<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 11-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
/x/ SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
/ / SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-8940
--------------------------
Kraft Foods Thrift Plan
Three Lakes Drive, Northfield, Illinois 60093
(Full title of the plan)
PHILIP MORRIS COMPANIES INC.
120 Park Avenue
New York, New York 10017
(Name of issuer of the securities held pursuant to the plan
and address of its principal executive office.)
===============================================================================
<PAGE>
KRAFT FOODS THRIFT PLAN
ANNUAL REPORT ON FORM 11-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
TABLE OF CONTENTS
PAGE(S)
-------
REPORT OF INDEPENDENT ACCOUNTANTS....................... 3
FINANCIAL STATEMENTS:
Statements of Financial Condition as of December 31,
1994 and 1993........................................ 4-5
Statements of Income and Changes in Plan Equity for
the years ended December 31, 1994, 1993 and 1992..... 6-8
Notes to Financial Statements......................... 9-21
SIGNATURES.............................................. 22
SCHEDULES:
Schedule I - Investments as of December 31, 1994...... S-1-9
Other schedules are omitted because the information required
is contained in the financial statements.
EXHIBITS:
23. Consent of Independent Accountants.
-2-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To: The Corporate Employee Plans Investment
Committee of Philip Morris Companies Inc.,
the Corporate Employee Benefit Committee of
Philip Morris Companies Inc., the Management
Committee for Employee Benefits of Kraft
Foods, Inc., the Administrative Committee
and all Participants as a group (but not individually)
of the Kraft Foods Thrift Plan:
We have audited the accompanying statements of financial condition of the
Kraft Foods Thrift Plan (the "Plan") as of December 31, 1994 and 1993, and the
related statements of income and changes in plan equity for each of the three
years in the period ended December 31, 1994 and the schedule of investments as
of December 31, 1994. These financial statements and the financial statement
schedule are the responsibility of the fiduciaries of the Plan appointed by
Philip Morris Companies Inc. or Kraft Foods, Inc. (or their delegates). Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Plan as of December 31,
1994 and 1993, and the income and changes in plan equity for each of the three
years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
April 14, 1995
-3-
<PAGE>
KRAFT FOODS THRIFT PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1994
(IN THOUSANDS OF DOLLARS)
----------
<TABLE>
<CAPTION>
FREIHOFER
EQUITABLE
EQUITY INTEREST GOVERNMENT CAPITAL PARTICIPANTS'
INDEX INCOME SECURITIES MANAGEMENT PHILIP MORRIS LOAN
FUND FUND FUND FUND STOCK FUND ACCOUNT TOTAL
-------- -------- ---------- ----------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Allocated share of
Trust net assets $210,477 $770,911 $12,910 $12,738 $729,798 $36,587 $1,773,421
Employer contributions
receivable 585 752 63 1,663 3,063
Employee contributions
receivable 53 79 34 166
Interfund receivables
(payables) 9,274 6,066 2,557 (12,738) (5,159) -
Participants' loan
repayments receivables
(payables) 4 17 18 (39) -
-------- -------- ------- ------- -------- ------- ----------
Total assets 220,393 777,825 15,530 726,354 36,548 1,776,650
-------- -------- ------- ------- -------- ------- ----------
LIABILITIES:
Distributions and
withdrawals payable 1,189 6,926 140 5,633 54 13,942
Undistributed
participants' loans 137 407 14 330 (888) -
General and administrative
expenses payable 17 57 1 59 134
-------- -------- ------- ------- -------- ------- ----------
Total liabilities 1,343 7,390 155 6,022 (834) 14,076
-------- -------- ------- ------- -------- ------- ----------
Plan equity $219,050 $770,435 $15,375 $ - $720,332 $37,382 $1,762,574
======== ======== ======= ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
KRAFT FOODS THRIFT PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1993
(IN THOUSANDS OF DOLLARS)
----------
<TABLE>
<CAPTION>
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME SECURITIES PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
-------- -------- ----------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Allocated share of
Trust net assets $178,383 $662,425 $11,409 $652,587 $36,363 $1,541,167
Employer contributions
receivable 380 36 1,612 2,028
Interfund receivables
(payables) 3,706 824 (409) (4,121) -
Participants' loan
repayments receivables
(payables) 57 88 (84) (61) -
-------- -------- ------- -------- ------- ----------
Total assets 182,526 663,337 11,036 649,994 36,302 1,543,195
-------- -------- ------- -------- ------- ----------
LIABILITIES:
Distributions and
withdrawals payable 1,232 5,307 78 3,608 10,225
Undistributed
participants' loans 118 444 9 377 (948) -
-------- -------- ------- -------- ------- ----------
Total liabilities 1,350 5,751 87 3,985 (948) 10,225
-------- -------- ------- -------- ------- ----------
Plan equity $181,176 $657,586 $10,949 $646,009 $37,250 $1,532,970
======== ======== ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
KRAFT FOODS THRIFT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS OF DOLLARS)
--------
<TABLE>
<CAPTION>
FREIHOFER
EQUITABLE
EQUITY INTEREST GOVERNMENT CAPITAL PARTICIPANTS'
INDEX INCOME SECURITIES MANAGEMENT PHILIP MORRIS LOAN
FUND FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ----------- ---------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employer contributions $ 5,807 $ 12,080 $ 613 $ 20,134 $ 38,634
Employee contributions 20,249 33,870 1,971 41,845 97,935
Allocated share of Trust
investment activities:
Interest income 15 46,123 532 216 $ 2,306 49,192
Dividend income 35,624 35,624
Net appreciation
(depreciation) in
fair value of
investments 3,490 (124) 20,682 24,048
-------- -------- ------- -------- ------- ----------
3,505 46,123 408 56,522 2,306 108,864
-------- -------- ------- -------- ------- ----------
Total additions 29,561 92,073 2,992 118,501 2,306 245,433
-------- -------- ------- -------- ------- ----------
DEDUCTIONS:
Distributions and
withdrawals (14,735) (64,190) (982) (44,779) (2,636) (127,322)
General and administrative
expenses (199) (721) (18) (525) (1,463)
-------- -------- ------- -------- ------- ----------
Total deductions (14,934) (64,911) (1,000) (45,304) (2,636) (128,785)
-------- -------- ------- -------- ------- ----------
Net transfers among funds 17,811 27,504 2,143 ($12,738) (34,720) -
Transfers from predecessor
trusts 5,346 58,431 246 12,738 34,951 1,244 112,956
Participants' loans (2,598) (7,251) (140) (6,751) 16,740 -
Participants' loan repayments 2,688 7,003 185 7,646 (17,522) -
-------- -------- ------- ------- -------- ------- ----------
Net additions 37,874 112,849 4,426 - 74,323 132 229,604
PLAN EQUITY:
Beginning of year 181,176 657,586 10,949 646,009 37,250 1,532,970
-------- -------- ------- ------- -------- ------- ----------
End of year $219,050 $770,435 $15,375 $ - $720,332 $37,382 $1,762,574
======== ======== ======= ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
KRAFT FOODS THRIFT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS OF DOLLARS)
----------
<TABLE>
<CAPTION>
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME SECURITIES PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ----------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employer contributions $ 3,462 $ 7,787 $ 308 $ 22,513 $ 34,070
Employee contributions 13,301 29,249 1,055 48,344 91,949
Allocated share of Trust
investment activities:
Interest income 11 44,809 408 153 $ 2,566 47,947
Dividend income 28,356 28,356
Net (depreciation)
appreciation in
fair value of
investments 14,093 1 (229,384) (215,290)
-------- -------- ------- -------- ------- ----------
14,104 44,809 409 (200,875) 2,566 (138,987)
-------- -------- ------- -------- ------- ----------
Total (deductions)
additions 30,867 81,845 1,772 (130,018) 2,566 (12,968)
-------- -------- ------- -------- ------- ----------
DEDUCTIONS:
Distributions and
withdrawals (8,453) (50,263) (425) (32,182) (2,334) (93,657)
General and administrative
expenses (22) (139) (9) (170)
-------- -------- ------- -------- ------- ----------
Total deductions (8,475) (50,402) (434) (32,182) (2,334) (93,827)
-------- -------- ------- -------- ------- ----------
Net transfers among funds 20,035 27,102 360 (47,497) -
Transfers from predecessor
trusts 14,678 46,955 186 31,479 1,369 94,667
Participants' loans (1,869) (6,545) (126) (6,128) 14,668 -
Participants' loan repayments 1,989 6,340 118 7,815 (16,262) -
-------- -------- ------- -------- ------- ----------
Net (deductions)
additions 57,225 105,295 1,876 (176,531) 7 (12,128)
PLAN EQUITY:
Beginning of year 123,951 552,291 9,073 822,540 37,243 1,545,098
-------- -------- ------- -------- ------- ----------
End of year $181,176 $657,586 $10,949 $646,009 $37,250 $1,532,970
======== ======== ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
KRAFT FOODS THRIFT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS OF DOLLARS)
----------
<TABLE>
<CAPTION>
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME SECURITIES PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ----------- -------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employer contributions $ 2,725 $ 6,747 $ 56 $ 24,952 $ 34,480
Employee contributions 10,970 30,286 409 49,078 90,743
Allocated share of Trust
investment activities:
Interest income 5 46,298 384 311 $ 2,683 49,681
Dividend income 24,408 24,408
Net (depreciation)
appreciation in
fair value of
investments 8,907 (3) (30,584) (21,680)
-------- -------- ------ -------- ------- ----------
8,912 46,298 381 (5,865) 2,683 52,409
-------- -------- ------ -------- ------- ----------
Total additions 22,607 83,331 846 68,165 2,683 177,632
-------- -------- ------ -------- ------- ----------
DEDUCTIONS:
Distributions and
withdrawals (7,462) (46,568) (652) (60,626) (2,311) (117,619)
General and administrative
expenses (24) (196) (9) (229)
-------- -------- ------ -------- ------- ----------
Total deductions (7,486) (46,764) (661) (60,626) (2,311) (117,848)
-------- -------- ------ -------- ------- ----------
Net transfers among funds 277 (22,081) 3,056 18,748 -
Transfers from predecessor
trusts 4 19 1 38 62
Participants' loans (2,082) (8,484) (91) (9,527) 20,184 -
Participants' loan repayments 1,313 5,191 33 6,671 (13,208) -
-------- -------- ------ -------- ------- ----------
Net additions 14,633 11,212 3,184 23,469 7,348 59,846
PLAN EQUITY:
Beginning of year 109,318 541,079 5,889 799,071 29,895 1,485,252
-------- -------- ------ -------- ------- ----------
End of year $123,951 $552,291 $9,073 $822,540 $37,243 $1,545,098
======== ======== ====== ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. GENERAL DESCRIPTION OF THE PLAN:
The Kraft Foods Thrift Plan (formerly known as the Kraft General Foods Thrift
Plan and hereinafter referred to as the "Plan") is a defined contribution
plan designed to encourage employees to save for retirement by providing
eligible employees with an opportunity to invest a portion of their
compensation and to share in the profits of Kraft Foods, Inc. (formerly known
as Kraft General Foods, Inc. and hereinafter referred to as "Kraft Foods") by
making such contribution. Kraft Foods is a subsidiary of Philip Morris
Companies Inc. (the "Company"). The Plan is the successor plan to the Kraft,
Inc. Thrift Plan and, with respect to employees who are not represented by a
collective bargaining unit, the General Foods Corporation Employee Thrift-
Investment Plan for Salaried Employees (the "GF Salaried Plan") and the
General Foods Employee Thrift-Investment Plan (the "GF Hourly Plan" and
collectively with the GF Salaried Plan, the "GF Plans"), and, effective April
1, 1993, the Lenders Bagel Bakery, Inc. Profit-Sharing Plan (the "Lenders
Plan"), and, effective as of December 31, 1993, the Salary Reduction and
Voluntary Investment Plan for Salaried Employees of Oscar Mayer Foods
Corporation (the "Oscar Mayer Salaried Plan") and, effective as of December
31, 1994, the Entenmann's Inc. Employee Savings Plan (the "Entenmann's Plan")
and the Savings and Profit Sharing Plan of Charles Freihofer Baking Company,
Inc. (the "Freihofer Plan") (see Note 10). This Annual Report of the Plan on
Form 11-K includes information concerning the financial condition of the
former Entenmann's Plan and Freihofer Plan as of December 31, 1994, and the
Oscar Mayer Salaried Plan as of December 31, 1993, and the income and changes
in plan equity for the Entenmann's Plan and the Freihofer Plan for the year
ended December 31, 1994, and Oscar Mayer Salaried Plan for the year ended
December 31, 1993. Financial information concerning the Entenmann's Plan and
the Oscar Mayer Salaried Plan for the prior years is set forth in separate
Annual Reports on Form 11-K for each plan.
Salaried and certain hourly employees of Kraft Foods and certain of its
domestic subsidiaries (the "Kraft Foods Companies") who are not represented
by a collective bargaining unit, are eligible to participate in the Plan,
provided they meet eligibility requirements. After completing one year of
service, eligible employees generally may make tax-deferred and after-tax
contributions. Matching contributions by Kraft Foods (the "Kraft Foods
Matching Contributions") are contributed to the Plan in accordance with the
formula described in Note 3. The provisions of the Plan are detailed in the
official Plan document which legally governs the operation of the Plan.
The administration of the Plan has generally been delegated to the Management
Committee for Employee Benefits of Kraft Foods (the "Committee") comprised of
employees of Kraft Foods. The Committee has appointed the Administrative
Committee, comprised of members of the Committee, to handle certain Plan
administration matters. The Corporate Employee Plans Investment Committee of
Philip Morris Companies Inc. (the "Investment Committee") (the Committee, the
Administrative Committee and the Investment Committee, collectively are
hereinafter referred to as the "Fiduciaries") is responsible for the
selection of the
-9-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
investment options in which participants invest their assets in the Plan
and monitors the performance of these investment options.
Assets of the Plan are co-invested with the assets of the Kraft Foods, Inc.
Frozen Defined Contribution Plan, the Oscar Mayer Foods Corporation Long Term
Savings Plan for Union Employees, the Oscar Mayer Foods Corporation Long Term
Savings Plan for Hourly Employees, and effective January 1, 1993, with the
assets of the GF Hourly Plan, in a commingled investment fund known as the
Kraft Foods Master Defined Contribution Trust (hereinafter referred to as the
"Trust") (see Note 7).
Prior to April 1, 1993, the assets of the Lenders Plan were co-invested with
the assets of the Plan in the Trust. Effective April 1, 1993, the assets of
the Lenders Plan were transferred to the Plan. Prior to December 31, 1993,
the assets of the Oscar Mayer Salaried Plan were co-invested with the assets
of the Plan in the Trust. Effective December 31, 1992, the assets of the
Freihofer Plan were co-invested with the assets of the Plan in the Trust.
Effective December 31, 1993, the assets of the Oscar Mayer Salaried Plan were
transferred to the Plan. Effective December 31, 1994, the assets of the
Entenmann's Plan and the assets of the Freihofer Plan were transferred to the
Plan (see Note 10).
Participants have the option of investing their Plan Accounts (see Note 4) in
5% increments in the four funds listed below. Participants in the Freihofer's
Plan did not have the option of investing his or her Plan Accounts in the
Philip Morris Stock Fund, however, such participants did have the additional
option of investing in the Freihofer Equitable Capital Fund.
EQUITY INDEX FUND (formerly the EQUITY FUND) - This fund is invested
primarily in an index fund of stocks on a weighted average basis in
approximately the same proportion as the Standard & Poor's Composite Index
of 500 Stocks ("S&P 500").
INTEREST INCOME FUND - This fund consists primarily of investment contracts
entered into by Bankers Trust Company (the "Trustee") with financial
institutions, each of which agrees to repay in full the amounts invested
with the institution, plus interest. The assets of the Interest Income Fund
are also invested in pools of mortgage-backed and asset-backed securities,
corporate bonds, and obligations of the United States government and its
agencies. As an integral part of the purchase of each pool of these
investments for the Interest Income Fund, a financial institution agrees to
protect the pool to the extent its market value fluctuates, but not in the
event of a default of any security in the pool.
GOVERNMENT SECURITIES FUND - This fund was opened to new investments on
July 1, 1992 and includes primarily direct obligations of the U.S.
Government or its agencies, obligations guaranteed by the U.S. Government
or its agencies, and fully insured bank deposits.
-10-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
PHILIP MORRIS STOCK FUND - This fund is invested in the common stock, $1
par value, of the Company (the "Common Stock") and short-term temporary
investments.
None of the foregoing funds guarantees a return to the participant.
Participants can change their investment elections effective the first day of
the calendar quarter, except that amounts transferred from the Interest
Income Fund may not be directly invested in the Government Securities Fund.
Each participant may vote all the shares of Common Stock held in his or her
Accounts and invested in the Philip Morris Stock Fund. The Trustee will vote
full and fractional shares of the Common Stock in accordance with each
individual participant's instruction. The Trustee votes those shares of
Common Stock for which no or inadequate voting instructions have been
received in the same proportions as the shares for which instructions have
been received.
At December 31, 1994 and 1993, there were 37,638 and 35,424 participants,
respectively, some of whom elected to invest in more than one fund. Set
forth below is the number of participants investing in each fund.
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1994 1993
------ ------
<S> <C> <C>
Equity Index Fund 18,004 15,269
Interest Income Fund 30,470 25,907
Government Securities Fund 3,766 2,528
Freihofer Equitable Capital Fund 590 -
Philip Morris Stock Fund 28,684 26,872
</TABLE>
Each participant is at all times fully vested in the balance of his or her
After-Tax Contributions, Tax-Deferred Contributions, QVET and Rollover
Accounts (see Note 4). A participant shall be fully vested in the balance in
his or her Company Match Account upon attainment of age 65, retirement,
permanent and total disability, or death. A participant who is employed by
Kraft Foods or any affiliate shall be fully vested in his or her Company
Match Account based on the number of years of vesting service determined in
accordance with the following schedule:
<TABLE>
<CAPTION>
VESTED
YEARS OF SERVICE PERCENTAGE
---------------- ----------
<S> <C>
Less than 2 0 %
2 but less than 3 25 %
3 but less than 4 50 %
4 but less than 5 75 %
5 or more 100 %
</TABLE>
-11-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Participants who were participants in the GF Plans and hired prior to January
1, 1991 become 100% vested in amounts contributed to their Company Match
Account upon attaining age 55 if still employed by the Kraft Foods or any
affiliate.
FORFEITURES:
Kraft Foods Matching Contributions forfeited by terminated participants
are used to reduce future Kraft Foods Matching Contributions to the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
VALUATION OF TRUST INVESTMENTS:
Investments in common trust funds of the General Employee Benefit Common
Trust of Bankers Trust Company ("GEBT") are valued on the basis of the
relative interest of each participating investor (including each
participant) in the fair value of the underlying assets of each of the
respective GEBT common trust funds.
Investment contracts and pools of mortgage-backed and asset-backed
securities and other investments held in the Interest Income Fund are
recorded at their contract values, which represent contributions and
reinvested income, less any withdrawals plus accrued interest.
Securities listed on an exchange are valued at the closing price on the
last business day of the year; listed securities for which no sale was
reported on that date are recorded at the last reported bid price.
Securities that are not listed on an exchange are generally traded in
active markets and valued by the Trustee from quoted market prices.
Short-term temporary investments are generally carried at cost, which
approximates fair value.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME OF THE TRUST:
Investment transactions are accounted for on the dates purchases or sales
are executed. Realized gains and losses are computed on the basis of
average cost of investments sold. Dividend income is recorded on the ex-
dividend date; interest income is recorded as earned on an accrual basis.
In accordance with the policy of stating investments at fair value, the
net appreciation (depreciation) in the fair value of investments reflects
both realized gains or losses and the change in the unrealized
appreciation (depreciation) of investments held at year-end (see Note 8).
-12-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
3. CONTRIBUTIONS:
No contribution is required from any eligible employee under the Plan.
Eligible employees may make contributions on a tax-deferred basis, an after-
tax basis, or in a combination of the two. Basic Contributions are those
made on an after-tax basis and that are not in excess of 6% of each
compensation payment to the participant. Tax-Deferred Basic Contributions
are those made on a tax-deferred basis and that are not in excess of 6% of
each compensation payment to the participant. Basic Contributions and Tax-
Deferred Basic Contributions may not, in the aggregate, exceed 6% of each
compensation payment. Contributions in excess of 6% of each compensation
payment to the participant and up to 16% of each compensation payment are
referred to as Supplemental Contributions if made on an after-tax basis and
Tax-Deferred Supplemental Contributions if made on a tax-deferred basis. The
percentage of compensation available for both tax-deferred and after-tax
contributions varies from year-to-year in order that the aggregate
contributions actually made by participants do not cause the Plan to violate
limitations on such contributions set forth in the Internal Revenue Code of
1986, as amended (the "Code"). The Code also imposes a dollar limitation on
the amount of tax-deferred contributions for a calendar year. For 1994, each
participant's tax-deferred contributions was limited to $9,240; for 1995,
each participant's tax-deferred contributions will again be limited to
$9,240.
Each year, Kraft Foods Matching Contributions are based on the amount of each
participant's Basic Contributions and Tax-Deferred Basic Contributions to the
Plan. For the year ending December 31, 1993, employees who were participants
in the Oscar Mayer Salaried Plan were not eligible for the Kraft Foods
Matching Contributions and could elect to contribute from 2% to 15% of each
compensation payment on a tax-deferred basis and from 2% to 10% of each
compensation payment on an after-tax basis and the combined percentage of
tax-deferred and after-tax contributions could not exceed 15% of the
participant's annual compensation. Currently, the Kraft Foods Matching
Contributions percentage for the following Plan year is announced before the
end of the preceding year. Kraft Foods Matching Contributions were 57% of
participants' Basic Contributions and Tax-Deferred Basic Contributions for
1994, 55% for 1993 and 60% for 1992. However, due to limitations under the
Code, certain amounts for highly paid individuals are not contributed to the
Trust but are instead recorded as liabilities of the applicable Kraft Foods
Company.
Participants' contributions are recorded in the period in which they are
withheld by the Kraft Foods Companies. Kraft Foods Matching Contributions
for the year are accrued by the Plan based upon the amount to be funded each
year in accordance with the Plan's formula noted above.
-13-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Kraft Foods Matching Contributions are discretionary. While Kraft Foods has
not expressed any intent to discontinue making Kraft Foods Matching
Contributions, it is free to do so at any time. Kraft Foods Matching
Contributions and participant contributions are subject to specified
limitations as described in the Code and the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
The Plan provides, in the event of a Change of Control (as defined in the
Plan) of the Company, for Kraft Foods Matching Contributions for the year in
which the Change of Control occurs and for two years thereafter (the "Control
Period") equal to the greater of (a) the average of Kraft Foods Matching
Contributions as a percentage of Basic Contributions and Tax-Deferred Basic
Contributions that were contributed to the Plan for the two years prior to
the year in which the Change of Control occurs, or (b) 75% of each
participant's Basic Contributions and Tax-Deferred Basic Contributions for
each year during the Control Period.
4. VALUATION OF PARTICIPANT ACCOUNTS:
The Committee maintains Accounts for each participant to reflect the source
and the participant's share of the funds invested in the Trust:
<TABLE>
<CAPTION>
Account Source
------- ------
<S> <C>
Company Match Account Kraft Foods Matching Contributions
Tax-Deferred Contributions Account Tax-Deferred Basic and Supplemental
Contributions
After-Tax Contributions Account Basic and Supplemental Contributions
Rollover Account Amounts transferred (directly or
indirectly) from another plan
qualified under Section 401(a) of the
Code
QVET Account Qualified voluntary employee
contributions made prior to January 1,
1987
Loan Account Outstanding loans obtained from the
Plan
</TABLE>
At the end of each month, the Trustee determines the current fair value of
each fund in the Trust. The fair value of each participant's share in the
Trust is determined with respect to their Company Match Account, Tax-Deferred
Contributions Account, After-Tax Contributions Account, Rollover Account and
QVET Account on the basis of their proportionate share in each fund.
-14-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
5. WITHDRAWALS AND DISTRIBUTIONS:
Participants may make withdrawals against their Company Match, Tax-Deferred
Contributions, After-Tax Contributions and Rollover Accounts under limited
circumstances in accordance with the provisions outlined in the Plan.
Upon termination of employment, including retirement, a participant has
several options available, as described in the Plan, with respect to the
distribution of his or her Accounts. Normally, distributions are made one
month after such termination.
In the event the Plan is terminated, distributions will be made in accordance
with the current value of participants' Accounts under the direction of the
Committee and in accordance with the Code.
6. PARTICIPANTS' LOANS:
The loan program permits participants to borrow from their Tax-Deferred
Contributions, After-Tax Contributions and Rollover Accounts in accordance
with the provisions outlined in the Plan.
A participant's Loan Account equals the principal amount of his or her loans
outstanding. The principal amount of loan repayments reduce the Loan Account
and are added back to the participant's Accounts originally used as the
source of the loan. The repaid amount (including interest) is reinvested in
the funds according to the participant's current investment authorization.
Participants' loans are carried at the original principal amount less
principal repayments. Participants' loan repayments receivable represent
amounts withheld by the Kraft Foods Companies from participants' compensation
and not yet remitted to the Plan. Amounts to be disbursed under employee
loan agreements are recorded as undistributed participants' loans as of the
loan agreement date.
7. INVESTMENTS HELD BY THE TRUST:
The Plan's allocated share of the Trust's net assets and investment
activities is based upon the total of each individual participant's share of
the Trust. The Plan's approximate allocated share of the Trust and its
approximate allocated share of the net assets of each fund in the Trust at
December 31, 1994 and 1993, were:
-15-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(in thousands of dollars)
(continued)
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Trust 93% 89%
Equity Index Fund 98% 98%
Interest Income Fund 94% 89%
Government Securities Fund 99% 100%
Freihofer Equitable Capital
Management Fund 100% -
Philip Morris Stock Fund 89% 89%
Participants' Loan Account 100% 99%
</TABLE>
The Plan's approximate allocated share of the Trust's investment activities
for the years ended December 31, 1994, 1993 and 1992, was 89%, 85% and 87%,
respectively.
Effective January 1, 1994, most payments to third parties for expenses in
connection with the administration of the Plan are borne by the Trust. Prior
to January 1, 1994, all expenses incurred in administering the Plan were
borne by Kraft Foods, with the exception of brokerage commissions, investment
management fees and transfer taxes, which were paid by the Trust. In
addition, Oscar Mayer Foods Corporation ("Oscar Mayer") paid the investment
management fees incurred in administering the Oscar Mayer Salaried Plan.
Expenses paid by Kraft Foods and Oscar Mayer are not reflected in the
financial statements of the Plan.
The following expenses are paid from the Plan's assets: investment management
fees, brokerage commissions, trustee's fees, audit fees, recordkeeping fees
and legal fees. For 1994 and 1993, the approximate amount of such expenses,
expressed as a percentage of the average net assets of each fund under the
Plan, are as follows:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Equity Index Fund 0.10% 0.01%
Interest Income Fund 0.10% 0.02%
Government Securities Fund 0.14% 0.09%
Philip Morris Stock Fund 0.08% -
</TABLE>
Investments that represented five percent or more of total Trust assets as of
December 31, 1994 and 1993 were:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Philip Morris Stock Fund
Common Stock $794,210 $724,969
GEBT Equity Index Fund $213,759 $180,299
Interest Income Fund
Prudential $101,387 $92,181
Mass Mutual - $98,459
</TABLE>
The GEBT Equity Index Fund currently includes Common Stock.
-16-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(in thousands of dollars)
(continued)
At December 31, 1994 and 1993, the financial position of the Trust was:
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Assets:
Investments at fair value:
Equity Index Fund:
GEBT Equity Index Fund
(cost $209,846 and $120,304) $ 213,759 $ 180,299
Short-term temporary investments
(cost approximates fair value) 346 1,038
Interest Income Fund:
Investment contracts
(cost approximates fair value) 748,032 699,018
Short-term temporary investments
(cost approximates fair value) 70,518 44,426
Government Securities Fund:
Government securities
(cost $10,986 and $7,512) 10,877 7,513
Short-term temporary investments
(cost approximates fair value) 1,920 3,859
Government Securities Fund (GF):
Government securities (GF)
(cost $891) - 886
Short-term temporary investments
(cost approximates fair value) 996 384
Freihofer Equitable Capital
Management Fund:
Equitable Capital Management
Corporation Combined Equity
Account (cost $6,063 and $5,433) 12,698 13,175
Short-term temporary investments
(cost approximates fair value) 38
Philip Morris Stock Fund:
Common stock
(cost $546,407 and $504,354) 794,210 724,969
Short-term temporary investments
(cost approximates fair value) 6,771 6,360
Participants' Loan Account:
Loans to participants 36,592 36,401
---------- ----------
Total investments 1,896,719 1,718,366
Receivables:
Employer contributions receivable 733 -
Employee contributions receivable 409 -
Interest income 637 204
Dividend income 11,412 8,486
---------- ----------
Total assets 1,909,910 1,727,056
Liabilities:
Distributions and
other payables 388 -
---------- ----------
Net assets $1,909,522 $1,727,056
========== ==========
</TABLE>
-17-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(in thousands of dollars)
(continued)
The changes in the Trust net assets for the years ended December 31, 1994,
1993 and 1992, were:
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Additions:
Employer contributions $ 45,559 $ 37,538 $ 38,284
Employee contributions 112,998 114,541 98,943
Transfers from predecessor trusts 54,833 140,700 144,365
Investment activities:
Interest 53,007 54,578 51,664
Dividends 40,029 33,575 25,362
Interest on participant loans 2,304 2,639 2,456
---------- ---------- ----------
95,340 90,792 79,482
Net appreciation (depreciation)
in fair value of investments 26,296 (255,146) (19,024)
---------- ---------- ----------
Net investment activities 121,636 (146,354) 60,458
Deductions:
Distributions and withdrawals (150,932) (120,175) (122,442)
General and administrative
expenses (1,628) (234) (244)
---------- ---------- ----------
Increase in Trust net assets 182,466 8,016 219,364
Net assets:
Beginning of year 1,727,056 1,719,040 1,499,676
---------- ---------- ----------
End of year $1,909,522 $1,727,056 $1,719,040
========== ========== ==========
</TABLE>
The transfers from the predecessor trusts for the year ended December 31,
1994, includes the transfers of assets to the Trust of the assets of the
former Entenmann's Plan in the amount of $52,343.
The transfers from predecessor trusts for the year ended December 31, 1993,
includes the transfer of assets to the Trust of the assets of the GF Hourly
Plan in the amount of $137,904.
The transfers from predecessor trusts for the year ended December 31, 1992,
includes the transfer of assets to the Trust of the assets of the Oscar Mayer
Salaried Plan and the assets of the Freihofer Plan in the amounts of $94,212
and $49,060, respectively.
-18-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(in thousands of dollars)
(continued)
8. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF TRUST INVESTMENTS:
The realized gains and losses on disposals and changes in unrealized
appreciation and depreciation of investments in the Trust for the years ended
December 31, 1994, 1993 and 1992 were:
<TABLE>
<CAPTION>
FREIHOFER
EQUITABLE
EQUITY GOVERNMENT GOVERNMENT CAPITAL
INDEX SECURITIES SECURITIES PHILIP MORRIS MANAGEMENT
FUND FUND FUND (GF) STOCK FUND FUND TOTAL
--------- ----------- ----------- -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
1994
- ----
Realized gains:
Proceeds $194,914 $ 3,955 $1,860 $ 44,214 $1,455 $246,398
Cost 135,224 3,969 1,867 31,833 659 173,552
-------- ------- ------ -------- ------ --------
Net realized gains
(losses) 59,690 (14) (7) 12,381 796 72,846
-------- ------- ------ -------- ------ --------
Unrealized (depreciation)
appreciation:
Beginning of year 59,995 1 (5) 220,615 7,743 288,349
End of year 3,838 (109) - 231,434 6,636 241,799
-------- ------- ------ -------- ------ --------
(Decrease) increase (56,157) (110) 5 10,819 (1,107) (46,550)
-------- ------- ------ -------- ------ --------
Net appreciation
(depreciation) in fair
value of investments $ 3,533 ($ 124) ($ 2) $ 23,200 ($ 311) $ 26,296
======== ======= ====== ======== ====== ========
1993
- ----
Realized gains:
Proceeds $ 7,181 $55,646 $2,341 $ 35,029 $1,587 $101,784
Cost 4,761 55,578 2,330 23,702 837 87,208
-------- ------- ------ -------- ------ --------
Net realized gains 2,420 68 11 11,327 750 14,576
-------- ------- ------ -------- ------ --------
Unrealized appreciation
(depreciation):
Beginning of year 45,286 68 421,453 6,410 473,217
Transfer from GF Plans 1,557 7 83,290 84,854
End of year 59,995 1 (5) 220,615 7,743 288,349
-------- ------- ------ -------- ------ --------
(Decrease) increase 13,152 (67) (12) (284,128) 1,333 (269,722)
-------- ------- ------ -------- ------ --------
Net (depreciation)
appreciation in fair
value of investments $ 15,572 $ 1 ($ 1) ($272,801) $2,083 ($255,146)
======== ======= ====== ======== ====== ========
</TABLE>
-19-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(in thousands of dollars)
(continued)
<TABLE>
<CAPTION>
FREIHOFER
EQUITABLE
EQUITY GOVERNMENT GOVERNMENT CAPITAL
INDEX SECURITIES SECURITIES PHILIP MORRIS MANAGEMENT
FUND FUND FUND (GF) STOCK FUND FUND TOTAL
------ ---------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
1992
- ----
Realized gains:
Proceeds $10,720 $11,619 $ 46,401 $ 55 $ 68,795
Cost 7,314 11,547 21,757 53 40,671
------- ------- -------- ------ --------
Net realized gains 3,406 72 24,644 2 28,124
------- ------- -------- ------ --------
Unrealized appreciation:
Beginning of year 38,754 143 458,322 497,219
Transfer from GF Plans 246 246
Transfer from Oscar Mayer 17,722 17,722
Transfer from Freihofer 5,178 5,178
End of year 45,286 68 421,453 6,410 473,217
------- ------- -------- ------ --------
(Decrease) increase 6,532 (75) (54,837) 1,232 (47,148)
------- ------- -------- ------ --------
Net (depreciation)
appreciation in fair
value of investments $ 9,938 ($ 3) ($ 30,193) $1,234 ($ 19,024)
======= ======= ======== ====== ========
</TABLE>
9. TAX STATUS:
The U.S. Treasury Department has determined that the Plan, as amended and in
effect as of April 25, 1990, constitutes a qualified plan under Section
401(a) of the Code and the related Trust is, therefore, exempt from Federal
income taxes under the provisions of Section 501(a) of the Code. The Plan
has been amended several times since that date and the Plan, as amended and
in effect through July 1, 1994 has been submitted to the Internal Revenue
Service for a determination that the Plan, as so amended, continues to
constitute a qualified plan under Section 401(a) of the Code and the related
Trust continues to be exempt from Federal income taxes under Section 501(a)
of the Code. These amendments have been drafted to comply with the provisions
of the Code applicable to qualified plans. The Fiduciaries believe that the
Plan, as so amended, continues to comply with the applicable provisions of
the Code and that the Plan continues to be administered in accordance with
the applicable provisions of the Code.
Participants will not be subject to income tax on Kraft Foods Matching
Contributions, tax-deferred contributions made on their behalf by Kraft Foods
or with respect to rollover contributions when made to the Trust, nor on
earnings credited to their Accounts until withdrawn or distributed.
-20-
<PAGE>
KRAFT FOODS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
(concluded)
10. TRANSFERRED PLAN PARTICIPANTS AND NET ASSETS AND TERMINATED PLANS:
Effective December 31, 1994, the account balances of all participants in
the Entenmann's Plan and Freihofer Plan were transferred to the Plan. The
Plan has reflected these transfers in its 1994 financial statements, as an
addition to transfers from predecessor trusts, although the actual
transfers of the related investments to the Plan were executed by the
Trustee in 1995.
Effective December 31, 1993, the account balances of all participants in
the Oscar Mayer Salaried Plan were transferred to the Plan. The Plan has
reflected this transfer in its 1993 financial statements, as an addition to
transfers from predecessor trusts, although the actual transfer of the
related investments to the Plan was executed by the Trustee in 1994.
Effective April 1, 1993, the account balances of all participants in the
Lenders Plan were transferred to the Plan.
-21-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Management Committee for Employee Benefits of Kraft Foods, Inc., having
administrative responsibility of the Plan, has duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
KRAFT FOODS THRIFT PLAN
(Name of Plan)
By /s/ TERRY M. FAULK
-----------------------------------
Terry M. Faulk, Chairman,
Management Committee for Employee
Benefits of Kraft Foods, Inc.
Date: April 26, 1995
-22-
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
PHILIP MORRIS STOCK FUND -- 42.23%
COMMON STOCK -- 41.87%
TOBACCO -- 41.87%
Philip Morris Companies Inc. 13,812,339 $546,406,712 $794,209,493
SHORT-TERM INVESTMENTS -- 0.36%
GEBT Pyramid Directed
Account Cash Fund 6,770,867 6,770,867 6,770,867
------------ ------------
TOTAL PHILIP MORRIS STOCK FUND 553,177,579 800,980,360
------------ ------------
EQUITY INDEX FUND -- 11.29%
GEBT Equity Index Fund -- 11.27% 212,951 209,846,013 213,758,888
SHORT-TERM INVESTMENTS -- 0.02%
GEBT Short-Term Investment Fund 345,751 345,751 345,751
------------ ------------
TOTAL EQUITY INDEX FUND 210,191,764 214,104,639
------------ ------------
INTEREST INCOME FUND -- 43.16%
INVESTMENT CONTRACTS -- 39.44%
PARTICIPATION CONTRACTS WITH INSTITUTIONS -- 27.97%
New England Mutual Life
#GA 4832 9.00%
matures 5/15/95 16,809,447 16,809,447 16,809,447
Connecticut Mutual Life Ins. Co.
#70267 9.37%
matures 7/3/95 1,314,385 1,314,385 1,314,385
New York Life Ins. Co.
#05939 9.35%
matures 8/26/95 1,516,350 1,516,350 1,516,350
Great West Life
#K17020 9.50%
matures 10/3/95 8,811,813 8,811,813 8,811,813
Hartford Life Ins.
#GA-5245 8.97%
matures 10/31/95 7,824,347 7,824,347 7,824,347
</TABLE>
S-1
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Participation Contracts with Institutions (continued)
Hartford Life Ins.
#GA 5246 8.80%
matures 10/31/95 4,861,183 $ 4,861,183 $ 4,861,183
Provident Mutual Life Ins. Co.
#8142-001 8.72%
matures 12/31/95 956,172 956,172 956,172
Confederation Life Ins.
#62325 9.33%
matures 1/2/96 21,109,885 21,109,885 21,109,885
Prudential
#K6160 9.40%
matures 2/3/96 38,551,424 38,551,424 38,551,424
Ohio National Life Co.
#5265 8.47%
matures 3/1/96 464,514 464,514 464,514
Commonwealth Life Ins.
#00326 FR 9.26%
matures 4/1/96 10,689,998 10,689,998 10,689,998
Canada Life Ins. Co.
#45492 8.50%
matures 6/1/96 21,248,847 21,248,847 21,248,847
Mass Mutual
PGIC #10404 6.23%
matures 7/20/96 28,965,975 28,965,975 28,965,975
Prudential
GA 7269 6.60%
matures 8/15/96 60,530,955 60,530,955 60,530,955
Mass Mutual
#K5897 10.10%
matures 9/8/96 52,598,822 52,598,822 52,598,822
New York Life
#GA 20013 5.83%
matures 9/30/96 28,352,735 28,352,735 28,352,735
John Hancock
GAC# 6436 8.03%
matures 11/30/96 29,011,265 29,011,265 29,011,265
New York Life Ins. Co.
#06204 8.55%
matures 12/1/96 19,519,943 19,519,943 19,519,943
Connecticut General Ins.
GA-7771 7.15%
matures 1/1/97 32,273,747 32,273,747 32,273,747
</TABLE>
S-2
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Participation Contracts with Institutions (continued)
Hartford Life Ins. Co.
#9108 8.74%
matures 5/1/97 27,383,064 $ 27,383,064 $ 27,383,064
Prudential Insurance Co. of America
GA-7270 5.86%
matures 12/1/97 2,304,788 2,304,788 2,304,788
Metropolitan Life Ins. Co.
Acct# 102503 5.64%
matures 12/1/97 1,188,552 1,188,552 1,188,552
Provident Mutual
#8159001 8.55%
matures 3/1/98 852,148 852,148 852,148
Mass Mutual
GAC 10223 8.36%
matures 4/30/98 10,157,780 10,157,780 10,157,780
Connecticut General Life Ins.
#25119 8.81%
matures 8/1/98 21,756,966 21,756,966 21,756,966
Aetna Life Ins. Co.
MV 6008 4.73%
matures 12/31/98 2,025,185 2,025,185 2,025,185
Hartford Life Ins. Co.
GA 10225 7.65%
matures 1/31/99 20,068,000 20,068,000 20,068,000
Allstate Life Insurance Company
#5428 6.15%
matures 4/30/99 36,615,741 36,615,741 36,615,741
Allstate Life Ins. Co.
GIC# 5581 7.23%
matures 5/20/99 1,920,033 1,920,033 1,920,033
Provident National Assurance
#02705689 6.96% 20,803,272 20,803,272 20,803,272
------------ ------------
TOTAL CONTRACTS 530,487,336 530,487,336
------------ ------------
FINANCIAL INSTITUTION POOLS -- 11.47%
National Westminster Bank
#SAM 0104A 5.80%
GEBT Short-Term Investment Fund 794,953 794,953
Confederation Life Ins.
matures 11/30/95 8.61% 10,580,242 10,580,242
</TABLE>
S-3
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Financial Institution Pools (continued)
National Westminster Bank Contract (continued)
Federal National Mortgage Association Remic
matures 6/25/2005 6.25% $ 2,261,992 $ 2,261,992
Federal Home Loan Mtg. Corporation
matures 8/15/2005 6.25% 1,126,785 1,126,785
Federal National Mortgage Association
matures 8/25/2005 6.00% 488,337 488,337
Federal Home Loan Mtg. Corporation
matures 8/15/2008 6.50% 3,180,690 3,180,690
Federal National Mortgage Association Pool
matures 5/1/2009 7.00% 2,719,009 2,719,009
Federal National Mortgage Association Pool
matures 5/1/2009 6.50% 2,715,172 2,715,172
Federal Home Loan Mtg. Corporation Pool
matures 6/1/2009 6.50% 2,703,228 2,703,228
Federal Home Loan Mtg. Corporation Pool
matures 7/1/2009 7.00% 2,829,931 2,829,931
Federal Home Loan Mtg. Corporation Pool
matures 4/15/2011 5.00% 2,294,622 2,294,622
Federal National Mortgage Association
matures 8/25/2012 5.60% 1,512,835 1,512,835
Federal Home Loan Mtg. Corporation
matures 8/25/2013 6.70% 4,072,555 4,072,555
Federal National Mortgage Association
matures 9/25/2015 6.00% 2,227,037 2,227,037
Federal Home Loan Mtg. Corporation
matures 12/15/2015 6.50% 2,769,257 2,769,257
Federal National Mortgage Association
matures 6/25/2016 5.70% 4,203,806 4,203,806
Federal National Mortgage Association
matures 7/25/2016 5.65% 2,247,603 2,247,603
Federal Home Loan Mtg. Corporation
matures 1/15/2018 6.00% 4,180,009 4,180,009
Federal National Mortgage Association
matures 6/15/2018 7.00% 300,624 300,624
Federal National Mortgage Association
matures 1/25/2020 7.00% 4,121,824 4,121,824
Government National Mortgage Association
matures 5/15/2024 7.00% 3,493,390 3,493,390
----------- -----------
Total National Westminster Bank Contract 60,823,901 60,823,901
----------- -----------
</TABLE>
S-4
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Financial Institution Pools (continued)
Provident Life & Accident
#630-05581 5.45%
GEBT Short-Term Investment Fund $ 395,207 $ 395,207
U. S. Treasury Note
matures 3/31/96 5.13% 4,459,169 4,459,169
U. S. Treasury Note
matures 6/30/96 6.00% 2,214,456 2,214,456
U. S. Treasury Note
matures 11/30/98 5.13% 3,620,847 3,620,847
U. S. Treasury Note
matures 8/15/2002 6.38% 2,206,531 2,206,531
Federal Home Loan Mtg. Corporation
matures 9/15/2002 4.85% 2,629,197 2,629,197
Federal National Mortgage Association Remic
matures 7/25/2003 5.40% 2,748,948 2,748,948
U. S. Treasury Note
matures 8/15/2003 5.75% 655,218 655,218
Federal Home Loan Mtg. Corporation
matures 9/15/2008 6.00% 1,669,489 1,669,489
Federal Home Loan Mtg. Corporation
matures 11/1/2008 6.00% 2,446,464 2,446,464
Federal National Mortgage Association Pool
matures 7/1/2009 6.00% 2,454,934 2,454,934
Federal National Mortgage Association
matures 9/25/2019 5.50% 2,507,835 2,507,835
Federal National Mortgage Association
matures 8/25/2023 3.00% 2,350,655 2,350,655
Federal National Mortgage Association Pool
matures 6/1/2024 6.50% 2,430,410 2,430,410
----------- -----------
Total Provident Life & Accident Contract 32,789,360 32,789,360
----------- -----------
Commonwealth Life
No. ADA 00044TR 6.20%
GEBT Short-Term Investment Fund 6,140,932 6,140,932
Standard Credit Card Master Trust
matures 8/7/96 5.88% 2,785,615 2,785,615
MBNA Master Credit Card Trust
matures 8/15/99 6.20% 2,615,626 2,615,626
U. S. Treasury Note
matures 8/15/2003 5.75% 1,215,288 1,215,288
Federal National Mortgage Association
matures 9/9/2003 5.97% 503,428 503,428
</TABLE>
S-5
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Financial Institution Pools (continued)
Commonwealth Life (continued)
Federal Home Loan Mtg. Corporation
matures 2/15/2005 6.65% $ 5,117,332 $ 5,117,332
Federal National Mortgage Association
matures 5/25/2005 6.70% 5,085,199 5,085,199
Federal Home Loan Mtg. Corporation
matures 8/15/2005 6.70% 5,114,176 5,114,176
Federal National Mortgage Association
matures 11/25/2005 7.15% 2,081,284 2,081,284
Federal National Mortgage Association Pool
matures 8/25/2006 6.00% 4,681,238 4,681,238
Student Loan Mortgage Association
matures 8/1/2007 7.13% 673,644 673,644
Federal National Mortgage Association Pool
matures 7/1/2009 7.00% 7,966,780 7,966,780
Federal Home Loan Mtg. Corporation
matures 12/15/2018 6.00% 2,448,917 2,448,917
Government National Mortgage Association Pool
matures 5/15/2024 6.50% 8,606,532 8,606,532
Federal National Mortgage Association Pool
matures 9/1/2024 7.00% 1,013,552 1,013,552
----------- -----------
Total Commonwealth Life Insurance Company Contract 56,049,543 56,049,543
----------- -----------
Peoples Life Insurance Company
No. 106873 6.30%
GEBT Short-Term Investment Fund 1,585,926 1,585,926
U. S. Treasury Note
matures 2/15/97 4.75% 5,691,311 5,691,311
Premier Auto Trust
matures 5/2/98 6.45% 716,013 716,013
Federal Home Loan Mtg. Corporation Remic
matures 12/15/98 5.50% 2,259,788 2,259,788
U. S. Treasury Note
matures 2/28/99 5.50% 5,000,198 5,000,198
American Express Master Trust
matures 7/15/2001 5.38% 1,307,797 1,307,797
Federal Home Loan Mtg. Corporation Pool
matures 11/1/2001 8.00% 600,817 600,817
Federal Home Loan Mtg. Corporation Remic
matures 1/15/2002 4.75% 2,264,465 2,264,465
U. S. Treasury Note
matures 8/15/2003 5.75% 4,754,519 4,754,519
</TABLE>
S-6
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Financial Institution Pools (continued)
Peoples Life Insurance Company (continued)
Standard Credit Card Master Trust
matures 11/7/2003 8.25% $ 707,098 $ 707,098
U. S. Treasury Note
matures 2/15/2004 5.88% 5,303,212 5,303,212
Federal National Mortgage Association Pool
matures 11/1/2005 10.5% 2,344,515 2,344,515
Federal Home Loan Mtg. Corporation
matures 2/15/2007 4.25% 5,098,732 5,098,732
Federal Home Loan Mtg. Corporation Pool
matures 5/1/2009 6.00% 2,723,201 2,723,201
Federal Home Loan Mtg. Corporation Pool
matures 6/1/2009 6.50% 3,762,602 3,762,602
Federal National Mortgage Association Pool
matures 7/1/2009 6.00% 1,541,756 1,541,756
Federal National Mortgage Association Pool
matures 7/1/2009 7.00% 1,569,144 1,569,144
Federal Home Loan Mtg. Corporation
matures 12/15/2010 5.25% 1,140,888 1,140,888
Federal National Mortgage Association
matures 3/25/2012 5.00% 1,643,122 1,643,122
Federal Home Loan Mtg. Corporation Remic
matures 1/15/2014 5.75% 1,654,250 1,654,250
Federal Home Loan Mtg. Corporation
matures 1/15/2014 5.25% 4,963,834 4,963,834
Government National Mortgage Association
matures 9/15/2019 9.00% 104,348 104,348
Federal National Mortgage Association
matures 12/15/2019 6.00% 517,066 517,066
Government National Mortgage Association
matures 12/15/2019 9.00% 1,020,639 1,020,639
Government National Mortgage Association
matures 1/15/2020 9.00% 301,399 301,399
Government National Mortgage Association
matures 6/15/2020 9.00% 523,575 523,575
Government National Mortgage Association
matures 9/15/2020 9.00% 2,606,244 2,606,244
Government National Mortgage Association
matures 10/20/2021 9.50% 1,868,436 1,868,436
Government National Mortgage Association
matures 8/15/2022 9.00% 1,503,327 1,503,327
Government National Mortgage Association
matures 5/15/2024 6.50% 2,660,344 2,660,344
</TABLE>
S-7
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
--------- --------------- ------------ ------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ ------------
<S> <C> <C> <C>
Financial Institution Pools (continued)
Peoples Life Insurance Company (continued)
Government National Mortgage Association
matures 1/15/2025 9.00% $ 143,441 $ 143,441
------------ ------------
Total Peoples Life Insurance Company Contract 67,882,007 67,882,007
------------ ------------
TOTAL POOLS 217,544,811 217,544,811
------------ ------------
TOTAL INVESTMENT CONTRACTS 748,032,147 748,032,147
------------ ------------
SHORT-TERM INVESTMENTS -- 3.72%
GEBT Short-Term Investment Fund 65,639,936 65,639,936 65,639,936
GEBT Stable Value Government Fund 4,878,264 4,878,264 4,878,264
------------ ------------
TOTAL SHORT-TERM INVESTMENTS 70,518,200 70,518,200
------------ ------------
TOTAL INTEREST INCOME FUND 818,550,347 818,550,347
------------ ------------
GOVERNMENT SECURITIES FUND -- 0.67%
GOVERNMENT SECURITIES -- 0.49%
United States Treasury Note,
4.125% due 5/31/95 6,000,000 5,986,094 5,944,680
United States Treasury Note,
4.125% due 6/30/95 1,500,000 1,507,031 1,482,420
United States Treasury Note,
4.00% due 1/31/96 500,000 497,539 482,735
United States Treasury Note,
6.00% due 6/30/96 1,500,000 1,495,273 1,467,660
------------ ------------
TOTAL GOVERNMENT SECURITIES 9,485,937 9,377,495
------------ ------------
FEDERAL AGENCY OBLIGATIONS -- 0.08%
Student Loan Marketing Association
Medium Term Note SER97 BB
8.29% due 12/22/97 1,500,000 1,500,000 1,499,394
------------ ------------
TOTAL FEDERAL AGENCY OBLIGATIONS 1,500,000 1,499,394
------------ ------------
TOTAL SECURITIES 10,985,937 10,876,889
------------ ------------
</TABLE>
S-8
<PAGE>
KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST
SCHEDULE I - INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D
-------- --------------- ------------ --------------
FACE AMOUNT COST
OR NUMBER BASIS OF
NAME OF ISSUER AND TITLE OF ISSUE OF SHARES/UNITS INVESTMENTS FAIR VALUE
- --------------------------------- --------------- ------------ --------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 0.10%
BT Pyramid Government Securities Cash Fund 1,919,760 $ 1,919,760 $ 1,919,760
-------------- --------------
TOTAL GOVERNMENT SECURITIES FUND 12,905,697 12,796,649
-------------- --------------
GOVERNMENT SECURITIES FUND (GF) -- 0.05%
GOVERNMENT SECURITIES -- 0.02%
United States Treasury Bill,
due 6/1/95 500,000 484,703 484,703
-------------- --------------
SHORT-TERM INVESTMENTS -- 0.03%
BT Pyramid Government Securities Cash Fund 511,401 511,401 511,401
-------------- --------------
TOTAL SHORT-TERM INVESTMENTS 996,104 996,104
-------------- --------------
TOTAL GOVERNMENT SECURITIES FUND (GF) 996,104 996,104
-------------- --------------
FREIHOFER EQUITABLE
CAPITAL MANAGEMENT FUND -- 0.67%
Equitable Capital Management
Corporation Combined
Equity Account 365 6,062,740 12,698,331
-------------- --------------
TOTAL FREIHOFER EQUITABLE
CAPITAL MANAGEMENT FUND 6,062,740 12,698,331
-------------- --------------
PARTICIPANTS' LOAN ACCOUNT -- 1.93%
Participants' Loans 36,592,584 36,592,584 36,592,584
-------------- --------------
TOTAL INVESTMENTS $1,638,476,815 $1,896,719,014
============== ==============
</TABLE>
S-9
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Philip Morris Companies
Inc. registration statement on Form S-8 (File Nos. 33-1480, 33-17870, 33-37115,
33-38781 and 33-39162) of the Kraft Foods Thrift Plan of our report dated April
14, 1995, on our audits of the financial statements of the Kraft Foods Thrift
Plan as of December 31, 1994 and 1993 and for the years ended December 31,
1994, 1993 and 1992, and the financial statement schedule as of December 31,
1994, which report is included in this annual report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
April 26, 1995
