<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
--------------------------
Philip Morris Deferred Profit-Sharing Plan
(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>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
ANNUAL REPORT ON FORM 11-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
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.......................... 9-20
SIGNATURES............................................... 21
SCHEDULES:
Schedule I - Investments as of December 31, 1994....... S-1-8
</TABLE>
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 Philip Morris
Management Committee for Employee Benefits,
the Administrator and all Participants as a group
(but not individually) of the Philip Morris
Deferred Profit-Sharing Plan:
We have audited the accompanying statements of financial condition of the
Philip Morris Deferred Profit-Sharing 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 its delegate). 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.
New York, New York
March 20, 1995
-3-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1994
(IN THOUSANDS OF DOLLARS)
-----
<TABLE>
<CAPTION>
U.S.
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME OBLIGATIONS PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ----------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Allocated share of
Trust net assets $416,178 $584,446 $34,636 $443,488 $58,416 $1,537,164
Employer contributions
receivable 25,486 25,280 5,412 18,140 74,318
Employee contributions
receivable 566 584 90 482 1,722
Interfund receivables
(payables) (355) (1,013) 271 1,097 -
Participants' loan
repayments receivables
(payables) 553 603 46 462 (1,664) -
-------- -------- ------- -------- ------- ----------
Total assets 442,428 609,900 40,455 463,669 56,752 1,613,204
-------- -------- ------- -------- ------- ----------
LIABILITIES:
Distributions and
withdrawals payable 2,329 4,201 361 3,060 397 10,348
Undistributed
participants' loans 286 494 47 224 (1,051) -
-------- -------- ------- -------- ------- ----------
Total liabilities 2,615 4,695 408 3,284 (654) 10,348
-------- -------- ------- -------- ------- ----------
Plan equity $439,813 $605,205 $40,047 $460,385 $57,406 $1,602,856
======== ======== ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1993
(IN THOUSANDS OF DOLLARS)
-----
<TABLE>
<CAPTION>
U.S.
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME OBLIGATIONS PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- -------- ------------ -------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Allocated share of
Trust net assets $407,374 $538,650 $33,027 $449,211 $65,664 $1,493,926
Employer contributions
receivable 33,365 33,554 6,745 26,097 99,761
Employee contributions
receivable 545 580 72 559 1,756
Interfund receivables
(payables) (1,291) 4,671 (1,066) (2,314) -
Participants' loan
repayments receivables
(payables) 676 690 51 666 (2,083) -
-------- -------- ------- -------- ------- ----------
Total assets 440,669 578,145 38,829 474,219 63,581 1,595,443
-------- -------- ------- -------- ------- ----------
LIABILITIES:
Distributions and
withdrawals payable 6,585 11,509 293 9,637 1,572 29,596
Undistributed
participants' loans 445 319 40 229 (1,033) -
-------- -------- ------- -------- ------- ----------
Total liabilities 7,030 11,828 333 9,866 539 29,596
-------- -------- ------- -------- ------- ----------
Plan equity $433,639 $566,317 $38,496 $464,353 $63,042 $1,565,847
======== ======== ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS OF DOLLARS)
-----
<TABLE>
<CAPTION>
U.S.
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME OBLIGATIONS PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ------------ -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employer contributions $ 25,514 $ 25,342 $ 5,365 $ 18,127 $ 74,348
Employee contributions 7,463 7,670 1,077 6,363 22,573
Allocated share of Trust
investment activities:
Interest income 3 39,718 1,434 153 $ 3,892 45,200
Dividend income 31 23,427 23,458
Net appreciation
(depreciation) in
fair value of
investments 6,005 (567) 12,136 17,574
-------- -------- ------- -------- -------- ----------
6,039 39,718 867 35,716 3,892 86,232
-------- -------- ------- -------- -------- ----------
Total additions 39,016 72,730 7,309 60,206 3,892 183,153
-------- -------- ------- -------- -------- ----------
DEDUCTIONS:
Distributions and
withdrawals (37,150) (60,486) (4,190) (38,379) (5,370) (145,575)
General and administrative
expenses (206) (341) (67) (174) (788)
-------- -------- ------- -------- -------- ----------
Total deductions (37,356) (60,827) (4,257) (38,553) (5,370) (146,363)
-------- -------- ------- -------- -------- ----------
Net transfers among funds 3,184 25,329 (1,334) (27,179) -
Net transfers between plans 66 108 5 35 5 219
Participants' loans (6,178) (6,473) (759) (4,535) 17,945 -
Participants' loan repayments 7,442 8,021 587 6,058 (22,108) -
-------- -------- ------- -------- -------- ----------
Net additions
(deductions) 6,174 38,888 1,551 (3,968) (5,636) 37,009
PLAN EQUITY:
Beginning of year 433,639 566,317 38,496 464,353 63,042 1,565,847
-------- -------- ------- -------- -------- ----------
End of year $439,813 $605,205 $40,047 $460,385 $ 57,406 $1,602,856
======== ======== ======= ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS OF DOLLARS)
-----
<TABLE>
<CAPTION>
U.S.
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME OBLIGATIONS PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ------------ -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employer contributions $ 33,685 $ 34,241 $ 6,107 $ 25,757 $ 99,790
Employee contributions 7,048 7,610 1,031 8,145 23,834
Allocated share of Trust
investment activities:
Interest income 4 38,301 1,380 90 $ 4,388 44,163
Dividend income 1 22,644 22,645
Net (depreciation)
appreciation in
fair value of
investments 39,463 25 (198,100) (158,612)
-------- -------- ------- --------- -------- ----------
39,468 38,301 1,405 (175,366) 4,388 (91,804)
-------- -------- ------- --------- -------- ----------
Total additions 80,201 80,152 8,543 (141,464) 4,388 31,820
-------- -------- ------- --------- -------- ----------
DEDUCTIONS:
Distributions and
withdrawals (40,290) (75,258) (4,097) (53,254) (6,409) (179,308)
General and administrative
expenses (182) (327) (64) (161) (734)
-------- -------- ------- --------- -------- ----------
Total deductions (40,472) (75,585) (4,161) (53,415) (6,409) (180,042)
-------- -------- ------- --------- -------- ----------
Net transfers among funds (9,702) 79,015 (1,351) (67,962) -
Net transfers between plans 271 224 5 247 58 805
Participants' loans (9,913) (9,022) (910) (7,700) 27,545 -
Participants' loan repayments 7,432 7,751 536 7,750 (23,469) -
-------- -------- ------- --------- -------- ----------
Net (deductions)
additions 27,817 82,535 2,662 (262,544) 2,113 (147,417)
PLAN EQUITY:
Beginning of year 405,822 483,782 35,834 726,897 60,929 1,713,264
-------- -------- ------- --------- -------- ----------
End of year $433,639 $566,317 $38,496 $ 464,353 $ 63,042 $1,565,847
======== ======== ======= ========= ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS OF DOLLARS)
-----
<TABLE>
<CAPTION>
U.S.
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME OBLIGATIONS PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
--------- --------- ------------ -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employer contributions $ 33,372 $ 31,137 $ 6,270 $ 34,060 $ 104,839
Employee contributions 7,184 7,127 771 9,354 24,436
Allocated share of Trust
investment activities:
Interest income 13 33,723 1,480 221 $ 4,406 39,843
Dividend income 2 21,161 21,163
Net appreciation
(depreciation) in
fair value of
investments 27,628 6 (24,722) 2,912
-------- -------- ------- -------- -------- ----------
27,643 33,723 1,486 (3,340) 4,406 63,918
-------- -------- ------- -------- -------- ----------
Total additions 68,199 71,987 8,527 40,074 4,406 193,193
-------- -------- ------- -------- -------- ----------
DEDUCTIONS:
Distributions and
withdrawals (14,889) (21,923) (1,253) (23,355) (1,902) (63,322)
General and administrative
expenses (169) (324) (58) (158) (709)
-------- -------- ------- -------- -------- ----------
Total deductions (15,058) (22,247) (1,311) (23,513) (1,902) (64,031)
-------- -------- ------- -------- -------- ----------
Net transfers among funds (42,677) 4,135 (299) 38,841 -
Net transfers between plans (8) (2) (9) (6) (25)
Participants' loans (10,051) (8,799) (464) (11,427) 30,741 -
Participants' loan repayments 6,876 6,447 385 8,129 (21,837) -
-------- -------- ------- -------- -------- ----------
Net additions 7,281 51,521 6,838 52,095 11,402 129,137
PLAN EQUITY:
Beginning of year 398,541 432,261 28,996 674,802 49,527 1,584,127
-------- -------- ------- -------- -------- ----------
End of year $405,822 $483,782 $35,834 $726,897 $ 60,929 $1,713,264
======== ======== ======= ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
1. GENERAL DESCRIPTION OF THE PLAN:
The Philip Morris Deferred Profit-Sharing Plan (the "Plan") is a defined
contribution plan maintained for the benefit of eligible non-union salaried
and hourly employees of Philip Morris Companies Inc. (the "Company"), and
certain of its domestic subsidiaries, including Philip Morris Incorporated
and certain of its subsidiaries ("Philip Morris"), Miller Brewing Company
and certain of its subsidiaries ("Miller"), Philip Morris Capital
Corporation, Philip Morris Management Corp., and certain headquarters
employees of Philip Morris International Inc. (collectively, the
"Participating Companies"). The Plan is designed to provide eligible
employees with an opportunity to share in the profits of their respective
Participating Companies and to invest certain of their funds in a tax-
advantaged manner. Employees of Kraft Foods, Inc. and its subsidiaries are
not eligible to participate in the Plan.
Eligible employees generally may make before-tax and after-tax contributions
beginning on or after the January 1 following their respective dates of
hire. Eligible employees who complete twenty-four months of accredited
service are eligible to share in their Participating Company's contribution
(the "Contribution") as 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 Corporate
Employee Benefit Committee of the Company (the "Committee"), a Management
Committee for Employee Benefits (the "Management Committee") comprised of
certain members of the Committee, and the Senior Vice President, Human
Resources and Administration of the Company (the "Administrator"). The
Corporate Employee Plans Investment Committee of Philip Morris Companies
Inc. (the "Investment Committee") (the Committee, the Management Committee,
the Administrator and the Investment Committee, are hereinafter collectively
referred to as the "Fiduciaries") is responsible for the selection of the
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 Philip Morris
Incorporated Deferred Profit-Sharing Plan (the "PMI Plan") and the assets of
the Philip Morris Incorporated Deferred Profit-Sharing Plan for Craft
Employees (the "PMI Craft Plan") in a commingled investment fund known as
the Philip Morris Deferred Profit-Sharing Trust Fund (the "Trust") (see Note
7).
Participants have the option of investing their Plan Accounts (see Note 4)
in 10% increments in four funds:
EQUITY INDEX 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").
-9-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
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.
U.S. GOVERNMENT OBLIGATIONS FUND - This fund 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.
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. Prior to
June 1, 1994, participants could change their investment elections three
times during each calendar year. Effective June 1, 1994, participants can
change their investment elections once each month.
Any Contribution and participant contributions made to an Account
established on and after January 1, 1992, for which no investment direction
has been given are invested in the U.S. Government Obligations Fund. In all
other cases, the Contribution and any participating contributions made to an
Account for which no investment direction has been given are invested in the
Equity Index 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.
-10-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
At December 31, 1994 and 1993, there were 12,996 and 13,817 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 8,842 9,181
Interest Income Fund 8,356 8,505
U.S. Government Obligations Fund 2,302 2,179
Philip Morris Stock Fund 10,378 11,157
</TABLE>
Each participant is at all times fully vested in the balance of all of his
or her Accounts, which includes a Company Account and may include a Personal
Before-Tax, Personal After-Tax, Rollover and PAYSOP Accounts.
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 the pools of mortgaged-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.
-11-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
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 of investments held at year-end (see Note 8).
3. CONTRIBUTIONS:
The Contribution for the year is accrued by the Plan based upon the amount
to be funded each year in accordance with the defined contribution formula
noted below. Participants' contributions are recorded in the period in which
they are withheld by the Participating Companies.
For the year ended December 31, 1994, the Contribution on behalf of eligible
employees of Philip Morris who have met the twenty-four month service
requirement is an amount equal to the lesser of (1) three percent of
Operating Profit (defined below), less the amounts allocated for
participants in the PMI Plan and the PMI Craft Plan and (2) fifteen percent
of the aggregate participant compensation for such year of the participants
employed by Philip Morris among whom the Contribution is to be allocated.
The Contribution on behalf of eligible employees of Miller who have met the
twenty-four month service requirement is an amount equal to the lesser of
(1) three percent of Operating Profit, and (2) fifteen percent of the
aggregate participant compensation for such year of the participants
employed by Miller among whom the Contribution is to be allocated.
The Contribution by Philip Morris, expressed as a percentage of aggregate
participant compensation, is allocated ratably among participants (the
"Philip Morris Contribution Percentage") according to their individual
compensation. The Contribution by Miller, expressed as a percentage of
aggregate participant compensation, is allocated ratably among participants
(the "Miller Contribution Percentage") according to their individual
compensation.
The Contribution on behalf of eligible employees of any other Participating
Company is the greater of (1) the Philip Morris Contribution Percentage, or
(2) the Miller Contribution Percentage, multiplied in either case by
aggregate participant compensation for such year of the participants of
these other Participating Companies. The aggregate Contributions to the Plan
and the contributions to the PMI Plan and the PMI Craft Plan may not be more
than three percent of consolidated earnings of the Company and its
subsidiaries before income taxes and cumulative effect of any accounting
change and provisions for deferred profit-sharing and incentive compensation
plans.
-12-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
Operating Profit is defined as the earnings of Philip Morris or Miller, as
the case may be, before cumulative effect of any accounting changes,
discontinued operations and extraordinary items, interest and other debt
expense, income taxes, amortization of goodwill, minority interest,
unallocated corporate expenses, the amount of any deduction used in
computing such earnings for the Contribution to the Plan and the
contributions to the PMI Plan and the PMI Craft Plan and contributions to
any incentive compensation plan.
For the years ended December 31, 1993 and 1992, the Contribution was an
amount equal to the lesser of (1) three percent of consolidated earnings of
the Company and its subsidiaries before income taxes and cumulative effect
of any accounting change and provisions for deferred profit-sharing and
incentive compensation plans, less the amounts allocated for participants in
the PMI Plan and the PMI Craft Plan and (2) fifteen percent of the aggregate
participant compensation as defined by the Plan.
However, due to limitations under the Internal Revenue Code of 1986, as
amended (the "Code"), certain amounts for highly paid individuals are not
contributed to the Trust but are instead recorded as liabilities of the
Participating Companies.
No contribution is required from any participant under the Plan.
Participants may make contributions on a before-tax and after-tax basis to
the Plan. If a participant has not made the maximum after-tax contribution,
he or she may, subject to certain statutory limits, make a lump sum
contribution which may not exceed the maximum amount of personal after-tax
contributions permitted for all calendar years after January 1, 1971 in
which he or she was a participant, less the aggregate of all of such
contributions previously made. The percentage of compensation available for
these 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 Code. The Code also
imposes a dollar limitation on the amount of before-tax contributions for a
calendar year. For 1994, a participant's before-tax contribution was limited
to $9,240; for 1995, a participant's before-tax contribution will again be
limited to $9,240, with a limitation in each year of eight percent of
compensation on the total amount of before-tax and after-tax contributions.
While the Participating Companies have not expressed any intent to
discontinue making the Contribution, they are free to do so at any time. The
Contribution 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 a Contribution for the year in which the Change of
Control occurs and for two years thereafter at least equal to the lesser of
(a) the percentage of participants' compensation that was contributed to the
Plan for the year prior to the year in which the Change of Control occurs
and (b) ten percent of the participants' applicable annual compensation.
-13-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
4. VALUATION OF PARTICIPANT ACCOUNTS:
The Trustee maintains Accounts for each participant to reflect the source
and the participant's share of the funds invested in the Trust:
Account Source
------- ------
Company Account Contributions
Personal Before-Tax Account Before-tax contributions
Personal After-Tax Account After-tax contributions
Rollover Account Amounts transferred, directly or
indirectly, from another plan qualified
under Section 401(a) of the Code
PAYSOP Account The account balance transferred from the
Philip Morris Employee Stock Ownership
Plan
Loan Account Outstanding loans obtained from the Plan
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, Personal Before-Tax,
Personal After-Tax, Rollover and PAYSOP Accounts on the basis of their
proportionate share in each fund.
5. WITHDRAWALS AND DISTRIBUTIONS:
Participants may make withdrawals against their Company, Personal Before-
Tax, Personal After-Tax, Rollover and PAYSOP Accounts in accordance with the
provisions outlined in the Plan.
All withdrawals by participants are subject to approval of the Committee (or
other administrator of the Plan acting pursuant to the Committee's delegated
authority) and will not be permitted if they would have the effect of
disqualifying the Plan and the related Trust from exemption from taxation.
-14-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(CONTINUED)
Distributions are made only in the event that a person ceases to be a
participant. Upon termination of employment, including retirement, a
participant has several options available, as described in the Plan, with
respect to his or her Company, Personal Before-Tax, Personal After-Tax,
Rollover and PAYSOP 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 Company, Personal
Before-Tax, Personal After-Tax, Rollover and PAYSOP Accounts under the Plan
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 Participating 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:
In 1994 and 1993, $219 and $805 were transferred into the Plan, net of
transfers out of the Plan, respectively, from the PMI Plan and the PMI Craft
Plan as a result of employees being transferred between hourly and salaried
status.
-15-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(CONTINUED)
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:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Trust 68% 68%
Equity Index Fund 70% 67%
Interest Income Fund 67% 65%
U.S. Government Obligations Fund 47% 49%
Philip Morris Stock Fund 75% 76%
Participants' Loan Account 57% 61%
</TABLE>
The Plan's approximate allocated share of the Trust's investment activities
for the years ended December 31, 1994, 1993 and 1992 was 70%, 87% and 63%,
respectively.
Taxes and fees incurred by the Trust and most of the costs of administering
the Plan and Trust paid to third parties are paid by the Trust. 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 0.05% 0.04%
Interest Income Fund 0.06% 0.06%
U.S. Government Obligations Fund 0.17% 0.17%
Philip Morris Stock Fund 0.04% 0.03%
</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 $575,890 $583,717
GEBT Equity Index Fund $599,219 $611,007
Massachusetts Mutual Life Insurance Co. $121,809 $114,812
Commonwealth Life Insurance Co. $142,303 -
</TABLE>
The GEBT Equity Index Fund currently includes Common Stock.
-16-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING 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 $589,262 and $378,818) $ 599,219 $ 611,007
Short-term temporary investments
(cost approximates fair value) 552 1,632
Interest Income Fund:
Investment contracts
(cost approximates fair value) 865,384 814,023
Short-term temporary investments
(cost approximates fair value) 13,432 11,879
U.S. Government Obligations Fund:
Federal agency obligations
(cost $6,669 and $12,240) 6,582 12,290
Government securities
(cost $57,299 and $40,047) 56,632 40,050
Corporate obligations
(cost $1,636) - 1,660
Short-term temporary investments
(cost approximates fair value) 10,326 13,240
Philip Morris Stock Fund:
Common stock
(cost $388,051 and $391,987) 575,890 583,717
Short-term temporary investments
(cost approximates fair value) 4,240 1,012
Participants' Loan Account:
Loans to participants 102,894 106,306
---------- ----------
Total investments 2,235,151 2,196,816
Receivables:
Interest income 1,469 1,071
Dividend income 8,267 6,898
---------- ----------
Total assets 2,244,887 2,204,785
Liabilities:
Other payables 107 363
---------- ----------
Net assets $2,244,780 $2,204,422
========== ==========
</TABLE>
-17-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, EXCEPT PER UNIT DATA)
(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 $ 156,080 $ 169,173 $ 164,444
Employee contributions 29,484 30,289 31,496
Investment activities:
Interest 63,760 60,694 54,772
Dividends 31,039 30,052 27,537
Interest on participant loans 6,379 7,199 7,586
---------- ---------- ----------
101,178 97,945 89,895
Net appreciation (depreciation)
in fair value of investments 22,530 (203,526) 11,303
---------- ---------- ----------
Net investment activities 123,708 (105,581) 101,198
Deductions:
Distributions and withdrawals (267,720) (217,387) (82,158)
General and administrative
expenses (1,194) (1,106) (1,060)
---------- ---------- ----------
Increase (decrease) in Trust net assets 40,358 (124,612) 213,920
Net assets:
Beginning of year 2,204,422 2,329,034 2,115,114
---------- ---------- ----------
End of year $2,244,780 $2,204,422 $2,329,034
========== ========== ==========
</TABLE>
The number of employee participation units and the net asset value per unit
for the funds at December 31, 1994 and 1993, were:
<TABLE>
<CAPTION>
U.S.
EQUITY INTEREST GOVERNMENT PARTICIPANTS'
INDEX INCOME OBLIGATIONS PHILIP MORRIS LOAN
FUND FUND FUND STOCK FUND ACCOUNT TOTAL
-------- -------- ----------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
1994:
Net assets $599,746 $878,797 $74,339 $588,459 $103,439 $2,244,780
Number of
participation units 143,186 291,597 32,217 163,839
Net asset value per
unit $4.1886 $3.0137 $2.3074 $3.5917
1993:
Net assets $612,574 $825,882 $67,656 $591,415 $106,895 $2,204,422
Number of
participation units 146,575 293,146 29,406 175,318
Net asset value per
unit $4.1793 $2.8173 $2.3008 $3.3734
</TABLE>
-18-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING 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 or depreciation of investments in the Trust for the years ended
December 31, 1994, 1993 and 1992, were:
<TABLE>
<CAPTION>
U.S.
EQUITY GOVERNMENT
INDEX OBLIGATIONS PHILIP MORRIS
FUND FUND STOCK FUND TOTAL
---------- ------------ -------------- -----------
<S> <C> <C> <C> <C>
1994
- ----
Realized gains (losses):
Proceeds $712,663 $195,232 $161,885 $1,069,780
Cost 481,914 195,625 142,757 820,296
-------- -------- -------- ----------
Net realized gains
(losses) 230,749 (393) 19,128 249,484
-------- -------- -------- ----------
Unrealized appreciation
(depreciation):
Beginning of year 232,189 78 191,729 423,996
End of year 9,957 (753) 187,838 197,042
-------- -------- -------- ----------
(Decrease) (222,232) (831) (3,891) (226,954)
-------- -------- -------- ----------
Net appreciation
(depreciation) in fair
value of investments $ 8,517 ($ 1,224) $ 15,237 $ 22,530
======== ======== ======== ==========
1993
- ----
Realized gains:
Proceeds $120,081 $465,701 $256,282 $ 842,064
Cost 87,110 465,217 216,219 768,546
-------- -------- -------- ----------
Net realized gains 32,971 484 40,063 73,518
-------- -------- -------- ----------
Unrealized appreciation:
Beginning of year 205,950 554 494,536 701,040
End of year 232,189 78 191,729 423,996
-------- -------- -------- ----------
(Decrease) increase 26,239 (476) (302,807) (277,044)
-------- -------- -------- ----------
Net (depreciation)
appreciation in fair
value of investments $ 59,210 $ 8 ($262,744) ($ 203,526)
======== ======== ======== ==========
</TABLE>
-19-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(CONCLUDED)
<TABLE>
<CAPTION>
U.S.
EQUITY GOVERNMENT
INDEX OBLIGATIONS PHILIP MORRIS
FUND FUND STOCK FUND TOTAL
-------- ----------- -------------- ---------
<S> <C> <C> <C> <C>
1992
- ----
Realized gains:
Proceeds $169,470 $97,959 $232,729 $500,158
Cost 141,824 97,889 216,234 455,947
-------- ------- -------- --------
Net realized gains 27,646 70 16,495 44,211
-------- ------- -------- --------
Unrealized appreciation:
Beginning of year 191,418 433 542,097 733,948
End of year 205,950 554 494,536 701,040
-------- ------- -------- --------
(Decrease) increase 14,532 121 (47,561) (32,908)
-------- ------- -------- --------
Net appreciation
(depreciation) in fair
value of investments $ 42,178 $ 191 ($ 31,066) $ 11,303
======== ======= ======== ========
</TABLE>
9. TAX STATUS:
The U.S. Treasury Department has determined that the Plan, as amended and in
effect as of January 1, 1988, 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 June 1, 1994, has been submitted to the Internal Revenue
Service for 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 the Contribution and
before-tax contributions made on their behalf by the Participating
Companies, nor on earnings credited to their Accounts until withdrawn or
distributed.
-20-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Corporate Employee Benefit Committee of Philip Morris Companies Inc., having
administrative responsibility of the Plan, has duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
PHILIP MORRIS DEFERRED
PROFIT-SHARING PLAN
(Name of Plan)
By /s/ LARRY A. GATES
------------------------------------
Larry A. Gates, Chairman,
Corporate Employee Benefit Committee
of Philip Morris Companies Inc.
Date: April 26, 1995
-21-
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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>
EQUITY INDEX FUND -- 26.83%
GEBT Equity Index Fund -- 26.81% 596,952,542 $589,262,285 $599,219,171
SHORT-TERM INVESTMENTS -- 0.02%
GEBT Short-Term Investment Fund 552,122 552,122 552,122
------------ ------------
TOTAL EQUITY INDEX FUND 589,814,407 599,771,293
------------ ------------
PHILIP MORRIS STOCK FUND -- 25.96%
COMMON STOCK -- 25.77%
TOBACCO -- 25.77%
Philip Morris Companies Inc. 10,015,471 388,050,974 575,889,582
SHORT-TERM INVESTMENTS -- 0.19%
GEBT Short-Term Investment Fund 4,240,152 4,240,152 4,240,152
------------ ------------
TOTAL PHILIP MORRIS STOCK FUND 392,291,126 580,129,734
------------ ------------
INTEREST INCOME FUND -- 39.32%
INVESTMENT CONTRACTS -- 38.72%
PARTICIPATION CONTRACTS WITH INSTITUTIONS -- 27.75%
Allstate Life Insurance Company
No. GA-4603 9.18%
matures 1/1/95 5,024,244 5,024,244 5,024,244
Prudential Asset Management Company
No. 5880 9.42%
matures 3/31/95 2,623,672 2,623,672 2,623,672
John Hancock Mutual Life Insurance
Company No. 4688 8.54%
matures 10/31/95 2,192,903 2,192,903 2,192,903
Metropolitan Life Insurance Company
GAC No. 9893-9 9.32%
matures 11/1/95 15,880,249 15,880,249 15,880,249
Massachusetts Mutual Life Insurance
Company No. 6200 9.20%
matures 3/1/96 17,053,415 17,053,415 17,053,415
</TABLE>
S-1
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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)
CNA Insurance Company
GP 35000-B 4.71%
matures 3/8/96 271,799 $ 271,799 $ 271,799
Provident National Assurance Company
No. 0270425303A 8.93%
matures 3/15/96 35,135,404 35,135,404 35,135,404
Massachusetts Mutual Life Insurance
Company No. 6280 9.55%
matures 6/30/96 14,375,226 14,375,226 14,375,226
Prudential Insurance Company of America
No. GA 5905-213 9.50%
matures 8/31/96 3,941,452 3,941,452 3,941,452
New York Life Insurance Company
No. GA-20012 6.25%
matures 9/17/96 28,511,997 28,511,997 28,511,997
Massachusetts Mutual Life Insurance
Company No. 10403 6.59%
matures 9/30/96 90,380,223 90,380,223 90,380,223
John Hancock Mutual Life Insurance
Company No. 6435 6.95%
matures 12/2/96 29,013,127 29,013,127 29,013,127
Prudential Asset Management Company
No. 5905-215 9.19%
matures 12/31/96 16,378,500 16,378,500 16,378,500
Prudential Asset Management Company
No. 5905-211 8.29%
matures 2/1/97 4,578,686 4,578,686 4,578,686
Bank of America
No. SP1 212 9.47%
matures 7/31/97 20,884,732 20,884,732 20,884,732
Hartford Life Insurance Company
GA No. 9067 8.60%
matures 9/30/97 34,609,601 34,609,601 34,609,601
Prudential Life Insurance Company
No. 5905-216 9.45%
matures 9/30/97 20,694,588 20,694,588 20,694,588
Commonwealth Life Insurance Company
No. 00343 FR 8.68%
matures 2/28/98 23,595,435 23,595,435 23,595,435
New York Life Insurance Company
No. 06121 8.50%
matures 3/1/98 46,766,426 46,766,426 46,766,426
Principal Mutual Life Insurance Company
GAC No. 748-112 8.87%
matures 5/1/98 62,181,303 62,181,303 62,181,303
</TABLE>
S-2
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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)
Allstate Life Insurance Company
No. GA-5421 6.47%
matures 4/7/99 26,448,877 $26,448,877 $26,448,877
New York Life Insurance Company
No. GA-06989 7.33%
matures 7/31/99 23,773,758 23,773,758 23,773,758
Principal Mutual Life Insurance Company
GAC No. 3-748-114 5.82%
matures 9/6/99 31,831,814 31,831,814 31,831,814
Security Life of Denver
No. FA 0147 9.10%
matures 12/31/99 3,437,343 3,437,343 3,437,343
Metropolitan Life Insurance Company
No. 12861 5.60% 60,680,643 60,680,643 60,680,643
------------ ------------
TOTAL CONTRACTS 620,265,417 620,265,417
------------ ------------
FINANCIAL INSTITUTION POOLS -- 10.97%
Provident Life & Accident
GAC No. 63005580 5.45%
GEBT Short-Term Investment Fund 389,243 389,243
U. S. Treasury Note
matures 3/31/96 5.13% 4,356,218 4,356,218
U. S. Treasury Note
matures 6/30/96 6.00% 2,163,331 2,163,331
U. S. Treasury Note
matures 11/30/98 5.13% 3,537,250 3,537,250
U. S. Treasury Note
matures 8/15/2002 6.38% 2,155,588 2,155,588
Federal Home Loan Mtg. Corporation
matures 9/15/2002 4.85% 2,568,495 2,568,495
Federal National Mortgage Association Remic
matures 7/25/2003 5.40% 2,685,483 2,685,483
U. S. Treasury Note
matures 8/15/2003 5.75% 640,091 640,091
Federal Home Loan Mtg. Corporation
matures 9/15/2008 6.00% 1,630,945 1,630,945
Federal Home Loan Mtg. Corporation
matures 11/1/2008 6.00% 2,389,981 2,389,981
Federal National Mortgage Association Pool
matures 7/1/2009 6.00% 2,398,255 2,398,255
Federal National Mortgage Association
matures 9/25/2019 5.50% 2,449,935 2,449,935
</TABLE>
S-3
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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 Contract (continued)
Federal National Mortgage Association
matures 8/25/2023 3.00% $ 2,296,384 $ 2,296,384
Federal National Mortgage Association Pool
matures 6/1/2024 6.50% 2,374,298 2,374,298
----------- -----------
Total Provident Life & Accident Contract 32,035,497 32,035,497
----------- -----------
National Westminster Bank
No. SAM 0104A 5.80%
GEBT Short-Term Investment Fund 629,078 629,078
Federal National Mortgage Association Remic
matures 6/25/2005 6.25% 1,790,003 1,790,003
Federal Home Loan Mtg. Corporation
matures 8/15/2005 6.25% 891,669 891,669
Federal National Mortgage Association
matures 8/25/2005 6.00% 386,440 386,440
Federal Home Loan Mtg. Corporation
matures 8/15/2008 6.50% 2,517,005 2,517,005
Federal National Mortgage Association Pool
matures 5/1/2009 7.00% 2,151,659 2,151,659
Federal National Mortgage Association Pool
matures 5/1/2009 6.50% 2,148,622 2,148,622
Federal Home Loan Mtg. Corporation Pool
matures 6/1/2009 6.50% 2,139,170 2,139,170
Federal Home Loan Mtg. Corporation Pool
matures 7/1/2009 7.00% 2,239,435 2,239,435
Federal Home Loan Mtg. Corporation Pool
matures 4/15/2011 5.00% 1,815,824 1,815,824
Federal National Mortgage Association
matures 8/25/2012 5.60% 1,197,166 1,197,166
Federal Home Loan Mtg. Corporation
matures 8/25/2013 6.70% 3,222,772 3,222,772
Federal National Mortgage Association
matures 9/25/2015 6.00% 1,762,341 1,762,341
Federal Home Loan Mtg. Corporation
matures 12/15/2015 6.50% 2,191,422 2,191,422
Federal National Mortgage Association
matures 6/25/2016 5.70% 3,326,636 3,326,636
Federal National Mortgage Association
matures 7/25/2016 5.65% 1,778,616 1,778,616
Federal Home Loan Mtg. Corporation
matures 1/15/2018 6.00% 3,307,805 3,307,805
Federal National Mortgage Association
matures 6/15/2018 7.00% 237,896 237,896
</TABLE>
S-4
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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
matures 1/25/2020 7.00% $ 3,261,761 $ 3,261,761
Government National Mortgage Association
matures 5/15/2024 6.50% 2,764,456 2,764,456
----------- -----------
Total National Westminster Bank Contract 39,759,776 39,759,776
----------- -----------
Commonwealth Life Insurance Company
No. ADA 00043 TR 6.02%
GEBT Short-Term Investment Fund 3,954,649 3,954,649
U. S. Treasury Note
matures 6/30/96 6.00% 10,701,245 10,701,245
Standard Credit Card Master Trust
matures 8/7/96 5.88% 2,791,397 2,791,397
U. S. Treasury Note
matures 10/31/98 4.75% 3,297,951 3,297,951
MBNA Master Credit Card Trust
matures 8/15/99 6.20% 2,621,055 2,621,055
Federal Home Loan Mtg. Corporation
matures 8/15/2005 4.00% 4,066,758 4,066,758
U. S. Treasury Note
matures 8/15/2003 5.75% 2,830,193 2,830,193
Federal National Mortgage Association
matures 9/9/2003 5.97% 264,248 264,248
Federal Home Loan Mtg. Corporation
matures 11/15/2003 5.50% 5,090,285 5,090,285
Federal Home Loan Mtg. Corporation
matures 2/15/2005 6.65% 5,127,953 5,127,953
Federal National Mortgage Association Remic
matures 5/25/2005 6.70% 5,095,753 5,095,753
Federal Home Loan Mtg. Corporation
matures 8/15/2005 6.70% 5,124,791 5,124,791
Federal National Mortgage Association Remic
matures 1/25/2006 7.00% 3,536,863 3,536,863
Federal Home Loan Mtg. Corporation
matures 4/15/2006 6.75% 5,789,369 5,789,369
Federal National Mortgage Association Remic
matures 4/25/2006 6.25% 4,885,188 4,885,188
Federal National Mortgage Association Remic
matures 8/25/2006 6.00% 4,690,954 4,690,954
Federal Home Loan Mtg. Corporation Pool
matures 7/1/2008 7.00% 5,925,738 5,925,738
Federal National Mortgage Association Pool
matures 5/1/2009 7.00% 7,775,187 7,775,187
</TABLE>
S-5
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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 Insurance Company (continued)
Federal National Mortgage Association Remic
matures 7/25/2011 5.50% $ 7,690,750 $ 7,690,750
Federal Home Loan Mtg. Corporation
matures 12/15/2011 5.25% 5,258,286 5,258,286
Federal Home Loan Mtg. Corporation
matures 5/15/2014 5.40% 5,125,581 5,125,581
Federal Home Loan Mtg. Corporation
matures 12/15/2018 6.00% 2,454,000 2,454,000
Federal National Mortgage Association Remic
matures 12/25/2018 4.75% 4,644,244 4,644,244
Federal Home Loan Mtg. Corporation
matures 1/25/2019 6.25% 1,874,104 1,874,104
Government National Mortgage Association Pool
matures 5/15/2024 6.50% 8,091,410 8,091,410
------------ ------------
Total Commonwealth Life Insurance Company Contract 118,707,952 118,707,952
------------ ------------
Peoples Life Insurance Company
No. 106873 6.30%
GEBT Short-Term Investment Fund 1,282,409 1,282,409
U. S. Treasury Note
matures 2/15/97 4.75% 4,578,431 4,578,431
PRAT
matures 5/2/98 6.45% 576,003 576,003
Federal Home Loan Mtg. Corporation Remic
matures 12/15/98 5.50% 1,817,908 1,817,908
U. S. Treasury Note
matures 2/28/99 5.50% 4,022,458 4,022,458
AMXMT
matures 7/15/2001 5.38% 1,052,070 1,052,070
Federal Home Loan Mtg. Corporation Pool
matures 11/1/2001 8.00% 483,334 483,334
Federal Home Loan Mtg. Corporation Remic
matures 1/15/2002 4.75% 1,821,671 1,821,671
U. S. Treasury Note
matures 8/15/2003 5.75% 3,824,819 3,824,819
Standard Credit Card Master Trust
matures 11/7/2003 8.25% 568,832 568,832
U. S. Treasury Note
matures 2/15/2004 5.88% 4,266,221 4,266,221
Federal National Mortgage Association Pool
matures 11/1/2005 10.5% 1,886,068 1,886,068
Federal Home Loan Mtg. Corporation
matures 2/15/2007 4.25% 4,101,725 4,101,725
</TABLE>
S-6
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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)
Federal Home Loan Mtg. Corporation Pool
matures 5/1/2009 6.00% $ 2,190,706 $ 2,190,706
Federal Home Loan Mtg. Corporation Pool
matures 6/1/2009 6.50% 3,026,862 3,026,862
Federal National Mortgage Association Pool
matures 7/1/2009 6.00% 1,240,280 1,240,280
Federal National Mortgage Association Pool
matures 7/1/2009 7.00% 1,262,313 1,262,313
Federal Home Loan Mtg. Corporation
matures 12/15/2010 5.25% 917,798 917,798
Federal National Mortgage Association
matures 3/25/2012 5.00% 1,321,825 1,321,825
Federal Home Loan Mtg. Corporation Remic
matures 1/15/2014 5.75% 1,330,777 1,330,777
Federal Home Loan Mtg. Corporation
matures 1/15/2014 5.25% 3,993,205 3,993,205
Government National Mortgage Association
matures 9/15/2019 9.00% 83,944 83,944
Federal National Mortgage Association
matures 12/15/2019 6.00% 415,959 415,959
Government National Mortgage Association
matures 12/15/2019 9.00% 821,063 821,063
Government National Mortgage Association
matures 1/15/2020 9.00% 242,463 242,463
Government National Mortgage Association
matures 6/15/2020 9.00% 421,196 421,196
Government National Mortgage Association
matures 9/15/2020 9.00% 2,096,619 2,096,619
Government National Mortgage Association
matures 10/20/2021 9.50% 1,503,081 1,503,081
Government National Mortgage Association
matures 8/15/2022 9.00% 1,209,366 1,209,366
Government National Mortgage Association
matures 5/15/2024 6.50% 2,140,140 2,140,140
Government National Mortgage Association
matures 1/15/2025 9.00% 115,392 115,392
------------ ------------
Total Peoples Life Insurance Company Contract 54,614,938 54,614,938
------------ ------------
TOTAL POOLS 245,118,163 245,118,163
------------ ------------
TOTAL INVESTMENT CONTRACTS 865,383,580 865,383,580
------------ ------------
</TABLE>
S-7
<PAGE>
PHILIP MORRIS DEFERRED PROFIT-SHARING TRUST FUND
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 -- 0.60%
GEBT Short-Term Investment Fund 13,432,391 $ 13,432,391 $ 13,432,391
-------------- --------------
TOTAL INTEREST INCOME FUND 878,815,971 878,815,971
-------------- --------------
U.S. GOVERNMENT OBLIGATIONS FUND -- 3.29%
GOVERNMENT SECURITIES -- 2.53%
United States Treasury Notes
4.125% due 5/31/95 30,000,000 29,800,000 29,723,400
United States Treasury Notes
4.125% due 6/30/95 10,000,000 10,046,875 9,882,800
United States Treasury Notes
4.00% due 1/31/96 7,500,000 7,461,621 7,241,025
United States Treasury Notes
6.00% due 6/30/96 10,000,000 9,990,625 9,784,400
-------------- --------------
TOTAL GOVERNMENT SECURITIES 57,299,121 56,631,625
-------------- --------------
FEDERAL AGENCY OBLIGATIONS -- 0.30%
Federal Home Loan Mtg Corporation
Multiclass Mtg Partn CTFS GTD
SER 1304 CL 1304-F Var Rt 6/15/97 1,749,928 1,749,928 1,736,243
Student Loan Marketing Association
Medium Term Note SER97 BB
8.29% 12/22/97 3,500,000 3,500,000 3,498,587
Federal Home Loan Mtg Corporation
Multiclass Mtg Partn CTFS GTD
SER 1296 CL 1296-I Var Rt 7/15/99 1,424,980 1,418,746 1,347,490
-------------- --------------
TOTAL FEDERAL AGENCY OBLIGATIONS 6,668,674 6,582,320
-------------- --------------
SHORT-TERM INVESTMENTS -- 0.46%
GEBT Short-Term Investment Fund 10,325,806 10,325,806 10,325,806
-------------- --------------
TOTAL U.S. GOVERNMENT OBLIGATIONS FUND 74,293,601 73,539,751
-------------- --------------
PARTICIPANTS' LOAN ACCOUNT -- 4.60%
Participants' Loans 102,894,433 102,894,433 102,894,433
-------------- --------------
TOTAL INVESTMENTS $2,038,109,538 $2,235,151,182
============== ==============
</TABLE>
S-8
<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 No. 33-10218) of the
Philip Morris Deferred Profit-Sharing Plan of our report dated March 20, 1995,
on our audits of the financial statements of the Philip Morris Deferred Profit-
Sharing 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.
New York, New York
April 26, 1995
