Tobacco Documents Online

L,YBRAND, RO S SBRO S. &MONTGOMERY CERTIFIED FUBLIC ACCOUNTANTS NEW YORK ROCKFORD RESIDENT PARTNERS PHILADELPHIA ST. LOUIS WILLIAM M. LYBRAND 90 B R O A D S T R E E T CHICAGO LOUISVILLE GOSTON ATLANTA PRIOR SINCLAIR SALTIMORE DALLAS NORMAN J. LENHART N E W YO R K 4 WASHINGTON HOUSTON WALTER L.SCHAFFER PITTSBURGH SAN FRANCISCO CONRADB.TAYLOR DETROIT LOS ANGELES ALVI N R. JENNINGS C LEVELAND SEATTLE January 27, 1954 CINCINNATI TULSA HERMON F BELL CHRISTOPHER H. KNOLL LONDON PARIS HILTON R. CAMPBELL EDWARD 6. CARSON WALTER R. STAUB PHILIP BARDES HARRY N. CASE JOHN C. POTTER LOUIS H. RAPPAPORT HENRY C. ELFERS The Board of Directors, Philip Morris & Co. Ltd., Incorporated, 100 Park Avenue, New York 17, N. Y. Dear Sirs: We have been requested by your counsel, Messrs. . Conboy, Hewitt, 0'Brien & Boardman, to furnish our opinion with respect to certain information relating to Philip Morris & Co. Ltd., Incorporated (hereinafter referred to as the Company), identified below, contained in the Registration Statement (Registration No. 2-10640) on Form S-1 and Amendment No. 1 thereto, as filed with the Securities and Exchange Commission. References in the left-hand column are to captions or subcaptions appearing in the Prospectus filed as part of the aforesaid Amend- ment No. 1 to the Registration Statement. CAPITALIZATION OF PHILIP MORRIS The Company's funded debt, AND BENSON AND HEDGES short term notes and capital stock outstanding as of October 31, 1953, with re- lated footnotes. SALES AND PRODUCTION All information relating to the Company. DIVIDENDS All figures relating to the Company. BUSINESS OF PHILIP MORRIS All figures in the second para- graph. The table, expressed in units, setting forth the Company's total cigarette sales and its sales for consumption outside the United States for the cal- endar years 1948-1953.

The Board of Directors, Philip Morris & Co. Ltd., Incorporated - 2 PRICES OF THE PHILIP MORRIS BRAND The list prices (before 10% trade and 2% cash di.scounts) of Philip Morris cigarettes from January 1, 1948 to date. TOBACCO The statement that the Company employs averages, computed monthly, to determine the cost per pound of its tobacco in- ventory. Dollar value of the Company's leaf tobacco inven- tories at March 31, of each of the years 1948-1953 and at December 31, 1952 and Decem- ber 31, 1953• The statement that the Company in 1950 sold 333,077 shares of Common Stock for $15,732,549 and 130,610 shares of Cumula- tive Preferred Stock, 3.90% Series, for $12,897,737, in each case after deduction of underwriting commission. PROPERTY OF PHILIP MORRIS - All of the information set PROPERTY ADDITIONS f orth under this heading. DIRECTORS, OFFICERS AND PRINCIPAL The table with related foot- STOCKHOLDERS -- REMUNERATION OF notes in so far as it refers DIRECTORS AND OFFICERS to remuneration. We have compared the information identified above, other than percentage calculations, with entries in the accounting or other related records of the Company. In our opinion, such in- formation is in accord with the records examined and the per- centages used in connection therewith are correctly calculated. The data appearing under "Comparison of Earnings per Share of Common Stock" so far as they relate to the Company have been reviewed by us and, in our opinion, the calculations reflected in the table appearing under that heading have been correctly computed on the bases indicated. The proposed accounting treatment set forth under the heading "Proposed Accounting Treatment of Acquisition" is in ~ ~

The Board of Directors, Philip Morris & Co. Ltd., Incorporated - 3 accord with our recommendations and the computations under that heading are, in our opinion, correct on the bases indicated. It is understood that this letter is not to be re- produced, in whole or in part, or to be referred to, in the Registration Statement or in any amendment thereto or in the related Prospectus or in any literature used in connection with the offering of securities covered by the aforementioned Regis- tration Statement and related Prospectus. HNC