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CA PHILIP MORRIS & CO. LTD. , IDICORPORA'I'ED Opinion Relating to Computation of Provision for Additional CompensPtion to Officers and Employees for the fiscal year ended AZareh 31, 1945 ;,0 LYBRAND, Ross BROS. & MONTGOMERY CERTIFIED PUBLIC ACCOUNTANTS NGW YORK OFRICE

~ / ? // ~. /%II /If ~r /// Illr / /Y4 1,~r , //f/'///I CERt1r1Eb PU9LiC ACCOUNTANt,S k ri N[WT(%NROCTR011 DALLA! PHIlAUlL1~N1A CL'CVtLANtlMOV9TON CNICAOOCtNCINNATI AN rRANC1ICO 11O5TON AOCR-ORb LO! ANO[L[. flALtMOfiC. LOVI9v14LL lCATTIC WA'Y111N11T(1N PT 1'111iQ p11 TULIUNON ATLANTA LONbON To the Bos,rd of Directors of Philip Morris & Co. Ltd., Incorporated: We have reviewed the computation of the provision for additional compensation to officers and employees of PHILIP MORRIS & Co. LTD., INCORPORATED for the fiscal year ended March 31, 19a5 as shown by the statemer.ts anr_exed~hereto. In our opinion, the net income for that year, amounting to 46, 803, 624.62 (after a provi;; i on of $1250, 000 for poet-war and other eontincenc:.es), has been determined in a.ccordance with generally accepted principles of accounting, and the provision of $152,002.34 for additional compensation does not exceed the amount allowable under a resolution of the Board of Directors on June 17, 1937 as adopted at the annual meetinZ of stockholders on July 20, 1937. New York, May 23, 1945. d,~'a~~NV1~'~y 1

PHILIP MORRIS & CO. LTD. , INC0P,P0RATED COMPUTATION of ADDITIOEAL CONrENsATIOfi to OFFICERS and ENPLOYL'Eg for the fiscEl year ended March 31) 1945 Net income before provisions for federal taxes on income, and post-war and other contingencies (after deducting provision of $152,002.34 for additional compensation to officers and employees) 13,613,624.62 DEdtct : Provision for federal taxes on income (less $245,000 post-war refund credit of excess profits tax) 46,560,000.00 Provision for post-war and other contingencies 250,000.00 6810000.00 Net income transferred to earnedsurplus 6,803,624.62 Deduct: Interest at 7 per cent on average capital of ~68,784,778.68, as computed on appended statement ,814,934.51 Interest at 7 per cent on funded debt, less interest of $351,500 accrued' during year on Twenty Year 3,06 Debentures 468,666.67 5,283,601..18 Balance upon which additional compensation is based -1 11,~20~ 02~. 44 Additional compensation (10 per cent of 1,520,023.44) 152,002._~4 2

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PHILIP MORRIS &- CO. LTD., INCORPORATED RECONCILIATION of EAF;uED SUHPLUS, as SiiOWN in the ANT?EXEi) CONPUTATION, of AViRt1C.E CAPITAL, WITH iARNEll SURPi,US' as SriOty14 by BALANCE ShEET of the COb!PAINY INCLUDED in OUR R_:'PURT, DATED MAY 23, 1945, Si1ENITTED under Sr.PARRATZ CO'VER __._.....r Earned surplus at March 31, 1945, as shown in the annexed computation of average capital in co!Znection with provision for additional compensation to officers and employees (computed in accordance with resolution of the Board of Directors on June 1,7, 1937 as adopted at the annual meeting of stockholders on July 20,1937) Dedunt: Provision for additional compensation $27,410,856.39, to officers and employees for the fiscal year ended March 31, 1945 ~ 152,002.34 Provision for federal taxes on income (less $245,000 post-war refund credit of excess profits tax) for the fiscal year ended March 31, 1945 6,560,000.00 6,712,002.34 Earned s urpl us at MRrc?z 31, . 1945 as shown by balance sheet of colr.pan;- included in our report, dated DIay 23, 1945, submittedi unc'1U.;, separate cover ), 698'L854. o~ . I 4