, the 

Harvard Medical School announced 

acceptance of a 52 .8million grant 

from eight tobacco companies, 

including Philip Morris, and an 

association of tobacco growers. The 

grant will fund a five-year program 

of research on the relationships„if 

any„between cigarette smoking and 

pulmonary and cardio-vascular 

diseases . In announcing the grant, 

the principal Harvard investigator 

said, "While it is common knowledge 

that cigarette smoking has been 

alleged to be a major cause of these 

diseases, many other factors, not so 

well publicized, may also be 

important . These include exposure to 

air pollutants, the genetic differences 

in hostsusceptibility, and so on . A 

direct causal relationship for many of 

these or other environmental factors 

has not been clearly demonstrated." 

Philip Morris is also a participant in 

a $2 million research grant to 

Washington University, in SL Louis, 

Missouri, for the study of cancer 

immunology in man . This study is 

now in its second year, and 

encouraging progress is being made 

in this very active and promising field 

of cancer investigation . 

While there was little in the way of 

new lecislative activity, relative to 

smoking and health in the United 

States, several!countries in which we 

have operations did enact laws 

limiting cigarette advertising an d 

requiring warning notices on packages 

and advertising , 

Problem Areas 

The government's Phase II wage and 

price regulations and the relatively 

moderate fiscal and monetary policies 

in effect in 1972 resulted in a reduced 

rate of inflationof approximatel y 

3 .8 % for the entire year. Profit margi n 

limi'tationsprevented your company 

from raising the prices of its product s 

or those of its subsidiaries during 1972. 

A serious threatto yourcompany, all 

multi-national companies, and the 

national interest exists in the form of 

the "Hartke-Burke Bill" now before 

Congress. This legislation threatens 

harm to international trade by 

eliminating credits for taxes paid in 

other countries, which would greatly 

increase tax obligations in the U.S : 

The bill would alfo impose quotas on 

imports and prohibitthe exportation . 

of U,S. technology . 

As has been the case with most 

multi-national companies, Philip 

Morris's international expansion has 

resulted in increased U.S:

employment and a positive 

contribution to our balance of 

payments. Employment in the U .S . 

in support of our international 

activities increased more than 300% 

during this period . We sincerely hope 

that Congress will examine the 

record carefully before imposing any 

counter productive measures. 

In 1972, five states and the District 

of Columbia raised or passed 

legislation approving increases in 

cigarette excise taxes ; this compares 

with 16 state increases in 1971 . 

Unfortunately, we cannotrealistically 

expect the number of future tax 

increases to remain at or close to the 

1972 level : 

In fiscal 1972, total cigarette excise 

tax revenues came to $5 .2 billion, an 

amount almost 50% greater than the 

combined revenues from cigarette 

sales of the six domestic manufacturers 

(excluding federal excise tax) . This 

total was composed of $2 .l~billion in 

federal excise taxes, $3 .0 billion at 

the state level, and $ .1 billion at the 

municipal!and county levels . 

It is an accepted fact that the excise 

tax, like the sales tax, is a regressive 

form of taxation in that a larger 

proportion of lower ineomes are 

absorbed by each dollar of such a tax . 

It has been documented that excise 

taxes activelydiscriminate against 

poor urban dwellers who tend to 

smoke greater numbers of cigarettes . 

In many instances, excise tax 

increases have beenatdeastpartially 

self-defeating. In New York City 

where the "tar" tax was added to 

substantial existing excise taxes, the 

number of cigarettes taxed continued 

to decline . In 1972, the number of 

cigarettes taxed declined below the 

level taxed in 1965: While actual tax 

revenues have increased marginally, 

legal cigarette sales are being 

diverted from New York City or are 

being displaced by bootlegged 


Social Responsibilit y 

In late 1979, Philip Morris initiated 

a company-wide audinof its 

practices in the areas which fall 

under the heading of "corporate 

responsibility" in an effort to 

determine whether manacement 

policies and directives were, in fact, 

being carried out-and'to whatextent. 

and where . Requiring nearly a year, 

the findings have helped'establish 

bench marks and directions for 

future management action at 

corporate, operating company, and' 

individ'ualiplant levels. 

In Oetobea our overall corporate 

program received favorable 

recoenition in a reportenutled 

"Initiatives in Corporate 

Responsibility," prepared and 

published by the Consumer 

Subcommittee of the U .S . Senate 

Committee on Commerce under the 

chairmanship of Senator Frank E . 

Moss, of Utah . This Senate Commerce 

Committee report, which surveyed 

300 of the top corporations on the 

Fortune "500" list, referred to " . . . 

an outstanding report submitted by 

Philip Morris . _ . " 

During 1972, responsibility for 

reviewing ourcontinuing programs in 

these areas, and for initiating new 

programs, was assigned to two new 

committees of our Board of Directors 

-the Environmental Committe e 

and the Corporate Committee on 

Social Responsibility and 

Contributions . These committees 

were created to ensure that our 

programs and performance are 

progressive and productive . The goals 

that we have been pursuing include 

recruitmentofwomen, minorities, 

and veterans, advancement of equal 

opportunities for minorities and 

women4 increased business with 

minority-0wned institutions, on-thejob 

training, significant involvement 

in both community affairs and the 

arts, and substantial reduction or 

oftabor, will represent a significant 

educational experiment in time to 

come . 

In 1972, Miller completed its 

conversion to fully recyclable, 

aluminum beer cans, while Formosa 

Sprin_'s and Nicolet Papens effluent 

control programs became fufly, 

operational . Mission Viejo's efforts to 

preserve and enhance the environment 

durinc and afterhome construction 

proved highly successful . 

In 1972, your Board was saddened by 

the death of Dr. Jess H. Davis, 

President of the Stevens Institute of 

Technology. We shall miss his 

wisdom and dedication . . 

The Board was subsequently 

strengthened by the election as 

Directors of Mrs. Whitney M . 

Young . Jr ., w idowof the late civili 

rights leader, and Mr. John T. 

Landry, Vice President of Philip 

Morris Incorporated and Group Vice 

President-Director of Marketing, 

Philip Morris U1S.A . 

We are optimistic about Philip 

Morris's future-in 1973 and the 

years beyond . Our record of growth 

in the cigarette business, in the U .S. 

and world-wide, is well known . 

Given the vitality and momentum of 

our cigarette brandsthroughoutthe 

worldJ there is every reason to 

believe thatour cigarette growth will, 

continue . We also believe there is 

great future potential in the brewing; 

industriall and housing areas of 

our business . 

For their dedicated contributions to 

our continuing growth, we are grateful 

to all our 33,000 Philip Morris 

employees in this country and'around 

the world, and we thank them for 

their outstanding performance . 

Respectfully sub'mtined on behiltof 

the Board of Directors ,


The new Philip Morris Research 

Center Tower (abo ve), com pl eted last 

fall in Richmond, will be dedicated 

this April'in a ceremony including a 

scientiflc symposium at which three 

Nobel,Prize winners ;amoneothers, 

will participate. Dr. Glenn T. Seaborg, 

former Rtomic Energy Commission 

Chairman and winner of a Nobel 

Prize in 1951, has agreed to be 

keynote speaker at the ceremony. 

Research is a very It ig)t priority 

function at Philip Morris, not only 

in terms of our corporate researeh 

in tobacco agronomy, product 

development, and product quality 

but also in fields not directly related 

to the internal Philip Morris research 

program. Specifically ; Philip Morris 

as a co»tpany investsaubstantial 

sums in support of scientificand 

medical research in the area of 

cigarette smoking and health, and 

the U.S. tobacco industry as a whole 

expends more funds in such research 

than the federaLgovernment or 

all'voluntary healthagencies in the 

United States combined . 

It is important to note thatlhere is a 

continuing exchange of scienti('ie data 

andfindings between the Philip 

Morris Research and Development 

Center in Richmond and research 

organizations operated'by Philip 

Morris International a8i(iates arourud 

the world.

Major Locations Fh4liyMurre~ntorpprxM .Opsm~fin~Ca^C.netiAffiN;m-dLkrnxn 


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RetrosRective de 1'Annee 

EL 1972, v'obe slsc.'Ift6a laitl lfat dhtls chfRn 

d'aRaises et do b6n6fices sam prgcedent or. pour 1n 

194ase ann6e coueculrve. its dividendls ~par 

action onl nlgmente par rapport ilI'lannfe prf 

egdeate- Pour 1972, k chiBre d'a11gimconsollid6 

a accusEua ecaoissemenl do plos de 15,095 at Its 

RRttef MItH ont'awgmen4ede 22,65 . Le Rven 

U pm acliors Icn tenanc compre on atrn convsnlbke l 

augmenun de 20,1 %el le rtvenu efCecuf par 

action do 16.2% . 

En 1972, Philip Morris a consinut it accroiare sa 

paet du maache mondial on crgareues. En termes 

de realn unitaires. Philip Morris denenail la 

aecondt socjelt colee on bourse do I'6ndustrk de 

in cigaretle dans he monde. Marlboro esl derenue 

Is premiere marque surk marche mondia6, lout 

ense mamlenam all second rang surte marchd 

des Etats-Uars. Et Philip Morris a towjouoaa 

aecontk plaee dans l'uMuslrrae de lacigarette aux 

EuwUhis 

. Le chiBre d'aRaires delYnduatrk est maale de 4 

% poucalleindreapproalmativemeno 3R50 mdliardi 

d'unites. Lcsvenleslolales do Philip Morris 1 en ~ 

oomplan4 In Etals-Unis it 1'etranger) atletgoem 

mainlenane 6 .55du maocnE mwndial. 

Pb 1972. pouelatroisi2me annee conseuutire . Ie 

e 

aveotees do 1'industne au¢ Elaus-Unis ono atcus 

no aecrotssemen4 aacgnant enriran 534 mtWards 

dbnitEs, sdl une maporation do plus de 3F . 

Pendant I'u nee, In vsnte ataires de Philiip 

Morris sunk muchEame icatn.ool auamenude 

plus Oe 13~'.b el notre pan du marchE. nt passee 

m fm d'annee lpius dc 20Se. 

Philip Morris a vuson ch8 d M nres consolid 

a 

E aoilre, an coun des cinq derniern annen, 

taua annuel compos6 do 111,711 . Pendant ce«e 

pfriode, In revenus nets progressalent selon un 

taua compost annuel moyen de 23 .3 % tt It, 

revellus par :action (en Ien3nleUmptede9 :tilr[5 

converubles) croissateat Ik 17,6Cu par aonee. 

Pourda456me annee consecuuve . rotre rompagnue 

gayt dn dividendes sur an actions ondmaures . 

urIa clnquieme annec consrcutive . IesdIvldendes 

out nctvsfune matorauon:celle dc 1972 

represenle kaaimum aulo.nse par In directives 

dela Phase II .A1'heure actuelle:ltdivrdende 

attnuel se Imme 1 $1,296 par action ordinatrc . 

Vrgres our Erau-Unra 

Les gains realises par In antes de Philip Morris 

aux Etats-Unis onu sulvi1 nsoclmprnslonnap 

. l do Maribono qui, pani de 6,6SQ ii Y a cinq anss'est 

taille une pan do 12.5 .^0dlh marchE americal~n. 

Marlboro s'at consrderabkalent rapprochbde In 

prin

do 1'annge: Lp Wmitn Imposfea aua marRnb6eb 

6esaires n'om paspermus! volre societf d'augmenter 

In pfu do ss produita, ni des produiuda 

an 6liales 

. Mur voere sodit6, poue trsmea In sonhH nMd 

. It pfOK,l d o- 

pallanalCS~, p pOnr 1"infEr4t pntlOnal 

101 dit "Hanke-6urke", qui rtait aatuellemenM1 

1'obJet do dfhbtrpioro w Congrls.

-L 

v! 

PakiatLq PanatnE. Refna Untdo. Repdblica 

Dominicana .Solzy,y Veneiuela. y,eztnrn compa- 

Ilias afiliadas dedistabucidn y venta en,Ecuador, 

Ptapcia, Grecia, Nueva Zelalsdia„Puerto Rico T Suecia. Hay ooncesionanos quc incluyen fabriqntes 

en Austrla . Bofivia. Finlandia, Haiti, Hong 

:AnuOas Halandesaa, 

FWpinas y YsrMgm aru 

Calaldrrada camela ma7er do lastegfenn Internulonates 

tanto an ventascomoen utdidades 

. manumdo. su rapidn . PhiBp Morris Europa Jrde 

sagrollo ; ya esefen produccl6et una nucva fabric 

a m Berlin oecidental yx ha asnptaado la planta de 

I. Philip Morris Holland B V.en Bergen op Zoom. 

Marlboro an essentaentre laa marcas pnnctpales 

ca Austria. Finlandia . Italii ySwyy goea d 

. Olra 

ceatelenin rentasen OtrM paiXf plroptas 

matea popular dt Philiip Momn an los mercados 

dgartilleroa do Europa n la MuraW Ambassadon : 

En las regiossea de1 PacfOw asiYuco, del CaaadS 

U aldtntG an ~u respectnsvu posicmnes ddl ~ 

nXteaslo duranu 1972 para Phdilp Morrrs Inlerna- 

Uonal ylas venua y ganancsas ouunldaa han fsd 

. 

o mayogcs 

Ean-[Id Mmn 

Cstantiososnfuerma 7 .recursoa dedic6la Cerveraerta 

MilYtt :a lartoryaniiaeibo y fortaleeimientm 

t1e sua .operaciones, a la vea que atraves6 porun 

aslo duficiL A yesar de que has rentas por barn 4 

y lasentradisoperatiras aumenlaron dunn4 

1972, decBnarona las utilidades por operaa6ade It 

emprcsa Mi14ea Ditha disminuas6a ceeej61a 

fatensiBcacibn de la compelencia en Prenos eo la 

industria cervecera y los costof cada rea mayprea 

de lu materias primaa, la mano do obs'a y los 

arateriales do eavase . 

So ha propuesto Miller4ortaiecer su estructurade 

rntu y su rcmunerabilidad at instituir cambios 

de Iarga alcance que aun' no Xrefleian on los 

reaultadoshnancieros deIa Com~pania. Enforma 

tangiblela gerencia principal ha adqmrido mis 

solidez, laa operaciones de distribucion de venlas 

Tmercadeo to ban reorganieado yse perfecciona 

a organizaci6n dtslrib'u'dona . En 1972, elrerngl6n 

do Productos Miller x amplid debido a nuevos 

productos y adquisiciones Demostraron «mer 

falto vaciu mnoraciones an e1 emax . 

La contlnuada concentraci6n de Iaindustria urvecera 

ofrecelmapromcsa do oportuniidades do 

larga ducaci6n Pa+ala compalniaMiller ya~qua 

Esta or una do las tces marcaa do cerreza de calldadalta 

dist[ibuidas de costm a costa, siendo, 

hm el xgmenuode m4arapido ccecimientodel 

mercado. En 1972, e1 rengl6n do carvezaa do 

ealidadalta a4una6 el IOTe del nsereado an sonspaeacl6n 

a 23%en e1 ado 1967. 

lAllfp Morrfs Induatrld 

Laa uts7idadaoperativas de Philip Morris Indwtrial 

hudrePasaron 5100 mnllann por primera vez, 

an aurnento do 18% sobre 1971, y ei austsemto en 

mtradas operaaonales fue ai aun mayor - 26% . 

Nuntrascomypnias industrks xbeneficiaron 

do In cconomla de E.U .A. an 1972, pero ; to que 

todavfa es mas imporunte es el Ihecho do qae IY 

estrategiade renrtas Ae es[as compani6s tiene un, 

ea[oque tatalmenre ouero con resulladossatisfactodosen 

to que All refiere a ventas ya benaficioa . 

La orientaci6n do Ias estralegiaa de v

4- 

I 

I 

ho .4 It 

Ssnado de EU.A ., bain to dueccidn d

der fBltrcndg HenteBer tBrlleaibk Verpackungen 

in den USA, regisviene hdhemGrwinne, doch 

dfg Einkuptte radtea leicbt unterden Stand vop 

1971 abl/tulun 

VkJp 

Im Septevtber erwarben wir einenlo0pcotentigen 

Antell denMission Viejo Company . mnn neuen 

Siedlungs-undWohnbu~ aernehmens . Diep~itssten Unternehmen on Mission Viejo befindfn 

sieh im kalitomischen O ngeCounty ; Woh - tmngen ~werdeo such in Phoerux ( Arizona ) und 

eine ncue Siedlung in Denver (Colorado)gebauu . 

Mission Viej9s Umsatze und Prohte wurdm im, 

vierten Qpanal won 1972m1e denao von PliiBp 

MorrsskomolidierL 

Knpftd.rrrrfteranr 

Wrr be8nden um am Beginn eioes Programsns 

geauigerter Kapitalauf'aendungen . Unsert Ausgabea 

eneichten 1972 tineSUmme ron 120 

IlOnep DOllar, einewexndirhe Sleigernn g 

gese ub'er den 1971 iausgcgebeven 68 Millionen. 

W"alvend der nachsten funt Jahrecrechnen wir miL 

Atngaben von uber 500 . Miilionen Dollar fur 

unsert erweittrten Herstellungsadagea., Neue 

Antasen werden nichc nur in, den USA, sondern 

auch in Ubersee enidhtel werdea.liauptsachtich 

asr Tabakverarbeimng. Diese Planeuncerslneichen 

unaer VertraLten in die tortwahrende Ausdehaung 

and die gesteiierten ProfitmoRlichkeiten der 

Zipretteniodustrte rund um die Erde . 

Da wiclstlgste Bestandtleil ditsn Progratnms is 

t aln sieh In ~RiehaLond ( Virgikla) im Ban oehod- 

BNter Zigarettentabrikationskompkr. der als der, 

rj:sste and modemste seiher Art geplanl dst. Nach 

igstelYupg dieses Proiekls int Jahte 1977 strcrde n 

gich die Gesamlkosten. Grundsluck . Gebaude, 

Ausstattung und MaschBnen inbtgriHen, aw( 

mehr als 200 Millionen Dollar belauftn. Es ist 

vorgeuhen~ dass die entcn Zigaretsen in diexm 

Werk im Jahm 1973 brodurienwerd:ea und di 

t 

e vo1leBetriebsfShigkeil im Jahre 1974 erraich 

wtrd 

Du neuq achtatSckiee Forachungszenmum i 

nRichmond,i das ungefahr 300 Wissenschattler auftaeh'men 

kann, srud dtuen April eiagewsiht 

staden. 

Rnucken and Qesundkelf 

Die TabakOndustrie uotentutzf such weiterhin 

die Fonchwns zur Liisung vieler ungeloster 

Fragen ia bexut.aut du Rauchen and die 

Gesundheto. ZumJahresende gab die Harvard 

MediwllSchool die Annahme eln

Rassegna dell'Anno 

L Vostra SocieH ha presentato ne11972 

aectatooali ennrate ed utili d'exrcirio C. pi 

diciannovrsimo anno consecutivo, unili per vione 

rmaa+on di quelli dell'anna precedente.L e eDttate consolidate d'eserdno per i111972sono 

aluaenutc de okn it 15R e i4 reddito ne«n de 

:< . Assumendo exrcilatr tutte le opvooi, 

l22i6 

I'uttltper azwne eaumeortato del 20 ;1',b, mtntre 

I'aumen[o edt1 16,1;'e~ae riferila alne az~ani 

esulenu , 

Mel 1972 la Philip Morris In cantiauaro a guadagnare 

lerren. nellnduvna mundtlale delle 

Igatene . t.:ome vendueuninane la Philip Morris ! d'e uta la feconda netmondo fra Iesoeleta 

pihste ddl ramo atganlle. Marlboroe dtvenuea li 

uno del mondu e connnuaa d 

essere Isunnarn numerodue neats Suti Un[b : l .a 

PRilip 4tos e[usmna la~sonelanumuro due del 

nbm ugartue nepi Suu U I 

Le renddle di isiaanuc not imondo I wno>umenmte 

E1 .1 4% a cvrca 3.150 mildardt d . uniti. It quanu- 

.latiro totale rendwo dalla PhSliplforns . tanto 

pegL Suu L'niti the alllcsttra, rappresepu ogg 

:lSb dcl tatale mondiale. 

in 6 

La sarWsre dt snarettt aeail Stau Uniat sono 

aumeuute nel 1972 per it erru annomnsectnivo 

am0 a rasatunaere an totale appPOUtmativo or 

$54 milaNi d-tli . an aumenm ctoe it, !oltreil 

3% . L. vend,tc umunc delYa Philip !ilon 

uatali Suu Un[tt sono aumenue d[ olare it 1311 

duraale 1'anno, e la nosira quota dct mercato 

Le entrate

~rM -'~ ~~ I 

_: 

1 

de1bStaW dl NewYork calcoli che ne11a 

CiHkdi New York lo srorso asna, uno su In 

pacchttli di sigamte conumati 6 dii cnntrabbando. 

ReaponsablNrd Secinh 

Veno I. Oneder 19711. PhilOp Morrii ha avdito 

Ima verifnca estesa all'intera azienda delk prassl 

M.L . elle am che cadonosoua la denaminfzione 

di "mppnsabdieil souetanie', nell'inknlo 

di aceinare x is palltica e be direttivs dell'ammlrllsValiDnt 

eranm attua[eiln pratica t slno a 

quale misuas e dove . popo Quasi un annodi 

livoro i risululi sonD serritl a defioim punti idl I 

riferimemo e direttncd per 7a futura azione 

degli amminis[ralori,i aE livello dtllla socie[a in 

generak-dllle singple socieli di gislione e de{e 

sibgole fabbricha 

Durame il rrtese dt ootobre II programma generale 

della Societa ha ricevulo favorerole ricoaoscimento 

in unarNatlone dal titald "ImtlaliYe in 

kma di mponsabilini wcicsarie",preparatae 

pubbkcau dal Sottocomitatoper i Goasumatori 

dG Comulauo Per ii Comnsercio del Senata dlgl 

. Frank E i Stau Uniti, sotto la pnesidenza del Sen . 

Moss dello lJtah. la relazione del Comitato per 

a Commercio del Senato- cheho copeno 300 delle 

maegiori sociela della listadi "500" prepanoa~ 

dalla rb9sta Fortune, menrbnara ' . . . um 

aenVioaale nppprto preaentatodalla Philip 

Morris . , .'L 

Durante 11119721f mppnsabilili per I . rerifnca 

d programmi permaneaos in qutste area. 

e e vio .tli nuori Drogramm~i, (u aiTida[a a 

di comi[an del noskoComluo d'Am, 

minut[azione: il Comitalo per 1'Am biRienle ed'il 

Comiuto per It 11espomabilia9ed i Coatnbu u 

Sociali. Quesu' comnatl sono stati islituiitipt r 

alaiaueareehe I nostfi pragrammi e attiritjsian a 

ptogressivi e produnivi . Gli obittuvi the abbiamo 

perseguito comprendano assunztone di personak 

(emminile, di grupRi di minCraoza e vemraDl, 

migliorameato delBa cRuaglianu di opportunitl 

per minoranzee donne. aumenlo delk Isansazioni 

eon dstle diiprapritla Will inoranzc, addestrammto 

aW lavono, rilevanleinteresumento . tan[o 

aelfa vila deBa oomunlti che nellear[i . eriduzionc 

wslawalt oRPUCeehiminavone deRli inquiaamen[iprorcnuenli 

dalle noslre fabbiriche . 

Al principia del 1977 : dopo un lungo perioda dll 

studl inlevsi, It Phitlip Morris ha annonuato uo 

aecesionale p[ogramma unlc oall ' e innovalrvo. di 

biorst d'z studio, io appoRgia eduoaziane pno 

(sssionak, qu k suppkmentoipeciale del nasV U apppggio all'educazionasuperione 

: Noi speriam 

a 

o a rAnllamo che questapragramma, the h 

rixvuta 1 aUpprqraiane del Minlste d l Lavor 

n i silrnia- o i Stau niu, poua appresent a 

nperi menuonelcampodell educazionenol 

del kmpo: . 

Ne11972 la Milkr Brewing has ultimato Irsua 

apnvereione alPuso distatole di alluminio 

tompletapsevV riutiliuabill,~ menlre i Rrogranrmi 

per sl conuodb delle emifsioni do Dane de0a 

FormmaSpr"mlrs e la Nicolel Paper sonD emrati 

in piena operazione . Gli sforn dellia Musion 

Vkjo nel. Dreserrarc ed abbellirel'ambienlt 

durank e dopu la coslruaione dcik ttsioenzs wao 

Matl icoroaaus dagrande aucceuu. 

D VosVO Consigliod'Amministrazione Is rattrBlatc 

nel 1972 dalla morrce del Dott. Jess 

H . Davis, Dim[ore dello Stevens tnuiluss o 

f Techooll Sentidemo la mancanza deila sua 

aa{gczza e devozime, 11 inosVO Consiglio d'Ammini~lrazione 

6 stalo pstl tardi arricchiuo mediame 

Is ekzione aConsigikredella Sig, to Whitne y wM 

Young Jr. . redova del compianto campione dei . 

difitti civdll, e del Sig' laha T. Landey, Yiar 

Diret[ore. delia Philip Marris Intorponated! Vice 

Direltore diGruDpo t Capo del Marke[ing della 

Philip Morris US :A. 

llinw ouindstl'. circa 0 futuro deiG Phllip Mopru 

per 11 1973 e per glt anni a ven . 11 nostro 

passato dl accresclmcnta not ramo sigamte, 

rlegB Ssau Uniai ed la tuteo IL mondo, 2noto a 

tuW. Conslderati lavitalil! e In slancio delll 

oe 

aostre marche per il mondo intero, abbiam 

opsl dikitla di credere h . it nosVO accrescimento 

ne t carnpo siPrette co tnuera. Rioentanlo anche 

the rl siaun grande potenziale lucura nci raml 

delia nostra altintadedicall alia prodonune d i 

b4ra,f1pradal7i indusinaY edalkcoslruzioni 

teLdeYZiaO. 

Siamo vatl a tatti 133 .000 dipeadepli della 

PhBip Monif, in qutsto paese e nel'~mondo, per 

B IDtO devoto appano a11a nostra tbminw a 

atpansioae CB rinaruaamo per It IarD sccelkn k 

Prtseatata rispetknamenue 

per t1 Comiglio d'Amlrumuvarlom 


Jaarrapport 

In 1972 meldsle Uw Orma rekordomzenen 

en-winstTa, alf oakvoor hetnegemiendt ppKavoigende 

iaar . ecn hogsoe wimsl per aandeel. 

De {ekonsolideerde omzN nam In 1972 ma meer 

dart i3 .0ê lae . terwiil do nettowinu met 42 .6!'. 

allDe wlnsl ]teeg met 20.1 . ala allt sarldee4 

houdersRehruuk zouden maken nan hun optlerecbt 

an met 16,2oper aandeel na can..ente. 

Philiip Morris verwterf in 1972 een groseraandeel l 

in do imernationak steanellenmarkt . In holl 

heid irerkoch[e srRareelen uitRedrukt werd ;PhiAi 

p Mozris deop Een no gronnte stRarettenfahrikan 

.erlld met heunrloterlmR. Marlbaro. n~op hel 

tkr w 

oènhlnk hel meest verk'ocnre merk ter weeeld to 

bltef nummer cwee op do Amenkasnse markt . 

Philip Monu Is nog steeds op it. na de grootue 

■t'gutttenf abriksal do V.S . 

De verkoop ran de srgarettenindustre nam over 

de gehele wereld toe met 4% ton ten laaal van 

ongeverr 3.e50 tru4ard stnks. Do touk verkoop 

rfn Phuip Morns (VS . inuemaelonaal) . in 

sigarrlten ulcgedauks, bedraagt no 6,5';. raa net 

mtaL over do gehtle wereld. 

De varkoopran do industne in lhe VS . into in 

1972 voor het deade opeenvalgende iaartot ongeveer 

576 mdjard slul no toename met mee t 

dan Jê. De. verk'oop van Philip Morris sltegin do 

V.S~. :in sigare.tten wtgedrukt ;metmeer darl 

an ons markuandeel nam toe tot meer dan 20% 

aan het eind van het laar . 

De gekonsolideerde omzet ran Philip Marrir 

groeide tijdens de afgelopen viill met eeniaugemiddrlde 

van 18,7`."0 . De netto-wlnst steeg in 

deze penode met are gemldtlelde van 27.J°een d 

.6r'o perewinat 

pemaandcelJ voar konvenim met17 

tar. Voor her a5tteopeenvolRende iau keerde 

wfierltatendividen!dultopd Rewont ndeltn. 

Voor h'te vnfdd opeenvolgeodt laar werd h'tr,fiv 

: do verhogr.npover 1972 nedroeg 

~ dend verhoogd 

he[maslmum, dat do richrhlnen gedmrende de 

Iwttde tast van deluon- on pni maalreRelen 

toestaan . Het huidlceaarlijkse dividend be. 

draagt nuS1,1.96 per gewoonaandrelJ 

Verkoop u do Nerrmtde Sr,izrr s 

Detoename in do verkoop van Philip Morrui 

.was . in do cerste plaatste danken aan d n do VS o 

roortdurcnde Rroel van Marldoru . Dit me k bcrukte 

ten markla d 1 van 1 3 . vereelcken, 

met 6.6û njf 1 r geleden . \r rIboro kamt fttedr 

dsch[er bil her meese verkochte merk in do V S to 

BeD . nez au Philip Morru USA . ust op de tnerken 

die in rangordevolgen. 

Philip Mbrrii USAversterigde zijls poslt'se 

rerder alagrootste in ds 1110mm klasse, met 

Brnson k Hedl)n 100. dat hermeevverkochte 

mtrk IGOmm slRaree[en in 1972 werd, mel 

Rnlboro 100 . Parliament 100 and Vrrgrnln Slinq 

OOmm groep,s het snelst groeiende soon 

si{uet on de Amertkaanu markt :De totalo 

verkotzn van I00mm agarettrn nannen un 1972 

meer dan 21% van damaak[ voor liun rekenuag. 

Jnternauanan 

fToen er in 1955 een begin word gemaakt mat d 

o nevenaktiviteilen in andere landrn, vcrkach 

tPhilip Morris al4,l zndlard sigareutrn op do in , 

temationalmankl . In 1972 verkoent Philip Morris 

III miljard sigaretten in meer dan d601rnden 

door eaport wn 1a miljard slRattuen en bkak 

produktie van hlialen on Iicentiehoudera. 

DedochtermaatschfDPden n Rndip Marri 

.4 e~en met produklit besrg hou- 

eIntemauanal 

den, bevinden zl

gdotte mgen, die betrekkins hebben op roken 

en gexondlleid. Ikmedische (akultNt van de unlswsnett 

ran Harvard maakte aan het eindvan 

bet jaar bekend; dat ten subsidie on 52,111 mdjoen 

dollar wu aanvaard, geReven door aclit labakamaatschappi1rn 

(o.a . Phdip Mtrrrrsl en Kn groep 

tabakstelen . De tubsidie ral Kn reseanchMpro- 

~xamma von vij{)aar Bnancteren oveehet vrrban 

d(gp du Eestas[I iusun bet rokrn can sigarcuten 

ep loag- en vaassiekcen. Toen Or subsidilbekend 

gemaakt werd . zeide voomaamsteonderzoeker, 

'Terwi)( hetatyemeen bekend Is, dattbet roken 

an fugaretten wordt aangevoerd als een van d e 

belaner+ikstt oorzakenvandeze ziekten. kunneo 

velc andere faktoren . die aiet one uitgebrcid 

. ook can belana zryn : Tbt deze 

ep blikatie kregen 

faktorcn behore.n het bFootaesteldaln an 

lachtveruntteinnging- de erfeulke venclrjllen in 

gevtsHiiheidlne . Fendirekt~oorzakelukverband 

ta ein duideliik aanltetoo~ voor vaNvao deae of 

artdere milietrfaktoren:' 

Philip Morris neemt oot deel In we researchtub'sidie 

van S2. mdjoen voot dt Wuhington 

Uojvczsietit irr St .l.oui! (Ml.nouri): beslemd voor 

bet aodeaoeit vaatanker,immuooiogie bit d 

. DitondtrSaekbCVlGdt xlctl thana in xil e elelte a 

-treedt jaar to mca nuakt berrtoedtgendevootuit- 

àng op duaktieve to veelbelovend seliied raa 

kaaker reseuch . 

Er was In de Vereruyde Staten weindg it doen ; vat 

nieuwe w.eteevmde aktiviteit op her lerrelh can 

tokrn en gezandaaid4ansaat maar verscheideoe 

andere landee.waaria wij werkzaa'm njn ; name n 

ttaen aan, w.aardoorbeperlungen worden opgelagd 

voor hetadveneren van ugaeetten en waaz 

.ingen vereiat in op de paki n 

- doorwaarrchuw 

tn in advKCenues . 

froblsman 

De lweede lise can de looa- en prijcbeheeningsplaatreReien 

der regering en het rei~tiet voor 

► nscaal m manetarrbeleld in 19721eiddr 

xichn 

:8!-c n ta een beperklere voor toMame van oagevccr3 , 

ha gehelejaar . Beperkingen It. aanzien an de 

winsemargtsverhmderdan, oal U . ondernetnin 

. of dae van haar 

gdeprnaen an haar produliten 

dochtermulscbappUen, kon nerbogen . 

Een emsagabadreigiag voor Uw andememing, 

alle mul[i-nalionale ondernemingen en het algenrten 

ibelang wordt ytvormd door de xg . 

"Hartke-Burke Wet." die nu in het Coogrn in 

beliandrlutg ts. Deze wH dreigt ernstige schadd+ 

toe tebrcngen aan de door in her bualenland 

betaaLde belastingen niK langer alt>lttekposten 

te ttescM1anwen, 7avua soo dtae aret invoerquuti s 

raas[ellen to de uirroer van Amenkaansa tecbnnlogie 

verbiadtn . 

Zoals bet seval was voor de meats mollPnationale 

cademenuogen, heeit b intrmationale etpanaie 

an . Phllip M6rrh tot gerqls geha4 dat de werkgoie~enheid 

in Or V.5-roenattt eo t


4' 

Philip Morris U .S.A. 

(000 omwed)i 1972 L971 1970, 

Operaunp 

Revenues $1,164,530 $1.035,178 5920,323 

Operaune 

tncome 194 .072 166;784 178,05 1 

Philip Marris U . S . A . reearded new 

highs in operating revenues and 

profits in 1972 as its unitisales of 

cigarettes increased for the 17th 

straight year. Philip :vlorris U. S . A.'s 

market share rose from abour 18% 

to more than 2091D, and the company 

today has a solid number two 

position in the United States. 

This growth is attributable to your 

com pany's strong position ~within the 

filter cigarette market, which has 

been the fastest-growing segment 

since the 1950's„and to its leadership 

in the I00mm category . The filter 

segment of the industry has grown 

from 29% in 1956 to 835`b i n 

1972 ; while the 100mm seement has 

grown from 9% in 1967 to more 

than 215'0 lastyear. 

Unique among cigarette companies, 

Philip Morris has four major brands 

currently enjoying strong growth 

trends. 


Marlboro, our loading brand, 

advanced to second place among 

all brands im1971 and accelerated its 

rise toward the top in 1972 . Total 

Marlboro unitsales increased 

by 17% in 1972 and accounted for 

morefhan 12% of the total U .S. 

market: 

Benson & Hedges 100% became the 

leading 100mm brand in 1972 with a 

sales increase of 13% . 

Virginia Slims, with itsapecialiappeal 

to women, grew 13% . 

Parliament, with its exclusive 

recessed filter, increased by more 

than 4%, much ofrthabgrowth 

coming from the Parliament 100's . 

With Benson & Hedges I00's, 

Parliament 100's, Marlboro 100's 

and Vireinia Slims, Philip Morri s 

is the leading company in the 100mm 

category . 

The distinct positioningaf our major 

brands permitted sharp marketing 

focus for each. The`Marlboro 

Country" theme has proved 

adaptable to magazine, newspaper, 

and outdoor advertising. This theme 

was amplified in several unusual, 

ways in 1972 . A unique eight-page 

magazine insert-the "Marlboro 

Country Store"-offered to the publi c 

items of Western merchandise tha t 

have been requested by consumers 

over the years . In a new promotional 

effort, the "Marlboro Chuckwago n 

and Western Art ExhibiN'wasa 

leading attraction at majonfairs 

throughout the country . 

>~' ~! 11 ~~ 

~+\+ .; .~\ 

m 

1) Archittct's rendering of new manufuturieg 

eomptea in Riahmond. Virpnia. 

2) Aerial viewof manufa¢turing complex 

under eonstractioo: it will be eompteted i n 

rs i.. 

3) New PhitipMorre ReteareA To.er 

adJacent tomanufaeturia8 complex . 

- 'A'lc..r.


This new cigarette manufacturing 

compltx, designed by architect 

Gordon Bunshaft, Senior Partner of 

Skidmore, Owings & Merrill, will 

ultimately have a capacity equal 

to nearly 25% of the :total number 

of cigarettes currently sold in the 

United States. Productiorcwill! 

commence this vear; and construction 

of the buildings will be completed in 

1974 . A new generation of machinery 

and equipmentand a vastly modified 

production line will assure the 

highest quality standirrds now 

attainable andmake this facility the 

mostefficient as well ias the largest 

and most modern in the world ! 

In every way, this cigarette 

manufacturing complex symbolizes 

your company's confidence in the 

future of~the cigarette business and 

Philip Morris's continued growth 

within the industry. 


1) Marlboro paekageson the Louisville 

production line. 

2) Benson & Hedgeslo0'a-graphie 

depictiona of "America's Favorite Cigarette 

Break." 

3) RetaJ display rack for the new "Flicker" 

ladies' safety shaver. 

1) Benson d Hedges Vq'scartotn ready to be 

paeked; 

2) Another retail rack featuring the Petsonna 

744 tungsten steel razor~blade, toyetAerwitti 

the new Face Guard blade. 

3)'11he Parliament recessed 61ter vorksiike 

a cigarette holdeeworks"-for Parliiameet 

regular andParliament 100'a. 

4) Member of eapanded U.S. Was forrae, 

working at the retail eounter.

1)VGginiaSlims-"You've come a long way." 

2) Data processing at Itichmond :Operations 

Center 

, 3) Marlboro Lights expanded~brand's reac h 

into the highBltration segment of th'emark'et; 

4) Inspection eontrolpoint on Virginia Slims 

tioe. 

3) The "Marlboro Country^ theme lives in 

peimt advertising . 


Many innovations that will 

improve the environment for our 

manufacturing people have been 

incorporated in thisfacility. 

Machinery will be arranged in 

modules . Each team of employees will 

be involVed in virtually all stages of 

production . This will provide variety 

in their work routines and personal 

identification with the quality of the 

finished product . These employees 

will be trained for this highly 

sophisticated'production plant in the 

newly established training center 

in Richmond . 

It is our intention to incorporate in 

our Louisville operation the 

manufacturing equipment, techniques 

and modular manufacturing 

philosophy being implemented in the 

new Riehmond!factory. To effect this, 

plans are under study to completely 

modernize and enlarge our Louisville 

facilities. 

In addition to construction~of~our 

new cigarette manufacturing 

complex, Philip Morris in 1972 also 

completed a new 8-story Research 

and Development Tower, which 

represents a major expansion of the 

Philip Morris U .S.A . Research 

Center in Richmond . The new 

Research Towerwill enable us to 

expand further our current bodyof 

knowledge in the scientific and 

technical areas of our operations. 

The research ~staff-scientists, 

technicians and supportpersonnelhas 

also been expanded . 

Research activity receives high 

priority at Philip Morris, and the 

achievements of our research staff 

have gained increasing recognition 

in recent years . One Philip Morris 

development, a gas sensor which 

assists the analysis oficigarette smoke, 

received an award as one of the 

major industrial inventions in 1972 : 

In the past five vears, Philip Morris 

U .S.A . researchers have published 

more than 164 papers and have 

patented 102 discoveries. 

Many of our research discoveries 

have application to Philip Morris 

operations and products, and, like 

our new factory, they symbolize our 

persistent effort to enhance product 

quality, to satisfy consumer 

preferences, and to increase efficiency. 

The physical integration of the 

Research Tower with the Operations 

Center and the new plant in one 

modern complex again emphasizes 

the productive relationship of 

research, leaf, marketing, and 

manufacturing functions. 

The General iProducts Division of 

Philip Morris UIS .A . introduced 

several new products in 1972 : 

Among them were Face Guarda a 

blade designed for sensitive skin, and 

Flieker„a women's shaving 

instrument shapedlike a compaetl 

Inspite of its growing size and 

complexity, Philip Morris U.S: A . 

has been able to enlarge its 

management almost entirely by 

promotion from within. This fact 

attests to the capabilities ofits 

employees and is an important factor 

in the loyalty of our personnel. 

' _lt 

~r„

Philip Morris U.S .A . 

Operating Revenue s 

YltqMUtt)aM4a 

'63 64 66 66 01 66~ 69 70 71 i 7 7 

Operating Revenues ofPhilip Morris U .S .A. 

have inereased at an average annual 

compounded rate of 10 .2 .â since 1963. 

Marlboro Share of Total U .S, Industry, 

AII categories of Marlboro now represen 

:6% of induury,a growth rateof 10 .9 % 

t 12 

per year since 1963 . 


Philip Morris U .S.A . 

Filter Cigarette UnitSales ■ 

Non-Filter Cigarette Unit Sales ■ 

amwnuma 

120 

Philip Morris U .S.A. unit cigarette sales have 

grow'n atan average annual compounded 

rateof 9a! oover thelast 10 years . Filter 

cigarette sales represent 9gS'aofPhilip Morris 

U .S :A.'s total. 

100mm Cigarette Share of 

U .S . Industry ■ 

Philip Morris 100mm Share of 

U .S . Industry- 

Percarnaq0 

24 

Since 1965 ; the year~100mm cigaretteswere 

introduced, thiscategory,hasgrown, at a rat 

eof about three percent in shareof market 

peryear, to27 .69e ofindustry sales. Phlli 

.S .A . brands. 6% ofindustry total pMorris U , 

. account formore than 27%of the category . 

U .S. Cigarette Industry UnitSalbs 

Total Filter Cigarettes ■ 

Total Non FilterCigaretses ■ 

Philip Morris Share of US. Industry (Si) - 

63 '64 '65 66. 67 66 60 '70 ~ It 72 

Total U.S. cigarette industry unit Isales have 

increased at an average annual compounded 

rate of 2 :8%since 1970 and at a rate of 

1 .1% since 1963.The filter segmenthu grown 

atarate of 5 :3%since 1963 . Philip Morris 

U .S.A.'s share of U.S. industry was 20 .0% 

for1972,


-r 

_ .t 

L 

- Philip Morris International 

° (0000mined) 1972 19,71 1970 

Operatint 

Reremaa3623,699 $517,670 f424,800 

Operadn ® 

---IpCome 84:095 66 .968 . 54;16 7 

Philip Morris Internationalposted 

new records in sales and income in 

._1972. Cigarette unit sales increased 

14% over 1971, and consolidated 

operating revenues were 204'a higher 

than the previous year. Operating 

income increased 25% . 

During 1972, Philip Morris became 

the leading exporter of cigarettes 

from the U .S ., and M'arlboro now 

ranks as the number one cigarette 

brand around the world . 

Philip Morris International's growth 

is due in great part to the demand 

for Philip Morris brands generated 

by our international affiliates, 

licensees, andmarketine companies 

in their own marke ts. Our major 

international brands account for 

approximately 501:'0 of our 

international sales, but in many 

countries national brands dominate 

the market. 


Philip Morris Europe, the largest of 

the international regions in sales and 

profits, continued its rapid growth 

during the year. Itadded to production 

capacity with the opening of a 

factory in West Berlin and with the 

expansion of Philip Morris Holland 

B . V.'s plant in Bergen op Zoom . 

Marlboro continued to grow as the 

leading American brand in several 

European countries; while European 

brands-such as Muratti Ambassador 

-continued to strengthen aheir 

market positions . New marketing 

offices were opened during the year 

in Paris . France and Amstelveen, 

Holland, with resulting marketing 

efficiencies. 

In the Asia/Pacific region, Philip 

Morris strengthened its position. 

The Philip Morris (Australia) group 

recorded anotherlargeincreasein 

sales and profits . This was achieved 

primarily by enlarging Philip Morris's 

share of the Australian cigarette 

market . Lindeman Wines, in the first 

full year after acquisition, also posted 

satisafactory sales and proficgrowth . 

Our New Zealand affiliate and 

Philippines licensee both increased 

salbs with the successful'introduction 

of new brands. 

1) Marlboro displap at JFK Airport dutY fres 

abop. 

2)krartboro apauon Europeaa motor racieg 

aeams co the tnmernatlorwt Grand Prfa eiresit 

. 

. 3)Viseounl is a kading brand in Australia

Y ~. 

. ._ . ~k .i 

1) Mar[boro is gaining an increasing market 

sharein Europe. 

2) Marlboro stagecoach promotion inMexiw ., 

7)Laboratory technician in Venezuela . 

4) Marlboro boat cruises a Dutch canaL 

3)7ntroductory advertising forMar[boro bo ; 

packing in Germany. 


In Indonesia, where P.T. Philip 

Morris Indonesia was formed in 1971 

with local partners, our activities 

were directed toward structuring the 

organization and'renovating the 

factory . 

The India-Pakistan war disturbed 

the cigarette markets in both those 

countries . Despite the obvious 

handicaps„our affiliate companies 

remained profitable . 

In the Latin America/Iberia region, 

Philip Morris Espana S .A . and 

Philip Morris lberica S.A . increased 

theirstaffs and equipped their 

manufacturing facilities in the Canary 

Islands in preparation formarketing 

of brands on the Spanish mainland . 

Our Venezuelan affiliate, C .A . 

Tabacalera Nacionall further 

improvedits market position with 

Astor, a leading brand, which now 

accounts for over half of the 

Venezuelan cigarette marketi 

Our affiliate in Mexico, Cigarrera 

Nacional, S. A ., ,has increased its 

sales but continues unprofitable. The 

Government of Mexico in 

November, 1972, formed a company, 

Tabacos Mexicanos, S . A. de C. V. 

(Tabamex), which has taken over alli 

responsibilities in the nation for 

the growing and sale of leaf tobaeco: 

Tabamex has indicated it will 

negotiate for the purchase of 

Cigarrera Nacional's growing and 

leaf processing facilities. In addition, 

the Mexican Government is now 

seeking the Mexicanization of foreign 

controlledcigarette companies to 

bring foreign share ownership of 

cigarette companies to a minority 

position . Your management will 

make every effort to obtain fair and 

equitable compensation for shares 

made available to bfexicans upon 

Mexicanization . 

Tabacalera Centroamericana, S .A ., 

our Guatemalanaftiliate, suceessfully 

concentrated'its marketing eHort s 

on enlarging its share of the 

Guatemalan cigarette business . 

During the year, Philip Morris 

acquired'a substantial interest in its 

licensee in Panama, Tabacalera 

Nacional, S .A. 

In Argentina, Massalin y Celirsco 

S.A .C . e I . continued to make progress 

in the salb of its premium-priccd 

brands . Argentina's infiation and

monetary problems, however~ have 

adversely affected this affiliate's 

profitability. 

In the Dominican Republic, E . LeSn 

Jimenes, C. per A. has successfully 

introduced a new brand and is 

continuing its marketing and 

development programs. 

A licensing and technical exchange 

agreement with Colombia's largest 

cigarette manufacturer, Cia . 

Colombiana de Tabaco, S .A ., was 

successfullynegotiated . 

Benson & Hed¢es (Canada) Ltd~ 

had'another successful!year. A 

largerahare of the cigarette market 

produced greater earnings for 

Benson & Hedecs Tobacco Company 

which dominates the 100tnm category 

with its Benson & Hedges l00's . The 

company purchased a leaf-processing 

plant in Delhi, Ontario, and expanded 

its Montreal factory . 


1) Umbrella in Bombaypromotes Cavanders 

cigarettes, a IFadmg brand ;in India . 

2) Lindemn's wine display in Australia . 

3) M urattt A rnbassador is the leadin 

.brand in Swuzerland l 

g charcoal tilter 

4) Cases or Canadian cigarettes packed for 

shipment. 

5) Marlboro IDO'!-mtroductory advertuing 

in Argenbna. 

1) Baronet is the third largest brand in 

Meaico. 

2) Benson & Hedges retail shop in Toronto. 

3) Formosa Spring Brewery quality eontrol ' 

laboratory; Barrie. Ontario. 

4) Company-supported clinic in Indonesia. 

S)Cigaretteresearcb laboratory in Canada .

I) Formosa Spmng Brewery is expand+ng its 

plant in Ontario . 

2) Astor isthe best-selling cigarette brand in 

Venezuela. 

3) Swiss aNHiate i factory in Neuch9teL 

4) Marlboro jauconcert in Austraiia. 

A .~ .r^~ -'_'i 

ogs .: ~ , 

~~„' ~rta~~ 

.. r 

~ ~itF .~.-?.l.1,i ~ 


. 

1) Marlboro sign adorns hotel on the 

Medioerranean . 

2) ~Delivery of Col6radA cigarettes i n Argentina 

. 3) ~BOnd Street bus advertising in Sweden . 

4) Marlboro greets travelers at airport in 

Quito,Ecuador. 

5) Philip Morris is now the leading eaponer 

of U.S: made cigarettes. 

Formosa Spring Brewery, which 

began prodUction in its new brewery 

in February, 1972 ;increased its 

share of the Ontario beer market 

fourfold through the introduction of 

a new brand, Oktoberfest. A new 

warehouse has already been added to 

the brewery, and a new aging facility 

andanother bottling line will be 

completed by mid-1973 : Although 

notyet profirable, Formosa Spring 

Brewery has achieved a growth 

record which indicates an 

encouraging potential . 

The increasing demand for quality 

American cigarettes like Marlboro i n 

conjunction with Philip Morris 

Internationalls ability to provide 

consumers around the world with 

theirown indigenous types o f 

cigarettespltices your company in a 

position ideally suited for further 

international growth . 

I


1 


,r,r~e,......,.__ 

Mi Iler Brewing Company 

(000 omitted) 1972 1971 197 

0Oyerstin 

`Revenues 1211,262 $204:134 5198,479 

Operatin g 

Income 228 r.300 11 .409 

Miller Brewing Company''s barrel 

sales increased 4% in 1972 and its 

operating revenues increased 3'70, 

although-operating income declined . 

The decline in operating income 

reflected the intensified price 

competitioain the brewing industry 

and the rising costs for raw 

materials, labor and'packaging 

materials . This cost-price squeeze 

has resulted in a decline in the 

number of U.S. brewing companies 

from approzimately11$ in 1965 to 

approximately 65 today. 

Miller's potential is promising, 

however, since it is one of the three 

nationally distributed brands of 

premium beer, the fastest-growing 

segmentofthemarketi In 1972, the 

premium beersegmenraccounted for 

30% of the market compared with 

23% in 1967 . 


1 1)2vtiller High Life bottlca move to market 

I from the Milwaukee brevery. 

1) MilleoHiah Life in neon at th'epoiot of 

sek . 

2) Cases of,Miller High Life naer move to 

market. 

3) New Miller 7aa. no depoait boules wero 

introduced in 1972.

L 

1) New brands and new packages greatly 

expanded the Millerfamilylist year . Notable 

addition waaMilke Ale, while Miller Mal 

. 

t Liquor went national 

2) The Miller Tavern at Mflwaukerbrewery 

-imponant stap on visitors tours . 

3) Copper brewing keottesin Milwaukee. 


1) Mitter Reclamation Center for recycling 

aluminum cans-Azusa, California . 

2)Mitter High Life Beer in new lightweight, 

quartaize brown glass bottles was introduced 

during the year, theyare encased in insulating 

foamed polystyrene sleeves-a 8rrtt in the malt 

beverage industry . 

3)Inspeeton oversee quality production all 

atongthe Miller High Life line. 

♦) The Meister Brau brand names acquired 

in mid-year included both Meister Brau, sold 

in Illinois and several Midwest states, an 

d Use, a low caloric and lowearbohydote beer . 

During 1972, Miller's senior 

management was substantially 

strengthened and reinforced. The 

Marketing Department has been 

restructured ;and a brand' 

management system has been 

introduced. The Sales Managementi 

Department has also been 

reorganized, and Miller's distributor 

relationships and organization have 

been revitalized . 

Miller expanded its product line in 

1972 through the acquisition of 

established brands . In June, 1972, 

Miller acquired the trade names and 

distribution network of Meister 

Brau, Inc. Meister Btau is one of the 

top three brands in the Chicago area 

and is marketed in several Midwest 

states. This purchase gives Miller 

an established brand in the popularprice 

segment. The Lite brand, a low 

calorie and low carbohydrate beer, - 

and the Buckeye brand were also 

purchased . 

In addition to giving Miller additional 

brands to market through existing 

disttibutors ;the Meister Brau 

acquisition~increased the number of 

Miller distributors from 

approximately 750 to nearly 850.

Miller also expanded its product 

line in 1972 through the introduction 

of two new products-Milwaukee 

Extra and Miller Ale . Milwaukee 

Extra, a new popular-price brand, 

was introduced and test marketed in 

Greensboro, North Carolina, and 

Phoenix„Atizona, while Miller Ale 

was introduced andtest markete d 

in three Northeast markets. During 

1972 ; national distribution of Miller 

Malt Liquor was also begun. 

Miller also launched several 

innovative packages in 1972. The 

Miller High Life 7 oz. bottle in the 

8-bottle "ponypack'" was introduced'' 

with great success in the East and' 

then expanded with similar success to 

most U.S . markets. Miller Plasti- 

Shield quarts, bottles with insulating 

plastic sheaths, have also been 

introduced in five test markets. 

Another important development 

during 1972 was the passage of a law 

by Oregon which-by means of a 

lOwer deposit-encourages the use of 

returnable bottles interchangeable 

among brewers . Since October 1, 

Miller High Life has been packaged 

for distribution in OregQn in stubby 

brown bottles, instead of the clear 

bottles . Consumer acceptance has 

been positive. 

The substantial malt beverage 

marketin the United States, estimated 

at $11 .2 billion in 1972, remains 

attractive in terms of its potential for 

growth . We are confident that Miller's 

new management will acquite a 

larger, more profitable share in the 

years to come . 


Miller Brewing Company 

Operating Revenues ■ 

Share of Total Industry 

Over the last 10 years Mdler's Operaung 

Revenues havetncreased'7.7 ;6 per yea 

. Mitfci s share of reosopounded annuallY total 

beer rndusuy sada in 1972was 4 .17.. 

Domestic Beer Industry Unit Sales 

NationaltyDistribuled Premium Beer (esL) ■ 

Regwnal'and Non Premium Beer (ps .) ■ 

w.-ae-«. 

SO 

12 

1 

63~ 64 e5 66 67 68 fiB~ 70 71~. 72 

Since 1963, total Ibeeniodustry unit sales have 

grown 3 .8% a yearon a compounded average 

annuai tiasis. In contrast, the premium 

segment has grown 9,87e per year in thi speriod 

.

1) Test lapplication of electrostatic coabn g 

powder at Armstrong Products, in Wgrsa+r . 

Indiana. 

2) Milpriott's Education Divfdion produe a 

'4ans.Vision overlays-as showm here-that 

are used in textbooks and industrial manuals . 

3) Press rolls of Milprint packaging materrak 

medby national cuatomers: 

4) Kentucky Governor Wendall H : Ford (L), 

with Nicolet Paper presidennRobert G. E«erp 

announcing plinned constructton of new pape r 

coating materiaisoperation in Ni¢holasvillt. 


.~ . 

~'~ .. ._ q=, 

I) Quality control check at Milprint's 

Milwaukee plant. 

2) Night view of one of Milprint's six 

packaging facilities 

. 3) Checking the print job on Kellogs s Peps 

INekzges. 

4) Specialty paper used for food packagin 

., in 

gio production,at Nicolet Paper Co 

De Pere, Wisconsiat. 

5) Fmployteconcentration on one of Philip 

Morris Industrial 's produ --- "--- 

(000 omutted) 1972 1911 197 0 

Operating 

Revenues $113,136 f93 .513 f17,87 5 

Operatin g 

Income 7,735 . 6 .13.5 6,06 9 

Philip Morris Industrial exceeded 

$100 million in operating revenues 

for the firsttime in 1972 by recording 

an 18% inerease over 1971 . 

Operating income was up 26% . 

There are several reasons for this 

favorable performance . The 

improvement in the U .S. economy 

was one important factor ; also the 

company's increased emphasis on 

strategic marketing of sophisticated 

high margin products was successful . 

Milprint Inc. increased revenues . Its 

operating income, however„was 

down slightlyftom 1971 due to the 

cost of enlhrging its marketing 

organiiation and strengthening its 

markenpromotions . Initiated in 1971 . 

the new marketing programs should 

have a positive etiect on earnings in 

1973 ; The company entered 1973 

with a substantial backlog of orders .

: , . 

Milprint produces flexible packaging 

materialsvsed primarily for snack 

foods, candy, coffee, processed meat 

and dry processed foods. Its growing 

reputation as a leader in its field was 

enhanced last year when Milprint 

won nine of twenty-four awards 

presented to ten packaging-converter 

companies by the National Flexiblt 

Packaging Association . It also 

received a:fiisrplace award from the 

World'Packaging Organization in 

Tokyo . Among Milprint's newest 

award.winningdevelopments are 

flexible pouches for antifreeze and 

motor oil . In addition, Milprint is 

now supplying a micro-thin, 

laminated material to Polaroid 

Corporation for use in the filtn for 

the new SX-70 Land camera . 

In May, Milprint established another 

manufacturing facility in Fremont, 

Ohio, to make thermoformed 

containers for packaged lUneheon 

meats . Milprint's Koch Label 

Division was merged!into its Midwest 

Packaging Division in an effortto 

broaden Koch's markets beyond the 

seasonal beer label business . Sales 

and earnings of, Milprint's 

Educational Division were virtually 

unchanged . 

Nicolet Paper Co ., which produces 

glassine andprinting and specialty 

papers,recordeditsfiighestsalesin 

history while increasing its earnings. 

In October, Nicolet announced iFwill 

build a $5 million manufacturing 

facility in Nicholasville, Kentucky, as 

headquarters of its Special Products 

Division. Created in 1971 to coat 

paper and plastic materials for food 

packages, the division will begin 

coating operations in the new plant i n 

late 1973 . 

Nicolet's Plainwell Paper Co., Inc., 

produced satisfactory sales and 

earnings increases in 1972. The 

growing demand for its technical and 

printing papers required the start-up 


of its third paper-makine machine 

with a capacity of 10,00U tons a year . 

This Annual Report is printed on 

Plainwell paper . 

Polymer Industries, Inc., also 

attained new highs in sales and 

earnings . The textile industry, 

Polymer's principal marketfor its 

coatings, expanded with the 

development of woven textured 

polyester fabrics . Polymer also 

maintained its leadership position in 

specialty coatings for household 

fabrics. 

Polymer's major new product 

introduced in 1972was Mira-Glos 

RT„a high-gloss paper coating for 

the printing indUstry which "cures" 

or dries at room temperature. Similar 

competitive coatings require high 

temperatures for curing . Nfira-Glos 

was introduced into Europe by the 

Polymer Industries Europe S.A . 

marketing organization . 

Polymer's further penetration into 

Europe will''be aided by the 

acquisition last November of 1Vikolin 

Werk, Willi E . Kohimeyer G :m .b .H . 

of Bremen, Germany ;an established 

specialtyehemical manufacturer 

serving the European Common 

Market ! 

Armstrong Products Co., acquired 

in 1971~ increased its sales and 

profits in 1972 with its liquid epoxy 

adhesives, electrostatic coating 

powders and powder application 

systems, three growing lines. 

Armstrong expandedits research and 

development laboratories, whic h 

are essential to the continuing 

development of new specialty 

chemicals, and strenethened its 

marketing organization in 

anticipation ofincreased demand for 

its products . 

Philip \torris Industrial 

Operating Revenues 

63 6463 66 67 . 66. 69 0 71 7 2 

Philip \iorris IndlastnarrOperaunj Revenues 

have mcrrasedat an arerageannual 

eompoundednteof3 .9 :e sutce 1963:

1) The "Tour de Mission Viejo" drew 

ehampimn bicycle racers from Mexico, as well 

as the L.S. The race attracted thousands o 

f viewers and exceptional Icoverage throughou t 

California. 

2) Action on the gridiron at Mission Viejo 

school. 

3)OnesecGon of the Mission Viejo 

community, as seen from theair. 

4) The commwnity has hosted some of the 

aation's top pro golten at its Club House and 

ehampionshipgolf coune. 


1) Table tennis u a populir sport at the 

Recreation Centers. 

2)Ynung artists at work . 

3)The basketball courts arealways in play . 

Mission Viejo Company 

(000 omitted 1 1972 1971 1970 . 

Operating 

ttevenues $60.924 $37,812 $26.834 

Operating 

Income 5,714 2,256 682 

InSeptember~ Philip Morris 

Incorporated completed the 

acqpisition oU 100r/o of Mission 

Viejo Company, a new community, 

land detvelopment and home-building 

corporation headquartered in 

Southern California :Philjp Morris 

had assumed operating control in 

1970 after negotiating an option to 

acquire the company. 

Recording its best year in 1972, 

Mission Viejo received sales 

agreements for 1,920'homes: It sold 

1,596 homes in the Mission Viejo 

planned community in Orange 

County, Cali(ornia ; 178 homes in a 

development in Tempe, Arizona, 

a suburb of Phoenix, and 146 homes 

in Mission Viejo, Colorado„a 

suburban community of Denver, 

which opened in September .

By December, the population of 

Mission Viejo's communities at all 

three locations reached almost 

24,000 . Approximately 8,000 acres 

of our 11,000-acre California 

community remain to be developed . 

The Mission Viejo plbnned 

community in Colorado encompasses 

640 acres and eventually wil l 

include 3,000 homes and townhouses . 

in addition to recreational centers 

and commercial land sites . 

In the Arizona project, called "The 

Lakes ." Mission Viejo is building 

homes in conjunction with a 

community developer. Four 

neichborhoods with a population o f 

1,000 are now open, and constructio n 

on a fifth will be¢in this year . 

Mission Viejo's financial services 

division became a comprehensive 

operation in 1972 . It now includes 

MVC Financial!Corporation, 

Mission Viejo Insurance Agency, 

Mission Viejo Realty, and Mission 

Viejo Escrow Corporation,This new 

division now enables homeowners to 

obtain mortgages at favorable rates, 

insure their property, and resell 

their homes. 

Mission Viejo builds homes of 

several price ranges in its 

communities . As a result, almost half 

of the Mission Viejo homeowners 

who sell their homes do not leave the 


This is partly the result of the 

environmental amenities which are 

an inteeral and visiblt asset of eac h 

of Mission's carefully pl5nned 

communities . For example, since 

1965 at Mission Viejo, California, 

95,000 trees and shrubs have been 

planted at a cost of $4 .2 millionmany 

more trees and shrubs, 

incidentally, than were removed in 

the process of home construction . 

Landis devoted to golf courses, large 

parks and green belts, andextensive, 

fully-equipped recreation centers . 

As one of the nation's most advanced 

and progressive new community 

corporations, we expeetMission 

V iejo to continue to outpace the 

housing market as it has in the past . 

Mission Viejo has consistently 

observed conservative accounting 

practices . Sales revenues are not 

recorded until the transactionhas 

closedland payment in full has been 

received . Essentially all of .ktission 

Viejo'srevenues are from the sale of 

houses and Ihnd! Mission Viejo's 

operating results for the fourth 

quarter have been included'in the 

consolidhted financial statements of 

Philip Morris Incorporated'starting 

with the fourth quarter of 1972 :

1) Joseph ECuWman 3rd . 2) George 

Weissman . 3) Hugh Cullinan. 

4) Margaret B. Young.S) dtiahard W 

. 6) James E. West. 

.Dammann 


Directors and' Officer s 

Directors 

James C. Bowling 

Vice President 

Alfred Brittain II I 

President, Bankers?rust Company 

Andrew C. Britto n 


George V. Comfort 

George Com/ort & Sons 

Company, Inc. 

John E .Cookman 

Senior Vice President 

Dr. J . A. Cordido-Freyte s 

President, C. A . Tabacalera Nacional 

Hugh Cullman 

Executive Vice President 

Joseph F. Cullman 3rd 

Chairman of the Board 

Richard W. Dammann 

Dammann & Hetning, 

Attorneys-at-Law 

Clifford!H . Goldsmith 


Chandler H': Kibbee' 

John T. Landry'' 


Edward'Lasker 

Counsel , 

McKenna, Fitting & Finch, 

Attornevs-0t-Law 

T.11Fewman Lawler 

Lawler, Sterling & Kent, 

Aitorneys :at-Law 

H! Robert Marschal k 

President, Richardson-Merrelllnc : 

Ross R . tifillhise r 

Executive Vice President 

John A . Murphy 


George 1Veissman 

President 

James E . West 

Chairman o/the Board, 


J. Harvie Wilkinson, Jr. 

Consultant, United Virginia 

Bankshares 

Margaret B . Young 

Chairman, Whitney M. Young,lr. 

Memorial Foundation 

Wir trt H . Hatcher 

Director Emeritus 

Ray Jones 

Director Emeritus 

Arthur Snapper 

Member, Advisory Board 

*Retided Senior Vice President 

# Newly elected diireoaonand officer s 

Officers 

Joseph F. Cullman 3rd 

Chairman o/the Board and 

Chief Executive Officer 

George Weissma n 

President and Cltiet Operating 

Office r 

Ross R . Millhise r 

Executive Vice President and 

President, Philip Morris U.S .A . 

Hugh Cullma n 

Executive Vice President and 

President . Philip Morris 

lnternationa l 

John E . Cookman 

Senior Vice President and 

Chie/, Fin ancial Officer 

Thomas F. Ahrensfeld 

Vice President and General Counsel 

James C. Bowlin g 

Vice President ; Assistant to the 

Chairman ojdie Board and 

Director, Corporate A&irs 

Andrew C . Britto n 

Vice President and'Senior Vice 

President-Operations, Philip Morris 

U.S .A . 

Clifford H .Goltlsmit h 

Vice President and EsecutiveVice 

President, Philip Morris U .S .A . 

S . Lyle Graha m 

Vice President-Personnel 

John T. Landry 

Vice President and Group Vice 

Ptesidenr-Directorof Marketing, 

Philip Morris U .S .A . 

Jetson E. Lincol n 

Vice President-Planning 

George W. Macon, Jr . 

Vice President and Vice President- 

Leaf, Philip Morris U .S .A . 

Hamish Maxwell 

Vice Presidenr and Regional Vice 

President Asia/Paci(tc, Philip Morris 

Jnternational 


Vice President and President. C{rieJ 

Executive Officer, Miller Brewing 

Compan y 

PhilipJ . Reilly 

Vice President and President, 


Benjarnirt A . Soyars' e 

Vice President and Vice President- 

Manufacturing, Philip Morris U.S.A .

1Fred~M . Stefa n 

Vice President and President, 

Philip Morris Industrial 

Ronald A . Thomson 

Vice President and RegionalVice 

President-Euro pe/Middle East J 

A f rica . Philip Morris /nternationa!' 

Dr . Helmut R . R . Wakeham 

Vice Presidentand Vice Presidenf- 

R& D, Philip hforris U .S .A . 

Eu2ene J . T. Flanaean 

Associate General Counsel, 

Secretar y 

C . Gilbert Collin¢wood 

Treasurer 

Walter F. Sperber 

Controller 

Stephen F. W Ball i 

Assistant TreasurerandAssistunt 

Secretarv 

Buford A. T) ncs 

Assistant Trea.surer 

James G . Gilleran 

Assistant Controller 

Robert N . Souther 

Assistmu Controller 

Robert A. White 

Assistant Controller - 

Mary E . Russell 

Assistant Secretary 

Executive Committee 

J. F Cullman 3rd, Chairman 

A.Brittain II I 

G . V. Comfort 

J. E . Cookman 

H. Cullman 

T. N. Lawler 

R . R . Millhiser 

G. Weissma n 

J. H. Wilkinson, Jr . 

C. H . Kibbee - Ex Officio 

Finance Committee 

J . E . Cookman, Chairman 

A. BrittainIll 

H. Cullman 

C. H. Kibbee 

E . Laske r 

R. R. Millhiser 

0 . Weissman 

J. H . Wilkinson, Jr . 

Audit Committee 

J . H . Wilkinson, Jr., Chairman 

A. Brittain II I 

R. W. Dammann 

E. Lasker 

it R.Iwiarschalk 


1) Ross R . hfillhi3er andJamesC: Bowling. 

2) John A . Murphy . 3) John E. Cookman . 

4)Andre. C . Brntton . SlEdward Lasker. 

6) Alfred Briotain ]1[ . 7) ~T. Newman Lawler. 

-1 k N ~~T , W 

1)ChandlerH .Kbhee.2)Dr .J.A 

.ryrea . 3)fohn T. Landry . CordidoFn and 

CBRord H . Gmtdsmi.th. 4) J. Huvis Nwtkinrm 

3) George V.tomfort.6) H . Rober 

. 

tMancha6k

Hu=h Culiman 

Ross R. Millftiser 


Philip Morris U.S.A . 

100 Park Avenu 

e New York, New York 1001 7 

Ross R. MRBtiser; President 

Ctifford H . Goldsmith, 

Executive Vice Presiden 

. Brinon,, 

t Andrew C 

Senior Vice PresideM-0peratfons 

John T. Laadry, 

Group Vice President-Director o(Marketing 

George W.Macon, Jr,, Vice Presidene-Leaj 

Dr : Helmut R. R. Wakeham 

. Vice Prerident-Research and'Developmen 

. Soyars , 

t Benjamin A 

Vice President-Manu jacnrrirta 

Max L. Berkowitz, Vice Pre.rident- 

A .tsixtant Direetoro)'Marketing 

Russell N. Freund, Vice President-Personnel 

Edward M . Schaafi Jr :, , 

Vice Presidenr-Produtcrro 

. Pollack , 

n Shepard P 

Vice President-Finance and Pl6naing 

Charles H. Wilson, 

Vice Preeident-General Products Division 

Rich'ardD. Robertson , 

Vice President-Ecolog 

;x I! Kay„Jt, Conerolln 

y All 

Philip Morris International 

100 Park Avenue 

New York, New York 10017 

Hugh Cullman, President 

Regional VicePresidenu : 

CharlesLombard; Canada 

Hamish Maxwell, Asia/Pacifi 

. Salquero, Latin America/(beria 

c Carlos E 

Ronald H. Thomson, 

Europe/Middle £art/Alric 

. Turner, Vice PresideneSales 

a James E 

William J. O'Cunnor, 

Vice President,& Chir/Adminiitrative Ofjecer 

Albert E . Bellat, Vice President 

Aleardo G . Buzzi. Vice Presiden t 

Fred C . Moessinger, Vice Presidenr,Personnel ' 

R. W.Murray, VicePresidera-P'inanc e 

Miller Brewing Company 

4000 West State Street 

Millraukee, Wisconsin 53201 

John A . Murphy, 

President, Chief ExeeutiveO(fice e 

William K . Howetl, Eucwrve Vice President 

Lauren S. Williams, VicePresideneSales 

Clifford R. Wilmot. 

Vice Prestdent-BlandManagemen t 

Thomas B. Shropshire , 

Vice Prendtnt-Market Planning 

Charles H . Day , 

Vice Premdem ; Dileotoro/Operattanr 

RoberrH. Lindstrom, Vice Prestdent-Finance 

ClementG. \leyn , 

Vice Prendlneitfaster Brewer 

Warren H . Dunn. Grnsocl Counsel . Secretary 

Phil A. Gsauj AasutantSecretasy 

Stanley C. Zapek, Controtler

Philip Morris Industrial 

4200 North Holton Street 

MBwaukee, Wisconsin 5321 

. Stefan, Presiden 2 Fred M 

. Witt. 

t Arthur P 

Vice President-Finance 6Planning 

JamesB . Kurtzweil, PresidennAlilprint Inc . 

Robert G . Etter, President-Nicolet PapenCo . 

Paud H . Groth, VicePresident 

&General ,%fanager-Nicolet Paper Co . 

Richard'L' ., Radt, ExenuiveVicr President d 

General Afanager.Plainwell Paper Co ., Inc. 

Richardson Thurston , 

Preslde'na-Polrnrerlndtistries; Inc. 

Leonard L . AdleqEzecuuve VicePreiident- 

PolYmtr lnddstnn, Inc. 

Edmund,P Whitby, 

PreridennArmstrong Products Co .. Inc. 


26137 La PazRaad ! 

Mission Yieju; California 9267 

. West, Chairman of the 5 James E Board 

Philip J . Reilly; President 

Anthony R. Moiso. Secretary 

James G . Toepfer, 

Senior Vice President. Operations 

Roger F CCark, 

Vice Precident, Financial Seuvices Di+iston 

James G . Gilleran„Vice President . 

Adminiitrarrve Se-eesDiviiton 

Geurt Henri LodWer„Vice President . 

Environmental ~Systernr Divisio 

. Rodman, Controller n Robert M 

William K. Smith, Assistant Secretary 



Philip J . Reilly

S Yeara 1972 1967 

Compounded Average 

Annual Growth 

Rate 

: Operatin g 

Revenues 52,131,224 $904,841 18 .746 

Pre-Tax 

Income 229,634 81,317 23 .19 

s 

6 Earning 

pershare 

Primary 4.67 1.9718 :9% . 

Fully 

Dt7uted 4.37 1 .94 17 .6 % 

10 Years 1972196 

2Compounded Average 

Annual Growt h 

Rate 

Operaling 

Revenues S2,131y24 $550,624 14 .5 % 

Pre-Tax 

Income 229,634 47,464 1115. 

Earnings 

per Share 

Primary 4.67 0.98 16 .9% 

Full y 

DilJtted 4.37 0.9816 :1°0 

15 Years 

Operating 

Revenues 

fre-Tax 

Income 

Earnings 

per 3hare 

Primary 

Fully 

Diluted 

1972 1957 

Compounded Average 

Annual Growth 

Rate 

$2,131,734 $439,920 : 11 .11. 

229,634 35,740 132 % 

4.67 0,76 12.996 

437, 0.76 12:4 % 

The year 1972 was one of significant 

achievement for Philip Morris 

Incorporated in terms of unit sales , 

revenues, profits and continue d 

strengthening of its financial position . 

The above table highlights the recor d 

of our growth during the last 5-, 10- , 

and 15-year periods . This 

performance establishes Phili p 

Morris as one of the leading growth 

companies in U.S. industry . 

The improving trend lnpre-tax profi t 

margin which commenced in 1965 

continued during 1972, as may be 

noted in Chart 1 . This improvement 


was particularly gratifying in view 

of the increased cost of tobacco leaf . 

labor, and other raw materials, and 

the absence of any opportunity to 

increase prices due to government 

controls . This improvement was 

primarily the result of the significantly 

greater unit volume and a n 

effective cost control program 

throughout the company . 

Record levels of capital expenditures 

were recordedduring 1972 in 

the amount of S 120 million, 

However, our expanding funds from 

operations provided the majority- 

97 percentin 1972-of our capital 

expenditure requirements, as 

illustrated in Chart 2 and further 

amplified in the Financial Statements . 

We anticipate thatthis high leveliof, 

capital spending will continue for at 

least the next five years and that 

during that time these requirements 

will be exceeded by internally 

generated funds from operations. 

For the fifth consecutive year, the 

company increased the dividend on 

its common stock . As a result of the 

Phase Ii restrictions, this increase 

was limited to 4% for1972 : As 

illustrated in Chart3 ; our dividend 

payoutcontinues to be conservative 

and we believe represents sound 

financial policy in view of the high 

level of capital expenditures 

anticipated for the nextseveral years. 

This conservative dividendpoliey, 

plus conversion ofdebentures, has 

resulted in a rather rapid expansion 

of stockholders' equity (Chart 7)j 

Nonetheless, our pre-tax return on 

stockholders' equity continues to 

exceed'30%, which is well ahead of 

the return on equity of the 30 Dow 

Iones industrial companies (Chart 4)j 

The reeentaapid growth in our pe r 

share earnings extended into 1972. 

CharrS illustrates thisgtowth an d 

compares Philip Morris performance 

with that ofrthe 425 stocks used i n 

the Standard and Poor's industria l 

average . 

Our overall financial condition 

strengthened further in 1972 with a 

substantial increase in workin g 

capital as well as stockholders' equity 

(Chart7) . Long term debt increased 

from the prior year primarily as a 

result of converting $150 million of 

our short'term borrowingS to long 

term, However, the ratio of long term 

debt to equity (Chart 6) has been 

reduced from a peak in 1969 and is 

presently, in our opinion, at a 

conservative leveli There are no 

significant near term maturities of 

funded debt, and with our strong 

financial condition we anticipate no 

need for any domestic long term debt 

or equity financing. 

The continuation of the government's 

balance of payments program 

requires us to raise certain funds 

overseas . During the year, Philip 

Morris sold $31 million of 15-year 

Deutsche Mark debentures . We 

would expect that other offshore 

term financing will'be required from 

time to time for as long as the balance 

of payments program remains in 

effect . 

Following the Smithsonian Accord 

iaDecember, 1971, there were no 

major currency realignments that 

affected earnings in a material 

manner . The net result of such 

realignments that did occur in 1972 

was reflected by an increase in the 

reserve applicable to international 

operations of$3 :8 million. 

During the year, the company was 

advised by the New York Stock 

Exchange that as a result of changes 

in its listing requirements our 

3 .90% Series Preferred was to be 

delisted. This would have resulted in 

further reducing its already limited 

marketability, Consequently, in 

December, 1972, the company 

offered to purchase all shares of the 

3490% Series Preferred for $70 per 

share and simultaneously offered to 

purchase all shares of the 4% Series 

Preferred at $75 per share . Upon the 

expiration of the offer, January 12, 

1973 ; 141,565 shares representing 

80.5% of the combined'outstandin g 

shares had been purchased and wil l 

be canceled . Subsequent to the offer, 

the 4% Series was also delisted . 

4 1 

..it'.'

Operating Revenues ■ 

Pre-Tax Margins (',70 ) - 

Chart I 

2000 

1600 

1600 100 

1200 

1000 

65 c6 68 69 70 

Pre-Tax Return on Sto¢kholders' Equity 

Philip Morris ■ 

Dow Jones 30 Industriak - 

Chart 4 

56596061 6263 64 65 66 67 6969 701172 

Stockholders"Equity ■ 

Working Capital - 

Chart 7 

1411i11N GIOOIIaco 

565960 6162'67'64 6566676669707172 


Funds from Operations 

(after Di'vidends) ■ 

Consolidated Capital Expenditures- 

Chart 2 

A6aan ol Odian 

170 

Primary Earnings Per Share 

(195S-100 ) 

Philiv \lorris7 

Sland4rd & Poor'i4?5- 

Chan S 

5859'60616263 646566'61666970 :7172 . 

Primary Earnings per Share ■ 

Dividends Declared per Share - 

Chart 3 

56 59 606162 63 64 65 66676669107172 

Long-Term Debt to Equity 

Senior Lon~p TermDebt 0 

Subordlnated Lons-Ti:rm Debt 

Chart 6 

Sa 59 69 61 62 63 64 65 666766 69 7071 72

- V~ 

Consolidated Balance Sheets 

llt0ln Moeri. tncwvo.amd,nd con .ouaaoedsuE.+diain 

Dtennbn31,1972 and 197 1 

Assets: 

1972 1971 

Cash and cash equivalents _ . . . .. . . . . .. ._ . . . . . .. . . . . .. . ._ . . . . . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . ... $ 54,471,000 $ 48,343 ;000 

Receivables . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . . . .. . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. 128;935,0W 102,448,000 

Inventories : 

Leaf tobacco . . . . .. . . .. .. . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . .. .. . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. .. . . . .. . . . .. . . . .. . . . . .. 591,894,000 497,954 ;000 

Other raw materials . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . . .. . . . .. . . . . .. 51,997,000 42,348,000 

Work in process and finished goods . . . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . .. . . . . .. 130,827,000, 129,942,000 

Housing programs under construction . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . .. 26 .427,000 1 

801,145,000' 670;244 ;000 

Prepaid expenses . . . .. . . . . .. . . . . . .. . . . .. . . . . . . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . .. 5,157,000 5,418 .000 

Total current assets . . . .. . . . . . . . .. . . . . .. . . . . . .. . . .. .. . . . .. .. . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . .. 989,708,000' 826,453 ;000 

Investments in and advances to unconsolidated subsidiaries and affiliates : 

Domestic .. . . . . .. . . . .. . . . . .. . . . .. .. . . .. . . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . . _ . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . 

Foreign . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. .. . . .. . . . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . .. . . . . . .. 

Land and offtract improvements . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. 25,999,000 

20,086 .000 

92,431,000 80 .369 .000 

92,431,000 100,455,000 , 

Property, plant and eqRipment, ateost : 

Land and land improvements . .. . . . . . .. . . . . .. . . . .. .. . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . .. . . . . . .. . . . . .. 18,796;000 14 ;362,000 

Buildings and'building equipment . .. . . . .. . . . . . .. . . . . .. . . . . .. . . .. .. . . . .. . . . .. . . . . . . .. . . . . .. . . .. . . . . .. . . . . . .. 129,171,000 108,945,000 

Machinery and equipment . .. . . . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . .. . . . . . .. 313,63900 265,638,000 

Construction in progress . . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . .. . . . . .. . . . . . .. 109,542,000 58,130.000 

571,148(000 447,075,000 

Less, Accumulated depreciation . . . . .. . . . . . .. . . . .. . . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. 197,776,000 173,005,000 

373,372;000 274,070,00 0 

Other assets . . .. . . . . .. . . ... . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . .. . . . . . .. . . . . . .. . . . . .. . . . ... . . .. 17,696,000 22,127,000 

Brands, trademarks, patents and goodwill . .. . . . . .. . . .. .. . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . .. 202,288,000 168,930,000 

$eenotes to fnenciil statements. 


$1;701,494,000 $1,392,035,000

Liabilities: 

Notes payable . . .. . . . . .. . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . .. .. . . . . . . . . .. . . . . . .. . . . . .. . . .. . . . . . . . . . . .. . . . .. . . . . . . .. . . .. . . . .. .. $ 197;900,000 $ 201,400,000 

Current portion oflong-term debt . . .. . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . .. . . . . . .. . .. 3,300,000 100,000 

Accounts payable and accrued liabilities . . . . .. . . . ... . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . . . . . . . . .. . . . . .. . . .. ... 212,489,000 166,704,000 

Federal and other income taxes . . . .. . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . . . .. . . . .. . . . .. . .. 42,287,000 32,365,000 

Dividends payable .. . . .. . . . . .. . . . . . . . .. . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . .. .. . . . .. . . . . .. . . . . ... 8,941,000 8,293,000 

Totalicurrent liabiliiies .. . . . .. . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. 464;917,000 408,862,000 

Long-term debrc 

Senior .. . . .. . . . . . . . .. . . . .. . . . .. . . . . .. . . . . . .. . . . . ._ .. . . . . . . .. . . .. . . . .. . . ._ .. . ._ . . . . . .. . . . .. .. . . . .. . . . . .. . . . . . .. . .. ._ .._ 370,154,000 216,433,000 

Subordinated . .. . . .. . . .. .. . . .. . . . . . . .. . _ . . . . . . _ . . . . .. .__ . . . . . . .. . . . . ._ ._ .. . . . . . .. . . . . .. . . .. . . . . . .. 109,652,000 136,003,00 0 

Deferred income taxes . .. . . . .. . . . . . . .. ._ . . . . .. .. . . .. . . . . . . . . . .. . . . .. . . . . .. . . . .. . . _ .._ . . . .. . . . . . _ . . . . .. . . .. . . . . .. 35,674,000 30,658,000 

Reserve applicable to international operations . .. . . .. . . . . . .. . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. 17,963,000 14 ;401,000 

Other liabilities . . . .. . . .. . . .. . . . . ... . . . . . . .. . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. 7,585,000 6,564,000 

Total liabilities .. . . .. . . . . . . ... . . .. .. . . .. . . . . . .. . . . . .. . . . .. . . . _ . . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . .. .. . . .. 1,005 .945 .000 

Stockholders'Equity: 


Cumulative preferred stock, par value $100 penshare . .. . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . . . . .. 24,773,000 25,104,000 

Common stock, par value $1 per share . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . . . . .. . . .. .. . . .. . . . . . .. 27,315,000 26,285,000 

Additionalipaid-in capital . . . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. 179,581,000 150,104,000 

Earnings reinvested in the business . . .. . . . .. . . . . . .. . . . . .. . . .. .. . . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . . . . . . . . .. 473,925,000 384 ;031,000 

705,594,000 585,524,000 

Less, Cost~of treasury stock . . . . ... . . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . ... . . . . . .. . . . .. . . . .. .. . 10,045,000 6,410,000 

695,549,000 579,114,000 

$1,701,494,000 $1,392,035,000

1972 197 1 

Operating revenues . .. . . . . .. . . . . . . . . .. . . .. . . . ._ . . . . . .. . . . . . . .. . . . . . . . . . .. . . .. . . . . . . . .. . . . . . . . . . .. . . . . .. . . .. $2,131,224,000 $1,852,495,000 

Cost of sales : 

Cost of products sold . . . . . .. . . . . .. . . . .. . . . . . .. .. . . . . . .. . . . .. . . . . .. . . . . . .. . . .. .. . . .. 832,890,000 700,021,000 

Federal and foreign excise taxes on products sold . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . .. 722,929,000 642,529,000 

Gross profit .. . . . .. . . . . . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . _ _ . ._ . . . . . .. . . .. . . . .. . . . . . .. . . . . .. . . .. 575,405,000 509,945,00 0 

Marketing, administration and research costs . . . . . .. . . . .. . . . . .. . . . . . .. . . . . . . . . .. . . . . . .. . . .. .. . . .. 299,422,000 278 .736 .000 

275,983;000 231,209,00 0 

Equity in netearnings of unconsolidated subsidiaries and affiliates . .. . . . . .. . . . . . .. . . . . .. . . .. 11,478;000 9,928,000 

Operating income ofioperating companies . .. . . . . .. . . . .. . . . .. . . . . .. .. . . . . . . . . . . . . . .. . . . . .. . . .. 287,461,000 241, 13 7,,00 0 

Corporate expense . . .. . . . . .. . . . . . . : : .. .. . . . . _ . . . . . . .__ . . . . . . . . . .. . . . . . . . . . .. . . . .. . . . . .. ._ . .. . . .. 19,870,000 18,412,000 

Interest expense _ . . . . .. . . ._ . . . .. . . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . . . . . . .. . . . .. . . . . .. . .. 37,870,000 35,472,000 

Otherdeductions (income), net 87,000 (2 ;547,000) . 

Earnings before income taxes . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . .. 229,634.000 184,800.000 

Provision for federal and other, iincome taxes : 

Current . . . . _ . . . .. . . . .. . . _ .. . . . . ._ . . . . . ._ . . . . .. . . . . _ _ . .._ . . . .. . . . . . . .. . . . . . . .. . . .. . . . . .. . . . . . .. . . .. . . . 

Deferred . .. . . . .. _ . ._ . ._ . . .___ . . . . . . .. . . . . . . . . .. . . . .. . . . . .. . . . 

Net earnings . ._ ._. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. _ . . .. . . . . . .. . . . .. . . . . . .. . . .. . . . . . . . . . . .. . . . .. . . . . . .. . . . .. . . . . 

100,278,000 78,743,000 

4,890,000 9,559,00 0 

105,168,000 88,302,000 

$ 124,466,000 $ 101,498.00 0 

Earnings per common share : 

Primary . .. . . . . .. . . . . .. . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . . ..__ .. . . . . .. . . . . . .. . . . .. . . . .. . . . . . . .. . . .. .. . . . .. . . . . .. . . . . .. . . .. $4.67 $4 .02 

Fully diluted . . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . . _ ._ . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . .. $4.37 53 .64 . 

See notes to financial statements. 


C

Consolidated Statements of Stockholders' Equit y 

Philip Momu lo

. ~-. ~ _:~ _ t 

Consollidated~ Statements of Changesin Fiinancial Position 

t'tini0 Mortis loaoryorated and Consctldned SubsiAiarin 

Jorthayems. ended Dcoember 31 . 1972 and 1971 

1972 1971 

Additions to Working Capital: 

Operations: 

Net earnings . _ . . . .. . . . .. . . . .. . . .. . . . .. . . .. . . . . . . . . . .. . . 

S I24,466 ;000 $101,498,000 : 

Add (deduct) items not requiring current use of working capital : 

Depreciation . .. . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . ... 26,576a000 21,500,000 

Amortization . .. . . . . .. . . . .. .. . . . .. . . . .. . . .. . . . . .. 1,563,000 1,421,000 

Deferred income taxes . . . . . .. . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . .. . .. 4,890,000 9,559,000 

Provision for reserve applicable to international operations . . . . . . . . . . .. . . . . .. 1,723,000 

Equity in net earnings of unconsolidated subsidiaries and alfiliates . .. . . . . .. . . . . .. (11,478,000)', (9,928,000 ) 

Dividends received from unconsolidated subsidiaries _ . . . .. . . . . .. . . . . .. .__ . . . . . .. . . . . . .. . . . . -. 4.692,000 2,875,000 

From operations__ .. . . . . .. . . .. . . .. . . . .. .. . . . .. 150,709;000 128,648,000 

Financing' : 

Long-term debt : 

Issued . . . . . .. . . . . .. . . . .. . . . . .. . . .. .. . . . . . .._ . .. . . . __ . . . . . . . . .. .. . . .. . . . . . . .. _ 184,108,000 47,868,000 

Prepaymentsandretirements . . . . .. . . .. (38,892,000) (9,766,000) 

From long-term debt . ._ . . . . .. . . . .. . . . . ._ . .. .. 145,216a000 38,102,000 

Stockholders' equity : 

Shares issued under stock options 4,434,000 3,720,000 

Sharesofpreferredstockpurchasedforueasury .. . . . . . .. . . . ._ . . .. (4,188,000) (2;021,000) 

From equity transactions . . .. . .. 2464000 1,699 .000 

From financing . . . .. . . . . .. . . . .. 145.462,000 39,801,000 

Other : 

Disposal of~property ; plant and equipmeno 

Net unrealized exchange gainsadded to reserv e 

. . . .. . . .. 1,433,000 8,442,000 

applicable to international operations . .. . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . .. 3,755,000 2,928,000 

Additions to working capital . . . . . . .. . . . . .. . . ... .. . . .. . . . .. . . ._ . . . . . . . . . .. . . . .. . . . . _ . . . . . . . .. 301,359;000 179,819,000 

Uses of Working Capital: 

Dividends . . . . .. . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . .. . . . . . . . . . . .. . . . . ._ .. . . . . . . . . . .._ . .. . . . ._ . . . .. . . . . . .. . .. 34,572,000 31,832,000 

Expansion and modernization of'property ; planrand equipment . .. . . . .. . . . . . . . . .. . .. 120,034,000 68,001,000 

Investments in and advances to unconsolidatedsubsidiaries and affiliates . . . . . .. . . . . . .. . .. 5,276,000 4,013,000 

Investments in consolidated subsidiaries, net of working capital acquiredf' : 

Mission Viejo Company . . . . .. . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . .. 22,524,000 

Other subsidiaries . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . .. .. . . .. . .. 6,873,000 2,255,000 

29,397;000 2,255,000 

Other, net . . . . .. . . . . .. . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . .. . . . . .. . . .. .. . . . .. . . . . . . . . . .__ .. . . . . .. . .. 4,880,000 3,809,00 0 

Working capital used _ . .. . . . . .. . . . . .. . . . . .. . . . .. . . . _ .. . . . .. . . . . .. . . . . _ . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . .. 194,159,000 109,910,000 

Inerease in working capital _ . . . . .. . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . .. $107,200,000 $ 69,909,00 0 

Changes in components of working ca pitai': 

Cash and cash equivalents .. . . . .. . . . . .. . . ... . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . .. . . . . .. . . . . . .. . . . 

Receivables . . .. . . . .. . . ... . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . .. . . . . . .. . . . .. . . . .. . . . . . .. . . . . .. . . . 

Inventories . . . . .. . . . .. . . . .. . . . ... . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . .. .. . . .. . . . . . .. . . . 

Notes payable . . . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . . . . . .. . . . .. . . . . .. .. . . .. . . . 

Accounts payable and accrued liabilities . . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . .. .. . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . 

Other; net . .. . . . ... . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . ... . . . .. . . . .. . . . . .. . . . .. . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . 

Other significant financing transactions, not affecting working capital, 

S 6,128,000 ($ 3,699,000) 

26,487,000 929,00 0 

130,901,000 101,816,00 0 

3,500,000 (14,200,000) 

(45,785a000) (19,960,000) 

(14,03 i,000) 5,023,00 0 

$107,200,000 $ 69,909,000 

were conversions of $26,351„000 and $56,066,000'of debentures into common stock in 1972 and 1971, respectively : 

Represented by : 

Net noncurrent assets of companies acquired, prineipally land and offtrac t 

improvements . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . . ... . . : .. . . . ... . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. .. . . .. . . . . .. 

Cost in excess of net assets acquired . . . . .. . . . . .. . . . . .. . . . . .. . . . ... . . . .. . . ... . . . ... . . . . .. . . . . .. . . ... . . . . ... . . . .. 

Less, Amount invested in Mission Viejo Company in~1970 . . . .. . . . . .. . . . . .. . . . .. . . . . .... . . .. 

See notes totinancial sutements . 


$ 21,004,00 0 

28 ;479,00 0 

.49,483,000 

$ 362,000 , 

1,893,000 

2,255 ;000 

20,086,000 

S 29,397,000 $ 2,255,000

I -^, 

~~_-- ~-.,-il 


Notes to Consolidated Financial Statements 

Summary of Accounling Policies: 

The sienificant accounting policies followed by Philip Morris and its subsidiaries are presented below to assist the reader in 

reviewing the consolidated financial statements and other data contained in this report. These policies comply with generally 

accepted accounting principles and have been consistently applied . 

Consolidation : 

The consolidated financial~statements include the accounts of the Company and all wholly owned subsidiaries . Investments 

in andadvances to unconsolidated subsidiaries and affiliates arc stated at cost adjusted for equity in undistributed earnings or 

losses since the dates of acquisition. 

Foreign operations : 

Appropriate amounts provided out of earnings are added to the reserve applicable to international operations for possible 

losses which might arise from diminution invalue of the Company's investments inforeien subsidiaries as the result of events 

such as governmental actions or currency devaluations . The accounts of foreign subsidiaries are translated into U:S: 

dollars at year,end rates or average rates during the year except for noncurrent assctsand liabilities which are translated at 

rates in effect in the years the balances arose . Net unrealized translation gains are added to this reserve and nerunreaiized 

transltition losses would be charged to income should such losses exceed'prevtous unrealized gains and provisions . 

Receivables: 

Current eamines are charged with an allowance for doubtful accounts basedon experience and any unusual circumstances 

which may affect the ability of customers to meet their obligations . Receivables are reportedin the balance sheet net of such 

accumulated allowances. Accounts deemed uncollectibVe are charged againsrahis allowance. 

Inventories: 

Inventories are valued aothe lower of cost ormarket. The cost ofleaf tobacco is determined on an average cost basis an d 

the costofiother inventories is determined generally on a first-in, first-out basis . It is a generally recognized industry practice 

to classify the total amount of leaf tobacco inventory as a current asset although part of such imentory, because of the 

duration of the aging process, ordinarily would notbe utilized within one year . The cost of housing pro¢rams under construction 

represents the cost of land, including offtract improvements, interesnand propcrtytaxes„plus housing construction 

costs on sites currently under developmenu 

Land and o ff tracrimprovements : 

The cost of land, including offtract improvements, interest and property taxes, is reported as a noncurrent asset until a 

designated area is placed into development. Offtract improvements are items such as access roads, utilities,ete ., which are 

essential to the development of a community, but which are not directly attributable to the development of a particular 

tractor area . The cost of these improvements is allocated to the entire acreage available for sale . 

Brands„trademarks, patents and goodwill : 

In conformity with an opinion of the Accounting Principles Board, the cost in excess of net assets of companies acquired'afte r 

November 1, 1970 is being amortized over a period of no more than forty years. Such excess cost in eonnection with 

investments made prior to November 1, 1970 is not being amortized because, in the opinion of management, the relatedi 

investments have notexperienced any diminution in value . Patents and patent rights are being amortized on the 

straight-line methodbased on their respective lives. 

Income taxes: 

The provisions for federal and foreign income taxes are cattulated on reported pre-tax earnings . Certain items of income 

and expense included in the financiallstatements, such as depreciation, are reported in different years in the tax return s 

in accordance with applicable income tax laws. The resulting difference between the financial statement income tax provisio n 

and income taxes currently payable is reported in the financial statements as deferred income taxes . Investment tax credit s 

on assets placedin service during the year are accounted foras a reduction in the provision for income taxes . Provision is als o 

made for federal income taxes on the portion of undistributed earnings of foreign subsidiaries that is expected to be 

remitted to the United States. 

Maintenance, repairs and depreciation : 

Maintenance and repairs are charged to income and expenditures for renewals and improvements are capitalized . Provision 

for depreciation of asseu is recorded by a charge against income at ratesconsidered adequate to amortize the cost of 

such assets over their useful lives using the straight-line method of computation . 

Pension plan.c: 

The Company and certain of its consolidated subsidiaries have pension plans covering substantially allof their employees . O 

Prior service costs, which are being amortized over periods ofiup to thirty years, and accrued pension costs are funded with 

independent trustees . Q 

Research and development: 

Research and development costs are charged against earnings in the year incurred . 

.- ~:,_

;AE 

}r.~ s 

e a ; . 

; 

r:. . 

: t, .. .-p . 


, 

Acquisitions: 

In L970, the Company invested 520,086,000in convertible notes, capital stock and related options of Mission Viejo 

Company, a planned community builder . During 1972 ;the Company converted the notes and invested an additional i 

$13,500,000 to exercise the options . Also in 1972, the Company acquired, under new agreements, all of the remaining 

ownership interest in Mission Viejo for a maximum purchase price of $30,011,000 . Ofthis amount, $21,010,000 i s 

payable over a five-year period and is subject to downward adjustmentif'Mission Viejo's cumulative earnings, as defined, do 

not reach a specified level . The acquisition of Mission Viejo has been accountedfor as a purchase and its accounts have 

been included in the consolidated results since September 30, 1972. The consolidation of Mission Viejo since September 30, 

1972 affected the comparability of'net earnines for the years 1972 and! 1971 only2o a minor extent . Investment cost in 

excess of net assets of btission Viejo is included in brands, trademarks, patents and goodwill Excess cost of $24,309,000 

attributable to the 1970 agreements is not being amortized'because, in the opinion of management„there has been no 

diminution in the value of the related investment . Excess cost attributable to the 1972agreements of $176,000 a t 

December 31,1972 and the excess cost which will arise on payment of the remaining purchase price under such agreements 

will be amortized over a period of forty years . 

A number of other small acquisitions were made during 1972. None of these materially affeetedthe reported operating results . 

Foreign Subsidiaries: 

Principalfinaneialdata of foreign subsidiaries are as follows : 

1972 : 

Consosdaed uneonsoiidwed 

Assets . . . . .. . . . .. . . . .. . . . . . . . . . .. . . . .. . . . . .. . . . . . . . . ._ . .. ._ . .. . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. $391,353,000 $241,151,000 

Liabilities, other than due the Company. . . . . .. . . . . .. ._ .. . . . . . . . . .. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . .. .. . . .. . . 198,572,000 1114,554,000 

Net assets . . . . . .. . . . .. . . . . . . . . .. . . . . .. . . . . . . . . .. . . . . . . .. . . . .. . . . .. . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . .. . . . . . .. . . . . .. 192,781,000 126,597,000 

Company's equity and advances . . . . . . . .. . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . .. . . . . . .. . . . .. . 192,781,000 83,695 :000 

Operating revenues .. . . .. . . . . .. . _ . .. . . . . .. . . .. . . .. . . . .. . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . .. . . . . . .. . . . .. . 521,159 ;000 456,131 .000 

Netearnings . . . .. .. . . . .. . . . . . . . . . . . _ . .. . . . .. . . . .. . . . . .. . . . . .. 25,031,000 19,168,000 

Company's equity . . . . . . . . . . . . . . .. . . .. . . . .. .. . . . . . . . . . . . . . . .. . . . . . .. . . .. 25,03 (,000 11,478,000 

1971 : 

Operating revenues .. . . . . .. . . . .. .. . . . . .-_ . . .. . ._ . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . . . 434,874 ;000 389,739,000 

Net earnings . . . . . .. .. . . .. . . . . .. . . . . .. . . . _ . . . . . .. . . . .. . . . .. . . .. . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . .. 19,39_ ;000 16,279,000 

Company's equity . . . . . . .. . . . . . . ._ . . .. . . . . . .. _ . . . . . .. . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . 19,392 ;000 9 ;928,00 0 

At Decemben 39, 1972, the Company's investments in unconsolidated foreign subsidiaries exceeds its equity in their net assets 

by approximately $8,700,000 . The Company is amortizing $3,000,000 oflthis excess which arose subsequenCt o 

November 1, 1970 j 

Federalincome tax has not been provided on $110,000,000 of undistributed earnings of foreign subsidiaries, accumulatcd 

since inception of the Company's investments in such subsidiaries„which is expected to be permanently invested abroad . 

Expansion of Facililies 

Construction of the new cigarette manufacturing complex in Richmond, Virginia is proceeding on schedule . The construction 

cost, including interest and real estate taxes during the construction period, will total approximately 5100,000 ;000 . 

Installation of the latest machinery and equipment over the next five years will bring the total cost of this complex to over 

$200,000,000: Actual commitments at December 31, 1972 at all locations for plant, equipmentandimachinery approximated 

$125,000,000.

Brands, Trademarks, Patents and Goodwill : 

At December 31, 1972, this account includes $202,200,000 of brands, trademarks and goodwill of which approximately 

$114000,000, applicable to investments subsequent to November 1„1970, is being amortized over periods of up to forty years . 

December 3 1 

Long-Term Debt: 1972 1971 

4 .90% Notes, payable $2,600,000 annually from 1974 to 1988 and $16,000,000 

in 1989 . . . . . . . .. . . . . .. . . . . . . . .. . . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . .. $ 55,000,000 $55,000,000 

63's5'c Sinking Fund Debentures, payable $3,500,000 annually from 1976 to 199 2 

and S 15,500,000 in ~ 1993 . .. _ . .. . . . . .. . . . . . .. . . .. .. . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . .. 75,000,000 75,000,000 

Bank Term Loan Agreemenrmaturing in 1980. Interest is av th % above 

the bank prime rate .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . . .. . . . . .. . . .. .. . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . .. 150,000,000 

6a/o % Loan, 100,000,000 Deutsche mark, payable 10,000,000 Deutsche mark 

annually from 1978'to 1987 . . . .. .. . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . . . .. .. . . .. . . . . . .. . . . . .. . . . . .. . .. 31,226,000 

8&1 °fa Guaranteed (by Philip Morris Incorporated) Sinking Fund Debentures o f 

Philip Morris International CapitallN. V., payable $600,000 annually 1975 

throueh 1979 ; $1,500,000 annually 1980 through 1985 and'$3,000,000 

in 1986 . . . . .. . . . . .. . : . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . .. 15,000,000 15,000,000 

8% Guaranteed (by Philip .'vlorris Ihcorporated) Notes of Philip Morris International 

Capital N . V., payable in 1978 ._ . . . . . . . . .. . . . . . .. . . .. . . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . _ . . .. . . . . .. . .. 15,000,000 15,000,000 

7~fi % Guaranteed (by Philip Morris Incorporated) 60,000,000 Dutch guilder note s 

of Philip Morris International Capital N. V.', payable 15,000,000 Dutch guiltier s 

annually beginning in 1975 . . . .. . . . .. . . . . . . . . .. . . . . . . .. . . ._ . .. . . . . . .. . . . . . . .. 17,868,000 17,868,000 

Secured trust deed notes of Slission Viejo Company . Interest ranges 

from 5 % to 8,8755''a _ . .. - . . .._ . .. . . . . . .. . . . .. 10,943,000 

43/s % Sinking Fund'Debentures . . . ._ . . . . . .. . . . .. . _ . . . . . . . . . . . .. 9,705,000 

Eurodollar revolving credit agreement cancelled December 31, 1972 26,000;000 

Other notes and dcbentures .- . . . .. . . . . . .. . ._ . . . . . . . .. . . . . .. . . . . . . . . . ... 3,417,000 2,960,000 

373,454,000 216,533,000 

Less„Portioneurrentlypayable . .. . . . . .. . . . . . . . . .. . . . .. . ._ . .. . . . . . .. 3,300,000 100,000 

Seniordebt . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . . . .. . . . _ .__ ..__ ., . .. . . . .. $370.154,000 $216,433:000 

10% Subordinated Notes, payable 534600,000 annually from 1974 to 1976 , 

$5 ;760,000 annually from 1977 to 1981 andl532,300,000 in 1982. Callable 

after February 1, 19741at no premium . . .. . . . . . .. . . . . . . . . . . . . . . .. . . .. . . . . . _ . . 

6% Convertible Subordinated Debentures due 1994, convertible at S27 :7 5 

per share .. . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . .. .. . . . . . _ _ . . . . .. . . . .. . . . .. .. . . . . . .. . .. . . . . . .. . . . .. . . . . . . . .. . . . . . .. . . . . . . . . .. . . . 

Othersubordinatedconverrtibledebenture s 

Subordinated debt _ . . .. . . . . . .. . . . . . . . .. . . . .__ . . . . . . . . . . .. . . . . . _ . . . . . 

Generally, the long-term debt is callable, anannuall y decreasing premiums . 

S 72,000,000 $ 72,000,00 0 

28,590,00& 49,778,000 

9,062,000 14,225,000 

$109.652,000 $136,003,000 

Expenses incurred in securing long-term loans are inelUded in other assets and are being amortized on the straight-linemetho d 

over the respective lives of the issues giving rise thereto . 

Aggregate maturities of long-term debt in each of the following years are : 1973, 53,300,000 ; 1974„$7,400,000 ; 

1975;,511,300,000 ; 1976,,521,400,000 ;,1977,,518,000,000 . 

. , ., . 


rown--;r,~:l.t, .

1 ' 

Caoital Shsres _ 


Preferred, 4% Series : 

At December 31, 197 11 . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . . .. 147,873 147;873 ( 30,874) 116,99 9 

. .. .. . . .. . . . . .. . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . . . ( 36,205) (36,205) 

R'etired . . .. . . . .. . . . . .. . . . .. . . . .. . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . . . . (1,999) (1,999) 1,999 

At December 31, 1972 . .. . . . . .. . . . .. . . . . .. . . .. . . . . . .. :: .. 145,874 145,874 ( 65,080) 80,794 

Preferred, 3 :90% Series : , 

At December 31, 1971 . . .. .. . . . . . . . . .. . . .. . . . . .. . . . . . .. 103,163 103,163 ( 40,528) 62,635 

Purchased 

. .. . . ... .. . . .. . . . .. . . . .. . . . . .. . . . . . .. . . . . . . . .. . . . . . .. ( 21,634) (21,634) 

R'etiredl . .. . . . . .. . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . .. . . . .. . . . . . .. (1,307) (1,307) 1,30 7 

AfDecember3l, 1972. . .. . . . .. . . . .. .. . . . .. . . . . .. . . . . .. . 101,856 101,856 ( 60,855) 41,001 

Common, $1 par value : 

At December 31, 1971 .. . . . . .. . . . ... . . . . .. . . .. . . . . . .. . .. 50,000,000 26,284,981 (115,527) 26,169,454 

Issued for : 

Debenture conversions .. . . . . .. . . . .. . . . .. . . . . . .. . .. 886,302 22,416 908,718 

Stock options .. . . . . .. . .. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . .. 143,873 143 .87 3 

At December 31, 1972 .. . . .. .: . . . ... . . . .. . . . .. . . . . . .. . .. 50,000,000 27,315,156 ( 93,111) 27,222,045 

Pursuant to an offer to stockholders to purchase all outstanding preferred shares, the Company had purchased'and included in 

treasury stock at December 31, 1972, 32,535 shares of the 4% Series and 21,634 shares of the 3.90% Series . An additiona158,224 

shares of the 4% Series and 29,172 shares ofthe 3 :90% Series were purchased inlanuary,1973 : 

As of December 31, 1972, 1,291,782sharesof common stock are reserved for conversion of convertible debentures and 

273,592shares are reserved for the exercise of stock options . 

Stock Options : 

Pursuant to stock option plans approved by stockholders, common stock of the Company has been made available for 

option to officers and'other key employees atmarket prices on the dates granted. 

1972 197 1 

Shares under option, beginning of year . . . . . .. . . . .. .. . . . . . . . .. . . . . .. . . . . .. . . .. .. . . . .. . . . .. . . . . . .. . .. . . . . . .. . . . . .. . . 

Options granted . . . .. . . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . . .. . 

Options exercised' . .. . . .. . . . . .. . . .. . . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . .. . . .. .. . . . .. . . . . .. . . . . . .. . . . . . .._ . . .. . 

. 

., 

Optionscanceled' .. . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. .. . . . .. . . . . .. . : : . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . ._ . . . .. . . . .. . . . . .. . . . . .. . . 

363,835 

55,750 

(143,873) 

(2,120) 

442,71 1 

106,350 

(181,44i1 ) 

(3 :785 ) 

Shares under option, end of year .. _ .. . . . .. . . . . . .. . . . . .. . . . . . .. . . . :. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . 273 .5920 363 .835 

Shares available for option, end of year. . . . . .. . . . . .. . . . .. . . . . .: . . . . . .. . . . . . . . . .. . . .. . .. . . .. . . . . .. . . . . .. . . . .. . . . . 

At prices rangin`from $21.56to $104 :06 , 

25,992 79 :62 2 

Dividend Restrictions: 

Certain ofthe agreements covering Jong-term debtandpreferred stock contain restrictions with respect to the paymentof 

dividends (other than stock dividends) on common stock andto the purchase, redemption orretirement of capital shares . At 

Deeember 31, 1972, approximately $326,000,000of consolidatedearnings reinvested in the business was free of such 

restrictions .


Earnings Per Share: 

Primary earnings pericommon share is calculated on the weightedaveraee number of shares of common stock outstanding 

during each year; which was 26,499,669 in 1972 and 25,063,307 in 1971 . 

Fully diluted earnings per common share gives effect to the reduction in earnings pershare which would result from the 

conversion of all outstanding convertible securities and the exercise of stock options . Convenible securities were 

assumed to have been convertedfrom the beginning ofithe period and net earnings were adjustedfor related interest net of tax . 

Funds assumed to have been received from exercise of stock options were assumed to have been used to acquir e 

shares for the treasury arthe higher of the average market price during the periods or the market price atthe close ofthe 

periods . The number ofsharesnf common stock used in this computation was 28,632,716 for 1972 and 28,278,474 for 1971 . 

Incentive Compensation Plan: 

In accordance with the Company's Incentive Compensation Plan, which was approved'by stockholders at the 1967 annual 

meeting, a provision ofi51,933,000 was made aeainst 1972 earnings for awards that wilGbe made to officers and other key 

employees in 1973, A provision of $',1,702 ;000 was made against 1971 earnings . These amounts were less than the 

maximum amounts that could be provided under the plan . 

IncomeTaaes: 1972 197 1 

Provision for federal and other income taxes : 

Federal .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . .. .. . . .. . . . . . .. . . . . .._ .. . .. . . . .. _ . .. . . . .. . . . . . .. . . . . .. 3 75,001.000 $66,207,000 

State and local . .. . . . . .. . . . . .. ._ .. .. . . . .. . . . . . . . . .. . . . . .. . . . . . . .. .. . . ._ ._ .. . . . . . . .. . . . . .. . . . .. 10,100.000 6,980,000 

Foreign .. . . . . .. . . . . . .. . . .. .. . . .. . . . _ . . . . . .. . . . .. . . . . ._ . . .. . . . . . .. . . . . .. _ . .__ . .. . . . . . .. 20 .067.000 15,115,00 0 

$105,168,000 588302 .00 0 

Additional Information : 197= 

Depreciationofplantandequipment__ . . . . .. . . . . .. . . . . .. . . . . ._ . . .. . . ..__ S 26 .576 .000 

Pension plan expense .. . . . .. . . . . . .. . . . .. . . . . .. . . . . . .. . .. . . . .. .. . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . ..__ . .._ . . . . . . . ._ . . 

Investmentitaxcredit . . . .. . . . . . . . .. . . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . ._ . . . .._ . . . .. . . . . .. . . . .. . . .. S 2,70'_' :000 

Report of Independent Certified Public Accountant s 

To the Board of Directors and Stockholders of Philip Morris Incorporated : 

We have examined the consolidated balance sheet of PHILIP MORRIS INCORPORATED and Consolidated Subsidiaries as o f 

December 31, 1972 and the related consolidated statements of earnings, stockholders' equity andchan,es in financial positio n 

for the year then ended. Our examination was made in accordance with generally, accepted auditing standards, an d 

accordingly included such tests of the accounting records and such otherauditing procedures as we considered necessary i n 

the circumstances. We previously examined'and reported upon the consolidated financial statements for the year ended 

December 31,1971 . 

Inour opinion, the financial statements mentioned above present fairly the financial position of Philip Morris Incorporated 

and consolidated subsidiaries atDecember 31, 1972 and 1971 and the results of their operations and the change s 

in financial lposition for the years then ended, in conformity with generally accepted accounting principles applied on a 

consistent basis . 

Lybrand, Ross Bros . & Montgomery 

Nlw York, January 30, J 973 :

t Fifteen Year Financial Revie w 

I Tlniy Mertu tecorporrted ana comeifdmed sueslGfarfe s 


(iw thowunds rxcrpt tosr niwr ilrms) 1972 1971 1970 1969 196 8 

OperatingRevenues . . . _ .. . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . . ... $2,131,224 

Federal Exciae Taxes . .. . . . . .. . . .. .. . . . .. . . . . .. . . . . .. . . . .. .. . . . .. . . . .. . . ... .. . . .. . . . . .. . .. 494,77 8 

Foreign Excise Taxes .. . . . . . .. . . .. . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . .. . .. 228,151 

Operating Income . . .. . . . . .. . . . . . .. . . .. . . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. 287,46 1 

Earnings Before Income Taxes . .. . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . . .. ... 229,634 

Pre-Tax Profit Margins .. . . . . . .. . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. ... 10.8 % 

Net Earnings . .. . . . .. . . . .. . . . .. . . . . . . .. . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . .. . . . . . .. . . . . .. . . . . ... 124,466 

Dividends Declared ; Common . ._ . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . .. . . . . ... 33,882 

Common Dividends Declared As % of NetEarnings . . . . . .. . . . . .. . . . .. .. 27 .2% 

Dividends Deelared! Preferred . . . . . .. . . . .. . . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. 690 

Net Earnings Reinvested . . . . . .. . . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . . . .. .. 89,89 4 

Capital Ezpenditures . .. .. . . . .. . . . . .. . . .. .. . . . .. . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . .. . . . . . .. . .. 120,034 

AnnuallDepreciadon . .. . . . . . .. . . .. . . . . .. . . . . _ . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . .. 26,576 

Property„Plant & Eqpipment(Gross) . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . . .. . .. 571,148 

Property„Plant & Equipment (Net) . . . .. . . . . .. . . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . .. .. 373+372 

Inventories ..__ . .. . . . .. . . . . .. . . . . .. . . . . .. . ._ . . . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . .. .. . . . .. . . . .. 801,145 

Current Assets . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . .. . . . . .. . . . . . . . . . . .. . . . .. . . . .. . . . . .. . . . . . .. . .. 989,708 

WorkingCapital . . .. . . .. . . . . .. . . . . . .. . . .. .. . . .. . . . . . .. . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . ... 524,791 

Total Assets . . . .. . . . . .. . . . .. . . . . . .. . . .. .. . . . .. . . . . .. . . . . .. . . . .. .. . . . .. . . . .. . . . . . .. . . . .. . . . . . .. . . .. 1,701,494 

Short-Term DebV . .. . . .. .. . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. 197,900 

Senior Long-Term Debt . . .. . . . .. . . . .. . . . . .. . . . . . .. . . . .. . . . . . . .. . . .. . . . . .. . . . . .. . . . . . .. . .. 373,400 

Subordinated Long-Term Debt . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . .. .. . . . .. . . . . .. . . . . .. . . .. 109,700 

Total Debt . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . .. . . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . . .. . .. 681,000 

Stockholders' Equity .. . . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . ..'.. . . . .. . . . . . .. . . .. 695,549 

1,852,495 1,509,540 1,142, 373 1,019,846 

441,143 372,092 319 ;086 295,90 3 

201,386 147,1241 54,247 4%84 1 

241,137 203,180 153,237 126,159' 

189,800 150;008 115,613 100,10 7 

10.2% 9.9% 10.1% 9 .8% 

101,498 77,498 58,340 48,866 

31,080 24,452 21,794 18,755 

30.6% 31.6% 37.4% 38 .4 % 

752 870 887 922 

69,666 52,176 35,659 29,18 9 

68,001 39,595 23,636 26,373 

214500 17,658 13,512 12,13 9 

447,075 394,088 236,962 219 ;346 

274,070: 236,697 147,354 1380704 

670,244 568,428 447,319 451,922 

826,453 728;837 574,988 561,685 

417,591 347,682 315,871 312,406 

1,392,035 1,239,424 976,489 786a578 

201,400 187,100 158,100 153,800 

216,500 178,500 168,700 176,000 

136,000 192,100 163,600 : 25,000 

553i900 557,700 490,400 354,800 

579,114 452,849 355,808 314,49 6 

Primary Harnings Per Common Share .. . . . ... . . . . .. . . .. . . . . . .. . . . . .. . . . . . .. . . .. .. $4.67 4.02 3.36 2.58 2.18 

-Fully Diluted Eaming5 Per Common Share . . . .. . . . .. . . . . . .. . . . .. . . . .. .. . . .. . .. 4.37 3.64 2.85 2:40 2.14 

Dividends Declared Per Common Share . . . . .. . . . . .. . . . .. . . . .. . . . .. . . . . . .. . . . . .. 1.262 1.21 1 .05 .98 .85 

Book Value Per Common Share _ . . . . . . .. . . . . .. . . . . . .. . . . . .. . . . .. . . . .. . . . . . .. . . . . .. 25.10 ~ 21 .44 17.87 14.78' 13 .12 

MarketPriceofCommonShareHigh.Low . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . .. 1I81/4-67~/4 71463/4 50t/r-28 363/a-25t/a 34~/4-22 

Closing Price Year End .. . . . .. . . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . . .. . . . ... 118~/4 70~/4 49'/z 35'4 32 

Price/Earnings Ratio . . . . .. . . . .. . . . . .. . . . .'. . . . . .. . . . . .. . . . . .. . . . . . .. . . .. . . . . .. . . . . . .. . . . ... 25 17 14 13 1 4 

No.ofCommonShares-ActualYearEnd . . . . .. . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . .. 27,222,045 26,169 ;454 : 24,158,840 22,565,334 22,200,308 tl 

No. of Common5hares-Weighted' Average .. . . . . .. . . .. . . . . .. . . . . .. . . . . .. . . .. 264499,669 25,063,307 22,806,598 22,269,461 21,928,890 Q r l 

2 :

1968 1967 1966 1965 1964 : 1963 1962 1961 19601 1959 195 8 

1,019,846 

295,903 

41,841 

904,841 

271,073 

39,658 

7714975 

234,975 

30,057 

704,544 

214,128 

27,780 

641,439 

194,312 

22.462 

585,059 

193,768 

8,276 

550,624 

187 ;133 

3 ;78 5 

529,127 

184,146 

509,332 

175,947 

499,598 

168,608 

473,55 2 

163,02 3 

126,159 

100,107 

101,838 

81,317 

81,867 

65,144 

65,128 

52,423 

55,568 

44,466 

56,634 

46,729 

56 ;402 

47;464 

52,701 

45,985 

52.376 

44,578 

49,690 

41,159 

47,426 

39,854 

9 .8% 9 .0F'o 8 .4% 7 .4% 6.9% 8 .0% 8!6no 8.7% 8 .84"a 8.2% 8 :4 % 

48,866 43,601 34,183 26,509 22,614 22,052 21,946 21,511 20,984 19,590 180705 

18,755 15,226 15,101 12,896 12,867 12,855 13,046 13,212 13,085 11,140 10,46 7 

38.4% 34 .9% 44!2%a 48 ;6%a 56.9% 58.3% 59 .4% 61.4% 62.4% 56.9% 56 .0% 

922 922 923 943 953 953 953 970 1,0111, 1,024 1,03 7 

29,189 27,453 18,159 12,670 8,794 8,244 7,947 7,329 6,888 7,426 7,20 1 

26,373 25,688 17 ;089 12,078 19,366 26,243 11,843 8,733 7,300 12,380 8,580 

12,139 10,903 9 ;532 8,857 8,316 6,765 6,293 5,638 5,362 4,932 4,98 1 

219,346 193,656 172,593 159,759 153,224 139,595 110,204 99,066 93,641 90 ;050 80 ;90 6 

138,704 123,555 110,157 104,044 102,417 93,150 68,6641 61,560 59 ;960 59,655 53,444 

451,922 386,576 297,761 2711,823 257,256 235,375 228 ;088 232,541 209,326 210 ;967 219,744 

561,685 485,908 372,895 339,082 318,978 297,295 279,068 277,350 249 ;819 252,239 271,65 8 

312,406 306,172 253,257 213,826 202,810 190,982 179,222 190,859 190,423 187,4041 150 ;10 3 

786,578 

153,800 

176,000 

25,00 0 

648,994 

82,600 

173,800 

512,549 

27,200 

133,800 

466,277 

57,300 

100,800 

443,438 

56,700 

102,300 

412,543 

53,800 

91,400 

365,024 

57,400 

63,400 

351,018 

45,200 

65,400 

321,717 

21,000 

67,400 

321,620 

30,000 

69,100 

333,489 

89,40 0 

30,60 0 

354,800 

314,496 

256,400 

280486 

161,000 

249,821 

158,100 

230,677 

159,000 

217,783 

145,200 

208,711 

120 ;800 

201,720 

110,600 

199,685 

88,400 

195,956 

99 , 100 

1'89,317 

120 , 00 0 

181,352 

2 .18 1 .97 ' 1 .54 1 .19 1 .01 .99 .98 .94 .91 .85 .8 1 

2 .14 1 .94 1 .54 1 .19 1 .01 .99 .98 .94 .91 .85 .8 1 

.85 .70 .70 .60 .60 .60 .60 .60 .60 .52 .50 

13 .12 11 .77' 10.48 9 .63 903 8 .62 8 .25 7 .99 7 .74 7.47 7.1 3 

34~/4-22 283fa-15~/s 17~la-121P 16~/ s- 121/ s 14~/ a- 11~/ + 15 -11 ~ / a 18/-10% ~ ~ 20/a-13 13/a-10 10'/e,9' 10~/a-7S6 

32 ' 22~a 17 14?fs 12%a 12~/e 12~l4 183i'e 133'6 103'd 10~/i 

14 11 11 12 12 12 12 19 14 12 1 2 

22,200,308 21,830,874 21,613,344 21,521,730 21,458,478 21,429,444 21,526,428 21,972,954 22 ;029,792 21,937,686 21,774,654 

21,928,890 , 21,674,884 

00oooooss4 

® ri .~,s,.. 


- - ~: '~; .~ ~ :~ ~ i 


___~ i i i I I

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