Tobacco Documents Online

10 Philip Morris U.S.A. The Philip Morris Operations Center, in Richmond. Virginia, costing in excess of $200 million, is the most sophisticated cigarette manufacturing facility in the world. Dedicated in 1974 and now operating at about two-thirds of its planned capacity, the facility is a showcase of advanced manufacturing technology and unique employee work environment. The Center represents the largest single capital investment in Philip Morris's history and in the history of the U.S. cigarette industry.

12 'Ihere's more to choosing alow-tar ' ~ l~picdng~tunber: .4rci.,vayw..rx,tlwaayuairv,u,Ja. ~ ifxn+an_xduu.fia•ihauwJ.ulda.ma\rl\i •••Ilr'aaaIIIMMM~~~~ p,M>.,u,ssnm~i.c Rol.Yi.r kx.IbnY'l>t,ivm &N,µnxdfianpx W urluit µr@aNN.,,efqn Md Itn0.xlxn•Sna vll,kwxM hntlxad xnu~.l'wbnnaiarnm.~.adx,k.aPU1W4y, Mmuuh.upvyn `:,ihn+m'fiNarka.bxk' \fa,u Eup} Moreduniusalwrvrreurlbec 1"aWQ1TlCllt. Philip Morris U.S.A. The "Marlboro Country" advertising theme is recognized as one of the most memorable in the history of advertising. The continuity of its humorous, offbeat advertising helped to strengthen Benson & Hedges' leadership in the 100mm category. Operating Revenues F.~.~'M,!~.'m,n~_kve6,n.mo4,rcnJ+t . 'Fauiched Flawubreaktbtou~hands struggk to bring tasie to bw tar smoktng ~r-orQraf,he4.ea,ar ,ww•.~w,u,Q tiw+a~'mk<,he s...~~.~ ~lan+x MERIT Information-packed advertisements told the news of the 'Enriched Flavor' breakthrough for Merit. 1976 1975 $1,963,144,000 $1,721,549,000 In early 1977, advertisements like this introduced the reformulated Parliament as a low-tar brand. Fashionable, feminine advertising helped to maintain Virginia Slims as the preeminent woman's cigarette. 1974 1973 11 The Virginia Slims Tennis Circuit has achieved full stature as a major sports competition. 1972 $1,502,267,000 $1,303,629,000 $1,164,550,000 Operating Income $ 401,426,000 $ 337,314,000 $ 286,225,000 $ 227,282,000 $ 194,072,000 Clifford H. Goldsmith, President John T. Landry, Executive Vice President and Director of Marketing James J. Morgan, Vice President and Assistant Director of Marketing Max L. Berkowitz, Senior Vice President Frank E. Resnik, Vice President, Operations Administration Benjamin A. Soyars, Senior Vice President, Manufacturing Richard D. Robertson, Vice President, Ecology and Director of Energy Resources F+i Robert H. Cremin, Vice President, Sales _ Edward M. Schaaf, Jr., Vice President, Production ' 4" J. Paul Jeb Lee, Vice President, Marketing Services Dr. Robert B. Seligman, Vice President, Research and Development Ya Q C Fred J. Laux, Vice President, Personnel . Richard L. Snyder. Vice President, Finance and Administration (Jo CA William G. Longest, Vice President, Leaf Dr. Helmut R. R. Wakeham, Vice President, Science and Technology l`J W. Wallace McDowell, Vice President. Operations R. Nelson Beane, Controller

13 Quality is monitored by elaborate control devices, but quality responsibility still rests with highly trained and skilled workers. Quality cigarettes begin with expert buying of the finest tobacco. Philip Morris U.S.A. Operating Revenues The manufacturing area of the Operations Center, where each of the most technologically advanced cigarette making-packing modules available produces more than 4,000 units a minute. Philip Morris U.S.A. Operating Income The research and development personnel who achieved the scientific breakthrough for Merit are working on new developments that will meet changing consumer preferences. U.S. Cigarette industry Unit Sales Marlboro Share of Total U.S. Industry Miltions of -_-Millions of eillion % % Dollars dollars Units 2100 420 700 35 21 1800 Operating revenues of Philip Morris U.S.A. have increased atan average annual compounded rate of 13.5% since 1967. in$ ce 1967, operating income of Philip Morris U.S.A. has increased at an average annual compounded rate of 21..9%. 1 72 73 74 7576 ~ Total Filter Cigarettes ~ Total Non-Filter Cigarettes - Philip Morris Share of U.S. Industry (%) Total U.S. cigarette industry unit sales have grown at an average annual compounded rate of 1.6% over the last 10 years, while the filter segment increased at an annual rate of 4.2%. 676 6 7 71 727 747576 W ~ Marlboro 80-85mm Full Flavor ~ Marlboro Line Extensions All categories of Marlboro represented 15.5% of the U.S. industry In 1976 versus 6.6% In 1967. The Marlboro line extensions accounted for 23.3% of all Mariboros sold in 1976.

14 Philip Morris International Philip Morris International unit sales have continued to grow at a significantly higher rate than the world cigarette industry. We are now actively involved in almost every major market worldwide. One of our important newer markets is West Germany, where the company's affiliate, Philip Morris GmbH, is growing rapidly and Marlboro now ranks as the s xth-largest selling brand in that country. ZIGAR

16 Philip Morris International Brunette, produced by our affiliate Fabriques de Tabac Reunies, is one of the leading brands in the Maryland tobacco blend segment of the Swiss market. Marlboro is the number one selling international brand in Italy. Mark Ten is the major cigarette brand of Benson & Hedges (Canada) Limited. Premier Tobacco Industries Limited, in Pakistan, increased its -share of the rapidly growing filter market where the company's leading brands are Red & White . and K-2 Filter. 1976 1975 1974 1973 1972 Operating Revenues $1,083,970,000 $1,040,002,000 $887,077,000 $822,907,000 $623,699,000 Operating Income $ 130,104,000 $ 112,975,000 $ 94,017,000 $ 92,150,000 $ 84,095,000 Hugh Cultman. President Hamish Maxwell, Executive Vice President. Europe/Middle East/Africa and Asia/Canada Eric M. Janssen, Vice President, Personnel R. William Murray, Vice President, Europe/Middle East/Africa Charles F. Lombard. Vice President Carlos E. Saiguero, Vice President, Latin America/iberia Hans G. Storr, Vice President, Finance ~ William J.O'Connor,Vice President, Australla/ William H. Webb, Vice President ... j 0 New Zealand and Chief Administrative Officer ~ .,.~ Albert E. Bellot, Vice President C3 C] Aleardo G. Buzzf, Vice President _ U0 - ~ Staffan Gunnarsson, Vice President tf` Hamilton Hurley, Vice President

Benson & Hedges 100's continues as one of the company's leading brands in Argentina. In Brazil, Shelton Extra Suave, successfully introduced in 1976, continues to post unit safes increases. Phiiip Morris internationai Operating Revenues Philip Morris's U.S. export shipments showed a significant increase in 1976. Lindeman (Hoidings) Limited, our affiliate wine company in Australia, is the leading wine producer in that country. Philip Morris International Cigarette Unit Sales Export. Affiliates. Licensees Billion 175 Units Philip Morris Brasileira S.A. de Cigarros' new factory in Curitiba represents the company's effort to produce quality products in modern, efficient environments throughout the world. Philip Morris (Australia) Limited has become the largest cigarette company in that country with Marlboro its leading brand. Philip Morris internationai Operating income Millions of 140 Dollars 67 68 69 76 71 72'73 74 75 76 Total Filter Cigarettes Total Non-Filter Cigarettes 17 % 14 Philip Morris Share of World Market (%) Philip Morris International's operating Since 1967, total unit sales of Philip Since 1967, operating income of Philip World cigarette industry unit sales revenues of consolidated and unconsolidated Morris International's affiliates, Morris International has increased at an (excluding the U.S.) were about affiliates have grown at an average annual licensees, and exports have increased average annual compounded rate of 20.3%. 3.3 trillion in 1976, and over the last Compounded rate of 23.8% since 1967. at an average annual compounded 10 years have grown at an average rate of 17.6%. _ rate of 3.9%. Total World Cigarette Unit Sales Excluding U.S.A. Billion Units 3500

W 20 Miller Brewing Company The Fort Worth, Texas, brewery like Miller's other facilities uses highly automated equipment to insure consistency and quality in the brewing process. An architect's rendering of Miller's new corporate headquarters building now under construction in Milwaukee. .,•,~. . • If Milier ' ` • • lr• !... • • i /~ Miners~ • •'II ~-• • ijl~~Mdlertiaiei r • i Millertimer - . ., ~~Miilerti~ • ,I/ Milkr •_ L ~ : 11 ---~: • II-'~9!" ` • 0 • 11 ~ • V, •II " A • • II .,. r _ • • tt Continued use of the highly successful "Miller Time" theme helped Miller High Life sustain its rapid growth rate in 1976. 0 511 ,;,2'J,1C_.!!.~ 1976 1975 1974 1973 1972 Operating Revenues $982,810,000 $658,268,000 $403,551,000 $275,860,000 $211,262,000 Operating Income $ 76,056,000 $ 28,628,000 $ 6,291,000 $ (2,371,000) $ 228,000 John A. Murphy. President and Chief Executive Officer William K. Howell, Executive Vice President Lauren S. Williams, Vice President, Marketing and Treasurer Warren H. Dunn, Vice President, Travis G. Adler, Controller General Counsel and Secretary Edward W. Frantel, Vice President, Sales Thomas A. Fulrath, Vice President, Personnel Q -~s CA Larry K. Neuman, Vice President, _ ~ Plant Operations ,0 Allen A. Schumer, Vice President, ne.rertsi Gi..,.. M V 0 Thomas B. Shropshire, Vice President, Market Planning +p . I Georgy Tarala, Vice President, Engineering

The new brewery now under Miller now has three aluminum construction in tTden, North Carolina, can manufacturing plants. Miller's fifth facility, is scheduled to begin production in 1978. Miller High Life in six-packs of 12-oz. bottles on a high-speed packaging line at the new brewery in Fulton, New York. Miller Brewing Company Operating Revenues Miller Brewing Company Barrel Shipments Millions of _ Millions of Dollars Barrels 21 ! 67 68 69 70 71 72 73 74 75 76 Miller Unit Sales Miller Share of U.S. Industry (%) Miller's multi-brand marketing approach concentrates on the premium segment of the market. Analysis conducted at quality control laboratories at each of our breweries helps to maintain Miller's high quality standards. Miller Brewing Company Operating Income Over the last 10 years. Miller's operating Since 1967. Miller's barrel volume has Since 1967, operating income of Miller revenues have grown at an average risen at an average rate of 16.1 % per year. has increased at an average annual annual rate of 20.6%. Since 1970, after Miller's growth in 1976 moved the company compounded rate of 16.4%. Miller was acquired, revenues have into third place among U.S. brewers with a increased.at an average rate of 26.1 %. share of about 12.2%. ! ! 21 Domestic Beer Industry Unit Sales 67 68 69 70 71 72 73 74 75 76 Regional and Non-Premium Beer (est.) Nationally Distributed Premium Beer (est.) Since 1967, total U.S. beer industry barrel sales have grown at an average yearly rate of 3.7%, and the premium beer segment, where Miller is positioned, has increased at an average rate of 10.6%.

22 Philip Morris Industrial Modern computer controls help employees in Philip Morris Industrial's paper companies control the quality of their products. Sophisticated machinery is used by our packaging companies to produce food packaging materials. 0 Packaging materials for the food industry and for non-food applications are produced at six U.S. facilities by Philip Morris Industrial. William D. McCoy, Philip Morris Industrial's president and chief executive officer. 1976 1975 1974 1973 1972 Operating Revenues $169,096,000 $151,960,000 $155,390,000 $132,126,000 $113,136,000 Operating Income $ 10,620,000 $ 8,052,000 $ 12;280,000 $ 8,300,000 $ 7,735,000 William D. McCoy, President and Chief Executive Officer Fred M. Stefan, Chairman of the Executive Committee James B. Kurtzweil, Executive Vice President, Operations Edward B. Kime, Jr., President, Packaging Group Richard L. Radt, President, Paper Group t`r f C? ' Ralph J. Becker, Vice President, Purchasing Co Robert G. Etter, Vice President, Business Development C CIO V - George R. Lewis, Vice President, Finance and Planning a t~T Alan G. Wernick, Vice President, Personnel 11

23 Ii, Wisconsin Tissue Mitls produces 35,000 tons of paper annually for use in making products such as disposable paper napkins. Reinforcing bars, used in bridge and highway construction, are coated with a powder coating material made by Armstrong Products Company, a Philip Morris Industrial company. Construction is underway in Colonial Heights, Va., on a new packaging materials plant. Polymer Industries, another Philip Morris Industrial company, makes highly technical chemicals for the textile industry. Philip Morris Industrial Operating Revenues Philip Morris Industrial Operating Income 175 Millions of - . Dollars 14 Millions of Dollars 12 '10 8 6 4 2 0 ~ .{b 67 68 69 70 71 72`73 74 75 76 67 68 69 70 71 72 73 74 75 76 CC! Operating revenues of Philip Morris - Since 1967, operating income of Industrial have increased at an Philip Morris Industrial has increased - average annual compounded rate of at an average annual compounded - 8.5%since1967. rateot6.1%.