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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PHILIP MORRIS INCORPORATED By: GEORGE WEISSMAN. (George Weissman, Chairman of the Board) Date: March 15, 1982 Pursuant to the requirements of the Securities and Exchange Act of 1934, thi's report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated: Signature Title Date EORGE WEISSMAN Director, Chairman of the Board and Chief Executive Officer arch 15, 1982 (George Weissman) -- HANS G. STORR Vice President and Chief Financial i Officer arch 15, 1982 (Hans G. Storr) W ^ WILLIAM C. SMIY Vice President and Controller March 15, 1982 sTHOMAS F. (William C. Slniy) AHRENSFELD, JAMES C. BOWLING, Directors ALFRED BItITTAIN IIl, GEORGE V. COMFORT, DR. JOst ANTONIO CORDIDO-FREYTES, HUGH CULL- MAN,, JOSEPH F. CULLMAN 3RD, WILLIAM H. DON- ALDSON, PAUL W. DOUGLAS, JANE EvANs, CLIF- FORD H. GOLDSMITH, ROBERT E. R. HUNTLEY, JoHN T. LANDRY, H. ROBERT MARSCHALK, HAMIsH MAXWELL, Ross R. MILLHISER, T. JUSTIN MOORE JR.,, JOHN A. MURPHY, SHEPARD P. POLLACK, MARGARET B. YOUNG, Directors. *By: EUGENE J. T. FLANAGAN Mar& 15, 1982 Eugene J. T. Flanagan ( Attorney-in-fact ) 10

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Our report on the consolidated financial statements of Philip Morris Incorporated has been incorporated by reference in this Form 10-K from the 1981 annual report to shareholders of Philip Morris Incorporated and appears on page 53 therein. In connection with our examinations of such financial statements, we have also examined the related financial statement schedules listed in the index on page 9 of this Form 10-K for the year ended December 31, 1981. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly the information required to be included therein in conformity with generally accepted accounting principles applied on~ a consistent basis. New York, New York January 26, 1982. COOPERS' BC LYBRAND CONSENT OF INDEPENDENT CERTIFIED PUBLIC' ACCOUNTANTS We consent to the incorporation by reference in the Prospectuses prepared in accordance with the requirements of Form S-8' or Form S-16 pursuant to the Securities Act of 1933 and incltided in registration statemenv No. 2-64081, registration statement~ No. 2-68533, registration statement No. 2-72523, registra- tion statement No. 2-72954 and registration statement Nb. 2-58510, respectively, and any amendments thereto, of our report dated January, 26„ 1982, which is included on page 53 of the annual report to shareholders of Philip Morris Incorporated for the year ended December 31, 1981 and incorporated by reference into this Annual Report on Form 10-K for the year ended December 31„ 1981. COOPERS & LYBRAND New York, New York March 12, 1982.

FINANCIAL STATEMENT SCHEDULES PHILIP MORRIS INCORPORATED and Consolidated Subsidiaries SCHEDULE M-INVESTMENTS IN, EQUITY IN' EARNINGS OF, AND DIVIDENDS RECEIVED FROM RELATED PARTIES for the years ended December 31, 1981, 1980 and 1979 (in millions) CoL A CoL B CoL C Balasue at Besinninp of Period Additiom ame of Issuer and Description of Investment (1) Number of Shares or Units Principal Amount of Bonds and Notes (2) mount in Dollars (1) Equity Taken Up in EarninQs (Losses) of Related Parties for the Period (2) ther (a) 1981:' Greater than 50% ownership ..................................... Various $227.2 $26.8 $ 19.5 50% ownership or less ................................................ Various 58.3 25:7 347.1 Unconsolidated subsidiaries and affiliates (20 at beginning and 22 at end of period ) ....................... $285.5 $52.5 $366.6 1980: Greater than 50% ownership ..................................... Various $213.8 $13.3 $10.5 50% ownership or less ................................................ Various 46.4 14.3 0.2 Unconsolidated subsidiaries and affiliates (18 at beginning and 20 at end of period) ....................... $260.2 $27.6 $10.7 1979: Greater than 50% ownership ..................................... Various $204.7 $14.3 S 4.6 50°k ownership or less ................................................ Various 38.5 6.6 2.5 Unconsolidated subsidiaries and affiliates (16 at beginning and 18 at end of period ) .....::................ $243.2 $20.9 $ 7.1 Nom: ( a) Represents primarily additional investments and in 1981 includes $346.4 million for the Rothmans investment, which includes 17,362,500 6.25% Convertible Senior Subordinated Sterling/Deutsche Mark Bonds and 03,655,000 6.95% Convertible Junior Subordinated Sterling/Deutsche Mark Bonds of Rothmans International plc. (b) Represents amortization of excess of investment cost over equity in net assets and reduction of investment in certain subsidiaries. (c) Included in the balance at end of period are advances of $38.9 million, $33.4 million and $31.2 million for the years ended December 31, 1981, 1980 and 1979, respectively: S-2

Co1. D Col. E Coi. F Deductions Balance at End of Period (1) Distribution of Earnings by Persons in Which Earnings ( Losses ) Were Taken Up (2) ther (1) Number of Shares or Units Principal Amount of Bonds and Notes (2) Dividends Received During the Period from Investments Amount Not Accounted in for by the Dollars Equity Method (b) (c) $ 8.0 $0.2 Various $265.3 3.8 1.3 Various 426.0 $11.8' $1.5 $691.3 $ 9.8 $0.6 Various $227.2 2.5 0:1 Various 58.3 $12.3 $0:7 $285.5 $ 9.6 $0.2 Various $213.8 0.8 0.4 Various 46.4 $10.4 $0.6 $260.2 S-3

PHILIP MORRIS INCORPORATED and Consolidated Subsidiaries SCHEDULE V-PROPERTY, PLANT AND EQUIPMENT for the years ended December 31, 1981, 1980 and 1979 (in millions) CoL A Col. B Col. C Col'. D Col. E Col. F Additions (1) (2) Balance at Assets of Other Balance at Beginning Additions Companies Changes- End of Classification of Period at Cost Acquired Retirements Add (Deduct) Period (a) 1981: (b) Land and: Iand improvements ........ $ 152.8 $' 2.1 $ 1.2 $ 0.6 $ 36.8 $ 192.3 Buildings and building equipment. 755.6 4.9 9.0 5.4 243.1 1,007.2 Machinery and equipment .............. 1,912.0 38.7 11.8 57.8 433.9 2,338.6 Construction in progress ................. 727.1 983.0 - 0.3 (7118) 996:0 $3,547.5 $1,028.7 $22.0 $64.1 $ - $4,534.1 1980: Land and land improvements ........ $ 133.9 $ 1.4 $ 0.3 $ 0.4 $ 17:6 $ 152.8 Buildings and building equipment. 562.5 2.7 3.3 3.5 190! 6 755.6 Machinery and equipment .............. 1,547.6 32.9 12.11 58.4 377:8 1,912.0 Construction in progress ................. 581.1 732.0 - - (586:0) 727.1 $2,825.1 $ 769.0 $15.7 $62.3 $' - $3,547.5 1979: Land and land improvements ........ $ 101.2 $ 3.8 $ 0.8 $' 29.7 $ 133.9 Buildings and building equipment. 476.2 1.5 $ 0.3 2.5 87.0 562.5 Machinery and equipment .............. 1,231.4 30.2 1.1 29.9 314.8 1,547.6 Construction in progress ................. 408.5 604.6 - 0.5 (431.5) '581. l $2,217.3 $ 640.1 $ 1.4 $33.7 $ - $2,825.1 NOTES: (a) A significant portion of the additions are due to expansion and modernization of Miller Brewing Company and domestic cigarette manufacturing facilities. (b) Represents reclassifications among categories. The principal depreciation rates used are as follows: Rates ( Percent ) Ciass of Property per Annum Land improvements ........................................................... 4-6.8 Buildings and building equipment .................................... 2-5 Machinery and equipment ................................................ 635-7.3 When items of machinery and equipment subject to composite rate depreciation are retired or otherwise disposed of, the acquisition costs of such items are charged to accumulated depreciation which is also credited with the proceeds received from disposition, if any. Consequently, no profit or loss on such retirement or disposal is recognized. Generally, when items other than machinery and equipment subject to composite rate depreciation are retired or otherwise disposed of, accumulated depreciation is charged with the amount of depreciation accumulated thereon and any profit or loss on such retirement or disposal is credited or charged to income. S-4

PHILIP MORRIS INCORPORATED and Consolidated Subsidiaries SCHEDULE VI-ACCUMULATED DEPRECIATION, DEPLETION' AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT for the years ended December 31, 1981, 1980 and 1979 (fn millions) Co1.A CoL B Col. C CoC D CoL E Col. F Additions (1) (2) Additions Accumulated Balance Balance at Charged to Depreciation Other at Beginning Costs and of Companies Changes- End of Description of Period Expenses Acquired Retirements Add (Deduct) Period (a) 1981: Land improvements ................... $ 12.3 $ 4.4 $ 0.1 $ 16.6 Buildings and building equip- ment ........................................ 160.0 35.0 $ 0.9 4.5 191.4 Machinery and equipment ........ 561.3 173.5 5.5 39.8 700.5 $733.6 $212.9 $ 6.4 $ 44.4 $908.5 1980: Land improvements ................... $ 8.8 $ 3.5 $ 12.3 Buildings and building equip- ment ........................................ 130.4 27.4 $ 03 $ 1.9 $ 3.8 160.0 Machinery and equipment ........ 456A 145.2 4.0 40.5 (3.8) 561.3 $595.6 $176.1 $' 4.3 $ 42.4 $ - $733.6 1979: Land improvements ................... $' 6.8 $ 2.1 $ (0:1). Buildings and building equip- ment ........................................ 109.7 21.5 $ 0.9 0:1 Machinery and equipment ........ 363.2 110.3 $ 0:4 17.5 $479.7 $133.9 $ 0.4 $ 18.4 $ - NoTE: (a) Represents reclassifications among categories. $ 8.8 130.4 456.4 $595.6 r 0 0 cn N ~ N ~ ~ S-5

PIiILIP MORRIS INCORPORATED and Consolidated Subsidiaries SCHEDULE VIII-VAf.UATION AND QUALIFYING ACCOUNTS for the years ended December 31, 1981, 1980 and 1979 (in millions) CoL A Col. B Cot. C Col'. D Col. E Additions escription Balance at Beginning of Period (1) (2) Charged to Charged to Costs and Other Expenses Accounts eductions Balance at End of Period 1981: (a) Allowance for discounts ....................................... $ 4.2 $129.5 $128.9 $ 4.8 AIlowance for doubtful accounts ......................... 13.9 4.5 3.3 15.1' $18.1 $134.0 $132.2 $19.9 1980: Allowance for discounts ....................................... $ 3.3 $114.1 $113.2 $ 4.2 Allowance for doubtful accounts ......................... 15.3 5.7 7.1 13.9 $18.6 $119.8 $120.3 $18.1 1979: Allowance for discounts ....................................... $ 3.2 $ 96.9 $ 96.8 $ 3.3 Allowance for doubtful accounts ......................... 13.1 6.7 4.5 15.3 $16.3 $103.6 $101.3 $18.6 NbTE: ( a) Represents charges for which the reserves were created.. S-6

PHILIP MORRIS INCORPORATED and Consolidated Subsidiaries SCHEDULE IX-SHORT-TERM BORROWINGS for the years ended December 31, 1981, 1980 and 1979 (in millions) Cal. A Col. B Col. C CoI. D Col. E Col. F Weighted Average Interest Maximum Amount Average Amount Weighted Average Balance Rate at Outstanding Outstanding Interest Rate Category of Aggregate Short-Term Borrowings at End of Period End of Period During the Period During the Period During the Period 1981: (a) (b) (c). Bank loans ......................................................... $232.4 14.1% $500.9 $164.2 11.8% Commercial paper obligations ......................... 953.7 12. 7% $95 5.9 $810.9 15.8% Amount reclassified to long-term ..................... (884.9) $301.2 1980: Bank loans :............................................................ $202.8 11.6% $202.8 $128:6 7.6% Commercial paper obligations ............................. 638:5 16.4% $849.2 $737.1 12.3% Amount reclassified to long-term ......................... (6853) $156.0 1979: Bank loans :............................................................ $185.1 12.7% $185.1 $124! 6 9.0% Commercial paper obligations ............................. 524.8 13.3% $833.9 $521.1 10.7% Amount reclassified to long-term ......................... (650.0) $ 59.9 NOTES: (a) The Company's credit facilities include revolving credit agreements and other arrangements which mature after twelve months and provide the ability to refinance $884.9 million of short-term borrowings at December 31, 1981, $685.3 million at December 31, 1980 and $650 million at December 31, 1979. Since management intends to refinance this debt, these amounts have been classified as long-term debt. (b) The average amount outstanding was primarily computed on a daily average basis. (c) The weighted average interest rate is primarily based on~ the total interest incurred for the period divided by the average amount outstanding during the period as computed in (b) above. S-7

PHILIP MORRIS INCORPORATED and Consolidated Subsidiaries SCHEDULE X-SUPPLEMENTARY INCOME STATEMENT INFORMATION for the years ended December 31, 1981, 1980 and 1979 (in millions) Column A Column B Item Charged to Costs and Expenses 1981 1980 1979 1. Maintenance and repairs ................................................... $305.0 $247.4 $189.3 2. Advertising costs ................................................................ $670.6 $593.9 $462.8

EXHIBIT INDEX 3.1. Restated Articles of Incorporation of the Company: * 3.2. By-laws of the Company: 10.L 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, 1198'1, but only to the extent set forth in Items 5, 6, 7 and 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 1981. 15.1. 1973 Stock Option Plan of the Company.* 15.2. 1977 Stock Unit Plan of the Company: * 19.1. Letter from independent certified public accountants in connection with 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! E-1