Tobacco Documents Online

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CONTI.N'1'S Directors and Offirers .......................... 2-3 I•'inaneial Highlights of tf e Year ....,.,. 4 The PreSident's Report ........................ 5 \tilprint, Inc . .......................................... 7 I{esaurcli .................................................. S Operattiuns .............................................. 10 Leaf .......................................................... 10 Philip Morris 0verseas ........................ 11 llarketinn ................................................ 12 llarketing, ... Tl e Brand Iniaae .... 14-15 Corporate Citizenship ..... ............... 16 Exeentic•e Personnel ...,..... ~.~ .................. 17 The Pre.idPnt's Office ............................ 18 :lndited Finaneial Statements ......,. 20-26 Four-Year Finanr•ial Smmuai,v ............ 27 Products of Philip Morris Inc. ..,.. 2S

nII;rCTnRs JOSEPH F. CULLMAN, 3rd 2/ ALFRED E. LYON, Chairman L. G. HANSON . WIRT-H. HATCHER CHANDLER.H. KIBBEE H. E. RIDDELL.~. TRArSFER.\GE\-TS: Cunrnnty Trust Co. of N. Y., 140 Broadal•ny, New Yorlc REGISTRARS: The Fir.<'t r ntinnnl City Bank of New I ork, 5:i ii'Ull Street, New York Bankers Trust Company, 16 li'crll Street, New Fork COL'xSEI.: Conboy, Hewitt, 0'Brir-n cC• Boardnama, 39 Broadlralt, Yelr York AUDI'rCRS: Lybrunct, Ross Bros. cG lIo atgovaery, 90 Brond Street, New York 2061674032

OFFICERS JOSEPH F. CliLLBIAti, 3rd President ~VI£T H. HATCHEIt Sezaior V ice Presidezzt JOH\ E. COOIi,IIA~ T'icePresidezzt,Diiez•sifacatioozd^Det•elopznent DB. ROBEIIT N. DuPI'IS VicoPresiclezzt,Researck d- Development CHA\ DLEP~ H. IiIBBEE Tice President, Treasurea• and Secretary ROBERT P. IIOPEP VicePresicleut, Chief of Operations GEOP.GE ~CEISS.lLA.\ Vice President, Director of 3farl:etizag AADIIEW C. BItITTO\ VicePresidezzt,Clzief of Manufacture ROGEIt AL GItEE\E VicePresidezzt,llcl2ertisizag GEOAGE J. HE\_A' VicePresiderat,DistriLution ItAi JO'-'~TES Vice President, Sales PAUL D. SRIITH 1 ire President and Gerzerad Corrn,cel HOWARD S. CULLMAN DR. JESS H. DAVIS HENRY P.. BLU\I Controller JOIi-Y, A. HADTPSON d.ssistaut Treasurer COII'-\IELIA CRAIG 9.ssistavzt Secretary PAULI\ E IVAG'EII Assistant Secretrtrt/ ARTHUR SNAPPER ROBERT P. ROPER K. H, ROCKEY

HIGHLIGHTS 1957 1956 Sales $408,813,852 $3,86193,733 Income Before Federal and State Taxes ' 32,721,339 29 692,528 ~. _- _ _ _ -- - Federal and State Taaes on Income 16,961,900 KE1b 286,900 ry \et Income . 15,759,439 35;628 ~ _ - - Earnings per Common Share 4.50 - 4.OS Coumion Stock Dividends Paid 9,410,548 ~ 8,911,685 ~- Earnings Retained for Future Operation and Risk 4,896,759 ~~ ~~,453,588 _ Current Assets __ 249,792,702 50,050,939 Current Liabilities 108,527,504 ~ 0 157,378 Working Capital 141,265,198 r~ 893.5E _ The Notes to Consolic7rrted FhaanCial Stntemeuts shmzild be read in cnnjnaetion zritk t7~e above data. 41

1957 A\ \ LT AL REPORT-PHILIP MOIiPIS Ii~TC. For the twelve months ended December 31, 1957, consolidated net sales were $408,813,802, an increase of 0.8Go over the $386,193,733 for the previous year. Net income of $10, 7 59,439 compared tvith $14,405,628 for 1956, an increase of 9.400. Earnings for the year amounted to $4.50 per share, compared with $4.08 for 1936. The consolidated operations of Philip Morris Inc. for 1957, and the comparable fig•ures for 1936, have been restated to include the operations of llilprint, Inc. for both years. In addition to the re-ular dividends on the Preferred Stocks, four quarterly dividends of 75c per common share were paid during 1957 which represented the 30th consecutive year in which Philip Morris Inc. has paid dividends on its Common Stock. The total of $3.00 per common share paid during 1937 was the same as in the past seven years. The Company's sales in 1957 were the highest in its history. lIarlboro filter ci~arettes continued their upward trend and became leadin; brand. Ci~arette consumption increased in 1907 to an all-time peak, and with the increase in our national population the outlook for the industry seems proniisinIg. our J/

At the Annual Meeting of Stockholders in April, the Compail-~ -'s charter was amended to permit it to activate a program of diversification. Your niana~enient and Board of Directors feel that by joining the -reat stability of earnings of the cigarette industry Nvith souiidl5- mana-ed coiupaiiies having above average growth prospects, the Company will be in a position to increase its future potential and earnino-s. The broadened base of the Company's operations and the addition of iuan5r skilled people are assets of great iniportaiice which are not reflected on our balance sheet. As the first step iii this lon-g-raii~.ge program of diversification, tlie'ae<luisitioii of llilhriiit, Inc., a leading, company iii the flexible packaging industry, was approved at a special uieetin, of stockholders in May, 1937. The stock of this compam, was acquired in July in exchange for Philip Morris common stock. The considerable increase iii your Company's tan,ible net worth and «-orking, capital duriu- the year, as a result of this acquisition, is not reflected in aiiy of the comparative fi~,•ures in this report because prior years' fi`~•ui•es have been i•e stated as indicated in the \ otes to Cozisolidated Financial Statements. G/

These a•e typical scenes in the bliiprint plants where skilled craftsinanship, iuode)~i eqeeipaneut and strict qaialitg control resuit in tlze p»,oduction of top-rated fle: - ible pachaging for Amcrica's lcading consagner prodttcts. In the competitive world of flexible packaging, llilprint. Inc. of llilwaukee, Wisconsin is a pioneer and leader. It is famed in its huge industry as the first American company to print on cellophane. It is well known as the first company in the world which ever printed, in multicolor, on aluminum foil. It was the first eompany to apply print successfully to a sheet of polyethylene. Its reputation for quality pachages and printin.- is outstandina. The last time you ~-isited a supermarket or grocery store, you probably picked up and carried out a lIil- print packaae. Milprint packages the products of hundreds of companies in no fewer than sixty-five industries. This array of packages includes among others polyethylene. cellophane and pliofilm bags. paraffin-coated litlwaraphed cartons and laminated color-printed aluminum foil wraps. Clearly lIilprint's packaging business is comples, its technoloay intricate; it employs the highest cali- bre crafts and skills in American printing today. Flexible packaging is, in fact, one of the fastest-mov- > _ ~ --t-~....,N in~- husinesses in our fast-moving modern world. Today. Milprint operates ten plants in the L"nitecl States, with combined manufacturing space of well over 1,000.000 square feet. Since 1946, it has owned the Nicolet Paper Corporation of DePere, Wisconsin. one of the outstandina glassine paper mills in the country. It maintains Product Development and Pe- search Laboratories. and many new packages now =racin- the counters of our markets were created in this department. Milprint employs over 3,000 people. Itt has asso- ciate companies in twenty-four foreil-n countries which look to :llilprint for the ideas and the tech- nidnes of iuodern American packaging. Developments in the packaffina field have been out- standing in the past ten yeai,s but the need for ne«- and novel packaging is never outgrown. New food teclmolo0es such as irradiation hy atomic fission and new chemical preservatives such as antibiotics will all involve new developments in packaging and. in turn, open new areas and opportunities for lIilprint. 7/

em P.ESEARCI3 The Company's researeh program R-as a,ain es- panded during the year. It lieeaine apparent that the Department's facilities were inade(luate and would beeome more so when the Department set up its propo,sed centralized research activities fbr the Company and its snbsi(liary. .1coordiu-ly, your Board authorized the voii,triuction of a larre wudern lalioraturv to I e lo cated near onr new factory ware- hotise on a (f5-acre tract the Company is developinn in Richmond. It is expected to be completed aronnd June of 1939 at a cost of over three niillion dollars. This new laboratory, which will give us the finest facilities in our indnstry. will he known as "The lieComas Research Center." The building and its facilities will he a tribute to onr late Presi<1ent, 0. Parker lIcCoiuas. A eonsiderable amount of time and effort were devoted to help implement the diversification pro- gram in the technical field. Because of the many areas of mutuall research and technical interest found to exist between Philip 1llorris and its new subsidiary, a committee of research personnel has been forined and will meet regularly. This will lead to better coordination of the research efforts of the 81 parent Company and its subsidiary and better utili- zation of the potential advantages of our diversifi- cation program. Increased use was made of outside research lab- oratories and consultants to annment our own work and also to obtain broader and more specialized technical thinking on onr projects. For the past four 5-ears, your Cmipally has sup- ported the Tobacco industry Research Committee, which is investigating all aspects of tobacco use and health and is iual:ing inforniation on the subject available to the public. Dnring this period the Com- mittee has allocated some ~,'?,000,000 to specific proj- ects of independent scientists in fifty-two leadina universities, hospitals and research institutions. The Research Department continued to make im- portant-contribtttions to our overall l;nowle(Ige which is obviousl.v invaluable in enabling us to purchase the best possible materials and to process them so as to produce and package cigarettes of a quality, purity and flavor second to none. As in past years, many technical papers were presented to scientific bodies. More than a dozen patent applications are in preparation by our attorneys.