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Presideut's _lte,s,1o'e Finaurial Opvr< tirnls Le, f JI;i rhetiiia Oa~~r.~~as I'hilij> .1[o~rri-~ ~Ind I)ivi,iuii, Pliilip 1Iorri~4 Centcc I:uitilo.vae Iielriti,,ii, Curhor;ite Citizenaiip audited Fiun nri.il 5taitenneiits Seven Fem. Suunmuirv TIMN 440289

t / Joseph F. Cullman, 3rd President Howard S. Cullman President, Cullman Bros., Inc. Richard W. Dammann Danamann, Roche and Goldberg, At to rn e Js-a t-Lccw Dr. Jess H. Davis I'resident, Stevens Institute r,f Technology Dr. Robert v. DuPuis Vice President, General Foods Corporation L. G. IIanson Retired Wirt H. Hatcher Se0or Vice President Cba3ucller H. Kibbee Exe<•utive Vice President-Finance T. \ewnian Lawler Lawler & Rockzcood, Attorneys-at-Laiv 11. f:. Riddell TVic1,•es, Riddell, Bloomer, Jacobi & JlrGnire, A ttmrn e ifs-u t-La tu Robert P. Roper Executive Vice President-Operations Arthur Snapper Chairmma, Jlilprint, Inc. Sidney Weil President, A•S•R Products Company Geot•,e jFeissman Executive Vice President-Overseas J. lIarvie Wilkinson, Jr. President, State Planters Bank of Comrnerce and Trusts, Richmond, Virginia DIRECTORS E1IERITUS Alfred E. Lyon Ilonorar;y Chairman K. H. Rockey V"eic ForA, eA'eic York 1lorl-an Unaranty Trust Company of \ew Y ork 30 West Broadway, New York, \ ew Y ork The First \ ational City BanIk of \ ew Y ork 55 Wall Street, New York, New York Chemical Bank New York Trust Company 100 Broadway, New York, ti ew York Conbov, Hewitt, O'Brien & Boardman 39 Broadway, New York, \ ew Y ork L,Ybrand, Ross Bros. & Montgomery 2 Broadway, \ ew York, New Y ork ,VIMN 440291

PHILIP MORRIS I N C O ft P O R A T E D * 1960 * ANNUAL REPORT !i tF,CL"'l16"1: OF'FIC1~;~: luu k'~trk .1venue, New 1'o~rk 17, Ae\~ ~ 1"orli I116'11Lj(.7H7T8 (.~000) «(1011) \ et Sales .................. $ 506,412 $ 4'.1.1~,-}5 \~et Income ................ $ 20,9S4 $ 1!),:~!)U Per Share of ('ommon ~'-,to~ck : \ et I nconme .............. $ 5.44 $ :,.US I)ividends I)eclared ...... l;ook Value .............. Taxes h'ederal Excise T<ites ..... I+'ecleral <zncl State Income $ 0.60 -1(i.-t(i $ 1 i-5,947 $ 44.79 $ 1 Taxes ................. $ `? ;,a i 0 $ `' 1,:>OS Otlier: Social Security aul(l Iocal taxes ............. $ ;,1)39 Total Taxes ....... $ 203,256 $ 1 S):;,'?-k9 Vurnber of 5tockliolders Preferred ............... '?.''35 ?,'?6? Common ................ ;-1,4:)1 ?4,4'?1 \tutiber of Sliarus Uutstaiid- Prefei•red (less treastir\ ~ stock) ................. 253,606 '::5,.7-)(N, Common (less treacnry stock) ................. :;.Eii1,G>`? :~(i,~~l Tlre ltotex to cortsolidaterl ft}uowiul sMte>>te7it.~ .tihuv.lct F)c• i•crir( in cwi- jzcpc•tion uitb the abovc data. TIMN 440293

TOP- RANKED TELEVISION SHOWS AND NEWSPAPER ADVERTISEMENTS CARRY PRODUCT MESSAGES TO MILLIONS OF CONSUMERS DAILY ...~: Sh0.. ~:reet=;` .. .,.. , ?pP ... ..i. t~.. ...... . 3';r. ..., ...., _ ... _ ..~d~id.'... ..,,... ,~'1

Joscph F. Cullman, 3rd Presiclerat «irt II. Hatcher Senior 1'ice President Chandler H. Kibbee T'xecictioe V ice I're.Odetrt-Piraauce Robert. P. Roper L'xeeutive Vice President-Opercrtinus (;eorg-e Weissman Executive I"ice President-Overseas Andrew C. Britton Vice President, C1aie f o f dlanrs factnre IIagh Cullman Vice Presirlen.t, Assistaaat Chief of Operatimrs John P:. Cookman Vice President, Diversification and Treasrn•er Georl-;e C. Dawson Vice President, Overseas Clifford H. Goldsmith Vice President, Subsidiary Relations Roger \I. Greene Vice Pre.sideot, Advertising George J. Henn y' Vice I're.qiilerrt, Distribution and (.'astorraer Service Ray Jones I'iee President, Sales George W. Macon, Jr. Vice President, Lerrf Ross R. Jlillhiser Vice President, Director o f lltm•1,-eting Pattl D. Smith Vice President, General Connsel Thomas F. Alirensfeld Associate General Counsel and Secretary IIenry R. Blum Controller .John A. Hampson assistant Treasr(rer Walter F. Sperber .I.csistant Co0roller Cornelia Crai--- tlssistant Secretary Mary E. Russell Assistant Secretary ` Retired, December 31, 1960 TIMN 440290

I-. iw T IWA '.~"-_ , ..- 4dW R RIIF ~ j:.. _ Marlboro q N 9A TIMN 440292 6.

1 l/.~~.•!~l.i'1).( 8 _l L _!_N (,i; ~/1A December 31, 1960 and 1909 (\"ote 1) ai Current: 1959 Cash ....................................... $ 11,r"95,531 $ 12,521,263 Accounts and notes receivable, less allowances for discounts and doubtful accounts ..... 27,350,535 27,523,056 Inventories ('Note 2 ) ........................ 209,325,774 210,967,270 Prepaid expenses ........................... 1,316,736 1,226,951 Total current assets .................. 249,818,576 252,235,5-10 Ec uity I of unconsolidated foreign subsidiaries (t5N ote 1) ............... . . ....... 7,555,077 5,152,516 Land, buildings, machinery and equipment, at cost .... 93,641,243 90,0-I9,SS9 Less, Allowance for depreciation ............. 33,650,910 30,395,128 59,960,333 59,654,761 Deferred charges and other assets .................. 2,7-16,-I00 2,6=15,025 Brands, trade-marks, patents and good will, less amortization ................................ 1.634,109 1,S9S,659 $321,71.7,495 $321,619,504 The accompanying notes are an integral part of the financial statements. TIMN 440306 14

PHILIP MORRIS INCORPORATED (INCORPORATED IN VIRGINIA) AND ITS CCNSOLIDATED SUBSIDIARIES ~ t. l. l i: i l, l 7'I i. ,. V)l,l) 1959 Current: \ otes payable .............................. $ 20,966,000 $ 29,960,466 Lono-term liabilities due within one y-ear ...... 2,000,000 1,600,000 Dividends payable .......................... 3,558,701 3,219,813 Accounts payable and accrued liabilities ....... 19,043,827 16, 7 S8,191 Federal and other taxes on income ............ 1=I,793,161 13,266,262 Total current liabilities ................ 60,361,689 64,834,732 Lonb-term liabilities (Note 3) ...................... 65,400,000 67,467,500 . Total liabilities ....................... 125,761,689 132,302,232 Stockholders' equity (Notes 4 and 5) : Cumulative preferred stocks, par value $100 per share ........................ 28,740,200 29,070,S00 Coninion stock, par value $5 per share (Note 5). 18,401,820 18,231,405 Capital surplus ............................. 45,613,512 44,605,434 E'arnin~s retained in the business (Note 6).... 106,744,669 100,364,650 199,500,201 192,322,259 Less, Cost of preferred and conunon stocks held in treasurN ............ 3,544,395 3,005,017 195,955,806 189,317,272 $321,717,495 $321,619,504 TIM~ 440307 V'J

l h,~ll~~_! Ii'IL~ I A, A-S-R PRODUCTS COJIPANY. Acquired in llay 1960, A-S-R Products division is expected to benefit from the resources of the parent company. In advertising, A-S-R will be able to utilize the greater efficiency of Philip Morris' extensive media franchises. This also permits A-S-R to advertise with ~Yreater flexibility of timing and weight. The merehandisin; and marketin~ skills of Philip JIorris have already proved useful to A-S-R. While separate sales staffs are maintained, the marketing experience of the parent company has been made available to the division. A-S-R has also availed itself of Philip Morris' research, engineering and new product development facilities. This division has, since the acquisition, teamed its own personnel with those of the parent company to explore areas of product improvement and new product development. All this is aimed at creating products of superior quality and demonstrable consumer advantabes. Sidney Weil, President A-S-R Products, at left, with Joseph F. Cullman, 3rd, President of Philip Morris, pictured with display of well-known A-S-R consumer and industrial products. Philip Morris acquired A-S-R in May 1960. TIMN 440302 10

PHILIP MORRIS INCORPORATED (INCORPORATED IN VIRGINIA) AND ITS CONSOLIDATED SUBSIDIARIES ; for tke years ended December .3Z, 1.960 and 1909 (\"ote 1) 1959 \ et sales ......................................... $506,412,297 $498,455,711 Cost of goods sold ................................ 384,340,057 379,060,557 Cost of shipping goods, selling, advertising and generall administration ...................... 75,494,329 73,932,450 -159,834,386 452,993,007 Operating income ........................... 46,577,911 45,462,704 Other income ..................................... 3,227,740 1,610,832 49,805,651 47,073,536 Interest .......................................... 3,465,285 4,192,763 Provision under deferred profit-sharing plan ........ 1,225,153 1,030,602 Other deductions .................................. 1,397,743 1,094,247 6,088,211 6,317,612 Earnings before provision for taxes on income and before equity in net earnings of unconsolidated foreign subsidiaries ................... 3,717,440 0,755,924 Provision for federal and other taxes on income ...... 23,370,292 21,508,447 20,3~7,148 19,247,477 I~(luit~- in net earnings of unconsolidated foreign subsidiaries, less related f ederal taxes on income (--N'ote 1) ............. 637,266 342,327 \ et earnings ............................... $ 20,984,414 $ 19,5SO,SO4 The accompanying notes are an integral part of t72e financial statements. `VIM~S 4,AO3QS 13

VENEZUELA: C. A. Tabacalera Nacional, in which Philip Morris has a controlling interest, makes Marlboro, Alpine. Parliament and Philip Morris, in addition to local brands, in this modern plant. Executive Vice President George Weissman, right, Chairman of the Board and Chief Executive Officer of Philip Morris Overseas, with George C. Dawson, President of the Company's Overseas Division. I'IIII,II' .l/Uh'h'IA'~; OI"l;li'Sl;'_(S The complexities of the world situation, the emer;~int,• of common economic associations and the rise of nationalism throughout the world created new problems -and new opportunities-for the Overseas Division in 1960. Combining all phases of its operation including export sales and sales by subsidiaries and licensees, the Overseas Division in 1960 enjoyed its best year to date. The total net income produced topped all previous records. The gains in the past y ear are due to the continued expansion in overseas markets. In 1960, foreign subsidiary financial results were consolidated with those of the parent company as described in the financial section of this Annual Report. Among Philip Morris Overseas world-wide activities : In Venezuela, when the ;overnment restricted the import of U. S. made cigarettes, C. A. Tabacalera Nacional, a company in which Philip Morris has a controllin- interest, was able rapidly to expand manufacture locally of Philip lIorris brands. Thus, the loss of substantially well-established export sales formerly shipped from the United States was offset. In addition, C. A. Tabacalera -Nacional also manufactures and markets local brands. In Germany, where because of high import duties export sales were negligible, Philip lIorris Overseas licensed Brinkmann, G.m.b.H. to manufacture and sell 11larlboro. This has proceeded most encouragingly. In Canada, construction is well alono, on a new, modern cijarette plant near Toronto. From this plant, TIMN 440300 8

jor thc y(ars ertrlcd DecemLer J1, 1,060 and 1;)j3 (Note 1) Capital surplus : Balance at beginning of year, as previously reported ................... Add: Excess of par value of common stock of A-S-R Products Corporation over par value of common stock of Philip Morris Incorporated issued in exchange theref or Capital surplus of A-S-R Products Corpora- tion at December 31, 1958 .............. Balance at beginning of year, as adjusted: .. ... Excess of proceeds over par value of cammon stock issued under stock options. .:. ... . Adjustments for retirement of preferred stocks through sinking fund ................... Adjustments for common stock issued under A-S-R employees' stock option plan as- sumed by the Compan.. ... . .. . ..:... ... Balance at end of year..... :..... EARNINGS RETAINED IN THE BUSINESS: Balance at beginning of year, as previously reported ................... Add, Earnings retained in the business of A-S-R Products Corporation and its sub- sidiaries at December 31, 1958 (Note 1) .. Add, Equity in undistributed net earnings of foreign subsidiaries not previously in- cluded in consolidation, less related fed- eral taxes on income ................... Balance at beginning of year, as adjusted ...... Net earnings per accompanying statement ..... Deduct : Cash dividends declared : Philip Morris : = On cumulative preferred Stocks : 4% Series ............ : . . . . . 3.90% Series ........ ..... On common stock ............... A•S-R, on common stock.... `...... Expenses incident to the combination of Philip Morris and A-S-R ........... Balance at end of year (Note 6) ... The accompanying notes are an integral part of the financial statements. 16 1'l),n 19-59 $ 3r,-136,056 6,001,700 241,656 $ 44,605,434 43,679,412 908,616 882,551 56,962 43,471 42,500 - $ 45,613,512 $ 44,605,434 $ 84, 789,801 7,325,102 92,114,903 824,518 $100,364,650 92,939,421 20,984,41-1 19,589,804 121,349,064 112,529,225 658,944 672,414 351,571 351,571 12,889,327 10,368,564 13,899,842 11,392,549 196,380 772,026 14,096,222 12,164,575 508,173 - 14,604,395 12,164,575 $106,744,669 $100,364,650 TIMN 440308

© President Joseph F. Cullman, 3rd, discusses the purchase and blend of quality tobaccos used in the Company's new Philip Morris Commander during his Fall tour of Kentucky auction markets. From left to right, Edwin W. Humphreys, President of Southwestern Tobacco; Mr. Cullman; J. Pinckney Harrison, Chairman of the Board of Universal Leaf Tobacco Co.; and Wirt H. Hatcher, Senior Vice President of Philip Morris. By direetin, major mana~e- ment attention to the continuation of basic engineering and machinery development programs, "cost of prod- uct" Naas held at previous year's levels relative to sales. Increased efficiency offset the higher costs of leaf tobacco, materials, labor costs per hour, and related improvements in frin;•e benefits. The _1Ianufacturing Department was charged with developinlp- a king size, non-filter cigarette, to be so en,ineered as to set a new high quality standard in cigarette manufacturing. The cigarette was destined to become Philip Morris Commander. To accomplish this, a radical departure in cigarette manufacturing technolo~,•y Nvas employed. In cooperation with the 1Iolins Machine Company, the delivery of DIolins Mark VIII Makers was expedited. These new and unique machines are the most revolutionary development in cigarette manufacture in t«-enty-five years. In the past, the industry's making machines depended upon gravity to drop the tobacco onto a movin, belt. The continuous vacuum action of the Mark VIII holds the tobacco in shape. This air jet delivery is continuously controlled electronically with utmost precision. The end result is a cigarette with uniform texture, firm, well-packed ends, and a solid feel. Independent tests prove Commander the most evenly packed cigarette of its type on the market. Successful meeting of the good sales demand for Philip Morris Commander attests to the skill of the operating personnel in adapting themselves quickly to the most modern manufacturing methods, thus rontinuin~_- to ;•ive the CompanY a competitive edge iu 1>rodnct quality. !, f', . 1F Despite a larger 1960 crop of Bright flue cured leaf, an active demand existed durin,r the entire buying season and the average price of the crop was somewhat higher than in 1959 due chiefly to the higher prices paid for certain grades. The market was also affected by unusually active forei;n buying. Overall quality was slightly better; there were fewer undesirable hybrid types produced. The Company purchased considerably more Bright leaf than in 1959, replenishing inventories to normal. A summary of daily analyses of each grade made by our Research Center confirmed the judgment of the Company's buyers that the Bright leaf we purchased was unusually ripe, mild and flavorful, and will assure a continuance of the high standards established for the Company's eigarettes. While Burley leaf encountered bad weather at planting time, growing conditions improved during later critical periods and acceptable quality for the most part was produced, with slightly fewer pounds than in 1959. The average market price was higher. The Company's increasing requirements necessitated appreciably larger purchases to bring leaf inventory to the proper level to insure the use of only fully aged tobacco. Very satisfactory purchases of Turkish-type leaf were made in 1960, in terms of both quality and price. TIMN 440297 5

position in this larye market. Reco(ynizinc, the -rowin; importance of our wholly owned and majority owned foreign subsidiaries, we adopted a policy in 1960 of consolidatin~ the results of these subsidiaries into our overall financial results. Sales and profits of wholly owned subsidiaries and our equity in profits of our majority owned foreign subsidiaries are included in the Consolidated Financial Statements. In April, the stockholders approved the acquisition of the assets of A-S-R Products Corporation for about 363,000 shares of Philip Morris Common Stock. We referred to this acquisition as a possibility in last year's Annual Report and later described the affairs of this corporation in a detailed proxy statement sent to all stockholders. A•S•R is a major producer of razors and blades in the United States and England under the trademarks Gem, Pal, Personna and Fver-Ready. We have been coneentratinn, first on improving the A-S-R line of products with major emphasis on research, product development and new products. During the year, we disposed of two small California operations of A•S•R, Com Air and L".S. Relay, which did not fit our objectives for A-S•R. We are optimistic about the future for A-S-R and the opportunities for enlarging the A-S-R business, especially in the razor and blade fields. 1960 was not a good year for Milprint, Inc., our flexible packagin,- subsidiary with headquarters in Milwaukee, Wisconsin. Although sales volume was down only moderately, profit margins continued to reflect the hi~--hly competitive nature of the packaging industry ~,enerally, in which production capacity presently eteeecls demand. During the year, we placed in full operatin_g commission our new ;•lassine and sulphite paper mill at Nicolet, a llilprint subsidiary. This new mill will add importantly to the Nicolet output and is already contributing to Nicolet's profits. _lIajor organizational chan~es at lIilprint were effected during the year. Plant facilities on the East Coast were consolidated at Downingtown, Pa., and on the West Coast at South San Francisco, when a major addition to our plant there was completed. Since its acquisition in 1957, we have effected important changes in the organization, method of operation and facilities of Milprint. Under more favorable conditions in the national economy and the packaging industry, these changes should produce improved sales and profits for Milprint. Polymer Industries, Inc., our small chemical and adhesives subsidiary, completed the construction of new polymerization and solvent plants. Sales and profit trends at Polymer were favorable as our new facilities reached expected levels of productivity and efficiency. We were particularly pleased by the contribution made by our expanded research activities now housed in our new Research Center at Richmond, Va. This fine facility is attracting a high caliber of personnel interested in scientific research and is providing them with the most modern equipment available. Important contributions to our complete product line, including those of A•S-R, are being made by our Research Department. As for the future, we are optimistic for reasons we believe to be sound : the ~reater than averaae increase in the growth of the world's population in the 21 to 35 age group, which smokes more cigarettes than any other a;e category; the continuing rise in the number of women smokers; and the strong overseas demand for American-type ciaarettes, coupled with the fact that in less mature economies abroad, consumption of cigarettes is browin; at a far faster rate than in the United States. Philip Morris has emerged from the industry's period of change in a strong position, competitively represented in every smoking eategory by a well designed and well packaged cigarette. The quality traditionally associated with your Company has never been hi~her. I would like to extend mana;ement's appreciation to the men and women of Philip Morris. Their eneraies, their talents and loyalty have made your Company's year a successful one. JOSEPH F. CULLMAN, 3RD New York, New York President March 3, 1961 TIMN 440295 3

The year 1960 was one of continued pro,•ress for Philip Morris. Net sales of $506,412,000 were 1.6 per cent greater than the $498,456,000 for 1959. Net income of $20,984,000 compared with $19,590,000 for 1959, an increase of 7.1 per cent. On a per common share basis, net income was $5.44, up from $5.08 last y ear. Unit cigurette volume and dollar sales set a new Company record, and sales and earnings increased for the seventh consecutive year. Dividends of $3.60 per share were paid on the Common Stock, $4.00 on the 4% Cumulative Preferred and $3.90 on the 3.90% Cumulative Preferred Stock. Payment on the common shares-up from $3.00 in 1959-represented the 33rd consecutive year of payment on Philip Morris Common Stock. Ci,,urette sales continued to improve. They were the most important factor in the successful year experienced in 1960. In the late summer of 1960, this Company introduced Philip Morris Commander in the S5mm full kin(,r size field. Commander was the first ci:;arette to offer the American smoker the hioh standard of uniformity, firm ends, fullness of packing and "vacuum cleanino," of tobacco supplied by the new Mark VIII ci-arette makino, machine. This revolutionary new machine makes a noticeably better ci~l-arette and is the first major advance in cigarette making technique in many years. The public's response to the new Philip _lIorris Commander has been most (Yratifying. Sales of this product were up sharply over Philip Morris Longs, and by year-end the long decline in the Philip Morris brand had been reversed and an upward trend was developing. All our filter brands showed strength, especially Marlboro, now popular in both the flip-top box and the king size soft paek, which was running about 10 fo ahead of the 1959 sales rate throughout the last quarter of 1960. Recessed filter Parliament continued to show strength, especially in the king size soft pack. Our Alpine brand, combining fresh filtration, li,rht menthol and fine tobaccos further established itself in this ~rowin; cateaory. A dignified new desian was developed for our Benson & Hedges packet and introduced in the summer of 1960. Sales of this hi;h quality product, which is America's laraest selling premium priced, premium quality ci;arette, reacted well to our promotion and to the new packet as volume increased over the previous year. Philip 1lorris Overseas enjoyed another year of sales growth, market development and expansion. During the year, the exportation of American made ci-arettes to Venezuela came to a halt due to that ~overnment's policy and, accordin~ to plan, we began manufacture there of Philip Morris, Marlboro, Alpine and Parliament cigarettes in our subsidiary, C. A. Tabacalera Nacional. The reception of these brands manufactured in Venezuela has been favorable, and we have been successful in maintaining our important position in this market. We also make and sell in Venezuela brands employing only tobacco ~rown in Venezuela. At the year's end exchange controls were in effect in Venezuela, but dollars were being received by us for tobacco and materials shipped from the United States. A conservative accounting approach to profits accruing to the parent company has been adopted until the exchange situation in Venezuela becomes clearer. During the year, Philip Morris Overseas improved its position on the European continent, especially in West Germany, where 11Iarlboro was successfully introduced under a manufacturin- ayreement with the Brinkmann Company. Our Overseas Division also improved its position in France, Italy, Spain and Sweden where Philip Morris and Marlboro are leading American made brands, and in Switzerland, where Marlboro has aa leading position. In Canada we broke ground in Brampton, outside of Toronto, for a new ultra-modern cigarette factory for our wholly owned subsidiary, Benson & Hedges (Canada) Ltd. In England, we moved into new and enlarged facilities. Philip Morris (Australia) Ltd. had a good year notwithstanding competition for the first time from American made cigarettes imported into Australia. Profits were about $500,000 with sales of both Philip Morris and Marlboro showina encoura~inb trends at the year's end. In the Philippines, Philip Morris made important progress, and the 1l'Iarlboro brand was successfully introduced. In Latin America, Philip 11lorris brands have been traditionally strong and, during 1960, enjoyed fine sales in a number of good neighbor nations to the south. We hope and plan to expand our TIMN 440294 2

AUSTRALIA: Sales and profits increased again during 1950 for Philip Morris (Australia) Ltd. Marlboro and Philip Morris are made by this subsidiary, as well as Revelation, a local filter brand. completely equipped with the world's latest cigarette manufaeturing equipment, Benson & Hedges (Canada) Ltd. will enter thc Canadian cigarette market. This subsidiary's ei<,ar operations, located in Montreal, showed moderate pro~-gress in 1960. In England, Philip Morris & Co., Ltd. moved into new, larger facilities and reinforced its management with avie«- to expanding their efforts in that area. Philip Morris (Australia) Ltd., has made encouraging penetration of the Australian market. The Swiss licensee, Fabriques de Tabac Reunies, S. A., reports that Marlboro is the leading seller in its cate(yory. The P1lilippines licensee has enjoyed sales so favorable that production has been restricted to meet the limited availability of American-grown leaf. In man' v areas of the world-Europe, Middle East, Africa, the Far East- and South America-demand for Philip Morris products often exceeds the ability to meet requirements because of local import or currency restrictions. Many of the above and similar activities reflect the Company's approach to expansion overseas. Through investment, licensing or similar arrangements on export sales, Philip Morris has flexibility to secure true international development of business. To further the Company's world-wide marketing operations, Executive Vice President George Weissman, formerlv in charge of marketing, has been appointed Chairman of the Board and Chief Executive Officer of Philip Morris Overseas. ENGLAND: Philip Morris & Co., Ltd. moved into a new plant in London during the year and also reinforced its management. Marlboro, Alpine, Philip Morris are made by the English subsidiary. CANADA: Top, architect's rendering of the new plant near Toronto for Benson & Hedges (Canada) Ltd. Bottom, by the end of the year, construction was well under way on the modern Canadian facility. Subsidiary expects to enter the Canadian cigarette market in 1961. TIMN 440301 9

('o.VSOhwATA'D S7'<>,z'r_1IrXT OF SOL-hCE AND I;SE OF I'L'VDS Year endecl December 31,1960 (000 omitted) SOURCE OF FUNDS Net Earnings .......................................... . $20,984 Depreciation ........................... ................ 5,362 Shares Issued under Stock Option ..... ..... 1,071 Disposal of Fixed Assets ..... ................. 3,709 Reduction in Current Assets ................... 2,420 Other, Net ................................................ 1,024 $34,570 USE OF FUNDS Capital Improvements ............................ $ 7,300 Additional Investment in C. A. Tabacalera Nacional (Venezuela) .................. ..... 1,530 Payment of Short Term Loans ................ 8,594 Payment of Long Term Debt ...................... 2,068 Common and Preferred Stock Purchased for Treasury ................................ ....... 813 Expenses in respect to A•S•R Acquisition 508 Dividends Paid to Stockholders ............ 13,757 $34,570 For the seventh consecutive year llie Comhany r(,ported increases in both sales and eai"n- im,•s. Consolidated net sales in 1960 were up 1.6cl'(, over t959 to a record high of $506,412,000 and consolidated net earnin,>•s were $20,984,000, or 7.11/~o over 1959. It was pleasing to note the improved profit marain repre- ,ented by this percentage gain in net earnings in spite of the relatively unfavorable sho«-in~ of non-tobacco subsidiaries and divisions. Consolidated net earnings, after provision for dividends on the preferred stock, amounted to $5.44 per share compared to $5.08 in 1959, as restated to include the A•S-R Products division and forei~,n subsidiaries. Thus the Company comfortably covered its dividend of $3.60 per common share, an annual level to which it was raised by the Board of I)irectors beainnina with the January 1960 quarterl,r payment. The Company retained $6,888,000 of net earnim,•5, «-hieh with depreciation of $5,362,000 more than paid for 1960 capital outlays of $7,300,000. For the first time, Philip JIorris has this year included fore ign tobacco subsidiary figures in the financial statements. The Principles of Consolidation are set forth in the notes to the audited statements; broadly speaking, the Company has consolidated in full all its n-holly owned foreign subsidiaries, and has included in the financial statements the net earnings of forei(,n subsidiaries not wholly owned only to the extent of its interest in them, and after related income taxes. In accordance Nrith the public announcement of October 26, 1960, the Company has been acquiring its ('ommon Stock in the open marl:et, and at year-end held a modest amount as reflected in notes to the financial statements in this Annual Report. As was announced, this stock, and additional shares which may be thus acquired, are to be available for possible use in connection with future acquisitions, stock option p1ans and other corporate purposes. DISTRIBUTION OF THE SALES DOLLAR year ended December 31, 1960 Manufacturing & Distribution Costs ............ 44.03G Excise Tax .................................................... 34.74~ Employee Salaries & Fringe Benefits ... .... . 12.27G Federal & Other Taxes on Income ............ 4.62~ Interest & Net Non-operating Costs ........... .20~ Stockholders' Dividends .............................. 2.78G Reta i ned Earn i ngs .............................. .... ...... 1.36~ TIMN 440296 4

With two members of A•S•R management on the Philip Morris Board of Directors, and with A•S•R management unchanged, conditions are appropriate for fullest exploitation of the opportunities foreseen in the acquisition. .IIILPRIN1', INC. In August, former President Arthur Snapper became Chairman of the Board and Chief Executive Officer of Milprint, the Company's flexible packaging subsidiary. Fred M. Stefan was elected President. His background and experience are ideally suited to the planned progress and expansion of this subsidiary. AIilprint's South San Francisco plant added more than 57,000 square feet to its existing plant and all West Coast operations were consolidated at that site. At DePere, Wisconsin, Milprint subsidiary -Nicolet Paper Corporation completed a plant expansion to accommodate a new paper making machine. The added producing capacity, coupled with the finest available tinishing equipment, makes it possible for Nicolet to market many additional types of specialty papers. Throughout the year, Alilprint gained greater flexibility in its operations. The industry of which it is a part is fast changing; favored packaging materials and their combinations change as quickly as new processes and new products are developed. Jlilprint is committed to no one packaging material. Its versatility and ability to offer combinations of packaging best suited to the customer's needs is an advantage to Milprint's customers and a sound basis for this subsidiary's operations. POLYMER INDUSTRIES, INC. Polymer completed new solvent adhesives and polymerization plants at Springdale, Connecticut, in September. The latter facility now produces a substantial share of Polymer's own requirements for standard polymers at costs which should favorably affect profits. As a further result of adding polymer capacity, this subsidiary in 1961 will broaden its market base through the sale of synthetic resins, and will expand its sales as a formulating chemical company. Sales of chemical additives for textiles-a vital part of Polymer's business-were ahead of the previous year. The world's largest supercalender for making glassine complements new paper machine in Nicolet Paper Corporation's expanded plant in DePere, Wisconsin. All equipment is the most modern available. I'll/1Jf' )l0l,hlS Philip Morris' research program was further strengthened during the year. The Research Center staff was expanded to include additional senior personnel with important skills in various fields. Two new laboratories-for radio chemistry and biochemistry research-were fully equipped and staffed in 1960. The Research Center is carrying forward a basic program aimed at the technical problems in all aspects of the Company's business as well as product development work in the tobacco area. In addition, each of the subsidiaries has product development (Yroups active in its specialized field. Contributions by Research to Purchasing, .lIanufacturina and Marketing were significant. Research on leaf, cigarette components and packaging materials is reflected in standards of highest quality maintained in the Company's products with no increase in costs. Flavor evaluation and improvement were important areas of activity aimed at meeting the public's demand for full-flavored tobacco products. Utilization techniques were developed to improve efficiency of leaf usage and product quality. The Research Department performs scientific and technical services for all units and subsidiaries of the Company. The continuing growth of this, activity indicates the importance of the Research Center to the Company's diversified business. TIMIN 440303 11

PHILIP MORRIS 100 PARK AVE. NEW YORK 17, N. Y. INCORPORATED TIMN 440314

Cooperating with Molins Machine Company, Philip Morris personnel made Marlboro cigarettes on the Molins Mark VIII maker at the British Trade Fair in New York. Philip Morris' Janice Taylor greets distinguished visitor, the Duke of Edinburgh. : l i:( , 1 l l. f: . In October 1960, the following executive changes were announced: Georo-e Weissman, formerly Executive Vice President, Marketing, was named Chairman of the Board and Chief Executive Officer of Philip llorris Overseas. Mr. Weissman will continue as an Executive Vice President of the parent company. Clifford H. Goldsmith was elected Vice President, Subsidiary Relations; and Hu,(Xh Cullman, formerly Treasurer, was elected Vice President, Assistant Chief of Operations. John E. Cookman, Vice President, Diversification, was also elected Treasurer. Ross R. \Iillhiser was appointed Vice President, Director of .llarketing. He had previously been Vice President and Assistant Chief of Operations. George J. Henn, Vice President, Distribution and Customer Service, retired at the end of the year. He had been Nvith the Company for thirty-seven years and had been a Vice President for the past seventeen years. ll:l: Mutually satisfactory labor ne<,otiations were completed during 1960 with the unions which represent most of the Company's employees. The successful completion of these ne`•otiations reflected the continued history of sound, understandin;• relations between Philip Morris and its men and women, both union and non-union. A comprehensive major medical insurance plan, formulated especially for Philip Morris, was put into effect for all salaried employees late in the year. 71: ( 171i:1,: ,Vsllll' In December, former Career Ambassador and Lnited States Information Agency Director George V. Allen was elected President of The Tobacco Institute. He succeeds The Honorable The Philip Morris Derby Festival Show, during Louisville's famous Kentucky Derby Week, identifies Company with community. From left: Spencer T. Jones, plant manager; Parade Grand Marshal Raymond Burr, star of TV's Perry Mason; Lillian Campbell, Derby Festival Queen; and famous Johnny. Free show, which features top talent, attracts more than 20,000 Louisvillians and Derby visitors each year. James P. Richards, Special Presidential Ambassador and former Conl-ressman from South Carolina, who has retired. Mr. Richards' valuable counsel will still be available to the organization. Philip Morris has actively supported the work and the aims of the Institute since its inception three years ago. The Tobacco Industry Research Committee-now in its seventh year-has contributed $4 million to research designed to determine the relationship, if any, between tobacco and health. Philip Morris, along with other tobacco manufactttrin- and leaf companies, contributes to the TIRC. Their research is organized and grants are allocated throu~h a scientific advisory board composed of some of the nation's most distinguished scientific leaders. Those interested in the reports of the TIRC may write to Executive Director, 150 East 42nd Street, New York 17, N. Y. The Tobacco Tax Council, Richmond, Virginia, researches and reports information pertaining to taxes on tobacco products. Today, 47 states and 324 municipalities collect cigarette taxes in addition to the eight cents per pack imposed by the Federal Government. The inequitable tax burden imposed on smokers is a matter of increasing concern. The Council has just published a booklet on this subject which is available on request to The Tobacco Tax Council, 1000 N. Thompson Street, Richmond, Virginia. The role of the corporation in the community and the industry continues to expand. Your Company's management is keenly aware of the responsibilities and benefits of good corporate citizenship. Just as Philip l'Iorris is known as a leader and innovator in research, production and marketing, the Company conducts its operations in a responsible manner that will continue to enhance its relationships with investors, employees, customers, and communities. TIMN 440304 12

The preferred stock is redeemable at any time, otherwise than ,~through sinking funds, at $105.50 per share plus accrued divi- ~'~~ ' dends for 4% Series and at 5100.75 per share plus accrued divi- dends for 3.9011o Series. 1. PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of all wholly-owned active sub- sidiaries. Effective January 1, 1960, the Company changed its accounting practice (1) to include in the consolidated financial statements the accounts of all wholly-owned foreign subsidiaries, (2) to include in consolidated earnings the equity of the Com- pany in net earnings of unconsolidated foreign subsidiaries more than 5070 owned, less a reserve for federal taxes which may be payable on these earnings in the event of their remittance. For comparative purposes, 1959 earnings have been restated on the same basis. The equity of the Company in net assets of unconsolidated foreign subsidiaries at December 31, 1960, exceeded the cost ($5,848,437) thereof by $1,709,640. In 1960, the Company by an exchange of its stock acquired the net assets of A-S-R Products Corporation. For accounting pur- poses, this transaction was treated as a pooling of interests; con- sequently, the accompanying balance sheets and statements of earnings and surplus include the accounts of both companies for each period shown. 2. INVENTORIES: December 31 1960 1959 Tobacco and tobacco products at average cost: Leaf tobacco ................... $170,926,863 $173,215,691 Manufactured stock and operating sup- plies ........................ 21,705,610 21,602,935 Other inventories, at the lower of cost (first-in, tirst-out) or market ..... 16.693.301 16,148,644 $209,325,774 $210,967.270 5. STOCK OPTIONS: At December 31, 1960 and 1959 there were outstanding options held by officers and other key employees to purchase, subject to certain limitations, 79,131 and 74,932 shares of the conimon stock of the Company, at closing market prices ranging from $43.1`_'5 ($35.75 for 207 shares assumed under a• S• R stock option plan) to $70.75 and from $43.125 to 863.875, respectively, and the unoptioned shares available for the granting of additional options were 3,319 and 25,734, respectively. During 1960, options for 23,750 shares were granted at market prices on the dates of grant of $70.75. Options granted in prior years were exercised during 1960 for 18,423 shares at prices from $43.125 to :363.875 per share and options for 1,335 shares were canceled. In addition, the Company assumed the existing stock option plan of A• S• R Products Corporation under which, at December 31, 1959, 6,203 shares of the Company's stock were under option at prices ranging from $35.208 to ffi40.6`?5 per share. During the year, options for 5,660 shares were exercised and options for 336 shares were canceled. 6. DIVIDEND RESTRICTIONS: Under the provisions of the agree- nients covering long-term liabilities and preferred stock, there are certain restrictions with respect to the payment of dividends (other than stock dividends) on the common stock and to the purchase, redemption or retirement of capital shares. At Decem- ber 31, 1960, under the most restrictive of these provisions relat- ing to the 47/,.;C/o Sinking Fund Debentures, approximately $52,200,000 of the consolidated earnings retained in the business was free of such restrictions. 7. DEPRECIATION: Provision for depreciation of plant and equip- ment charged to costs and expenses aggregated $5,361,975 in 1960 and $4,931,618 in 1959. 3. LONG-TERM LIABILITIES, less amount due within one year in- cluded in current liabilities: December 31 1960 1959 Sinking Fund Debentures: 25/s%, payable $1,600,000 annually and balance of $16,000,000 on April 1, 1966 ......................... $22,400,000 $24,000,000 4~/s%, payable $2.000,000 annually from 1965 to 1978 and balance of $12.00 0,000 on June 1, 1979 ...... 40,000,000 40,000,000 41/a% Not from 1 es, payabl 962 to 19 e $400,000 annually 66 and $1,000,000 in 1967 ......................... 3,000,000 3,400,000 Other .... ........ ................. - 67,500 $65,400,000 $67,467,500 4. CAPITA L SHARE S: Authorized at December 31, 1960: Preferred, 287,402 shares Common, 5,000,000 shares Outstanding (including treasury stock) : 960 959 Preferred: 4% Series ....................... 169,862 171.861 3.90% Series .................... 117,540 118,847 Common ........................... 3,680,364 3,656,281 In treasury: Preferred: 4% Series ........ . ............ 6.401 6,500 3.90% Series .................. 27.395 28,702 Common ......................... 8,732 - The Company is required to set aside annually in sinking funds, amounts sufficient to redeem 1,999 shares of preferred stock, 4% Series, at $105.50 per share, and 1,307 shares of 3.90% Series at $100.75. Shares held in treasury at December 31, 1960, are suffi- cient to fulfill sinking fund requirements for the ensuing year. OPINION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TIMN 440309 17

I'IIILIP JIURR1,5' I\COHI'ORATI?U ITS DIVISIOJ'S. A51 13SII)IAIi11iS AND AFFILIAThS PHILIP 1IQRRIS I\ CORI'OR a'I'P;D 100 Park Avenue \ ew V ork 17, New 1"ork PLANTS Richmond, Virginia Louisville, Kentucky PHILIP MORRIS OVERSEAS 100 Park Avenue N ew I ork 17, New York Benson & Hedges (Canada) Ltd. Philip _llorris (Australia) Ltd. Philip Morris & Co., Ltd., Eno-land C. A. Tabacalera Nacional (Venezuela) LICENSEE OPERATIONS Fabriques De Tabac Reunies (Switzerland) La Suerta Cibar & Cinarette Factory (Philippines) Tabacalera Nacional S. A. (Panama) Brinkmann, G.m.h.H. (West Germany) 3IILPRINT, INC. 4200 N. Holton Street Milwaukee 1, Wisconsin PLA\ TS Milwaukee, Wisconsin Downinbton, Pennsylvania South San Francisco, California I)ePere, Wisconsin Nicolet Paper Corporation, DePere, Wisconsin A-S-R PRODUCTS COHPAN Y 380 Madison Avenue New York 17, New V ork PLA~:T-Staunton, Virginia S Supreme Produets Corporation, Chicago, Illinois The Li~htfoot Company, New York, New York Ever-Ready Razor Products, Ltd., London. England Pal Blade Corporation, Ltd., Montreal, Canada POLYMER INDUSTRIES, I NC. Viaduct Road Sprin~dale, Connecticut PLANTS Springdale, Connecticut Greenville, South Carolina TIMN 440312 _lrxomrl tlie tcell-J;rtutcr~ prurhtrfs iiutr p,rrt f Pl,ilip llor•ris a.s a res0t oJ tlre rtrrlozsitir,rr of 1'rrl Irrjector ruwl Grnr Sirirjlrdllc bindrs, siu.yit•rrl blrarles, I;t•er--Rr,rd,l .,hrn•iriq br?rs1irs. Sirprci}tc Ilrrir ('xttiitq Kits, l,•nite xhru•pcrtrrs r,xrl ,lr•ill riziul,s. hlle A'S•Ii CwiljJQ7(jf (li('i.<2rr)t'.: 1)IY171r1 N,li)1Ps rU'r' r•rrr ~l0>rcl ( t•c r•,ftt•hc r, ror flir ir (jrrrrlit.)f rnrrl crrlrtr'. 20 PRINTED IN U. S. A.-DESIGNED BY DESIGNERS 3-PRINTED BY DAVIS. DELANEY. INC.

100 50 4 1954 t855 t'85a 1957 1958 tS9 198t SALES _ EARNINGS 15, 19% _ DIVIDENDS SALES _ OPERATING INVESTMENT* *Operating Investment is the sum of "total current assets" and "plant and equipment" at cost, as shown on the Company's consolidated balance sheets. SEV~.E~-1~ YEAR: .I'INA1'VCIAL RL'VIEW"j (Itt thousands, except bast four columns) Earnings Shipping Before ' Seliiez Federal Net Earnings _ Adrt'Y k and Other Net Excise Cost of Cen't 'Taxes Prefit SaNSS Taxes 6oodf Sold AdRia. on Income (2) Amount Margin t860',. $5U6;412' $175,947 $384,34fl $75,494 $43,717 $20,984 19591, 498,456 168,608 379,061 73,932 40,756 19.590 t9Sf8 473,022' 163,(J23 360,763' 67,$55 39,743 18,705 1957 439,596 - 157.646 336,718 62,529 35,451 17,441 19~ 409,934 144.165 320,010 53,809 31,682 15,544 1955 358,789- " 126.254 282,844 44,135 28,275 13,212 11954; 352;674' 129,438 280.086 41.736 27,103 13 020 NOTES: ~, BDOK VALUE PER SNAA Net "•ina Retain.d D[ridends dedxed ' -~ -- - --~- . % ef Nrtt : Arte.a1 Com.on , Prefmad Areooet EernieBs Oeprocie 4,1°la . $13,085 3.9% 4.0°'0 4:0°l0 3.8P/Q 3,7% 3.7% 11,140 10,467 10,017 9,516 9,074 9,604 $1,011 $6,988 32.8 0 $5,36Z 1,024 7,426. 27.9% 1,037 7.201 38.5% 1,039 6,385 3fi.6°e 1,041 4,987' 32.19a 1.043 3,095 23.4°'a 1,185 2.231 17.1% (1)- These statistics combine inf<7rmation for aii consolidated sutssidiaries. A•S•R 6ivision acquired in 1960 an a pooling of interests Das'is ificluded for all periods shorvn. Wholly owned foreign,subsidiaries consolidated for the first time in 1960 are reflected from tha date•s af . (2) Excludes equities in net earnings_ of unconsolidated foreign 4ubsidiaries more tftian 5040 owned, less related federal taxes on inco TIMN 440310 18

NuuonS $225 t~uoNS tulaNa ~: $14 0 t~2111111111 . . 0 T98t. 1934 1955 T9& 1957 192 1ON` 19W - 1954~ 105 19% tN7 19% 110W 190- 1954 1955 1959, 1957 1953. 190 INVENTORIES - TOTAL DEBT ..;M NET WORTH Debt $209,326 $249,819 $189.457 $67,400 $21,000 $ 88,400 $194,322 Per Cesmoa Share Plant & Plant & Ne. of Capitat Eqaipment Equipment Current Y1orRing toeQ Shert Tangible Ccmnoa htet Dividend Workirtt B.e1c 11 Expenditures (Gross) (Net) Inventories Assets Capitaf Term Term Totat Net Ytorttt Siares (3) Earniegs Declared Capitat Ya1ae' $7,300 $93,641 $59,960 12.380 $90,050 59,655. 8,580 80,906 53.444 8,337 74,009 51,024 13,830 68,464 48,717 6.307 59,574 41,688 7,492 57,185 40,531 210;967 252,239 187,404 69,100 30,0100 99,100 187,419 219,744 271,658 150,I03 30,600 89,400 120,000 179,602 213,209 263,210 149,063 33,700 84.200 _ TOTAL DEBT 117,900 173,466 215,188 263,152 - 148,144 36,500 35;200 121,700 167,514 203,511 249,195 155;412 39,300 67,700 107,000 162,716 191,794 223.508 ' 156,740 37,600 43,100 equities are included irt net earnings for all periods since dates of acquisitiorr.: 80,700 (3) Outstanding: shares include in all periods the equivalent of Philip Morris shares interests basis. 162,542 CAPITAL ~ NET ~ DEPRECIATION EXPENDITURES RETAINED EARNINGS 3,671,632' $5.44 $3.60- $51.60. $46.46 3,656,281 5.08 3.15 51.26 44.79 3,629,109 , 4.87 3.00 41.36 42.79 - . 3,621,345 4.53 3.00 41 16: 4230> , 3,621.345 4.01 3.00 40.91 °'40.64 3.621.137 3.36 3.00 42.92 ' 39.38 3,621,137 3.27 3.00 43.28 38.40 :- ssued in exchange for companies acquired on a pooling o},' , TIMN 440311 19

11<Ijo,r Imlrketing, news, of tlie y<<Ir ~vit, Pliilip Jlorris I"- iii'_r ~~ ize ('omm<luvlcr. introviucevI late in the tliird /lttarter. Cvmunan(ler is made on a remark<Ihle new marliine, the Jlark VIII, that <entl}- V<feut>.m <•le~lns (~Vc•rV hit of tobacco. _liore cvenl* y I,arked and firmer at the ends, Commander is a tioticeablY superior Cigarette. Commander was 1<tunche<1 in <i newly clesio°ned soft pack which continues the i<lentit,y of the famous Philip Morris brand. but at the same time adds ne«- visual elements. The Philip Morris regular size pack %ras sub,eqnently chan<„-ed to conform in basic style components to the Cominander package. Response from the public exceeded expectations. ~ales by- the end of the vear were runnin(y at a rate Considerably ahead of Philip Morris Lona Size for comparable periods a year earlier. Marlboro ei,narette volume was well ahead of sales for 1959. Advertisino, for this brand continued to call attention to its full flavor and esclusii•e Selectrate Filter, and it was obvious from the year's results that JIarlhoro delivered what the a(lvertising promised. I>enson & Hedges appeared during the third quarter of the year in a redesigned packet. I1 ashioned Ily well-known Ilesigner Walter Landor, the new parl:et features an imprinted cellophane wrapper which is removed when the packet is opened. Sales of this brand are rnnnina ahead of the previous year in all maikets. Alpine, placed on the national market in the latter part of 1959, was the only one of a number of brands introduced hv the industrv that year to become firmly established. Its unique blen(l and natural menthol set it apart from competition, and its distinetive packagye design reflects the refreshina characteristics of the cig•arette itself. ['arliament. with the exclusive one-quarter inch reces, filter, increased its share of the hi<h filtration market. "Every Parliament gives y-ou an extra ntar-(Yin" was the advertisin, theme from which ['arli~iment's several advanta,'es were presented durin,r the •-e~lr to the pithlic. The stren,•th of the advertisin!_), behind all Company }>rilncls inerc<3,e(1 a,'ain in 1960. ylarll>ono ,lxrnsored -National League professional football gal)ws ilcross the couutry on CBS-TV for Newspaper and magazine clippings reflect part o President Cullman and Executive Vice President Weissman greet the press at conference to introduce new Philip Morris Commander. the fifth consecutive year. That brand also sponsored the Pro Championship ,•etme and the Runner-Up Bowl, both on NBC-TV. Evening national television sponsored by the Company's brands included The I)obie Gillis "',how, Rawhide, Perry Jlason, Route 66 and Douglas Edwards with the News, all on CBS-TV. Average ratin,•s for all these programs were well above evening television avera,>•e, which meant the Company was realizing ,reater value consistently for each advertisino- dollar ,l~ent. National periodicals such as Life, Look, The New Vorker, Sports Illustrated. TV Guide, The Saturday Review and Time reached millions of people with messanes about Company brands. Leadinn advertisint,• a~encies worked on the preparation and placement of advertising: Leo Burnett Company, Inc. for Philip Morris and Marlboro, smoking tobaccos and corporate; Benton & Bowles, Inc. for Parliament; and Doyle - Dane • Bernbaeh, Inc. for Benson & Hedges and Alpine. A new dimension was added to Company advertisin,r in 1960 when the Compan.y sponsored five public service programs on CBS-TV. Called "CBS Reports," the documentaries treated such subjects as high«-ay safety, problems of international refurees, the fiscal challen,~•es of the national administration, the development of the Navy's Polaris missile and the migrant worker. Philip Morris sales personnel again evidenced their ahility to meet the challenges of constantly changin, marketin, conditions by- successfnlly broadening distribution and promotion as corporate s<tles increased during the year. the excitement created by the introduction of new Philip Morris Commander in 1960. ~ew lor6t~orldd\ Iraram LYea & L&uce - ° s Nip M«iis K&6s Cdkk~r' Newsweek Ift Thame for New K'mq '.".."~ "'., ".....`. Fifl. r,~lr 1,1 (:,haifn t4i,F f,- 1't,ilil, \I,.rri. /.,,,,nn.,n,l,•r 1).Lu1 ..r..rr~s . . .. r1 e:Ere?~e~ ~otk ¢ itEtc~ _- _ _~ dvert~sin~.- Latest Call for Phitip VETaIaxsw ronx~.'.~(tURC , d4uag 3fa~PH sur 0.lah k„wdow• _._ __ .-. -~t Pfcili10Forr1+ liet. tlrire to twuurrh Comma Rew Xing Size Commander latroduted by Philip Morris

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