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Tobacco Institute

Philip Morris Incorporated Annual Report 1973

Date: 1974 (est.)
Length: 56 pages
TIMN0440119-TIMN0440174
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CB1663, TI Storage Box 5188
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BUDGET / FINANCIAL
Date Loaded
30 Oct 1998
Author (Organization)
Philip Morris
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150
Author
Cullman, J.F. 1
Weissman, G. 2
Millhiser, R.R. 3
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Minnesota AG
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Mn1-16
Mn1-17
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hdx52f00

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1. Cullman, J.F. Author
  • Affiliation:

    Philip Morris

2. Weissman, G. Author
  • Affiliation:

    Philip Morris

3. Millhiser, R.R. Author
  • Affiliation:

    Philip Morris

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1 Financial Highlights 2 Review of the Year 8 World Map-Philip Morris Incorporated 22 Philip Morris U.S.A. 26 Philip Morris International 30 Miller Brewing Company 34 Philip Morris Industrial 36 Mission Viejo Company 38 Financial Review 52 Directors and Officers Philip Morris Incorporated, 100 Park Avenue, New York, N.Y. 10017. Transfer Agents: Morgan Guaranty Tru,t Company of New York, 30 West Broadway, New York, N.Y. 10015; United Virginia Bank, Box 6E, Richmond, Va. 23214. Annual Meeting: Apri124, 1974, 2:00 P. M. 4001 Commerce Road, Richmond, Va. TIMN 440120 Design: Chermayeff & Geismar Associates Cover Photograph: Ezra Stoller
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Philip Morris Incorporated Annual Report 1973 Financial Highlights Ooerating Revenues . .. . ... .... .. ... ... ............. .......... ..... Net Earnings .. . ... .. . .... ........ ........... ............................. Per Share of Common Stock: Net Earnings: Primary . . . ........ . .... ..... . .......... . . .... ................... .... Fully Diluted . ... .. .. . ...... . ....... ........ .... ............ Dividends Declared Percent Increase Over Prior Year: . . .. . Operating Revenues ..... ... .. ....... ...... . . ....... Net Earnings ........ . . ... .... .. . ..... .... ...... . .. . ... . . . . Net Earnings Per Common Share: Primary. . ...... . ... .. . _ . .... ......... ....... ... ...... . Fully Diluted ....... .. ... .......... .... ....... ......... . ...... .. Operating Companies Revenues: Philip Morris U.S.A. . . . . . . ... .. . Philip Morris International . . . . Philip Morris Industrial . Miller Brewing Company. _ . Mission Viejo Company (1) ......... .. Consolidated Operating Revenues Operating Companies Income: Philip Morris U.S.A. . . Philip Morris International Philip Morris Industrial Miller Brewing Company. Mission Viejo Company (1) . ... ...... . _ Consolidated Operating Income (2).. (1) Operating revenues and operating income from September 30. !+-' (2) Corporate expense, interest, other items and income taxes. «hi,h allocation thereof would be arbitrary. The notes to consolidated financial statements should be read in con.. 1973 $2,602,498,000 148,632,000 $5.42 5.21 1.348 22.1 % 19.4% 1972 $2,131,224,000 124,466,000 $4.67 4.37 1.262 15.0% 22.6% 16.2% 20.1% $1,303,629,000 822,907,000 132,126,000 275,860,000 67,976,000 $2,602,498,000 $ 227,282,000 92,150,000 8,300,000 (2,371,000) 4,122,000 S 329,483,000 $1,164,550,000 623,699,000 113,136,000 211,262,000 18,577,000 $2,131,224,000 $ 194,072,000 84,095,000 7,735,000 228,000 1,331,000 $ 287,461,000 1971 $1,852,495,000 101,498,000 $4.02 3.64 1.21 22.7% 31.0% 19.6% 27.7% $1,035,178,000 51 -1,670,000 ') ~,513,000 2(1-1,134,000 $1,852,495,000 $ 166,734,000 66,968,000 6,135,000 1,300,000 $ 241,137,000 iirectly attributable to the operating companies, are not allocated since a ny , ith the above data. TIMN 440121 I
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We believe that Miller High Life was the fastest growing national brand in the U.S. in 1973. Sales of Miller High Life in both bottles and aluminum cans were up substantially, and consumer acceptance of the 7 oz. 8-bottle "pony pack" was excellent. Miller Ale was also weli received in the Northeast, the major U.S. market for ale, and sales of Meister Brau in the Chicago area also contributed to Miller's record barrel sales. Increased consumer demand for Miller's quality beer products pushed 1973 production to peak capacity. In fact, at times during the year Miller lacked the capacity to meet demand. Miller reported an operating loss of $2.4 million which resulted from increased costs of packaging and raw materials, continuance of price competition in the brewing industry, and relatively high manufacturing costs resulting from the lack of modern efficient brewing facilities at Miller. In the industry, cans and bottles account for an important part of total costs, and the cost of these packages was up almost 7% during 1973. The costs of malt, corn, and barley increased dramatically. Price competition, prevalent in the brewing industry for many years, remained intensive. The resultant cost-price squeeze was reflected in lower margins throughout the industry. In order to increase production and to effect efficiencies, while maintaining superior product quality, Miller has embarked on a major expansion and modernization program. Nearly $200 million has been appropriated for this program over the next five years. The most modern brewing and packaging equipment is being installed in the Miller breweries in Milwaukee and Fort Worth. In addition, production capacity is being expanded in the Milwaukee and Fort Worth breweries. At midyear, construction began on a new warehouse and shipping facility at the Milwaukee location where Frederic Miller started brewing in 1855. Miller also has broken ground for a $16 million recyclable aluminum can manufacturing plant in Milwaukee. In January, 1974, we announced plans to build a $70 million brewery within 200 miles of metropolitan New York. This new Miller facility will begin operations in 1976 with an initial capacity of two million barrels; ultimate capacity will be six million barrels per year. A number of factors, especially the availability of the highest-quality water, will be considered in selecting the exact location of the new brewery. Your company's long-term plan is to build sales volume and market share, and to increase Miller's brewing capacity while making operations competitive and efficient. Although Miller had an operating loss in 1973, there was much substantial evidence that our long-range plan is sound. Our confidence in the long-term profit potential of Miller Brewing is evidenced by our substantial appropriation for capital expansion. Philip Morris Industrial. Industrial's revenues reached S 132 million in 1973, an increase of 17% above the results of the previous year. The gain in operating income was 7.3% despite sharp increases in materials costs that could not be passed on to customers, and actual shortages of some materials such as wax, solvents, aluminuni, and pulp. As an example, pulp prices rose more than 39% during the year, and the impact of this particular cost increase was especially significant on many of Philip Morris Industrial's operations. Toward the end of the year, the Cost of Living Council al lu%t cci small price increases on Philip Morris Industrial products. However, costs continued to rise sharply in November and December, after Industrial's price increases were granted. Each of Industrial's operations-in chemicals, paper, and pd cka,_ing-recorded increased sales in 1973, and higher profits were recorded in both chcmic: l, cind paper. There was a slight reduction in the earnings level for packaging. Through increa,~cd sales of a number of high technology, higher margin products in all operations, Industri: l was able to partially offset the cost-price squeeze. Continued development of new products and new product applications was instrumental in implementing this strategy. Nicolet Paper Company has completed construction of one ot the world's largest coaters of papers and packaging films. The project, located in Nicholas~ ille, Kentucky, cost approximately S5 million. Polymer Industries, Inc. enlarged its Greenville, South Carolina, facility with the addition of a new warehouse and a fifth polcmrr reactor. Wikolin-Werk, Willi E. Kohlmeyer G.m.b.H. is expanding its manufacturing facilities in Bremen, West Germany. Mission Viejo Company. In 1973, Mission Viejo Company-recognized as a leader in master-planned home and community development-completed its first full year of operation under Philip Morris ownership. Mission Viejo's 1973 revenues rose 12% over the previous year's results to $68.0 million. Operating income came to $4.1 million. The homebuilding industry encountered numerous problems in 1973. The first half of the year was marked by adverse weather conditions in Southern California and Colorado, and rapid escalation in the cost of materials-especially lumber and plywood-as well as critical material shortages. Although Mission Viejo is a leader in environmental planning, new environmental regulations caused delays in processing building permits. During the second half of the year, "One of the company's major challenges last year was to continue the production of cigarettes in increasing volume, while maintaining our traditional high quality. Because cigarette manufacturing is entering a new era of technology during a period when sales of our brands continue to increase rapidly, our new $200 million complex in Richmond, Virginia... is proving to be a timely and rewarding investment." TIMN 440124
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university scholarships in':Vlexico, a broad program of assistance to medical, social, and educational institutions in Venezuela, and sponsorship of community cultural projects in Australia and Canada. Philip Morris employees around the world are encouraged to participate in civic affairs, and the list of their personal involvements is impressive. In the area of public disclosure, the New York Stock Exchange recently suggested that annual reports include common-stock price ranges, price-earnings ratios, dividends, and book value, which has been Philip Morris practice for several years. Last year's annual report was selected as the "best of all industry" in the annual Financial World awards. * * ~ Your Board was saddened last year by the death of Wirt H. Hatcher, retired Senior Vice President and Director Emeritus of Philip Morris Incorporated. Mr. Hatcher, who began working with Philip Morris in 1918, was a well-known figure throughout the tobacco industry. He was especially recognized for his knowledge and many writings on the growth of the industry and the development of its scientific processes. Mr. Hatcher played an important role in the growth of your company. The astute counsel of T. Justin Moore, Jr., President and Chief Operating and Financial Officer of the Virginia Electric and Power Company, was gained with his election to our Board in April. Since our last executive realignment in 1967, sales have more than tripled and profits more than quadrupled. In addition, two major operating companies-Miller Brewing and Mission Viejo-have been acquired. In a move dictated by our expansion, the senior-management structure of the corporation was broadened and strengthened last October when the Board of Directors promoted several key executives. In three of the major changes, George Weissman, President of Philip Morris Incorporated, became Vice Chairman of the Board; Ross R. Millhiser, President of Philip Morris U.S.A., was elected President of Philip Morris Incorporated; and Clifford H. Goldsmith moved from Executive Vice President to President of Philip Morris U.S.A. and Executive Vice President of Philip Morris Incorporated. Again we pay tribute to all our 37,000 employees around the world for their excellent performance throughout the year. Their work has been fundamental to the success of your company, and we thank them for their dedication. Respectfully submitted on behalf of the Board of Directors, A,.,,-t lJtJ1 : s~ ~ 2 6 ~ i, F;~lG..,,~ Joseph F. Cullman 3rd George Weissman R,,s R. Millhiser Chairman of the Board Vice Chairman of the Board I'wsident and Chief Exectuise Officer TIMN 440127
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Review of the Year Nineteen seventy-three marked the 20th consecutive year in which your company reported new records for operating revenues, profits, and earnings per share. Consolidated operating revenues reached $2.6 billion, an increase of 22.1 %, and net income rose to $149 million, a gain of 19.4% above 1972. Fully diluted earnings per share were $5.21 and primary per share earnings were $5.42, representing annual increases of 19.2% and 16.1 %, respectively. We are pleased with the 1973 results, achieved in a most difficult year marked by price controls, materials shortages, major currency realignments, and the energy crisis. Philip Morris further increased its share of the world cigarette market and strengthened its position as the second largest publicly-held cigarette producer in the world. In 1973, world-wide cigarette industry sales increased 4% to over 3.6 trillion units, and Philip Morris, including both United States and international sales, had a 6.7% share of the world cigarette market. On a world-wide basis, Marlboro continued to be the largest selling cigarette brand- a position it gained in 1972. Within the United States, Marlboro, the number two brand, moved very close to the top position. For the fourth consecutive year, total U.S. cigarette industry unit sales increased. Total industry unit sales were 577 billion, up 4.1 % over the previous year. At the same time, "Philip Morris further increased its share of the world cigarette market and strengthened its position as the second largest publicly-held cigarette producer in the world. In 1973... PhilipMorris, including both United States and international sales, had a 6.7% share of the world cigarette market. On a world-wide basis, Marlboro continued to be the largest selling cigarette brand...." Philip Morris unit sales increased 11.1 %. Your company's share of the U.S. market reached a new high of more than 21 % at year end. In 1973, Miller Brewing sales increased substantially-with revenues up 31 % and barrel sales up 28.8%. The dramatic jump in Miller's barrel sales represented the largest percentage gain among major U.S. brewers. The total brewing industry increased its barrel sales 4.7% in 1973. Miller moved from seventh to fifth place among U.S. brewing companies. Capital expenditures in 1973 came to $175 million, contrasted with the $120 million spent in 1972. Philip Morris is in the midst of a major capital expansion program to meet the growing demand for our cigarettes both in the United States and o% erseas and for our brewing and other products. During 1973, we announced an increase in planned capital expenditures from $500 million to approximately $750 million, to be spent o~ cr the next five years. The major portion of this total will provide for the expansion and modcrn ization of United States and international tobacco operations, and Miller Brewing, and to a lesser extent for Philip Morris Industrial and Mission Viejo. Over the past five years-1968 to 1973-Philip Morris's consolidated operating revenues increased at an average annual compounded rate of 20.6 <<. 1)uring the same period, net income rose at a compounded rate of 24.9% and fully diluted earnings per share were up 19.5% per annum. For the 46th consecutive year, your ~~~mh:rny paid dividends on its common stock, and dividends were increased for the sixth consecutive year. The current annual dividend rate is $1.40 per common share. Philip Morris U.S.A. The outstanding momentum of }our k:onip.iny's major U.S. cigarette brands-Marlboro, Benson & Hedges 100's, Virginia SI im.. . nd Parliament-led to record unit sales in Philip Morris U.S.A. of 123 billion, a gain ot I 1'- Operating revenues and operating income increased 12% and 17%, respecti% cl%. ior the year. Philip Morris U.S.A., our largest operating company in terms of revenues and protit,, retained its position as the fastest-growing cigarette company in the United States. Marlboro, our leading brand, attained a market share M I 1' - h~ the end of 1973, with the gap between it and the most popular brand narrowing ()nl% five years ago, Marlboro's share of the U.S. market was less than 8%. The company also continued as the sales leader in the gn+~% , n-, I()0mm segment; Benson & Hedges 100's sales were up 12.0% and it remains the leu.i,n; ;{ flmm brand, while sales of Philip Morris's other 100mm brands-Virginia Slims, Parl .inicnt 100's, and Marlboro 100's- also increased significantly during the year. Ten years ago there was no 100mm market, and five years :r_o 1 ()c)mm brands accounted for approximately 13% of total cigarette sales. By the end of 1) 7 3. however, 100mm brand sales represented more than 22% of total industry sales. The lar,e,t single share of the 100mm market is held by Philip Morris-with a 29% share of this category. The demographic picture also provides evidence of Philip Morris strength. Your company's brands have gained a high level of acceptance among smokers %ti ithin the faster-growing segments of the U.S. population, among women smokers, and among those smokers with a higher education. One of the company's major challenges last year was to continue the production of cigarettes in increasing volume, while maintaining our traditional high quality. Because cigarette manufactuting is entering a new era of technology during a period when sales of our brands continue to increase rapidly, our new $200 million complex in Richmond, Virginia-the ~. largest single component of our capital expansion program-is proving to be a timely and 1 IM~T 1~1 440122 rewarding investment. Although full capacity in the new plant will not be attained until 1977, by the end of last 3
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mortgage rates reached unprecedented highs, and the availability of mortaage money tightened "Our brands are marketed in more severely. Despite such negative factors, Mission Viejo was profitable for the year and sold a total of 1,650 houses in its three major locations-Orange County, California; Denver, and Phoenix. In addition, a small project was opened in Fresno, California, late in the year. The housing industry is cyclical, but we believe that Mission Viejo has suffered less severe disruptions in its operations than did many homebuilders around the country. It appears that many of the adverse factors which affected the homebuilding industry in 1973 will continue to impact on the industry in 1974. However, the outlook for housina over the next decade is good, and we expect that Mission Viejo will participate in the projected growth. Smoking and Health. In the area of smoking and health, we together with other companies in the tobacco industry continued our support of medical research through the Council for Tobacco Research-U.S.A. and by sponsorship of major research programs at the Washington University School of Medicine in St. Louis and the Harvard Medical School. Over the past 20 years, the industry has committed more than S48 million to scientific research related to tobacco and health. The annual report of the Council for Tobacco Research, with details of studies underwritten by the industry in 1973, may be obtained without charae from your company. ~ In August, the chairman of a newly-established federal agency, the Consumer Product Safety Commission, announced that his agency was considering imposing a ban on cigarettes which exceed a level of "tar" and nicotine that the Commission would determine to be "safe." No action has been taken by the Commission as of this writing. We are advised that neither the legislation establishing the agency, nor any of the statutes it administers, gives it authority to regulate cigarettes, and we intend to oppose any attempt it may make to do so. In the United States, several states enacted legislation prohibiting cigarette smoking in certain public places. Several foreign countries in which we do husiness adopted laws and regulations limiting cigarette advertising and requiring .~ arning notices on packages. A recent medical article reporting on a study conducted b% the Karolinska Institute in Sweden indicates that among pairs of identical twins there is no si~_,nificant difference either in length of life or tendency to develop heart disease as between the smokers and nonsmokers. The authors say their results suggest that genetic and personality differences are more important than smoking in determining lifespan and the likelihood of heart disease. Since this is the only population study which has compared smokers and nonsmokers who are genetically identical, we believe the results deserve careful attention. Ten years have now passed since the Surgeon General's Ac3% isc ry Committee on Smoking and Health issued its first report-in January, 1964. In the ensuing decade, scientific research on the conditions said to be related to ciQarette smokin,_-as claimed in the original report- has brought to light no valid experimental evidence conncctin_ cigarette smoking with disease. Rather, research has uncovered a broad spectruni 01 Other suspected risk factors. Additional intensive research on the chemistry of tobucco ,rnwkc during this period has failed to identify any component of smoke which, in the amount hrcscnt, can be considered a causal factor in any human disease. There has not been (mc Succcssful effort to produce in animals-through the inhalation of tobacco smoke-thosc crnclitions that some have attributed to smoking in humans. In short, it is our opinion that the claim that cigarette sm(,k i n<< hears a causal relationship to disease is more open to question today than it was ten ~c;tr. . Impact of the Energy Crisis. Numerous uncertainties ha% <• ~. !~ed from the "energy crisis," making it extremely difficult to assess the exact impact on f'h;I p Morris's operations. It is recognized, of course, that severe fuel shortages could cauSe s(,n~e disruptions, but production processes involved in our businesses require Ic„ ~:nergv than most industries, and, therefore, we believe that the "energy crisis" will have less ctl,:ct on Philip Morris than on most industries. Actually, the cost of fuel represents a minor portion of the tot:rl costs of our cigarette and beer manufacturing and the physical distribution of our products. It is possible that temporary dislocations in methods of product distribution in the United States could evolve, but we believe that the flexibility of our distribution network would allow us to overcome such problems. Early in 1973, extensive analysis was given to our energy necdsd and throughout the year we have taken such steps as seemed practical to assure an uninterrupted supply of our energy requirements. An extensive internal program for energy conservation is in effect at all locations as well as in the field. This program has already yielded tangible results as evidenced by substantial reductions in our energy usage. Price Controls. On-going U.S. government price control regulations under Phase IV than 160 countries and territories. Last year, Philip Morris brands had market shares of at least 10%-and in a number of cases substantially more thanl0%-in over 20 countries, including Australia, Canada, Italy, Lebanon, Mexico, Nigeria, the Philippines, Sweden, Switzerland, and Venezuela." TIMN 440125 restricted our ability to fully offset increased costs through higher prices. Early in 1973, under 4 5 Phase III, small increases were allowed for cigarettes. Later in the year, beer and industrial
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products obtained some price relief under Phase IV. However, even where price increases "... Miller's barrel sales have been, or will be, authorized, the net effect of the Phase IV price controls is a reduction increased 28.8% over sales of the of margins since price increases are limited to a dollar for dollar pass-through of cost previous year, compared with the brewing industry's overall gain increases. Cost increases in tobacco and sharp increases in the cost of the grains used in in barrel sales of 4.7%. brewing were experienced due to the exempt status of these agricultural commodities. Sizable Miller's gain was the largest, increases in pulp and paper prices were also allowed by the Cost of Living Council. in percentage terms, among major On JanuarY 11, 1974, the Cost of Living Council aPProved a price increase of 1.6% for U.S. brewers. Miller's market share rose dramatically ... and Miller Philip Morris U.S.A. which offsets cost increases somewhat. This increase has been applied to moved up from seventh place to all cigarette brands, and your company's wholesale prices are now at the level of most other fifth place among the leading U.S. U.S. cigarette companies. brewers. Operating revenues reached $276 million, up 31 %from Philip Morris International also experienced price control problems in 1973. In many 1g72," countries in which your company sells cigarettes, general inflation, without the ability to institute cigarette price increases, restrained earnings growth. Leaf. World-wide demand for tobacco increased in 1973. Tobacco harvests in certain exporting markets were lower than anticipated, thus reducing the supply of quality tobacco and resulting in higher world-wide tobacco prices. The international demand for quality cigarettes, coupled with monetary realignments, led to a high level of U.S. leaf exports. It is expected that on a world-wide basis tobacco will continue to be in tight supply, and, concurrently, leaf prices will continue to rise. Your company has been able to maintain inventories of aged tobacco in the quantity and quality needed. Cigarette Taxes. In the U.S. during 1973, legislation for a ciQarette excise tax increase was passed in only one state, Colorado, and this bill actually eliminated municipal taxes and increased the state tax. However, 41 cigarette excise tax increase bills were introduced in 20 states during the year. Responsible legislators, realizing that not only are excise taxes a regressive form of taxation-disproportionately affecting consumers with lower incomes-but also the fact that they encourage bootlegging, either defeated or failed to enact tax increases in 19 states. In fact, bills for the reduction of cigarette taxes are pending in four states. On January 10, 1974, Governor Wilson of New York recommended that New York City's taxes on cigarettes be repealed. He stated that "One major incentive to organized crime is the high New York City cigarette taxes, piled on top of the state tax, which have made the city the promised land for bootleggers." Directly related to this situation is the harmful effect which different levels of state excise taxes have on the traditional, legal distribution of cigarettes through established and reputable wholesalers and retailers. Total U.S. cigarette excise tax revenues in 1973 amounted to $5.5 billion, of which $2.2 billion was federal, $3.2 billion state, and $0.1 billion in municipal excise taxes. This amounts to $26.00 for every man, woman, and child in the U.S. This is clearly inequitable. The Public Interest. Philip Morris Incorporated is one of a number of major corporations which have established a committee of Board members conccrned specifically with the company's involvements with social needs and problems. Called the Public Affairs Committee, this group not only is authorized to review our current socicjl p:: rformance as a corporate citizen but is also responsible for anticipating and assessing ch:inges in value standards, needs, and priorities. A second committee of the Board, the Em ironmrntal Committee, has related responsibilities in the environmental area. In the interest of conservation and the environment, Miller Brc%~ ing Company has virtually completed its conversion to recyclable all-aluminum cans and refillable-recyclable bottles. Under a Miller-designed program, many of our distributors hu% e been setting up reclamation centers around the country. In addition to the distributors. customers and retailers are able to participate in this national effort to conserve our resources. Other Philip Morris packages are being studied from the point of view of resource conservation. It is also our policy to be innovative in our public-interest acti~ itics, and if possible to lead others into areas of need. As one notable example, last year our scholarship program for employees' children was expanded to include vocational training as well as college education. Believed to be the first of its kind, the vocational plan has dra~k n the favorable attention of government, education, and business leaders, and several other companies are initiating similar programs. Similarly, last year Philip Morris pioneered an adult-scholarship program for part-time studies by women occupied with jobs or household responsibilities. It is anticipated that this program will also become a prototype for other companies to follow. Philip Morris's annual Study of Social Responsibility keeps your Board updated on our TIMN 440 126 corporate progress in terms of public interest. The latest study, for example, shows increases in the proportions of minorities, women, and Vietnam war veterans among our employees as well as progress in promoting them to more responsible positions. Philip Morris International and its affiliates carried out numerous projects in the area of corporate social responsibility, including aid to flood victims in Pakistan and the Philippines,
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,i,'. Licensee / Einland P'n'.hp Morns Sweden AB P. _... ._ a.~o^z'. L'C i Sco."ar.c W,ko::n-Werk /'P1es1 Germany ~ . .. c ^norr s Ho'.land B.V Licensee / Polard ,F s MOr'.s 8 Ce ~_~c / Eng'arc `~ ,'?~ We!lab S.A. / Belgium Godfrey °n~ll~s L'c %'ng:an ~a ~~ Phillo Morris Germany G.m.b H _-mucensee i .4ustria ~abr'C~'es Ce TabaC Pet:ne5 S A' Sw'zerlantl .,v :~ ~~ Licensee / Yugoslavia .', , ~ L.,ce~'nsEe / Ilaly R n / Soa ..YYn ' r ~ eg.o bera 'K. N.Y 'n Amer:ca ! b:~'.o `.4orns Espa.~a, S A. / Canary Is:ands Pn:i p Norns Iber:ca. S A/ Canary Islands --can= Ph'lip Morns Overseas, Inc / G'ee, Phil.p Morris Nigeria Ltd. :~ Prem'er Tobacco Industnes L:d. / Pakistan ~.;,~ Godlrey PhdLps. '.rtlre. Lttl. OLcensee ! Hc, ; v _..a ~ L,censee ! Malaysia 9 Licensee / Singapore 0 P T Philip Morr.Slntlones.a - I ~n rioldings LId. ® Pn~hp Morr, s As a-P3- alia ~ P^, ;w . ~' .. . . _ . TIMN 440129
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December this facility was producing approximately 100 million cigarettes per day-20% of "The outstanding momentum of your its ultimate capacity. Projected completion of the physical structure is on target for early eompany's major U.S. cigarette brands-Marlboro,Benson&Hedges 1974. During 1973, your company also began construction of a tobacco blending and 100's, Virginia Slims, and handling facility near Richmond. This plant, which will cost approximately $43.8 million, is Parliament-led to record unit needed to support the growing requirements of the new Richmond complex. sales in Philip Morris U.S.A. of 123 billion, a gain of 11%. Total expenditures for marketing in 1973 remained at virtually the same level as in 1972, and ... Philip Morris U.S.A., our largest advertising costs were again lower than in 1970, the last year of cigarette broadcast advertising. operating company in terms of As a result of the higher sales volume, marketing expenditures per 1,000 cigarettes decreased. revenues and profits, retained its position as the fastest-growing The American Safety Razor Division of Philip Morris U.S.A. also contributed to corporate cigarette company in the United profits. Its principal new products-Personna Double I1, a razor with four shaving edges, two on States." each side, and Flicker, a women's shaving instrument-received national distribution in 1973. During the year, your company disposed of two small operations-the Clark Gum and Lightfoot Soap companies. Philip Morris International. The momentum that Philip Morris International has established in recent years continued in 1973. Last year, world-wide cicTarette sales of this important Philip Morris operating company totaled 124 billion units. While the world industry's unit sales outside the United States rose 4%, Philip Morris International unit sales increased 9.5%. Operating revenues and operating income increased 31.9 % and 9.6%, respectively. Our brands are marketed in more than 160 countries and territories. Last year, Philip Morris brands had market shares of at least 10%-and in a numhcr of cases substantiallv more than 10%-in over 20 countries, includin- Australia, Canada. Italy, Lebanon, Mexico, Nigeria, the Philippines, Sweden, Switzerland, and Venezuela. The increased demand for American-type blended cigarettes has led to the international succc,s ()f %1~irlboro; however, other established taste preferences are well recognized and approxini: t~:I% ()U'r' of our international unit sales are in regional and national brands. Philip Morris Int~:rn;~t onal currently manufactures and markets some 145 cigarette brands around the world. Inlate 1973, Philip Morris formed a joint venture %~ th ftr,viliun interests for the construction of a cigarette factory in Curitiba, Braiil. I:ntr% into the market in that country is scheduled for early 1975. Also during 1973, your company entered into liccnsi n-, ;j ~~rcmients with the Japan Tobacco and Salt Public Corporation and Agros of Poland for th: nicinufacture of Marlboro cigarettes in those countries. In Mexico, in spite of expanded unit sales and markct sh. r,-. sharply increased costs and increased government controls resulted in our affili; tc. t'i~:.trrcra Nacional, S.A., continuing in a loss position. We are currently studying a numbcroi ::I i,-rn;itives with respect to our Mexican business including reducing our ownership to a mi nority position in line with current'vlexican government policy. We anticipate ;rt t ir.-!nic that this matter will be resolved durina the first half of 1974 and that whatever action i. ~?.-,: d appropriate will have no material effect upon our 1974 results. Unit sales and revenues were up in all four region~-- I;: I iddle East/Africa; Latin America/Iberia; Asia/ Pacific; and Canada. Philip ~1, r r• f ur,~pe, the largest region in terms of revenues and profits, added Africa and the Midd lc I 7, area of responsibility. In 1973, profits in Europe were adversely affected by dislocati, :• . husiness caused by the numerous currency realignments. This was offset. hw\%. • r.;,iins in other regions. Around the world, Philip Morris International continu, ~ i _oing program of facilities expansion and improvement. In Australia, cigarette an,i I m n;in wine production facilities were enlar2ed. Construction of one of the largest toha,:~ 'wuse complexes in Europe, close to our Swiss affiliate's factory in Neuchatel, is -~.ipIction. Like most American companies with international oper.It E'hilip Morris again made a positive contribution to the U.S. balance of payments in P~ - ~ At the same time, the presence of Philip Morris in man} :,. r. t rics is possible only because it demonstrably contributes to the economies of those countr,., \hetted by continuing company expansion, our policy of training, recognizing performan-:c. :tid promoting personnel from within the organizations in host countries has been basic to 1'liilip Morris International's success. This international growth record in 1973-in face of mOuntf n-, inflation and economic nationalism-positions your company well for continued go%k th in the international market. Miller Brewing Company. In 1973, Miller's barrel sales incre;tsed 28.8% over sales of the ~I1~~1`t `4 ~~3 previous year, compared with the brewing industry's overall «ain in barrel sales of 4.7%. Miller's gain was the largest, in percentage terms, among major U.S. brewers. Miller's market share rose dramatically from 4.0% to 5.0%, and Miller mo% ed up from seventh place to fifth place among the leading U.S. brewers. Operating revenues reached $276 million, up 31 % 3 from 1972. t
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Ma jor Loca#ions Phiiip Slorris (ncorporated, Operating Companies, Affiliates, and Licensees .,...._ s„SA _'ac•, s'.2•^.a?,crt, A° 5tes any LCe^sees ~ Ylc.er 3re-y rompany ?eia elcr,.s ~dl,s.ra, "drsso' ~ e:o Co-oany 'er. Benson & Hedges (Canada) Ltd ~7 Benson & Hedges Tobacco Company--~ Formosa Spring Brewe -„~ry Fremont. Ohio Plainwell, Mlch De Pere, Wisconsin 91 Milwaukee. Wisconsin s•® 0 Fs Denver, Colorado `,esno, Calilornfa---~ ~ sco. Cahfo a '~ 1- 42L52. CalfO ia •.'. .' ;son Vo7o. Caldorma _ Phoemx.Ar¢ona Warsaw, Indiana 0 ® g®(J- Philip Morns .rcc•ocrztec, New York. N YAr w Evansvllle.lndiana ®~,'.A'~.® L_ powmngtown, Penns;~a Loulsville, Kentucky J ®~ Rich^ond, V ry.n,a ~rgma Nicholasvllle. KentUCky~ Fort Worth. Texas • Greenvdle. South Carolina Ggarrera Nac onal. SA. ; Mexico ® iabacaiera Centroameccana. SA, l Guatemaia ® r E. Leon :-e-es C oor A 1 Cori Licensee / tuaa: 0® 0 " c " -- : .,. Rco Tabacalera Nacional, S A. / Panama ® Uce,ee / Colombia ® Tabacalera Andina. S A. / Ecuador 0 9 Stamford. Cornecan ® Lcensee . ^a~ds Am.lles ® C. A. Taoa s. ,a Nac orai / Verezue Licensee / Bolivia ® Phaip MorriS BrasileiradeCigarros Luda. / Brazil ® Massalin y Celasco. S A.C. e I. / Argemma 0 0 Philio Morris ;New Ze2land) L'.d. TIMN 440128
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Philip Morris U.S.A. Philip Morris U.S.A. Operating Revenues Philip Morris U.S.A. Filter Cigarette Unit Sales  Non-Filter Cigarette Unit Sales A U.S. Cigarette Industry Marlboro Share of Unit Sales Total U.S. Industry Total Filter Cigarettes  Total Non-Filter Cigarettes E Philip Morris Share of U.S. Industry BI!lion U.tts Percertage Percemage 600 30 14 0 3 Operating Revenues of Philip Morris U.S.A. have increased at an average annual compounded rate of 11.09a since 1964. C- 65 36 e7 68 Philip Morris U.S.A. cigarette unit ~ales have grown at an average anr,u;tl compounded rate of 9.7':~ ocer tnc last 10 years. Filter cigarette salc, represented 98cb of Philip Ntorris U.S.A.'s total unit sales in 1973. The 1973 Virginia Slims circuit, with tennis stars like Margaret Court, received wide recognition. 2 12 10 1 6 4 2 64 65 66 67 58 69 70 7: 72 73 Total U.S. cigarette industry unit sales have increased at an average annual compounded rate of 2.8% since 1970 and at a rate of 1.3% since 1964. The filter segment has grown at a rate of 5.1 % over the past 10 years. Philip Morris U.S.A.'s share of U.S. industry was 21.3~'o in 1973 versus 9.8% in 1964. One survey revealed that 17llOro' "Martboro Country" is one of , the two best known themes in all American advertising. All categories of Marlboro now represent 13.7% of industry. Marlboro has grown at an average annual compounded rate of 12.0% since 1964. A Philip Morris salesman takes the order. Continued upgrading of our sales force is essential to meet the growing sophistication of distributor and retailer operations. Seminars and ; advanced teaching methods are ; used to update sales techniques. Over 6~/s million Flicker Ladies' Safety Shavers were purchased in 1973, the first full year of national distribution. More cigarettes are purchased in supermarkets than in any other outlet. Specialists in the company's sales force work to increase Philip Morris's sales in these outlets. 24 1
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100mm Cigarette Share of U.S. Industry  Philip Morris 100mm Share of U.S. Industry - = 69 7C 71 72 73 Since 1965, the year 100mm cigarettes were introduced, this category has grown to 22.6~'c of total industry sales. Philip Morris U.S.A. brands account for more than 295c of this category, or '% of the total industry sales. At the National Automatic Merchandisers' Association Conference, a Philip Morris computer operator assisted vending machine accounts in determining the optimum brand mix in their machines. Cigarette filters being sent to the "making packing" area. The Richmond facility has established a new standard of excellence. 25 The first annual "Marlboro Cup" racQ at Belmont, which featured Secretariat, Riva Ridge and other top horses, was one of the most exciting sports events of the year.
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Philip Morris U.S.A. (000 omitted) (000 omitted) Operating Revenues Operating Income 1973 $1,303,629 227,282 1972 1971 $1,164,550 81,035,178 194,072 166,734 100 Park Avenue Russell N. Freund, Shepard P Pollack, Edward M. Schaaf, Jr., New York. New York 10017 Vice President, Personnel Vice President, Finance & Vice President, Production Clifford H. Goldsmith, President John P Jeb Lee, P1C71Ei7(17° Benjamin A. Soyars, John T. Landry, Vice Pre.sident, 1lctrketittg Richard D. Robertson, V ice Presid err t, :1Qanu f acturirtg Esecntire Vice President & Services Vice President, Ecology & Dr. Helmut R. R. Wakeham, Director of .LTcrrketin; George W. Macon, Jr.. Environment and Director Vice President, Research & Max L. Berkowitz, Vice President, Leaf of Energy Resources and Development Conservation Senior Vice President W Wallace McDowell, Charles H. Wilson. Robert H. Cremin, Vice President. Operations Vice President, Gener tl Products Vice Presidertt, Sales Coordination Alex Kay, Jr., Controller Clifford H. Goldsmith, President of Philip Morris U.S.A., viewing one of the five cigarette making bays. Each bay will ultimately produce more than 100 million cigarettes per day. Rows of cigarette "maker-packer" modules at the new Richmond complex, where production commenced in early 1973. Physical construction of the complex will be completed in 1974. In the right rear, outside the windows, is one of the fully landscaped garden courtyards which can be seen from each bay. The study of cigarette smoke composition is one area in which research and development works closely with the manufacturing and leaf departments to retain leadership in production of the highest quality cigarettes. TIMNq 440142 Far left-Benson & Hedges 100's is the largest selling brand in the 100mm category, which is the fastest-growing segment of the U.S. cigarette market. Left-Parliament 100's is another important brand in the 100mm segment-"... the recessed filter works like a cigarette holder works." 22
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Philip Morris International (000 omitted) (000 omitted) Operating Revenues Operating Income 1973 1972 1971 $822,907 $623,699 $517,670 92,150 84,095 66,968 100 Park Avenue Ronald H. Thomson, Carlos E. Salguero,Vice President, Aleardo G. Buzzi, Vice President New York, New York 10017 Executive Vice President, Latin America/Iberia Staffan Gunnarsson, Vice President Hugh Cullman, President Europe/ Middle East/A,frica James E. Turner, Fred C. Moessinger Hamish Maxwell, Charles E Lombard, Vice President, Vice President, Sales , Vice President, Personnel Executive Vice President, Canada Canada William J. O'Connor, Robert H. Souther and Asia/Pacific Vice President and Chief , Vice President, Finance Administrative Officer Albert E. Bellot, Vice President mm rABAKWAREM 0 N ;R Our Lindeman wine affiliate in Australia had record sales and earnings last year. This company's new tank " farm, bottling plant and warehouse complex is now in operation. Am dpsten k~al~in~afin faihgpithaft Marlboro is now among the top ten cigarette brands in West Germany where sales of the brand increased 31 percent during 1973. ME ,. , 0 0 R EAP 0 Hugh Cullman, President of Philip Morris International, announced the strengthening of the regional management structure, including geographical consolidation and creation of two executive vice president positions. Far left-Our U.S. Sea and Air Stores Region reported strong sales growth during 1973. Marlboro is the number one cigarette brand in the U.S. duty free market. Left-The large leaf, packaging, and finished goods warehouse near our Swiss affiliate's factory in Neuchatel is one of the new European installations opened in 1973. 26
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A "" `" °:' Astor, the leading brand in Venezuela, further increased its market share during the year, and our Venezuelan affiliate I reported record sales in 1973. 27 Philip Morris brands made under license in the Philippines achieved record sales levels in 1973. Also last year, Marlboro became the first U.S. cigarette brand to be made under license in Japan. conditions, this affiliate and Premier Tobacco Industries Ltd., Pakistan, continued profitable in 1973. Godfrey Phillips, India, Ltd. Despite difficult business The Four Square filter brand has received strong ~ marketing support from Marlboro is the leading cigarette in Ecuador where our affiliate, established in 1973 with Ecuadorian and Spanish partners, completed construction of a new factory.
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23 ; ! A 0 f ~. Mairlboro r-.- ~ ~ Marlboro w. . Marlboro Marlboro Marlboro 1VTarlhc>ro M..rll~c~r<> lot C A ® Y owl liat: 1 a 9 --;. v. Lord Todd, F.R.S., of Christ's College, Cambridge, England, winner of a Nobel Prize in 1957, speaking at the first Philip Morris Science Symposium held in conjunction with the Research Tower dedication. Cartons of Marlboro move ~ along part of the new automatic ~ materials and product handling ~ system. Each cigarette-making machine is equipped with elaborate quality control devices which are connected to a centrally controlled computer. At the dedication of the Research Center Tower in Richmond are (left to right) Gov. Linwood Holton of Virginia, Dr. Glenn T. Seaborg, former Atomic Energy Commission Chairman and Nobel Prize winner, Ross R. Milihiser, and Dr. H. R. R. Wakeham, Vice President-Research and Development. "Hogsheads" of the finest aged 3 tobaccos are handled by a fully automated materials handling '~ system in the "primary" area of the Richmond complex.
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?~ Marlboro is a popular, premium z priced brand in Panama where ~ Tabacalera Nacional, S.A. recorded increased sales and profits. During the year leaf processing facilities were expanded. 29 Marlboro is one of the leading brands of Philip Morris Holland B.V. This affiliate is the largest exporter of cigarettes in the Netherlands, and during the year it expanded the Bergen op Zoom factory to accommodate present and future sales growth. =,aw Our U.S. export sales continue j to rise and Philip Morris remains the leading exporter of cigarettes from the U.S. Over the last ten years, Philip Morris's exports of U.S.-made cigarettes have increased at an average annual compounded growth rate of 13.1 percent. TIMN 440149 lnternational brands, such as Marlboro and Muratti Ambassador, accounted for the largest portion of sales gains in Europe. New activities in Europe included agreements with the Spanish Monopoly for Philip Morris to manufacture and market in the EEC their leading brand, Ducados, and to produce their new brand, Lola, in the Canary Islands for sale on mainland Spain.
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Miller Brewing Company (000 omitted) (000 omitted) Operating Revenues OperatinQ Income 1973 $275,860 $21 (2,371) 1972 1971 1,262 $204,134 228 1,300 4000 West State Street Lauren S. lwilliams, Clifford R. Wilmot, Robert H. Lindstrom, Milwaukee, Wisconsin 53201 Vice President, Marketing and Sales Vice President, Brand Management Vice President, Finance John A. Murphy, President and Thomas B. Shropshire, Clement G. Meyn, Warren H. Dunn, Chief Esecuti e Officer Vice President, Market Planning Vice President, Master Brewer General Counsel, Secretary William K. Howell. Thomas A. Fulrath, Travis G. Adler, Controller ExccuUive Vice President Vice President, Personnel More beer-drinkers are enjoying "Miller time" than ever before. .~ Miller High Life at the a supermarket, in recyclable > aluminum cans. TIM.IN 440150 30 John A. Murphy, President and Chief Executive Officer, led Miller Brewing from seventh to fifth place in the U.S. brewing industry. Cyclists preparing for a "Miller Classic" race. Races were held C in California, Colorado, Florida, Illinois and Georgia.
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Philip Morris International Philip Morris International Philip Morris International Total World Cigarette Unit Sales Total Exports of U.S.-Made Operating Revenues Cigarette Unit Sales Excluding U.S.A. Cigarettes  Con,olidated  Export, Affiliates, Licensees Total Filter Cigarettes  Philip Morris Share (%) - Uncon>olidated a Total Non-Filter Cigarettes n Philip Morris Share of World Market (%) - --- E6 63 71 72 73 Philip Morris International Consolidated O perating Revenues-excluding alliliates not wholly owned-have grown at an average annual compounded rate of 301b since 1964. Operating Revenues of consolidated and unconsolidated affiliates combined have increased at a rate of 381i since 1964. fi7 68 " Since 1964, Philip Morris Intern.iuonal's unit sales of cigarette, by afiili;;tc., licensees, and through export, I:.ue grown at an average annual com{)ounJed rate of 219c per year. 31! ~cn Unts Percentage .,,:.',cn Unas , eraents^e C00 15 60 _ 2600 a 26C0 y 73 so 2400 2 0 2200 - ~ 2000 0 730C 9 160C 8 30 7EC0 7 k-& _ 30 1200 6 CCO 5 20 0 660 n ~ 600 ~al >.n_I- Ila 3 0 lm F 2 0 ism 10 0 2 200 E ~sm I In" 64 E5 66 67 6B 69 70 71 72 73 64 65 66 67 60 69 70 71 72 73 World industry unit cigarette sales in international markets (excluding the United States) were 3.0 trillion in 1973. Unit sales have grown at an average annual compounded rate of 4.5% over the last 10 years. Philip Morris's share of the world market reached 4.1% in 1973. Mark Ten (left) and Belvedere (above) are major brands of the tobacco division of Benson & Hedges (Canada) Ltd. During 1973, this affiliate recorded increased market share, operating revenues and earnings and its tobacco manufacturing facilities were further expanded. Total exports of U.S.-made cigarettes have grown 3.1 % per year compounded annually since 1964. Philip Morris's share of U.S.-made cigarette exports reached 31.5% in 1973. Philip Morris (Australia) Ltd. now manufactures all cigarettes at one expanded and integrated complex in Moorabbin (above). Sales and income from cigarette operations again increased in 1973. T'IM~ 440148 28
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zal het totale effekt van de prijskontrolemaatregelen onder Fase IV een vermindering van marges betekenen, aangezien prijsverhogingen beperkt zijn tot het door- berekenen van kostenverhogingen op een "dollar-per- dollar" basis. Scherpe kostenstijgingen werden gekon- stateerd ten aanzien van tabak en graansoorten die voor het brouwen worden gebruikt, tengevolge van de vrijstelling voor deze agrarische produkten. Behoorlijke stijgingen van pulp- en papierprijzen werden eveneens toegestaan door de "Cost of Living Council." Op 11 januari 1974, stond deze Raad aan Philip Morris U.S.A. een prijsverhoging toe van 1,695 waarmee de kostenstijgingen enigzins worden gedekt. Deze verhoging is voor alle merken doorgevoerd en de grossiersprijzen van uw bedrijf komen nu overeen met die van andere Amerikaanse sigarettenfabrikanten. Ook Philip Morris International ervaarde in 1973 prijskontroleproblemen. In vele landen waar uw firma sigarettcn op de markt brengt, werden de winstver- hogingen beperkt door de algemene infiatie, zonder dat een mogelijkheid bestond verhogingen van sigaretten- prijzen te bewerkstelligen. Ruwe tabcrk De totale vraag naar tabak over de gehele wereld is in 1973 gestegen. De tabaksoogst in bepaalde export- gebieden was kleiner dan voorzien, waardoor de toevoer van kwaliteitstabak verminderde en de ta- baksprijzen over de gehele wereld stegen. De interna- tionale vraag naar kwaliteitssigaretten, gekoppeld aan monetaire herwaarderingen, deed de export van ruwe tabak vanuit de Verenigde Staten hoog oplopen. Verwacht wordt dat tabak over de hele wereld beperkt voorradig zal zijn. Het gevolg zal zijn dat de prijs van ruwe tabak zal blijven stijgen. Uw firma is in staat geweest om voorraden van gerijpte tabak in de benodigde kwaliteit en hoeveetheid aan te houden. Sigarettenaccrjnzen . In 1973 werd in de Verenigde Staten slechts in een staat, Colorado. een wet aangenomen voor een ver- hoging van sigarettenaccijnzen; deze wet verving in feite gerneentelijke belastingen en verhoogde de staats- accijns. Credurende het afgelopen jaar, werden echter in 20 staten 41 wetten ter verhoging van accijns op sigaretten in werking gesteld. In 19 staten werden de accijnsverhogingen door de verantwoordelijke wet-s gevers of wel niet aangenomen of niet doorgevoerd, doordat men inzag, dat accijnzen niet alleen een vorm van regressieve belasting zijn, die konsumenten met lagere inkomens onevenredig belasten, maar dat zij ook een zwarte handel in de hand werken. In feite zijn er in 4 staten wetten in behandeling voor de vermindering van accijns op sigaretten. Op 10 januari 1974 raadde Gouverneur M. Wilson van New York aan, dat de belasting op sigaretten door New York City zou worden ingetrokken. Hij ver- klaarde: "De hoge sigarettenbelastingen van New York City, die over de staatsaccijns heen worden berekend, blijken een belangrijke stimulans te zijn voor georga- niseerde misdaad, zodat de stad "bet beloofde land" is geworden voor zwartehandelaars." In rechtstreeks verband hiermee staat het schadelijk effekt dat ver- schillen in staatsaccijns hebben op de traditionele legale sigarettendistributie door erkende en bonafide grossiers en detailhandelaren. De totale opbrengst van sigarettenaccijnsbelastingen in de Verenigde Staten bedroeg in 1973 $5.5 miljard, waarvan respektievelijk $2.2 miljard in federale. $3,2 miljard in staats- en S0,1 miljard in gemeentelijke heffingen. Dit komt neer op een totaal van $26,00 per bewoner van de Verenigde Staten, met inbegrip van vrouwen en kinderen. Dit is duidelijk onbillijk. .Vautscfeappelijke armgelegenheden Philip Morris Incorporated is een van een klein aantal grote bedrijven, die een comite hebben ingesteld bestaande uit leden van de Raad van Bestuur, die spe- ciaal belast zijn met de aktiviteiten van het bedrijf op sociaal gebied. Dit •'Pubtic Affairs Committee" (Commissie voor Maat,chappelijke Aangelegenheden) is niet alleen gemachtigd om onze huidige maatschappe- lijke prestaties als bedrijf te bekijken, maar is ook verant- woordelijk om vooruit te lopen op en het op de juiste waarde schatren van veranderingen in maatschap- pelijke waarden en'behoeCten en het stellen van priorueiten. Een tweede comile van de Raad van Bestuur, het "Environmental Committee", heeft overeen- kom,ti;=e verantwoordelijkheden op het gebied van milieu-auneeleeenheden. In het belang van grond,toffenbesp:rrrnlsn en milieu- hescherming heeft %,filler Brewing ('r,uipuny bijna de omschakeling voltoold nnar tie+,en cn echeel uit aluminium bestaande blikjes, die bc•ide opnieuw gebruikt kunnen worden. In een door Miller untworpen pro- gramma, hebben veel van onze wederverkopers verzamelingscentra in het land opgezet. Niet alleen de wedercerkopen, maar ook klanten en detailhandelaren kunnen meedoen in deze landelijke poging om grond- ,toffen te besparen. Ook andere Philip Morris- verpakkingen worden momenteel bestudeerd teneinde grond,toffen te besparen. Ook is het onze politiek om vooruitstrevend te zijn in onze aktiviteiten voor de bevordering van maatachap- pelijke belan_en en indien mogeliik anderen voor te gaan in de beantwoording aan maatschappelijke be- hoeften. Als tekenend voorbeeld werd het afgelopen jaar ons programma van studiebeurzen voor kinderen van onze werknemers uitgebreid. Het omvat nu zowel beroepsopleidingen, als opleidingen voor hoger onderwijs. Het plan voor beroepsopleidingen, waarvan men veronderstelt dat het het eerste in zijn soort is, is gunstig ontvangen door overheidsautoriteiten bij het onderwijs en in de zakenwereld. Verschillende andere bedrijven zijn met overeenkomstige programma's begonnen. Op dezelfde wijze verrichtte Philip Morris in het af- gelopen jaar baanbrekend werk met betrekking tot studiebeursprogramma's voor volwassenen en part- time-studies voor vrouwen. die hetzij een baan hebben of een huishouden leiden. Men verwacht dat ook dit programma een prototype wordt, dat door andere bedrijven zal worden nagevolgd. De jaarlijkse Philip Morris "Study of Social Respon- sibilitv" (Studie van Maatschappelijke Verantwoordelijk- heid) houdt de Raad van Bestuur op de hoogte Nan de vooruitgang van het bedrijf wat betreft maatschappelijke aangelegenheden. De laatste studie laat bijvoorbeeld de proportionele stijging zien van minderheidsgroepen, vrouwen en oud-Vietnamstrijdets in ons personeel. Evenzo vermeldt het de vooruitgang wat betreft hun bevordering tot meer verant- woordelijke posities. Philip Morris International en zijn geaffilieerde maatschappijen voerden talloze projekten uit op het gebied van sociale bedrijfsverantwoordelijkheid, waar- onder hulp aan watersnoodslachtoffers in Pakistan en de Philippijnen, studiebeurzen voor universiteiten in Mexico, een uitgebreid programma voor huipverle- ning voor medische, sociale en onderwijsinstellingen in Venezuela en de subsidiering van plaatselijke kulturele aktiviteiten in Australie en Canada. Over de gehele wereld wordt het personeel van Philip Morris aangemoedigd deel te nemen aan aktiviteiten in het gemeenschapsleven. De opsomming van gevallen waarin zij persoonlijk betrokken zijn, is indrukwekkend. Wat betreft het vrijgeven van informatie stelde de "New York Stock Exchange" onlangs voor dat jaarverslagen ook beurskoersen, koers-winstver- houdingen, dividenden en boekwaarden zouden moeten omvatten hetgeen al verschillende jaren door Philip Morris wordt toegepast. Ons vorige jaarverslag werd overigens bij de jaarlijkse toekenning van onderschei- dingen door Frnancra! World, als het beste van de gehele industrie gekozen. Het afgelopen jaar betreurde uw Raad van Bestuur het overlijden van Wirt H. Hatcher, gepensioneerd senior vice president en emeritus direkteur van Philip Morris Incorporated. De heer Hatcher. die in 1918 bij Philip Morris in dienst trad, was in de hele tabaksindustrie een zeer bekende persoonlijkheid. Hij werd in het bijzonder ecu;r,rrdeerd voor zijn kennis en vele pu- blikaties over de croei van de industrie en de ontwik- keling van wctcn.~happelijke processen daarin. De heer Haecher perlde een belangrijke rol bij de groei van uw firrna. De Raad ~:,n 13r~tuur werd door de verkiezingen in april ver.;crkt rnce hct waardevolle adviseurschap van T. Justin \l avr lr , president, chief operating en financial uliicrr ~.rn de Virginia Electric and Power Company Sinds onze la;rt.ie tunktieverschuivingen in 1967 is de omzet meer ~!nn -rJrirvoudigd en de winst meer dan verviervoudigd. Bo,cndicn zijn twee belangrijke werkmaatschapprjcn. Miller Brewing en Mission Viejo, overgen-mcn. Door uitbreidrn_ _en,u. dtaakt werd in oktober jl. toen de Raad %an f3c.euur besloot verschillende top- funktionaris.en le ;u,nnoveren, de struktuur van de hoofddirektie drt:chrcid en versterkt. Drie van de belangrijk,le ~er.:nJenn,,en daarin waren de benoem- ing van Gearee 1\ri•~rnen, president, tot vice-voor- zitter van dc It,r,tJ -n Bestuur; verder werd Ross R. 1lillhr~cr. pr-Lient van Philip Morris U.S.A., werd gekoien r,,r prr-Jcnt van Philip Morris Incorpor- ated; en ClilforJ II („. Id,rnith, executive vice president, werd bemOrrnJ ;•:-Jrnt van Philip Morris U.S.A. en executi.e ~. ,-,irnt van Philip Morris Incorpor,urd Opnieu" hrcn.-, n.; hrrlde aan al onze 37.000 per- soneelsledcn !',clc wereld voor hun uitstekende prestatie+ hr: iaar. Hun werk is funda- menteel 'r,, . .~;tn uw bedrijf en wij danken hen voor hun :• ,. ~ I~~~re. Met hoo_,r,h;rn: :.~:•,)clen namens de Raad van Bestuur, / Joseph F. CulInI.:r: ~ Voorzitter :rn ~:~: !t . ..~ en Chief Execuin- 4 t 13estuur George aWeissm:r r: Vicevoorzittcr %.rn d, It.r.rd van Bestuur (~,~c('~CJ< <L'~ Ross R. Millhiser President ,rIMIS 440141 21
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31 The new distributor reclamation Consumer acceptance of the program involves the consumer "Pony 8-Pack" of Miller High and retailer as well as Life in 7 oz. bottles is one of the distributors and Miller Brewing. reasons for Miller's dramatic volume gains in 1973. Expansion and modernization at the Milwaukee brewery is well underway. TIMN 44®151
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At Milprint's Milwaukee plant, designing and producing consumer product packaging is the major business. Philip Morris Industrial Operating Revenues M:'lions of Co;lars 1:0 '30 !20 t70 C0 90 ao 70 60 sc :c 30 20 es sa c - ;2 73 Philip Morris Industrial's Operating Revenues have increased at an average annual rate of 7.1 re since 1964. Construction of one of the world's largest coaters of paper and plastics for Nicolet's Nicholasville, Kentucky facility was completed during the year. A fifth polymer reactor began operating in late 1973 at Polymer's Greenville, South Carolina plant (right). Flexo-Lack, a specialty chemical lacquer for flexible packaging paper, is produced by Wikolin-Werk of Bremen, West Germany. Fine quality printing papers, such as the paper used in this annual report, are manufactured at the Plainwell Paper Company plant in Michigan. TIMN 440155 35
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Miller Brewing Company Miller Brewing Company Miller Brewing Company Operating Re,,enues i Miller Unit Sales / Miller Share of U.S. Industry (%) - . ~..-:;:D, ~~::rs ?'S 6 53 7' ,2 3 Miller's Operating Revenues have increased at an average annually compounded rate of 10.7Sc over the last ten > ears. Re% enues since 1970 have risen at an average rate of 9.3% per year. Miller Bartender's Cup ski races feature competition among racers from local taverns. ......,ns cf 3arrefs Perceniage t0 10 9 ds 66 67 68 69 Barrel volume has grown at un :,~rr,:cc annual rate of 8.5% since 1964 ::nd at a rate of 8.9% per year since 1970. Market share in 1973 was 5.0'- „r,u, 4.0% last year. The Miller Quality Awareness Program applies not only to product but also to people and all other facets of the business. TIMN 440152 32 Domestic Beer Industry Unit Sales Nationally Distributed Premium Beer (est.) 0 Regional and Non-Premium Beer (est.) s 64 6- 66 6 68 69 70 71 72 3 Beer Pricing Trends (1964 =100) Wholesale Price Index All Commodities E Wholesale Price Index Beer- rcex t50 6 65 66 67 68 69 'C • ;_ 73 The wholesale price index for all commodities has risen at an average rate of 4.1 % since 1964 while the wholesale price index for beer has risen at 1.5% annual rate. In the last year, the index for all commodities rose 13.8c while the index for beer increased 19b. In the last ten years total beer industry unit sales have grown at an annual rate of 3.9%. The premium segment has increased 10.7% per year during the same period.
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In addition to Miller High Life, Brewing takes place in the Miller line of malt beverages copper kettles such as includes Miller Ale, Miller Malt, these at the Milwaukee Meister Brau and Lite. Lite brewery (below). contains one-third fewer calories than Miller's regular beer. ! 33 Miller High Life is the fastest growing major U.S. brand. Miller High Life is sold in all 50 states and 56 countries around the globe. Many of the nation's top anglers competed in the first annual Miller High Life Bass Masters Classic fishing tournament held at Clark Hill Reservoir in South Carolina. TIMN 440153 The Azusa, California brewery produces Miller products for the West Coast market.
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Philip Morris Industrial (000 omitted) (000 omitted) Operating Revenues Operating Income 1973 $132,126 8,300 1972 1971 $113,13 6 $95,513 7,735 6,135 4200 North Holton Street William D. McCoy, James B. Kurtzweil, Robert G. Etter, President, Milwaukee, Wisconsin 53212 Executive Vice Presrdent, Executive Vice President, Paper Group Fred M. Stefan, President General Administration Operations Edward B. Kime, Jr., President, Karl M. Bierman, President, Chemical Group Packaging Group Glassine and greaseproof papers for such uses as food packaging are manufactured at Nicolet's De Pere, Wisconsin facility. Total computer processing control is employed in paper Fred M. Stefan, President of making operations at De Pere. Philip Morris Industrial. 34
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Retrospective de 1'annee En 1973. pour la vingtieme annee consecutive. votre societe a enregistre a nouveau des resultats sans precedent pour ce qui est du chiffre d'affaires, des benefices et du revenu par action. Le chiffre d'affaires consolide a atteint 2,6 milliards de dollars, soit une augumentation de 22.1 %, et le benefice net s'est eleve a 149 millions de dollars, soit une progression de 19,4% par rapport a 1972. Le rendement par action (en tenant compte des titres convertibles) s'etablit a 5,21 dollars et le rendement effectif par action a 5,42 dollars, soit un accroissement annuel de 19,2% et de 16.1% respectivement. Nous sommes satisfaits des resultats obtenus en 1973, une annee rendue extremement difficile par suite du controle des prix, des penuries d'approvisionnement, de realignements importants des parites monetaires et de la crise de 1'energie. Philip Morris a encore accru sa part du marche mon- dial des cigarettes et a renforce sa position en tant que deuxieme producteur de cigarettes du monde dont les actions sont cot€es en bourse. En 1973,les ventes mon- diales de l'industrie de Ia cigarette ont augmente de 4% pour atteindre plus de 3600 milliards de cigarettes, et Philip Morris (en tenant compte des ventes aux Etats-Unis et a 1'etranger) obtenait 6,7% du marche mondial de la cigarette. Marlboro demeurait la marque de cigarette la plus vendue dans le monde-position qu'elle avait acquise en 1972. Aux Etats-Unis, Marlboro, qui occupe le deuxi8me rang, s'est rap- prochee tres pres de la premiere place. Pour la quatri8me annee consecutive, les ventes totales de 1'industrie americaine de la cigarette ont augmente, atteignant 577 mitliards d'unites, soit une progression de 4,1% par rapport a 1'annee precedente.'En meme temps, les ventes unitaires de Philip Morris ont aug- mente de 11,1%. La part du marche americain detenue par votre societe atteignait en fin d'annee un niveau record de plus de 21%. En 1973, les ventes de Miller Brewing se sont con- siderablement accrues-le chiffre d'affaires augmentant de 3 1 % et Ie volume des ventes en barils de 28,8%. L'essor remarquable des ventes de Miller represente Ia plus forte progression en pourcentage enregistree parmi les principaux brasseurs des Etats-Unis. En 1973, les ventes totales, en barils, de I'industrie de la biere ont augmente de 4.7%. La Societe Miller est passee de la septieme a la cinquieme place de l'industrie de la biere aux Etats-Unis. En 1973, les investissements ont atteint $175 millions, compare a$120 millions investis en 1972. Philip Morris realise un programme d'expansion important afin de satisfaire la demande-croissante pour nos cigarettes, aussi bien aux Etats-Unis qu'a l'etranger, et la demande pour nos bieres et autres produits. En 1973, nous avons annonce que le montant prevu de nos investisse- ments passerait de $500 millions a environ $750 mil- lions se repartissant sur les cinq prochaines annees. Ce montant servira en grande partie a financer 1'expansion et la modernisation de nos centres de production de cigarettes aux Etats-Unis, a L'etranger et de Miller Brewing et en de moins grandes proportions Philip Morris Industrial et Mission Viejo. Au cours des cinq dernieres annees-de 1968 a 1973-1e chiffre d'affaires consolide de Philip Morris augmen- tait en moyenne au taux annuel compose de 20,6%. Pendant la meme periode, Ie benefice net a progresse a un taux compose de 24,9% et le rendement par ac- tion (en tenant compte des titres convertibles) a augmente de 19,5% par an. Pour la 46me annee consecutive, votre soci@te a distribue des dividendes sur ses actions ordinaires, et pour la sixieme annee con- secutive ces dividendes etaient en progression par rap- port a 1'annee precedente. Le dividende annuel se monte actuellement a 1,40 dollars par action ordinaire. Philip Morris U.S.A. Grace au dynamisme exceptionnel des principales mar- ques de cigarettes de votre societe aux Etats-Unis- Marlboro, Benson & Hedges 100's, Virginia Slims et Parliament-les ventes unitaires de Philip Morris U.S.A. ont atteint le chiffre record de 123 milliards, soit un accroissement de 114a. Pendant I'exercice, le chiffre d'affaires et le benefice d'exploitation ont aug- mente respectivement de 12% et 17 io. Philip Morris U.S.A., notre principale societe d'exploitation, pour ce qui est du chiffre d'affaire et des benefices, demeure la societe de l'industrie de la cigarette connaissant la croissance la plus rapide sur le marche americain. Marlboro, notre marque principale, detenait, a la fin de I'annee 1973, 14% du marche et 1'ecart qui la separe de la marque Ia plus vendue s'amenuise encore. Il y a seulement cinq ans la part du marche americain detenue par Marlboro etait inferieure a 8%. La societe a maintenu sa position dominante dans le segment des cigarettes de 100mm: les ventes de Benson & Hedges 100's ont augmente de 12,0',%o et cette marque est toujours la premiere dans ce secteur en pleine expansion. Les autres marques 100mm de Philip Morris-Virginia Slims, Parliament 100's et Marlboro 100's-ont elles aussi nettement progresse pendant 1'annee. Il y a dix ans, le marche des 100mm n'existait pas; cinq ans plus tard,les ventes de cette categorie de cigarettes representaient environ 13% du marche total. Cependant, vers la fin de 1973, les ventes des marques de 100mm representait plus de 2217o des ventes totales de l'industrie. La part principale de cc marche est detenue par Philip Morris qui comptait 29% de cc segment. La repartition des ventes par secteur de population refi@te egalement la position predominante occupee par Philip Morris. Les marques de votre societe sont par- ticulierement bien acceptees dans les secteurs de la population americaine en forte croissance, ainsi que par les femmes et les consommateurs ayant un niveau d'instruction superieur. L'annee derniere la societe a d"u resoudre un pro- bl'eme important: accroitre Ie volume de production tout en maintenant notre haute qualite traditionnelle. Au moment oCt les techniques de fabrication des ciga- rettes entrent dans une ere nouvelle et alors que nos ventes continuent a progresser rapidement, notre nou- veau complexe de $200 millions en construction a Richmond-I'eiement le plus important de notre pro- gramme d'investissement-represente un investissement opportun et rentable. Le nouveau centre de production n'atteindra sa pleine capacite qu'en 1977, cependant, en decembre dernier, il produisait environ 100 millions de cigarettes par jour -soit le 20% de sa capacite prevue. Les travaux de construction proprement dits seront termines au debut de 1974. En 1973, votre societe a egalement entrepris la construction d'une usine pour le melange et la pre- paration des tabacs pres de Richmond, Virginie. La construction de cette installation, qui coutera environ $43,8 millions, a ete rendue necessaire par l'accrois- sement des besoins de notre nouveau centre de Richmond. En 1973, les depenses de marketing sont demeurees pratiquement au meme niveau qu'en 1972 et les frais de publicite ont ete a nouveau inferieurs a ceux de 1970, derniere annee ou la publicite radiophonique et televisee etait autorisee. L'accroissement du volume des ventes a entraine une diminution des frais de marketing par mille cigarettes. La division American Safety Razor de Philip Morris U.S.A. a contribue elle aussi aux benefices de la societe. Ses principaux nouveaux produits-Personna Double 11, rasoir a quatre lames, deux de chaque c8te, et Flicker. rasoir pour femmes-ont ete commercialises en 1973 sur tout le territoire des Etats-Unis. En cours d'annee. deux petites societes, Clark Gum et Lightfoot Soap ont ete cedees, car. ces societes ne s'integraient pas dans notre plan general de croissance. Philip Morris lnternational L'essor que Philip Morris International a connu ces dernieres annees s'est poursuivi en 1973. L'annee der- niere, les vente, owndiales de cette importante so- ciete d'exploitunon ont atteint un total de 124 milliards de cigarettcs. Alors que les ventes mondiales de l'in- dustrie de la cigareue hors des Etats-Unis augmentaient de 4%, celles de Phrllip Morris International progres- saient de 9,5`'~. E.e chiffre d'affaires et le benefice d'explioitation de Philip Morris International se sont accrus respectivement de 31,9% et 9,6%. Nos marques sont en vente dans plus de 160 pays et territoires. L'an dernier, Philip Morris International, ses filiales et se; licencies detenaient une part du marche d'au moins 10C'o-et dans plusieurs cas un pour- centage superieur 5 10Cc-dans plus de 20 pays, parmi lesquels 1'Australie, le Canada, l'Italie, le Liban, le Mexique, le Nigena, les Philippines, la Suede, la Suisse et le Venezuela. L'augmentation de la demande pour les cigarettes de t>pe americain est a l'origine du succes mondial cie Marlboro; cependant, nous tenons compte des preferences pour d'autres categories de gofit, ainsr, eu'; environ de nos ventes unitaires inter- nationales sunt r2,tl,ees avec des marques regionales et nattonales. A~tucllement, Philip Morris International fabrique et di,tnbue quelque 145 marques de cigarettes dans le monde. A la fin de 19-t. Ph lip Morris formait une association comprencmt unc p.u uripation d'interets bresiliens pour la constructn0n ,i',m centre de production a Curtiba, Bresil. Notre enirce ur le marche de ce pays est prevue pour Ie Jchut rle 1975. Toujours en ly't. -ere suciete a conclu des accords au Japon avec I.i ' J, i,en Tobacco and Salt Public Cor- poration" et en P„Ioene avec Agros, pour la fabrication sous licence Llc, .,E.r.rr,es Marlboro dans ces pays. Au Mexique. m.,iL:rc I,tccroissement de ses ventes uni- taires et de ,.r p.u: Ju marche, notre filiale Cigarrera Iracional. S.A. ., -nunue d'enregistrer des pertes resultant de la h -.tue ,ugmentation des couts et de 1'augmentatuon .:- „-uro!es gouvernementaux. Nous etudions actucllcrn,nt hlusieurs alternatives, entre autre, la redu,:n„n „ n,are participation qui nous don- nerait une po,r,i„n m,noritaire, conformement a la politique actuellc ,lu ,;uu,ernement Mexicain. Nous prevoyons que cc tr qur,tion sera resolue dans la pre- mi8re moitie de 19-4 et que, quelque soit l'issue, elle n'aura aucun etlet rn,rrquant sur les resultats de 1974. Les ventes ont aut:mcnte en volume et en valeur dans les quatre regiom-1=urupe/Moyen Orient/Afrique; Amerique latine Penrn,ule iberique; Asie/Pacifique et Canada. Philip Morris Europe, la plus importante region du point de .ue du chiffre d'affaires et des bene- fices, a etendu sa re,ponsabilite et comprend main- tenant I'Afrique et le 'vtoyen Orient. En Europe, pen- dant 1'annee 1973. Ic, nombreux realignements des parites monetaires unt perturbe nos activites, cc qui a entraine des repercu„ions defarovables sur les bene- fices, compense, cependant par les progres realises dans d'autres regions. Dans le monde entier, Philip Morris International poursuit son programme d'expansion et de modernisa- tion de ses installations. En Australie, nos centres de production de cigarettes et nos installations pour la vinification ont ete agrandis. La construction d'un des plus grands entrepots de tabac d'Europe, a proximite du centre de production de notre filliale suisse a Neuchatel, est en voie d'achevement. Comme 1a plupart des societes americaines exergant une activite internationale, Philip Morris a de nouveau contribue positivement en 1973 a l'equilibre de la balance commerciale des Etats-Unis. Par ailleurs, dans plusieurs pays, Philip Morris peut poursuivre ses activites grace a l'apport evident qu'elle fournit a leur economie. Notre programme de forma- tion prend de plus en plus d'ampleur par suite de t'expansion constante de la societe. Il assure le perfec- tionnement et la promotion interne des employes des pays hotes en fonction de leurs qualites professionnelles et des resultats obtenus. 11 constitue un element fon- damental du succes de Philip Morris International. Les resultats obtenus a I'etranger en 1973, malgre l'infiation galopante et le nationalisme economique, de- montrent que votre societe est bien placee pour pour- suivre sa croissance sur le marche international. Miller Brewing Company En 1973, les ventes de Miller en barils ont augmente de 28,8% par rapport a 1'exercice precedent, contre 4,7% pour 1'industrte de la biere dans son ensemble. Proportionnellement, la progression enregistree par Miller a ete superieure a celle des autres grandes bras- series americaines. La part du marche de Miller a progresse de facon spectaculaire, de 4% a 5%, Miller passant de la septieme a la cinquicme place de 1'in- dustrie. Le chiffre d'affaires a atteint 276 millions de dollars, soit une augmentation de 31% par rapport a 1972. Scion nos estimations, Miller High Life est la marque nationale qui a progresse le plus rapidement sur le marche americain en 1973. Les ventes de Miller High Life, aussi bien en bouteilles qu'en boites d'aluminium, ont considerablement augmente et les consommateurs ont reserve un accueil tres favorable au "pony pack" de 8 bouteilles de 7 oz. La marque Miller Ale a ete tres bien accueillie dans le nord-est, principal marche des Etats-Unis pour cc genre de boisson. et le succes de Ia marque Meister Brau dans Ia region de Chicago a egalement contribue 1'annee derniere a porter a un niveau record les ventes de biere Miller. En 1973, la demande croissante des consommateurs pour les bieres de qualite produites par Miller, a en- train€ une utilisation maximum de la capacite de brassage. En fait, a certaines periodes de 1'annee, Miller n'a pu satisfaire entierement la demande. Le deficit d'exploitation de Miller, $2,4 millions, est imputable a Ia hausse des couts des mati8res premieres et du conditionnement, a la concurrence des prtx dans I'industrie de la biere, et aux couts de fabrication relativement eleves d"u au fait que Miller ne dispose pas d'installations de brassage modernes et efficaces. Pour 1'industrie, les boites et les bouteilles representent une part importante du prix de revient et leur cout a augmente de pr8s de 7% en 1973. Les prix du malt, du mais et de l'orge sont montes en fleche. La guerre des prix, qui sevit depuis de nom- breuses annees dans cette industrie, s'est poursuivie in- tensivement. La contraction du rapport cout-prix s'est traduite par une reduction des marges benefici- aires pour tous les brasseurs. Pour accroitre sa production et son rendement, tout en maintenant la qualite superieure de ses produits, Miller a entrepris un vaste programme d'expansion et de modernisation. Pres de $200 millions seront affectes a cc programme au cours des cinq prochaines annees. Des installation de brassages et de condition- nement les plus modernes sont actuellement mises en service dans les brasseries Miller de Milwaukee, Fort Worth et Azusa, Californie. D'autre part, la capacite de production des brasseries de Milwaukee et de Fort Worth a ete augmentee. Au milieu de I'annee, la con- struction d'un nouvel entrepot et d'un centre d'expedi- tion etait mise en chantier a Milwaukee, la ou Frederic Miller avait ouvert sa brasserie en 1855. Dans la meme ville, Miller construit une fabrique de $16 millions pour la production de boites d'aluminium recyclables. En janvier 1974, nous annoncions le projet de con- struire une brasserie de $70 millions situee a environ 350 km. de la ville de New York. Le nouveau centre de production de Miller entrera en operation en 1976 avec une capacite initiale de deux millions de barils; la capacite totale sera de six millions de barils par annee. Certains facteurs, specialement la disponibilite d'une eau de haute qualite, seront pris en consideration Lorsqu'll s'agira de choisir 1'emplacement de la nouvelle brasserie. L'objectif du plan a long terme de votre societe est d'accroitre le volume des ventes et la part du marche detenue par Miller, ainsi que d'augmcnter sa capacite de production tout en rendant ses operations concur- rentielles et efficaces. Bien que Miller ait enregistre une perte en 1973, il existe de bonnes raisons de penser que notre plan a long terme est rationnel. Nous sommes confiants qu'un profit potentiel exi,te pour Miller Brewing; cette confiance est concreu,ce par l'importance de nos investissements. Philip Morris Industrial Philip Morris Industrial a realise un chiffre d'affaires de 132 millions de dollars en 1973, ,oit une progression de 17% par rapport a 1'annee precedente. Le benefice d'exploitation a augmente de 7,3% malgre la forte hausse des prix des mati8res premieres qu'il etait im- TIMN 440130 .1
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Mission Viejo Company 1973 1972 1971 (000 omitted) Operating Revenues $67,976 $60,824 $37,812 (000 omitted) Operating Income 4,122 5,714 2,256 26137 La Paz Road Philip J. Reilly, President Roger E Clark, Vice President Mission Viejo, California 92675 James G. Toepfer, James G. Gilleran, James E. West, Senior Vice President Vice President Chairman of tlie Board Philip J. Reilly, President of Mission Viejo, sets the pace for the environmental planning of Mission Viejo's new communities. Geurt Henri Lodder, Vice President Robert M. Rodman, Controller William K. Smith, Secretary California, shows the orderly expansion of this master- planned community. There are now more than 25,000 residents. An aerial view of Mission Viejo, ~ Mission Viejo offers many ~ family activities; it's more than just a place to live ,TIMN 440156 Mission residents about to ride out into the rolling hills of Southern California. 36
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Eind 1973 kwam Philip Morris tot een joint venture voor de konstruktie van een sigarettenfabriek in Curitiba, Brazilie, die deels in Braziliaanse handen is. Het plan is begin 1975 een begin te maken met de voorziening van deze markt. In 1973 sloot uw firma ook licentie-overeenkomsten af voor de produktie van :vlarlboro-sigaretten in Japan met Japan Tobacco & Salt Public Corporation en in Polen met Agros. In Mexico veroorzaakten-ondanks de toename in verkoop in eenheden en de vergroting van het markt- aandeel-de sterk gestegen kosten en toegenomen overheidsbemoeienissen met onze geafHlieerde maat- schappij, Cigarrera Nacional, S.A., dat bet bedrijf nog meer terrein verloor. Wij bestuderen momenteel een aantal alternatieven betreffende onze Mexicaanse be- langen, waarbij wij eveneens overwegen onze interes- sen terug te brengen tot een minderheidsbelang overeenkomstig bet huidige Mexicaanse r,egeringsbeleid. Wij voorzien op dit moment dat deze zaak gedurende de eerste helft van 1974 zal zijn opgelost en onafhan- kelijk welke maatregelen men uiteindelijk zal treffen, zullen zij geen materieel effekt hebben op de resultaten van 1974. De verkoop in eenheden en de omzet stegen in alle vier gebieden: Europa/Midden-OostenjAfrika; Latijns- Amerikajlberie; AziejPacific, en Canada. Philip Morris Europe, het grootste gebied wat betreft omzet en winst, voegde Afrika en het Midden-Oosten toe aan zijn verantwoordelijkheidsgebied. In 1973 werden de winsten in Europa nadelig beinvloed door ont- wrichtingen in onze industrie die veroorzaakt werden door de veelvuldige valutaherwaarderingen. Dit werd echter tenietgedaan door winsten in andere gebieden. Philip Morris International zet zijn programma van uitbreiding en verbetering van faciliteiten rond de gehele wereld voort. In Australie werden produktiefa- ciliteiten voor Lindeman wijn en sigaretten uitgebreid. De bouw van een van de grootste tabaksopslagcom- plexen in Europa, dichtbij de fabriek van onze Zwitserse geaffilieerde maatschappij in Neuchatel, nadert zijn voltooiing. Zoals de meeste Amerikaanse bedrijven die hun be- langen over de hele wereld hebben verspreid, droeg ook Philip Morris in 1973 positief bij tot de handelsbalans van de Verenigde Staten. Tegelijkertijd is de aanwezigheid van Philip Morris in vele landen slechts mogelijk, doordat deze aantoonbaar bijdraagt tot de ekonomie van deze landen. Aange- spoord door voortdurende uitbreiding van onze bedrij- ven, is ons beleid om eigen personeel in landen waar onze bedrijven gevestigd zijn op te leiden, gelijke kansen te geven en te bevorderen, een basis voor bet sukses van Philip Morris International. Dit rekord qua internationale groei in 1973, in bet aanzien van stijgende inflatie en ekonomisch nationa- lisme, brengt uw bedrijf in een goede positie om de groei in de internationale markt voort te zetten. Miller Brewing Company Vergeleken met vorig jaar steeg in 1973 de afzet in vaten van Miller met 28,8%, dit vergeleken met een omzetstijging van 4,7% in de totale bierindustrie. De stijging bij Miller was in procenten de grootste in vergelijking met de belangrijkste bierbrouwers in de Verenigde Staten. Miller's marktaandeel steeg drastisch van 4,0% tot 5,0%, en Miller schoof op van de zevende tot de vijfde plaats qua rangorde van de grootste brouwers in de Verenigde Staten. De omzet bereikte $276 miljoen, een stijging van 31% ten opzichte van 1972. Volgens onze ramingen is Miller High Life het snelst groeiende merk dat in 1973 in de Verenigde Staten werd verkocht. De verkoop van Miller High Life zowel in flessen als in aluminiumblikjes steeg aanzienlijk. Het "pony pack" (een verpakking met 8 f9essen van elk 20cl) werd door bet publiek zeer goed ontvangen. Miller Ale (een Engelse biersoort) werd ook goed ontvangen in bet i`Joordoosten, de grootste markt voor "ale", en de afzet van Meister Brau in bet gebied rond Chicago Jroeg eveneens bij tot Miller's rekordafzet in vaten. De gestegen konsumentenvraag naar de kwaliteitsbieren van Miller bracht de produktie in 1973 tot topkapaci- teit. Er waren gedurende'het afgelopen jaar momenten dat Miller in feite niet voldoende produktiekapaciteit had om aan alle vraag te voldoen. Miller meldde een verlies van S2,4 miljoen hetgeen bet gevolg is van gestegen kosten van verpakkingen en grondstoffen• een voortzetting van de prijskonkurrentie in de bierindustrie, en de relatief hoge produktiekosten als gevolg van Miller's gebrek aan moderne, efficiente brouwinstallaties. In deze industrie vormen blikjes en fiessen een belangrijk deel van de totale kosten. De kosten voor deze verpakkingen stegen in 1973 bijna 7%. De kosten van mout, mafs en gerst stegen drastisch. De prijskonkurrentie die reeds vele jaren in de bierindustrie heerst, bleef zeer intensief. De resulterende vernauwing tussen kosten en prijzen werd weerspiegeld in lagere marges in de gehele industrie. Om de produktie op te voeren en de efficientie te ver- hogen, en toch de superieure kwaliteit van bet produkt te handaven, startte Miller een grootscheeps uitbrei- dings-en vernieuwingsprogramma. Voor dit 5-jarig programma is bijna $200 miljoen uitgetrokken. De modernste brouwinstallaties en verpakkingsmachines worden geinstalleerd in de Miller-brouwerijen in Milwaukee en Fort Worth. Bovendien wordt de produktiekapaciteit van de Milwaukee-en Fort Worth- brouwerijen uitgebreid. Medio vorig jaar werd in Milwaukee begonnen met de bouw van een nieuwe opslagplaats en een expeditiecomplex op de plaats waar Frederic Miller in 1855 begon met brouwen. Miller heeft ook de voorbereidingen beeindigd voor eenfa- briek van $16 miljoen voor de produktie van opnieuw bruikbare aluminiumblikjes in Milwaukee. In januari 1974 maakten wij plannen bekend dat wij binnen 200 mijl rond New York een ongeveer $70 miljoen vergende brouwerij wiilen gaan bouwen. Dit nieuwe produktiecentrum van Miller wordt begin 1976 in gebruik genomen en zal dan een kapaciteit hebben van 2 miljoen vaten; de uiteindelijke kapaciteit zal 6 miljoen vaten per jaar bedragen. Een aantalfaktoren, waartoe in bet bijzonder de beschikbaarheid over water van hoge kwaliteit wordt gerekend, zullen bepalend zijn voor de juiste plaats van deze nieuwe brouwerij. Uw firma heeft op lange termijn bet plan om afzet en marktaandeel uit te breiden en de brouwkapaciteit van Miller te verhogen, terwijl de produktiefaciliteiten efficient en konkurrerend zullen worden gemaakt. Alhoewel Miller in 1973 een bedrijfsverlies leed, waren er wel duidelijk aanwijzingen dat ons plan op langere termijn gezond is. Ons vertrouwen in het winstpoten- tieel op langere termijn van Miller Brewing wordt aangetoond door onze aanzienlijke reserveringen voor kapitaalinvesteringen. Philip Morris Industrial De omzet van Industrial bereikte in 1973 een hoogte van $132 miljoen, een stijging van 17% ten opzichte van de resultaten van vorig jaar. De stijging in bedrijfsre- sultaten bedroeg 7,3%. Dit ondanks scherpe verho- gingen van grondstofprijzen die niet doorberekend konden worden aan de afnemers, plus recente tekorten aan sommige stoffen, zoals was, oplossingsmiddelen, aluminium en pulp. De prijzen voor pulp stegen bij- voorbeeld met meer dan 39% gedurende bet afgelopen jaar, en het gevolg van deze prijsstijging in bet bijzonder was vooral van invloed op vele produktiecentra van Philip Morris Industrial. Tegen het einde van het jaar, stond de "Cost of Living Council" (Raad voor het Beheer van Lonen en Prijzen) in de Verenigde Staten kleine prijsstijgingen toe voor produkten van Philip Morris Industrial. De kosten bleven echter snel stijgen in november en december, nadat de prijsstijgingen aan Industrial werden toegestaan. Elk van Industrial's prod ukt iecentra-chemicalien, papier en verpakkingen-boekte in 1973 verhoogde omzetten en er wer.ien hogere winsten behaald in chemicalien en papic•r. Er was een kleine teiuggang in het winstniveau van ~crpakkingen. Door de verhoogde omzet van alle produkt iecentra in een aantal geavanceerde technische produkten rnet grotere winstmarges, kon Industrial de vernauwing tussen kosten en prijzen gedeeltelijk tenietdoen. Voortdurende ontwikkeling van nieuwe produkten en toepa,singen daarvan waren bevorderlijk voor de uitvoering van deze strategie. Nicolet Paper Company voltooide de bouw van een van de grootste "coaters" van papier en verpakkingsfolies in de wereld. Dit projekt dat in Nicholasville, Kentucky, staat, heeft ongeveer $5 miljoen gekost. Polymer Indus- tries, Inc. breidde zijn proJuktiefaciliteiten uit in Greenville, South Carolina, door de toevoeging van een nieuwe opslagruimte en een vijfde polymer-reactor. Wikolin-Werk, Willi E. Kohlmeyer G.m.b.H. is zijn produktiefaciliteiten in Bremen, West-Duitsland, aan het uitbreiden. Mission Viejo Cumpam Mission Viejo Compan.-Jie op het gebied van projektontwikkelm_ Je t,aon ,r.rngeeft-beeindigde 1973 als het eerste vollcdiLC• i-ir ,+nder beheer van Philip Morris. Mission Vielu', ornret over 1973 steeg met 12%, hetgeen ten opzichte ..rn ~arie jaar neerkomt op $68,0 miljoen. De winst z.,kie met '_8`c tot $4,1 miljoen. De huizenbouwinduar.c ,tuMe in 1973 op talloze problemen. De eer,rc hcllt ~.rn het jaar werd geken- merkt door slechie wrcr-m,iandigheden in Zuid- Californie en ColoraJ,,. ~rtclle prijsstijgingen van grondstoffen-vooral r,,.-ict en gelamineerd hout-en grote schaarste aun Hoewel Mission Viejo een toonaangever is irt nnm,ieliike ordening, veroor- zaakten nieuwe mrlicrr.+c:~r~ingen vertragingen in bet afhandelen van buuw-rcunn ngen. In de tweede helft van bet jaar, bereiktcn de h, h„theekrenten een on- geevenaarde hoogte cn ••cr,l h,,potheekgeld zeer schaars. Ondanks dergetijke nc~:.,:- r Lrktoren was Mission Viejo dit jaar winst_r}cnd cn %rrkochtin totaal 1.650 huizen in zijn drie belan.~ werkgebieden: Orange County, Californic; Den,c•r, (-ulorado, en Phoenix, Arizona. Bovendien wcrJ -,n het einde van het jaar een begin gemaakt met een Lk:n projckt in Fresno, Californie. De huizenbouw is een cy,Ir.,he industrie, maar wij menen dat Mission V icju numler storingen in zijn akti- viteiten heeft gehad dun scle .indere bouwers in bet land. Het ziet er naar uit d, t ~cle negatieve faktoren die de bouwindustrie in 1973 heinvloedden, ook in 1974 hun invloed zullen hebben. De vooruitzichten voor de huizenbouw voor de komende tien jaar zijn echter goed en we verwachten dat 'vtis,wn Viejo in de geplande groei zal participeren. Roken en Gezondheid Wat roken en gezondheid betrett, zetten wij samen met andere bedrijven in de tabaksindustrie onze steun voort aan medisch onderzoek door de "Council for Tobacco Research-U.S.A." (Raad voor Tabaksonder- zoek in de Verenigde Staten ) en door de subsidiering van belangrijke research-programma's van de Medische Faculteit van de Washington University in St. Louis en de Medische Faculteit van Harvard. Over de afge- lopen 20 jaar heeft onze industrie meer dan $48 miljoen besteed aan wetenschappelijk onderzoek met betrekking tot tabak en gezondheid. Het jaarverslag van de "Council for Tobacco Research" dat details bevat uit studies die in 1973 zijn gedaan door de industrie, kan kosteloos bij uw firma worden verkregen. In augustus kondigde de voorzitter van een pas op- gericht federaal bureau, de "Consumer Product Safety Commission" (Commissie voor de Veiligheid van Consumentenartikelen) aan, dat zijn bureau overwoog om een verbod uit te vaardigen voor sigaretten, die een door de Commissie als "veilig" bepaald teer en nicotine gehalte overschrijden. Tot op dit ogenblik heeft de Commissie nog geen aktie ondernomen. Wij zijn op de hoogte gesteld van het feit dat noch de wet- telijke regeling die de commissie heeft opgericht, noch de verordeningen die zij hanteert, haar de bevoegdheid geeft de sigarettenverkoop te reguleren, en bet is onze bedoeling om aan elke poging dit te doen, weer- stand te bieden. In de Verenigde Staten hebben een aantal staten wetten aangenomen om bet roken in bepaalde openbare gelegenheden te verbieden. Verschillende andere landen waar wij zaken doen, namen wetten en verordeningen aan die bet adverteren voor sigaretten beperken en waarschuwingen op sigarettenpakjes vereisen. Een recent medisch artikel dat verslag uitbracht over een studie door bet °Karolinska Institut" in Zweden, toont aan dat er tussen identieke tweelingen met ver- schillende rookgewoonten geen duidelijk verschil is in levensduur of de neiging om hartziekten te krijgen, tussen rokers en niet-rokers. De schrijvers stellen dat hun bevindingen er op wijzen dat in het bepalen van de levensduur en de kans op een hartziekte, genetische en persoonlijkheidsverschillen belangrijker zijn dan roken. Aangezien dit het enige bevolkingsonderzoek is, dat genetisch gelijk zijnde rokers en niet-rokers heeft vergeleken, menen wij dat de resultaten de nodige aandachtverdienen. Het is nu tien jaar geleden dat de "Surgeon General" (te vergelijken met onze Direkteur-Generaal) van het "Advisory Committee on Smoking and Health" (Adviescommissie voor de Volksgezondheid, speciaal belast met roken en gezondheid) zijn eerst rapport in januari 1964 publiceerde. In de daarop volgende tien jaar heeft wetenschappelijk onderzoek naar de symp- tomen, waarvan in het oorspronkelijke rapport werd beweerd dat zij verband houden met bet roken van sigaretten, geen proefondervindelijk bewijs aan bet licht gebracht inzake de relatie tussen bet roken van sigaretten en ziekten. Integendeel, het onderzoek heeft een breed spectrum van andere verdachte risiko- faktoren opgeleverd. Aanvullend intensief onderzoek gedurende deze periode naar de chemische samenstel- ling van tabaksrook is er niet in geslaagd enig be- standdeel van rook te identificeren, dat-althans in de aanwezige hoeveelheid-als een causale faktor in enigerlef ziekte die bij mensen voorkomt, kan worden beschouwd. Er is geen suksesvolle poging geweest bij dieren-door bet inhaleren van tabaksrook-die symptomen op te wekken die sommigen toeschrijven aan mensen die roken. Kortom, naar onze mening is de bewering dat er een causaal verband bestaattussen hetroken van sigaretten en ziekten heden ten dage meer een open vraag dan bet dat tien jaar geleden was. EfJekt van de energiekrisis Door de "energiekrisis" zijn talloze onzekerheden ontstaan, die bet buitengewoon moeilijk maken om de juiste gevolgen voor Philip Morris te beoordelen. Men onderkent natuurlijk, dat ernstige brandstoftekorten tot enige ontwrichtingen kunnen leiden, maar bet pro- duktieproces in onze industrie vereist minder energie dan de meeste andere industrieen. Dientengevolge menen wij dat de "energiekrisis" minder weerslag zal hebben op Philip Morris dan op de meeste andere industrieen. De brandstoffen maken in feite slechts een klein gedeelte uit van de totale kosten voor onze sigaretten- en bierproduktie en de distributie van onze produkten. Het is mogelijk dat tijdelijke ontwrichtingen in de wijze van distributie van deze produkten in de Verenigde Staten zouden kunnen onstaan, maar we menen dat bet aanpassingsvermogen van ons distributienet ons in staat stelt dergelijke problemen op te vangen. Begin 1973 is een uitvoerig onderzoek gedaan naar onze energiebehoeften en gedurende bet gehele jaar hebben wij de nodige stappen ondernomen teneinde een ongestoorde toevoer van de voor ons vereiste energie te verzekeren. Bij al onze vestigingen is een uitgebreid intern programma voor ernergiebesparingen ingesteld. Dit programma heeft reeds tastbare resultaten opgele- verd, hetgeen bleek uit een aanzienlijke vermindering in ons energieverbruik. Prijskontroles De voortgaande prijskontrolemaatregelen van de Amerikaanse regering onder Fase IV beperkten ons om gestegen kosten geheel met prijsverhogingen te dekken. Begin 1973 werden tijdens Fase III kleine prijsver- hogingen voor sigaretten toegestaan. Later dat laar- onder Fase IV-kregen bier en industriele produkten enig respijt. Echter zelfs daar, waar prijsstijgingen werden toegestaan of nog zullen worden toegestaan, TIMN 440140 20 I
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De meme, Philip Morris a inaugure 1'an dernier le pre- mier programme de bourses pour adultes a 1'intention des employees et des menageres desireuses d'effectuer des etudes a temps partiel. Il faut esperer que cc pro- gramme servira aussi d'exemple a d'autres societes. Grace a 1'etude effectuee chaque annee sur tes respon- sabitites de la societe dans le domaine social, le Conseil d'administration est informB des progres accomplis par Philip Morris dans 1'interet public. A titre d'exemple, il ressort de la derniere de ces etudes que nous employons un nombre accru de membres de minorites ethniques, de femmes et d'anciens combattants du Vietnam, et qu'ils sont promus a des postes comportant davantage de responsabiiites. Philip Morris International et ses filiales ont realises de nombreux projets de caractere social: aide aux victimes des inondations au Pakistan et aux Philippines, octroi de bourses d'etudes superieures au Mexique, assistance a un grand nombre de services medicaux et sociaux et a des etablissements d'enseignement au Venezuela, et parrainage de projets culturels entrepris par diverses collectivites australiennes et canadiennes. Philip Morris encourage ses employes, ou qu'ils soient dans fe monde, a participer aux activites de leur collec- tivite, et il est pratiquement impossible d'enumerer toutes les contributions personnelles qu'ils ont apportees dans ce domaine. En ce qui concerne les renseignements d'ordre financier fournis au public, la Bourse des valeurs de New York a propose recemment que les societes indiquent dans leurs rapports annuels la fourchette des cours, Ie P/E ratio (rapport cours-benefice), les dividendes et la valeur comptable de leurs actions ordinaires. C'est d'aiLleurs ce que Philip Morris fait deja depuis plusieurs annees et, 1'annee derniere, notre rapport annuel s'est vu decerner par 1'hebdomadaire Financial World le titre de "meilleur rapport de 1'annee" de 1'industrie americaine. Le Conseil d'administration a eu a deplorer 1'an dernier le deces de M. Wirt H. Hatcher, vice-president en retraite et administrateur honoraire de Philip Morris Incorporated. M. Hatcher, qui etait entre chez Philip A,lorrts en 1918, etait bien connu dans 1'industrie du tabac. Ses connaissances et ses nombreux ouvrages sur le developpement de L'industrie et la mise au point des techniques qu'elle utilise lui avaient valu une reputation justifiee. M. Hatcher a largement contribue a 1'expan- sion de notre societe. Nous beneficions maintenant des conseils eclaires de M. T. Justin Moore, Jr., president-directeur general et directeur financier de la Virginia Electric and Power Company, qui a ete elu membre du Conseil d'adminis- tration en avril. Depuis notre derni'ere restructuration, en janvier 1967, nos ventes ont plus que triple et nos benefices ont plus que quadruple. En outre, nous avons acquis deux im- portantes socretes d'exploitation, Miller Brewing et Mission Viejo. Par suite de notre expansion, nous avons ete amenes en octobre dernier a elargir et a renforcer la structure de ia direction de la societe, aussi, le Conseil d'administra- tion a decide de promouvoir plusieurs de nos princi- paux directeurs. Trois des principales modifications concernaient: M. George Weissman. president de Philip Morris Incorporated, nomme vice-president du Conseil d'administration, M. Ross R. Millltiser, president de Philip tilorris U.S.A., nomme president de Philip Morris Incorporated, et M. Clifford H. Goldsmith, vice- president executif de Philip Morris U.S.A., nomme president de cette meme societe et vice-president executif de Philip Morris Incorporated. Nous rendons a nouveau hommage a nos 37.000 em- ployes dans le monde entier pour les brillants resultats qu'ils nous ont permis d'obtenir pendant 1'annee. Leur travail a contribue dans une large mesure au succes de notre societe et nous les remercions de leur devouement. Rapport soumis au nom du Conseil d'administration, Joseph F. Cullman 3rd President du Conseil d'administration et Administrateur en chef ~.~ W~.~,.._.. George Weissman Vice-president du Conseil d'administration Ross R. Millhiser President Informe del ano En este ejercicio de 1973 conmemoramos los veinte afios consecutivos durante los cuales vuestra Compaiiia ha venido reportando nuevos records de ingreso bruto operacional, de ganancias y de utilidades por accion. Elingreso bruto operacionalconsolidado se elevo a U.S.$2.600 millones, un aumento del 22,1%, y Las ganan- cias netas ascendieron a U.S.$149 millones, un incre- mento del 19,4% sobre 1972. Las utilidades por accior,, incluyendo bonos convertibles, fueron de U.S.$5,21 y las utilidades efectivas por accion fueron de U.S.$5,42, lo que representa aumentos sobre el ano anterior del 19,2% y 16,1%, respectivamente. Nos sentimos complacidos de ]os resultados obtenidos en 1973, sobre todo porque se lograron en un aiio suma- mente dificil caracterizado por los controles de precios, la escasez de materiales, el reajuste de Las paridades de las principales divisas y la crisis energetica. Philip Morris amplio en mayor grado su participacion en el mercado mundial de cigarrillos y reforzo el segundo puesto que ocupa entre Las mayores empresas cigarri- lleras del mundo cuyas acciones se cotizan en la bolsa. En 1973, Las ventas mundiales de la industria del cigarri- Llo aumentaron 4% hasta sobrepasar los 3.600 billones de unidades; la participacibn de Philip Morris en el mercado cigarrillero mundial, que abarca Las ventas en Estados Unidos y en el extranjero, fue del 6,7%. A escala mundial, los cigarrillos Marlboro siguen siendo los de mayor venta -on puesto que ostentan desde 1972. En Estados Unidos, la marca Marlboro ocupa el segundo lugar pero redujo considerabiemente la dis- tancia que la separa de ]a primera. Por cuarto ano consecutivo, se registro un incremento en el total de ventas por uni.dad de la industria cigarri- llera en Estados Unidos. El total de unidades vendidas por industria fue de 577.000 millones, lo que representa on aumento del 4,1% frente al ejercicio anterior; paralelamente, las ventas por unidad de Philip Morris aumentaron en un 11,1%. La participacion de vuestra Compafiia en el mercado estadounidense alcanzo un nuevo tope de mds del 21 % al cierre del ejercicio. En 1973, las ventas de Miller Brewing aumentaron consi- derablemente -con incrementos del 3 1 % en el ingreso bruto operacional y del 28,8% en Las ventas por barril. La espectacular wbida de Las ventas por barril de Miller represento el mayor aumento porcentual registrado en la industria cer.ecera de Estados Unidos, la cualelevo el total de sus venut, por barril en un 4,7% en 1973. Miller paso del septimo al quinto puesto entre Las compatiias cerveceras estadounidenses. Las erogaciones capiializables en 1973 ascendieron a U.S.SL75 millone,, unu cifra muy superior a la de U.S.$120 millone, para 1972. Philip Morris esta imple- mentando un ambicio,o programa de expansion de capital para s.ut,tacer la creciente demanda de nuestros cigarrillos, en E,tados Unidos y en el extranjero, y de nuestros producto, del ramo cervecero y demas. Durante 1973 anunciamo~ un aumento de U.S.$500 millones a aproximadamente U.S.5750 millones en erogaciones capitalizables pre,upue,tadas para los proximos cinco ahos. La mayor parte de esta suma se destinara a la expansion y modernii ;cirin de Las operaciones tabacale- ras internacionales, a~liller Brewing y, en una propor- cion mucho menor, a Philip Morris Industrial y Mission Viejo. En los tSltimo, clnco ano, -de 1968 a 1973- eL ingreso bruto operac:onal comolidado de Philip Morris aumento de acuerdo a un, t-a promedio compuesta del 20,6% anual. En este penodo, las ganancias netas subieron de 24,9% y las ut.lid.,dc, pur accion, considerando bonos convertible,, aument.sron un 19,5% por ano. Este es el cuadragesintu-,exto clerLiao consecutivo en que vuestra Compania pn_d di% i ~cndu, sobre sus acciones comu- nes, y ei sexw en yLle. t.tmbien consecutivamente, aumen- taron los dividendo, I I ectual dividendo por acciones comunes es ife U 5 SI.»u. - Philip Morris t A El notable impet,: dc I.,- principales marcas de cigarrillos de Estados Un:do, ~:c tra Compafiia-Marlboro, Benson & Hed~e, I~~~~'~ c, tr a ~\ irginia Slims y Parliament- hizo que las ~ent.,, ;-r unidad de Philip Morris U.S.A. alcanzaran un nc-I de 123 billones, un aumento del 11%. El rn_rc,o uperaeional y Las ganancias operacionale, re_-tr.-,n .,untentos del 12% y 17%, res- pectivamente, dr,r.,n;c c', r;crcicio. Philip Morris U.S.A., nuestra mayor Coml'.r;:;.r Je operaciones en terminos de ingresos y gun.,n.:.,•- rr~uvo el sitio que ocupa como la compafiia de ~I~- on la tasa de crecimiento mas alta en Estado, 1L n,dh,,. Marlboro, nuestra m,c.., pr;ncipal, obtuvo una partici- pacion en el mercadO dcl Ir'~ a finales de 1973, cerrando aun mas la brecha quc I, c~cra de la marca mas popu- lar. Hace solo cinco .wo•. I,. participacion de Marlboro en el mercado estadounidrn,e era de menos del 8%. La Compafiia tambtcn ~c m:,ntuvo a la cabeza en cuanto a ventas en el creciente -gmento del mercado de los cigarrillos de 100 milimciros; las ventas de Benson & Hedges 100's aumentn ron el 12,0% y es La marca que ocupa el primer lug.,r en e,e sector, mientras que Las ventas de las otra> mar<.,, de 100 milimetros de Philip Morris -Virginia Sltm,. E'urliament 100's y Marlboro 100's- tambien aument,ron considerablemente durante el ejercicio. Diez aiios atras no existia un mercado para cigarrillos de 100 milimetros y hace cinco anos las marcas de 100 milimetros sumaban aproximadamente el 13% del total de Las ventas de cigarrillos. A fines de 1973, sin embargo, las ventas de Las marcas de 100 milimetros representa- ban mas de 22% del total de Las ventas de la indatstria. La mayor participacion individual en el mercado de los 100 milimetros es la de Philip Morris- con una partici- pacion del 29°'o en esa categoria. Desde el punto de vista demografico tambien es facil constatar la fortaleza de Philip Morris. Las marcas de vuestra Compania han recibido una magnifica acogida por parte de los fumadores comprendidos en 1os sectores de la poblacion estadounidense de mas rapido creci- miento, el sector femenino y los fumadores con una educacion superior. Una de Las mayores dificultades que la Compania Logro salvar el aiio pasado fue la de continuar la elaboracion de cigarrillos en un volumen ascendente, manteniendo siempre nuestra tradicional alta calidad. Asi, nuestro nuevo complejo en Richmond, Virginia, principal componente de nuestro ambicioso programa de expansion de capital ha demostrado ser una acertada y beneficiosa inversion, ya que la elaboracion de cigarrillos ha entrado en una nueva era de cambios tecnologicos, precisamente en el periodo en que nuestras marcas con- tiniran consumiendose a un ritmo cada vez mas rapido. Aunque no sera posible alcanzar la plena capacidad de Las nuevas instalaciones hasta 1977, a fines del pasado mes de diciembre esta planta estaba produciendo aproxi- madamente 100 millones de cigarrillos diariamente -un 20% de su capacidad maxima. Los trabajos de edi- ficaci6n marchan de acuerdo a 1o planificado y estaran terminados a principios de 1974. Durante 1973 vuestra Compafiia tambien inicio la construccion de una planta de procesamiento de tabaco cerca de Richmond: Esta planta, a un costo aproximado de U.S.$43,8 millones, es indispensable para atender las crecientes necesidades del nuevo complejo industrial de Richmond. El total de gastos por concepto de mercadeo en 1973 se mantuvo casi al mismo nivel que en 1972, y los gastos de publicidad fueron de nuevo menores que los de 1970, el iltimo afio en que se permitio hacer propaganda a los cigarrillos por radio y television. Como resultado del crecido volumen de ventas, los gastos de mercadeo por 1.000 cigarrillos disminuyeron. La American Safety Razor, una division de Philip Morris U.S.A., tambien contribuyo a]os beneficios de la Compania. Sus principales nuevos productos- Personna Double 11, una hoja con cuatro tilos para el afeitado, dos por cada lado y Flicker, una afeitadora para damas-fueron distribuidos a escala nacional en 1973. Asimismo, durante el ejercicio se vendieron dos de nuestras empresas de menor envergadura; Clark Gum y Lightfoot Soap Company. Philip Morris International El dinamismo con que Philip Morris International desarrollo sus operaciones en aflos recientes continuo en 1973. El aiio pasado,las ventas a nivel mundial de esta importante empresa operativa de Philip Morris totalizo 124 billones de unidades, mientras que las ventas de la industria cigarrillera mundial, excluyendo Estados Unidos crecio 4%, el volumen de ventas de Philip Morris International aumento 9,5%. Los ingresos y Las ganancias operacionales aumentaron 31,9C2. y 9,6%, respectivamente. Nuestras marcas se distribuyen en mas de 160 paises y territorios. En el ejercicio anterior, Philip Morris I.nternationai y sus companias afiliadas y conceyiona- rios, tenian por lo menos una participacion del IU~b en el mercado -y en algunos casos, un porcentaje con- siderablemente mayor- en mas de 20 pai,e,, entre e11os: Australia, Canada, Filipinas, Italia, Libano, Mexico, Nigeria, Suecia, Suiza y Venezuela. La cre- ciente demanda de cigarrillos de tipo amernc: nu ha con- ducido al exito internacional de Marlboro. in embargo, donde existen preferencias por otros sabores e,table- cidos, estamos debidamente representados y aproxima- damente el 60% de nuestras ventas internuctonales por unidad consisten en marcas regionale, y naciona- les. Actualmente Philip Morris International elabora y vende unas 145 marcas de cigarrillos en ei mundo entero. A finales de 1973 se anuncio que Philip Morri, pro- yecta la construccion de una planta en Curiuha, Brasil, a traves de una compafiia afiliada cuya propiedad comparte con intereses brasilenos. Nue,tra introduc- cion en el mercado de ese pais esta programada para principios de 1975. Tambien durante 1973, vuestra Compariia tlrmo dos acuerdos de concesion; en Japon con Japan lobacco & Salt Public Corporation y en Polonia con :>gros para la elaboracion de cigarrillos Marlboro en c,os paises. En Mexico, a pesar de que las ventas por unidad han subido y que nuestro segmento del merc~do e ha expandido, nuestra filial, Cigarrera Nuciun, l, S.A. con- tinua incurriendo perdidas debido al alr, , iolenta de los costos y el aumento de controles gubernementales. Estamos estudiando una serie de altern.rn.:n al respecto, entre Las cuales se encuentra, la reducciun de nuestra participacion en la empresa para con~erurLr en minorita- ria, ajustandonos asii a la actual politica del (iobierno Mexicano. Esperamos tener una solucion rn el transcurso del primer semestre de 1974 y cualquicra que e,ta sea, no tendra gran repercusion sobre los re,uli.,dos de 1974. TIMN 440132
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Fifteen Year Financial Review Philip Morris Incorporated and Consolidated Subsidiaries (in thousands except last nine items) 1973 1972 1971 1970 1969 Operating Revenues ..... . . . ... ...... .. . .. ................................... .. ...... . . $2,602,498 2,131,224 1,852,495 1,509,540 1,142,373 Federal Excise Taxes ..... ............................................................ 558,947 494,778 441,143 372,092 319,086 Foreign Excise Taxes ............. .................................................... 334,512 228,151 201,386 147,124 54,247 Operating Income . ... .............. .. ................ . . . .............................. 329,483 287,461 241,137 203,180 153,237 Earnings Before Income Taxes .................................................. 255,609 229,634 189,800 150,008 115,613 Pre-Tax Profit Margins ......................................................... .... 9.8% 10.8% 10.2% 9.9% 10.1% Net Earnings ...................... .... ..... ................ ....................... ........ 148,632 124,466 101,498 77,498 58,340 Dividends Declared: Common ........ ................................ ........ 37,128 33,882 31,080 24,452 21,794 Common Dividends Declared As % of Net Earnings .............. 25.0% 27.2% 30.6% 31.6% 37.4% Dividends Declared: Preferred ................ . .......... . ........................ 128 690 752 870 887 Net Earnings Reinvested ............................................................ 111,376 89,894 69,666 52,176 35,659 I Capital Expenditures ... . .......................... . .......................... . ........ 174,665 120,034 68,001 39,595 23,636 Annual Depreciation .... .......... . . .......... ...... ............ ......... ..... ...... 30,245 26,576 21,500 17,658 13,512 Property, Plant & Equipment (Gross) .............................. ....... 728,726 571,148 447,075 394,088 236,962 Property, Plant & Equipment (Net) ........................ .... 510,286 373,372 274,070 236,697 147,354 Inventories . ............... . . . ................... ... ...... ................ .. ... . . 1,009,414 801,145 670,244 568,428 447,319 Current Assets .............................................. ................. . . . .. 1,245,934 989,708 826,453 728,837 574,988 Working Capital ........................... .............................. 515,347 524,791 417,591 347,682 315,871 Total Assets .. . ._ ...._ ...... .. ....... ............................ ... . . . 2,108,403 1,701,494 1,392,035 1,239,424 976,489 Short-Term Debt . .... ..... ...... ............................. ... .. .. ... . 440,343 197,900 201,400 187,100 158,100 Senior Long-Term Debt ........................................................ ..... 408,387 373,400 216,500 178,500 168,700 Subordinated Long-Term Debt ......................... ............ . 98,634 109,700 136,000 192,100 163,600 Total Debt ...... ' .................... _.................. ........................... . ...... 947,364 681,000 553,900 557,700 490,400 Stockholders' Equity ................................ ............ ...... _ .. . . . 815,028 695,549 579,114 452,849 355,808 Primary Earnings Per Common Share ................... $5.42 4.67 4.02 3.36 2.58 Fully Diluted Earnings Per Common Share ............... .. 5.21 4.37 3.64 2.85 2.40 Dividends Declared Per Common Share .........._........... 1.348 1.262 1.21 1.05 .98 Book Value Per Common Share .. ........................... .... 29.32 25.10 21.44 17.87 14.78 Market Price of Common Share High-Low .................... 1363/4-971/2 1181/4-673/4 71-463/4 501/4-28 363/s-251/s Closing Price Year End .................................................... 1143/4 1181/4 701/4 491/2 353/4 Price/Earnings Ratio ...................................................... . 21 25 17 14 13 No. of Common Shares-Actual Year End ........................ 27,689,217 27,222,045 26,169,454 24,158,840 22,565,334 No. of Common Shares-Weighted Average ...................... . 27,402,087 26,499,669 25,063,307 22,806,598 22,269,461 TIMN 440160 1W
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37 The recreation center of the Casta del Sol neighborhood of Mission Viejo, California offers numerous social and recreational activities for residents in the"45plus"age group. An olympic size pool at the Marguerite Recreation Center was the site for the 1973 Los Angeles Invitational Swimming Meet. Mission Viejo Opera;ing Revenues  Homes So:d - - 69 - Since the first home was sold in 1967, Mission Viejo Companv's Operating Revenues have increased at an acerage annual compounded rate of 27?1i. In 1973, 1,650 homes were so;d in all Mission Viejo communities. The company's Mission Viejo, California community offers a broad line of homes like this Granada model. The Aurora, Colorado planned community offers similar California-type housing. Eleven schools, ranging from grade schools on up to college, meet the educational needs of Mission Viejo, California, residents. TIMN 440157
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1968 1967 1966 1965 1964 1963 1962 1961 1960 1959 1,019,846 904,841 771,975 704,544 641,439 585,059 550,624 529,127 509,332 499,598 295,903 271,073 234,975 214,128 194,312 193,768 187,133 184,146 175,947 168,608 41,841 39,658 30,057 27,780 22,462 8,276 3,785 126,159 101,838 81,867 65,128 55,568 56,634 56,402 52,701 52,376 49,690 100,107 81,317 65,144 52,423 44,466 46,729 47,464 45,985 44,578 41,159 9.8% 9.0% 8.4% 7.4% 6.9% 8.0% 8.6% 8.7% 8.8% 8.2% 48,866 43,601 34,183 26,509 22,614 22,052 21,946 21,511 20,984 19,590 18,755 15,226 15,101 12,896 12,867 12,855 13,046 13,212 13,085 11,140 38.4% 34.9% 44.2% 48.6% 56.9% 58.3% 59.4% 61.4% 62.4% 56.9% 922 922 923 943 953 953 953 970 1,011 1,024 29,189 27,453 18,159 12,670 8,794 8,244 7,947 7,329 6,888 7,426 26,373 .25,688 17,089 12,078 19,366 26,243 11,843 8,733 7,300 12,380 12,139 10,903 9,532 8,857 8,316 6,765 6,293 5,638 5,362 4,932 219,346 193,656 172,593 159,759 153,224 139,595 110,204 99,066 93,641 90,050 138,704 123,555 110,157 104,044 102,417 93,150 68,664 61,560 59,960 59,655 451,922 386,576 297,761 271,823 257,256 235,375 228,088 232,541 209,326 210,967 561,685 485,908 372,895 339,082 318,978 297,295 279,068 277,350 249,819 252,239 312,406 306,172 253,257 213,826 202,810 190,982 179,222 190,859 190,423 187,404 786,578 648,994 512,549 466,277 443,438 412,543 365,024 351,018 321,717 321,620 153,800 82,600 27,200 57,300 56,700 53,800 57,400 45,200 21,000 30,000 176,000 173,800 133,800 100,800 102,300 91,400 63,400 65,400 67,400 69,100 25,000 354,800 ' 256,400 161,000 158,100 159,000 145,200 120,800 110,600 88,400 99,100 314,496 280,186 249,821 230,677 217,783 208,711 201,720 199,685 195,956 189,317 2.18 1.97 1.54 1.19 1.01 .99 .98 .94 .91 .85 2.14 1.94 1.54 1.19 1.01 .99 .98 .94 .91 .85 .85 .70 .70 .60 .60 .60 .60 .60 .60 .52 13.12 11.77 10.48 9.63 9.03 8.62 8.25 7.99 7.74 7.47 341/4-22 283/4-153/4 17Ys-121/4 161/s-121/s 14' -1 1 i/4 15-111/8 183/4-101/s 20~/s-13 131h-10 107/8-9 3 2 2 21 /4 17 143/4 12 ~/- 1 12 3/ 8 121 /4 18 3/813 3/ 8 10 3/ 8 14 11 11 12 12 12 12 19 14 12 22,200,308 21,830,874 21,613,344 21,521,730 21,458,478 21,429,444 21,526,428 21,972,954 22,029,792 21,937,686 21,928,890 21,674,884 ,V1MS 440161 41
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1973 1972 Liabilities: Notes payable. .. $ 440,343,000 $ 197,900,000 Current portion of long-term debt..... . . .. . . .. . . .. . ... .... .................... ......................... 7,186,000 3,300,000 Accounts payable and accrued liabilities... .... ._. 232,655,000 212,489,000 Federal and other income taxes ...... ........ ........... _................. _.......................................... 40,681,000 42,287,000 J Dividends payable ........ .. .............. .... ............... ...... ... ...... ............................................ 9,722,000 8,941,000 Total current liabilities... . . ............... . ......... ... .... ........ ......... _ .................... 730,587,000 464,917,000 Long-term debt: Senior ... ... . . ..................... .......... .......... . ........ .. 404,801,000 370,154,000 Subordinated . ........ ....... .... ... ...... .. . 95,034,000 109,652,000 Deferred income taxes . .... . .......... .......... .. .... 46,507,000 35,674,000 Reserve applicable to international operations 9,104,000 17,963,000 Other liabilities. . . . . .. ... ... . . ... .. ....... ........ 7,342,000 7,585,000 Total liabilities . ................ ..... .... .... ...... . . 1,293,375,000 1,005,945,000 Stockholders' Equity: Cumulative preferred stock, par value $100 per share 10,269,000 24,773,000 Common stock, par value $1 per share ........ ..... .. 27,754,000 27,315,000 Additional paid-in capital ......... ................. _....... 197,348,000 179,581,000 Earnings reinvested in the business ..................... 585,301,000 473,925,000 820,672,000 705,594,000 Less, Cost of treasury stock .. ..... .. .................. 5,644,000 10,045,000 815,028,000 695,549,000 $2,108,403,000 $1,701,494,000 T1MN 440163 43
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Consolidated Balance Sheets Philip Morris Incorporated and Consolidated Subsidiaries Deceniber 31, 1973 and 1972 A SSetS: Cash and cash equivalents ........ ... . .......... ................. ........ ................ ............................ Receivables . ..... . .... .. . .. . . ... ............ .... ... _ .. ............ .. ........................ ........................... Inventories: Leaf tobacco ... ... . .... ... .... ....... . .. ..... ................. . .. . .. ........................................ Other raw materials. .... ....................... ..... .. ............ . . . . .. ..... .................................... Work in process and finished goods ............................... . . ...................................... Housing programs under construction ........................ ... .... . . . .................................. Prepaid expenses . ... . Total current assets .......... ............... ....... . ... _ .. ........................ Investments in and advances to unconsolidated foreign subsidiaries and affiliates ...... Land and offtract improvements .. ....... ..... ........ .. ....... .................... Property, plant and equipment, at cost: Land and land improvements ......... Buildings and building equipment ...... ............ . ..... Machinery and equipment ......... . ..... ................ .... . Construction in progress . ....... ........... ..... .. . Less, Accumulated depreciation ... . ..... ........ . . _ . Other assets _ ........ ....... .. Brands, trademarks, patents and goodwill ........... ....... See notes to financial statements. 1973 $ 56,139,000 171,608,000 690,509,000 63,800,000 218,456,000 36,649,000 1,009,414,000 8,773,000 1,245,934,000 103,702,000 26,877,000 26,177,000 175,268,000 368,439,000 158,842,000 728,726,000 218,440,000 510,286,000 17,673,000 203, 931,000 $2,108,403,000 1972 $ 54,471,000 128,935,000 591,894,000 51,997,000 130,827,000 26,427,000 801,145,000 5,157,000 989,708,000 92,431,000 25,999,000 18,796,000 129,171, 000 313,639,000 109, 542,000 571,148,000 197,776,000 373,372,000 17,696,000 202,288,000 $1,701,494,000 TIMN 440162 42
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equity of 30 Dow Jones Industrial companies. For the last seven years the growth in our per share earnings has been substantially ahead of the comparable growth of the 425 stocks used in the Standard & Poor's Industrial average as shown in Chart No. 5. During 1973 we sold $24,615,000 of fifteen-year Swiss franc debentures at an interest cost of 6i/2 % to satisfy some of our requirements under the government's balance of payment program. We also arranged a 180,000,000, three-year, Eurodollar Revolving Credit. The currency fluctuations during the year had significant but mixed impact on the corporation. In Europe these fluctuations affected margins. In other areas, notably Australia, our earnings benefited from the dollar devaluation. From an overall point of view, our income from international operations was in line with our 1973 budget and well above the 1972 results. During the year we continued our conservative accounting procedure of not taking unrealized profits or losses from foreign operations into earnings but crediting or charging them to our Reserve Applicable to International Operations which at year end was $9,104,000 versus $17,963,000 in 1972. The decrease in the Reserve results principally from translating long-term foreign currency debt into U.S. dollars at year-end exchange rates rather than at exchange rates in effect on the dates the debt was sold. Start-up expenses at our new manufacturing complex in Richmond amounted to over $6,000,000. These expenses were not capitalized but were charged directly to earnings. The same high level of start-up costs will continue into 1974 when this facility will be operating at considerably less than 50% of capacity. Our investment tax credit in 1973 was $4,841,000 and at this time we are estimating it will be up considerably in 1974. The total cost of our pension plans, including prior service, amounted to $14,805,000 in 1973 versus $10,620,000 in 1972. Unfunded prior service costs are amortized over thirty years. In 1973, the total of such prior service liabilities was S 14.W,000 contrasted with $15,000,000 in 1972. There has been much discussion in recent months ahout the amount of "inventory profits" resulting from inflation which may be artificially distorting 1973 reported results of corporations. This matter is not a significant factor «ith Philip Morris. Our major product is cigarettes and tobacco leaf is approximately one-half of tht: cost of this product, excluding excise taxes, in the United States. Tobacco is a commodit. subject to government price support with a history of small but continuously risin g hr;:,:s-averaging about 5% per year over the last five years. The increase in leaf tobacco pri,:,:, has been substantially smaller than almost every other raw material. Accordingly, our rc,ults have not been importantly affected by inventory profits. All publicly-held corporations are required to file ~ti ith the ticcurities & Exchange Commission "Form 10-K" which contains a great deal of detailed .tat i.t i,:al and technical information about the companies. Any Philip Morris stockholder %'v ho ~k i,hes this 10-K report may obtain a copy without charge by writing to the Secretary, Ph i 1 ip%tt ,rris Incorporated, 100 Park Avenue, New York, New York 10017. Quarterly Operating Results Quarters Operating Revenues 1972 I $ 486.2 II 524.1 III 563.6 IV 557.3 Year $2,131.2 1973 I $ 570.6 II 634.3 III 683.0 IV 714.6 Year $2,602.5 \: t Income Earnings Per Share Fully Diluted 5 27.5 $0.97 31.8 1.12 34.6 1.21 30.6 1.07 ,124.5 $4.37 -,32.3 $1.13 38.4 1.34 42.3 1.48 35.6 1.25 5148.6 $5.21 Primary Earnings per Share (1959 =100) Philip Morris  Standard & Poor's 425 - Chart 5 ntlex 700 59 60 61 62 63 64 65 66 67 63 69 70 71 72 73 Long-Term Debt to Equity Senior Long-Term Debt  Subordinated Long-Term Debt a Chart 6 Percentage 100 59 60 61 1111111til 62 63 64 65 66 6 66 69 Stockholders' Equity  Working Capital - Chart 7 WJions of Dollars 900 600 700 600 59 60 61 62 63 6 65 66 T'IMIN 440159 9 72 73 07 0 72 73 39
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Consolidated Statements of Earnings Philip Morris Incorporated and Consolidated Subsidiaries jor the years ended December 31, 1973 nnd 1972 Operating revenues .... ...... . Cost of sales: Cost of products sold. .. . . ............... Federal and foreign excise taxes on products sold ...... Gross profit ...................... Marketing, administration and research costs .... .. Equity in net earnings of unconsolidated foreign subsidiaries and affiliates ........ .... ... Operating income of operating companies ... ................ ....... ........ ....................... Corporateexpense ......... ............................ Interest expense ........... ....... . ................. . . ........ ........ .. ... ...._.. .. ... .... ........................ Other deductions, net.............................. ............................... .. . .._.................................. Earnings before income taxes. ...... .. . ...... . . . _..... ............ Provision for federal and other income taxes: Current . .... ........ ..... ............. . ... .... . . . ... . . Deferred Net earnings .. ... .... ... ...... . ...... ... .. . . ... . . ... Earnings per common share: . Primary ...... . . . . . . ...... .... ............. . .. .... ... . . .... ....... Fully diluted ............ . ... ........ .......... .... ... ................. . . See notes to financial statements. 1973 $2,602,498,000 1,060,777,000 893,459,000 648,262,000 338,978,000 309,284,000 20,199,000 329,483,000 21,016,000 50,993,000 1,865,000 255,609,000 100,617,000 6,360,000 106,977,000 $ 148,632,000 $5.42 $5.21 TIMN 440164 1972 $2,131,224,000 832,890,000 722,929,000 575,405,000 299,422,000 275,983,000 11,478,000 287,461,000 19,870,000 37,870,000 87,000 229,634,000 100,278,000 4,890,000 105,168,000 $ 124,466,000 $4.67 $4.37 44
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Financial Review 5-10-15-Year Growth Record (in thousands except earnings per share) 5 Years 1973 1968 Compounded Average Operating Revenues $2,602,498 $1,019,846 Annual Growth Rate 20.6% Pre-Tax Income 255,609 100,107 20.6% Earnings Per Share Primary 5.42 2.18 20.0% Fully Diluted 5.21 2.14 19.5% 10 Years 1973 1963 Compounded Average Operating Revenues $2,602,498 $ 585,059 Annual Growth Rate 16.1 % Pre-Tax Income 255,609 46.729 18.5% Earnings Per Share Primary 5.42 0.99 18.5% Fully Diluted 5.21 0.99 18.1 % 15 Years 1973 1958 Compounded Average Operating Revenues $2,602,498 $ 473,552 Annual Growth Rate 12.0% Pre-Tax Income 255,609 39,854 13.2% Earnings Per Share Primary 5.42 0.81 13.5% Fully Diluted 5.21 0.81 13.2% Nineteen seventy-three was a year of important gains for Philip Morris Incorporated in terms of unit sales, operating revenues and profits. I linlu_1t, 1ut the year, the corporation continued to strengthen its overall position. The abcn c t.rhlc II i ~hlights the record of growth during the last five, ten and fifteen-year periods. This p,:rtorniance continues to place Philip Morris among the leading growth companies in Ani~ r ~an industry. As noted in Chart No. 1, there was a slight decline in our prc-t;tx margin which reversed the trend which started eight years ago. While we had the hcnrtit of a small increase in the price of cigarettes, effective in February of 1973, substantial cost n,:re;r,es in all areas of our business caused the decline in this ratio. We anticipate con: inu in_, cost increases in 1974 and all of our U.S. operating companies applied for price ,~%I, ith the Cost of Living Council during 1973. The most important of these requested hric~: ::,, r,,.t;cs amounted to $0.15 per thousand cigarettes in the U.S., and this request was aphr~ ,I: d .; nci implemented on all our brands in January, 1974. Capital expenditures during 1973 amounted to $174.r,o ~~+ t ~.; ntl were at an all-time peak for the corporation. We anticipate that this high le% cl ~,I ...; I ;~ penditure will continue for at least the next five years and we are currently estimat iTi _'.t ;! ~c five-year aggregate will be approximately $750,000,000. These funds will be prini,r .. ;~ nt to enlarge and improve manufacturing facilities for our world-wide tobacco t l r: .1nci for our Miller Brewing Company operations. As noted in Chart No. 2, our funds from operations aft~:r ~i.ls have, over the past fifteen years, generally exceeded our consolidated capital ex pcn,! i- :, r.. I h is was not the case in 1973 and we anticipate that it will not be the case in 1974 and Pj i I, tw•ever, over the next five-year period we anticipate that funds from operations after di% 1 i. .: .~ ill be in excess of our projected $750,000,000 capital expenditure program. As :,:,'. ..t;d in Chart No.7,stockholders' equity increased significantly while our high level of work ,..;•, t,tl was maintained. The effect on our balance sheet of our rapidly growing buSrn, " ;, 'upled with the substantial capital expenditures is clearly reflected in Chart No. 6. Wh.lc th,: ratio of debt to equity is considerably below the peaks reached in 1969 and 1970, it is ~till at a high level for the company. However, our substantial cash flow, coupled with tii,: liquidity of our leaf inventories, continues to maintain the corporation in a stre n;_ tin;tncial position. For the sixth consecutive year, dividends on the common stock were increased and the current annual rate is now S 1.40 per share. As indicated in Chart No. 3, while dividends have been on an upward trend for the past fifteen years, earnings per share have grown far faster with the result that earnings reinvested in our business have increased from 38% in 1959 to 75% in 1973. In view of our large capital expenditure program, we believe this conservative dividend policy is in the best interest of the corporation and its stockholders. The high pre-tax return on stockholders' equity which continues to exceed 30% provides further support for the continuation of this dividend policy. The trend of this return on equity is illustrated in Chart No. 4 and it is interesting to note that our return is substantially higher than the return on Operating Revenues  Pre-Tax Margins (%) - Chart I Mil',icns ct Dorars Percentage 2600 2400 2200 2000 1600 1600 / 1400 200 1000 800 600 400 200 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 Funds from Operations (after Dividends)  Consolidated Capital Expenditures - Chart 2 3 12 0 9 7 6 2 1 Mi111ons of Dollars 150 -.i 111ttf1 59 60 61 62 63 64 65 66 07 68 69 07 72 73 Primary Earnings per Share  Dividends Declared per Share - Chart 3 Dollars 550 Pre-Tax Return on Stockholders' Equity Philip Morris  Dow Jones 30 Industrials - Chart 4 Percentage 35 30 25 20 1s 10 5 59 60 61 62 63 64 65 66 67 65 69 70 71 72 73 TIMN 440158 38
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Der.Leiter einer neugeschaffenen US-Bundesbehorde Zur Uberwachung der Sicherheit von Konsumartikeln (Consumer Product Safety Commission) gab ver- gangenen August bekannt, dass seine Behorde ein Verbot fur Zigaretten erwagt, deren Gehalt an Teer- stoffen und Nikotin ein von dieser Behorde als "ungefahrlich" erachtetes Mass uberschreitet. Bis zur Abfassung dieses Berichtes hat die Behorde noch keine weiteren Schritte in dieser Richtung unter- nommen. Nach Ansicht von Experten gibt weder das Gesetz, durch das die Behorde geschaffen wurde, noch irgendein von ihr in der Ausiibung ihrer Tatigkeit angewandtes Gesetz der Behorde das Recht, solche Vorschriften iiber Zigaretten zu erlassen. Deshalb werden wir uns gegen jeglichen Versuch in dieser Richtung zur Wehr setzen. In den U.S.A. haben mehrere Einzelstaaten Gesetze erlassen, durch die das Rauchen in bestimmten bffent- lichen Bereichen untersagt wird. Verschiedene andere Lander, in denen wir geschaftlich tatig sind, haben durch den Erlass entsprechender Gesetze und Bestim- mungen die Werbung fur Zigaretten eingeschrankt and warnende Hinweise auf den Zigarettenpackungen zur Aufiage gemacht. Ein Artikel uber eine vom Karolinska Institut in Schweden durchgefuhrte medizinische Untersuchung, der vor kurzem veroffentlicht wurde, deutet darauf hin, dass bei eineiigen Zwillingen, die sich-was Rauchen anbetrifft-unterschiedlich verhalten, keine wesentlichen Unterschiede in der Lebensdauer und Anfalligkeit fiir Herzkrankheiten zwischen Rauchern und Nichtrauchern festzustellen sind. Den Autoren zufolge deuten ihre Forschungsergebnisse darauf hin, dass genetische und Persbnlichkeitsunterschiede eine wichtigere Rolle in bezug auf Lebensdauer und Anfalligkeit fUr Herzkrank- heiten spielen als das Rauchen. Da es sich hierbei um die bisher einzige Studie handelt, die genetisch identische Raucher und Nichtraucher miteinander vergleicht, sind wir der Ansicht, dass deren Resultate grbsste Beachtung verdienen. Seit die Beratungskommission fur Rauchen und Gesundheit des Surgeon General im Januar 1964 ihren ersten Bericht verbffentlichte, sind jetzt 10 Jahre vergangen. In diesem Jahrzehnt haben weitere wissen- schaftliche Untersuchungen keinerlei zuverlassige experimentelle Beweise fUr irgendwelche Zusammen- hange zwischen Zigarettenrauchen und gesundheitlichen Schaden'erbracht, wie sie in dem ersten Bericht behauptet worden waren. Die weiteren Forschungen haben vielmehr ein breites Spektrum von Risikofak- toren aufgedeckt. In intensiven chemischen Analysen des Tabakrauchs ist kein Bestandtei] des Rauches ermittelt worden, der in der vorhandenen Dosierung als Ursache fur gesundheitliche Schaden angesehen werden konnte. Auch durch Tierversuche mit Inhalieren von Tabakrauch konnten nicht in einem einzigen Fall solche Zusammenhange nachgewiesen werden. Wir sind deshalb der Meinung, dass die Behauptung, zwischen Rauchen und Krankheit bestUnden ursachliche Zusam- menhange, heute noch fraglicher als vor zehn Jahren ist. Auswirkungen der Energiekrise Die vielen Ungewissheiten, mit denen die "Energie- krise" noch behaftet ist, machen es sehr schwierig, ihre Auswirkungen auf die Geschaftsentwicklung unseres Unternehmens prazise vorherzusagen. Ernste Lieferungsengpasse bei der Beschaffung von Heiz- und Kraftstotlen wurden zweifellos Produktionsstorungen verursachen. Doch die Produktionsprozesse in unseren Betrieben benotigen, anders als die der meisten anderen Industrien, relativ wenig Energie. Deshalb glauben wir, dass die "Energiekrise" fur Philip Morris weniger nachteilige Folgen haben wird, als fur die meisten anderen Industrieunternehmen. Tatsachlich machen die Aufwendungen fur Heiz- und Kraftstoffe nur einen geringen Teil der Produktions- and Distributionskosten unserer Zigaretten und Biere aus. Es ist moglich, dass sich im Verteilungssystem unserer Produkte in den Vereinigten Staaten zeitweilige Verschiebungen ergeben werden. Wir sind jedoch zuversichtlich, dass wir dank der Flexibilitat unseres Verteilungsnetzes in der Lage sein werden, derartige Probleme zu meistern. Schon Anfang 1973 unterzogen wir unseren Energie- bedarf einer griindlichen Analyse. Wahrend des ganzen Jahres wurden geeignete Schritte unternommen, um eine kontinuierliche Deckung unseres Energiebedarfs sicherzustellen. Daruber hinaus wurden umfassende Vorkehrungen zur Einsparung von Energie nicht nur in allen Betrieben, sondern auch im Aussendienst getroffen. Eine erhebliche Reduzierung unseres Energie- verbrauchs beweist, dass diese Massnahmen schon jetzt greifbare Resultate erbracht haben. Preiskontrollen Die auch im Rahmen der Phase IV des amerikanischen Stabilitatsprogramms weiterhin bestehenden Preis- kontrollen hinderten uns daran, Kostensteigerungen voll durch entsprechende Preissteigerungen zu kompen- sieren. Anfang 1973 warden noch im Rahmen der Phase III geringe Erhohungen der Zigare,4tenpreise genehmigt. Spater im Berichtsjahr, nach dem Ubergang auf Phase 1V, wurde ern gewisser Spielraum fUr Erho- hungen der Preise fur Bier und industrielle Erzeugnisse gewahrt. Doch selbst in den Fallen, in denen Preiser- hohungen genehmigt wurden oder werden, haben die Preisvorschriften der Phase IV im Endeffekt stets eine Verminderung der Gewinnmargen zur Folge, da Preiserhohungen nur un Rahmen der Kostensteige- rungen zulassig sind. Starke Kostensteigerungen waren bei Tabak und bei Braugetreiden zu verzetchnen, die als landwirtschaftliche Erzeugrnsse nicht der Preiskon- trolle unterliegen. Auch die Preise fUr Zellstoff und Papier sind mit Zustimmung des Cost of Living Council betrachtlich gestiegen. Am 11. Januar 1974 genehmigte der Cost of Living Council eine Preiserhohung um 1,6 % fUr die Produkte der Philip Morris U.S.A., wodurch die eingetretenen Kostensteigerungen wenigstens zum Teil kompensiert werden konnten. Diese Erhbhung gilt fur alle unsere Zigaretten-Marken, deren. Grosshandelspreise jetzt dem Preisniveau der meisten anderen amerikanischen Zigarettenhersteller angeglichen worden sind. Preiskontrollen warfen im Berichtsjahr auch fur die Philip Morris International Probleme auf. In vielen Landern,in denen unsere Zigaretten vertrieben werden, wurde das Wachstum der Ertrage dadurch gebremst, dass einerseits inflationare Kostensteigerungen hinge- nommen werden mussten, andererseits jedoch eine entsprechende Erhdhung der Zigarettenpreise nicht moglich war. Tabakmarkt Die weltweite Nachfrage nach Rohtabak nahm 1973 zu, die Tabakernten in einigen Exportlandern fielen jedoch niedriger aus als erwartet, so dass bei verringer- tem Angebot von Qualitatstabak die Rohtabakpreise in der ganzen Welt stiegen. Die hohe Nachfrage nach Qualitatszigaretten im Ausland und die Verbilligung des Dollars durch Wechselkursanderungen bewirkten, dass der amerikanische Rohtabak-Export stark zunahm. Es ist damit zu rechnen, dass das Tabakange- bot auf dem Weltmarkt auch kunftig relativ knapp bleiben wird, und dass dementsprechend die Rohta- bakpreise weiterhin steigen werden. Unserem Unterneh- men gelang es, sich mit ausreichenden Vorraten an abgelagertem Tabak in der von uns benotigten Menge und Qualitat einzudecken. Zigarettensteuer In den USA wurde im Berichtsjahr nur in einem einzigen Staat, namlich in Colorado, ein Gesetz zur Erhbhung der Verbrauchsteuer auf Zigaretten erlassen. In diesem Fall wurde die dem Staat zufliessende Steuer erhoht, gleichzeitig wurden aber die von den Gemeinden bisher erhobenen Steuern abgeschafft. Im Laufe des Berichtsjahres wurden in den USA in 20 Bundesstaaten nicht weniger als 41 Gesetzentwurfe eingebracht, die auf eine Erhdhung der Verbrauchsteuern auf Zigaretten abzielen. Andererseits sind in 19 Staaten derartige Steuererhohungen entweder abgelehnt oder entspre- chende Gesetzinitiativen verhindert worden, weil verantwortungsbewusste Gesetzgeber eingesehen haben, dass Verbrauchsteuern nicht nur eine regressive Form der Besteuerung darstellen, die Verbraucher mit niedrigem Einkommen relativ starker belasten, sondern auch zum Zigareuemchmuggel verlocken. In vier Einzelstaaten liegen der Levislative sogar Gesetzvor- lagen vor, die eine Senl.ung der Zigarettensteuer zum Ziele haben. Am 10. Januar 1974 empfahl Malcolm Wilson, der Gouverneur des Staates New York, die Abschaffung der von der Stadt New York erhobenen Zigarettensteuer. Er er4.Lute in diesem Zusammenhang: "Die hohe Zigarertensteuer in New York City, die zusatzlich zu der Zigarettensteuer des Staates New York erhoben wird, i,t e nc _rosse Verlockung fur das organisierte Verbrecherwm. Sie macht dfese Stadt zum gelobten Land fiir Srhmuggler." In direktem Zusammenhang mit die,er Situation stehen die nachtei- ligen Auswirkungen, die die unterschiedliche Hohe der von den Einzelstaaten erhohcncn Verbrauchsteuern auf den normalen, rechtm:i„ ~:en Vertrieb von Zigaretten durch den etablierten und . chtbaren Gross- und Einzelhandel hat. Die Einnahmen aus Z,e.urtren,teuern beliefen sich in den USA auf in,ge-rni S s.~ Milliarden, wovon $ 2,2 Milliarden auf vom Bund. $ i.'_ Milliarden auf von den Einzelstaaten und S(0 >lilli.,rde auf von Gemeinden erhobene Steuern ennnri, n 1) c, entspricht $ 26,00 fur jeden Mann, jede 1=r.tu r.n.! !cJcs Kind in den Vereinig- ten Staaten. Die l..'nh;ll,.,c~r .f r,er Art von Besteue- rung ist unverkennhar UnserBeitragzum 11 J.. t!fqemeinheit Die Philip Morris ln.oct, r,•c,f nt eines der wenigen Grossunternehmen. d c:r :, des Verwaltungsrats einen Ausschuss t!.eh,ldc' der sich speziell mit den Belangen und Pn,r ca ••i fcr Allgemeinheit befasst. Dieser Ausschuss, I- ,, Committee genannt, hat nicht nur die Aute.,i,. reStellung unseres Unter- nehmens innerhalb dcr t„c ~., haft und seine Beitrage zur Losung sozialp.+in:,, •, • f~<cn laufend zu iiber- priifen, sondern es ohl, ;t :r!n I uch, Veranderungen von Wertvorstellungen. ft,,; .-;,,i„trukturen und Prioritaten der Gemru,,. ,. , oraus zu erkennen und ihre Bedeutung /a •< . ~ n Ein zweiter Aus- schuss innerhalb de, \-, - _• r.r,s, das Ervironmental Committee, versieht ahn!~,'•~ \.:f,aben im Bereich des Umwettschutzes. Fur Einsparung von Roh• •": n.tnd zum Schutz der Umwelt hat die Miller Brr...,,< <bmpany die Umstel- lung auf wieder verwerth.-r. .,:.! Aluminium bestehende Dosen sowie auf Nachfu!!'t-, ncn, die ebenfalls wieder verarbeitet werden kiinncn. pr-,i,ch abgeschlossen. Im Rahmen eines von %li!'rr cniwurfenen Programms haben viele unserer Gro„~crtctlcr iiberall in den Vereinigten Staaten Riickc.,hrrcntren eingerichtet. Grosshandler, Einzelhandlcr cnd Kunden kdnnen sich an dieser gemeinsamen :\n,crengung beteiligen, sparsamer mit unseren Rolnuotfen umzugehen und gleichzeitig die Belastungi der L'ntwelt durch Abfall- stoffe zu mindern. Andere ~,,n den Unternehmen der Philip-Morris-Gruppe verucndcte Verpackungen werden derzeit unter dem <;c,i,htspunkt der Roh- stoffeinsparung iiberpriift. Im Rahmen unserer Aktivitaten fUr das Gemeinwohl bemuhen wir uns, neue Wege zu gehen und-wie wir hoffen-auch die Aufinerksamkeit Anderer auf Gebiete zu lenken, die der Hilfe bedurfen. Ein Beispiel dafur ist unser Stipendienprogramm fur die Kinder unserer Mitarbeiter, das im Berichtsjahr auch auf die Aus- bildung an Berufsfachschulen and Universitaten ausgedehnt wurde. Das Stipendienprogramm fUr den Besuch von Berufsfachschulen-unseres Wissens das erste seiner Art-hat den Beifall fiihrender Vertreter aus Regierung, Erziehungswesen und Wirtschaft gefunden und eine Reihe von Unternehmen veranlasst, ahnliche Programme einzufuhren. Als erstes Unternehmen hat Philip Morris im Berichts- jahr auch ein Stipendienprogramm fur Erwachsene eingefuhrt, das Frauen, die beruflich oder im Haushalt tatig sind, in die Lage versetzen soll, sich halbtags weiterzubilden. Wir erwarten, dass auch in diesem Fall andere Unternehmen unserem Beispiel folgen werden. Eine von der Philip-Morris-Gruppe jahrlich abgefasste Studie iiber unsere sozialen Verpflichtungen ("Study of Social Responsibility") informiert den Verwal- tungsrat laufend uber die von unserem Unternehmen zum Wohl der Allgemeinheit geleisteten Beitrage. Aus der jiingsten Studie geht hervor, dass der Anteil der Minoritatengruppen, der weiblichen Mitarbeiter und der Vietnamkriegs-Heimkehrer an unserer Gesamt- belegschaft gewachsen ist, und dass auch bei der Beforderung dieser Mitarbeiter in verantwortungsvollere Positionen Fortschritte erzielt worden sind. Die Philip Morris International und ihre Beteiligungs- gesellschaften nahmen sich ebenfalls zahlreicher, dem Wohl der Allgemeinheit dienender Projekte an. A1s Beispiele seien erwahnt: Hilfe fur die Opfer von Hochwasserkatastrophen in Pakistan und auf den Philippinen, Gewahrung von Stipendien fur Univer- sitatsstudien in Mexiko, ein breitgefachertes Unter- stiitzungsprogramm fiir medizinische, soziale und erzieherische Institutionen in Venezuela, sowie die finanzielle Fdrderung von Volksbildungseinrichtungen in Australien und Kanada. Unsere Mitarbeiter auf der ganzen Welt werden dazu ermutigt, sich an Projekten, die dem Wohl der Allge- meinheit dienen, zu beteiligen. Die Liste ihrer person- lichen Engagements dieser Art ist eindrucksvoll. Zur Publizitatspflicht hat die New York Stock Exchange kiirzlich vorgeschlagen, dass kiinftig die Geschaftsbe- richte auch die Kursschwankungen der Stammaktien, Kurs/Gewinn-Relationen sowie Dividenden und Buchwert enthalten sollen. Fur Philip Morris Inc. war dies schon seit mehreren Jahren eine Selbstverstandlich- keit. Unser Geschaftsbericht 1972 wurde bei der jahr- lichen Preisverteilung der Zeitschrift "Financial World" als der beste Geschaftsbericht aller amerikanischen Industrieunternehmen ausgezeichnet. In aufrichtiger Trauer gedenkt der Verwaltungsrat der 1973 verstorbenen Herren Wirt H. Hatcher, ehemaliger Senior Vice President und Director Emeritus der Philip Morris Incorporated, und Richard Thurston, Vorsit- zender des Verwaltungsrats der Fa. Polymer Industries. Herr Hatcher, der seine Tatigkeit bei Philip Morris im Jahre 1918 begann, war eine bekannte PersiSnlichkeit der Tabakindustrie. Er genoss besonderes Ansehen wegen seiner umfassenden Kenntnisse und seiner zahlreichen Schriften uber das Wachstum der Branche und die Entwicklung der von ihr angewandten wissenschaftlichen Verfahren. Herr Hatcher hat wesentlich zum Wachstum unseres Unternehmens beigetragen. Herr Justin T. Moore Jr., Prasident sowie Vorsitzender der Geschaftsfiihrung und Leiter der Finanzen der Virginia Electric and Power Company, wurde irrt April 1973 in den Verwaltungsrat gewahlt. Wir gewannen in ihm einen klugen Ratgeber. Seit dem letzten Revirement unserer Konzernleitung 1967 haben sich unsere Umsatze mehr als verdreifacht, und die Ertrage sind auf inehr als das Vierfache des damals ausgewiesenen Betrages gestiegen. Daruber hinaus haben wir zwei bedeutende Unternehmen-die Miller Brewing Company und Mission Viejo-erworben. In Anbetracht der raschen Expansion des Unternehmens wurde die Fuhrungsspitze der Geselischaft im Oktober 1973 verbreitert und verstarkt. Mehrere Ftihrungskrafte wurden vom Board of Directors in neue Schlussel- positionen berufen. Zu erwahnen ist besonders die Berufung von George Weissman, Prasident dcr Phrlip Morris, Inc., zum stellvertretenden Vorsitzenden des Board of Directors und von Ross R. Millhiser, Pr5,ident der Philip Morris U,S.A., zum Prasidenten der Philip Morris Incorporated. Clifford H. Goldsmith, bisher Executive Vice President der Philip Morris U.S A., wurde zum Prasidenten dieser Gesellschaft und gleichzeitig zum Executive Vice President der hlutter- geseilschaft ernannt. Im Namen des Verwaltungsrats Joseph F. Culiman 3rd Vorsitzender des Verwaltungsrats und des Konzernvorstands George Weissman Stellvertretender Vorsitzender des Verwaltungsrats V{..w ~4 Ross R. Millhiser Prasident TIMN 440 136 16
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Consolidated Statements of Stockholders' Equity Philip Morris [ncorporated and Consolidated Subsidiaries for the years ended December 31, 1973 and 1972 Preferred Stock, Authorized and Issued at $100 Par Value Common Stock, Authorized 50,000,000 Shares at $1 Par Value dditional Paid-In Capital Earnings Reinvested Cost of in the Treasury Business Stock otal Stockholders' Equity Balance,Jartuary 1,1972 $25,104,000 $26,285,000 $150,104,000 $384,031,000 ($ 6,410,000) $579,114,000 Net earnings for the year 1972 124,466,000 124,466,000 Cash dividends declared: Preferred stock: 4% Series ( 447,000) ( 447,000) 3.90% Series ( 243,000) ( 243,000) Common stock, $1.262 per share ( 33,882,000) ( 33,882,000) Preferred stock purchased for treasury ( 4,188,000) ( 4,188,000) Common stock issued upon conversion of debentures 886,000 25,098,000 311,000 26,295,000 Proceeds from common stock issued under stock options 144,000 4,290,000 4,434,000 Preferred stock retired ( 331,000) 89,000 242,000 - Balance, December31, 1972 24,773,000 27.315,000 179,581,000 473,925,000 ( 10,045,000) 695,549,000 Net earnings for the year 1973 148,632,000 148,632,000 Cash dividends declared: Preferred stock: 84 000 ( 84 000) 4% Series , ) ( , 3.90% Series ( 44,000) ( 44,000) Common stock, $1.348 per share ( 37,128,000) ( 37,128,000) Preferred stock purchased for treasury ( 6,739,000) ( 6,739,000) Common stock issued upon conversion of debentures 353,000 10,129,000 389,000 10,871,000 Proceeds from common stock issued under stock options 86,000 3,885,000 3,971,000 Preferred stock retired (14,504,000) 3,753,000 10,751,000 - Balance, December31, 1973 $10,269,000 $27.75-3,O00 $197,348,000 $585,301,000 ($ 5,644,000) S815,028,000 ( ) Denotes deduction. See notes to financial statements. TIMN 440165 45
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productos industriales experimentaron algtin alivio bajo la-Phase IV". Sin embargo, atin en aquellos casos en que so ha autorizado el incremento de precios, o se e,pera tal autorizacion, el efecto definitivo de estas medidas segim Ia "Phase IV" es una reduccion de los tnargenes de rentabilidad ya que los aumentos de precios estan limitados a cubrir dolar pot dolar el aiza de los costos. Los granos empleados en la fabrica- cion de cerveza y el tabaco, experimentaron agudos aurnentos en los costos ya que estos productos agricolas estan exentos de regulacion de precios. Aumentos considerables en los precios de la pulpa y del papel tambien fueron autorizados por el "Cost of Living Council" (Comision Reguladora del Costo de la Vida). Con fecha 11 de enero de 1974, la antes mencionada comision aprobo un aumento de precios del 1,6% para Philip Morris U.S.A. que compensa en algo el alza de los costos. Todas las marcas de cigarrillos han recibido este aumento de precio, y los precios al por mayor de vuestra Compaiiia est5n ahora al nivel de los de la mayoria de las otras compatiias cigarrilleras de E>tados Unidos. Philip Morris International tambien experiment6 dificultades en 1973 a causa del control de precios. En numerosos paises en los que vuestra Compania vende cigarrillos, las utilidades se vieron frenadas pot la inflacion general unida a la imposibilidad de aumentar los precios de los cigarrillos. Hoja La demanda mundial de tabaco aumento en 1973. Las cosechas de tabaco en ciertos paises exportadores fueron menores de lo que se esperaba lo cual tuvo el efecto de reducir el abastecimiento de tabaco de calidad y producir un encarecimiento mundial de la hoja. La demanda internacional de cigarrillos de calidad, con- juntamente con las nuevas paridades monetarias, produjeron un alto nive] de exportaciones de tabaco en rama por parte de Estados Unidos. Se espera que el abastecimiento de tabaco continuara bastante escaso en todo el mundo y, a la vez, los precios del tabaco en rama continuaran en alza. Vuestra Compania ha logrado conservar existencias de tabaco curado en las cantidades y calidades necesarias. Inzpnestos sobre cigarri2los Solo uno de los estados de la union norteamericana, Colorado, aprobo durante 1973 una Iegislacion que iija un impuesto de con,umo sobre los cigarrillos y esta ley en realidad elimino los impuestos municipales y aumento ei impuesto estatal. Sin embargo, en el trans- curso del ano se presentaron 41 proyectos de ley relativos al aumento del impuesto de consumo sobre los cigarrillos en 20 estados. Legisladores responsables, comprendiendo no solo el caracter regresivo de esos impuestos-que afectan desproporcionadamente al consumidor de renta reducida-sino tambien el hecho de que estimulan el contrabando, revocaron el aumento de los impuestos, o no lo adoptaron, en 19 estados. Es mu,, cuatro estados tienen pendiente de aprobacion, proyectos de ley para la reduccion de los impuestos sobre los cigarrillos. E l 10 de enero de 1974, el Gobernador Wilson de Nueva York recomendo la abolicion del impuesto sobre los cigarrillos vigente en la ciudad de vueva York. En su declaracion dijo que "Uno de los mayores incentivos para el crimen organizado lo constituye el alto impuesto ,obre los cigarrillos en la ciudad de Nueva York, que ,umado al estatal, ha convertido a la ciudad en la tierra prometida para los contrabandista,". En relacion directa con e,ta situacion esta el efecto nocivo que lo; diferentes nivele, de los impuestos estatale, de con,umo ejercen sobre la distribucion licita de cirarrillo,, tru- dicionalmente en manos de mayoristas y detalli,tas de 'olida reputacion. La recaudacion por concepto del impuesto de consumo de cigarrillos en 1973 alcanzo un total de U.S.S5.50(1 millones desglosados en U.S.S2'00 millones para el gobierno federal, U.S.$3.200 millones para lu, e>tados y U.S.S100 millones para los municipios. Eato representa U.S.526.00 pot cada hombre. mujer v nino en E,tados Unidos. Eslo es claramente injuato. Re.spo,taabiiidud sociu! Philip Morris Incorporated, al igual que tin pequeno crupo de companias importante,, ha establecido un comitd integrado pot miembros de la Junta Directiva cuyas preocupaciones e,pecificas son aque[las necesi- dades y problemas sociales con los cuales se encuentra compenetrada la Compania. Este Comitd de Asuntos Publico-que asi se llama-no adlo est"a autorizado paru examinar el de,empeno de nuestra labor social en nuestra condicion de ciudadano juridico, sino que es responsable tambiin de anticipar y evaluar los cambios en los valores humanos. las necesidades y las priori- dades. El Comite del Medio Ambiente, tambicn formado por miembros de la Junta Directiva tiene a su cargo todo lo relativo al sector ambiental. En atencion a la conservacion y el ambiente, Miller Brewing Company casi ha terminado la conversion al u,o de latas de aluminio y de botellas rellenables, envases ambos de material transformable. Segtin un programa formulado por Miller, muchos de nuestros distribuidores han establecido centros de deposito de estos envase~ en todo el pais. Ademas de Ios distribui- dores, los clientes y los detallistas pueden participar en este esfuerzo nacional para conservar nuestros recursos. Otros envases de Philip Morris estan en es tudio desde el punto de vista de la conservacion de recursos. Nuestra politica tambien contempla ]a introduccion de innovaciones en nuestras actividades de responsabilidad social; y de ser posible dar la pauta para que otras empresas tambien intervengan en estos sectores que requieren ayuda. Un ejemplo notable que podemos citar es la ampliacidn Ilevada a cabo el ejercicio pasado, en nuestro plan de becas para los hijos de los empleados, para que inctuyese capacitacion en artes y oficios asi como educacion a nivel universitario. Considerado el primero de su tipo, este plan de capacitacion ha atraido la atencion favorable del gobierno, de educa- dotes y de figuras destacadas en el mundo de los negocios, y varias otras compaiiias estan iniciando planes similares. Asimismo, el ano pasado Philip Morris fue el precursor de un plan de becas para adultos que ofrece cursos abreviados para las mujeres que trabajan o atienden su hogar. Se espera que este plan tambien se convierta en un ejemplo a seguir para otras compaiiias. Anualmente, Philip Morris circula un Informe sobre la Responsabilidad Social que mantiene a vuestra Junta Directiva al dia sobre el progreso de la Compania en el aspecto de la responsabilidad social. El informe mas reciente, pot ejemplo, seiiala un aumento en la pro- porcion de los grupos minoritarios, mujeres y veteranos de la guerra del Viet-Nam en nuestro personal, asi como un progreso en su ascenso a cargos de mayores responsabilidades. Philip Morris International y sus companias afiliadas Ilevaron a cabo numerosos proyectos en el sector de Ia responsabilidad social de la empresa, entre ellos, la ayuda a victimas de inundaciones en Pakistan y en las Filipinas, becas universitarias en Mexico, un amplio programa asistencial dirigido a instituciones medicas, sociales y educacionales en Venezuela y el patrocinio de proyectos culturales en comunidades del Canad'a y Australia. Los empleados de Philip Morris en el mundo entero son estimulados para que participen en activi.dades civicas y la lista de sus contribuciones personales a este campo es impresionante. - En el sector de Ia divulgacion at publico, la Bolsa de Valores de Nueva York sugirio recientemente que los informes anuale, dehieran incluir listados de la escala de preciu< de acciones comunes, la relacion de precio a utilidad pur acci6n, los dividendos y el valor en libros, todo lo cual, Philip Morris viene informando desde hace ,: rio, :rfioI. Casualmente, nuestro Reporte Anual del ado p.i•:.Jo fue seleccionado pot la revista Financial World como "el mejor de toda la industria" en su adjudicaciun :mual de premios. Vuestra Junt.t D,rectiva recibio con pena, el ano pasado, la noticia de la mtxrte de W'irt H. Hatcher, antiguo Vice- pre>idente SupQrior y Director Emerito de Philip Morris Incorporated. FJ Sr. Hatcher, quien empezo a trabajar en Philip Morris en 19 18, era una figura bien conocida en el ramo del ctbaco. Gano especial renombre por su erudicion y su, numcro,o+ escritos sobre el crecimiento de la industria y et de,::rrollo de sus procesos cientificos. El Sr. Hatcher de,cmpctiu un importante papel en el crecimiento de vue,tr.t ('ompania. El valioso a,e,oranuen!o del Sr. T. Justin Moore, Jr., Presidente y Ejecuu1u Superior a cargo de Operaciones y Finanzas de la \ Electric and Power Company vino a reforzar nuc,tn, ~uadro ejecutivo al ser electo miembro de nt,e,tr,, Jt,:t;,, Directiva en el mes de abril. Desde nue,tra u!t1n1•, rre.:ructuracion ejecutiva en enero de 1967. I- srr;.:, han excedido del triple y los beneticio, ,e h:,n m.,• ;ue cuadruplicado. Ademas, dos importante, r„m;,,ili.,- nperativas-Miller Brewing y Mission v, 1cju-t uci „n ,,dquiridas. Como re,ult:,chl J•: n, cxpansion, la estructura ejecuti,n uperi„r ,k I., ('„mpania fue ampliada y reforzad,i en oct,:'•,r --nJe> la Junta Directiva ascendiei a1,:r:- r. , claves. Entre los cambios principale, ,, u, r. ~:- Lle George Weissman, Presidente dc 1'!•.~,' , ~1~rn, Incorporated, quien se convirtio en A,,c;~~~-n~r de la Junta Directiva; Ross R. Millhi,cr. 1',U-I, :r E'hilip Morris U.S.A., quien fue electo :.f'h!lip Morris Incorporated; y Clifford 11. GoId•n:...cn paso de Vicepresidente Eiecutivo a Pre,:.Ic,rc .:. f'htlip Morris U.S.A. y Vicepre,idente I-:~.... :c f'hilip Morris [ncorporated. Una vez m5s yucrc:,.• -, ;•rc,ar nuestro reconocimiento a los 37.000 etnp!r_,,:•• ., r Icvtemos en todo el mundo, por su eficaz col,dl- .:. n lL,,rante el ejercicio. Su labor ha sido fundament.,l rl cxito de vuestra Compania y les agradecemo, u ..r.:c;n. Respetuosamente, u no,nhrr de la Junta Directiva Joseph F. Cullman 3rJ Presidente de la Jcnt, Dirc~iva Primer Oficial Ejecutivo Uj A_...~s... George Weissman Vicepresidente de la Jun::, Directiva Ross R. Millhiser Presidente de Philip Morris Inc. Geschaftsverlauf und Ausblick i Auch im Geschaftsjahr 1973 konnte Philip Morris 1nc.- zum 20. MaI in ununterbrochener Folge-die Umsatz- erldse, den Jahresiiberschuss und den Gewinn je Aktie gegenuber dem Vorjahr erhuhen. Die konsolidierten Umsatzerlose erreichten $ 2,6 Mrd, und lagen damit um 22,1 Se iiber dem Vorjahrswert. Der Jahresuberschuss stieg im Berichtsjahr um 19,4 % auf $ 149 Mio. Der Gewinn je Stammaktie betrug $ 5,42. was einer Zunahme von 16.1 Cb gegenuber dem Vor- jahr entspricht. Unter voller Berucksichtigung a11er Umtauschrechte ergibt sich ein Gewinn je Stammaktie von $ 5,21, was eine Verbessenmg von 19,2 % gegeniiber dem Vorjahr bedeutet. Diese Zahlen sind um so erfreulicher, wenn man bedenkt, dass das Geschaftsjahr 1973 durch Preiskon- trollen, Rohmaterialienverknappung, betrachtliche Verschiebungen der internationalen Wahrungsrela- tionen sowie die Energiekrise gekennzeichnet war. Philip Morris konnte seinen Anteii am W'elt-Zigaretten- markt weiter steigern und unsere Position als zweit- grdsste notierte Aktiengesellschaft unter allen Zigaret- tenherstellern der Welt festigen. Der weltweite Absatz der gesamten Zigarettenindustrie erhohte sich 1973 um 4Q, auf iiber 3,6 Billionen Zigaretten. Unser Absatz in den Vereinigten Staaten und auf den Auslands- markten sicherte uns einen Anteil von 6,7 % am Welt- Zigarettenmarkt. Unsere Marke Marlboro nimmt weiterhin den im Jahre 1972 erreichten ersten Platz auf dem weltweiten Zigarettenmarkt ein. In den Vereinigten Staaten kam diese Marke-derzeit auf dem zweiten Platz-der Spitzenposition sehr nahe. Wie in den drei vorausgegangenen Jahren nahm der Absatz der amerikanischen Zigarettenindustrie auch 1973 weiter zu und erreichte insgesamt 577 Milliarden Stiick-eine Steigerung um4,1 Sb. Unser Absatz erhohte sich im gleichen Zeitraum um 11,1 %, und unser Anteil am amerikanischen Zigarettenmarkt erreichte zum Jahresende einen neuen Hochststand von iiber 21 Unser Brauereiunternehmen Miller Brewing Company konnte im Geschaftsjahr 1973 einen erheblich hoheren Ausstoss erzielen. Die Umsatzerlose stiegen um 31 %, der Ausstoss um 28,8 %. Mit dieser dvnamischen Entwicklung seines Bier-Absatzes erzielte Miller von allen grosseren amerikanischen Brauereien die hochste Steigerungsrate. Die gesamte Brauereibranche konnte ihren Bier- Absatz 1973 um 4,7 % steigern. Miller riickte vom siebten auf den funften Platz unter den amerikanischen Brauereiunternehmen auf. Die Investitionen in Sachanlagen beliefen sich im Ge- schaftsjahr 1973 auf $ 175 Mio. im Vergleich zu $ 120 Mio. im Vorjahr. Philip Morris befindet sich im Anfangsstadium eines umfangreichen Investitionspro- gramms, um der steigenden Nachfrage gerecht werden zu kiinnen, derer sich sowohl unsere Zigarettenmarken in den USA und in anderen LSndern als auch unsere Brauereierzeugnisse und anderen Produkte erfreuen. 1973 beschlossen wir, die fiir die nachsten fiinf Jahre geplanten Sachinvestitionen von $ 500 Mio. auf $ 750 Mio. zu erhohen. In den letzten funf Jahren-1968 bis 1973-n:,hmen die konsolidierten Umsatzerlose von Philip Morris ;iihr- lich um durchschnittlich 20,6 % zu. Der Jahresiiber- schuss stieg in der gleichen Zeit um 24,9 r'<. unJ der Gewinn je Aktie unter voller Berucksichtigung aller Umtauschrechte erhohte sich um 19,5 ~c. 19' 3,+ar da, 46. Geschaftsjahr in ununterbrochener Folec, ~n dem eine Dividende auf die Stammaktien des l'nternehmcns ausgeschiittet wurde. Ausserdem wurde 1973 die Divi- dende zurn sechsten Mal in ununterbrochcncr F„I_e erhoht. Die derzeitige j5hrliche DividendenuuS- schdttung belauft sich auf $ 1,40 je Stammal.tie. Philip Morris U.S.A. Dank der ausserordentlichen Dynamik un>crcr tigsten Zigarettenmarken auf dem US-M:,rl t tLvlr)uro, Benson & Hedges 100's, Virginia Slims unJ 1',:rlr„nrenr -konnte Philip Morris U.S.A. einen 1'tekord,,h,,,ti vsm 123 Milliarden Zigaretten erzielen, was cincr 7un,,hme von 11 % gegenuber dem Vorjahr entspri ht. l m,atrer- lose und Jahresiiberschuss erhdhten sich ,m 8criLhi,- jahr um 12 % bzw, 17 %. Philip Morris C;.S.:\_ tmser umsatz-und ertragsstarkstes Konzernunterncirmrn. erzielte wieder die hochste Zuwachsrate ~imcr ,lirn amerikanischen Zigarettenherstellern. Unsere Spitzenmarke Marfboro erreichte En,!c Iy7 t einen Marktanteil von 14 %. Der AbstanJ iur Jerzeit noch popularsten Marke verringerte sich ssc::rr. \ar funf Jahren lag der Marktanteil von Mrerlh<.,,, in dcn U.S.A. noch unter 8 %. Die Geselischaft spielte auch weiterhin Jir Jominie- rende Rolle auf dem wachsenden Mar6t Jc, 1-m n:m Zigaretten. Unnere Benson & Hedges ltur, ,ri,~itLn eine Umsatzsteigerung von 12,0 % und inJ n;e.h wie vor die fuhrende Marke unter den 100 rnm / c.,rctten. Auch die anderen Marken unter den lun mm /,_~aretten von Philip Morris U.S.A.-Virginiu Slrnr, I'„rlr,urrevii 100's und Marlboro 100's-konnten im l3cr,.hi,l,rhr betrachtliche Absatzsteigerungen verre,cl,nru Vor 10 Jahren waren die 100 mm Zigarcucrl n,,, h_ar- nicht auf dem Markt. Vor 5 Jahren betru_ tI,r vt,,rl.t- anteil ca. 13 % des gesamten Zigarettcr.,h-vr,. I nde 1973 jedoch entfielen mehr als 22 'c Je, _r,.,nurn Zigarettenabsatzes auf die 100 mm Zi,,:,,c-:r1, hc, denen Philip Morris U.S.A.-mit einem Marki•,n!c l se,n 29 ~c am Berichtsjahresende-die Fuhrung,p," ::, n it.Jt. TIMN 440134 14
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El r gres0 b[ut0 ope[acional y las ventas por unidad aumentaron en las cuatro regiones -Europa/Oriente ivledroi Africa; America Latina/ lberia; Asia/Pacifico; y Canada. Philip Morr's Europe, la region mas extensa en terminos de ingreso bruto operactonal y ganancias, anadio Africa y el Ortente Medio al sector de su responsabilidad. En 1973. las ganancias logradas en Europa se vieron afectadas desfavorablemente por los trastornos experi- mentados por los numerosos reajustes de las paridades embargo, por rnorletariasacias regtst.r dfue ase nmotrasr egiones. Alrededor del mundo, el programa de Philip Morris Internattonal de expansion y mejora de sus instalaciones prostgue su minterrumpida marcha. En Australia, las instalaciones para Ia elaboracton de cigarrillos y de vinos Lindeman fueron ampliadas. Uno de los complejos para el almacenamtento de tabaco mas grandes de Europa, situado cerca del centro de operaciones de nuestra filial Suiza en Neuchatel, esta ya casi terminado. AI igual que la mayoria de las compafiias norteamerica- nas con operactones internacionales, Philip Morris contnbuyo una vez mas a la balanza de comercio de Estados Unidos en 1973. Al mismo tiempo, la presencia de Philip Morris en muchos paises es posible solamente porque se puede demostrar que contribuye a sus economias. Estimulada por la continua expansion de la Compaiiia, nuestra polntca de capacitar, reconocer el rendimiento y promo- ver al personal de las empresas en los paises donde somos huespedes, ha sido un factor preponderante en el exito de Philip rbiorris International. El nivel de crecimiento alcanzado en el campo interna- cional en 1973 -a pesar de la infiacion y del creciente nacionalrsmo economico- coloca a vuestra Compania en una ventajosa situacion para continuar su crecimiento en el mercado internacional. iLliller Brewing Company En 1973 las ventas por barril de Miller aumentaron un 28,8% sobre las ventas del ejercicio anterior, en compa- racion con un incremento del 4,7% en las ventas por barril de la industria cervecera en general. El aumento de Miller fue el mayor, en terminos porcentuales, entre las cervecerias mas importantes de los Estados Unidos. La participacion de Miller en el mercado aumento de modo sensacional de14,0% al 5,0%, pasando del septimo al quinto lugar entre las principales compaiiias cerve- ceras de Estados Unidos. El ingreso bruto operacional alcanzo los U.S.$276 millones, lo que representa un 31% sobre 1972. De acuerdo a nuestros estimados, Miller High Life fue la marca nacional de mas rapido creci- miento en Estados Unidos en 1973. Las ventas de Miller High Life, tanto en botella como en las novisimas latas de aluminio transformable, aumentaron considerable- mente; la acogida brindada por el p6blico consumidor al estuche de ocho botellas de 7 onzas cada una, liamado °Pony Pack", fue excelente. Miller Ale tambien fue muy bien recibida en la region del noroeste de los Estados Unidos donde predomina la preferencia por la cerveza inglesa (ale), y las ventas de Meister Brau en la zona de Chicago tambidn contribuyeron a que las ventas por barril de Miller alcanzaran niveles sin precedentes. La creciente demanda por parte de los consumidores de productos cerveceros Miller de calidad, hicieron aumen- tar la produccion en 1973 a su capacidad maxima. Es mas, en algunas oportunidades durante el ejercicio, las instalaciones de Miller no fueron suficientes para satisfacer la demanda. Las perdidas operacionales de U.S.$2,4 millones infor- madas por Miller fueron el resultado del crecido costo de los envases y materias primas, la incesante batalla de precios en la industria cervecera y los costos de fabri- cacion relativamente altos debido a que Miller no cuenta con instalaciones modernas y eficientes. En este aspecto, las latas y las botellas contribuyen considerablemente a aumentar los costos totales, los cuales aumentaron casi un 7% durante 1973. Hace anos que en la industria cervecera predomina una intensa lucha de precios. El costo de la malta, el maiz y la cebada aumentaron en forma excepcional durante este ejercicio. La estrechez del diferencial entre costos y precios se reflejo en margenes de rentabilidad mucho mas pequenos en todo el ramo cervecero. Con el tin de aumentar la produccion e implantar meto- dos mas eficaces, manteniendo siempre la calidad superior del producto, Miller ha lanzado tut ambi- cioso programa de expansion y modernizacion. Casi U.S.$200 millones han sido presupucstados a este fin durante los proximo, cinco anos. Los mfls modernos equipos para la fabricacion de cerveza y envase estan siendo m,tulados en Ias certecerias de Miller en Milwaukee y Fort Worth. Ademas Ia capacidad de pro- duccion fue ampliada en las cervecerias de Milwaukee y Fort Worth. A mediados del ejercicio se inicio la cons- truccion de una nueva in,talacion para almacena- miento y embarque en el mismo sitio donde Frederic Miller fundo su cerveceria en Milwaukee, en 1855. Nliller tambien ha puesto la primera piedra para la construc= cion, en Milwaukee, de una fabrica de latas de aluminio transformable a un costo de U.S.$l6 millones. En enero de 1974, anunciamos los planes para construir una cerveceria, a un costo de U.S.$70 millones a 200 millas de distancia del area metropolitana de New York. Esta nueva planta comenzara sus operaciones en 1976 con una capacidad inicial de dos millones de barriles; siendo la capacidad total planificada, seis millones de barriles anuales. Ciertos factores, especialmente 1a dis- ponibilidad de agua de purisima calidad, determinaran la ubicacion exacta de esta nueva planta. El objetivo a largo plazo que persigue vuestra Compania consiste en fomentar las ventas y la participacion en el mercado, asi como incrementar la capacidad de produc- cion de cerveza de la Miller introduciendo a la vez procedimientos mas eficaces que nos permitan competir en una posicion mas ventajosa. A pesar de que Miller incurrio una perdida operacional en 1973, nuestro plan a largo plazo se mantiene sobre bases concretas. Nuestra fe en el potencial de Miller Brewing para producir ganancias a largo plazo quedo demostrada por eI monto de las sumas destinadas a la expansion de capital. Philip Morris Industrial El ingreso bruto operacional de Philip Morris Industrial se elevo a U.S.$132 millones en 1973, lo que representa un aumento del 17~/o sobre los resultados del ejercicio anterior. El incremento de los ingresos operacionales fue de 7,3% a pesar de drasticos aumentos en los costos de materiales que no fue posible transferir al con- sumidor, asi como una verdadera escasez de algunos materiales como cera, disolventes, a]uminio y pulpa. Por ejemplo, el precio de la pulpa aumento en mas de un 39% durante el ano y el impacto de este aumento en el costo tuvo un efecto significativo sobre varias de las operaciones de Philip Morris Industrial. Hacia el cierre del ejercicio, el "Cost of Living Council" (Comision Reguladora del Costo de la Vida) permitio pequenos incrementos en los precios de los productos de Philip Morris Industrial. Sin embargo, los costos con- tinuaron subiendo extraordinariamente en noviembre y en diciembre, luego de haber recibido Philip Morris Industrial autorizacion para dicho aumento. Cada una de las operaciones de esta Compania -productos quimicos, papel y envases-registro aumen- tos de ventas en 1973, y en los sectores de productos quimicos y papel se registraron ganancias mayores. El nivel de utilidades disminuyo ligeramente en el sector de envases. A traves de incrementos de ventas en todos los sectores de un numero de productos de alta tecnologia y mayor rentabilidad, le fue posible a la Industrial compensar parcialmente el cenido diferen- cial entre costo y precio. El incesante desarrollo de nuevos productos y de nuevas aplicaciones para estos, fue de vital importancia en la implementacion de esta estrategia. Nicolet Paper Company ha terminado la construccion de una de la, m.tyores instalaciones del mundo para el recubrimiento Je papel y peliculas para empaquetados. Esta obra, uhieada en Nicholasville, Kentucky, costo aproximadamente U.SS5 millones. Polymer Indu,ir:e,. Inc. amplio su planta de Greenville, Carolina del Snr• al ariadir un nuevo aimacen y el quinto reactor p.ir:r la produccion de polimero. Wikolin- Werk, Willi L. Kohlmeyer G.m.b.H., esta ampliando sus instalaciune, dc manufactura en Bremen, Alemania Occidental. Mission Viejo Co.np:nnEn 1973, la Mi„iun Viejo Company -considerada como lider entrc !a, companias dedicadas al fornento de viviendas y urbanizaciones planificadas, termino su primer ejercicio completo de operaciones como parte de Philip Morris. En 197: cl ingreso bruto de Mission Viejo sobrepa,o en un I'-~c al del ejercicio precedente, elevando,e a U.S.Shx,u millones. Los ingresos opera- cionales sufrienon un descenso del 28%, hasta ei nivel de U.S.54,1 millonc,. El sector de la c,)mtruccion de viviendas experimento numerosa~ dilicu!t.:Jc• cn 1973. Los primeros seis meses del ano e,tu% ~cr-n .s r. rterizados por condiciones meteoroltiei-• en el sur de California y en Colorado y hur I.: ~cr;, _inosa subida del costo de los materiale, ---rn p•:rucular madera y contraencha- pado; a,i com,: .:r,.: in.:rcada escasez de materia prima. :,, c,ta a la vanguardia en el campo Aunque ~ nhicntal, las nuevas regulaciones de la planitir.:~~,n .~~~nhicntal, introduciJa, cn c •.::r• ocasionaron demoras en la tramitacion J ~•rmi,os de construccion. Durante la segunda ma.:.: ~~ .~~1t,:. las tasas de interes hipote- cario alcani.:-n ~... in precedentes, reduciendose severamente I.: ~c~hiliJad de fondos para ese tipo de prc,c m,,,• A pesar de f-:-r1 ._n nepativos, Mission Viejo registro ganancias en cl ~%endio un total de 1.650 vivienda, en ,u, ..:,:cs ciones principales el Condado de Orange en (~ . I las ciudades de Denver, Colorado y Phocmv. Nnlona. Ademas, a fines del ejer- cicio se inaugur,: ~.n.: ,a yucna urbanizacion en Fresno, Californi.r La industria de L.: -:)- r,,:cion de viviendas es extre- madamente ciclic.i. ;-o rcemos que la proporcion en que este factor h, I•rr-J-tdo las operaciones de Mission Viejo, e, mcnu yue a muchas otras companias del ramo en el p: f, v p..recer, el efecto de los ele- mentos negativo, yuc I~..n afectado al sector de la cons- truccion de viviend- cn 1973 se extendera sobre 1974. Sin embargo, el hronostico de la vivienda para la proxima decada •c ;•rc•rnta favorable y confiamos en que Mission Viejo participara en el crecimiento que se anticipa. El fnmar y la salud En union de otras Companias del ramo, continuamos prestando nuestro ,po,r+ a las investigaciones medicas a traves del "Council for "Pobacco Research" (Comision Investigadora del Tahaco) de EE.UU.; tambi6n patro- cinamos importantes programas de investigacion en las Facultades de Medicina de las Universidades de Wash- ington en St. Louis, Missouri, y Harvard en Cambridge, Massachusetts. Durante los tiltimos veinte anos, la industria tabacalera ha destinado mas de U.S.$48 millo- nes a la investigacion cientifica del tabaco y su impacto sobre la salud. La memoria anual de la Co- mision Investigadora del Tabaco enumera los estudios, auspiciados por la industrta tabacalera, efectuados durante 1973 y puede obtenerse gratis de vuestra Compania. En el mes de agosto el Presidente del "Consumer Product Safety Commission" (Comision de Seguridad de Bienes de Consumo), una agencia federal de re- ciente creacion. anuncio que este organismo tenia en estudio la prohibicion de aquellos cigarrillos cuyo con- tenido de alquitran y nicotina excediese lo que la Comision determinase como "saludable". Hasta la fecha la Comision no ha tomado ninguna decision. Se nos ha informado que ni la legislacion que establece dicha agencia ni ninguno de sus estatutos, le confiere jurisdiccion sobre los cigarrillos, y es nuestra intencion oponernos a cualquier tentativa en ese sentido. En Estados Unidos, varios estados han aprobado leyes que prohiben fumar en determinados lugares pt5blicos. Varios paises extranjeros con los que comerciamos han adoptado leyes y regulaciones que limitan Ia propaganda del cigarrillo y requieren la impresion de avisos preventivos en las cajetillas. Un reciente artictdo medico informa sobre un estudio realizado por el Karolinska Institut de Suecia que indica que entre parejas de gemelos identicos, uno de los cuales es fumador, no hay diferencia importante ni en el termino de vida ni en la tendencia al desarrollo de enfermedades del corazon, por razon de la des- igualdad de sus habitos. Los autores dicen que los re- sultados obtenidos sugieren que las diferencia5 geneticas y en la personalidad son mas importantes que el habito de fumar para determinar el termino de vida y las probabilidades de sufrir enfermedades del corazon. Por ser este el unico estudio demografico en que se han comparado fumadores y no fumadores genetica- mente identicos, creemos que los resultados merecen cuidadosa atencion. Una decada ha transcurrido desde que el "Surgeon General's Advisory Committee on Smoking & Health" (Comite Asesor al Cirujano General, sobre el Fumar y la Salud) emitio su primer reporte en enero de 1964. Las investigaciones cientificas Ilevadas a r.iho durante dicha decada, sobre las condiciones supu:-tamente relacionadas con el fumar cigarrillos, see~ r•, se argu- mentaba en el antes mencionado reporte. i:) ha hecho relucir ninguna evidencia experimental , .:~,da, que relacione el fumar con las enfermedade, 1,ias bien, dichas investigaciones han descubierto -' : amplia gama de otros posibles factores. Intensivas invc,u_actones adicionales sobre la composicion quimica del humo, realizadas durante este periodo, han fracasado en identificar ningtin componente del humo que, en la proporcion presente, pueda ser considerado como factor causante de ninguna enfermedad humana. No ha habido ningt5n intento fructifero que haya logrado producir en animales, -a traves de la inhalacion del humo-aquellas condiciones que algunov han atribtudo al fumar en personas. En pocas palabras, es nuestra opinion que el argumento de que el fumar conlleva una relacion c.nu•al a en- fermedades, esta hoy mas sujeto a dudu, yue hace diez aitos. Areas de conJlicto La "crisis energetica" ha producido numen ,.r, incerti- dumbres que hacen muy dificil determin.ir -n e.vactitud el impacto que esta tendra sobre las oper.:, :"ne, Je Philip Morris. Desde luego, no se puede Jc ..r de reco- nocer que una fuerte escasez de combu,ubl1 podria causar cierto desconcierto, pero las tecnir.:• Je Librica- cion de nuestros productos requieren men- cnergia que la generalidad y, por lo tanto, opin.tm- y,:e la "crisis energetica" afectara a Philip ~M::rr • en menor grado que a la mayorfa de las demas inJu,tn.:,. En realidad, el costo del combustible repre•cnt.r una porcion minima de nuestros costos tocilc• Lle rl.ihora- cion de cigarrillos y cervezas y de la di,trihucion fisica de nuestros productos. Es posible y~.e ho, metodos de distribucion de productos en Estado, 1n:Jo, experimenten trastornos pasajeros, peru . nti. mo< en que la flexibilidad de nuestra red de Ji•trihucion nos permitira superar tales problema>. A principios de 1973, se llevo a cabo un :rr.cn•o analisis de nuestras necesidades energfticas yuc nr• I•crmnio tomar en el transcurso del ejercicio Lr, nuJ:J.n que esti- mamos oportunas para asegurar el ah.:,i-m:ento ininterrumpido de nuestras exigencia, de rncr.ia. Un amplio programa interno para la comen-:,+n de energia esta en vigor en todos nuestn- Este plan ya ha producido resultdo, I.:!] . t le, ,eg n ]o demuestran las sustanciales redu-;-,c• rn m6entro consumo energetico. Controles de precios Las regulaciones sobre los aumento, Jc• precio,, en vigor de acuerdo con la "Phase IV" .•:.:r.r eu:pa) de las regulaciones de precios del gobierr.,, c•;.:Juunidense, restringen nuestra habilidad para e,:m;•rn-r los mayores costos mediante aumento, Jr p:c.:~:,. A prin- cipios de 1973, segtin "Phase 111" ttc:.~r.: e;.ipa) se autorizaron algunos pequefios aument0• ,ie• ]precios para los cigarrillos. Ya entrado el aiio, Lr rcr,rnr > otros TIMN 440133
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Consolidated Statements of Changes in Financial Position Philip Morris Incorporated and Consolidated Subsidiaries for the years ended December 31, 1973 and 1972 Additions to Working Capital: Operations: Net earnings ....... ... .. . . .......... ... .. .... ... . ..... . .. .. ... . ...... ................. Add (deduct) items not requiring current use of working capital: Depreciation . .. _ .... . ...... ... ...... .... . . . .. ........ .. ......... . ....... ............. .... Amortization . . . .... ..... .... .............. Deferred income taxes . . . .. ... .... . . . .... . ... ........ . .. . . . .... ..... .... ..................... Provision for reserve applicable to international operations ....... ....... ....... ....... Equity in net earnings of unconsolidated foreign subsidiaries and affiliates.... ...... Dividends received from unconsolidated foreign subsidiaries and affiiliates.. ..... .... From operations.. . Financing: Long-term debt: Issued .. . . . .... . . . .... ... .... ..... . .. ... ........... . Prepayments and retirements . . ...... ... . ........ ...... . From long-term debt . . ..... ........ . .. . ... . Stockholders' equity: Shares issued under stock options _. Shares of preferred stock purchased for treasury From equity transactions . . . . . ... .. . . From financing.. Land and offtract improvements transferred to housing pmgr.Ims under construction Disposal of property, plant and equipment ..... ........ . Net unrealized exchange gains, resulting from translation of %turking capital, added to reserve applicable to international operations Additions to working capital. . ... Uses of Working Capital: Dividends ....... ..... Expansion and modernization of property, plant and equipmcnc .. ..... ...... Land and offtract improvements . . . Investments in and advances to unconsolidated foreigon , uh, it li.lrir,~ and affiliates .. . Investments in consolidated subsidiaries, net of workins c.,i•i ta i . ,: quired . . . . .. . . . Other, net Working capital used .... . . . . . Increase (decrease) in working capital.. .... ..... .. Changes in components of working capital: Cash and receivables Inventories . .. . . . Notes payable. . . Accounts payable and accrued liabilities Other, net.. Other significant changes in financial position not affecting working capital: Increase in foreign currency long-term liabilities resulting f rom translation at year-end rates with a corresponding decrease in the reserve applicable to international operations ........ .... ... . ..... Increase in common stock and additional paid-in capital resulting from conversions of debentures with a corresponding decrease in long-term debt ..... . *Net noncurrent assets, principally land and offtract improvements .... .... ... .... ........ Cost in excess of net assets acquired ..................... ... Less, Amount invested in Mission Viejo Company in 1970.. .... . See notes to financial statements. 1973 $148,632,000 30,245,000 1,702,000 6,360,000 3,000,000 (20,199,000) 8,612,000 178,352,000 28,639,000 (7,776,000) 20,863,000 3,971,000 (6,739,000) (2,768,000) 18,095,000 2,528,000 7,798,000 2,798,000 209,571,000 37,256,000 174,665,000 3,711,000 (316,000) 2,053,000 1,646,000 219,015,000 ($ 9,444,000) $ 44,341,000 208,269,000 (242,443,000) (20,166,000) 555,000 ($ 9,444,000) 1972 $124,466,000 26,576,000 1,563,000 4,890,000 (11,478,000) 4,692,000 150,709,000 184,108,000 (38,892,000) 145,216,000 4,434,000 (4,188,000) 246,000 145,462,000 1,429,000 1,433,000 3,755,000 302,788,000 34,572,000 120,034,000 2,234,000 5,276,000 29,397,000* 4,075,000 195,588,000 $107,200,000 $ 32,615,000 130,901,000 3,500,000 (45,785,000) (14,031,000) $107,200,000 $ 14,657,000 $ 11,018,000 $ 26,351,000 $ 21,004,000 28,479,000 (20,086,000) $ 29,397,000 TIMN 440166 46
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December 31 Long-Term Debt: 1973 1972 4.90% Notes, payable $2,600,000 annually from 1974 to 1988 and $16,000,000 in 1989 . ... ................................. ..... ............................................ $ 55,000,000 $ 55,000,000 65/a % Sinking Fund Debentures, payable $3,500,000 annually from 1976 to 1992 and $15,500,000 in 1993 ._ ._ . . . ... ........ . .. . . .......... .......... .................... . .............. 75,000,000 75,000,000 Bank Term Loan Agreement maturing in 1980. Interest is at 1/2 % above the bank prime rate ... . ...... . ...... ..... ........ . .... ........................................................... 150,000,000 150,000,000 63/4 % Loan 100,000,000 Deutsche mark, payable 10,000,000 Deutsche mark annually from 1978 to 1987 ................ .... .... . ... .. ...... . .. ......... ........... ............. 37,037,000 31,226,000 8i/z% Sinking Fund Debentures, payable $600,000 annually 1975 through 1979, $1,500,000 annually 1980 through 1985 and $3,000,000 in 1986 .... .... ............ ..... 15,000,000 15,000,000 8% Notes, payable in 1978 ........ _ . . ............ .... ...... ... 15,000,000 15,000,000 7i/2 % Notes 60,000,000 Dutch guilders, payable 15,000,000 Dutch guilders annually beginning in 1975 .. ................. .... . . . . .. ....... .......................... ._.............. 21,429,000 17,868,000 Secured trust deed notes of Mission Viejo Company. Interest ranges from 5% to 8.875% ............ .......................... _ .. ............................................. . 7,053,000 10,943,000 6i/2 % Swiss Franc Loan due 1988 ................. . ............................................. .... 24,615,000 Other notes and debentures .. ....... ............... .................................... 8,253,000 3,417,000 408,387,000 373,454,000 Less, Portion currently payable ...... .... . ........................................... 3,586,000 3,300,000 Senior debt ........................... ................... . . . ............................................. $404,801,000 $370,154,000 10% Subordinated Notes, payable $3,600,000 annually from 1974 to 1976, $5,760,000 annually from 1977 to 1981 and S32.-300,000 in 1982. Callable at no premium ............................ ........... ........................................... $ 72,000,000 $ 72,000,000 6% Convertible Subordinated Debentures due 1994, convertible at $27.75 per share .................................................. ... .......................................... 19,871,000 28,590,000 Other subordinated convertible debentures ._ .......................................... 6,763,000 9,062,000 98, 634,000 109, 652, 000 Less, Portion currently payable ......... ..... .. ............................ 3,600,000 Subordinated debt ...................................... .......................................... . $ 95,034,000 $109,652,000 Foreign currency long-term debt is translated at year-end rates. Generally, the long-term debt is callable, at annually decreasing premiums. Expenses incurred in securing long-term loans are inrluded in other assets and are being amortized on the straight-line method over the respective lives of the issues giving rise thereto. Aggregate maturities of long-term debt in each of the fol lu~~ ing years are: 1974, $7,186,000; 1975, $14,288,000; 1976, $20,933,000; 1977, $19,153,000; 1978, S37.858.t)00. During 1973, the Company entered into a 180,000,000 0 Fr urodollar revolving credit agreement, expiring September 15, 1976. This credit is available to support short-term borrow in~ requirements. At December 31, 1973, there were no amounts borrowed under this agreement. TIMN 440169 49
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Directors and Officers TIMN 440172 52
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Reserve Applicable to International Operations: This reserve consists of (a) amounts provided from earnings for possible losses which might arise from any downward revaluation of the Company's investments in foreign subsidiaries and affiliates which could be caused by governmental actions or by currency devaluations and (b) net unrealized exchange gains or losses arising from translation of foreign currency accounts. In 1973, foreign currency long-term debt was translated at year-end rates. Prior to 1973, such long-term debt was translated at historical rates; the difference between translation at year-end or historical rates was not significant. Net translation losses for the year ended December 31, 1973 of $11,859,000 were deducted from the reserve applicable to international operations. Capital Shares: Authorized Issued Treasury Outstanding Preferred, 4% Series: At December 31, 1972 ..... ................... ............ 145,874 145,874 (65,080) 80,794 Purchased ... ...... .. .__ (60,217) (60,217) Retired ................. ............ ......................_ (92,882) (92,882) 92,882 At December 31, 1973 52,992 52,992 (32,415) 20,577 Preferred, 3.90% Series: AtDecember3l, 1972 .... . ... ........ ........ 101,856 101,856 (60,855) 41,001 Purchased ....... ........ ... ............... ............ .... (29,826) (29,826) Retired ....... ...... . .. ... ......_ ... .... ...................... (52,159) (52,159) 52,159 At December 31, 1973 ...... ......... ..... ............ 49,697 49,697 (38,522) 11,175 Common, $1 par value: At December 31; 1972. .. . . .... . . .... .......... ... 50,000,000 27,315,156 (93,111) 27,222,045 Issued for: Debenture conversions .. ... .. .......... ............. 352,932 28,030 380,962 Stock options ... ..... . .... ... . .. . . .... ..... ......... 86,210 86,210 At December 31, 1973 ..... _ . . .. ... . 50,000,000 27,754,298 (65,081) 27,689,217 As of December 31, 1973, 910,700 shares of common stock are reserved for conversion of convertible debentures and 322,672 shares are reserved for the exercise of stock options. Stock Options: Pursuant to stock option plans approved by stockholders (the most recent plan covering 400,000 shares having been approved in 1973), common stock of the Company has been made available for option to officers and other key employees at market prices on the dates granted. 1973 1972 Shares under option, beginning of year .. ........ ... 273,592 363,835 Options granted ..... .. . .. ... .. .... .... 140,300 55,750 Options exercised......... .... ........ ... . ... ... .... . .. ..... ...... (86,210) (143,873) Options canceled ........ .. .......... . ... .... ....... ......_ . ... . ... ........... . . ......._... (5,010) (2,120) Shares under option, end of year .. ... ..... ... 322,672* 273,592 Shares available for option, end of year ... ... 290,702 25,992 `At prices ranging from $29.00 to $119.44. Restrictions: Certain of the agreements covering long-term debt contain restrictions with respect to the payment of cash dividends on common stock and to the purchase, redemption or retirement of capital shares. At December 31, 1973, approximately $395,000,000 of consolidated earnings reinvested in the business was free of such restrictions. Other agreements covering privately placed long-term debt require the Company to maintain consolidated working capital of at least $400,000,000. Earnings Per Share: Primary earnings per common share is calculated on the wei,_hted average number of shares of common stock outstanding during each year, which was 27,402,087 in 1973 and 26,499.669 in 1972. Fully diluted earnings per common share gives effect to the reduct ion in earnings per share which would result from the conversion of all outstanding convertible securities and the exercise of stock options. Convertible securities were assumed to have been converted from the beginning of the period and net earnings were adjusted for related interest net of tax. Funds assumed to have been received from exercise of stock options were assumed to have been used to acquire shares for the treasury at the higher of the average market price during the periods or the market price at the close of the periods. The number of shares of common stock used in this computation was 28,657,892 for 1973 and 28,632,716 for 1972. Incentive Compensation Plan: In accordance with the Company's Incentive Compensation Plan, which was approved by stockholders at the 1967 annual meeting, a provision of $2,200,000 was made against 1973 earnings for awards that will be made to officers and other key employees in 1974. A provision of $1,933,000 was made against 1972 earnings. These amounts were less than the maximum amounts that could be provided under the plan. TIMN 440170 50
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T Provision for Federal and Other Income Taxes: Federal Foreign The 1973 provision includes: Currently payable . .... ........ $74,660,000 $13,576,000 Deferred . ............ 3,839,000 2,521,000 $78,499,000 $16,097,000 The 1972 provision includes: Currently payable .. .... . ... ........... $74,716,000 $15,462,000 Deferred . .......... .......... ............ ._ 285,000 4,605,000 $75,001,000 $20,067,000 State and Local Total $12,381,000 $100,617,000 6,360,000 $12,381,000 $106,977,000 $10,100,000 $100,278,000 _ 4,890,000 $10,100,000 $105,168,000 Reconciliation of the provision for income taxes computed at the federal statutory rate to the reported provision for federal and other income taxes is: 1973 1972 Provision computed at 48% of reported pretax earnings .. ._ Increases (decreases) in the provision resulting from: Inclusion of equity in net earnings of unconsolidated subsidiaries and affiliates in pretax earnings ... ..... (9,696,000) Investment tax credit.. . .. ..... .... ... . .. ..... . .. . (4,841,000) Foreign income taxed at less than 48% and not expected to be subject to U.S. tax in the foreseeable future (6,305,000) State and local income taxes, net of federal tax benefit . 6,438,000 Other._ ................ (1,311,000) Provision as reported . . . . .. .. . ... $106,977,000 Percent Percent Amount to Pretax Amount to Pretax $122,692,000 48.0% $110,224,000 Additional Information: Working capital at year end . . .... .. . . . . Depreciation of plant and equipment .. . Pension plan expense . . Rental expense ........ Report of Independent Certified Public Accountants 48.0% (3.8) (5,509,000) (2.4) (1.9) (2,702,000) (1.2) (2.5) (1,052,000) (.5) 2.5 5,252,000 2.3 (.4) (1,045,000) (.4) 41.9% $105,168,000 45.8% 1973 1972 $515,347,000 $524,791,000 $ 30,245,000 $ 26,576,000 $ 14,805,000 S 10,620,000 $ 12,166,000 $ 9,551,000 To the Board of Directors and Stockholders of Philip,tlorris Incorporated: We have examined the consolidated balance sheet of iItitt iP MORRIS INCORPORATED and Consolidated Subsidiaries as of December 31, 1973, and the related consolidated stat~mlcnts of earnings, stockholders' equity and changes in financial position for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and sitch othcr auditing procedures as we considered necessary in the circumstances. We previously examined and reported upon the consolid,itcd financial statements for the year ended December 31, 1972. In our opinion, the financial statements mentioned aho% ~: present fairly the financial position of Philip Morris Incorporated and consolidated subsidiaries at December 31, 1973 and 197 2- „nd the results of their operations and the changes in financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. New York, January 29, 1974. Coopers & Lybrand TIMN 440171 501 51
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Pension plans: The Company and certain of its consolidated subsidiaries have pension plans covering substantially all of their employees. Prior service costs, which are being amortized over periods of up to thirty years, and accrued pension costs are funded with independent trustees. Research and development: Research and development costs are charged against earnings in the year incurred. Foreign Subsidiaries: Principal financial data of foreign subsidiaries and affiliates are as follows: Consolidated Unconsolidated 1973: Assets ... . ..... ................... ............. ......... $456,356,000 $279,400,000 Liabilities, other than due the Company ......... ... ...... .. ... .......... 253,300,000 133,040,000 Net assets ................. ... ............................. ..... ........ _ . ............ 203,056,000 146,360,000 Company's equity and advances . ...... .... ... . .. ..... ...... ............. .. ........... 203,056,000 95,577,000 Operating revenues ...... ..... ...... ............................... . 710,079,000 521,685,000 Net earnings ............ . .... . _ ... _ ............. ............... 28,814,000 32,145,000 Company's equity ..... ..... ...... .......... .... ...... . .. ...... .. ..... ...... . 28,814,000 20,199,000 1972: Operating revenues ................ . . ...... ........ ........ ...... . 521,159,000 456,131,000 Net earnings ............. ........ ..................... ............. . .. ... ......... 25,031,000 19,168,000 Company's equity . ... ............... ..... .. ....... ... . . . .. ..... 25,031,000 11,478,000 At December 31, 1973, investments in unconsolidated foreian subsidiaries and affiliates exceeded equity in net assets by approximately $8,200,000, including $2,900,000 which arose subsequent to November 1, 1970 and is being amortized. Federal income tax has not been provided on $185,000.000 of undistributed earnings of foreign subsidiaries and affiliates, accumulated since inception of such investments, which is expected to be permanently invested abroad. Expansion of Facilities: Commitments for plant, equipment and machinery at all lorations approximated $84,000,000 at December 31, 1973. Cash and Cash Equivalents: Included herein are $20,008,000 and $18,131,000 of short-term time deposits at December 31, 1973 and 1972, respectively. Brands, Trademarks, Patents and Goodwill: At December 31, 1973, this account included approximately S l 3,000,000 applicable to investments made subsequent to November 1, 1970 which is being amortized over a period of up to forty years. In connection with the acquisition of the remaining ownership interest in Mission Viejo in 1972, the Company agreed to pay $21,010,000 over a five-year period, subject to downward adjustment if Mission Viejo's cumulative earnings, as defined, fail to reach a specified level. At December 31, 1973, $1,611,000, the : mount payable under such agreements, is included in brands, trademarks and goodwill and is subject to amortization. Short-Term Borrowing Arrangements: Average bank loans and commercial paper obligations ouut.tnd i n_ d uring 1973, both domestic and foreign, were $107,000,000 and $109,000,000, respectively, on which the weighted a~ r r a_c i n tcrest rates were 9.0% and 7.7 %, respectively. At Deeember 31, 1973, notes payable consisted of bank loans of $248,948,()t u i.ind commercial paper obligations of $191,395,000 on which the average rates of interest were 9.9% and 9.6%, respecti% ck [)uring 1973, the Company and its consolidated subsidiaries maintained average demand deposit book balances of apprL ~. ,>>.,tc 1` $16,000,000 with a number of banks, principally in the United States, to compensate the banks for account handl i n,2 md other important services and to support lines of credit. At December 31, 1973, lines of credit for bank and commcrc,.i1 p.i per short-term financing, including the 180,000,000 Eurodollar three-year revolving credit facility, amounted to ., ppn,\ i mately $560,000,000. TIMN 440168 48
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Notes to Consolidated Financial5tatements Summary of Accounting Policies: The significant accounting policies followed by Philip Morris Incorporated and its subsidiaries and affiliates are presented below to assist the reader in reviewing the consolidated financial statements and other data contained in this report. These policies comply with generally accepted accounting principles and have been consistently applied. Consolidation: The consolidated financial statements include the accounts of the Company and all wholly owned subsidiaries. Investments in and advances to unconsolidated subsidiaries and affiliates are stated at cost adjusted for equity in undistributed earnings or losses since the dates of acquisition. Foreign operations: Foreign currency accounts are translated into U.S. dollars as follows: ( I) current assets, current liabilities and long-term debt at year-end rates; (2) other assets and liabilities generally at historical rates; and (3) revenues, costs and expenses at average rates during the year except for depreciation and amortization which are based on the historical dollar cost of the related assets. Appropriate amounts provided from earnings are added to the reserve applicable to international operations for possible losses which might arise from diminution in value of the Company's investments in foreign subsidiaries and affiliates as the result of events such as governmental actions or currency devaluations. Net unrealized translation gains are added to this reserve and net unrealized translation losses would be charged to income should such losses exceed previous unrealized gains and provisions. Receivables: Current earnings are charged and an allowance is credited with a provision for doubtful accounts based on experience and on any unusual circumstances which may affect the ability of customers to meet their obligations. Accounts deemed uncollectible are charged against this allowance. Receivables are reported in the balance sheet net of such accumulated allowances. Inventories: Inventories are valued at the lower of cost or markct. The cost of leaf tobacco is determined on an average cost basis and the cost of other inventories is determined generally on a fir;t-i n. first-out basis. It is a generally recognized industry practice to classify the total amount of leaf tobacco inventor% i. : current asset although part of such inventory, because of the duration of the aging process, ordinarily would not be util izeci %~ ithin one year. The cost of housing programs under construction represents the cost of land, including offtract improvement,~. inte rcst and property taxes, plus housing construction costs on sites currently under development. Real estate operations: The cost of land, including offtract improvements. i n t ,:rc,~t and property taxes, is reported as a noncurrent asset until a designated area is placed into development. Offtract ini pnwements are items such as access roads, utilities, etc., which are essential to the development of a community, but %k h i,~h; ire not directly attributable to the development of a particular tract or area. The cost of these improvements is allocated to t I,~: ; ntire acreage available for sale and is charged to cost of sales as each parcel of the property is sold. Revenue and profit from real estate sales are rec ~_n i.,l at the time of closing when payment is received. Brands, trademarks, patents and goodwill: Cost in excess of net assets of companies acquir, I;,:. November 1, 1970 is not being amortized because, in the opinion of management, the related investments have nw? .;.~.!, cd any diminution in value. Excess cost in connection with investments made after November 1, 1970 is being amorti/:d ,•. rriod of no more than 40 years, as required by pronouncemcnts of the American Institute of Certified Public Acck'u; '.. • I'.,tents and patent rights are being amortized on the straight-line method based on their respective lives. Income taxes: The provisions for federal and foreign income taxt:, _ r, .::: ulated on reported pre-tax earnings. Certain items of income and expense included in the financial statements, such .,, .1. ;•..,.ition, are reported in different years in the tax returns in accordance with applicable income tax laws. The resulting ditTcr. n. .-, tween the financial statement income tax provision and income taxes currently payable is reported in the financial as deferred income taxes. Investment tax credits on assets placed in service during the year are accounted for as a reduct it ~!; ; r; t;ic provision for income taxes. Provision is also made for federal income taxes on the portion of undistributed earnin~~ ,t tot cign subsidiaries and affiliates that is expected to be remitted to the United States. Property, plant and equipment: Maintenance and repairs are charged to income and cxhcnclitures for renewals and improvements are capitalized. When the construction period of facilities exceeds one year, the capitalized cost of the facilities includes interest and real estate taxes incurred during the construction period. Provision for dcprcciation of assets is recorded by a charge against income at rates considered adequate to amortize the cost of such assets o% er their useful lives computed on the straight-line method. TIMN 440167 47
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!e es e e I n- 5U ec x n possible de reporter sur la clientele et malgrC de reelles dtfficultes d'approvisionnement, notamment en ce qui concerne la cire, les solvants, la pate a papier et 1'aluminium. Le prix de la pate a papier, par exemple, a auemente de plus de 395b au cours de 1'annee, ce qui a eu de profondes repercussions sur de nombreuses activites de Philip `,lorris Industrial. Vers la fin de l'annee, le "Cost of Living Council" (conseil charge de Ia surveillance du cout de la vie) a autortse Philip Morris Industrial a majorer ]egere- ment ses prix. Mais les couts ont continue d'augmenter sensiblement en novembre et en decembre, apres que la demande de majoration des prix de la societe ait e(e approuvee. En 1973, dans chacun de ses secteurs d'activite (pro- duits chimiques, papier et emballages), Philip Morris Irtdustrtal a enregtstre un accroissement de ses ventes. Les benefices ont egalement augmente pour les produits chimiques et le papier, mais ont accuse un leger tlechissement pour cc qui est des produits d'emballage. Dans totu les secteurs, grace a 1'accroissement des ventes d'un certain nombre de produits complexes dont les marges beneficiaires sont plus elevees, Philip Morris Industrtal est parvenu a cornpenser en partie la con- traction du rapport cout-prix. La mise au point de nouveaux produus et ies nouvelles applications de ces produits ont favorise la realisation de cette strategie. Nicolet Paper Company a termine la construction d'un des plus grands centres de production du monde pour le traitement du papier couche et de pellicules pour emballages. Cette fabrique, situee a Nicholasville, Kentucky, a coute environ $5 millions. Polymer Indus- ries, Inc., a agrandi l'usine de Greenville, Caroline du Sud et s'est enrichie d'un nouvel entrepot et d'un cinquieme reacteur de polymerisation. Wikolin-Werk, Willi E. Koltlmeyer G.m.b.H., a Breme, Republique Federale Allemande, societe recemment creee, est en train d'agrandir ses installations. .Mission Viejo En 1973, Mission Viejo Company-une des principales societes specialisees dans I'urbanisatton planifiee et la construction d'ensembles residentieLs-a acheve sa 0 miere annee d'activite sous le controle de Philip ris, Son chiffre d'affaires, en 1973, a progresse de 12c~ par rapport a I'annee precedente et a atteint $68 millions. Son benefice d'exploitation a diminue de 28%, pour tomber a 4,1 millions de dollars. Le secteur de La construction d'habitations privees a connu de nombreuses difficuites en 1973. Le premier semestre a ete marque par des conditions meteorologi- ques defavorables eri Californie meridionale et au Colorado, ainsi que par une hausse rapide du cout des materiaux, notamment le bois d'oeuvre et le contrepla- que, et par une grave penurie de materiaux de cons- truction. Bien que Mission Viejo occupe une position de premier plan pour ce qui est de la planification de 1'environnement, 1'instauration de nouveaux reglements sur t'environnement a retarde ta delivrance des permis de construire. Pendant le deuxieme semestre, le taux des prets hypothecaires a atteint un niveau sans precedent et les facilites de credit ont ete restreintes. Malgre ces difficultes. Mission Viejo a ete une source de benefices pendant l'exercice ecoule, avec un total de 1650 maisons vendues pour ses trois places princi- pales d'activite: Orange County, Californie, Denver et Phoenix. En outre, vers la fin de 1'annee, un projet d'importance secondaire a ete mis en chantier a Fresno, Californie. L'industrie de la construction est sensible aux fluctua- tions de Ia conjoncture. mais nous estimons que les activites de Mission Viejo ont ete moins gravement perturbees que celles de nombreuses entreprises simi- laires aux Etats-Unis. ll semble que la plupart des fac- teurs defavorables qui ont affecte cc secteur en 1973 continueront a se faire sentir en 1974. Neanmoins, pour les dix prochaines annees, les perspectives dans le sec- teur de la construction sont prometteuses et nous comptons que Mission Viejo participera a 1'expansion prevue. Le tabae et la sante Dans le domaine "tabac-sante", nous avons continue, avec d'autres societes de i'industrie du tabac, d'appor- ter notre aide en faveur des recherches a caractere medical en appuyant le "Council for Tobacco Research -U.S.A." (Conscil americain pour la recherche sur le tabac ), et de soutenir d'importants programmes de recherche entrepri, par la Faculte de medecine de I'Universite Washington a St. Louis et par la Faculte de medecine de l'Universite Harvard. Depuis vingt ans, I'industrie a consacre plus de $48 millions aux recher- ches scientifiques concernant le tabac et la sante. Sur simple demande, votre societe vous fournira gratuite- ment le rapport annuel du Conseil pour la recherche sur le tabac; ce document contient une description detaillee des etudes entreprises pour le compte de 1'industrie en 1973. Au mois d'aout, le president d'un organisme federal nouvellement cree, la "Consumer Product Safety Com- mission" (Commission pour le controle des produits de consommation), a annonce qu'elle envisageait d'in- terdire la vente de cigarettes contenant un pourcentage de "goudron" et de nicotine superieur a celui qu'elle considererait comme etant "sans danger". A ce jour, la Commission n'a encore pris aucune decision. Nous avons appris que ni la legislation portant creation de cet organisme, ni les reglements qu'il est charge de faire respecter, ne 1'autorisent a exercer un controle sur les cigarettes, et nous avons 1'intention de nous opposer a toute tentative qu'it pourrait entreprendre dans cc sens. Aux Etats-Unis, plusieurs etats ont adopte des lois in- terdisant de fumer dans certains lieux publics. Plusieurs pays ou nous exergons notre actrvite ont passe des lois et des reglements limitant la publicite pour les cigarettes et obligeant les fabricants a faire figurer une mise en garde sur 1'emballage de leurs produits. Se1on un article paru recemment dans une publication medicale. il ressort, d'une etude effectuee en Suede par le Karolinska Institut, que, parmi des paires de vrais jumeaux ayant des habitudes de consommation de tabac differentes, aucune difference significative n'a ete notee entre les fumeurs et les non-fumeurs, que ce soit du point de vue de Ia longevite ou de la tendance aux mala- dies du coeur. Sur la base des resultats de leur etude, les autcurs declarent que les differences genetiques et ]es differences de la personnalite ont plus d'importance sur la !ongevite et 1es risques de maladies cardiaques que Ie fait de fumer. Comme ces travaux constituent, jusqu'a present. la seule etude demograPhique com- parant des fumeurs et des non-fumeurs genetrquement identiques• nous pensons que leurs resuttats meritent one attention particuliere. Dix ans se sont ecoules depuis la publication, en 1964, du premier rapport du "Surgeon General's Advisory Committcc on Smoking and Health" ("commission con,ultati.e du medecin general en matiere de tabac- sante"). Durant ces dix annees, la recherche scientifi- que sur 1es incidences dites attribuables a la fumee- comme le pretendait le rapport original-n'a apporte aucune prcuve experimentale valable permettant d'at- tribuer la maludie au fait de fumer. Plutot que cette evidence. la recherchea decouvert unelargepamme d'au- tres facteun. ,uspectes comme pouvant presenter un risque. Dur,rnt cette periode, les recherches intensives sur la cumpo,ition chimique de la fumee du tabac n'ont pu ideni!licr aucun composant, qui, dans Les quantites contcnur•, etre considere comme un facteur de cau,,il,;c• J',,nc maladie humaine. Les tentatives entre- prr,c• p-,r ;,r,,duire chez les animaux-par inhalation de i,r J,i ~,,hac-les affections humaines que cer- n, ,itr huees a la fumee n'ont donne aucun rc,ult.,t Fn rc,u:~~ ,,,rr opinion est que la these selon laquelle il ciation de causalite entre la fumee de la rn,:!adie est plus sujette a caution au- jourd ne I'etait dix ans auparavant. Le, : ., ... • , .., !a crise de 1'energie L,, '... ~.,rr,_,ie" est a 1'origine de nombreuses incer:.. .•.,. tl est tres difficile d'en evaluer exacte- ment •r, r !e, activites de Philip Morris. 11 faut evidcmrn.:,• ,.•nnaitre qu'une grave penurie de com- busub!c ;', :.; cntraver certaines activites, mais les methIrJc. J` ..-t,on que nous utilisons necessitent moin,,i„~,ecellesdelaplupartdesindustries. Auss,, n.;, ,.,,rn, que la "crise de 1'energie" aura pour 1'h.' moins d'effets que pour la majorite des in,!,., ,. i: f.,it, le cout des combustibles ne reprc•r:": • ~ t.,,ble partie des coats totaux engages pour i:rr , ,:,~arettes et notre biere et pour dis- trihucr r,• II est possible que les methodes de di,ir,h.. .. ,fuits aux Etats-Unis soient tempo- ra,rrm~ c• .. ,,, par la crise actuelle, mais nous somm, , . . que la souplesse de notre reseau de d,•t:;t,,..;~I mettra de resoudre ces probl'emes. Au d, 1' .., ••,,,u, avons etudie en detail nos be- o:r,• ... ons pris, dans le courant de I'.rnn~: •r•ures pratiques qui nous parais- ,aic:,• r"'ur que notre approvisionnement en Nous ap liquons ns interru tion , .,, . . p . p sur tc ;. • un programme tres strict visant a ecr,n, . ; dans toutes nos installations. Ce pro~,r.- , nne des resultats tangibles et nous a pc•rn. , •,n,iblement notre consommation d'(•ncr: ~• ~nc•s convaincus que la demande de no, 1': : ;,.ts ralentie et que nous pourrons con: In.., :. ... • consommateurs des produits de haute u.. . ..:.:ntites suffisantes. Corttn:, . Les re,_l, - ontr8le des prix actuellement ap- pliquc• ;' . -~<ment americain dans le cadre de la pi,.- ~• ,•,,litique economique ne nous ont pas pcrm., :•.,er entierement 1'accroissement de no, .n relevement des prix. Au debut de 1973. .-:mentations ont ete autorisees pour les .i - :. -tormement aux dispositions de la phase I1I I• e, dans le cadre de la phase IV, les prix dc .: ' produits industriels ont pu etre leger~n:, . .. . Toutefois, meme lorsque des augmentau,-, .' , ont autorisees, le controle des prix, tel qu ,: ',u par les dispositions de la phase IV, a pour ~..~ .. r,iuire les marges beneficiaires etant dortnr ., c,,ugmentation du prix de vente doit corre•p, :..., r~•:ctement au montant de 1'ac- croissemcni .!, , .•:', de production. Le cout du tabac et des ccrr.:k• .: ,, r, pour la fabrication de La biere a accuse unc'. .. ~u_mentation d"u au fait que ces pro- duits •: -nt pas soumis au controle des prix. Le "Co,l r,t I:, ~C„uncil" a egalement autorise un rel'evemc•n: lu prix du papier et de Ia pate a papier. Le 11 janvier lv'-, le "Cost of Living Council" a ap- prouve une malnreuon de 1,6% des prix de Philip Morris U.S.A.. " qui a quelque peu compense 1'accrois- sement des cout,. Ceue augmentation a ete appliquee a toutes les marques de cigarettes, aussi, les prix de gros de notre societe sont maintenant alignes au niveau de ceux de la plupart des societes americaines de 1'indus- trie de la cigarette. Nous esperons que lorsque 1a phase IV se terminera en avril 1974, elle sera remplacee par un programme plus equitable. En 1973, Philip Morris International a egalement d"u faire face aux problemes inherents au controle des prix. Dans de nombreux pays ou Philip Morris vend des cigarettes, 1'inflation generale et 1'impossibilite d'aug- menter le prix des cigarettes a limite la croissance des benefices. Tabac brut La demande mondiale de tabac s'est accrue en 1973. Sur certains marches d'exportation, la recolte a ete moins abondante qu'on ne 1'envisageait. La quantite disponi- ble de tabac de qualite a done ete reduite et le cours mondial du tabac a augmente. Sur le plan international, la demande de cigarettes de qualite et le remantement des parites monetaires ont entraine un accroissement des exportations de tabac brut des Etats-Unis. Il est prevu que I'offre de tabac sur le marche mondial restera limi- tee et, par voie de consequence, que Ie prix du tabac brut continuera d'augmenter. Philip Morris a ete a meme de maintenir des reserves de tabac des recoltes precedentes en quantites et en qualite requises. Les taxes stir les cigarettes Aux Etats-Unis, en 1973, un seul etat, le Colorado, a adopte des dispositions legislatives augmentant le mon- tant de l'impot sur !es cigarettes. En fait, cette loi sup- primait les taxes municipales et relevait la taxe d'etat. Neanmoins. en cours d'annee, 41 projets de loi visant a augmenter l'impot sur les cigarettes ont ete deposes dans 20 etats. Dans 19 etats, des legislateurs conscients de leurs responsabilites, estimant que Ies droits sur les cigarettes constituent non seulement une forme regres- sive d'imposition affectant d'une maniere disproportion- nee Les consommateurs a faible revenu, mais aussi encouragent la contrebande, ont rejete ou refuse d'ap- prouver les projets prevoyant un relevement des droits sur les cigarettes. Qui plus est, des projets de lot visant a reduire les droits sur les cigarettes sont sur le point d'etre presentes dans quatre etats. Le 10 janvier 1974, le Gouverneur Wilson, de 1'etat de New York, a recommande l'abolition des droits imposes par la ville de New York sur les cigarettes. 11 a declare: "Les droits eleves qui frappent le, ciLarette, dans la ville de New York et qui s'ajoutent .: t.t taxe d'etat encouragent ]es organisations crimin,!Ies et ont fait de cette ville la terre promise des coni:: ".tndiers". A cet egard, iL faut noter que Ia differen- .;:.ii existe entre 1es droits persus par les divers etats a,.'.,lement un effet prejudiciable sur le systeme traditi:~r,nel et legal de dis- tribution des cigarettes par des gn,,.,utes et des detatl- lants bien connus et dignes de confiance. En 1973, le montant des recettes provenant des droits de consommation sur les cigarettes aux Etats-linis a ete de 5,5 milliards de dollars, dont 22 milliards per4us par le gouvernement federal, 3,2 milliards par les etats et 0,1 milliards par les municipalites. Or• cela equivaut a 26 dollars par personne residant aux Etats-Unis, en- fants compris. Cette situation est manifestement injuste. Actirites d'interet public Philip Morris Incorporated est I'une de> quelques grandes societes qui ont cree un coruite d'administra- teurs expressement charge de 4'oc,:uper des activites de leur societe en cc qui concerne Ies be,o,ns et les pro- bl'emes sociaux. Ce "Comite charge dc, alYaires publi- ques", est non seulement habilite a e,.iluer nos activites actuelles sur 1e plan social en tant que societe ayant des obligations civiques, muis il don aussi pre- voir L'evotution des besoins du public ct determiner 1es priorites qui en decoulent. Un autre :omite du Conseil d'administration, Ie °Comite de 1'environnement", s'est vu attribuer des responsabilites du ntente ordre dans le domaine de 1'environnement. Par souci de preserver les ressource, du pays et de pro- teger 1'environnement, Miller Bre., ine Company a vir- tuellement acheve sa conversion en vue de produire des emballages recyclables, c'est-a-dire. des boites entiere- ment en aluminium et des boutei!Ic, rcutilisabtes. Dans le cadre d'un programme con4u par %tiller, nombre de nos distributeurs ont mis sur pied• un I,eu partout aux Etats-Unis, des centres de recuperan„n de boites et de bouteiLles. Les clients et les detaill,tnt, peuvent, tout comme les distributeurs, participcr a ~ct etiort national de conservation des ressources. 1'h,l,p Morris etudie ses autres types d'emballages en fon,:uon des tmperatifs imposes par la conservation des re„.,urce,. Dans le cadre de nos activites d'intcrrt public, nous nous employons a innover et it in~ aer. ,i possible, d'autres soctetes a nous imiter en ,'rn_alseant dans des domaines d'utilite publique. L'n h:::r r.emple est L'elargissement de notre progr,tmmc de h0ur,es pour les enfants de nos employes, qu, c,:mprcnd maintenant la formation professionnelle et !'cn,c:u:ement superieur. Considere comme unique en son _rnre, ce programme de formation professionnelle a annr I'attention des pouvoirs publics, des enseignant,. ct dcs chefs d'entre- prise, ce qui a incite plusieurs :runr, •Ocietes u entre- prendre des programmes analu_ue,, ,rgMN 440131 11
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Nel gennaio del 1974 e stato da noi annunciato il progetto di realizzare un centro di produzione di birra del costo di $70 milioni, in una localita da definirsi, entro un raggio di 200 miglia dall'area metropolitana di New York: il nuovo centro Miller dovrebbe entrare in funzione nel 1976, con una capacita iniziale di due milioni di barili, da aumentarsi gradualmente fino a raggiungere una capacita di 6 miiioni di barili all'anno. Nella scelta della localita ove costruire il nuovo impianto, si fara luogo ad un'attenta valutazione di vari fattori, primo fra i quali la disponibilita del]a migliore qualita di acqua. II programma a lungo termine che la Vostra Societa si propone tende ad aumentare il volume del fatturato ed a conquistare una maggior quota di mercato, potenziando a] tempo stesso Ia capacita produttiva della Miller e rendendo l'organizzazione piu competi- tiva ed efficiente. Anche se Ie Miller ha riportato una perdita di gestione per il 1973, la fondamentale validita di tale programma rimane immutata, con- fortata com'e da numerose prove concrete. La fiducia che continuiamo a nutrire nella Miller e nella sua capacita di raggiungere, a lungo termine, livelli di redditivita soddisfacenti e sottolineata dalle notevoli somme stanziate per ulteriori investimenti produttivi. Philip Morris Industrial Il fatturato della Philip Morris Industrial ha raggiunto nel 1973 la cifra di $132 milioni con un aumento del 17% rispetto all'esercizio precedente. L'utile di gestione ha fatto registrare una variazione positiva del 7,35$, malgrado il sensibile aumento nei costi delle materie prime, aumento che non e stato possibile riflettere in prezzi di vendita piu elevati. Va inoltre tenuto presente che per determinate materie prime, quali cera, solventi, alluminio e pasta di cellulosa, vi sono state serie difl'icolta di approvvigionamento: basti ricordare, a titolo d'esempio, che il prezzo delta pasta di cellulosa e aumentato di oltre i1 39S'o nel corso dell'anno, in- fluendo in misura determinante sui costi di molte delle attivita delta Philip Morris Industrial. Verso la fine dell'anno, il "Cost of Living Council" (Comitato di Controllo sul Costo della Vita) ha autorizzato la Philip Morris Industrial ad apportare modesti aumenti al prezzo di vendita dei prodotti; tuttavia la tendenza all'aumento dei costi non si e modificata successivemente a tale autorizzazione, ma si e anzi andata sensibilmente intensificando nei mesi di novembre e dicembre. Tutte le varie aziende della Philip Morris Industrial nei settori della chimica, della carta e degli imballaggi hanno registrato, nel 1973, uno sviluppo del fattu- rato; i settori chimico e cartario hanno riportato un incremento dell'utile, mentre, per quanto concerne gli imballaggi si e registrata una leggera contrazione del livello di redditivita. La Philip Morris Industrial c' riuscita ad attenuare parzialmente le conseguenze nega- tive della pressione derivante da una situazione di costi crescenti e prezzi di vendita praticamente stazio- nari, grazie all'espansione delle vendite di prodotti di superiore livello tecnologico e maggior margine di profitto, da parte di tutte le aziende in questione; la costante attenzione dell'Azienda allo sviluppo di nuovi prodotti e di nuove applicazioni e stata essenzia]e per 1'applicazione di tale strategia. La Nicolet Paper Company ha completato la costruzione di uno dei piti grandi impianti del mondo per la patinazione della carta e della plastica per imballaggi; 1'impianto, del costo di circa $5 milioni, e ubicato a Nicholasville, Kentucky. La Polymer Industries, Inc., ha ampliato it centro di produzione di Greenville, Carolina del Sud, mediante la costruzione di un nuovo magazzino e di un quinto reattore di polimerizzazione. Anche la Wikolin- Werk, Willi E. Kohlmeyer G.m.b.H., societa di recente costituzione, sta ampliando i propri impianti produt- tivi di Brema, nella Repubblica Federale Tedesca. Mission Viejo Company Nel 1973 la Mission Viejo Company, che e oggi ricono- sciuta come una delle aziende di punta nel ,ettore dei complessi edilizi residenziali e della valorizzazione di comunit3 urbane, ha compiuto il primo anno di eserci- zio in proprieta delta Philip Morris. 11 fatturato della Mission Viejo per il 1973 ha raggiunto la cifra di 568,0 milioni con un incremento del 1'_rc rispetto all'esercizio precedente, mentre I'utile di gestione ha subito una flessione del 28!'i, ammontando a 54,1 milioni. Nel settore dell'edilizia residenziale, it 1973 e stato un anno difHcile: alle avverse condizioni atmosferiche, che hanno caratterizzato la prima meta dell'anno nella California del Sud e nel Colorado. si e assommato ii rapido aumento nei costi delle materie prime (specie legname e legno compensato) accompagnato a volte da grave scarsit3 delle medesime. Sebbene la Mission Viejo sia considerata all'avanguardia nella realizzazione di pro- ge[ti in armonia con I'ambiente, tuttavia la legislazione sugli aspetti ecologici, di recente introdotta, ha deter- minato notevoli ritardi nei tempi necessari al rilascio dei permessi di costruzione. Oltre a cio, la seconda parte dell'anno ha visto i tassi di interesse ipotecario ele- varsi a livelli mai prima raggiunti, mentre si manife- stava una estrema scarsezza di capitali destintati a finanziare i mutui edilizi ipotecari. Malgrado tali avversi fattori, ]a Mission Viejo ha egualmente chiuso l'esercizio in attivo, con un totale di 1.650 abitazioni vendute nelle tre principali localita in cui opera (Orange County in California, Denver nel Colorado e Phoenix in Arizona). Verso Ia fine dell'eser- cizio, inoltre, 1'azienda ha varato il progetto di un complesso residenziale di piccole dimensioni a Fresno, California. Pur tenendo presente la particolare sensibilita del settore edilizio agli andamenti ciclici, riteniamo che la Mis- sion Viejo abbia risentito della situazione in misura di gran lunga inferiore a molte altre imprese del settore. Si prevede ora che parecchi tra i fattori negativi che hanno pesato negativamente sull'industria dell'edilizia residenziale nel 1973 continueranno a far sentire il loro effetto anche nel 1974; ma, dato che le previsioni per il prossimo decennio offrono alle imprese del settore prospettive fondamentalmente positive, ci sembra legit- timo ritenere che anche la Mission Viejo partecipera allo sviluppo previsto. 11 Fumo e la Salute Nel settore del fumo c della salute, la Vostra Societa, assieme ad altre societ3 dello stesso settore, ha con- tinuato a sostenere la ricerca medica, tramite i] "Council for Tobacco Research-U. S. A." (Comitato Ricer'che sul Tabacco), nonche altri estesi programmi di ricerche perseguiti presso la Facolta di Medicina dell' Uni- versita Washington di St. Louis e la Facolta di Medi- citia dell' Universita di Harvard. Nel corso degli ultimi vent'anni, l'industria del tabacco ha devoluto oltre $48 milioni alla ricerr.r ,,:ientifica sul tabacco e la sua rilevanza per la salute. La Vostra Societa sara lieta di inviare gratuitamente, a chi lo richieda, il rapporto annuale del "Council for Tobacco Research", che con- tiene una dettagliata de,criiione dei vari programmi di ricerca finanziati dall'industria del tabacco nel 1973. Nei mese d'agosto, il Pre,idente della "Consumer Product Safety Commi>,ion" (Commissione di Vigilanza sui Beni di Consumo l, ente federale di recente istitu- zione, ha annunciato 1'inieniione delta Commissione stessa di proibire Ia sendu,: di igarette che contengano un tenore di "catrame" c nicotina superiori ad un determinato livello ",h lissato dalla Com- missione stessa. I-,n„ ,,I rn„r-,,cnto della stesura del pre- sente rapporto. I,: corwn,,;,,ne non ha ancora intra- preso alcuna aiinnr -r,:c:.i. dato che un parere legale conforta L'opini,+nc ,. . • .. _ee istitutiva della Commissione, nr '.., 1.. :,., r. ~, di sua competenza le con- feriscano alcun., .:,,.~. r q u,mto riguarda la pro- duzione e la di,ir,r•..;.. .,arette, qualsiasi provve- dimento ven_., rrc•,, :, ineontrera la nostra ferma oppo,iziunc In parecchi ntau •,r. ,:., -. . n,, tati varati provve- dimenti legisl:ur., ,c ,pI,,no i1 divieto di fumare in determinati luu_ht ; I, ,nche in parecchi paesi in cui operi.tn,,, :. „,t c andata estendendo la legislazione re,:n:;. :.., ;, puhlicita sulle sigarette, con l'obbligo di ;., onfezione un avverti- mento cautelativo. Una recente ra.sc_ri.i di uno studio condotto in Svezia dal K,uol:,:•, ~ I,~.t u coppie di gemelli identici-uno ,(,l,) d~: .. fermare che non c due individui, per y,:..~e propensione allln•- . . sembra invece chc :. ., imputare alle ditlc„ Poiche questo raffronti fumaton l. - genetiche idenii;'n<. : sembrano de_mi ~i E' passato tin ilc.nprimo rapportu ,... ~ mittee on Smo1.,••..- della Sanita sul I Nei dieci anni ~I~., • sulle affezioni um . primo rapportt--non ha prodoun .~:. a sostegno di talc stenza di un v;ni., . rischio. Anche !c sulla compotiizionc , sono state effettu,,t,: :riuscite a identitic,:rr, che-nella quanut,, - fattore causale di :,1,..:. Anche i tentativi di I- inalazione di tumo ~l: alcuni,insorgerebber„ , fumo, non hanno oncc. La tesi che 1'abitudinc diretta rilevanza cau-lr . I'individuo, quindi, ci ,uoggi di quanto non fo- .: : ,:r.,ture-sembra con- I,una differenza tra i ., J:: la longevita e la ~ ioni cardiache, mentre possano piuttosto ~e di personalita. rl ,uo genere che 1 con caratteristiche , ,i esso approda :••:derazione. , fu pubblicato il rral's Advisory Com- ( omitato Consultivo nelgennaio 1964. erca scientifica :n osteneva quel ie imputare al fumo, , . nmentale valida ., ha rivelato I'esi- ,>ili e diversi fattori di ueate ricerche -„o di tabacco, che :,o di tempo, non sono -nente del fumo , nte-possa ritenersi ,tologico dell'uomo. mali-mediante a'ezioni che, secondo rr effetto del ;,ltato. ,rette abbia una morbosi del- :neno accettabile ~ or sono. Conseguenze della Crr:,r I - •. , ., ,r La crisi energetica ha ~: ..,... .,,, I'evolversi di numerosi altri fattori d',n,c: , .:~. ehe rendono estre- mamente arduo valut,ue 1 11, r,-,,.,!e effetto che essa pub avere sulle attivit3 dci!., 1':•.:!,p Morris. E ammesso che una difftua careni., ~:, ,:t, .:r,,nte potrebbe cau- sare alcune ditficolta: eui;.,r ~., I., n,nura dei processi produttivi tipici dei nu,in ,1',tttivita e tale da richiedere un quantitau- di rr•„r,e energetiche inferiore a quello della p•,rte degli altri settori produttivi, e cib ci ind-c ., : ccncre che la crisi energetica avra minori sulla Philip Morris che su molti altri seuon Jell'c•.,rnumia. Il costo del carburante cosiitunce infatti una compo- nente minore dei costi totali di produzione delle sigarette e della birra, e non incide in mi,ura rilevante sui costi di distribuzione dei prodotti. E possibile, ovviamente, che si renda necessaria qualche temporanea modifica negli attuali metodi di distribuzione dei prodotti sul mercato statunitense, ma siamo certi che in tale evenienza la flessibilita della nostra rete distributiva ci consentirebbe di far fronte alla situazione. A11'inizio del 1973 si 6 proceduto ad un'analisi detta- gliata del fabbisogno d'energia, adottando, durante tutto 1'esercizio, i provvedimenti piti efficaci per garantire la continuita dei rifornimenti. In tutti i centri di produzione, come pure sul campo, e stato adottato un vasto programma interno volto a risparmiare energia, e la sensibile riduzione del consumo di energia che e stata gia realizzata e una tangibile testimonianza del- 1'efficacia del programma. Controllo de! Prezzi Le disposizioni sul controllo dei prezzi applicate dal Governo americano nel quadro della Fase IV hanno ridotto la possibilita di trasferire per intero sui prezzi di vendita gli aumenti dei costi di produzione. Nei primi mesi del 1973, nel quadro de11a Fase III, erano ancora consentiti modesti aumenti nel prezzo delle sigarette; in seguito, nell'ambito della Fase IV, siamo stati auto- rizzati ad effettuare contenuti incrementi di prezzo anche per la birra e per i prodotti industriali. Tuttavia, anche nei casi in cuitale autorizzazione e stata o verra concessa, il controllo del prezzi previsto dalla Fase IV finira, in ultima analisi, per causare una riduzione dei margini di profitto, poiche gli incrementi con- sentiti dei prezzi di vendita non possono essere superiori all'aumento dei costi di produzione. I] tabacco ed i cereali impiegati nella produzione della birra hanno subito aumenti molto accentuati, essendo queste derrate esenti da controlli sui prezzi. Inoltre, il "Cost of Liv- ing Council" (Comitato di Controllo sul Costo della Vita) ha autorizzato sostanziali aumenti di prezzo per la pasta di cellulosa e per ia carta. L'll gennaio 1974, il "Cost of Living Council" ha autorizzato la Philip Morris U.S.A. a praticare un aumento dei prezzi dell'l, 6%, che ha consentito di assorbire in parte giii incrementi del costi di produzione. Questo aumento e stato praticato per tutte le marche di sigarette, ed i prezzi all'ingrosso della Vostra Societa sono ora allineati con quelli della maggior parte degli altri produttori di sigarette statunitensi. Nel 1973, anche la Philip Morris International ha sperimentato le difficolta inerenti ad una situazione di controllo dei prezzi: in molti paesi in cui quest'azienda vende le proprie marche di sigarette, infatti, 1'impos- sibilita di aumentare i prezzi del prodot[o, pur in pre- senza di un'inflazione generalizzata, ha determinato una compressione dei livelli di redditivita. Tabacco in Foglia Nel 1973, il fabbisogno mondiale di tabacco ha subito un incremento, mentre il raccolto in alcuni paesi esportatori e stato inferiore alle previsioni. La conse- guente contrazione di forniture di tabacco di buona qualita ha causato in tutto il mondo una lievitazione del prezzo del tabacco. La domanda di sigarette di qualita superiore sui mercati internazionali, accoppiata alle variazioni delle parita monetarie, ha prodotto un elevato livello di esportazioni del tabacco statuni- tense in foglia. Sebbene si preveda il persistere di una carenza sui mercati mondiali e, conseguentemente, ulteriori aumenti di prezzo per i1 tabacco in foglia, la Vostra Societa e riuscita a mantenere sufficienti stock di tabacco stagionato della qualita richiesta. Grarurni Fiscali sulle Sigarette Nel 1973, solo uno stato americano, i] Colorado, ha approva[o una legge volta ad aumentare 1'imposta di consumo suile sigarette, legge che in detinitiva eliminava 1'imposta comunale ed aumentava quella statale. Nello stesso anno, tuttavia, in 20 altri stati sono st,,ti presentati 41 disegni di legge tesi ad aumentare Ic imposte di consumo sulle sigarette. In 19 di tali ,t;:ti il legislatore illuminato, conscio del fatto che non sulo le imposte di consumo sono una forma di prelievo ti,c;tle regressiva, che colpisce sproporzionatamente i con- sumatori delle fasce di reddito piu basse, ma anche del fatto che in pratica finiscono per incoraggiare il contrabbando, ha respinto tali disegni di le;•,,e u nnn ]i ha resi esecutivi. In quattro stati, per contro• uno all'esame disegni di legge volti a ridurre I'impo,tu. Il 10 gennaio 1974, M. Wilson, governatore deIlu t;no di New York, ha raccomandato 1'abolizione delt., t.:,,a sulle sigarette imposta dalla citta di New York, Ll:- chiarando che "le onerose tasse che Ia citth di srw Fork impone sulle sigarette, in aggiunta a quelle stac,li, sono un incentivo alla criminalita organizzata, ed hanno trasformato la citta in una terra promessa per i c„n- trabbandieri." A questo proposito non e da truscur,tre il falto che i differenti livelli d'imposta esistemi nei vari stati finiscono per colpire anche i canali di d:,tri- buzione tradizionali e legali, tramite grossisti e dett;t- glianti moralmente e commercialmente integri. Nel 1973, le imposte di consumo sulle sigarette h.:nno prodotto, in tutti gli Stati Uniti, un gettito di 5>.5 miliardi, di cui $2,2 miliardi sono andati al golerno federale, $3,2 miliardi ai vari stati e$0,1 miliardi alle autorita locali. In totale, quest'importo equivale ad un prelievo di $26.00 pro capite su tutta la pupulazione statunitense, comprese donne e bambini, ed e manifestamente iniquo. TIMN 440138 18
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Directors Officers George W. Macon, Jr. Executive Committee Vice President and Bowling James C Joseph F Cullman 3rd J. F Cullman 3rd, Chairman . Vice President-Leaf, Vice President Chairman of the Board and Philip Morris U. S. A. G. V. Comfort Alfred Brittain III Chief Executive Officer Hamish Maxwell J. E. Cookman President George Weissman , Vice President and H Cullman Bankers Trust Company Vice Chairman of the Board . Executive Vice President, Lasker E Andrew C. Britton* Ross R. Milihiser Philip Morris International . President T. N. Lawler George V Comfort John A. Murphy President, George Comfort Hugh Cullman Vice President and R. R. Millhiser & Sons Company, Inc. Executive Vice President and President and G. Weissman John E. Cookman President, Philip Morris Chief Executive Officer, J. H. Wilkinson Jr. International Brewin Com Mille an , Senior Vice President g p r y Finance Committee Dr J A Cordido-Freytes Clifford H. Goldsmith William J. O'Connor . . . Vice President and Ex tiv J. E. Cookman, Chairman President C. A. Tabacalera ecu e Vice President and , Nacional President, Phili p Morris U. S. A. Vice President and Chie f A. Brittain III John E Cookman Administrative Off cer, Culiman H Hugh Cullman . . Senior Vice President and Philip Morris International Executive Vice President E. Lasker Chief Financial Officer Philip J Reilly Joseph F Cullman 3rd . R. R. Millhiser Thomas F Ahrensfeld Vice President and Chairman of the Board . Vice President and President, T. J. Moore, Jr. Richard W. Dammann General Counsel Mission Viejo Company G. Weissman Dammann & Heming, James C Bowling Carlos E. Salguero J H Wilkinson Jr Attorneys-at-Law . . . , . Vice President, Assistant to the Vice President and H Kibbee Ex Officio C Clifford H. Goldsmith Chairman of the Board and Vice President, . , . Executive Vice President Director, Corporate A fjairs Philip Morris International Audit Committee John T. Landry C. Gilbert Collingwood Benjamin A. Soyars J. H. Wilkinson, Jr., Chairman Vice President Vice President, Finance Vice President and A. Brittain III Edward Lasker S. Lyle Graham Vice President- R. W. Dammann Counsel, Perso,utel Vice President Manufacturing, McKenna Fitting & Finch , Philip Morris U.S.A. E. Lasker , , Attorneys-at-Law John T. Landry erber Walter F S H. R. Marschalk V ice President and . p T Newman Lawler Executive Vice Presiclent, Vice President and Controller Management Committee Lawler, Sterling & Kent, Director of MarketinS, Fred M. Stefan J. F. Cullman 3rd. Chairman A t torneys-at-Law Philip Morris U.S.A. Vice President and T F Ahrensfeld H. Robert Marschalk Jetson E. Lincoln President, J Bowling C President, Vice President Plannin~~; Philip Morris Industrial . . R ichardson-Merrell I nc. , Ronald H Thomson J. E. Cookman Charles F Lombard . Ross R. Millhiser Vice President and Vice President and H. Cullman President Vice President Executive Vice President, C. H. Goldsmith T Justin Moore, Jr.** , Philip Morris Interncuic na! Philip Morris International R. R. Millhiser Virginia Electric & President Dr. Helmut R. R. Wakeham , J. A. Murphy Power Com pany Vice President and Vice President-R & D P. J. Reilly John A. Murphy , Philip Morris U.S.A. F M Stefan Vice President . Eugene J. T. Flanagan Weissman G George Weissman . Associate General Counsel Vice Chairman of the Board , Office of the Chairman Secretary Harvie Wilkinson Jr J J. F Cullman 3rd, Chairman . . , R. William Murray Consultant, United Virginia Director of Finance J. E. Cookman Bankshares Incorporated Buford A. Tynes H. Cullman Young Margaret B . Treasurer R. R. Millhiser Chairman, Whitney M. Young, Jr. Memorial Foundation George R. Lewis G. Weissman Assistant Treasurer Chandler H. Kibbee Director Emeritus Mary E. Russell As.sistant Secretary Ray Jones Member, Advisory Board Robert H. Souther Assistant Controller Arthur Snapper Member, Advisory Board Robert A. White Assistant Controller "Retired Vice President "*Newly elected director ¢ ~ 'rI1VLN 440173 C ~ v C
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r - - - ~~- - l~i.~~.....r..~i :~I ~Iii ~~~dLI!Iull~ll~~t~raarsrar..r.
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Rassegna deli'anno Anche per 1'esercizio teste conclusosi. la Vostra Societa ha incrementato it fatturato, gli utili e it reddito per azione; it 1973 rappresenta cosi it ventesimo anno di costante ascesa del livello di tali fondamentali dati finanziari. Rispetto al 1972, iI fatturato consolidato e 1'utile netto hanno registrato un incremento del 22,1% e del 19,4cc, raegiungendo, rispettivamente, la cifra di $2,6 miliardi e di $149 milioni. Il reddito per azione (tenendo conto dei titoli convertibili) e dunque stato di $5,21, ed it reddito effettivo per azione e stato di $5,42, it che rappresenta un aumento rispettivamente del 19,29'o e del 16,1%, per rapporto nl 1972. I risultati ottenuti nel 1973 sono tanto piCi soddisfacenti in quanto conseguiti in un anno particolarmente difficile, caratterizzato da controlli del livello dei prezzi, da difficolta nell'approvvigionamemo di materie prime, nonche da fondamentali variazioni delle parita mone- tarie e dalla crisi enereetica. La Philip Morris ha ulteriormente esteso la propria quota del mercato mondiale delle sigarette e rafforzato la propria posizione al secondo posto nella graduatoria mondiale delle societ3 produttrici di sigarette quotate in borsa. II fatturato totale nel mondo delle aziende del settore ha registrato nel 1973, un aumento del 4%, totalizzando la cifra globale di 3.600 miliardi di pezzi; Ia Philip Morris, Ira it fatturato per gli Stati Uniti e quello estero, si e assicurata il 6,7% del mercato mon- diale. Le Marlboro continuano ad essere la marca di sigarette piti venduta nel mondo, mantenendo cosi la posizione raggiunta nel 1972; sul mercato interno degli Stati Uniti, esse sono at secondo posto, ormai molto vicine alla posizione di testa. Negli Stati Uniti, le vendite in termini reali dell'intero settore della produzione di sigarette sono aumentate per it quarto anno consecutivo, raggiungendo i 577 miliardi di pezzi, con un aumento del 4,1% rispetto all'anno precedente. Nello stesso anno, la Philip Morris ha aumentato le proprie vendite unitarie dell'11,1%, assicu- randosi una quota del mercato statunitense mai raggiunta prima, e pari, alla fine dell'esercizio, at 21% del mercato. Nel 1973 it fatturato della Miller Brewing ha registrato una notevole espansione, con incrementi del 31% nei ricavi e del 28,87o negli ettolitri venduti. Tale percentuale rappresenta I'aumento piu elevato che si sia registrato negli Stati Uniti fra le principali aziende del settore, it quale, preso net suo insieme, ha riscontrato un aumento totale del volumi di vendite pari at 4,7%. La Miller 6 cosi passata dal settimo at quinto posto nella graduatoria delle aziende americane del settore. Nel 1973, gli investimenti sono stati portati a $175 milioni, contro i $120 milioni stanziati net 1972. La Philip Morris e attualmente impegnata in un vasto programma di espansione degli investimenti onde far fronte negli Stati Uniti ed all'estero alla crescente domanda del mercato per quanto riguarda le nostre sigarette, i prodotti net settore della birra ed altri prodotti. Come 8 gia stato annunciato net corso dell'anno, l'ammontare stanziato per 1'espansione degli investimenti net prossimo quinquennio e stato portato da $500 mitioni a circa $750 milioni; la maggior parte di tale importo servira a finanziare 1'ampliamento e la modernizzazione dei nostri impianti statunitensi ed esteri net settore del tabacco, mentre la rimanenza verra destinata alla Miller Brewing, alla Philip Morris Industrial ed alla Mission Viejo. Nell'arco del quinquennio 1968-1973 it fatturato con- solidato della Philip Morris e aumentato ad un tasso annuo medio composto del 20,6%. Nello stesso periodo 1'utile netto c aumentato ad un tasso annuo medio composto del 24,9~i, mentre il reddito per azione (tenendo conto dei titoli convertibili) ha registrato un aumento annuo del 19,5%. Per il quarantaseiesimo anno consecutivo la Vostra Societa ha remunerato it capitale ordinario, ed il dividendo e stato aumentato pei it sesto anno consecu- tivo. Attualmente i1 dividendo sulle azioni ordinarie viene corrisposto ad un tasso annuo di $1,40 per azione. Philip Morris U.S.A. Grazie al notevole dinamismo delle principali marche di si_arette prodotte neeli Stati Uniti dalla Vostra Societa -Marlboro, Benson &-Ifedges 100's, Virginia Slims e Parliament-. la Philip Morris U.S.A. ha fatturato 123 miliardi di pezzi, il che rappre,enta un incremento dello 1 ISc, e stabilisce cosi un nuovo primato. II fatturato e l'utile di gestione per t'esercizio sono aumentati rispetti- vamente del 125~ e del t7`.a. La Philip Morris U.S.A., la maegiore delle no,tre societa operative per fatturato ed utile, ha ancora tma tolta dimostrtuo di essere la societ3 di pid rapida espansione tru lc aziende statuni- tensi operanti nel scttore delle sigarette. La nostra marca di mag,ior succe,su, Ia Marlboro, che non piu di cinque anni Ft deteneva una quota del mer- cato statunitense inferiore all' 8Sb, alla fine del 1973 ha raggitmto un livello equivalente al 14%, ed ha accorciato ancora la distanza che le separa dalla marca piir vendtrta- La Vostra Socict3 rimene in testa alle vendite anche nel promettente settore delle igarette da 100 mm.: infatti, non soltanto le vendite delle Benson & Hedges 100s, che rimangono la marca piti richiesta tra le sigarette di questa lunghezza, hanno avuto un incremento del 12%, ma anche le vendite delle altre sigarette da 100mm prodotte dalla Philip Morris-Virginia Slims, Parliament 100's e Marlboro 100's-hanno registrato un notevole aumento nel corso dell'esercizio. Dieci anni fa, il mercato delle sigarette da 100 mm non esisteva; cinque anni dopo, esso rappresentava gi3 13% circa del totale delle vendite di sigarette, e alla fine del 1973 tale percentuale era salita a 22eio.del fatturato totale delle aziende del settore. La Philip Morris detiene la quota piu elevata del mercato delle sigarette da 100 mm, avendo raggiunto il 29% di tale categoria. La favorevole posizione delta Philip Morris risulta ancor piti evidente se si specifica la suddivisione delle vendite totali fra i vari settori della popolazione: le marche pro- dotte dalla Vostra Societa trovano infatti sempre migliore accoglienza nei gruppi di popoiazione in piti rapido sviluppo, tra it pubblico femminile e nei gruppi sociali con livello d'istruzione superiore. Uno del piu ardui problemi che la Vostra Societa ha dovuto aKrontare durante 1'esercizio ora concluso, e stato quello di aumentare considerevoimente it volume di produzione, pur senza modificare it tradizionale livello di qualita superiore del prodotto. Dato che la tecnologia della produzione di sigarette sta entrando in ima fase completamente nuova, e cio in coincidenza con un periodo di vivace espansione delle vendite delle nostre marche, i] nuovo complesso produttivo di Richmond, Virginia che ha richiesto un investimento di $200 milioni e che rappresenta il piu vasto complesso unitario del nostro programma di espansione, si e rivelato un investimento tempestivo e remunerativo. Anche se it nuovo centro di produzione non potra sfrut- tare appieno la prevista capacita produtliva fino a] 1977, gia alla fine del dicembre scorso si 8 reaizzata una produzione di 100 milioni di sigarette al giorno, equiva- lente al 2017 della capacita produttiva finale: il completa- mento delle opere murarie e previsto per i primi mesi del 1974. Nel 1973, Ia Societa ha inoltre dato t'avvio alla realizzaztone di un nuovo centro per la miscelazione e la preparazione del tabacco nei pressi di Richmond, Virginia, impianto reso necessario dal crescente fabbi- sogno del nuovo complesso di Richmond; l'investimento relativo 6 di 543,8 milioni. Le spese totali di "marketing" nel 1973 sono rimaste sostanzialmente intmutate rispetto al 1972; i costi pubbli- citari anche que,t'anno sono stati al di sotto dei livelli del 1970, ultimo anno in cui fu consentita la pubblicita radiofonica e televi~iva. Tenendo conto dell'accresciuto livello di fatturato. le spese di "marketing" sono proporzionalntente diminuite. Anche I'Americ:+n Safety Razor, divisione della Philip Morris U.S.A., ha etllcacemente contribuito all'utile della SucictS: t.u„i ptu importanti nuovi prodotti-il "Personna Duu'nlc II", rasoio a quattro lame, due per ogni lato. ed ~I "IIieker", rasoio per signora-sono stati dist;ibuin ncl 1973 su tutto it territorio statuni- tense. A'cl ~.~n++ ~Irll,+ ~tesso esercizio, infine, sono state vendure ,!,.c h+.-le societa: ]a Clark Gum e la Lightfoot So:p Philip 1fur,n hc, r,r'rriuncd Il din;im .m„ u -.: h,: dato prova negli scorsi anni la Philip I:::~ r+;,,;:,,nal si 6 mantenuto anche per il 1973; in :I %Aume totale di vendite a livello mondiulc ~!+ n•portunte societa della Philip Morris ha rag_iuni+, '.: ,.:r., Ji 124 miliardi di pezzi. Inoltre, mentre il ,:+ %cndite unitarie conseguito dal settore a li-l'.,::.,•n.;..:lc (esclusi gli Stati Uniti) ha avuto un irnrcn.rr,s,+ .1c1 4%, ]a Philip Morris Inter- national ha rr-!: ~,una variazione positiva del 9,5%. II fatturato e!`..:,r ,_r.tione della Societa sono anch'essi auntc :: r: ;~pcttivamente de131,9rc e de19,6%. Le nostre m,+r,',r, .-,+no distribuite in oltre 160 paesi e territori. In .,i:, 'u Lli essi, tra cui Australia, Canad'a, l ,,. Messico, Nigeria, Filippine, Svezia, S~ii~cr., c\, nri,:ela, le marche di sigarette della Philip Mnrn. 1: :- ,:nal hanno detenuto lo scorso anno una ,lu,•: ;•no equivalente almeno al 10%, ed in moltu ..:-: .: ... rt notevolmente superiore a tale cifra. Mal_r.:,: . .. ; nte domanda di sigarette di tipo "americ.~n++. . + hase del successo internazionale delle Marlh•. , a non ha trascurato altri tipi di sigarettr ., gusti e preferenze diverse dei fumtuori. , !clle sigarette vendute all'estero e rapprc••rn,.... _c regionali e nazionali; la Philip 'sLor, • A produce e distribuisce attual- mente cir-+ '. .! ~igarette in tutto it mondo. Negli uluin, ~-3, la Philip Morris, in partecip;ti., : . . -i brasiliani, ha formato un'associ.+, ~. . _-iruzione di un impianto per la maniLC;+•- . a Curitiba, in Brasile; il nostro inurr- brasiliano e previsto per i primi me•i ,.. • Net cono Lkl :ra Societa ha inoltre stipulato due accor~ii, r-ne, con la "Japan Tobacco and Salt I'u" n" e 1'altro in Polonia con Ia Agros per L, , clla licenza di fabbricazione delle sigarenr \t : tali paesi. Net Messico. ~ -pansione del volume di vendite unit,:+.. .+:nento della quota di mer- cato detenut,+ ,: r'igarrera Nacional S.A., il marcato arr,:, it e 1'aceresciuta partecipa- zione statale i+.:: ~r.:uo un andamento riflessivo della societd in .. . •,+no attualmente alto studio possibili altcrn.• +Ila nostra attivita messicana, coml,:t - : :ui.ione della nostra partecipa- zione ad una y+:,, -ranza, in conformita con quanto attualmc:r . .•,r, dal governo messicano. Oggi appare pic-:.;.,.r la questione sara risolta entro il primo 1974, e che, quale che sia 1'azione delibci .+:.+ ~::':,,n avra alcun effetto di rilievo sui risultati dcl 1',- i 11 volume di vendite unitarie e le entrate sono aumentati in tutte e quattro le regioni: Europa- Medio Oriente-Africa, America Latina-Iberia, Asia-Pacifico, ed infine Canad. La Philip Morris Europe, che gia era responsabile per 1'area piti importante come fatturato ed utile, ha esteso Ia propria giurisdizione ad includere anche 1'Africa ed it Medio Oriente. In Europa, le molteplici variazioni delle parita monetarie hanno creato serie dif5colta che hanno finito per riflettersi nega- tivemente sugli utili d'esercizio, i quali tuttavia si presentano ancora positivi grazie ai profitti realizzati in altre regioni. La Philip Morris International continua a portare avanti in tutto it mondo it suo programma di potenzia- mento e modernizzazione degli impianti produttivi: in Australia, mediante 1'ampliamento degli impianti destinati alla produzione di sigarette e di quelli della Lindeman, un produttore di vino, ed in Europa prose- guendo la costruzione, ora quasi ultimata, di uno dei piit grandi complessi deI continente per lo stoccaggio del tabacco, nei pressi della fabbrica delta nostra filiale svizzera, a Neuchatel. Come la maggior parte delle societa americane che svolgono un'attivita internazionale, anche la Philip Morris ha apportato un contributo positivo alla bilancia dei pagamenti statunitense. Non e per contro da sottovalutare it fatto che la presenza della Philip Morris in molti paesi e resa possibile unicamente grazie al fatto che essa offre un contributo patente allo sviluppo economico dei medesimi: sumolata dalla costante espansione della Societa, ]a nostra politica di addestrare it per- sonale delle imprese nei paesi ospiti, di riconoscere i1 contributo apportato dal singolo dipendente, e di avanzarlo nella carriera e stato un fattore prepon- derante del successo della Philip Morris International. Gli eccezionali incrementi ottenuti net 1973 in tutto it mondo, malgrado il manifestarsi di tendenze naziona- listiche nell'economia mondiale, pongono la Vostra Societa in una posizione favorevole ad assicurarle un costante sviluppo sui mercati internazionali. Miller Brewing Company Gli ettolitri fqtturati dalla Miller nel 1973 hanno registrato un tncremento del 28,85'c rispetto al 1972, contro it 4,7C5 che rappresenta 1'aumento corn- plessivo dell'intero settore birrario; 1'increntento della Miller 6 stato it piu alto fra quelli regtstrau dalle principali aziende statunitensi produtiri+ ~ di birra. La quota di mercato della Miller 6 aument in misura eccezionale, passando dal 4,0% al 5,0' la Societa, precedentemente in settima posizione. +:i a la quinta azienda degli Stati Uniti nel settore dc!; + hirra. II fatturato, infatti, ha raggiunto Ia cifra 1: i276 milioni, con una variaziorie positiva del 31% r•+,rtto all'esercizio precedente. Secondo le nostre valutazioni, la Miller High Life e stata, nel 1973, it prodo[to interno in piu rapida a,cesa su1 mercato statunitense, e le vendite sia in botti;_lia, sia in barattoli d'alluminio, sono notevolrnente aumentate. La nuova confezione "pony pack", di otto bottiglie da un quin[o, ha trovato largo consenso tra i consuma- tori; la Miller Ale ha incontrato favorevc,le ;:ccoglienza anche nella parte nordorientale degli St:ui Uniti, che rappresenta il mercato piu importante per L+ hirra di tipo inglese ("ale"). Le vendite della \lei,ter Brau nell'area di Chicago hanno anch'esse contrihuao a realizzare it quantitativo record di etlolitri fatturati dalla Miller. La crescente richiesta da parte dei comum:+tori di birra Miller di qualita superiore ha >pr>„+ 'l-nto i centri di produzione ai limiti della capacita produniva, e vi sono stati periodi durante 1'anno in cui I',v:enua non e stata in grado di soddisfare ttrtte Ie ricl•:;c,te della clientela. La Miller ha registrato una perdita d'e,crr:nw dt $2.4 milioni che va addebitata all'aumento Jc degli imballaggi e materie prime, alla rn;c•-+nte con- correnza dei prezzi esistente nel settore. cd a ~u.ti di produzione relativamente elevati, impr:i,+bih ad una carenza di impianti produttivi moderni rJ c!1;.,ienti. Net settore birrario, bottiglie e barartoli hc1.+no notevolmente sui costi totali, e net !v".t ,I ,.":r+ di tali contenitori ha subito un incremenir+ tIcl ?!, circa. Si sono verificati sensibili aumenti nel :~ ~lcl malto, del granturco e dell'orzo, e la concurr~ nr., ,Iri prezzi, che ormai da anni caratterizza i1 settore NrL .+~ +. c pro,e- guita in tutta la sua intensita. La cla••i..+ :cn.+e!ia tra prezzi e costi, che ne 6 conseguit,r. b..+ i1trnninato una riduzione degli utili presso tutte Ir :,n,c.c del settore. Onde incrementare la produzione e rr.:l!/.,re un ntaggior grado di efficenza pur mantrncn,i++ ;m; ri:rto I'alto livello qualitativo del prodotti. I.+ \1 •.!Irr ha varato un vasto programma di ampli.++", n~+ r rnudcrniz- zazioni, che prevede per it prossimo q~ .~r.tr;cnnio un investimento di circa $200 milioni. I r.,•:rruature piu moderne net campo della produzione c.ic!I'imhottiglia- mento delta birra sono attualmente n di imtal- lazione presso i centri di produzione \1:':Irr it Slilwau- kee, Wisconsin, e di Fort Worth, Te,.+•. ;,cr i quali e previsto, inoltre, un aumento dell:r -;•.+1 ~ii produttiva. A Milwaukee, inoltre, sullo ste,5o tce!_e Frederick Miller nel 1855 iniziava :+ ! r,"i •rre Ia pro- pria birra, e stata avviata, a meta awr+~. , +.truzione di un nuovo magazzino e banchina I+ ~ J+ii+,ne. Sempre a Milwaukee, Ia Miller ha - 'e fondamentn di un nuovo impianto destinato all.+ ;• ~tunone di barattoli di alluminio recuperabili. +!cl ,,,,to di $16 milioni. TIMN 440137 17
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Attitdta d'interesse pnbhlico La Philip Morris Incorporated e una fra Ie poche wcieta per azioni che abbiano co,tituito un apposito comitato, con:po,to di rnembri del Consialio d'Ammi- nistrazione, e destinato ad occupar,i specificamente del contributo dato dall'azienda allo soluzione dei bi,o_ni e dci problemi ociali. Tale Comitato Affari Pubblici della Vostra Societa stolge una duplice funzione: que!la di e,aminare la validitit delle attuali preaazioni de!la Societa in quanto ente gravato da obblighi di natura sociale, a quella di prevedere e valutare i mtnamenti nei valori dclla curttunit5, nei suoi bisogni e nelle sue priorita. Oltre a quc,to, esiste un secondo comitato del Con,it;lio d'Ammini>tr,tzione, il Comttato Ecologia. che e investito di analoshe funzioni per il settore ecolo,ico. Per contrihuire alla comervazione delle ri,or,e del paese e alla protezione dell'ambiente. la Miller Brewing Company ha modificato i tipi d'iniballuggi usati fino ad ura• ed e pa,sata urmai quasi per intero ai barattoli interamente in alluminio ed alle bottiglie recuperabili. Nel quadro di un programma e!aborato datla Miller, molti fra i distributori hanno creato celtri di raccolta per le botti_lie ed i barattoli vuoti in ~ari punti del paese, ne va dimenticato che anche i consumatori ed i dettaglianti possono participare a questo ~forzo nazionale volto alla conservazione delle ri,orse. La Philip Morris, inoltre, ha in corso di ,tudio nltri tipi d'imballaggi concepiti espressamente in 1'unzione dell'esigenza di conservare le risorse del paese. La Vostra Societa, net settore delle attivita d'interesse pubblico, tende sempre ad innovare e se possibile anche a spronare altre aziende ad offrire il loro contri- buto la dove se ne senta il bisogno: basti citare il nostro programma di borse di studio per i figli dei di- pendenti, che a partire dall'anno scorso e stato esteso anche alle scuole di avviamento professionale, oltre che alle umversita: constderato il primo del suo genere, tale programma di formazione professionale ha riacosso tl plauso di enti governativt, tnseenanu ed imprendi- tori.tanto che parecchie altre aziende stanno varando analog,hi programmi. Nel medesimo spirito, la Philip Morris ha avviato nel 1973 un programma di borse di studio destinate agli adulti• da concedersi a lavoratrici o casalinghe che, a causa delle loro occupazioni, possono dedicare agli ,tudi soltanto un impegno parziale. Appare fondato pre- sumere che anche questo programma servira di mo- dello ad altre azietde. Grazie allo studio sulle responsabilita sociali, effettuato dalla Philip Morris con frequenza annuale, il Consiglio d'Amministrazione e costantemente informato del contributo apportato dalla Societ3 alla soluzione dei problemi di interesse pubblico. Dallo studio piti recente, ad esempio, emerge it fatto che, sul numero totale dei dipendenti, e aumentata la percentuale di membri di minoranze etniche• di donne e di reduci di guerra del Vietnam, e che per tali elementi si e accresciuta la frequenza di promozione a posti di piu alta responsa- hilita. Amhe la Philip Morris International e le sue filiali hanno intrapreso vari programmi coerenti con 1'impegno ,ociale della Vo,tra Azienda: assistenza alle vittime della alluvioni net Pakistan e nelle Filippine, conces- sione di bone di studio di livello universitario nel un vasto pro_ramma di sovvenzioni ad enti di ;u,i,tenza medica• ociale e scolastica nel Venezuela ed inline patrocinio di attivita culturali a livello locale in Au,tralia cd in Canada. In tutto il mondo, i dipendenti della Philip Morris vem,ono incora;-,,iati a participare alle attivita socfali e ci~iche delle comunitu in cui vivono, tanto che ,arebbe pratic,unente impu„ibile elencare i contributi personali di tutti i sin,oli. In merito all'obbli_o di fornire al pubblico dati finanziari dettagliati, la Borsa Valori di New York ha recentemente ,uggerito I'inclusione, nei rendiconti delle societa, di dati rel:uili alle quotazioni delle aiiuni ordinarie. al rapporto tra la quoutzione di hor,a e 1'uti!e per azione, ai divi- dendi ed al valore contuhilc dclle aiioni ordinarie, tutti dati che I« Philip Morri, forni,ce da parecchi anni; val la pena ricordare ehe it no,tro Bilancio 1972 e stato premiato dalla ri..i,ta I'ur<uici<rf iG'orld come Ia "miglior relazione deil'anno" in tutta l'indu,tria degli Stati Uniti. Durante lu cor,o c,er,:izio. un luttu h,t colpito il Vostro Cbn,i_lio d'Ammini,tr:vione: c~rntrno a mancare Wirt H. Hatciter. Diretture Gcnerale a rip-o ed Ammini- ntr,iturc Onorariu dc•ila P!tilip Vurri, Iucurpurated. 11 ai-nor H:u,.hcr. ihe cra ;ala Philip M,irt is sin dal 1918, cru unu persunalitfh ben nuta Jcll'industria del tabacco, particularnten[e stimato per la nua protonda conoscenza del ,ett,)re c per i,uoi numero,! ,critti ,ell'evoluziune di quest'industria e,ulIu sviluppo dci relativi processi ,cientilici. ll ~i_nor Hatchcr ha foinito un contributo deterrninante alla crexict della Vostre Societ3. In Aprile T. Ju,tin Moore. Jr., Amministratore Delegato e Direitoie Gcnerale e Finanziariu della Virginia Electri,: and Pu~tcr Cumpany, e di~entuo ntembro del Con.,iglio ci'Arnministrazionc, che benetieera cosi dell'uppur[u del suo di~cernimento e detla sua esperienza. Dalla data della no,tra ultima ri,trutturazione, uvvenuta nel 1967, iI fatturato ,i c piu che triplicato e I'utile piit che quadruplicato. Abbiamo inoltre, acquisito due societa operative di notecole importanz.r. la Miller Brewing e la Mission Viejo. Per far fronte alle nuove esigenze che it potenziamento comporta, si e provveduto ad ampliare ed a rafforzare i'organico dei dirigenti di grado superiore della Societa e, ne11o scorso ottobre, il Consiglio d'Amministrazione ha promosso numerosi dirigenti con responsabilita di primo piano. Tra i mutamenti di maggior importanza. segna- liamo i,e_uenti: George Wei,smun, Amminhtratore Delegato della Philip ;vlorris Incorporated, e divenuto Vice Pre,idente del ConsiLlio d'Amministrazione; Ross R. Millhi,er. Amministratore Delegato della Philip b1orri, U.S.A.• e,tato nominato Amministratore Dele- ~a1o della Philip Morris Incorporated, mentre Clifford H. Gold,mith• gia Direttore Generale di Div!.yione della Philip Morris U.S.A., e divenuto Amministratore Delegato delta ,te„a societa e Direttore Generale di Divi,ione della Philip Morris Incorporated. Ci e gradito ancora una volta rendere atto a ttrtti i 37.000 dipendenti della Philip Morris nel mondo per 1'eccellente prestazione fornita in quest'esercizio. I11oro lavoro e componente fondamentale del successo deU'Azienda, e Ii ringrazianto vivamente per la loro dedizione. Rispettosamente presentato a nome del Consiglio d'Amministrazione. Joseph F. Cullr.t,ut lyd Presidente drl ( on- _lio d'Amministrazione e Direuore Gcnrr.tle /-,,.y¢ LtJ zti'.rr...e... Georcc Av'ci„n,.~n Vice Pro•iJctttr Ro„ It \1 Ammin.. Terugblik op het jaar `E'"'Cni .. . gende i.~.. .. omzcl. ,~ omze[ ,t en de ncn,• van 19,4': ~ (rekenin,• I • bedroea > ' bedroc_ s.5.}, respekue<<!-, , Wij zijn werden brl~.~ gekenntcr'.,o atoffcn. hc':.:energickti~• , was het 20ste achtereenvol- - J; iif nieuwe rekords boekte in i:tndeel. De ;ekonsolideerde ~tJ, een toename van 22,1~'0 '149 miljoen, een toename 1972. De winst per aandeel , ~ncerteerbare obligaties) per aandeel voor konversie .: rkomt op een stij~_ing van ,,,,Ir'c in vergelijking met 1972. .r,ultaten van 1973, die .-~,t moeilijk jaar, dat werd -les, tekorten aan grond- ;rwaarderingen en de Philip >I,•. irts zijn aandeel in de interna;ir.. ., ; en verstevigde zijn positic ..I, . ,te sigarettenproducent ter wcrrl.: .. '.tat genoteerd. In 1973 >teeC dc .. • .:-ettenindustrie over de gehclc "I 'rtt 3.6 biljoen eenheden. Philip \t . inlernationale sigaretten- markt -:: 6,7%. Marlboro bleef het mec,c rk ter wereld. Deze po,itic «. . Binnen c3e Verenigde Staten ,.!. 'op een na meest verkochte merkI hc:', . rrste plaats. Voor hrl ~• e.nde jnar nam binnen de Amcril.j- r . ric de totale verkoop in ecnheekn "op in eenheden bedroeg 577 miljar,:. :I op een stijging van 4,1~'r ~crnc'.-. :,ifgaande jaar. Tegelij- kertijd ,,<<.: nheden van Philip Morris met 1 I, I'. i I I vun uw bedrijf in de Verenipdc ti~ . het einde van het jaar een nieuw 1111, . r.t 21%. In 1973 nant i. vtiller Brewing aanzienlijk toe. De omic! - .ui;'ing van 31~0, terwijl de verkoup irt Deze drastische stijgin, wat h, : in vaten van Milier vertegenwuurt:i. ;ijging in procenten ten opzichtc , .- :e bierbrouwers in de Verenigde Stui,n rrindtutrie zag zijn verkoop in valcn .a,7;c toenemen. Qua rangorde van b;- : in de Verenigde Staten ~choof Miller ,,I, .. !.le naar de vijfde plaats. De kapitaalinvc,~r: _ - '-oegen in 1973 $175 miljoen, in ceacn•~,Ic S120 miljoen die in 1972 werden hc•:: : i•:p Morris bevindt zich middenin ccn ' tnvesteringsprogramma, teneincle te ..,cnemende vraag naar onze sigarcncn tt . \crenigde Staten als daar- buiten en naar ,,n., trn en andere produkten. In 1973 maaktcn ,~ . ••-J .l:u de geplande invester- ingen die over dc ~ , tif jaar zouden worden besteed• van 55ltit t:ii! - - rden verhoogd tot ongeveer $750 miljoen. Hct ~.v ,lce•1 van dit bedrag zal zijn voor de uitbreitl:n.: cn :. ,,Icrni,ering van tabaks- faciliteiten in de \.ti, vn . ~,trhunen, Miller Brewing en voor een aanzicrtLl4. V.iriner -edeelte voor Philip Morris Industrial en tilis,ton Viejo. Gedurende de afgelopen vijf jaar-1968/1973-is de gekonsolideerde omzet van Philip Morris gestegen met een jaarlijks gemiddelde dat neerkomt op 20,6''b. In dezelPde periuile stceg de nettuwinst met ecn 4emiddelde van 24,955 en de winst per aandeel (rekening houdend met konverteerbare obligaties) steeg met 19,5°i per jaar. Voor het 46ste achtereenvol,ende jaar keerde uw firma een dividend uit op de gewone aandelen, terwijl de dividenden voor het zesde achtereenvolgendejaar werden vcrhuo,d. Het huidige jaarlijkse dividend bedraagt $1,40 per gewoon aandeel. Philip Morris U.S.A. De dynamische groei van de belangrijkste sigarettcn- merkcn van uw firma in de Verenigde Staten-lblarlboro, Benson & Hedges 100's. Virginia Slims, en Parliament -leidde voor Philip Morris U.S.A. tot een rekordomzet in eenheden van 123 miljard, een stijging van 1 I q. De omzet en bedrijfsresultaten stegen gedurende het afgelopen jaar met respektievelijk 12% en 179~. Philip Morris U.S.A., onze groots[e werkmaatschappij wat betreft omzet en winst, behield zijn positie als de snelst groeiende sigarettenfabrikant in de Verenigde Staten. Marlboro. ons toonaangevende merk, verwierf tegen eind 1973 een marktaandeel van 14%, waarmee zij het meest verkochte merk nog dichter benaderde. Slechts vijf jaar geleden lag het marktaandeel van Marlboro op de Amerikaanse markt beneden de 8%. Het bedrijf handhaafde eveneens zijn leidende positie in de verkuop van de groeienele 100mm klasse; de verkoop van Benson & Hedges 100's stee, met 12,0% en blijft daarmee bet ineest verkochte 100mm merk, terwijl ouk de verkoop van de andere I00mm merken van Philip Morris-Virginia Slims, Parliament 100's, en Marlboro 100's-,edurende het jaar aanzienlijk toenam. Tien jaar geleden bestond er nog geen 100mm markt, en vijt' jaar geleden vertegenwoordigde de 100mm merken ongeveer 13% van de totale sigarettenverkoop. Tegen eind 1973 maakte de verkoop van 100mm merken echter ruim 22% deel uit van de totale verkoop van de indus[rie. Het grootste aandeel ~an de 100mm markt is in handen van Philip Morris-deze kategorie vertegenwoordigde 29$'a. Het demografuche beeld in de Verenigde Staten geeft eveneens blijk van de sterke positie van Philip Morris. De merken van uw bedrijf hebben een hoge graad van penetratie bereikt bij het snelst groeiendc deelvan de Amerikaanse bevolking, onder vrotnvelijke rokers en onder rokers die hoger onderwijs hebben ,_enoten. Een van de grootste uitdagin,en voor het bedrijf in het afoelopen jaar was het in opgaande lijn voortzetten van de sigarettenproduktie. terwijI onze per traditie hoge kwaliteit gehandhe;tfd diende te blijven. Aangezien de siaarettenpruduktie een nieuw technologisch tijdperk ingaat• gedurende een tijcd dat de verkoop van onze merken snel blijft stijgen, blijkt ons nicuwe $200 miljoen vergende complex in Richmond, Virginia-het _rootste op zichzelf staande project op ons inee,terins,- programma-cen tijdige ecn veelbetovende in,e,terino te zijn. Alhoewel het nieuwe bedrijf niet eerder u•tn ic_en 1977 op volle kapaciteit zal draaien, prudueccrcle cic'c fabriek eind december 1973 ongeveer 100 rtiliocn sigaretten per dag-209b van de uiteindcli)Le !,,ipacitcit. Het ligt in de bedoelin,z dat de aebotn',en hL•lin 1974 zullen worden opgeleverd. In 1973 be_on ut, ;ii m,t ook ntet de bouw van een complex voor de ,crntcn_;n en venverkine van tabak in de buurt van Richnnw nd. Virginia. Deze installatie, die on,evccr ~4 ~,.~ miljocn zal kosten, is nodig om aan de toenemenclc encn van het nieuwe complex in Richmond tegemoce tr I„onicn. De totale uitgaven voor marketing ble%en :n 1973 vrijwel op hetzelfde niveau als in 1972, tcr~~ijl de rrkla- mekosten opnieuw lager lagen dan in iv-u. Itet laat,tc jaar clat men via radio en televisie rekhm,e %o,rr >iga- retten kon maken. Als gevolg van de hoecic ~rrku,>p- cijfers, liepen de marketing-kosten per I.tntn ie:uctten terug. American Safety Razor, een divisie ~an 1'hilih \loxri, U.S.A., droeg eveneens bij tot de bedrijl-:n,t. De voornaamste nicuwe produkten-Pen,1nn, I)-.i)le 11, een scheerapparuat met 4 scheervlakkec• :•-.t,in elke zijde en Flicker, een lady-shave-werdeit n I:ut- delijk gedis'tribueerd. Gedurende het jaar ~.ri~icn ouk twee kleinere bedrijven-Clark Gum en I t~_hur,,,t Suap afgestoten. Philip Morris Internatiunu! De dynamische groei die Philip Morris in ~Ir ;it_elopen jaren heeft bewerkstelligd, zette zich in I1~' ; vowrt. De sigarettenverkoop over de vehelr %-c!..1 %an deze belangrijke werkmaatschappij van Philth \I- rri, hcdruc- in totaal 124 miljard eenheden• Terw ul 1IL ~cr V,uop in eenheden van de gehele industrie buitrrt ,ic \crcniede Staten met 4% steeg, nam de verkooh nt crnhcdcn van Philip Morris lnternational nict y.~ . c. Um/ct en bedrijfsresultaten stegen in 1973 mce :~ ;~cLtic~eti)k 31,9% en 9,6%. Onze merken worden in nieer dan 16u L.tnJrn en ge- bieden verkocht. I-iet afgelopen jaar It.,,t I'lulip Murri, marktaandelen van tenminste ]Ot!-en :n -n :umtul gevallen aanzienlijk meer dan 1O'i -ut t,~nt 20 landen, waaronder Austalie, Canad•t. LLibunun, :~lexico, Nil_erie, de Philippijnen, \cnri_rl,.l. lwcdc•n en Zwitserland, De oorzaak van Mtulh"nt. , ,uk,c, over de gehele wereld lag in de gestegen %r.i-- n,.ir Ameri- kaanse sigaretten. De andere voorl.c,,rrn ~iwr ,ntaken die men bewerkstelligde, worden ecltier :ei Jc_c onder- kend en ongevicer 60% van onze intct n.ttn+nale vcrkuop in eenheden li,t in regionale en lok: lc mcrkcn. Philip Morris International produccert cn %ei'k-upt op het ogenblik rond 145 verschillende sivureitenmerken over de gehele wereld. 19 TIMN 440139
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Attch die demof,raphische Struktur der Konsumenten ma"ht die starke Position von Philip Morris U.S.A. deutlich. L n,ere Marken erfreuen sich besonders guter s,ufnahme betm schneller wach,enden Teii der US- yevolkerunz, n:imlich bei den weiblichen Rauchern, Lind den Rauchern gehobener Bildung. Eints der Hauptprobleme bestand im Berichtsjahr fur uns darm, das Produktionsvolumen unserer Zigaretten Se,ter zu ;tei;_ern. ohne unseren traditionell hohen Qttplttatsst-nndard aufzugeben. Da sich die Zigaretten- h,,,rstellun~ am Anfang einer neuen technologischen .arl bennwet, unsere a4arken sich gleichzeitig aber auch eines standigcn, rapiden Umsatzwachstums erfreuen, wird sich der ncue mit einem Aufwand von 200 Mil- kionen Dollar errichiete Betriebskomplex in Richmond, Virgima-das umfangreichste Einzelprojekt unseres Inv esttuonsprogramms-als eine zum richtigen Zeit- punkt erfolgte Lind lohnende Investition erweisen. pbwolil die neue Anlage ihre volle Produktions- kapazit5t nicht vor 1977 erreichen wird, betrug die T,,,,esproduktion in dem neuen Werk Ende Dezember 1973 bereits annahernd 100 Millionen Zigaretten, d.h. ,0 cc der angestrebten Gesamtkapazit5t. Mit der Fer- tigstellung der Baultchkeiten isi ftir Anfang 1974 zu rechnen. lm Laufe des Gesch5ftsjahres 1973 begann das tJnternehmen auch mit dem Bau einer Betriebsanlage ur Tabakaufbereitung in der N5he von Richmond, Vlrginta. Die Errichtung dieses Werkes, dessen Kosten ;ich auf ca. $ 43,8 Millionen belaufen werden, ist auf- ~;rund des wachsenden Bedarfs des neuen Betriebs- komplexes in Richmond erforderlich. Die Gesamntufwendungen fur Marketing blieben gegen- uber dem Vorjahr praktisch unverandert. Die Aufwen- dungen ftir Werbung waren wtederum niedriger als 1970, dem letzren Geschaftsjahr vor der Einstellung der Zlgarettenwerbungin Rundfunk und Fernsehen.Infolge des gesteigerten Umsatzvolumens hat sich der llarketmg-Aufwand je 1 000 Zigaretten vermindert. ,.\uch Amertcan Safety Razor, eme Division der Philip \lorris, trug zum Konzernergebnis bei. Die wichtirsten neuen Produkte dieser Unternehmenssparte-der Rasie- rer "Personna Double II" mit vier Schneiden, d.h. einer poppelschneide auf jeder Seite. Lind der Datnen- rasierer "Flicker"-wurden 1973 uberall in den Vereimgten Staaten vertrieben. Wahrend des Berichtjahres wurden zwei kleinere Beteiligungsgesellschaften, Clark Gum und Lightfoot Soap, veraussert. pkilip Morris International Das dynamische Wachstum von Philip Morris International in den letzten Jahren hielt auch 1973 an. Im Berichtsjahr erreichte der Absatz dieses wichtigen Unternehmens der Philip Morris-Gruppe insgesamt 124 iNIilliarden Ztgaretten. Wiihrend die Wclt-Zigaretten- industrie ilhren Gesamtabsatc ausserhalb der Vereinigten Staaten urn 4% erhdhen konnte, gelang es der Philip Morris International, ihren Absatz urn 9.5 % zu stei- _ern. Umsatz Lind Eruebnis erhohten sich irn Geschafts- jahr 1973 urn 31,91c bzw. 9,6 %. Unsere Marken werden in mehr als 160 LSndern Lind Territorien vertrieben. Im Berichtsjahr hielten die Philip Morris International, ihre Beteiligungsgesellschaften und Lizenznehmer Marktanteile von mindestens 10 % in uber 20 L5ndern, einschliesnliclt Australien, ltulien, Kunada, Libanon, Mexiko, Nigericn. Philippinen, Schweden, Schweiz Lind Venezuela. In eincr Anzahl von Lflndern waren die 3larktanteile crheblich huher. Die gestiegene Nachfrage nach Zigaretten amerikani,cher Ge,chmacksrichtung hat zu dem internationalen Erfolg un,erer tAtarke Marlboro gefiihrt. Dennoch traeen wir auch anderen Geschmacksriclttungen Rechnung. Etwa 60 Sc unseres ?,b,atze, au„erhalb der USA entfallen auf regionale bzw. natiomtte '\larken. Philip Morris International produziert Lind vertreibt zur Zeit etwa 145 Zigaretten- marken auf der gummn W'elt. Gegen Endc 1973 wurde bekanntgegebem dass Philip ,'Ylorris-iiber cine Tochter_es,ellschaft, an der auch brasilianische Ge,cllkhaftcr bcteiliat sind-mit dem Bau einer Zigaretterfabrik in Curitiba, Brasilien, beginnen wird. Die Aufnahme der Gesch;iftst:itigkcit auf dem brasilianiachen Markt ist fiir Anfttng 1975 vorgesehen. \teiterhin schlossen wir im Berichtsjahr mit der Japan Tobacco and Salt Public Corporation und dem pol- r.ischen Cnternchmen Agrus Lizenzabkommen itber die Herstelltntg von Marlboru-Zigaretren in den betref- fenden Liindern ab. In Mexiko btieb un.,crc Beteiligtmgsgesellschaft Cigarrera Nacional. S.A. trotz steicendem Absatt Lind wachsendem %tarkt;,ntetl auft=rund sttlrker Kosten- stei;=erun~sen und acrschlirtter stuatlicher Kontrollen in der Verlustzone. W'ir pr,ifcn deshalb zur Zeit eine Reihe von Alternativen I'tir unscr mexikanisches En_agement, darunter im Einklang mit der derzeitigen mexiknnischen Politik :wch cine Verminderung unserer Beteiligung auf eine ;\tinderheit. Wir rechnen damit. dass diee Angele,enheit in der ersten H`alfte des Jahres 1974 gekl5rt wcrden wird, Lind da,s, wie immer die Entscheidung ausfallen wird. wir daraus fiir 1974 keine materiel!en tiachteile zu erwarten haben werden. Alle vier \larktregionen-Europa%Mittlerer Ostenj Afrika; Lateinamcrika/Iberisrhe Halbinsel; Asien/ Pazifik sowic Kanada-fionntcn Absatz und Umsatzer- lose steigern. Philip Morris Europa. der nach Umsatz und Ertrag wichtig.sten Region. wurde auch die Verant- w'ortung tur Afrika Lind den Mittleren Osten uber- tragen. Die Ertragslage in Europa wurde durch die r\nderungen zahlreicher W'iihrungsparit5ten im Berichtsjahr nachteilig beeinflusst. Ertraesverbesse- rungen in anderen Regionen brachten jedoch einen Ausgleich. In allen Teilen der Welt setzt Philip Morris Interna- tional ihr bereits voll in Gang befindliches Programm der Expansion und Modernisierung ihrer Betriebsan- lagen fort. In Australien wurden die Anlagen zur Zigarettenherstellung sowie zur Weinproduktion von Lindeman erweitert. In der Nachbarschaft des Werks Neuchatel, unserer Schweizer Tochtergesellschaf[, n3hert sich der Bau eines der grbssten Tabaklager Europas seiner Vollendung. Wie die meisten international tatigen US-Unternehmen leistete auch Philip Morris im Berichtsjahr wiederum einen Beitrag zur Verbesserung der amerikanischen Handelsbilanz. Andererseits ist die TStigkeit von Philip Morris in vielen Lzndern nur moglich, weil das Unternehmen nachweisbar auch zum wirtschaftlichen Gedeihen dieser Linder beitr5gt. Unsere, von der stetigen Expansion unseres Unternehmens begiinstigte Personalpolitik, die darauf abzielt. in den Gastlandern einheimische Krafte auszubilden, ihre Leistungen gebuhrend anzuerkennen und Mitarbeitern den Aufstieg im eigenen Haus zu ermoglichen. ist eine der Grundvoraussetzungen des Geschaftserfolgs der Philip Morris International. Das im Geschiiftsjahr 1973 auf den Auslandsmarkten trotz zunehmender Inflation und wirtschaftlichem Nationalismus erzielte Wachsturn versetzt unser Unternehmen durchaus in die Lage, seine weltweite Expansion auch kiinftig fortzusetzen. Miller Brerrin,q Compnny Im Geschaftsjahr 1973 verzeichnete die Miller Brewing Company einen um 28,8 % hoheren Bier-Absatz als im Vorjahr, wahrend die Branche insgesamt nur eine Zuwachsrate von 4,7 % erzielte. Millers Zuwachsrate war die hdchstc unter den grosseren amerikanischen Brauereien. Der Marktanteil der Miller Brewing Company erhohtc sich dementsprechend sprunghaft von 4.0 rb auf 5,0 ' i, und Miller ruckte vom stebten a«f den fiinften Platz unter den fuhrenden US-Braue- reiunternehmen. Die L'msatzerlose erreichten $ 276 Mio., was ciner Zunahme von 31 % gegeniiber dem Vorjahr eqtspri.ht. Nach un,crrr S,h:,liung war die Marke Miller High LiJe im Berit:h~,j_,hr auf dem US ,VIarkt von allen ein- heimiuchen Bicrm;,rl.cn die am schnellsten wachsende Vlarke. Dcr Ah,,,ti %un Willer High Life, sowohl in Flaschen al, .:ucL in Aluminiumdosen, stieg erheblich. Auch un,crc f le,thcn-Achterpackung "pony pack" (7 oz. x, t;,n.l hc:m Verbraucher ausgezeichnete Aufnalnuc. f).,, nc- ttil(er Ale wurde itn Nordosten der U.S.:\.--Jem hc&utendsten Markt fur Ale-Bier- ebenfalls,elv uu; .r,,l_enommen. Auch der Absatz unserer Bierm:,ncc itm,rrr Bruu in der Gegend von Chicago true ,rtn Rr;-rdausstoss der Miller Brewing Company bei. Die QuaGta;,b,crr .,+n %liller erfreuten sich 1973 einer so grossen N,,ehfi.:_c, d;,,, alle Brauereianlagen bis zur Grenze ihrer Kapant.~t ewsgelastet waren. Zeitweilig reichte im Bericht,jahr w;ar die vorhandene Kapazi- t3t nicht au,. unt ~lie \,,,;hfrage zu decken. Miller verzei:hnele r:nen Betriebsverlust von $2,4 Mio., der aut die >!u,:,c_ri,cn Ku,ten fur Verpackungsma- terialicn und R„h,t,"lc. dle fortv~ahrende seharfe PreiskonAunc:v ,u ,:,r Rr-,uereibranche sowie auf ein -man_scl~ i.cr„n.l Icistungsf5higer Brauereian- lagen-reiau~ f.,"tcnnkeau zuruckzufuhren ist. Die K,1,1- ~, t: I..,.nen Lind Dosen, die in der BruuinLlu,tPI , 1rr: ~:~hl~rhen Teil der Gesamtkos[en ausmat:hen, ,in,l 1•,-t •,,rn fast 7 clo gestiegen. Die Ko,tcn \1,,, Lind Gerste haven sich ,prunehatl-: !, ! I~ n Jer Brauereibranche schon seit Ja:,rcn ~ .. ~ ,.:h;trfe Preiskonkurrenz hat ,rn, Diese Preis-Kosten- Komtcll,l -n ': . I, r _esamten Branche niedrigere Gewinnm,,recn I I, ._ . Um die Pn,Ju'.,..;, 13cihehaltung des gewohnten hohen ..., /tt steigern und zu ratio- nalisieren, h,r N1_ . .:, nmfangreiches Expansions- und Modernisicrci:r,t eingeleitet. Nahezu $ 200 Mio. sind :u: :.:mm wahrend der n5chsten fiinf Jahre ~Icn Brauereibetrieben von Miller in •I f,trt Worth werden modernstc B,,u: -, . .1 \:,i.:ll,tnlagen installiert. Daruber hinaus wird Jic i'-kapazitat der Brauereien in Milwaukee .. ,I I '•~„rth erweitert. Mitte des Jahres wurdr ,+i %I.. , .. . an der Stelle, wo Frederic .Miller 1855 ,r n~ ., `:I,che Brauerei in Betrieb nahm, mit den :-,i I,ir einen neuen Lager- und Versandkonipl~\ i- ,r,::n. :4usserdem wurdein _Mihe,wkee der lur ein l6-Millionen-Dollar- \\'erk zur verwertbarer Aluminium- dosen gelegt. Im Januar 1974 h.thcn ,ii Plane angekiindigt, fiir $ 70 .14illionen einc 8,.,::,:t t ~n:2U0-Meilen-Einzugsbereich von New York /u h.,- rn Diese neue Miller-Anlage wird 1976 mit einer von zwei Millionen Fass den Betrieb ,,u! 11, Die Endkapazitat wird sechs Millionen I,;,, ,,w:lich betragen. Fiir die Wahl des Standorts wni cicc Rcihe von Faktoren aus- schlaggebend sc,n. hc-nders die Verfugbarkei[ von Wasscr bestcr Qu.,l l,,t. Unser Iangfrisu,:c, l:cl „t, Untsatz und Marktanteil der Miller Brcwl-mp,my auszuweiten, die Brauka- pazitut zu erhiihen uud 1lurch Rationalisierung fiir eine besscre Rentah,l,t3t iu sorgen. Obwohl Miller im Berichtajahr einen ~crhut hinnehmen musste, gab es vicle konkrete An/cichtn defiir, dass unsere langfristige Planung durchuus rcalnti,ch ist. Die Berei[stellung so umt'angreicher Mtttul fiir die Modernisierung und Erweiterung der Betriebsanlagen ist Ausdruck unseres Optimismus fur die langlristigen Ertragsaussichten der Miller Brewittg C:ompany. Philip Morris Industrial Dieses Unternehmen konnte seinen Cntsatz 1973 urn 17 % auf 132 Mio. steigern. Troaz scharfer Material- kostenerhohungen, die nicht durch huhere Verkaufs- preise weitergegeben werden konnten sowie etiektiver Beschaffungsschwierigkeiten bei Materialien wie Wachs, Lbsemitteln, Aluminium und Zells[off konnte das Betriebsergebnis urn 7,3 % verbessert werden. Dies ist ein bemerkenswerter Erfolg, denn die Preise fur Zellstoff stiegen im Laufe des Berichtsjahres um mehr als 39 %, und die Auswirkungen speziell dieser Kostensteigerung waren in vielen Produktionsbereichen der Philip Morris Industrial besonders stark spUrbar. Gegen Ende des Berichtsjahres stimmte der Cost of Living Council (die fur die Wiederherstellung der Geldwertstabilitat in den U.S.A. geschaffene Behorde) geringen Preiserhohungen fur die Produkte der Philip Ivforris Industrial zu. Der scharfe Kostenanstieg hielt jedoch im November und Dezember, nachdem die Erlaubnis fur die besagten Preiserhohungen erteilt worden war, weiterhin an. Alle Produktbereiche der Philip Morris Industrial- Chemie, Papier und Verpackungsmaterialien-konnten 1973 ihre Umsatze steigern. Die Sparten Chernie und Papier verzeichne[en auch hohere Ertrage. Dagegen hat sich die Ertragslage der Sparte Verpackungsma- terialien etwas verschlechtert. Die Tatsache, dass alle Bereiche in der Lage waren, in grdsserem Masse Produkte abzusetzen, die auf komplexen Technologien aufbauen Lind deshaib hohere Margen erlauben, ermogiichte es Philip Morris Industrial jedoch, dem Preis-Kosten-Druck teilweise auszuweichen. Die standige Entwicklung neuer Produkte und neuer Pro- duktanwendungen war eine wesentliche Voraussetzung fiir diese Strategie. Die Nicolet Paper Company hat die Errichtung einer der grossten Beschichtungsanlagen der W'eltf(ir Papier und Verpackungsfolien abgeschlossen. Die in Nicholas- ville (Kentucky) befindliche Anlage hat ca. $ 5 Mio. ekoste[. Die Polymer Industries, Inc. er.veiterte ihre Betriebsanlagen in Greenville durch ein neues Lager- haus und einen fiinften Polymerisa[ionsreaktor. Die Wilkolin-Werk W'illi E. Kohlmeyer GmbH iq dabei, ihre Fertigungsanlagen in Bremen auszubauen. Mission Viejo Company Fur die Mission Viejo Company-einer der fi.ihrenden Bautrager fur vorgeplante Ei_enheimsiedlungen-war 1973 das erste volle Geschiiftsjahr als Konzern2esell- schaft der Philip-Morris-Gruppe. Mission Vicjo konnte die Umsatzerlose dem Vorjahr gegeniib(t urn 12 0 auf $ 68 Mio. steigern. Das Ergebnis fiel wn 28 1c auf $ 4,1 Mi.o. Das Jahr 1973 brachte fiir die W'ohnurv, ind Sied- htngsbauindustrie zahlreiche Probleme.I)ie ertite H51fte des Berichtsjahres stand im Zeic!,: rt un ilnstiger Witterungsbedingungen in Siidkaliforn: n Lind in Colorado, rapider Kostensteigerungen auf dem 14ate- rialsektor-besonders bei Bau-und Furn:crholr-,owie empfindlicher EngpSsse bei der Materialhe,~:h,,llung. Obwohl Mission Viejo in der umweltfreurdl.c]•,en Planung Lind Gestaltung von Wohn- Lind Sicdlungs- projekten anderen Unternehmen wcit iSt. verursachte der Erlass neuer Umwelts;h,ivbc,tim- mungen Verzogerungen bei der Bearbeitun:: cun Baugenehmiaungsantragen. In der zwcitcn Bcr,ehts- jahresh3lfte stiegen die Hypothekenzinsen ,ul hisher unerreichte Hohen, und die Hypothekenhe„h,alung erfuhr starke Einschrankun;._en. Trotz dieser negativen Faktoren konntc 6 c\l,,,iorn Viejo Company im Berichtsjahr cin po,in- I-r_ehnis erwirtschaften und in ihren drei wicht~_,~~n Ite~_,unal- bereichen, namlich Orange County t 1:.::r,~rn~rn t, _csamt Denver (Colorado) und Phoenix (~\rii,1n., ~ 171, 1 650 Eigenheime verkaufen. Au>,erdom _v;en Ende des Berichtsjahres ein kleincre, S~rJl,:n_,pe,ijekt in Fresno (Kalifornien) bezugsferti_ Das Geschaft mit Eigenheimen und nungen unterliegt Konjunkturschw:,ni.tjn-r t~ ir glauben jedoch, dass Mission Viejo %,,:t .!,, l l,,ulc 1973 weniger stark betroffen wurde ;t'~., % :rl, .imkrc Unternehmen der Branche in den L'.S.:\ 1,•t:i;c nt, dass viele der Faktoren, die sich 197 1 r,- i:!, ,;,_ .,uf' die Branche auswirkten, auch die im Jahre 1974 beeintr5chtigen wenicn I) c•~,~~ . t, aussichten fiir die Wohntmgsindu,trr ;r:, r Jahrzehnt sind jedoch durchaus _iin,: : i\,r vrw,utcn, dass Mission Viejo an dem zu voll beteiligt sein wird. ftauchen atnd Genutdheit Im Zusammenhang mit dern Them,, R,,..-r~ n,:ns Gesundheit unterstutzen wir weitc,h-n ..- ., :n,,,m mit anderen Un[ernehmen der Tah,-.-:;^:~du,:rle- die vom U.S. Coanci( for Tohrrcco K, "..,, ih .ler Srhool ojMedicineander Washington l:ni,,! •.• :n St. Louis und der Medical School an der H.u,.,t,l t,, ~crnit} betriebenen Forschungen. In den Ic~; ,:: ',, 1:hrcn hat die Tabakwarenindustrie mehr al, ~., vl:,, fur die wissenschaftliche Erforschunl_ der /.,•.. : ,cnhen_e zwischen Rauchen und Gesundhe,t .I..:..1•r-ht. Der Jahresbericht des Cotntcil for Tub,,, ,,, i:, ",.,, A, der Einzelheiten uber die von der Bran:li; .,t I.,hr 1973 finanzierten Studien enth3lt, ist k-,,:..,-, -n uns erhaltlich. TIMN 440135 IS
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