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SECURITIES AND EXCHANGE'COMMISSION WASHINGTON, D. C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1981 Commission: file number 1-194 Philip Morris Incorporated (Exact name of registrant as specified in its charter). Virginia (State or other jurisdiction of incorporation or organization) 100 Park Avenue, New York, N. Y. (Address of principal executive otfices). 13-1607658' (I.R.S. Employer Identification No. ) 10017 ( 2ip Code ) Registrant's telephone number, including area code: 212-679-1800 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock (par value $1 per share ) 63'8°fo Sinking Fund Debentures Due 1993 8%°fo Sinking Fund Debentures Due 2004 9t/e% Sinking Fund Debentures Due 2003 8'/x% Notes Due 1985 8.65% Notes Due March 1, 1984 8.85% Notes Due 1982 9.55% Notes Due 1986 14% Notes Due April 1, 1991 14~/s% Notes Due November 15, 1988 15 ~/,% Notes Due 1991 New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filied by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes V No At February 1, 1982, the aggregate market value of the shares of Common Stock held by non- affiliates of the registrant was approximately $6,073,000,000. At such date, there were 125,403,994 shares of the registrant's Common Stock outstanding. Document's Incorporated by Reference Portions of the registrant's annual report to shareholders for the year ended December 31, 1981 are incorporated in Item I of Part I, Part II and Part IV hereof and made a part hereof. The registrant's definitive proxy statement in connection with its annual meeting of shareholders on Apri128, 1982, to be filed with the Securities and Exchange Commission within 120 days following the end of the registrant's fiscal year ended December 31, 1981, is incorporated in Item 4 of Part I and in Part III hereof and made a part hereof.

PART I Item 1. Business. (a) General Description of Business Philip Morris Incorporated (the "Company"), a Virginia corporation, and its subsidiaries and affiliates (collectively "Philip Morris") are engaged in the manufacture and sale of tobacco products (mainly cigarettes ), beer, soft drinks and industrial products and in community development. Philip Morris, on the basis of unit sales and excluding two national enterprises, is the second largest cigarette company in the world and its principal brand, Marlboro, has been the world's leading cigarette brand since 1972. Miller Brewing Company ("Miller"), a subsidiary of the Company, is the second largest brewing company in the world. Philip Morris is organized into six operating companies, consisting of the following divisions or subsidiaries: (1) Philip Morris U.S.A., which manufactures and sells cigarettes in the United States; (2) Philip Morris International, which manufactures and sells tobacco products outside the United States and sells beer and soft drink products outside the United States, Canada and Puerto Rico; (3) Miller, which manufactures and sells beer in the United States, Canada and Puerto Rico; (4) The Seven-Up Company ("Seven-Up"), which manufactures and sells soft drink products in the United States, Canada and Puerto Rico, food flavors and colors in the Western Hemisphere and certain food products worldwide; (5) Philip Morris Industrial, which manufactures and sells various industrial products; and (6) Mission Viejo Company, which owns and operates community development projects in California and Colorado. In addition, a 77%-owned subsidiary of the Company owns all of the outstanding shares of Lindeman (Holdings) Limited, the leading Australian winemaker. On May 26, 1981, the Company acquired from Rembrandt Group Limited for $350 million (i) 50% of the equity of Rothmans Tobacco (Holdings) Limited ("RTH UK"), which owns approximately 44% of Rothmans International ple ("Rothmans"), (ii) £7,362,500 6.25% Convertible Senior Subordinated Sterling/Deutsche Mark Bonds of Rothmans, (iii) £33,655,000 6.95% Convertible Junior Subordinated Sterling/Deutsche Mark Bonds of Rothmans and (iv) certain tobacco trademark rights not owned by RTH UK or Rothmans. As a result of the investment in RTH UK, the Company has obtained an indirect equity interest of approximately 22% in Rothmans. Based on unit sales and excluding two national enterprises, Rothmans is believed~ by the Company to be the fourth largest cigarette company in the world. The purchase price of the investment exceeded the equity in the net tangible assets acquired by $150 million. Su& excess is being amortized over a period of 40 years on a straight-line basis. For additional information concerning Rothmans, reference is made to the discussion under "International Tobacco Products." ( b ) Industry Segments Tobacco products (of which cigarettes accounted for 97.7% of sales in 1981) and beer represent Philip Morris's significant industry segments. The amounts of revenues, operating profit (together with a reconciliation to consolidated operating income of operating companies) and identifiable assets attribut- able to each of the industry segments of Philip Morris for each of the last three years are set forth in a note to the consolidated financial statements on p. 51 of the Company's annual report to shareholders for the year ended December 311, 1981 and incorporated herein by reference. (c) Narrative Description of Business Tobacco Products Philip Morris U'.S.A. is responsible for the manufacture, marketing and sale of tobacco products in the United States and Philip Morris International is responsible for the manufacture, marketing and sale of such products outside the United States (including United States possessions and territories ) and for exports from the United States. Philip Morris's tobacco products are sold principally to wholesalers (including distributors and government-owned organizations ), vending machine operators and large retail organizations. Product quality, marketing and packaging are the principal methods of competition in the highly competitive market for tobacco products. Philip Morris extensively advertises and promotes its tobacco products through various media, although television and radio advertising of cigarettes is prohibited in certain countries, including the United States. I

Philip Morris purchases leaf tobacco of various grades and types each year, primarily at auction. The tobacco is then graded, cleaned, stemmed and redried prior to its storage for aging up to three years. Large quantities of leaf tobacco inventory are maintained to support production requirements. Tobacco is an agricultural commodity subject to United States government controls, including the Tobacco Price Support and Production Adjustment Program administered by the U.S. Department of Agriculture. The price of leaf tobacco has risen in recent years. Domestic Tobacco Products In 1981, Philip Morris's total sales of cigarettes manufactured in the United States, including export sales of 45.6 billion units, amounted to 244.9 billion units, an increase of 4.5% over 1980 (4.3% excluding export sales). The industry's estimated sales of cigarettes manufactured in the United States, including export sales, increased by 1.4% in 1981 over 1980. In recent years, the industry has experienced only a modest increase in annual unit volume. The following table sets forth the estimated industry sales of cigarettes manufactured in the United States, the Company's unit sales and its share of the industry (including export sales in all cases ): Company's Years Ended Share December 31 Industry Company of Ind'ustry (in billion units ) ( 56 ) 1981 ...................................... 721.5 244.9 33.9 1980 ...................................... 711.8 234.4 32.9 1979 ...................................... 703.3 216.0 30.7 Source: Lehman Brothers Kuhn Loeb Incorporated (John C. Maxwell, Jr. ). Philip Morris U.S.A.'s major cigarette brands are Marlboro, Benson & Hedges 100's, Merit, Virginia Slims, Parliament Lights, Saratoga and Cambridge. Marlboro is the largest selling brand in the United States; Merit is one of the largest selling low "tar" brands in the United States; Benson & Hedges 100's is the largest selling 100mm. brand in the United States; and Virginia Slims is the largest selling cigarette brand in the United States designed especially for women. The fastest growing sector of the cigarette industry is the so-called low "tar" sector, generally considered to consist of brands delivering 15 mg. or less of "tar" per cigarette. In 198'1, this market accounted for approximately 59.9% of United States industry sales, and Philip Morris U.S.A.'s low "tar" brands accounted for approximately 24.0% of such market. Sales of ultra-low "tar" cigarettes, generally considered to consist of brands delivering 6 mg. or less of "tar" per cigarette, now account for approximately 9.8% of United States industry sales. Philip Morris's two ultra-low "tar" cigarette brands, Cambridge and Merit Ultra Lights, introduced in 1980 and 1981, respectively, accounted for 8.7% of the ultra-low "tar" market in 1981. Current prices per thousand cigarettes of Philip Morris U.S.A.'s principal brands, including the Federal excise tax of $4.00 per thousand, are $21.70 for 100mm. and 120mm. cigarettes and $21.20 for other cigarettes (including two price increases totalling $1.70 during 1981 and a price increase of $1.00 in February 1982). Excise taxes, sales taxes and other taxes levied by various states, counties and municipalities affecting cigarettes have been increasing in recent years. These taxes vary considerably and, when combined with the Federal excise tax, may be as high as 37 cents per package of twenty and may influence cigarette sales. International Tobacco Products Philip Morris International is the largest United States exporter of cigarettes (45.6 billion units in 1981, an increase of 5.8% over 1980) and markets its brands in more than 170 countries and territories through subsidiaries, affiliates, export sales organizations, licensees and other companies with which it has contractual arrangements. World cigarette industry unit sales (excluding the United States ) were approximately 3.9 trillion units in 1981. Philip Morris International's share of the world market in 1981 was approximately 6.4%, up from 2

6.2% in 1980. Philip Morris International has cigarette market shares of at least 15%-and in a number of cases substantially more than 13%-in at least 20 countries, including Argentina, Australia, Finland, Italy, Mexico, Pakistan, Switzerland and Venezuela. Prices in many of Philip Morris International's markets are government controlled, and excise tax increases, higher costs and government price restraints in a number of markets have restricted and may continue to restrict the operating income margins of Philip Morris International. The principal activities of Rothmans are the manufacture and sale of cigarettes and other tobacco products in Europe, Canada and Australia. Its principal cigarette brands include Rothmans King Size Filter, Dunhill International, Dunhill King Size Filter, Lord Extra, Peter Stuyvesant, Belga, Caballero and Craven "A ". Martin Brinkmann AG, a subsidiary of Rothmans, and Philip Morris G.m.b.H., a subsidiary of the Company, are, respectively, the third and fourth largest cigarette manufacturers in the Federal Republic of Germany. In 1981, the Company made a notification of its acquisition of an equity interest in Rothmans to the German Federal Cartel Office, which has issued a ruling opposing the transaction to the extent that it creates a deemed merger of Martin Brinkman AG and Philip Morris G.m.b.H. There are procedures for review of the decision of the Cartel Office and the whole proceeding could be protracted over a period of years. In addition, a complaint has been filed with the Commission of the European Economic Community (the "EEC") alleging that the acquisition violates the competition laws of the EEC. The Company has made submissions to the EEC refuting these allegations. No formal proceedings have been instituted by the EEC. Should any such proceedings be commenced, any decision could be appealed and the whole process could extend over a number of years. Smoking and Health; Legislation Reports and speculation with respect to the alleged harmful physical effects of cigarette smoking have been publicized for many years and, in the opinion of the Company, have had and may continue to have an adverse effect upon the industry's sales. In 1964, the Report of the Advisory Committee to the Surgeon General of the U. S. Public Health Service, essentially a review of the prior literature and consisting primarily of statistical association studies, concluded that cigarette smoking was a health hazard of sufficient importance to warrant appropriate remedial action.. In January 1979, the Secretary of Health, Education and Welfare released another report, principally a compendium of research studies published since the 1964 report, restating conclusions similar to those contained in the 1964 report and asserting that a broader range of health hazards is associated with cigarette smoking than~ those mentioned in the previous report. In January 1980, the Surgeon General released a report on the health consequences of smoking to women, stating that women face the same health hazards as men and that pregnant women and their unborn children face greater risks: In December 1980, the Surgeon General issued a report stating that all cigarettes, including those with the lowest tar and nicotine content, were health hazards and recommended various Federal measures to reduce smoking. In January 1981, the Surgeon General released another report reviewing changes in the composition of cigarettes in recent decades, repeating the assessment that smoking any type of cigarette involves health risks and recommending further study of the possible risks. In February 1982, the Surgeon General released a report reviewing the recent literature regarding cancer and concluding that cigarette smokers have overall mortality rates from cancer substantially greater than non-smokers and that cigarette smoking is a major cause or a contributing factor in the development of various cancers. In the Company's opinion, the 1982 report contains essentially no new conclusions. Since 1966, a Federal statute has required a warning statement on cigarette packaging. The current statement is: "Warning: The Surgeon General Has Determined That Cigarette Smoking Is Dangerous to Your Health~" The Federal Trade Commission (the "FTC"), in annual and special reports to Congress, has recommended that Congress enact legislation requiring stronger warnings and the funding of antismoking messages in mass media. Such legislation is now, pending. . Since 1971, television and radio advertising of cigarettes has been prohibited in the United States. Cigarette advertising in other media in the United States is required to include information with respect to the "tar" and nicotine content of cigarettes as well as the warning statement. 3

In 1972, the FTC approved consent orders requiring the Company and five other cigarette manufacturers to include in specified types of advertisements and in a prescribe& format the warning statement required by Congress for cigarette packaging. In 1981, the Company entere& into a consent judgment which modified the 1972 order by requiring certain changes in the format of the health warning in advertising, including an increase in size in certain cases. Lawsuits have been brought against asbestos companies seeking recovery for asbestosis and other diseases allegedly caused by exposure to asbestos. Some of the defendants have asserted cross-claims against the cigarette manufacturers on the theory that the claimed injuries were caused by cigarette smoking or exposure to smoking. In the Company's opinion, the proof required to establish derivative liability would be the same as that required in an action directly against a cigarette manufacturer. To date, all direct actions against cigarette manufacturers alleging that smoking or exposure to cigarette smoke caused disease have been unsuccessful. From year to year, legislation has been proposed in Congress which, if passed, could be detrimental to the tobacco industry. The most significant bills relating to cigarettes which have been introduced would: increase the Federal excise tax on cigarettes; modify or eliminate the Tobacco Price Support and Production Adjustment Program administered by the U.S. Department of Agriculture; require that a series of different health warnings be printed in rotational order on cigarette packages; require the printing on cigarette packages of the content of "tar", nicotine, carbon monoxide and other smoke constituents; and require the manufacture of cigarettes which minimize the risk of igniting fires in fabrics or other materials. Legislation potentially detrimental to the tobacco industry has been introduced from time to time in various state and local legislative bodies. Such measures usually relate to the taxation of cigarettes or to regulation of the advertising, labeling, promotion, sale and consumption of cigarettes. Enactments by regulatory agencies and other governmental authorities have restricted smoking areas aboard certain common carriers and in certain public places, and anti-cigarette groups are now concentrating on attempts to ban smoking in public places and places of employment. In recent years, a number of foreign countries have taken steps to restrict or prohibit cigarette advertising and to discourage cigarette smoking. In some cases, the restrictions are more onerous than in the United States. Beer Miller had an 8.1% increase in barrels sold in 1981 over 1980. Miller's major products are Miller High Life, the second largest selling brand in the United States, Lite, the largest selling lowered-calorie beer and third largest selling brand in the United States, and Ldwenbrhu, brewed and sold in the United States under a license agreement with LiSwenbritu Mtinchen AG and the second largest selling super-premium beer in the United States. The following table sets forth the industry's sales of beer, Miller's unit sales and Miller's share of the industry: Years Ended Miller s Share December 31 Industry(a) Miller of Industry (in thousands of barrels) (%) 1981 ............................................................. 184,400( est. ) 40,318 21.9 1980 ............................................................. 181,156 37,304 20.6 1979 ............................................................. 175,260 35,794 20.4 (a) Source: United States Department of the Treasury and Bureau of Census. The beer industry is highly competitive, with the principal methods of competition being product: quality, price, distributionj marketing and advertising. Miller engages in~ a wide variety of advertising and 4

sales promotion activities. Miller's beer products are produced with ingredients generally available in the market. The production process includes fermentation and aging periods. After completion of the process, beer products are distributed primarily through independent beer wholesalers. The production process is conducted throughout the year and at any one time Miller has on hand only a small quantity of finished products. Containers (glass or cans ) for beer products are either purchased from suppliers or produced at Miller's own facilities.. Soft Drinks Seven-Up manufactures and sells extract for soft drinks, principally 7UP, in the United States, Canada and Puerto Rico. Sales in more than 90 other countries are handled by Seven-Up International, an operating division of Philip Morris International. 7UP is reported to be the third largest selling soft drink in the world. Seven-Up is also engaged in the manufacture and sale of finished soft drink products, principally canned, bottled and pre-mixed 7UP and Diet 7UP and fountain syrup for 7UP and Diet 7UP. Through subsidiaries, Seven-Up is engaged in the processing and packaging of lemon oil and frozen concentrate for lemonade, as well as apple and other fruit-flavored products; the growing, processing and selling of fresh lemons and lemon products; the production of reconstituted lemon and lime juice; the manufacture of food flavors and colors; and the production of a broad product line of freeze-dried and convenience foods. In April 1977, the Food and Drug Administration (the "FDA") moved to ban the use of saccharin in consumer products. Acts of Congress have postponed the ban until August 14, 1983, pending further analysis of studies said to link the sweetener with bladder cancer. Should a ban ultimately be instituted, the diet segment of the soft drink industry could be adversely affected. Industrial Products Philip Morris Industrial manufactures and sells dense specialty papers, printing and technical papers,, disposable paper tissue products and specialized labels. Community Development Mission Viejo Company is engaged in community development and home building in Southern California and Colorado. It is developing Mission Viejo, a completely pre-planned town on approximately 10,000 acres in Orange County, California, between Los Angeles and San Diego;, Aliso Viejo, on approximately 6,600 acres close to Mission Viejo; a smaller residential area near Denver, Colorado, and the 22,000 acre Highlands Ranch in the Denver area. Employees At December 31, 1981, Philip Morris employed approximately 72,000 people. Energy Philip Morris's energy requirements are satisfied by utilizing several forms of energy, including coal, electricity,, fuel oil and natural gas: Philip Morris has taken a number of steps to conserve energy and to date has not experienced any material problems in satisfying its requirements. Environmental Controls Philip Morris is subject to various Federal, state and local laws and regulations concerning the discharge of materials into the environment or otherwise related to environmental' protection. Compliance therewith has been accomplished without any material adverse effect on Philip Morris's earnings, capital expenditures or competitive position. (d) Foreign and Domestic Operations and Export Sales The amounts of operating revenues, operating profit and identifiable assets attributable to each of Philip Morris's geographic areas and the amount of export sales from the United States for each, of the ltast three fiscal years are set forth in the notes to the consolidated financial statements on page 52 of the Company's annual report to shareholders for the year ended December 31, 1981 and are incorporated herein by reference and made a part hereof. 5

Item L Properties. Tobacco Products In the United States, Philip Morris owns nine tobacco manufacturing and processing facilities-seven in the Richmond, Virginia area, including the Philip Morris U.S.A. Manufacturing Center, which is believed to be one of the most modern cigarette factories in the world, and two in Louisville, Kentucky. Philip Morris owns or leases other premises and facilities, including an Operations Center to be completed early in 1982, a research and development facility and various administrative facilities in Richmond and an engineering center in York County, Virginia. In addition, a new cigarette manufacturing facility under construction in Cabarrus County, North Carolina is scheduled for completion in 1983 and will ultimately have an annual production capacity of approximately 60 billion units. Expansion of a facility for tobacco processing in the Richmond area commenced in 1981 and expansion of the facilities in Louisville will commence in 1982. Subsidiaries and affiliates of Philip Morris International own or lease cigarette manufacturing facilities in 30 countries outside the United States. The facilities located in the Netherlands, West Berlin, Munich and Argentina are undergoing substantial renovation and expansion. Beer Miller currently has breweries located in Milwaukee, Wisconsin; Fulton, New York; Fort Worth, Texas; Eden, North Carolina; Albany, Georgia and Irwindale, California. The breweries located in Fulton, Fort Worth and Eden are being expanded and a new brewery, in Trenton, Ohio, which is scheduled to have a capacity of 10 million barrels per year, is under construction. Miller's five can-making plants, located in Milwaukee, Fulton, Fort Worth, Reidsville, North Carolina and Moultrie, Georgia have an annual production capacity of 3 billion cans. Miller owns warehouses in Milwaukee, Salt Lake City, Utah, New Orleans, Louisiana and Portland, Oregon and leases warehouses in several other locations. A glass- making plant in Sennett, New York, which supplies the Fulton facility with a portion of its bottle needs, is being expanded. Other Seven-Up's principal extract and color manufacturing facility is located in St. Louis, Missouri. Seven- Up owns or leases other manufacturing plants, bottling plants and warehouses in various locations in the United States, Canada and overseas. Philip Morris Industrial owns or leases several facilities in the United States, including paper mills, warehouses and converting plants. Reference is made to the description of "Community Development" under Item 1 for information regarding Mission Viejo Company's properties. The Company's new world headquarters at 120 Park Avenue, New York, New York, will' be completed in 1982. General Philip Morris's plants and properties are maintained in good condition and are believed to be suitable and adequate for present needs. As a result of recent capital expenditures, approximately 72% of Philip Morris's property, plant and equipment was less than five years old at December 31, 198 1. Item 3. Legal Pr+oeeediregs. None. Item 4. Security Ownership of Certain Beneficial Owners and Management. This information is incorporated by reference to the Company's definitive proxy statement in connection with its annual meeting of shareholders on April 28, 1982, to be filed with the Securities and Exchange Commission within 120 days following the end of the Company's fiscal year ended December 31, 1981, and made a part hereof. 6

Executive Officers of the Company The following are the executive officers of the Company(a): Name Office Age(b) George Weissman ....................................... Chairman of the Board and Chief Executive Officer 62 Ross R. Millhiser ........................................ Vice Chairman of the Board 61 Clifford H. Goldsmith ................................. President 62 Hugh Cullman ............................................ Group Executive Vice President 59 John A. Murphy .......................................... Group Executive Vice President 52 Hamish Maxwell ......................................... Executive Vice President 55 Thomas F. Ahrensfeld ................................ Senior Vice President and General Counsel 58 James C. Bowling ....................................... Senior Vice President 53 John T. Landry ........................................... Senior Vice President 57 Albert E. Bellot ........................................... Vice President 61 Robert H. Cremin ....................................... Vice President 52 Eugene J. T. Flanagan ................................ Vice President, Secretary and Associate General Counsel 58. Edward W. Frantel ..................................... Vice President 56 William K. Howell ...................................... Vice President 51 Jetson E. Lincoln~ ........................................ Vice President 60 William D. McCoy ..................................... Vice President 52 W. Wallace McDowell ............................... Vice President 45 James J. Morgan ......................................... Vice President 39 R. William Murray ..................................... Vice President 45 William J. O'Connor ................................... Vice President 51 Shepard P. Pollack ..................................... Vice President 53 F. Harrison Poole ....................................... Vice President and Treasurer 61 Philip J. Reilly ............................................ Vice President 52 Frank E. Resnik .......................................... Vice President 53 Carlos E. Salguero ...................................... Vice President 52 Thomas B. Shropshire ................................ Vice President 56 William C: Smiy ......................................... Vice President and Controller 54 Richard L. Snyder ...................................... Vice President 41 Walter F. Sperber ....................................... Vice President 64 Hans G. Storr .............................................. Vice President and Chief Financial Officer 50 Lauren S: Williams ..................................... Vice President 44 Alexander Holtzman .................................. Associate General Counsel 57 George P. Hibbard ..................................... Deputy Treasurer 40 Norman J. Treisman ................................... Deputy Treasurer 44 (a) Set forth as part of Part I pursuant to General Instruction G(3 ) to Form 10-K and Instruction 4 to Item 3( b) of Regulation S-K. (b) As of February 1, 1982. All of the above mentioned officers have been employed by Philip Morris in various capacities during the past five years except William C. Smiy, who was employed in various controller positions by Westinghouse Electric Co. from February 1970 until his employment by the Company in June 1977. 7

PART II Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters. Item 6. Selected Financial Data. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The information called for by Items 5, 6 and 7 is hereby incorporated by reference to the following captioned paragraphs (at the pages indicated) im the Company's annual report to shareholders for the year ended December 31, 1981 and made a part hereof: Item Paragraph caption In annual report Page in annual report 5 Quarterly Financial Results ........................................................ 52 5 Restrictions .................................................................................. 49 6 Selected Financial Data .............................................................. 36 7 Management Discussion and Analysis of Financial Condition and Results of Operations .....................................................•. 36-39 Item 8. Financial Statements and Supplementary Data. The information called for by this Item is hereby incorporated by reference to the Company's annual report to shareholders for the year ended December 31, 1981 as set forth in the Index to Consolidated Financial Statements and Schedules (see Item 11) and made a part hereof. PART III Item 9. Directors and Executive Officers of the Registrant. Item 10. Management Remuneration and Transactions. Except for the information relating to the executive officers of the Company set forth in Part I of this Report, the information called for by Items 9 and 10 is hereby incorporated by reference to the Company's definitive proxy statement in connection with its annual meeting of shareholders on April 28, 1:982, to be filed with the Securities and Exchange Commission within 120 days following the end of the Company's fiscal year ended December 31, 1981 and made a part hereof. PART IV Item 11. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) Index to Consolidated Financial' Statements and Schedules Reference Form 10-K Annual Report Annual Report to Shareholders Page Page Data incorporated by reference to the Company's annual report to share- holders for the year ended December 31, 1981: Consolidated Balance Sheets at December 31, 1981 and 1980 .................... - 42-43 Consolidated Statements of Earnings for the years ended December 31, 1981, 1980 and 1979 ................................................................................... - 44 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1981, 1980 and 1979 ........................................................... - 45 Consolidated Statements of Changes in Financial Position for the years ended December 31, 1981,,198& and 1979 ................................................ - 46 Notes to Consolidated Financial Statements ................................................. - 47-52 Report of Independent Certified Public Accountants ................................... - 53. Data submitted herewith: Report of Independent Certified Public Accountants ................................... S-1 - Consent of Independent Certified Public Accountants .................................. S-1 - 8

Reference Form 10-K Annual Report Annual Report to Shareholders Page Page Financial Statement Schedules: III-Investments in, Equity in Earnings of, and Dividends Re- ceived from Related Parties .................................................... S-2 V-Property, Plant and Equipment .................................................. S-4 VI-Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment .............................................. S-5 VIII-Valuation and Qualifying Accounts ........................................... S-6 IX-Short-Term Borrowings .............................................................. S-7 X-Supplementary Income Statement Information ........................ S-8 Schedules other than those listed above have been omitted either because the required information is contained in notes to the consolidated financial statements or because such schedules are not required or are not applicable. Separate financial statements of the Company are omitted since the Company is primarily an operating company and all subsidiaries included in the consolidated' financial statements are wholly owned. The long-term indebtedness of two unconsolidated subsidiaries and one affiliate is guaranteed by the Company. Financial statements of unconsolidated subsidiaries and affiliates are not filed' for the reason that no such subsidiary or affiliate constitutes a significant subsidiary. (b) The Company did not file a report on Form 8-K during the last quarter of the period covered by this Report. (c) The following exhibits are filed as part of this Report: 3.1. Restated Articles of Incorporation of the Company.* 3.2. By-laws of the Company.. 10.1. Agreement, dated August 25, 1976, between the Company and Joseph F. Cullman 3rd.* 10.3. Incentive Compensation Plan of the Company:* 10.4. Financial Counseling Program of the Company.* 10.5. Benefit Equalization Plan of the Company.* 10.6. Automobile Policy of the Company.* 10.7. Agreement, dated December 21, 1981, between the Company and Joseph F: Cullman 3rd. 10.8. Directors'' Deferred Compensation Plan. 13.1. Company's annual report to shareholders for the year ended December 31, 1981, but only to the extent set forth in Items 5, 6, 7 and 8 hereof. 15.1. 1973 Stock Option Plan of the Company. * 15.2. 1977 Stock Unit Plan of the Company. * 19.1. Letter from independenr certified public accountants in connection with a change in accounting principle. 22.1. List of subsidiaries of the Company. * Incorporated by reference to the Company's Quarterly Report on Form 10-Q, dated November 13, 1980; for the quarter ended September 30, 1980. With the exception of the aforementioned information incorporated by reference in this Annual Report on Form 10-K, the Company's annual report to shareholders for the year ended December 31, 1981 is not to be deemed "filed" as part of this Report. 9