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1952 PFfiL4P f!s^P&15 & CO. LiE::., ftvCC>RPOP.ATLD F_xectrtirc OfJice,~: l00 Purti ,lrrnnc. ~'ru)"nrk 17, N. }'. ,fIMN 440526

TEXT Highlights of the Year .................. Review of the 1952 Fiscal Year .. . . . . . . . . . Investment and Taxes ................... Sales and Advertising ... ............. . • Leaf Tobacco ......................... Manufacturing ........................ Export ............................... Research ............................. Distribution, Purchasing and Traffic ....... The Philip Morris Team ................. Future of the Tobacco Industry .. . . . . . . . . . TABLES Highlights of the Year ................... Page 4 6 8 10 13 15 18 19 26 21 23 5 Comparison with Industry ............... Center Philip Morris Operations ................ Center Quarterly Results ...................... Center Audited Statements ..................... 24-29 CHARTS Cash Dividends and Federal Taxes on Income 7 How We Used Our Sales Revenue ......... 9 Leaf Inventory, Borrowed Funds and Sales. . 12 Essential Assets Related to Sales .. . . . . . . . . . 13 How Our Market Has Grown ............. 23 OTHER FEATURES Retail Price of Philip Morris in Typical City. 8 Philip Morris Products ............... Center, 32 Plants and Leaf Storage Warehouses ....... 18 Share Owners' Benefits .................. 30 TIMN 440525

The major portion of our improvement and expansion program was completed during the year with addition to our Louisville facilities raising our one-shift manufacturing capacity there by over 80 per cent. Our leaf storage capacity was increased to accommodate in our own premises the storage of strips produced by our ~reen-leaf stemming unit in Louisville. A new areen-leaf stemmery was completed in Louisville and one in Richmond is nearing completion. Operating economies are expected to result. The reQular $3.00 cash dividend was paid on the common stock. TIMN 440528

occurs while inen and cvoiitezj, rela,r-.over ihe`coffet-,cr!ps-"e worId-j-- TIM11T 440524

G. P. Brauburger O. H. Chalkley W. C. Foley L. G. Hanson W. H. Hatcher Alfred E. Lyon, Chairman and Chief Executive Officer O. Parker McComas, President L. G. Hanson, Vice President and Treasurer C. T. Ames, Jr., Vice President E. W. Dinwiddie, Vice President W. C. Foley, Vice President Alfred E. Lyon O. Parker McComas H. E. Riddell K. H. Rockey W. B. Ryan, Jr. W. H. Hatcher, Vice President G. J. Henn, Vice President Ray Jones, Vice President W. E. Liebetrau, Vice President H. R. Blum, Controller C. H. Kibbee, Secretary and Assistant Treasurer Cornelia Craig, Assistant Secretary TRANSFER AGENTS Guaranty Trust Co. of N. Y., 140 Broadway, New York REGISTRARS The National City Bank of New York, 55 Wall Street, New York Bankers Trust Company, 16 Wall Street, New York COUNSEL Conboy, Hewitt, O'Brien & Boardman, 39 Broadway, New York AUDITORS Lybrand, Ross Bros. & Montgomery, 90 Broad Street, New York TIMN 440527

O F T H E Y E A R SALES OF ............................................................................. provided for . . . Revenue stamps ........... ...... ...._....... _....... ........ ...... Tobacco and other costs of manttfacturing and distributing Philip Morris products ... ........... ..... I ....- Interest on borrowed money and other financial costs ......................... ............. . Payments to employees and insurance, hospitalization, pensions and other benefits ...... ................... ....... Income taxes for support of State Governments ... ..... . ......... ......... Federal normal and surtax on income ........ .......................... .......... .......... ..... Federal excess profits tax ................................. .... total Balance ................................................................... ai•ailable for: Payments of cash dividends to share owners preferred ................. ........................................ common ......................................................... Future operation and risk ......... .................... ...... INVESTMENT IN PHILIP MORRIS OF ........... ...... was represented by ... Unsecured loans ....................................... ....... ... Funded debt ..................................... ................. .... Interest of preferred share owners ...................... .. Interest of common share owners .......................... TOTAL PER COMMON SHARE TOTAL , PER COMMON SHARE $306,698,324 $125.28 $305,804,331 $131.16 148,812,213 60.79 147,312,301 63.18 112,394,326 45.91 108,831,875 46.68 3,368,126 1.37 1,855,734 .80 13,776,519 5.63 12,717,276 5.45 415,000 i ; .17 648,000 .28 14,605,000 j 5.96 15,064,000 6.46 700.000 i .29 2,686,000 1.15 294,071,184 , 289,115,186 12,627,140 16,689,145 1,244,311 i .51 1,253,047 I .54 7,341,313 ' 3.00 6,994,632 3.00 ~ 4,041,516 1.65 8,441,466 ; 3.62 241,051,408 98.46 227,139,146 97.42 85,000,000 34.72 75,000,000 32.17 1 32,000,000 13.07 32,000,000 13.72 1 31,385,000 12.82 31,510,101 1 13.51 92,666,408 37.85 88,629,045 1 38.02 TI14N 440529 5

SALES AND ADVERTISING In the field of advertising we have recognized the growing interest in television on the part of the public. Since last October we sponsored the Lucille Ball-Desi Arnaz Show, I Love Lucy, CBS-TV, at 9:00 P.M. on Monday. From an un- known show at that time it has become a first- ranking program. Other sponsored programs in- clude: Against The Storm, ABC Radio, 10:45 A.M., Monday through Friday; Break the Bank, ABC Radio, 11:30 A.M., Tuesday and Thurs- day; The Strange Romance of Evelyn Winters, ABC Radio, 3:45 P.M., Monday through Fri- day; Philip Morris Playhouse on Broadway, CBS Radio, 8:30 P.M., Sunday; the twin programs on WPIX, New York TV Station, with Joe Di- Maggio, Yankee Pre-view and Guest of the Day, which precede and follow each home game of the New York Yankees; Racket Squad, CBS- TV, 10:00 P.M., Thursday. All times given are Eastern Daylight Saving Time. These programs are supplemented by intensive nationwide news- paper coverage. We have endeavored to mold our sales pro- motion, both in advertising and in direct sales work, in keeping with the changing accent of consumer purchases. Our experimental sales promotion activities with the long (85mm.) cigarette, Dunhill, have been restricted to limited market areas in several metropolitan districts. These experiments appear promising but it is yet too early to draw any definite conclusion concerning them. "Lucy" and her husband, Desi Arnaz, receive an award as Board Chairman Alfred E. Lyon tioatches. The studio audience gathers. The accoutrentents of criminals and ineans for their de- tection cover the table in the "Racket Squad" progranv. 10

UNCLE SAM'S STAMP TAX. • TLLI.S 1-YPL( ~AL SCE V'L LS CONT1NL'ED O.V PAGE 12 • HOW WE USED OUR SALES REVENUE (IN PER CENT) reaching proper age. Thus, leaf inventory liqui- dated through manufacture and sale of cigarettes turns into cash. Because of the length of time during which tobacco must be aged, bank loans are used to carry a substantial portion of this inventory. These funds seldom exceed the book value of the tobacco to be converted to cash through sale of the manufactured products within the next year and a half. The sum of our total borrowings -funded debt and bank loans-is in conservative ratio. We do not plan any financing this year. Although there is no valid expectancy of lower taxes in view of the current rate of Govern- ment expenditures and the national debt struc- ture, in our opinion it is unlikely that the Federal excise tax on cigarettes will be raised again with- in the near future. Despite heavy tax burdens, the tobacco in- dustry continues to function soundly. In the last year the Federal Government raised the price of the tax stamp on manufactured cigarettes by 1( per package, an increase of 14%. The tax which this stamp represents, though charged against the ultimate domestic consumer, must be paid in advance by the manufacturer who subsequently collects from the consumer by including the amount of the tax in the sales price. This recent increase raised the portion of our working funds which is continuously advanced to the Govern- ment without interest to about $14,000,000. ~ 1.3 1952 VF1Ci!!!!!2 - --. $ 37.0 ~ 4.2 1951 ~ 3.9 ~t ----3.3 1950 1949 1948 ~ ---- 2.7 .6 36.1 ``4.5 ., -..-- 3.fi _ ~2.a ~ -.7 5 ~ 36.6 ~ 4.4 ~ GouernmenfiRevenue Stamps r Government (State & Federal) Taxes:on lncome: ~Iarnings Retained for Business Needs- ~ Stockholders (Gash~ Dividends) ~ fnterest (and f?ther Financial Costs), Employees Tobacco, Manufacturing, Distribution Costs TIMN 440533

I TIMN 440540

R.` E V f E W O F T t~ E 1952 `~' 1 5 C: A L~ r Y E. A R The Company's large-scale expansion and modernization plans which we reported last year are near scheduled completion. As a result of this expansion, our on::-shift manufacturing ca- pacity will be increased by approximately 40%, making it possible to eliminate the extra night shifts. Our sales volume from prior years was main- tained. Sales in many areas abroad were still restricted by lack of dollars. Export sales of Philip Morris products, including sales to United States Forces, were increased 35 %. We promoted Dunhill, our long cigarette, in several experimental cities during the fiscal year just ended. This product was repackaged in 1951 and the results of its promotion so far have been encouraging. Additional markets may be opened in the current year. Higher excise taxes after November 1, 1951, and the price increase of July 1950, in effect for the full twelve months of the fiscal year, ac- counted for a small increase in net sales. Our cost of goods sold, augmented by a larger outlay for revenue stamps, increased, however, so that with other increased costs, net income after Federal and State income taxes was $4,062,005 lower than in the previous year. The added excise tax of 1 C per package legis- lated in November 1951 brought the amount of Federal tax stamps per package to 8~. These excise taxes collected from the industry were covered by the increased price permitted, but the O.P.S. allowed no further increase. The financial condition of the Company con- tinues strong. Our capital and surplus at $124,- 051,408 offset our complete investment in plant and equipment as well as almost half of our investment in current inventories with the bal- ance covered by debentures and current loans. Current assets were $243,604,297 against current liabilities of $109,004,493, leavinE, working capital of $134,599,804. Our invest- ment in leaf tobacco is $198,803,705. Bank loans of $85,000,000 plus long-term funded debt of $32,000,000 amount to 58.85% of tobacco inventories. After paying the regular dividends on the 4% Series and 3.90% Series of Cumulative Pre- ferred Stock, and our regular dividend of $3.00 per share on the Common Stock, we retained $4,041,516 from the year's earnings, an amount equal to 42% of our increase in fixed assets. Of the funds needed for our program of ex- pansion and modernization, approximately $11,150,000 has been spent since the inception of the program in July 1950. At Louisville, $9,550,000 has been spent on the new green- leaf stemmery, 34 warehouses, and expanded manufacturing facilities. Approximately $950,- 000 remains to be spent to complete the pro- gram at Louisville. Our new factory addition and green-leaf stemmery at Louisville are in operation and most of our leaf tobacco there is already stored in our modern warehouses. In Richmond, approximately $1,600,000 has been spent for the new green-leaf stemmery and ware- houses to be completed about August 1952. Approximately $800,000 more will be spent there to complete the work. The completion of this program brings our productive capacity in line with the cumulative sales gains of recent years and gives us money- saving opportunities in the handling of green leaf not available to us in the smaller volume period of our early years. At the same time it makes possible better working conditions for our employees as the night shift is eliminated. At the Annual Meetincy last July, share owners approved a new formula for computing the ac- crual of the Incentive Compensation Fund. The distribution of such fund is subject, however, to the rules and reQulations of the Waae and Salarv Stabilization Boards. ~ TIllZIN 440530 6

flelen Hayes, President of ANTA, pins medal on Robert Culp, winner of the Intercollegiate Aetirr; Competition ruuler the sponsorship of the "Philip Morris Plcrvhorrse." We sponsored "The Strange Romance of Evelyn Winters" (below) and "Against The Storm" for daytime radio entertainment. Everybody loves "Lucy"! Behind the scenes of the television show. Johnny pays ofJ in "Break the Bartk." A dramatic moment in the "Philip MorJ-is Playhouse." TIMN 440535

~ JOHNNY MAKES A DELIVERY IN PEORIA, ILL. 22 2 SALES TAXES ARE COLLECTED. 22~- ,' I'./•'sa I N V ESTM ENT AN D T.AXES Ow- Louisville plant (rear vieu•). The right-hand portion - which appears to be lighter in shade - is the new addition. 3 JOBBER, DEALER AND RETAILER EARN A LIVING. Our investment in property, plant and equip- ment totaled $19,916,142 after depreciation at March 31, 1952, representing an increase of $9,556,608 durina the fiscal year. This invest- ment includes the major portion of the program of expansion and improvement undertaken more than a year ago. When completed the progranl will account for approximately $12,000,000. Our investment in leaf tobacco is $198,803,- 705 as against $200,151,303 at the end of fiscal 1950-51. This clean, redried tobacco, packed in hogsheads and in the process of aging is one of the most liquid and least perishable of all business inventories. Aging mellows and im- proves the smoking quality of tobacco for up to two or three years after which it maintains its condition without deteriorating. There is no quoted market on leaf in storage, its book value being the accumulated costs of purchase, ship- ping, redrying, storage and other incidental costs averaged by grade each month. Its true value is measured only as the principal ingredient of cigarettes for whose manufacture it has been set aside. . The sale of ciQarettes has a high dearee of sta- bility. The direct cost of manufacturina ci(larettes is onl~a small fraction of the cost of the tobacco thev contain. and it ma\ be safeh, concluded that all the tobacco aging in storane against the manufacture of popular cigarette brands will be consumed r\'the puhlic xithin a short time of its TIMN 440532

SHAr',E OWNERS' REWARD. AND BUILDING FOR THE FUTURE. ESSENTIAL ASSETS RELATED TO SALES ~ PLANT INYESTMENT ;MillionsofDollarsi 30D -- 7 LEAF 1NVENTORY,Miilions of Dollars) 250 - SALES (Mil[ions of Dollars) _ - 200 L E A F T O B A C C O Our domestic and imported leaf departments have broadened this past year both here and in the Orient. The importance to our operations of tobacco of Philip Morris quality is further re- flected in our increased leaf storage capacity. In addition to the thirty-four new warehouses in Louisville, three. have been built in Richmond. Others will be erected in Richmond on land ~ EMPLOYEES (Thousands) which we own there when our building program is completed. These warehouses will give suit- able room for care of our tobacco in our own premises while the aging process brings out the bouquet and character of the tobacco leaf to be used in the Philip Morris blends. Our investment in tobacco this year at $198,- 803,705 is ample, although somewhat smaller than last year, when we bought heavily of the exceptionally good 1950 crop. Philip Morris men visit a leaf market in 1951. Much tobacco is examined in selecting leaf of quality for our blends. From left to right: Mr. M. D. Robertson; Mr. Robert Clark (with back to camera); Mr. E. W. Tucker of Philip Morris; Mr. Wirt H. Hatcher, head of the Domestic Leaf Department of Philip Morris; Mr. 0. P. McComas, President of Philip Morris; Mr. James P. Covington, Universal Leaf Tobacco; Mr. John Poloncak of Philip Morris.

In reviewing export operations, our Board of Directors deemed it wise to cancel our running contract with Tobacco Products Export Cor- poration, formerly sales agents for Philip Morris in a number of foreian countries. The balance of this current contract, drawn up in 1946 to run until 1961, was canceled for its commuted value at January 1, 1952, by agreement with Tobacco Products. We are now in the course of building our sales and advertising forces in some of the areas previously operated by that company. In Paris, Mr. Lyon examines the report of our representatives there, Messrs. Michel Landau (left) and Henri Chevrier (right). Cigarette Factory, General Office, and Domestic Leaf Department Offices -in our original building 20th and Main Streets, Richmond, Va. Cigarette Factory -built in 1937 Stockton Street, Richmond, Va. Smoking Tobacco Factory 19th and Cary Streets, Richmond, Va. The Archbell Warehouse for Imported Leaf and Imported Leaf Department Office Building 15th and Dock Streets, Richmond, Va. Green-Leaf Stemmery and Storage Warehouses Maury Street, Richmond, Va. Cigarette Factory -bought in 1945 and enlarged in 1951 Maple Street, Louisville, Ky. Green-Leaf Stemmery and Storage Warehouses Miller's Lane, Louisville, Ky. TIMN 440545 18

5 TOBACCO AND OTHER COSTS. fi SHARE OF THE PHILIP MORRIS TEAM. ! ,1:EAF 1NVENTORY, :BO RRflWED FUNDS AN0 SALES IN-~NftEt1ONS OF DOLLARS ~ NET SALES ~ NET SALES LESS REVENUE STAMPS ~ Fl1idDED'DEf3T AnD 'BANK LOANS LEAF {NVEWOR(ES 1946 : 1947 1948 1949 :;. 7 INCOME TAXES ARE COLLECTED. ® 11 'TIMN 440536

The new,green-Ieaf stem- 'mery . nearing xompletion in Louisville. A hogshead of.fine tobac- co `Wrips" entering one of our,Louisvllle.warehouses for its long sleep.

35 30 25 20 15 10 5 ln addition to the factory extension, a green-leaf stemmery (upper right) and 34 leaf storage warehouses were erected and equipped in Louisville. This picture, taken last winter, shows the stemmery near- ing completion. All.of the buildings are now completed and in use. CASH DIVIDENDS AiiDfEIIERALTAXES D!t INCOME (MtttlOBS OF DOtilltS) Earnings Retained Cash Dividends  Federal Taes on Income (Above) Mr. C. T. Ames, Jr., Production Vice President (seated) discussing plans for the Louisville factory addition in the spring of 1951. Mr. W. N. McFadden, Louisville plant manager, stands beside him. (Below) Mayor Charles Farnsley of Louisville watches President McComas lay the cornerstone of the Louisville factory addition last July 31. TIMN 440531

MA.NU FACTU R1 NG ~L ith completion now in sight of the factory cxtension at Louisville, the Company's one-shift capacity will be 40%, greater than it was two years ago when the pro~ram was first planned. Factory space was being added while production proceeded, and entire production teams with their equipment were being established in the nevver and more efficient floor areas. Mr. S. T. Jones, Factory Super- intendent, shows a visitor how the new machines at Louis- rille farm cartons 40% faster. This team in Louisville can make your month's supply of Philip Morris in a rrtinrete. W. E. Coffman, maintenance engineer, watches a blending team in operation. Packages of Philip Morris cigarettes come from the packing tnachines with rapid-fire speed and precision. The operator of this fork-lift truck swiftly moves a half-ton of tobacco at a time. TIMN 440539 15

1 I ottr l)ircctor of Research and Develop- nient brings many years of experience in the development and improvement of prodtects through scientifzc research. Dr. DuPuis iras formerly in charge of research and development of S. C. Johnson and Son, Inc. During the war lie x•as engaged in research on vital military materiel. He is a Fellow of the American Instittue of Chemists, and a menrRc•r of the American Chenucal So- ciety and other associations of men in- terested in the advancement of science. When the present Philip Morris cigarette was launched in 1933, it represented a radical de- parture from the current practices in the tobacco industry. The pioneering keynote set by the Company has been followed continuously. The Company has consistently used science and re- search, not only in maintaining the high quality of its products, but in the development of better products. Continuing research makes possible new and better methods of manufacture from the standpoint of quality and efficiency with attendant savings in cost of production. Research is an important factor in all industry today and the Company utilizes research to the fullest ex- tent. A new research laboratory is being planned in Richmond to carry out expanded activities. An increased staff of chemists, physicists, biolo- gists and botanists is being organized. The Com- pany is fortunate in securing the services of Dr. Robert N. DuPuis who will be in charge as Director of Research and Development. The Company is also fortunate in retaining the services of Mr. Willard F. Greenwald, who for many years past has been in charge of our studies of the physiological effects of smoking. He will work closely with Dr. DuPuis. Fine equipment increases research effectiveness. TIMN 440547 19

Vice President W. C. Foley talks to Philip Morris truck driver Earl Hinton. T H E P H i L I P M O R R 1 S T E A M This account would not be complete without acknowledgment of the wholehearted coopera- tion given by the people who make up the Philip Morris Team. Each segment of the Team worked Dieticians prepare superior meals to be served at modest prices in cafeierias maintained for the health and convenience of the Pltilip Morris Team. The purchase of everything but leaf tobacco is controlled from the New York Office of the Purchasing and Distribution Department. The same department expedites the distribution of cigarettes and smoking tobacco to wholesale dis- tributing points, and is closely linked with pro- duction and sales demands. The controlled inventories and systematic ro- tation of our stocks at more than 50 distribution warehouses assurey factory freshness at all times. out its adjustments, whether in sales, administra- tion, accounting, or in the factories where we made the chanae from a two-shift manufacturing routine to a one-shift daytime operation. Our factory unions recognized our problems and ac- tively helped and supported us in our efforts to make the changes as smoothly as possible. TIlVil% 440548

TIMN 440546

1951 1950 Philip Morris As % of Sales Competitors As % of Sales Philip Morris As / of Sales Competitors As °i Sale Sales (1) $306,698 100 % $2,485,163 100 / $305,804 100 % $2,329,961 lOL / Net Income Before Taxes 28,347 9.24 233,202 9.38 35,087 11.47 224,604 4f.6, Taxes (2) 15,720 5.12 141,096 5.68 18,398 6.01 109.817 1.7" Net Income 12,627 4.12 92,106 3.70 16,689 5.46 114,787 - Total Investment (Bank Loans, Funded Debt, Capital & Surplus) 241,051 78.60 ! 1,751,265 70.47 227,139 74.28 1,600,353 ~ 6~'..6~ -- Total Inventories 221,453 72.21 1,614,160 64.96 220,839 72.21 1,473,723 6:, 2~ Net Income Before Taxes plus Interest ..... as Per Cent of Total Investment ...... . $ 32,102 . 13.32 / $ 252,577 I 14.42 % $ 37,035 16.30% $ 243,450 1`.2 Net Income Before Taxes as Per Cent of Net Worth 22.85 24.72 29.21 2. Analysis of Capital Structure Long Term Loans $ 32,000 20.51% $ 486,430 34.02 % $ 32,000 21.03% $ 493,448 34.~ Preferred Share Owners 31,385 20.11 ' 158,374 11.08 31,510 20.71 . 158 374 L"1.2 Common Share Owners & Surplus 92,666 59.38 I 784,838 54.90 88,629 58.26 761.514 5c.. _ (t) Includes Revenue Stamp Taxes (2) Includes Federal and State Taxes on Income and Federal Excess Profits Taxes ANALYSIS OF PHILIP MORRIS OPERATIONS AND FINANCIAL POSITION forthefiscalyearsendedMarch31952 1 ~,5' Net Sales $306,698,000 $305,.30 ANALYSIS OF OPERATIONS Net Sales 100% 10)° Cost of Sales: Revenue Stamps 48.52 48.- Other 32.66 32.2 Gross Operating Profit 18.82 19.` Shipping, Selling, General and Administrative Expense 8.26 7._ Net Operating Profit 10.56 12.2 Other Income .05 Total Income 10.61 12.2 Income Deductions 1.37 i Net Income Before Taxes 9.24 11. Federal and State Taxes on Income 5.12 6. Net Income After Taxes 4.12 5 ; Net lncome as Per Cent of Net Worth 10.18 13, ANALYSIS OF FINANCIAL POSITION Current Liabilities as Per Cent of Tangible Net Worth 87.87 84 Total Liabilities as Per Cent of Tangible Net Worth 113.67 111 Total Deht to Total Investment (including &~nk 48.54 47. Total Debt to lnventories 9 5~ „3 48 --- _. Tangible Net Worth to Total Assets COMPARISON OF PHILIP MORRIS OPERATIONS WITH THE AGGREGATE FIGURES OF ITS FOUR MAJOR COMPETITORS (oOO'somitted) TIMN 440542

A U D 1 T E D F I N A N C I A L S TAT E M E N T S B A L A N C E S H E E T A S S E T S Current: March 31, 1952 and 1951 Demand deposits in banks and cash on hand ...................................... Accounts receivable from customers, less allowance for discounts and doubtful accounts, 1952: $765,867; 1951 : $776,276 .................. Accounts receivable from others ........................................................ Inventories, at average cost: Leaf tobacco (including imported leaf in bond subject to duty).... Manufactured stock Stock in process, revenue stamps and operating supplies .............. Total inventories .............................................................. Total current assets .......................................................... Property, plant and equipment: Land, buildings, machinery and equipment, at cost ............................ Less, Allowance for depreciation .................................................. 198,803,705 15,392,862 7,256,828 221,453,395 243,604,297 25,813,909 5,897,767 $ 9,114,805 11,475,934 . 459,318 200,151,303 14,700,875 5,986,879 220,839,057 241,889,114 15,493,671 5,134,137 19,916,142 1 10,359,534 Other assets: Investment, at cost, in Philip Morris & Co. Ltd. (England) (Note-1) Prepaid expenses and deferred charges .............................................. 235,965 1,299,497 235,965 1,101,385 1,535,462 j 1,337,350 $265,055,901 S253.585.998 TIMN 440554 26

P H I L I P iW O R R 15 & C O. LT D., I N C O R P O R A T E D lrrcorporcrted in Vir;g inia STATEMENT OF EARNINGS Net sales for the fiscal years ended March 31, 1952 and 1951 $306,698,324 $305,804,331 248,977,304 245,937,345 25,319,811 22,496, 784 Cost of goods sold .............................................................................. Cost of shipping goods, sellinQ, advertising and general administration Operating income .............................................................. Non-operating income ........... ............................................................ Interest on debentures ........................................................................ Other interest charges ........................................................................ Provision under incentive bonus plan ................................................ Prior service contribution under company's retirement plan .............. Cancellation of export contract .......................................................... State income taxes .............................................................................. Earnings for year before provision for federal taxes on income .. .................................. .................................... Provision for federal taxes on income (including $700,000 for fed- eral excess profits tax in 1952 and $2,686,000 in 1951) .............. Net earnings for year ........................................................ 840,000 2,033,634 570,044 115,899 635,998 415,000 4,610,575 840,000 1,107,878 311,424 115,899 648,000 3,023,201 i The accompanying notes are an integral part of the financial statements. TIMN 440553

I N C 0 R P TIMN 440562

PHILIP MORRIS BALANCE SHEET STATISTICS (0o0'somitted) 1952 1951 1950 : 1949 1948 1947 1946 1945 1944 1943 :1StiETS Cash & Niarket<,ble Secw-ities $ 11,136 $ 9,115 $ 8,652 ' $ 5,264 $ 4,857 ! $ 4,024 ', $ 2,486 j $ 2,320 , $ 2,455 ' $ 3,175 Receivahles 11,015 11,935 10,810 ! 9,173 ~ 7,196 6,391 ; 7,914 : f 10,063 1 11,017 'I 8,219 Inventories 221,453 ; 220,839 159,611 132,444 93,913 98,812 1 112,745 87,280 I, 69,948 j 70,570 Other Current Assets -~ -; I - - I ; 1,867 i • 206 4,290 ; 102 Total Current Assets 243,604 ; 241,889 179,073 '~ 146,881 105,966 !, 109,227 i 125,012 ! 99,869 i 87,710 ; 82,066 Net Property Account 19,916 i 10,360 8,971 ' 8,301 6,828 i 6,468 I 4,989 j 5,110 ', 3,471 : 3,723 Prepaid Items & Other Assets 1,535 ! 1,337 1,051 ~ 1,117 937 j 1,049 1,391 1,929 j 3,304 !, 3,286 Total Assets 265,056 ! 253,586 189,095 156,299 113,731 j 116,744 ':; 131,392 ~I 106,908 '~ 94,485 ' 89,075 Number of Employees 3,707 3,786 3,420 3,554 3,285 3,405 3,904 4,753 3,881 2,970 LIAB[L1TIE5 Notes Payable $ 85,000 I $ 75,000 ~ 55,500 $ 30,000 ~ $ - $ 5,500 I $ 44,000 ! $ 16,000 ; $ 5,000 '$ - Federal Taxes 15,414 17,760 9,415 ; 7,811 ! 3,431 3,440 2,681 ~ 6,992 6,028 , 7,917 Accounts Payable 2,773 ', 3,020 5,057 I, 6,773 ; 5,753 ' 3,866 ' 2,574 5,047 '. 6,952 5,427 Other Current Liabilities 5,818 ~ 5,667 3,402 ~ 2,987 ! 1,797 i 1,834 ? 1,369 I 2,255 ; 1,645 ' 1,774 Total Current Liabilities 109,005 i 101,447 73,374 'ii I 47,571 ~ 10,981 , 14,640 50,624 'i 30,294 i 19,625 , 15,118 Long Term Debt 32,000 32,000 32,000 i 32,000 i 32,000 I 32,000 '; 11,500 11,300 11,500 11,700 Reserves for Contingencies. etc. 237 ', 237 i 500 ~ , -, 250 ', Net Worth 124,051 ', 120,139 83,721 76,491 ', 70,513 I 69,604 ~ 69,268 65,064 ', 63,360 1 ' 62,257 Total Liabilities and Capital 265,056 !, 253,586 189,095 156,299 ' 113,731 116,744 1 131,392 106,908 94,485 ' 89,075 Net Working Capital 134,599 ~ 140,442 105,699 i 99,310 '; 94,985 ~ 94,587 ~ 74,388 i 69,575 ~ 68,085 66,948 Net Asset Value Per Share of Common Stock i 37.92 I 38.01 (1)',~ 32.40 I 28.04 24.80 ~ 23.95 i 23.68 i 22.56*i 21.94*i 21.29* -adjusted to present capitatization (1) Before 5% stock dividend QUARTERLY SALES AND QUARTERLY ESTIMATES OF NET EARNINGS FiscalYearEndediViarch3l,>.9s2 Quarters Ended I NET SALES I TOTAL i PER SHARE 1951 ' June 30 $ 77,868,855 ~ $ 3,545,024 $1.32 September 30 76,678,245 3,409,627 ~ 1.27 December 31 79,799,280 3,114,265 ~ 1.14 1952 ; March 31 I 72,351,944 2,558,224 .92 TOTALS 306,698,324 12,627,140 4.65 Estimated Net Earnings as Reported ,rIMIS 440541

4 .Ltr. Mc'Fuclrlen pre.sents u cop%• of the r'lorese That You Built -dc•.ccriptire of the achievernents, obligations, benerts, and privileges of the nzembers of the Philip Morris or;rutiZation - cetclt entplol•ee hus a copy. The Company's policy is to maintain condi- tions of work which compare favorably not only with the tobacco industry but with all industry. In our program of plant expansion and improve- ment we continued the use of color, modern lighting, sound-proofing, and the scientific lay- out of working area to provide the most pleasant environment consistent with the efficient use of business premises for the places where the mem- bers of our orcyanization spend so large a part of their lives. y A Retirement Plan, Blue Cross Hospitaliza- tion, and Life Insurance, maintained at the Com- pany's expense, have for many years been part of our personnel program and enjoyed by all Philip Morris people. Operating under the Government's Wage and Stabilization program, our salaries and wages which totaled $12,868,604 were maintained at levels comparing most favorably with the highest in the tobacco industry. Mr. Lyon and N. Y. Civil Defense Director Arthur W. Wallander look at one of the thousands of Civil Defense posters supplied as a public service by Philip Morris. (Right) These posters are supplied free of charge to help the cause of conservation throughout the na- tion's foa•est areas and natural parks. (Above) Union Secretary Lonard Ford talking to union member Evelyn Lawrence in the Louis- ville cafeteria. (Left) A refreshing "wash up" in pleasant surroundings. (Right) Martha L. Schleicher, reg- istered nurse, attends Josephine Cook in the dispensary at the qi. Louisville factory. 2

The fiscal year of Philip Morris & Co. Ltd., Inc. ends March 31. Th<' Ir:'m~r., nl ncc /rrrr nraiar I ilnr.s arr nn n ralcnelor r~~nr hntiit. For CA anN ple. 1111' 195 1 c'nm/>nrn iA brncrn lh< .llar( h il. 19.~.' liaru? rcur n1 Yhilip .1lorvi., und Ibr 19~1 cnlrirdui itw lr.+-tlu• nihrr , -nrn(><wir~. 1949 1948 1947 % of ales Philip Morris As % of Sales Competitors As % of Sales Philip Morris As % of Sales Competitors As % of Sales Philip Morris As % of Sales Competitors As % of Sales ~ $255,752 100 / $2,316,574 100% $228,372 100% $2,286,066 100% $171,258 100 / $2.169,816 100 % .64 25,167 9.84 205,497 8.87 20,660 9.04 191,771 8.39 9,526 5.56 ! 160,501 7.40 .71 9,864 3.86 82,977 3.58 8,162 3.57 78,335 3.43 3,491 2.04 ; 66,107 3.05 .93 15,303 5.98 122,510 5.29 12,498 5.47 ~ 113,436 4.96 6,035 3.52 i 94,394 4.35 .68 171,221 66.95 1,569,072 67.73 138,491 60.64 1,559,457 68.22 102,513 59.86 ! 1,397,496 64.41 25 159,611 59.28 ' 1,418,013 61.21 132,444 57.99 1,416,384 61.96 93,913 54.84 1,272,877 58.66 21% $ 26,835 $ 224,946 15.72%' 14.34 % $ 21,760 15.71 %: $ 210,207 13.48% $ 10,389 10.13 /; $ 175,945 12.59% .42 30.06 ; 22.11 27.01 ~ 22.83 13.51 20.93 .91% $ 32,000 27.65 %~$ 522,657 37.39% $ 32,000 29.50 / $ 537,951 40.63% $ 32,000 31.22 % i $ 415,090 36.80 % .21 18,969 16.39 i 158,374 11.33 20,505 18.90 158,374 11.96 20,954 20.44 ~ 132,374 11.74 .88 64,752 55.96 ! 716,791 51.28 55,986 51.60 627,632 47.41 49,559 48.34 ~ 580,532 51.46 31. 51 1950 1949 304,000 1948 ~ 1947 i 1946 ! 1945 1944 1943 $255,752,000 $228,372,000 $171,258,000 $170,906,000 i $178,686,000 i $185,299,000 $177,901,000 $141,047,000 );0 100% 100% ~ 100% I 100% ! 100% 100% 100% 100% 17 I 48.89 49.41 50.32 49.74 53.18 48.46 I 54.23 53.08 .25 32.82 33.20 35.34 37.10 36.25 37.37 ; 31.37 1 27.52 .58 18 29 17.39 14.34 13.16 10.57 14.17 14.40 19.40 .36 I 7.62 7.66 8.55 I 7.46 I 6.13 6.52 I 7.03 8.81 .22 I, 10.67 9.73 5.79 i 5.70 ~ 4.44 7.65 ; 7.37 10.59 .03 i .07 .04 .34 I .40 1.30 .14 . 08 .13 25 10.74 9.77 6.13 6.10 5.74 7.79 ~ 7.45 10.72 .78 .90 .73 i .58 1.27 .83 .51 j .38 .36 47 9.84 9.04 5.56 4.83 4.91 7.28 7.07 10.36 .01 3.86 3.57 2.04 1.93 1.47 3.61 3.33 5.45 .46 5.98 5.47 3.52 2.90 3.44 3.67 3.74 4.91 .89 18.28 16.34 8.56 7.12 j 8.88 10.46 10.50 11.13 i 44 87.64 62.19 15.57 21.03 73.14 46.60 31.00 24.30 08 125.86 104.34 61.29 67.73 89.75 64.36 . 49.16 43.11 .10 51.25 44.77 31.22 35.01 44.48 29.56. 20.66 15.82 45 54.82 46.81 34.07 37.95 49.23 31.28 23.59 16.58 38 44.27 48.94 62.00 59.62 52.72 60.86 67.06 69 89 TIMN 44®5`$3

P H I L I P M O R R I S & C O. LT D., I N C O R P O R A T E D Incorporatecl in Virginia L I A 8 I L 1 T I E S 19:52 19511`' Current: Notes payable to banks ...................................................................... $ 85,000,000 $ 75,000,000 Cash dividends payable ...................................................................... 2,146,146 2,060,610 Accounts payable ................................................................................ 2,772,812 3,020,11 7 Accrued liabilities, interest, taxes (other than federal taxes on in- come), incentive bonus, advertising, etc ....................................... 3,671,158 3,605,821 Provision for federal taxes on income ................................................ 15,414,377 17,760,304 Total current liabilities .................................................... 109,004,493 101,446,852 Funded debt: 2s/s% Sinking Fund Debentures, maturing April 1, 1966 (sinking fund payments commence March 31, 1956) ................................ 32,000,000 32,000,000 C A P I TA L Share owners' investment, represented by (Note 2): Cumulative preferred stock, par value $100 per share: 4% Series .................................................................................... 18,785,300 18, 985,200 3.90 % Series ................................................................................ 12,930,300 13,061, 000 Common stock, par value $5 per share .............................................. 12,240,605 12,240,605 Paid in by share owners (in excess of par value of capital stocks, less financing expenses) ...................................................................... 33,300,209 33,304,643 Earnings reinvested or retained in the business .................................. 47,125,313 43,083,797 124,381,727 120,675,245 Less, Cost of preferred stock held in treasury .............................. 330,319 536,099 124,051,408 120,139,146 $265,055,901 $253,585,998 The accompanying notes are an integral part of the financial statements. 'I'Il!/IN 440555

How OUR MARKE HAS GROWN ^- Philip fi1orris &0o. ltd.Inc, UnitSales facat Years EtM `March3lst Per Cent at Pkiltb Marris Sales tu Total tadustrq H ~ a N N C 0 ~ 2 1 O Z u 10 933 ~ 5 d I 1943 394# 119d5 1946119A7 1 1948 11949 19W .195i 1952 *EsBmeted f F U T U R E O F T H E T O B A C C O I N DU S T R Y The Industry, oldest in the American econo- my, has maintained its upward course over a period of 300 years. An increase of 2.5 to 3% in cigarette sales of the tobacco industry for the year 1952 has been estimated on the basis of a projection of smoking population growth. As- suming no further excessive cigarette taxation and no additional restrictions on tobacco plant- ing, a continued increase of 2.5% a year has been estimated which would bring sales up to 470 billion units by 1960, a rise of more than 100 billion over the calendar 1950 figure. The Com- pany looks forward to sharing in this growth. PRESIDENT 'Y1ttt2b. 19~2 CItAiRMA,'i 01 THE ROARI) 7['IMlv% 440551

RECORD OF PHILIP MORRIS OPERATIONS (u00'somitted) 1952 1951 1950 , 1949 1948 1947 1946 1945 1944 1943 ;Net Sales ( including Revenue Stamps) $306.698 $305,804 i $255.752 I $228,372 $171,258 I$170,906 $178,686 $185,299 $177,901 $141,047 Cost of Sales ( including Revenue Stamps) 248.977 ; 245,937 208,985 ' 188,656 : 146,694 148,412 159,799 I 159,051 ~ 152,290 113,682 Gross Operating Profit 57,721 , 59,867 i 46,767 ; 39,716 I 24,564 22,494 ~ 18,887 26,248 ~ 25,611 ' 27,365 Shipping. Selling. General & Administrative Expense 25,320 ; 22,497 i 19,470 ! 17,499 ! 14,641 12,752 10,953 12,080 12,507 I 12,420 Operating Profit 32,401 ~ 37,370 ~i 27.297 i 22,217 ~~ 9,923 9,742 7,934 ~ 14,168 i 13,104 { 14,945 Other Income 151 ! 99 '. 172 j 101 ~ 588(i'I 683("'! 156 267 149 ~, 183 Total Income 32,552 ', 37,469 ' 27,469 ' 22,318 ' 10,511 10,425 8,090 14,435 13,253 i 15,128 Income Deductions 4.205 2,382 ! 2,302 ; 1,658 ~ 985 2,174(3)i 1,476(-+)1 940~sd 672 515 Net Income (Before Taxes) 28,347 : 35,087 ~ 25.167 20,660 ', 9,526 8,251 6,614 ~ 13,495 12,581 ': 14,613- Federal and State Taxes on Income 15,720 18,398 ' 9,864 I 8,162 , 3,491 3,293 466'•s11 6,692 i 5,930 ' 7,682 Net Income 12,627 ' 16,689 ; 15,303 12,498 ; ~ 6,035 j 4,958 ; ~ 6,148~ 6,803 6,651 6,931 - Cash Dividends Declared (Common) (Preferred) 7,341 ' 1,244 i 6,995 1,253 ', 5,996 1 i ;, 789 i 5,246 ; 818 ~ 3,497 1 836 3,498 863 j 2,998 817 4,497 866 4,496 ! 844 4,260 831 Net Income Retained in the Business'°' 4,042 I 8,441 '; 8,518 ~ 6,434 ' 1,702 597 ~ 2,333 ! 1,440 1,311 1,840 Per Share Earned on Common Shares Outstanding 4.65 ~ 6.62 !` 7.26 1 5.84 ~ 2.60 ~ 2.05 i 2.61(r'~ 5.94 5.82 ~ 6.10 Earned per Common Share Adjusted to Present Capitalization .65 ~ .62 7.26 '. I 5.84 i .60 .05 i 2.67 .97 .91 .05 Common Shares 2,448,121 ~ 2,331,544 i 1,998,467 11,998,467 ~ 1,998,467 1,998,468 1,998,470 999,235 I 999,235 999,207 ~ Includes $409,890 profit on sales of securities after deduction of $137,000 of Federal inconte taxes thereon. 2 Including renegotiation recovery of $310,000 in connection with government contracts and net premium of $133,865 receired on sale of 25's% Debentures. 3 Includir , premium of $472.000 paid on retirement of 3% Debentures, and prori.cion of $500,000 for contingencies. 4 Includes $242.000 irar-time packaging chan,eos-er loss (after deduction of $250,000 charged to reserre for post-rcar and other contingencies); also includes $275,000 for settlement of claims in connection vith rescission of subscriptions to Cwnulati e Preferred Stock, 3.60% Series. J Reflects a refund of Federal Excess Profits Taxes of prior years under carry-back provisions of the Internal Re enue Code amounting to $1,867,528 and a credit of $300,000 representing excessire pro 'isions of prior }'ears' taxes. s Subject to ntinor surplus adjustntents (except in 1951 wwhen 5% stock dividend was declared). 7 After stock split 2 for 1. $ Including prorision of $250,000 lor post-war and other contingencies. TIMN 440544

A U D I T E D F 1 N A N C I A L S TAT E M E N.T S S TAT E M E N T O F S U R P L U S for the fiscal years ended March 31, 1952 and 1951 Paid in by share owners (in excess of par value of capital stocks, less financing expenses) : Balance at beginning of year Excess of proceeds over par value on sales of common and preferred stocks, less financing expenses ...................................................... Excess of approximate market value over par value of common stock issued as a stock dividend .............................................................. Adjustments due to redemption of preferred stock ............................ Balance at end of year ...................................................... Deductron. Earnings reinvested or retained in the business: Balance at beginning of year .............................................................. Net earnings for year .......................................................................... Deduct, Dividends declared: On cumulative preferred stock: 461'o Series .................................................................. 3.90 % Series .............................................................. On common stock: In cash ........................................................................ In common stock, 116,577 shares .............................. Balance at end of year ote 3 (.'v ) ...................................... Tht• <tr(mmp,ui~ in,; n,tr,, n,e un iute.nd purt oJ Ihr• financia! .cturnmertl5. $33,304,643 4,434 ~ $14,288,392 13,766,521 5,245,965 3,765 $33,300,209 $33,304,643 $43,083,797 $40,471,181 12,627,140 16,689,145 55,710,937 57,160,326 745,116 750,710 499,195 502,337 7,341,313 6,994,632 5,828,850 8,585,624 14,076,529 $47,125,313 S43,083,797 TIMN 440556 28

PHILIP MORRIS & CO. LTD., INCORPORATED Irtcornorated in Vir;l-infa N O T E S T O F 1 N A N C I A L S TAT E M E N T S 1 Audited statements of the English subsidiary 2 translated at official rates of exchange showed net assets of $366,402 at March 31, 1951 and net income of $31,701 for the fiscal year then ended. Corresponding information as of March 31, 1952 and for the fiscal year then ended is not presently available. No dividends were received from the subsidiary during the period. Information concerning capital shares: Authorized: 3 Preferred, 350,000 shares (all of which have been originally issued) Common, 3,000,000 shares Outstanding (including treasury stock) : 1952 1951 Preferred: 4% Series 187,853 189,852 3.90% Series 129,303 130,610 Common 2,448,121 2,448,121 In treasury (preferred): 4% Series 1,999 2,698 3.90% Series 1,307 2,612 The company is required to set aside annu- ally, in sinking funds, amounts sufficient to redeem 1% of the maximum number of preferred shares that have been issued. The redemption prices are $105.50 per share for the 4% Series and $100.75 per share for the 3.90% Series. The company holds a suffi- cient number of shares of preferred stock in treasury for use in lieu of sinking fund pay- ments aggregating $342,475 to be made within one year from March 31, 1952. The cumulative preferred stock is redeem- able at any time, otherwise than through the sinking funds, at $107.50 per share for 4% Series to February 1, 1953 and $103.75 per share for 3.90% Series to May 1, 1954, and at diminishing per share amounts after those dates but not less than $105.50 for 4% Series and $100.75 for 3.90% Series; plus accrued dividends in each case. Holders of the shares of each series are entitled to such specified payments upon voluntary liquidation of the company and to $100.00 per share, plus ac- crued dividends upon involuntary liquidation. The terms of issue of the 25ia % Sinking Fund Debentures, include certain restrictions with respect to the declaration or payment of divi• dends (other than dividends payable in stock of the company) on any shares of common stock of the company, and to payments on account of the purchase, redemption or other retirement of its capital shares. At March 31, 1952, approximately $30,554,000 of the earn- ings retained was free of such restrictions. The terms of issue of the cumulative pre- ferred stock include certain restrictions with respect to the declaration or payment of divi- dends (other than dividends payable in stock of the company) on the common stock. The amount of earnings retained free of such re- strictions was in excess of the $30,554,000 mentioned above. Provision for depreciation of plant and equipment charged to costs and expenses aggregated $953,960 for the fiscal year 1952 and $909,381 for the fiscal year 1951. TIMl~ 440557

A lJ D 1 T E D F 1 N A N C 1 A L S TAT E M E N T S The Board of Directors and Share Owners of Philip Morris & Co. Ltd., Zncorporated: We have examined the balance sheet of PHILIP MORRIS F~ CO. LTT1., INCORPORATED as of March 31, 1952, and the related statements of earnings and surplus for the fiscal year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and sueh other auditing pro- cedures as we considered necessary in the circumstances. We made a similar examination for the i'isttal year ended March 31, 1951. In our opinion, the accompanying balance sheet and related statements of earnings and surplus present fairly the financial position of Philip Morris & Co. Ltd., Incorporated at March 31, 1952 and 1951 and the results of its operations for the fiscal years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. New York, April 23, 1952. ~avn~Ta .~ CERTtF'iGATE: ~vd,~'~4*' 10~~ TIMN 440552 ~

4 .4 These four young ladies are indirect Share Owners of Philip Morris through their interest in the Eaton & Howard Balanced Fund of Boston, Mass., one of the mutual funds sharing in Philip Morris ownership. The income derived from their investment helps outfit them for the steamer trip on which they are here embarking. Mrs. Robert Hoke and her daughter in the house in Louisville paid for with funds from Philip Morris Share Owner, the First Kentucky Fire Insurance Company, after fire destroyed a former residence. S H A R E O W N E R S) B E N E F I T S C O M E T O M A N Y I N D1 R E C T L Y Hundreds of business organizations are Share Owners in Philip Morris. Some of them, instead of manufacturing and selling things, depend largely upon their investments for income. The services rendered to people by these Philip Morris Share Owners are illustrated by a few examples pictured here. Without the capitalistic method of profit by investment, these services would not exist. Funds of these insurance companies are augmented by their share in Philip Morris earnings. Share Owner American Fidelity & Casualty Co. helps to reduce accidents through showing driv- ers of insured vehicles their faults before they become fatal. This picture of a bus passing on the inside of a curve is an exam- ple. It was taken with a special camera from a Cruising Auto (right). T'ININ 440558 30

P R O D U C T S O F T H E P H I L 1 P M O R R 1 S C O M PA N Y ~ ' Philip Morris quality, a standard feature of all our products, is the result of carefully developed tobacco know-how which is backed by a hundred years of experience. We use the finest domestic and imported tobaccos. We age our tobaccos in the industry's most modern warehouses-for a superior smoke like Philip Morris comes only from properly mellowed tobacco. Expert blending, electrically controlled, follows the aging process, and secret formulas bring out flavor and aroma of these blended tobaccos. Our cigarettes are su- perbly manufactured and packed by ultra-modern machinery. The best known and the most popular of our cigarettes is Philip Morris. Dunhill, a quality smoke with a famous name backed by years of experience, is fast growing in the king-size field. Spud, cork tipped or plain, is a superior, evenly mentholated cigarette. Marlboro, rich in mildness, is produced in three styles - plain ends, Ivory Tipped, and Beauty Tipped (red) for women. English Ovals, a luxury product of the best in domestic and Oriental leaf, is packed in crush-proof boxes and is sold in the ~ premium price class. Player's Navy Cut "Medium" cigarette, `~a•,~lend of top-grade Virginia Bright, and packed in sliding sle4e-like crush-proof boxes, is also a premium buy. s our i e tobaccos Bond Stre t n o ti bl d f p p , e , a ar ma c en o sleaed tobaccos comparable in every way to the most ex- pepspe mixtures, is our largest seller. Revelation, a mild to- ba6do of five quality tobaccos skillfully combined, is designed to appeal to the discriminating pipe smoker. Country Doctor, Handsome Dan, Barking Dog, and Wakefield Mixture are pipe mixtures each varying slightly to appeal to the special taste of a wide range of smokers. Lyon's Own is a superior mixture in the premium price class. TIMN 440560 32 PRINTED IN U.S.A.

.tilr". tl„ru .S,•elc rw-riv,,c a check from the ~~~rr~rtrt<rti~'<')/ P{ri(ip Jfurrir .Share Owner, the ,Scrcic'c Fire In.sttraunce Co.. 'u huwtteru Of the tost of rrhlacin,,, the icrr•rked furrtilv car. Covered by instu-ance through u Universal C.I.T. plan, the car was replaced hv auto lealer, Henry Triefenbach (ri_,ht). Mr. A. J. O'Hara, Vice President of The Northern Trust Company of Chicago, representing Share Owners, talks with our Financial Vice Presi- dent. L. G. Hanson, in his office. In accordance with their insurance agreement, the Con- tinental Casualty Co. provides the cost of the care which brought this young polio victim so far toward recovery. Mr. Ralph C. Ordway of Worcester, Mass., receives a check from the Insurance Company in which he is a policy holder. This benefit payment made to Mr. Ordway on account of disability which he suffered is one of many paid by this Philip Morris Share Owner, the Paul Revere Life Insurance Co. Donald B. Flood, Springfield, Mass., shows Chester Bulkley, his insurance agent, the section of his home which was restored by means of insurance payment from the Springfield Fire & Marine Insurance Co. of the Springfield Group of Insurance Companies, a Philip Morris Share Owner. In November1951, the names of 14,053 Share Owners were recorded in our Common Stock Record Books. These owners included: 4,964 men with 21.5 % of the total shares 5,260 women with 16.6 % of the total shares 1,083 joint tenants with 2.5% of the total shares 2,127 Institutions, Foundations and Fiduciaries with-14.3% of the total shares 179 Brokers with 10.1 % of the total shares 481 Companies, Nominees and others with 34.3 % of the total shares 99.4% of the shares are held within the territory of the United States. 29.5% of Philip Morris common stock is held by share owners living in rural communities and smaller towns or suburbs. TIMN 440559 3

! r 3. p4ulip.P,+eriiti "... WeRP:a\ I'\,r[Tl TF. nF \1NN \lar,Atr:Nr [H,, 0 liriF uVrr ur~~x.ACF:Nnti:A+sLLr.CY, Z. 111111, CEftIIFIC.aTF. tIF f,011PERATION ; ~.. ......~`, ~r...f,.,\. i i. i .,~.,,/ `,H. ~ , // ~„w/ "«. / r. i!. ~ S .. . ./ . . ~ ~ ..ai..,ti ...../~,.,.. I : .- ~nEun~~unj A'atinntim of ~jrgC':bieF~ l9 i1 • ..ll~tttttttt-4111ttt41ttttttktt;1 - ~ :.ni' _ 4. l..~ ii ,.a...............~...~..,. .+:.. 'i ..v.. ~tl~ip -+lnrria & @:D., Itd. . ~. ~--..... tfL CNlos 1SIttSTiit€X ti1101t' - ' ~ .... ...... fita r.. s,na sntt es.,n ,orsrsea ~. . rrttfifafF Ytf MFrtt -."~. - .`~. E,.aa ~..ex,nn s,ss ~ ~ Stltt1t1t11t1tttiti4' , J 7. For Best-of-Industry Annual Report "Financial World" Lfaga;.ine 2. For Excellence of Management Antericnn In.stitiue oJ .Nmurgenrent 3. For Furnishing Technical Assistance to Marshall Plan Countries Economic Cooperation Adntinistrution 4. For Labor-Management Cooperation and Good Relations A.F.L. Union Industries Show For Advancement and Support of the Fire Service International Association of Fire Chiefs TIMN 440561

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