Tobacco Documents Online

_ i- ~,~p' rated, founded mar ~ ~ Plul~~~tD=~i.~Jliactii~ ~~Itcor~"~ ~n~ lig[ni~ 1It1919,`has lo na Ina,jor clgarette ~ =inanu~ffi r ~bilap, It e lat~est U S;~jased 3nternational ~ ~ clgarrra~ ~~ - . . ~ _ ~ ~ .~ -~- Com ' Tf~ t~rporation ac Irev fy contro,~ the MI11Pr~rewing ~, ~ ,1~Ia"ltt i a!a~-fl~rgest b~t ,. t at ~a'' , ~;~~Tiller Is tl~k __ larges-t' 1~ e 0 es ~~.Co any, acc~uiredm id~~~~~ie worlcl ~ia~as~sa diver~ Into n ure ~ ~ ltegsues, A ~`p"`~cka a~r , as vwe as~nto~m- ~isudnt. _ ~ re ctet€by ~i~ p orris ln~ern ~o7~ nY, PIdTiI~ _A Pfiii. ~redl~ n tI©n. compTe~ ol3era#':~ : P51 ~r4v~des financin Morris~~L~grpOr~ d's op rating compameg~ levera~dl~la~°act~vit o~er financ 1. ; ,~~•... .

Financial Highlights (in millions of dollars, except per share amounts) 1984 1983 1982 1981 ~ _ 1980 Operating Revenues _ $13,813.7 $12,975.9 $11,586.0 $10,722.3 $9,649.5 Net Earnings 888.5 903.5 781.8 659.7 549.1 Earnings Per Common Share 7.24 7.17 6.23 5.28 4.41 Dividends Declared Per Common Share 3.40 2.90 2.40 - _- _ 2.00 - - ~ 1.60 - Funds From Operations Per Common Share 12.61 10.70 9.24 7.81 _ 6.29 Percent Increase Over Prior Year 4 Operating Revenues _ 6.5% 12.0% 8.1 % 11.1 % 18.4 % Net Earnings (1.7%) 15.6% 18.5% 20.1% 8.1% Earnings Per Common Share _ 1.0% 15.1% 18.0% 19.7% 8.1 % Dividends Declared Per Common Share Oper~:'-g Reve;.uss ! fl 17.2o/a 20.8% 20,0% 25.0% 28.0% Philip Morris U.S.A. - $ 6,133.3 $ 5,519.9 $ 4,330.1 $ 3,761.6 $3,272.1 Philip Morris International _ 3 ,741 . 0 3,646.7 3,563.7 3,400.3 ,205.4 3,205.4 Miller Brewing Company 2, 928 .2 2,922.1 2,928.7 2,837.2 2 The Seven-Up Company 734.0 649.9 530.6 _ 432.1 353.2 Philip Morris Industrial 277.2 237.3 232.9 291.1 276.5 Consolidated Operating Revenues $13,813.7 $12,975.9 $11,586.0 $10,722.3 $9,649.5 Operating Income Philip Morris U.S.A. $ 1,745.2 $ 1,337,8 $ 1,101.6 $ 905.7 $ 786.1 Philip Morris International _ 420.9 366.0 446.0 396.6 318.0 Miller Brewing Company 116.2 227.3 158,8 115.6 144.8 The Seven-Up Company 5.3 (10.8) (1.2) (1.7) _(7.1) Philip Morris Industrial 29,5 13.6 7.6 18.9 16.9 Mission Viejo Realty Group Inc.* 17.2 19.6 ~ 2.0 11.1 14.7 P.M. Credit Corporation* 11.3 4.5 0.9 _ Consolidated Operating Income $ 2,345.6 $ 1,958.0 $ 1,715.7 $ 1,446.2 $1,273.4 Compounded Average Annual Growth Rate 1984-1979 1984-1974 1984-1969 1984-1959 Operating Revenues 11.1% 16.5% 18.1% 14.2% NetEarnings 11.8% 17.6% 19.9% ~ 16.5% Primary Earnings Per Share 12.2% 16.4% 17.6% 15.2% Operating companies' income is income before corpoeate expense, interest, and other non-operating income and deductions. The amortization of previously capital- ized interest is included in operating companies' income. A write-down of the completed but inactive Miller Brewing Company facility in - ; Trenton, Ohio, reduced 1984 net earnings and earnings per share by $145.6 million and $1.19, respectively. *Represents equity in net earnings of these unconsolidated subsidiaries. ~ gA ~ CS~ Z~

 Operating reventles increased ~'~.5 % to ~ 13.8 billion.  Operating income increased 19.8 % to $2.3 billion.  Net income decrea.Qed 1. 7% to $888.5 million due to a write-down of Miller Brewing's facility in 'I~renton, Ohio.  Earnings per share increased 1. 0% to $7.24.  Declared dividends increased 17.2 % to $3.40 a share.  Funds from operations per share increased 17.9%. * OIic (IeLt, zfI. itU lowesc le°7el in `',`:.'  Our worldwide cigarette unit volume increased by more than 20 billion units. Operating Revenues Billions of Dollars 80 81 82 83 84 Operating Profit Billions of Dollars 8o 81 82 83 84

Review of the Year In 1984, Philip Morris' cigarette sales again increased in volume and market share, both in the United States and internationally. Our cigarette-operations continue to gen- erate most of the corporation's earnings and growth. The overall results of our-non-tobacco businesses have not yet matched our ambitions for them, but they showed progress in 1984. Miller Brewing Company's bar- rel sales were up slightly over..1983, the first increase in three years. Seven-Up volume also improved, and the company had an operating profit for the first time since 1979. Philip Morris Indttstrial_and the Mission Viejo Realty Group Inc. had good years -~!~....- "Ind le-i-1, *,~ rcrinpaniez~ eFtd ui Mie corporate ,~taif, :n : ~r to improve productivitly. These programs, which were completed in 1984, reduced a significant number of management and staff positions and are contributing to management effectiveness as well as lowering overhead expenses, - The corporation's operating income increased 19.8,I'l over 1983 but net income was down as a result of the de.cision reached in November to write-down Miller's completed but inactive Trenton, Ohio, brewery to net realizable value; this resulted in a charge of 5280.4 mil- lion to pre-tax income and i;1-1:j.6 it~illion to the net income of the corporation. i`1 strong ir;cr_~ase in cas'1 3.`w 't' !`qen?'Jlef~ us to evy ;4Ju.3 iuii;ion ana to complete the repurchase, authorized by the Board of Directors in late 1983, of 4 million common shares. In May, 1984, a further purchase of 4 million common shares was authorized, and at year-end 1.5 million had been purchased. Capital expenditures in 1984 amounted to S298 million. In 1984, Philip Morris raised the divi- dend declared on its common stock by 17.2 % to an annual rate of $3.40 per share. In mid-year, a new management team assumed responsibility for the company and for the commitments that have characterized Philip Morris' success over the past generation: -«'e are committed to make and market products of the highest quality and to develop new products that satisfy consumers' present demands and anticipate their needs. To do that, we will continue to invest in the best and most productive facilities, machinery, and equipment as well as in research and develop- ment activities oriented to the marketplace; -«'e are committed to profitable growth. We intend to continue to gain sales and market share through innovative marketing, and to broaden the base of our business through investment or acquisition in fields compatible with ou_r expe.-ience. «'- wi:i use our n~, +;i<<g iin'tncial surn~iil~~, a~~d reso~~rces to iiripr,wE-I •.'lt, ,-i~_;e of our sto(-kl:olders' investment; We are committed to defending the legitimate inter- ests of our businesses against discriminatory taxation and critics' proposals to impose unreasonable restric- tions on the use of our products and on some of our competitive marketing tools; We are committed to continue our programs in the public interest and to recognize our obligations to the society that supports us, in particular, to the com- munities where we work and invest. Thpse comniitments require another-that of a dedi- cated an~' ~up _i~r team of rlanagement and emplo,~ees. We itit,•:?~i , .~=rve and ^:-.hLince the quality of our ue:utli~: 's pertor:nance by ~fianing sure Philip Morris remains a lively, friendly, and stimulating company for which to work. We are committed to encouraging sensi- ble and confident risk-taking, to rewarding merit and achievement, and to seeing that occasional mistakes are treated as learning experiences. Net Earnings Earnings Per Share Dividend_s Declared Capital Expenditures Per Share B

Philip Morris tJ.S.A. In 1984, cigarette sales in the United States increased to approximately 600 billion units, showing some recovery from 1983 when sales levels were depressed by the effects of greatly increased taxation. Philip Morris U.S.A.-unit i volume increased U'1,4,'o to L1Et'i ~')Iliio 1 uilits, LIl1;I I;i';;, share improved to 35.3 % . ~ ` The Marlboro brand enjoyed a particularly good year as volume increased 7.4 %.. Marlboro Red remains by far the largest-selling brand in tlie market; Marlboro Lights consolidated its position as the leading low-tar cigarette. During the year, 25's packs of King Size Marlboro Red and Lights were successfully test marketed, and this convenience package became available nationally early in 1985. 14erit low-tar king size in a box was also intro- duced nationally in 1984; among our other brands, Benson & Hedges 100's and Virginia Slims held their leading positions in their cafegories. Philip Morris U.S. A.'s strong brand performance was enhan::-et1 by a sal<~z f,lrce re&pw,.'n"nt re-i'i.il ` in a significant impi'v'veme'°it: in blith pioduct Izni: j'i'.CkdjI' distribution. The increase in distribution was partially a result of the itltrodUctiUlt o~ Iz I.Cw ~ett3C'i , j'?;? t f _a1 L:/,i •.ld i)13r-,i- age display units, which heightened Philip ivitnris i'.S,A.'s share of in-store merchandising space. Speclal proiyro- tions such as the Marlboro Country Music Concerts and the Virginia Slims women's prf,f(, 1F,_Il tenliis tf,uro,-)- nlf'1lCs, along wita ~I: v.?1It't~' _u( i,ii;IP iii'i~)IITPf~ 11) i)1 1 ~ ~ , . ;lfid "flil!'t II (C.`~r.ii'i. . . lu'•1. ' L UC2l 1(I~. }1Clnt't[)2tll~ ~ t'tiCl'IC and }!r =~e f<<hel prniil-ict~, ,whievi,ri ,a shmre nf ~ibf11-it 5.5°%, of the Li.S. marker. Philip 1lurris U.,S.A. fii/f not c,oniltetf, ii) this segment in 1984. IIowever, «'e have broad and suc- cessful experience in price segmentation marketing in other countries and are prepared to enter the segment in the United States, if appropriate. The quality of our products remains our great coin- petitive strength. That quality is based on exacting manufacturing standards and high-quality tobacco, Our overall facility improvement and modernization t.ri;gram is continuing. Production increased in our new plant in Cabarrus County, North Carolina, the world's most mod- ern and technologically advanced cigarette factory, and we have realized significant productivity gains there. By the end of 1984, our new primary tobacco processing st=tnti<tl iIi'rC:~it:-:It, was almost complete. 'We made lar ~,, purchases of the 1984 U.S. il~_-:, ,ured and burley tobacco crops, andgtzaiity American tobacco leaf remains the mainstay of our products. In recent years, U.S. leaf has iostits price competitiveness in the world market, surpluses have accumulated, and uncer- tainties have arisen about the future of the tobacco pro- gram, Philip Morris is the largest buyer of U.S. tobacco, both for its U.S. and internationally ma.nufactured brands, and we intend to continue to depend principally on U,S,-grown tobacco. VJe will support programs to in- sure adequate supplies of quality tt baccl, at pri.^"s ,sl;ic!!, while competitive, allov; a fa-ir r:'tt.)r)1 to U,S. growe~~,.  U.S. Cigarette Industry Unit Sales - Philip Morris Share of U.S. Industry (%) Philip Morris U.S.A. Philip Morris U.S.A. Operating Revenues Operating Inoome Millions of Dollars 5100 4250 3400 Millions of Dollars 1500 1250 1000 2550 1700 850 0 75 76 77 78 79 80 81 82 83 84 750 500 250 0 Phillp Morris U.S.A. U.S. Cigarette Industry Cigarette Unit Sales Unit Sales Billion Units Billion Units 160 540 42% 150 450 35 120 360 28 270 21 60 180 14 30 90 0 0 75 76 77 78 79 80 81 82 83 84 75 76 77 78 79 80 81 82 83 84 205'764'7530

Philip Morris International ~fBI`~bUPu 11 L,IGHTS urk~~ invr Ii tt i; : r t~~ ~ _ LIDHa Philip Morris International had a good year, with operat- ing income increasing 15.01 to 5420.9 million. Even more encouraging, total unit volume increased 5,5% to 258.2 billion, showing that excellent growth potential for Philip Morris remains in our_ international markets. Results were particularly strong in the developed markets of Western Europe and in the Middle East. In West Germany, where a punitive tax increase in 1982 had depressed total market demand and encouraged price c•ut- `ing', consumers began to turn l;ack to mainstream .._,~,. Nla°-it oro rid especial, I,g ;52.3% in i t,•,, t'''e s'.!cCe.W_YJl inrrOC?ttt 'tio?1 of i4lar.bot•u it,U's early in the y~ear. In Italy, we had good growth for our leading brand, Marlboro, and especially strong performances by Merit and Multifilter, In France, our unit volume grew by 16%, and our market share increased to 15.8 %. Profitability in this market remains depressed due to government price controls and a tax system that discriminates between  Unconsolidated  Consolidated _ Philip Morris International Philip Morris International Operating Revenues Operating lncome Millions of Dollars Millions of Dollars 9000 390 7500 325 6000 260 4500 195 3000 130 _ -__ ~ 0 0 -~ . . . . 75767778796081528384 - 75767778798081828364 national and international products. In the United King- dom, the Raffles brand was launched nationally in August, following a successful test market in the south. This action has effectively doubled our market share in the U.K. to about 5%. Exports to the Middle East continue to represent an important source of income, In the Gulf, Marlboro Red, Marlboro Lights, and Merit are three of the top six brands. In Egypt, Marlboro sales were well up over last year. In the Turkish domestic market.. a new source of export business in 1984, Marlboro became the top- selling imported brand. The international segment still only accounts for approximately 2% of the large Japanese market, due in part to restrictions on distribution as well as high tariff and tax barriers. The restrictions have been modified as a result of negotiations betGv::en the Japanese guvern- ntent and the Japar, tcn tceo molopolv on the one hand w fi the L S, govet>.~mF tt eso_ a_11r t1 e_f rice uf_the Special TradeRepre~eiliatlve, on the other. These conces- sions, together with our intensified marketing efforts in Japan, helped to increase our sales in 1984 while our Lark and Parliament brands remained the two lead- ing imports. We continue to work for elimination of the remaining barriers to free and fair trade with Japan and the further development of the import segment. In Hong Kong, the market stabilized after a large duty increase and consequent price cutting. Marlboro again strengthened its position and is the leading brand in the market, with a share rjf 26 uo. In Malaysia, sales of Marlboro by our licensee increased strongly during the year, which q%~o saw t} e I~iltning of licensed manufac- ture of Marlboro in Indonesia. In spite of economic diffi- culties in the Philippines, we experienced only a modest decline in our licensed sales volume. i World Cigarette Industry Unit Sales (Excluding U.S.A.) ~ Philip Morris Share of World Market (Wo) Philip Morris International World Cigarette Industry Total Cigarette Unit Sales Unit Sales Excluding U.S.A. Billion Units Billlon Units • 210 ` _ 3600 9,0~/a ~ 175 140 105 _ . ~~ . - 2400 1800 _ _ _ ' . ' _ - ' _ _ - _ _ - - ~-5 ~ 6.0 ~ 4.5 ~ _ 70 1200 ~ 3.0 ., j 35 _ _ _ 600 1.5 ~ ~ 0 0 - -~ 0 ~ ~ 75 78 77 78 79 80 81 82 83 84 75 76 77 78 79 80 61 82 83 84 !

The econom,• in Latin America has placed our busi- nesses t4Nere under pressure. Consumers have switched virtually everywhere to lower-priced brands. This trend has reduced margins, as have price controls, which con- tinues to make it difficult to recover cost increases. TtI c•rlunt,eract this ,5ituation; our policy has been to concentrate on volume and market share gains. We have launched new, free-standing brands into growing seg- ments, Among the many launches made, L&M Lights in Argentina, Lider in Ecuador, and Casino in Uruguay were particularly successful. Marlboro is gaining market share almost everywhere in the region, and this despite its relatively high price. It has performed notably well in Brazil, where the market as a«•hole shows signs of recovery, and in Mexico and the Dominican Republic where our affiliates achieved record sales volumes in 1984. Philip Morris (Australia) Limited had a good year, led by the success of Peter Jackson_ 30's. Packaged in a four- row hinge-lid box, the brand increased its share of market from 7.5 % to 13.1 %, and contributed to the com- pany's overall improvement, which brought it to 29.4% of market, up from 27.0% in 1983. Philip Morris (Austra- lia) I,i~ w iI-, e UOro ~l:l'• ij ta:= 7) T al- ited. a 14% in ea+e5 and rem<;.ins>~ iea.del, i n its industr,y. The strength of the U.S. dollar continued to reduce the value of foreign sales and income when expressed in dollars. It also makes U.S, exports less price competi- tive in foreign markets. In 1984, our cigarette export vol- ume declined slightly from 1983 levels, but our share of the total U.S. cigarette export trade again improved, to about 60%. Rothmans International p.l.c, (London), in which your company has an investment, had another good year in 1984. During the year, we restructured our investment, bringing our equity in Rothmans International to slightly over .'10% and r,ur voting rights *,,t ,.?nde_r 25%. The rZstrL-`Gl_If1?g Settled i)~jeCt l:il~ rf:_ ~'1 the oravit!2_: traihactioil by the Commission of tite Ellrope mn l,o:nmii- nities but complainants are appealing. The matter also continues to be the subject of litigation in Germany. Mil1er Brewing Company Although the U.S. beer industry showed an estimated 0.7% decline in volume in 1984, Miller Brewing Company «`s r;le .;; aoll~:~~ of Iio~~~e,; 2r, zne ~ir of Mille- ucts reduced its operating iilcome. We are planning for future sales volume and income improvement by devel- oping new products and by creating new programs to revitalize Miller High Life. Meister Brau and Milwaukee's Best were successfully introduced nationally into the popular-priced segment within the past 15 months, As a result, we have been able to maintain brewery utilization, to satisfy the vol- ume requirements of our distributors, and to safeguard shelf and cooler space within retail outlets, Although the Miller Brewing Company Operating Revenues Millions of Dollars 75 76 77 78 79 80 81 82 83 84 Miller Brewing Company Operating Income 75 76 77 78 79 80 81 82 83 84 2057647532

margins on these brands are relatively low, we have two premium-price brands in test markets and others under development. Lite is the second-best-selling brand of beer in the U.S. market, and it retained its dominant position in the growing light beer category, while achieving a small volume increase. - The super-premium segment of the market in which Lowenbrau competes has been adversely affected by imports, made relatively cheaper by the strength of the U.S. dollar. This, together with the general consumer movement to popular-priced beers, resulted in a decline in Lowenbrau sales in 1984, Miller High Life is the third-best-selling brand in the U.S. market, but its sales decline, which continued in 1984, remains a major concern, Rectification of High Life's sales trend is a top priority. ~_: nmii, , r '>sti~ig nrcirain inclica`e,~ that iligh Life . . ~ i - -- C6 U1. t.Cl i ~ T`-~- ,; hen cnnl beers on the market, it is made without additives or pre- servatives, We have undertaken several marketing initia- tives to correct the sales problems of High Life, Among them is a new advertising campaign (begun in February, 11P85) which will improve the brancL's presentation and image. High Life sales responded well in 1984 to the introduction of the new 32-ounce King Kan, The brand has also continued to do well in the Canadian market where it is made under license. We are optimistic that the corrective steps that are being taken will result in an improvement in its sales performance., I'lte slowdown in indu, ry beur sales over recent ie.~.- . togethtr ;vith the ki -'ine ` i g:iller High Life vol- t Wtfor I;Ct3i'..:1.',s, resulted in a recognition that we could not set a date for the opening of our completed but inactive brewery in Trenton, Ohio. Since we could not forecast the time when this brewery's capacity will be needed, a decision to write the asset down to its net real_izable value was made in November.  U.S. Beer Industry Barrel Shipments - Miller Share of U.S. Industry (%) isiiter rrewfng Compar.y Barre! Shipments Millions of Barrels 36 30 U.S. Beer Industry Barrel Shipments Including Imports Milllons of Barrels - _ 18 75 - 12 50 _Y_a ... ~_ s = _ _ _ . 8 6 p 6 _ -- ; ~ -- 0 0 ~ ~-c ! 0 v75767778798081828384 75767778798081828384 The Seven-Up Company In 1984, The Seven-Up Company again achieved year-to- year revenue and unit volume growth and was profitable for the firstt time in five vears. The increase in our soft drink revenues for 1984 brought Seven-Up's compound average annual increase to 20.0% over the past five years. C<<r l;. .nds 7UP and Diet 7UP again had record sales I,. ..>s. V,'e moved t;~I. 10096 ?•'t.traSwect for- .,i' ui-i ; I. ' wT:_ J'1go.r r.'e LIhe in r"3ponSe to consumer preferences, The Seven•Op Company -- The SevenmUp Company Operating Revenues Operating Income -18 I I IL 0 tt I - _ _ _.-.. . .. . ~ - 75767778798081828384 75787778798081828384

Our contiitued success cvill d^le,ncl in iar;e part on maintaining a strong network of pr1ifitable, indel:.endent bottlers. We intend to contir_uie to operate bo- tling facilities and to maintain equity positions in bottling operations. Our iilvostments-are directed to specific -fluil~ 1A'(I1>.rf' i' ~ii't;bit Itl; 1`e(iLEiCt' (>Ur dirtc•t support. In 1984, we rri>l,~r;;ni?ecl~hl.;:+ ~tn t`p Foods Group into two divisions: the Citrus Products Division will con- tinue to produce private-label ptf,!iui•ts bnt will put greater emphasis on more profitable branded products, including Juice-Up Lemonade and Lemon Juice, which will be marketed nationally in 1985. The Freeze-Dried Division will continue to market its products in the tradi- tional outdoor and specialty segm:,nts. It will also intro- duce consumer retail products in 1985 as well as supply the food service industry. For Seven-Up International, which is under the direction of Philip Morris International, volume sales increased by 5.2 % in 1984, Good progress was made in the Europe/Middle East/Africa Region, including a successful introduction of 7UP in France during the year. Sales in Latin America recovered from the depressed lev- els of lg„). I the tiflutll Andreas Gemblr••, ~vho has 5uec-~,t'i.llly led Seven-I1p International since 1979, has--returned to Philip Morris International's EEC Region as Area Vice President and has been succeeded by Gabriel Bechaalany as President of Seven-Up International. Philip Morrls Industrial _ Philip Morris Industrial Operatiny Rwenues OperatlnQ Income Millbns of Dollars 2 Millions of Dollars 240 24 200 20 160 16 120 12 80 g 40 4 0 0 75 76 77 78 79 80 81 82 83 84 7576 77 78 79 80 81 82 83 84 Philip Morris Industrial Philip Morris Industrial operating revenues increased 16.8% over 1983 to S277.2 million, and opernt'? i income increas ? _ ^~ M ;;, 5 .:(n livisions c)uter'_ to iu'~ 4's recor/ t..;~ Wiscor„ `:- Tissue Mills inc. increa-%-1 its he tissue and towel markets through its traditiona"t ~,hannels of distribution. In addition, it expanded its share of high- quality, specialty printed and non-printed napkin lines. Nicolet Paper Company continued its leadership sta- tus in glassine and greaseproof papers. It made substan- tial share gains in the release backing market. Plainwell Paper Co., Inc. continued to improve its position in fine printing papers, release backing papers, and technical specialties. It successfully introduced "Solitaire," a premium printing grade. Koch Label Company is the leading U.S. produee: oi ,-ibelS ffir Y) r_F;', .` ai-st ~ir(!(Il;~,5 ,110 i.~ti'~ "' "' . oi1 1, 11 F' and pritiiii/g in-iC;(!iit As this Annual Report goes to press, we are actively considering offers to buy the companies that make tip Philip Morris Industrial. While well and profitably man- aged, Industrial's operations do not fit our long-term strategic object.ives, <1 W

Mission Viejo Realty Group Inc. .riission Viejo Realty Group's operating revenues of $237.7 million and operating income of $36.1 million were the second highest in the_company's history. Our housing sales were strong in the first half of 1984, but slowed in the second half as mortgage rates rose. Sales of land for business properties remained strong. In 1984, we opened six new housing projects. In Mission Viejo, we opened the Briarwood and Stoneybrook neighborhoods and in neighboring Aliso Viejo, California, w^ introduced Aspen Creek. Our new, 22,000-acre :,nned community of Higlilanda Ranch, Colorado, added rr: l1, Chaiet, ai.d Remingtt;;2 Bluffs, bringing its ~74 •t ;,i'r:d7 ,., ' 1, ., °h!.}?j<_s ~alicit event17a1l0 wIll supply some 30,000 housing units for the growing Denver market and provide business opportunities to a wide range of enterprises. Our communities are built around schools, parks, re- creational facilities, and retail, commercial, and business k3VRG Operatt.^.g Rovenues 1.I V RG Operating Income parks. On July 29, 1984, much of the world glimpsed those advantages when Mission Viejo played host to the first event of the Los Angeles Olympics-the cycling road races. Through the course of the games, swimmers and divers trained at Mission Viejo won nine gold medals. During the year, we assigned responsibility for our commercial properties to two wholly-owned entities: Continental Equity Investments Inc. will develop or acquire income-producing properties to be held for the long term; IVO, Inc. will handle short-term sales. Mission Viejo Company continues to operate the community and residential development business. sl.a~