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Rule No. 424(b)(3)
File No.
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KGF THRIFT PLAN
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November 1994
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PLAN NEWS
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. Fund Performance
. Closing PM Stock Price as of September 30, 1994
. 1995 Company Matching Contribution
. Estimated 1995 Interest Income Fund Rate of Return
. 1995 Plan and Service Improvements
. Diversification of Investments
. "Managing Your Future"
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Your statement is enclosed showing the activity in your account during the third
quarter, and a "snapshot" of your account balances with investments valued as of
September 30, 1994.
FUND PERFORMANCE
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<TABLE>
<CAPTION>
Third Quarter Only
July 1 Through September 30, 1994 Annualized Fund Performance
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Funds % Funds 1990 1991 1992 1993 1994
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<S> <C> <C> <C> <C> <C> <C> <C>
Philip Morris Stock Fund 20.3% Philip Morris Stock Fund 32.2% 57.5% -0.9% -24.3% 14.4%
Equity Fund 4.9% Equity Fund -1.8% 31.3% 7.8% 10.3% 1.5%
Interest Income Fund 1.7% Interest Income Fund 10.1% 9.5% 8.8% 7.9% 5.3%
Government Securities Fund 1.1% Government Securities Fund 8.9% 9.3% 5.2% 4.1% 1.9%
</TABLE>
The fund performance for 1990 through 1993 applies to dollars that were in the
fund on January 1 and remained in the fund until December 31. Dollars that were
invested, withdrawn, or transferred between funds during the year may have
earned a higher or lower rate of return due to market fluctuations. 1994 rates
of return apply only to dollars that were invested in the fund on January 1 and
remained in the fund until September 30, 1994.
SEPTEMBER 30 STOCK PRICE
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The price per share of Philip Morris stock on September 30, 1994 was $61.125.
1995 COMPANY MATCHING CONTRIBUTION
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In 1995, KGF will contribute 57 cents for each dollar of your basic
contributions to the Plan (the first 6% of your pay you contribute to the Plan
represents your basic contributions).
1995 INTEREST INCOME FUND RATE OF RETURN
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The rate of return in the Interest Income Fund during 1995 is estimated to be
6.5%.
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This page constitutes a supplement to a prospectus covering securities that have
been registered under the Securities Act of 1933. This supplement revision is
dated November 18, 1994.
--See Plan & Service Improvements on Reverse Side--
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1995 PLAN AND SERVICE IMPROVEMENTS
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Beginning in mid-1995 there will be several Plan and service improvements. Here
is a brief outline of the things to come:
NEW INVESTMENT OPTIONS--The KGF Thrift Plan will offer three NEW investment
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funds in addition to those already available in the Plan. The new funds will
include an:
BALANCED FUND, which invests in a combination of stocks,
bonds, and cash in a professionally managed, diversified
manner.
INTERNATIONAL EQUITY FUND, which invests in stocks of
companies based outside of the U.S.
GROWTH EQUITY FUND, which invests in common stocks who are
believed to have better-than-average long-term growth
potential.
DAILY ACCESS--You will have access to your updated account balances, and other
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account information such as your outstanding loan balances at the END OF EACH
BUSINESS DAY. In addition, you will be able to make contribution rate changes
and transfer your account balances DAILY among the Plan's investment funds.
FASTER TURNAROUND ON LOAN AND WITHDRAWAL DISTRIBUTIONS--Loan and withdrawal
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checks will be sent to you the week following your request.
THESE PLAN AND SERVICE IMPROVEMENTS WILL OFFER YOU A WIDER RANGE OF INVESTMENT
OPPORTUNITIES, AND GREATER FLEXIBILITY IN MAKING INVESTMENT CHANGES AND OTHER
THRIFT PLAN TRANSACTIONS. HOWEVER, THESE IMPROVEMENTS CAN ONLY BE HELPFUL IF YOU
UNDERSTAND THEM AND KNOW HOW TO USE THEM. THROUGHOUT EARLY 1995, YOU WILL
RECEIVE MORE DETAILED INFORMATION ABOUT THESE IMPROVEMENTS--HOW THEY AFFECT YOU
AND HOW YOU CAN BEST TAKE ADVANTAGE OF THEM. WE ENCOURAGE YOU TO TAKE THE TIME
TO READ THESE MATERIALS CAREFULLY.
DIVERSIFICATION OF INVESTMENTS
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If you are not already doing so, you should consider diversifying the current
balance in your account and your future contributions by investing in
combination of Funds offered by the Plan.
Diversification is the practice of spreading savings among different types of
investments to help reduce the risk of loss to your total savings program.
Diversification permits you to take advantage of the different investment
objectives of each Fund in the Plan. A diversification program balances a mix of
investments in accordance with your long-term goals and personal tolerance for
investment risk.
It is generally unwise to concentrate your accounts in an investment fund which
holds a single security. When making a decision relative to the Philip Morris
Stock Fund, you should consider your entire financial relationship with KGF and
the other Philip Morris affiliated companies, that is, your pension benefits and
all forms of your compensation that are provided by KGF. While we want to share
with you the opportunity to invest in Common Stock, and KGF is interested in
having its employees as shareholders, you should feel under no obligation to
invest in Common Stock.
"MANAGING YOUR FUTURE" - FROM THE EDITORS OF "MONEY" MAGAZINE
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"Managing Your Future," a regular addition to your quarterly Thrift Plan
statement information, covers a variety of topics related to savings plan
investing, and provides a question and answer section that deals with typical
questions 401(k) participants have about managing their investments. You may
find "Managing Your Future" useful in answering your own questions about 401(k)
investing.
