NYSA TI Single-Page 1
Report
Abstract
Highlights of the Year ................................................................
Fields
- Named Organization
- Bank of New York (Sells ADRs for BAT)
- Benson and Hedges (Benson & Hedges (elite cigarettes, 1948))
A small, elite cigarette company in NY, NY in 1948.- City Bank
- International Association of Machinists
- Leo Burnett (Advertising/PR)
Defense- National City Corp.
- Philip Morris & Co. Ltd. (Cigarette manufacturer, incorporated in U.S. in 1902)
Philip Morris & Co. Ltd.., was incorporated in New York in April of 1902; half the shares were held by the parent company in London, and the balance by its U.S. distributor and his American associate. Its overall sales in 1903, its first full year of U.S. operation, were a modest seven million cigarettes. Among the brand offered, besides Philip Morris, were Blues, Cambridge, Derby, and a ladies favorite name for the London street where the home companies factory was located - Marlborough.- Philip Morris Australia Limited (a unit of Philip Morris International)
PMI's first major overseas affiliate (1954)- Philip Morris Companies Inc. (Parent company of Philip Morris USA, Kraft, Miller)
America's seventh-largest industrial enterprise in 1993, owns Kraft, Miller Brewing, General Foods, and more.- Tobacco Workers International Union
- Benson and Hedges (Benson & Hedges (elite cigarettes, 1948))
- Named Person
- Alexander, Dean
- Ames, Clark T., Jr. (PM VP (1953-56), Board of Directors (1976-85))
Defense- Brand, Philip Morris
- *Britton, A.C. (use Britton, Andrew C.)
Defense- Britton, Andrew C (PM Manufacturing VP 1957-64, Board of Directors 1970-74)
A.C. Britton was the Vice President of Manufacturing for Philip Morris, Inc. from 1957 to 1964. He was Vice President of Corporate Tobacco Manufacturing from 1965 to 1974 and on the Board of Directors from 1970 to 1974. (Source: Philip Morris Summary - PMI Liability Notebook) Britton was also PMI Vice President of Tobacco & Gum and a PMI Vice President from 1970 to 1973. (N.M. Tobacco Companies Personnel List)- Cleve, Walter Van
- *Conboy, Hewitt, O'Brien & Boardman (use Named Org. Conboy, Hewitt O'Brien and B
Defense- Cookman, John E.
- Craig, Cornelia
- Cull, Howard S.
- Cullman, Howard S. "Hugh" (PM Inc., President 1957-67, CEO '67-78)
Howard "Hugh" Cullman was the brother of Joseph Cullman Jr. He was president of Philip Morris, Inc. from 1957-67, Chairman of Board and CEO of PM 1967-78, Chairman of Executive Committee of the Board 1978.- DuPuis, Dr. Robert N. (VP Research, PM)
Vice President of Research for Philip Morris, Inc. from 1955 to 1956. He was Vice President of Research and Development from 1957 to 1959 and on the Board of Directors from 1957 to 1963.- Gager, Forrest L.
- Greene, Roger
- Hanson, Leonard G.
- Hatcher, W.H. (PM Sr. VP 1958-61)
Defense- Houston, Minnie
- Jones, Ray (Vice Pres. of PM, 1953-57, VP Sales '58-64)
Ray Jones was a Vice President for Philip Morris, Inc. from 1953 to 1957 and Vice President of Sales from 1958 to 1964. Then he became Vice President of Corporate Sales Planning in 1965 and was on the Board of Directors from 1965 to 1974. (Source: Philip Morris Summary - PMI Liability Notebook) MR. Jones was a Office Manager for Philip Morris. (PMI's Introduction to Privilege Log and Glossary of Names, Estate of Burl Butler v. PMI, et al, April 19, 1996)- Jones, Spencer T.
- Keith, Michael
- Kibbee, Chandler H. (PM Finance Exec. VP 1960-73)
Defense- Lyon, A.E.
Defense- Lyon, Alfred E.
- McComas, O. Parker (PM CEO)
Defense- Mcfadden, Walter N.
- Millhiser, Ross
- Millhiser, Ross R (TI Executive Committee, PM Pres, 1968)
Ross Millhiser was Vice President of Philip Morris in 1952, VP and Director of Marketing at PM 1961-62, President of PM USA in 1970-72, President of PM Inc. in 1977, Chair of the Tobacco Institute Executive Committee and Vice Chairman of PM Inc. in 1979, Chairman of the Board of PM in 1980. The above information is gleaned from correspondence found within the Philip Morris collection of documents. The assumption is made that Millhiser worked at Philip Morris the entire time between 1952-1994, based on his correspondence during those dates, however nothing has been found in the documents verifying his positions at PM during the gaps in time noted above. President of Philip Morris in 1968 Millheiser was with Philip Morris in 1983 in New York. Knew that profitability of PM derived from addictive nature of nicotine. Why risk multi-billion dollar business for your rats, Victor.- Morris, Johnny Philip
- Nolan, Ray
- Riddell, H.E.
Defense- Rockey, K.H.
Defense- Roper, R. P. (PM Operations Exec VP 1965)
Defense- Roper, Robert P, Jr. (PM Marketing VP 1993)
1993 Held this position from June 7, 1993 to October 31, 1993, when he resigned.- Seligman, Robert B. (PM VP of R&D c. 1976-82)
Vice President of Research and Development at Philip Morris Richmond, VA 1976-1982. Reported to Senior Vice President of Operations. In 1982 transferred to tobacco technology group. Wanted to share ammonia and other tobacco technology with PM International companies.- Shaw, Robert
- Smith, Owen C. (PMII Secretary 1987-96, VP & Deputy Gen. Counsel 94-96)
1996 Secretary from November 20, 1987 tuntil at least June 28, 1996. Associate General Counsel from May 8, 1988 to September 27, 1994. Director from November 5, 1993 until at least June 28, 1996. VP and Deputy General Counsel from September 27, 1994 until at least June 28, 1996.- Wagner, Pauline
- Weissman, George (PM Chairman & CEO '79-84)
Vice President of Philip Morris from 1954 to 1956. Vice President and Assistant to the President in 1957. Vice President of Marketing from 1958-59. Executive Vice President of Marketing in 1960. Exec. VP Overseas in 1961, Exec. VP PM International 1962-66. President from 1967 to 1972. President and Chief Operating Officer in 1973. Vice Chairman from 1974-78. Chair and CEO from '79-84 and on the Board of Directors from 1959-84. "Mastermind" of Philip Morris' direction. - Ames, Clark T., Jr. (PM VP (1953-56), Board of Directors (1976-85))
- Date Loaded
- 16 Mar 2005
- Box
- 5188
Document Images
.4 N N U.4 L
REPORT
Year ended December 3], 1955
TI54232628
---
Directors and Officers ................................................................ 2
Highlights of the Year ................................................................ 4
The President's Report .............................................................. 5-15
Pictorial Feature Section .......................................................... 11-14
Audited Financial Statements .................................................... 16.21
Financial Information .............................................................. 2g
Philip Morris Products .............................................................. 2,4
T154232630
DIRECTORS
C. 1". AMES, JR. Vice Prea~dent in Charge oJ Production
HOWARD S. CUll.MAN Honorary Chairman, Fort oJ New York Authori~H
JOSEPH F. CULLMAN, 3RD Executive Vice President
L G. HAHSOH Senior VieePresident
W. H. HATCHER Vice President in Charge oJ LeaJ
ALFRED E. LYON Chairm,,n oJ the Board oJ Directors
O. PARKER McCOMAS President
H. E. RIDDEU- IVickes, Riddell. Bloomer, ]acob[& McGuire, Attorneys-at-Law
K. H. ROCKEY J~etired
W. B. RYAN. JR. Retired
OFFICERS
O. PARKER Me.COMAS
President
JOSEPH F. CULLMAN, 3RO
Executive Vice President
I.. G. HANSON
Senior Vice President
TRANSFER AGENTS: Guaranty Trust Co. of N. Y., 140 Broadway. New York
REGISTRARS: Th~ Fi~t National City Bank of New York. 55 Wall Street. New York
Banke~ Trust Company, 16 Wall Street. New York
COUNSEL: Conboy. Hewitt. O'Brien & Boardman. 39 Broadway. New York
AUOITORS: Lyb~nd. R~ Br~. & Montgom¢~. 90 Broad S~ree~, New York
T!54232631
C. T. AMES, JR.
Vice President--Production
I E. COOKMAN
• • " Presldem .-Organization
DR. R. N. OuPUIS
Vice President--Research
W, H. HATCHER
Vice President--Lea/
G. J. HENN
Vice President--Distribution
and Cuslomer Service
RAY JONES
; 'ice President-Sales
C, H. KIBBEE
Secretary and Treasurer
R. P. ROPER
Vice President--
Industrial Relutiot~s
GEORGE WEISSMAN
Vice President--
Assistant to the President
H. R. BLUM
Control}er
J. A. HAMPSON
Assistant Treasurer
CORNELIA CRAIG (above)
and PAULINE WAGNER,
AsMstant Secretaries
T154232632
---
TO TH
For the twelve months ended December 31, 1955,
consolidated net sales were $283,218,546 which rep-
resented no substantial change from the $282,774,523
reported for the previous year. Net income of
$11,526,261 equivalent, after allowance for dividends
on the preferred stocks, to $3.63 per share on the
common stock shows a small increase over the 1954
results.*
In addition to the regular dividends on the preferred
stocks, four quarterly dividends of 75¢ per common
share were paid during 1955 which represented the
28th consecutive year in which Philip Morris Inc. has
paid dividends on its common stock. The total of
$3.00 per common share paid during 1955 was the
same as in the previous four years.
The year 1955 witnessed the national introduction
of Marlboro, our Company's entry in the popular
priced filter field. The success of the Marlboro filter
cigarette in the hard flip-top box resulted in an en-
couraging increase in overall sales in the last six
months of the year over the same period of 1954.
Realization of the full sales and profit potential of
OF .PHILI.P MO.I~RI~ INC.
Marlboro was not possible in 1955 due to unavoidabIe
delays in the delivery schedules of imported packaging
machinery. It was not until April that Mariboros were
available in most of the major cities in the United
States. The enthusiastic acceptance of the brand soon
made it necessary to allocate orders. It was November
before we could end allocations and begin to expand
distribution to the remainder of the national market.
Based on the reception of Marlboro to date, we can
state that our thorough market research and our
merchandising methods have guided us successfully
through the difficulties of launching a new brand.
In September, Philip Morris Inc. became the first
major cigarette company to change simultaneously
the design and color of the package on a popular
priced brand. While we were obviously reluctant to
discontinue the traditionally famous Philip Morris
brown package, many months of careful research con-
vinced us that a change was desirable. The reaction
to the new gold, white and red Philip Morris package
has been gratifying, although, of course, it is still too
early to judge the long-term effect on sales.
This change-over, which involved the orderly sale
of the brown packs and the simultaneous distribution
of the new packs at some 1,300,000 retail outlets, was
a major undertaking particularly in view of the fact
that it had never before been attempted. The transition
was successfully accomplished by our Sales Depart-
ment with little, if any, shortages at the retail level and
at an immaterial expense to your Company. We wish
to acknowledge the full cooperation of the wholesale
and retail trade which was so essential to us in this
move.
The aforementioned accomplishments would not
have been possible this past year had not the Produc-
tion Department accomplished the difficult task of
quickly training upwards of 1,000 people in the effi-
cient operation of the intricate Marlboro filter tip mak-
ing and packaging machinery. Until sufficient ma-
chinery was "airlifted" in from England, this force
worked 24 hours per day, seven days a week to meet
the sales demand, giving the equipment the equivalent
of four years normal operation in less than twelve
months, without sacrificing quality. Coordinated plan-
ning of the manufacturing, inventory control, purchas-
ing and traffic operations enabled the Philip Morris
label change-over to proceed with a minimum of dis-
ruption to factory operation and distribution channels.
*These are not wholl.v comparable figures since the 1954 figures ~clude
anlv eleren months el both net sales and earnings el Benson and Hedge~.
Ti54232634
Executive Vice President Joseph F. Culiman, 3rd, reviews the "Pardon U~ While We Change Our Dress"
advertising and promotional
plan~ with the Board o~ Directors. (Seated le~t to right) W. H, Hatcher, O. Parker McComas, K. H.
Rockey, Howard Cullman,
C. ~'. ~4me$, It. and ~4. E. Lyon. Standing at the right is noted designer Egmont tlrens who
developed the new Philip Morrix package.
Robert Shaw, Art Director, Michael Keith, Sales
Promotion Manager, Ray 1ones, Sales Vice Pres-
ident, Robert Larkh~, Sales Promotion Director.
John Gaynar, Field Sales Promotion Manager,
and John R. O'Connor, National Sales Manager,
map strategy ]or pohlt-o/osale proalotion o~ the
new Philip Morris.
(CENTER} Walter ~Vaber, Manager Cttstomers"
Service Dept., Ray Nolan, Director o~ Inventory
Control, and John R. O'Connor, National Sales
Manager, played vital roles in the close coordi-
halloa o~ warehousing, distribution and sales
our 1,300,000 retail outlets during the introdttc-
lion o[ ,~darlboro and the new Philip Morris.
(F.~g ~mHT) Owen Smith o] the Leo Burnett
Agency. Roger Greene, ddvertising Director,
Ross R. Millhiser. Brand Manager, and Richard
Halpln, Accoant E.recutive. meet to plan the
well-received Marlboro ad~'ertish~g campaign.
T!54232635
The 1955-56 tobacco crop was of excellent quality
and in great supply, giving us the opportunities to
fully stock our inventories of vintage tobacco. Our
leaf processing plants have been adapted to success-
fully meet the demands of domestic multi-brand man-
ufacturing and the increased shipments of our blends
for use in Australia, England and the Philippines.
The Company's research program was carried for-
ward aggressively on all fronts during 1955. We feel
that research, as it has in the past, will contribute sub-
stantially to the welfare and progress of your Com-
pany. It is bur intention therefore to continue the
steady expansion of all activities of our Research and
Development Department.
Extensive progress was made in the identification
of smoke compounds and in other technical areas con-
nected with the manufacture of our products. During
the year the laboratory completed more than 35,000
special analyses of domestic, foreign and experimental
leaf samples in addition to extensive studies of the
various smoking characteristics of cigarettes. Aside
from these exhaustive chemical analyses of smoke and
tobacco, the Philip Morris technical personnel in 1955
broadened the scope of their activities in the fields of
electronics and atomic energy, particularly in the area
of quality control. Our scientists gained new stature
during the year with publication of numerous signifi-
cant articles in scientific journals.
During the past two years, we have placed great
emphasis on modernizing the packaging of our prod-
ucts because we believe that packaging today plays a
The Brand Manager System was institul~t..~to. ~.oordlaate
merchmtdising and other activities on our principal brandx.
Here Brand Managers Hugh Cullman, Parliament, John R.
Lotham, Philip Morrls, and Ross Millhiser, Marlboro (far
right) report to President O. Parker McComas and Execu-
tive Vice President Joseph F. Cullman, 3rd.
major role in the successful merchandising of all con-
sumer products. With Philip Morris regular and king
size in the new package, Marlboro in the unique flip-
top box, and other projects under way, we believe
that your Company is now in an excellent position to
meet today's competition successfully.
Our advertising campaigns, keeping pace with the
dramatic package change for Philip Morris and the
development of Marlboro cigarettes, have also been
redesigned to give each product a new personality.
The decision announced in last year's annual report
to discontinue network programming and to use tele-
vision and radio spots, newspapers and magazines,
gave us the flexibility required for the introduction of
T154232636
(racarr) Purc,~a~ing Director Walter N. McFadden, Produc-
tion Vice Pre~'dent Clarke T. Ames, Jr.,and General Factories
Supervisor Andrew C. Britton inspect the first sheet o[ labels
Ior the new Philip Morris package.
The American Machine and Foundry exhibil at the Cleveland
Atomic Exposition ]eatured a Philip Morris cigarette ma-
chine with the advanced Nucleonic MicroIeed Regulator.
Here Louisville Plant Manager Spencer T. Jones attd lamed
]ohnny Philip Morris are shown w~th Minnie Houston, Dean
Alexander and Walter Van Cleve o[ our Louisville plant.
Marlboro and the Philip Morris "Change of Dress.'"
This approach appears to have worked successfully
and we intend to continue and enlarge it in 1956.
The merchandising effort on each brand--selling, ad-
vertising and promotionmwas carefully coordinated
by each individual brand manager so as to produce
the greatest impact at the consumer level.
The consolidation of the Benson and Hedges opera-
tion with Philip Morris Inc. has been suceessfullycom-
pleted and all expenses of an)' consequence are behind
us. The long-term sales growth of Parliament ciga-
rettes was- not only arrested in 1955 but unit sales
declined, due primarily, we believe, to increased com-
petition from many new lower-priced filter cigarettes.
This was not completely unexpected and merchandis-
ing plans designed to have a stimulating effect on sales
of this brand are practically completed. In the mean-
time, it is gratifying to note that considerable econ-
omies resulted from integrating the Benson and
Hedges manufacturing facilities with our own.
During the year our foreign operations continued
to show an increase in both sales and profits over
1954. To coordinate our expanding activities in this
market, Philip Morris Overseas, a division o1~ Philip
Morris Inc., was formed during the latter part of the
year. Ha decision has been reached yet as to whether
this division should be incorporated, but in the mean-
while it is well staffed and has an active advisory Board
of Directors.
Philip Morris (Australia) Ltd. began the manufac-
ture and distribution of cigarettes in Australia early
in 1955 and, in spite of the many problems involved in
starting a new company, is operating profitably. At
present, we are continuing to investigate additional
business opportunities abroad, some of which may
require moderate capital investments on our part. In
most cases, however, we are making arrangements
with foreign cigarette producers for the manufacture
in their countries of Philip Morris brands under our
direct supervision. In these situations, no capital in-
vestment is required on our part, but royalties we re-
ceive will augment our income from abroad.
The sales demand [or the new Marlboro necessi-
tated placing the brand on allocation in June, 1955.
To relieve the shortage. Marlboro machinery wus
ltown in by Molins o] Enghmd and placed in
operation within twenty-Jour hours o[ arrival.
T154232637
We believe that instituting these arrangements, with
or without capital investments, is a sound move for
your Company. The sale of American-made cigarettes
abroad has been declining in recent ~years due both to
import restrictions and the vigorous efforts of some
foreign producers to manufacture acceptable ciga-
rettes of their own.
Our financial statements at December 31, 1955
reflect a modest decline in working capital. This was
due principally to three factors: first, our investment
in Philip Morris (Australia) Ltd.; second, the pur-
chase of a block of our 3.90% preferred stock; and,
third, the transfer to current liabilities of $1,600,000,
the first sinking fund installment on our debentures.
The increase in our current assets occasioned by the
accelerating pace of our business as the year drew to a
dose, brought an increase of $22,300,000 in our notes
payable. However, our projected borrowing in 1956
is well below our established bank lines, and we see
no need at this time for any public financing.
We have no plans at present as to the disposition of
the large block of the 3.90% preferred stock other
than to apply a portion of it each year to the sinking
fund, but it was offered at such a discount that its
purchase seemed well advised.
The kinds of machinery and equipment we use and
the types of buildings we construct are as available to
eve~j other cigarette manufacturer as they are to us.
The media in which we advertise also welcomes every
other cigarette advertiser. The 1,300,000 selling out-
lets throughout the country stock all brands of cig-
arettes. If our manufacturing is more efficient, more
(TOP R~OHT) Research and development activities bt our
modern Richmond laboratories are reviewed by the Board o]
Directors. (Le/t to right) Research Scientists d. E. O'Keefe,
Dr. Robert Sellgman, Dr. C. V. Mace and Research Vice Pres-
ident Dr. R. N. DuPuis with Board Chairman A. E. Lyon,
Director H. E. Riddell and President O. Parker McComas.
Nobel Prize Winner Dr. A. I. P. Martin is shown on a visit
to our Richmond laboratories with Philip Morris researchers
Forrest L. Gager and Dr. Robert Seligman.
Philip Morris research committee: Parliament Brand Man-
ager Hugh Cullman (back to camera). Lea] Vice Presi-
dent W. 1-1. Hatcher, Executive Vice President loseph F.
Cullman, 3rd, Vice President George Weissman, Research
Vice President Dr. R. N. DuPttis. General Factories Super-
visor A. C. Britton and Chic] Engineer C. E. Grosser co-
ordinate product and package research and development.
T!54232638
skillful, more quality conscious, it is because of our
people. If our merchandising is more creative, more
energetic, more effective, again, it is because of our
people.
We therefore recognize as a fact that our only per-
manent competitive advantage in the cigarette industry
must be people, for whom we have to compete with
all industry. It has been repeated time and again that
we believe, "People, not machines, are responsible for
the success of our business." In order to attract and
retain competent and loyal people, your Board of
Directors recommended the adoption of a deferred
porfit-sharing plan for substantially all of the Com-
pany's 4,700 employees, a restricted stock option plan
for key personnel and the discontinuance of a long-
standing cash bonus. These recommendations were
approved at a special meeting of stockholders in No-
vember by the largest affirmative vote in the Com-
pany's history.
Philip Morris has long recognized the responsibilities and
benefits of being a good citizen. Here 1ohnny Philip Morris
is shown giving a helping hand loading relle[ cigarettes
stricken Connecticut flood areas.
The salutary effect of our profit-sharing program
on the Company's employee and labor relations was
acknowledged in a public statement by Mr. S. E.
Blane, First Vice President of the Tobacco Workers
International Union, who commented, "With the ad-
dition of the profit-sharing plan, which looks like a
possible answer to the guaranteed annual wage and
which covers even seasonal employees, we know we
have the best security program in the industry."
Your management has been well aware of the need
for having available competent replacements for exec-
utives approaching retirement age. In order to assure
a continuity of experienced top management, your
Board of Directors, early in 1955, elected the follow-
ing:
Joseph E Cullman, 3rd, Executive Vice President;
John E. Cookman, Vice President in Charge of Or-
ganizational Planning and Controls; Dr. Robert N.
DuPuis, Vice President in Charge of Research and
Development; Chandler H. Kibbee, Secretary and
Treasurer, and Robert P. Roper, Vice President in
Charge of Industrial Relations.
It is with a great deal of sorrow that we report the
passing of Mr. Joseph E Cullman, Jr., during the
(Contimted on page 15)
(xnovl~ LEFT) Tobacco Workers International Union First
Vice President S. E. Blane and International Association of
Machinists Bus[ncss Representative A. A. Thompson congrat-
ulate Philip Morris President O. Parker McComas on the
introduction o~ the new Philip Morris Prolit-Sharing Plan.
(LI~Fr) President O. Parker McComas h;troduced the Board el
Directors and explained the neap Profit-Sharlng Plan to more
than 2,000/actory employees at a Richmond, Va., meeting.
TI54232639
• somoq u~alaomv ~Io suo!ll!tU u! uoos u;;q a^~q
o~essom /~!l~UOSaod ~onpoad aua,s oql
Sl~!Oa;tutuoo uo!s!^;Iol pu~ o!p~a ~ou
ffuipeoI u! p;~eodde q3!q,~ os~ql se q3ns s3umu
-as!~z~^p~ ol uop~p~ Ul "Ro~oadd~ ~u!s~^pe
zno u! p~p~IJ~ u~q os[~ s~q ~ffueqo L4!l~uosz~d
s!q.L "~anpo~d ano ~]o fO!lUUOs~d ~ql ffu!fftreqo u!
d~Is auo u~:~q ~^~q s~u~tudoI~t,~p ~u!~i~d
.s!.uo d q,I
PAI TNER SHIP
WITH THE
PEOPLE
Our extensive market research and packaging programs have been predicated
on the belief that since the consumer makes the final purchasing decision,
he can guide us in advance as to direction and selection of products and
packaging. A complex process of technical testing and consumer research
has been successfully applied to the development of the new Marlboro and
Philip Morris. It will be followed on future projects. Pictured here are some of
the typical steps from the designer's drawing board to the point of purchase.
Cooperation ~'ith ottr sapplierx was basic to our packaghtg program. In pictares below
(I. to r.), researcher .t~anes Giso.di, George Weissmaa, Vice President and Assistant to
the President. Albert Kner. head o] the Design Laboratory o] the Container Corpora-
Hidden camera records the pattern
o] consamer shopping at a super-
market clgarette display.
Researcher interWmt's
a supermarket to delerm~tl¢ her re-
acHon to the he: package.
T154232641
Truck driver tells researcher which
product and package he pre]ers.
Philip Morris Brand Mtmager John R.
ment ~,'ith designers Willh~m Gunn (left), and Egmont Arens (right).
lion o] America and his assistaat, Lony Rtthmann discuss the final test resnlts on vadotts
package dedg:~s. In addition to consttnler attitttdes and technical tt~easttrements, the
practicality and quality o] printb~g reprodttction on each design was care]ully considered.
Constnner selects new Philip Morris carton
in stackiag tests agab~st competitive braads.
TI54232642
New advances in scientific instrumentation
made possible extensive laboratory and screen-
ing work on our packages before the new de-
signs were submitted to consumer testing. (Top
to bottom): A camera records the eye move-
ment as consumer views the package; the angle
at which the carton becomes identifiable is
measured; impact and recognition values of
the package under varying conditions of light
and speed of viewing are measured; profes-
sional panel inspects packages for design val-
ues; and, subject tests new package against the
field for visibility and legibility ratings.
T154232643
early paxt of last year. Mr. Cullman, who was a Direc-
tor and Chairman of the Executive Committee,
devoted many, many years of wisdom and sagacity to
his industry and his Company. Mr. Howard S. Cull-
man, Honorary Chairman of the Port o[ New York
Authority, President of Cullman Bros., Inc., and a
tobacco industry leader for many years, was elected
to fill the vacancy on the Board of Directors caused
by the death of his brother.
Mr. Leonard G. Hanson, Senior Vice President and
Director, will retire on March I, 1956, having reached
the statutory retirement age. I wish to acknowledge
on behalf of myself and his associates, his distinguished
and unselfish devotion to your Company for 32 years.
His long experience and seasoned judgment will con-
tinue to be available to Philip Morris in his capacity
as a member of your Board of Directors.
One o! the most tamous living Araer~can~, Johnny Philip
Morris, was on hand to greet stockholders at the annual meet-
ing in Richmond's Jefferson Hotel.
In conclusion, let mc note the significant facts that
the downward sales trend of both the industry and
you~ Company was reversed during 1955, and that the
effects of the recent attacks upon/the industry are
abating. These factors coupled with the many changes
we have made both in our products and our methods
augur well for our future. The progress we have made
--over 50% of our current sales are in products
which we did not have three years ago--is possible
only because we have entered into a partnership with
people: the people who buy our cigarettes, the people
who make and market our cigarettes, and you, the
28,000 stockholders who have an equity of approx-
imately $30,000 behind each employee in this firm.
As we seek to strengthen further our present brands
and plan for new projects, we are confident that the
people and procedures that enabled us to "Change
our Dress" in the last three years will continue to
prove productive.
President
February 24, 1956
15
TI54232644
