-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CNcz+FxT7vLwrcrq0BnJP9+oREmyQP/G2ltzm+TJJab8P/SwH3lPvtY+E/GDx4BU Yk58caArYYQYST9QSBO9cQ== 0000940180-97-000349.txt : 19970416 0000940180-97-000349.hdr.sgml : 19970416 ACCESSION NUMBER: 0000940180-97-000349 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970415 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHILIP MORRIS COMPANIES INC CENTRAL INDEX KEY: 0000764180 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] IRS NUMBER: 133260245 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08940 FILM NUMBER: 97581221 BUSINESS ADDRESS: STREET 1: 120 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128805000 MAIL ADDRESS: STREET 1: 120 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10017 11-K 1 FORM 11-K KRAFT EMPLOYEE THRIFT INVESTMENT PLAN ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------- FORM 11-K (Mark One) [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 OR [_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-8940 --------- Kraft Foods Employee Thrift-Investment Plan Three Lakes Drive, Northfield, Illinois 60093 (Full title and address 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.) ================================================================================ KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN ANNUAL REPORT ON FORM 11-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 TABLE OF CONTENTS
Page(s) ------- Report of Independent Accountants..................... 3 Financial Statements: Statements of Financial Condition as of December 31, 1996 and 1995...................................... 4-5 Statements of Income and Changes in Plan Equity for the years ended December 31, 1996, 1995 and 1994... 6-8 Notes to Financial Statements....................... 9-19 Signatures............................................ 20 Schedules: Schedule I - Investments as of December 31, 1996.... S-1-11
Other schedules are omitted because the information required is contained in the financial statements. Exhibits: 23. Consent of Independent Accountants. -2- 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 Employee Thrift-Investment Plan: We have audited the accompanying statements of financial condition of the Kraft Foods Employee Thrift-Investment Plan (formerly known as the General Foods Employee Thrift-Investment Plan and hereinafter referred to as the "Plan") as of December 31, 1996 and 1995, and the related statements of income and changes in plan equity for each of the three years in the period ended December 31, 1996 and the schedule of investments as of December 31, 1996. 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 the fiduciaries, 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, 1996 and 1995, and the income and changes in plan equity for each of the three years in the period ended December 31, 1996, 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. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the statements of financial condition and statements of income and changes in plan equity is presented for purposes of additional information rather than to present the financial condition and changes in income and plan equity of each fund. The fund information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. COOPERS & LYBRAND L.L.P. Chicago, Illinois March 28, 1997 -3- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN STATEMENT OF FINANCIAL CONDITION as of December 31, 1996 (in thousands of dollars) ---------
Diversified Equity Interest Government Index Income Securities Philip Morris Fund Fund Fund (GF) Stock Fund Total ----------- -------- ----------- -------------- -------- ASSETS: Allocated share of Trust net assets $5,778 $13,373 $1,149 $127,059 $147,359 Employer contributions receivable 1 1 1 221 224 Interfund receivables (payables) 79 381 140 (600) - ------ ------- ------ -------- -------- Total assets 5,858 13,755 1,290 126,680 147,583 ------ ------- ------ -------- -------- LIABILITIES: Distributions and withdrawals payable 57 247 14 3,742 4,060 General and administrative expenses payable 1 5 1 33 40 ------ ------- ------ -------- -------- Total liabilities 58 252 15 3,775 4,100 ------ ------- ------ -------- -------- Plan equity $5,800 $13,503 $1,275 $122,905 $143,483 ====== ======= ====== ======== ========
The accompanying notes are an integral part of these financial statements. -4- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN STATEMENT OF FINANCIAL CONDITION as of December 31, 1995 (in thousands of dollars) ---------
Diversified Equity Interest Government Index Income Securities Philip Morris Fund Fund Fund (GF) Stock Fund Total ----------- -------- ----------- -------------- -------- ASSETS: Allocated share of Trust net assets $4,228 $12,880 $1,151 $116,797 $135,056 Employer contributions receivable 2 3 2 517 524 Interfund receivables (payables) 151 824 3 (978) - ------ ------- ------ -------- -------- Total assets 4,381 13,707 1,156 116,336 135,580 ------ ------- ------ -------- -------- LIABILITIES: Distributions and withdrawals payable 103 290 23 1,867 2,283 General and administrative expenses payable 2 7 1 61 71 ------ ------- ------ -------- -------- Total liabilities 105 297 24 1,928 2,354 ------ ------- ------ -------- -------- Plan equity $4,276 $13,410 $1,132 $114,408 $133,226 ====== ======= ====== ======== ========
The accompanying notes are an integral part of these financial statements. -5- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY for the year ended December 31, 1996 (in thousands of dollars) ---------
Diversified Equity Interest Government Index Income Securities Philip Morris Fund Fund Fund (GF) Stock Fund Total ------------ --------- ----------- -------------- --------- ADDITIONS: Employer contributions $ 10 $ 18 $ 12 $ 2,367 $ 2,407 Employee contributions 435 667 135 4,690 5,927 Allocated share of Trust investment activities: Interest income 786 63 147 996 Dividend income 5,127 5,127 Net appreciation in fair value of investments 1,089 25,050 26,139 ------ ------- ------ -------- -------- 1,089 786 63 30,324 32,262 ------ ------- ------ -------- -------- Total additions 1,534 1,471 210 37,381 40,596 ------ ------- ------ -------- -------- DEDUCTIONS: Distributions and withdrawals (1,292) (3,529) (189) (25,088) (30,098) General and administrative expenses (9) (30) (2) (200) (241) ------ ------- ------ -------- -------- Total deductions (1,301) (3,559) (191) (25,288) (30,339) ------ ------- ------ -------- -------- Net transfers among funds 1,291 2,181 124 (3,596) - ------ ------- ------ -------- -------- Net additions 1,524 93 143 8,497 10,257 PLAN EQUITY: Beginning of year 4,276 13,410 1,132 114,408 133,226 ------ ------- ------ -------- -------- End of year $5,800 $13,503 $1,275 $122,905 $143,483 ====== ======= ====== ======== ========
The accompanying notes are an integral part of these financial statements. -6- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY for the year ended December 31, 1995 (in thousands of dollars)
Diversified Equity Interest Government Index Income Securities Philip Morris Fund Fund Fund (GF) Stock Fund Total ----------- -------- ---------- ------------- --------- ADDITIONS: Employer contributions $ 11 $ 21 $ 14 $ 3,054 $ 3,100 Employee contributions 379 743 154 4,577 5,853 Allocated share of Trust investment activities: Interest income 791 46 96 933 Dividend income 4,684 4,684 Net appreciation in fair value of investments 1,212 17 42,863 44,092 ------ ------- ------ -------- -------- 1,212 791 63 47,643 49,709 ------ ------- ------ -------- -------- Total additions 1,602 1,555 231 55,274 58,662 ------ ------- ------ -------- -------- DEDUCTIONS: Distributions and withdrawals (859) (2,221) (156) (17,748) (20,984) General and administrative expenses (11) (39) (3) (260) (313) ------ ------- ------ -------- -------- Total deductions (870) (2,260) (159) (18,008) (21,297) ------ ------- ------ -------- -------- Net transfers among funds 73 1,598 101 (1,772) - Net transfers between plans (59) (112) (18) (1,159) (1,348) ------ ------- ------ -------- -------- Net additions 746 781 155 34,335 36,017 PLAN EQUITY: Beginning of year 3,530 12,629 977 80,073 97,209 ------ ------- ------ -------- -------- End of year $4,276 $13,410 $1,132 $114,408 $133,226 ====== ======= ====== ======== ========
The accompanying notes are an integral part of these financial statements. -7- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY for the year ended December 31, 1994 (in thousands of dollars) -------
Diversified Equity Interest Government Index Income Securities Philip Morris Fund Fund Fund (GF) Stock Fund Total ----------- -------- ---------- ------------- ---------- ADDITIONS: Employer contributions $ 11 $ 17 $ 13 $ 3,203 $ 3,244 Employee contributions 331 693 160 4,719 5,903 Allocated share of Trust investment activities: Interest income 853 53 27 933 Dividend income 4,406 4,406 Net appreciation (depreciation) in fair value of investments 64 (3) 2,518 2,579 ------ ------- ------ ------- -------- 64 853 50 6,951 7,918 ------ ------- ------ ------- -------- Total additions 406 1,563 223 14,873 17,065 ------ ------- ------ ------- -------- DEDUCTIONS: Distributions and withdrawals (742) (3,695) (933) (16,227) (21,597) General and administrative expenses (8) (33) (3) (195) (239) ------ ------- ------ ------- -------- Total deductions (750) (3,728) (936) (16,422) (21,836) ------ ------- ------ ------- -------- Net transfers among funds 905 2,263 350 (3,518) - Transfers from (to) predecessor trusts 174 334 (21) (1,194) (707) Participants' loan repayments 1 1 1 (3) - ------ ------- ------ ------- -------- Net additions (deductions) 736 433 (383) (6,264) (5,478) PLAN EQUITY: Beginning of year 2,794 12,196 1,360 86,337 102,687 ------ ------- ------ ------- -------- End of year $3,530 $12,629 $ 977 $80,073 $ 97,209 ====== ======= ====== ======= ========
The accompanying notes are an integral part of these financial statements. -8- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. General Description of the Plan: The Kraft Foods Employee Thrift-Investment Plan (formerly known as the General Foods Employee Thrift-Investment 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 certain operating units 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"). Hourly and certain salaried employees of Kraft Foods and certain of its domestic subsidiaries (the "Kraft Foods Companies") who are represented by designated collective bargaining units are eligible to participate in the Plan, provided they meet eligibility requirements. The benefits offered under the Plan may vary, depending upon the job location of the employee and the collective bargaining unit of which he or she is a member. After completing one year of service, eligible employees generally may make before-tax and/or after-tax contributions. Matching contributions by Kraft Foods from certain operating unit profits (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 to handle certain Plan administration matters. The Corporate Employee Plans Investment Committee of Philip Morris Companies Inc. (the "Investment Committee") is responsible for the selection of the investment options in which participants elect to invest their assets in the Plan and monitors the performance of these investment options. The Committee and the Investment Committee are hereinafter collectively referred to as the "Fiduciaries". The Plan's assets are co-invested with the assets of the Kraft Foods Thrift Plan and other plans sponsored by Kraft Foods in a commingled investment fund known as the Kraft Foods Master Defined Contribution Trust (hereinafter referred to as the "Trust") for which Bankers Trust Company (the "Trustee") serves as the trustee (see Note 6). Participants have the option of investing their Plan Accounts (see Note 4) in 25 percent increments in the four funds listed below. Except for participants employed at the Naperville, Illinois facility of Kraft Foods (a "Naperville Participant"), Kraft Foods Matching Contributions are initially invested in the Philip Morris Stock Fund but may be allocated and invested in the same manner as participant contributions in the month following the month in which the Kraft Foods Matching Contributions are made. -9- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) DIVERSIFIED EQUITY INDEX FUND (also referred to as the 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"). INTEREST INCOME FUND - This fund consists primarily of investment contracts entered into by 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 from original cost, but not in the event of a default of any security in the pool. GOVERNMENT SECURITIES FUND (GF) - 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. The average maturity of the securities in this fund is less than two years. PHILIP MORRIS STOCK FUND - This fund is invested in the common stock of the Company (the "Common Stock") and short-term temporary investments. None of the foregoing funds guarantees a return to the participant. Participants may change their options once a month, except that amounts may not be directly transferred between the Interest Income Fund and the Government Securities Fund (GF). Each participant may vote all the shares of Common Stock held in his or her Plan Accounts and invested in the Philip Morris Stock Fund. The Trustee will vote full and fractional shares of 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, 1996 and 1995, there were 3,523 and 3,689 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.
December 31, ------------ 1996 1995 ------ ------ Diversified Equity Index Fund 598 676 Interest Income Fund 1,052 1,265 Government Securities Fund (GF) 258 368 Philip Morris Stock Fund 3,331 3,574
-10- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) Each participant is at all times fully vested in the balance of his or her After-Tax Contributions Account, Before-Tax Contributions Account, and in the balance of his or her Kraft Foods Matching Account attributable to amounts contributed before January 1, 1986 or transferred from the General Foods Employee Stock Ownership Plan ("ESOP") (see Note 4), and, in the case of a Naperville Participant, in the balance of the employer contribution- derived account transferred from the predecessor plan. A participant shall be fully vested in the balance in his or her Kraft Foods Matching Account upon attainment of age 55, permanent and total disability, or death while employed by Kraft Foods or any of its affiliates. A participant who is employed by Kraft Foods or any of its affiliates at other than the Naperville, Illinois facility of Kraft Foods shall become vested in his or her Kraft Foods Matching Account based on the number of years of vesting service determined in accordance with the following schedule:
Vested Years of Service Percentage ---------------- ----------- Less than 3 0% 3 but less than 4 50% 4 but less than 5 75% 5 or more 100%
A Naperville Participant shall be fully vested in the entire balance in his or her Kraft Foods Matching Account after two years of participation in the Plan (and the predecessor plan) or the completion of five years of service. 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. -11- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 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, because these investments have fully benefit-responsive features. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. However, withdrawals influenced by employer-initiated events, such as in connection with the sale of a business, may result in a distribution at other than contract value. There are no reserves against contract values for credit risk of contract issuers or otherwise. The fair value of the investment contracts and the pools of mortgaged-backed and asset-backed securities and other investments at December 31, 1996 and 1995 was $712,948,000 and $725,034,000, respectively. The average yield and crediting interest rate of the Interest Income Fund was approximately seven percent for 1996 and 1995. The crediting interest rate for the pools of mortgaged-backed and asset-backed securities and other investments is reset periodically by the issuer based on the relationship between the contract value and the fair value of the underlying securities, but cannot be less than zero. The crediting interest rate for the investment contracts is either agreed-to in advance with the issuer or varies based on an agreed-to formula, but cannot be less than zero. 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. However, if trading in Common Stock has been suspended on the New York Stock Exchange and not resumed before the end of any trading day, the Trustee will use the composite price listed in The Wall Street Journal on the next business day. 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 7). -12- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 3. Contributions: No contribution is required from any eligible employee under the Plan. Eligible employees (other than Naperville Participants) may elect to contribute from one percent to 10 percent of his or her base rate of compensation, but contributions from base compensation over $15,000 may not exceed six percent. A Naperville Participant may elect to contribute from one percent to 16 percent of his or her compensation, but only contributions not in excess of six percent of compensation are eligible for Kraft Foods Matching Contributions described below. Contributions by participants employed at certain operating unit locations may be made on a before-tax basis, an after-tax basis, or in a combination of the two, while contributions by participants employed at certain other operating unit locations may be made only on an after-tax basis. The percentage of compensation available for both before-tax and after-tax contributions may vary from year-to-year. The aggregate contributions actually made by participants may 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 before-tax contributions for a calendar year. For 1996, a participant's before-tax contributions were limited to $9,500; for 1997, a participant's before-tax contributions will be limited to $9,500. Each year Kraft Foods Matching Contributions are based on the amount of each participant's contributions to the Plan, subject to certain limitations under the Code. Kraft Foods Matching Contributions on behalf of Naperville Participants equal 25 percent of each Naperville Participant's contributions not in excess of six percent of compensation. The Kraft Foods Matching Contributions percentage is the greater of (i) 75 percent of the matching contribution rate under the Kraft Foods Thrift Plan or (ii) from 30 percent to 65 percent of a participant's contributions, depending on the annual percent change in earnings shown in the table below. The Kraft Foods Matching Contributions percentage to the Plan for a Plan year cannot exceed the percentage contributed by Kraft Foods to the Kraft Foods Thrift Plan for the same year. The average annual percent change in earnings is the percent change in earnings, before income taxes, goodwill amortization, interest and Company assessments of certain operating units of Kraft Foods, over the five-year period immediately preceding the Plan year for which the Kraft Foods Matching Contributions are to be made.
The Kraft Foods Matching If Annual Percent Contribution as a Percentage of Change in Earnings Is Participant Contributions Is ---------------------- ------------------------------- +5% (or less) 30% 6-8% 35% 9-11% 40% 12-14% 45% 15-17% 50% 18-20% 55% 21-23% 60% 24% (or more) 65%
-13- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) Currently, the Kraft Foods Matching Contributions percentage for the following Plan year is announced before the end of the preceding year. The Kraft Foods Matching Contributions percentage was 43 percent, 55 percent and 57 percent in 1996, 1995 and 1994, respectively. 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. 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 the preservation of the Kraft Foods Matching Contributions for all participants for the year in which the Change of Control occurs and for two years thereafter. 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 ------- ------ Kraft Foods Matching Account Kraft Foods Matching Contributions and amounts transferred from the ESOP and other predecessor plans Before-Tax Contributions Account Before-Tax Contributions After-Tax Contributions Account After-Tax Contributions
At the end of each month, the Trustee determines the current fair value of each of the investment funds in the Trust described in Note 1. The fair value of each participant's share in the Trust is determined with respect to their Kraft Foods Matching Account, Before-Tax Contributions Account and After-Tax Contributions Account, on the basis of their proportionate share in each fund. 5. Withdrawals and Distributions: Participants may make withdrawals against their Kraft Foods Matching, Before-Tax Contributions and After-Tax Contributions Accounts under limited circumstances in accordance with the provisions outlined in the Plan. -14- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (in thousands of dollars) (continued) 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. 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, 1996 and 1995, respectively, were:
1996 1995 ------ ------ Trust 6% 6% Diversified Equity Index Fund 1% 1% Interest Income Fund 2% 2% Government Securities Fund (GF) 100% 100% Philip Morris Stock Fund 11% 10%
The Plan's approximate allocated share of the Trust's investment activities for the years ended December 31, 1996, 1995 and 1994, was eight percent, eight percent and seven percent, respectively. Most expenses incurred in administering the Plan and paid to third parties are borne 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 1996 and 1995, the approximate amount of such expenses expressed as a percentage of the average net assets of each fund under the Plan, are as follows:
1996 1995 ------ ------ Diversified Equity Index Fund 0.18% 0.28% Interest Income Fund 0.22% 0.30% Government Securities Fund (GF) 0.17% 0.28% Philip Morris Stock Fund 0.17% 0.27%
Investments that represented five percent or more of total Trust assets as of December 31, 1996 and 1995, were:
1996 1995 ------ ------ Philip Morris Stock Fund Common Stock $1,055,822 $1,071,626 Equity Index Fund GEBT Equity Index Fund $442,151 $312,179
The GEBT Equity Index Fund currently includes Common Stock. -15- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (in thousands of dollars) (continued) At December 31, 1996 and 1995, the financial position of the Trust was:
1996 1995 ---------- ---------- Assets: Investments at fair value: Equity Index Fund: GEBT Equity Index Fund (cost $296,077 and $230,148) $ 442,151 $ 312,179 Short-term temporary investments (cost approximates fair value) 945 3,928 Interest Income Fund: Investment contracts (at contract value) (cost approximates contract value) 719,263 729,677 Short-term temporary investments (cost approximates fair value) 31,250 74,111 Government Securities Fund: Government securities (cost $25,873 and $26,340) 25,693 27,129 Federal Agency Obligations (cost $2,979) 2,911 - Short-term temporary investments (cost approximates fair value) 812 4,060 Government Securities Fund (GF): Government securities (cost approximates fair value) 1,184 1,198 Short-term temporary investments (cost approximates fair value) 110 59 Philip Morris Stock Fund: Common stock (cost $439,309 and $478,175) 1,055,822 1,071,626 Short-term temporary investments (cost approximates fair value) 28,613 26,940 International Equity Fund: International Equity Fund (cost $52,300 and $21,536) 56,401 22,713 Short-term temporary investments (cost approximates fair value) 114 216 Balanced Fund: Balanced Fund (cost $72,891 and $28,863) 77,163 29,655 Short-term temporary investments (cost approximates fair value) 189 152 Growth Equity Fund: Growth Equity Fund (cost $117,557 and $66,204) 122,194 65,591 Short-term temporary investments (cost approximates fair value) 312 465 Other investments: Participants' Loan Account: Loans to participants 37,375 34,968 ---------- ---------- Total investments 2,602,502 2,404,667 Receivables: Interest income 1,063 1,052 Dividend income 11,308 11,926 Other receivables 2,980 - ---------- ---------- Total assets 2,617,853 2,417,645 Liabilities: Other payables 1,264 1,240 ---------- ---------- Net assets $2,616,589 $2,416,405 ========== ==========
-16- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (in thousands of dollars) (continued) The changes in the Trust net assets for the years ended December 31, 1996, 1995 and 1994, were:
1996 1995 1994 ---------- ---------- ---------- Additions: Employer contributions $ 35,823 $ 42,957 $ 45,559 Employee contributions 94,665 104,014 112,998 Transfers from predecessor trusts 300 (448) 54,833 Investment activities: Interest 47,971 55,956 53,007 Dividends 56,586 51,225 40,029 Interest on participant loans 2,598 2,394 2,304 ---------- ---------- ---------- 107,155 109,575 95,340 Net appreciation in fair value of investments 313,941 512,078 26,296 ---------- ---------- ---------- Net investment activities 421,096 621,653 121,636 Deductions: Distributions and withdrawals (348,908) (258,160) (150,932) General and administrative expenses (2,792) (3,133) (1,628) ---------- ---------- ---------- Increase in Trust net assets 200,184 506,883 182,466 Net assets: Beginning of year 2,416,405 1,909,522 1,727,056 ---------- ---------- ---------- End of year $2,616,589 $2,416,405 $1,909,522 ========== ========== ==========
The transfers from the predecessor trusts for the year ended December 31, 1994, includes the transfer of assets to the Trust of the assets of the former Entenmann's Plan in the amount of $52,343. -17- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (in thousands of dollars) (continued) 7. 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, 1996, 1995, and 1994 were:
Freihofer Equitable Equity Government Government Capital Index Securities Securities Philip Morris Management Fund Fund Fund (GF) Stock Fund Fund ------------ ------------ ------------ ------------- ------------ 1996 - ---- Realized gains (losses): Proceeds $ 51,031 $ 9,262 $ 1,436 $ 373,172 Cost 37,037 9,271 1,436 172,650 -------- ------- ------- --------- ------- Net realized gains (losses) 13,994 (9) - 200,522 -------- ------- ------- --------- ------- Unrealized appreciation (depreciation): Beginning of year 82,031 789 593,451 End of year 146,074 (248) 616,513 -------- ------- ------- --------- ------- Increase (decrease) 64,043 (1,037) - 23,062 -------- ------- ------- --------- ------- Net appreciation (depreciation) in fair value of investments $ 78,037 $(1,046) $ - $ 223,584 ======== ======= ======= ========= ======= 1995 ---- Realized gains: Proceeds $ 44,833 $16,505 $ 1,431 $ 173,058 $12,642 Cost 37,484 16,505 1,431 94,527 6,063 -------- ------- ------- --------- ------- Net realized gains 7,349 - - 78,531 6,579 -------- ------- ------- --------- ------- Unrealized appreciation (depreciation): Beginning of year 3,838 (109) 231,434 6,636 Transfer from Entenmann's 16,383 End of year 82,031 789 593,451 -------- ------- ------- --------- ------- Increase (decrease) 78,193 898 - 345,634 (6,636) -------- ------- ------- --------- ------- Net appreciation (depreciation) in fair value of investments $ 85,542 $ 898 $ - $ 424,165 $ (57) ======== ======= ======= ========= ======= 1994 ---- Realized gains (losses): Proceeds $194,914 $ 3,955 $ 1,860 $ 44,214 $ 1,455 Cost 135,224 3,969 1,867 31,833 659 -------- ------- ------- --------- ------- Net realized gains (losses) 59,690 (14) (7) 12,381 796 -------- ------- ------- --------- ------- Unrealized appreciation (depreciation): Beginning of year 59,995 1 (5) 220,615 7,743 End of year 3,838 (109) 231,434 6,636 -------- ------- ------- --------- ------- (Decrease) increase (56,157) (110) 5 10,819 (1,107) -------- ------- ------- --------- ------- Net appreciation (depreciation) in fair value of investments $ 3,533 $ (124) $ (2) $ 23,200 $ (311) ======== ======= ======= ========= ======= International Growth Equity Balanced Equity Fund Fund Fund Total --------------- ----------- ------------ ------------ 1996 - ---- Realized gains (losses): Proceeds $ 15,309 $ 9,120 $25,847 $485,177 Cost 14,552 8,758 25,254 268,958 -------- ------- ------- -------- Net realized gains (losses) 757 362 593 216,219 -------- ------- ------- -------- Unrealized appreciation (depreciation): Beginning of year 1,177 792 (613) 677,627 End of year 4,101 4,272 4,637 775,349 -------- ------- ------- -------- Increase (decrease) 2,924 3,480 5,250 97,722 -------- ------- ------- -------- Net appreciation (depreciation) in fair value of investments $ 3,681 $ 3,842 $ 5,843 $313,941 ======== ======= ======= ======== 1995 ---- Realized gains: Proceeds $ 2,036 $ 1,859 $2,514 $254,878 Cost 2,012 1,813 2,410 162,245 -------- ------- ------- -------- Net realized gains 24 46 104 92,633 -------- ------- ------- -------- Unrealized appreciation (depreciation): Beginning of year 241,799 Transfer from Entenmann's 16,383 End of year 1,177 792 (613) 677,627 -------- ------- ------- -------- Increase (decrease) 1,177 792 (613) 419,445 -------- ------- ------- -------- Net appreciation (depreciation) in fair value of investments $ 1,201 $ 838 $ (509) $512,078 ======== ======= ======= ======== 1994 ---- Realized gains (losses): Proceeds $246,398 Cost 173,552 -------- ------- ------- -------- Net realized gains (losses) 72,846 -------- ------- ------- -------- Unrealized appreciation (depreciation): Beginning of year 288,349 End of year 241,799 -------- ------- ------- -------- (Decrease) increase (46,550) -------- ------- ------- -------- Net appreciation (depreciation) in fair value of investments $ 26,296 ======== ======= ======= ========
-18- KRAFT FOODS EMPLOYEE THRIFT-INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (concluded) 8. Tax Status: The U.S. Treasury Department has determined that the Plan, as amended and in effect as of January 1, 1993, 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 Fiduciaries believe that the Plan continues to be administered in accordance with the applicable provisions of the Code. Therefore, participants will not be subject to income tax on Kraft Foods Matching Contributions, or before-tax contributions made on their behalf by Kraft Foods when made to the Trust, nor on earnings credited to their Accounts until withdrawn or distributed. -19- 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 EMPLOYEE THRIFT-INVESTMENT PLAN (Name of Plan) By /s/ TERRY M. FAULK ---------------------------------- Terry M. Faulk, Chairman, Management Committee for Employee Benefits of Kraft Foods, Inc. Date: March 28, 1997 -20- KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 --------------------------------- --------------- ----------- ---------- EQUITY INDEX FUND -- 17.03% GEBT Equity Index Fund -- 16.99% 259,974 $296,077,339 $442,150,965 Short-Term Investments -- 0.04% GEBT Short-Term Investment Fund 944,612 944,612 944,612 ------------ ------------ Total Equity Index Fund 297,021,951 443,095,577 ------------ ------------ INTEREST INCOME FUND -- 28.84% Investment Contracts -- 27.64% (The amounts included in Column D for the investment contracts represent contract value, see Note 2.) Participation Contracts with Institutions -- 17.22% Connecticut General Ins. No. 7771 4.55% matures 1/1/1997 11,761,408 11,761,408 11,761,408 J P Morgan No. 95-03 8.10% matures 1/25/1997 25,877,500 25,877,500 25,877,500 Hartford Life Ins. Co. No. 9108 8.74% matures 5/1/1997 32,378,796 32,378,796 32,378,796 Confederation Life Ins. No. 62325 0.00% matures 5/1997 21,109,885 21,109,885 21,109,885 Provident Mutual No. 008159-001 8.55% matures 3/1/1998 1,004,095 1,004,095 1,004,095 Mass Mutual No. 10223 8.25% matures 4/30/1998 11,913,686 11,913,686 11,913,686 Provident National Assurance No. 02705689 6.96% matures 7/31/1998 23,799,860 23,799,860 23,799,860 Connecticut General Life Ins. No. 25119 8.81% matures 8/1/1998 21,756,995 21,756,995 21,756,995 Hartford Life Ins. Co. No. 10225 5.68% matures 1/31/1999 20,052,910 20,052,910 20,052,910 Allstate Life Insurance Company No. 5428 6.15% matures 4/30/1999 36,609,754 36,609,754 36,609,754
S-1 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 - --------------------------------- --------------- ----------- ---------- Participation Contracts with Institutions (continued) Allstate Life Ins. Co. No. 5581 7.23% matures 5/20/1999 1,943,201 $ 1,943,201 $ 1,943,201 CNA Insurance Co. No. 24023 6.61% matures 6/29/2001 20,017,544 20,017,544 20,017,544 Sun America Life No. 4696 6.67% matures 12/31/2001 20,017,698 20,017,698 20,017,698 Mass Mutual No. 1040 6.21% 32,695,251 32,695,251 32,695,251 Prudential No. 7269 6.16% 70,734,000 70,734,000 70,734,000 New York Life No. 20013 6.39% 31,985,090 31,985,090 31,985,090 John Hancock No. 6436 5.82% 64,373,330 64,373,330 64,373,330 --------------- --------------- Total Contracts 448,031,003 448,031,003 --------------- --------------- Financial Institution Pools -- 10.42% National Westminster Bank No. SAM 0104B 4.28% GEBT Short-Term Investment Fund 668,903 668,903 Confederation Life Insurance GAC No. 62381 matured 11/30/1995 8.61% 8,108,070 8,108,070 Federal National Mortgage Association Remic matures 6/25/2005 6.25% 2,367,771 2,367,771 Federal National Mortgage Association Remic matures 8/25/2005 6.00% 514,937 514,937 Federal National Mortgage Association Remic matures 8/25/2012 5.60% 1,576,665 1,576,665 Federal National Mortgage Association Remic matures 8/25/2013 6.70% 4,044,382 4,044,382 Federal National Mortgage Association Remic matures 9/25/2015 6.00% 2,353,243 2,353,243 Federal National Mortgage Association Remic matures 6/25/2016 5.70% 4,366,089 4,366,089 Federal National Mortgage Association Remic matures 7/25/2016 5.65% 2,341,523 2,341,523 Federal National Mortgage Association Remic matures 1/25/2020 7.00% 854,086 854,086 Federal National Mortgage Association Pool matures 7/1/2008 7.00% 1,041,452 1,041,452 Federal National Mortgage Association Pool matures 8/1/2008 7.00% 1,030,303 1,030,303
S-2 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 - --------------------------------- --------------- ------------ ---------- Financial Institution Pools (continued) National Westminster Bank (continued) Federal National Mortgage Association Pool matures 1/1/2009 6.50% $ 171,619 $ 171,619 Federal National Mortgage Association Pool matures 2/1/2009 6.50% 613,304 613,304 Federal National Mortgage Association Pool matures 3/1/2009 6.50% 205,223 205,223 Federal National Mortgage Association Pool matures 5/1/2009 6.50% 1,271,306 1,271,306 Government National Mortgage Association Pool matures 12/15/2023 6.50% 284,287 284,287 Government National Mortgage Association Pool matures 3/15/2024 6.50% 93,774 93,774 Government National Mortgage Association Pool matures 4/15/2024 6.50% 1,776,787 1,776,787 Government National Mortgage Association Pool matures 5/15/2024 6.50% 1,276,524 1,276,524 Federal Home Loan Mtg. Corporation matures 8/15/2005 6.25% 1,184,252 1,184,252 Federal Home Loan Mtg. Corporation matures 4/1/2008 7.00% 127,322 127,322 Federal Home Loan Mtg. Corporation matures 8/15/2008 6.50% 1,692,931 1,692,931 Federal Home Loan Mtg. Corporation matures 9/1/2008 6.50% 46,077 46,077 Federal Home Loan Mtg. Corporation matures 12/1/2008 6.50% 48,731 48,731 Federal Home Loan Mtg. Corporation matures 2/1/2009 6.50% 2,029,335 2,029,335 Federal Home Loan Mtg. Corporation matures 6/1/2009 6.50% 88,055 88,055 Federal Home Loan Mtg. Corporation matures 10/1/2010 7.00% 260,939 260,939 Federal Home Loan Mtg. Corporation matures 2/1/2011 6.50% 138,688 138,688 Federal Home Loan Mtg. Corporation matures 2/1/2011 7.00% 791,070 791,070 Federal Home Loan Mtg. Corporation matures 3/1/2011 7.00% 1,271,320 1,271,320 Federal Home Loan Mtg. Corporation matures 4/15/2011 5.00% 1,769,714 1,769,714 Federal Home Loan Mtg. Corporation matures 12/15/2015 6.50% 2,887,649 2,887,649 Federal Home Loan Mtg. Corporation matures 6/15/2016 7.00% 318,819 318,819 Federal Home Loan Mtg. Corporation matures 1/15/2018 6.00% 4,415,122 4,415,122 ----------------- ---------------
S-3 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 --------------------------------- --------------- ----------- ---------- Financial Institution Pools (continued) National Westminster Bank (continued) Total National Westminster Bank Contract $52,030,272 $52,030,272 ----------- ----------- Trans America Life Insurance Company No. 76594 6.82% GEBT Short-Term Investment Fund 7,487,114 7,487,114 U. S. Treasury Note matures 6/30/1998 6.25% 1,399,192 1,399,192 U. S. Treasury Note matures 9/30/1998 6.00% 1,770,883 1,770,883 U. S. Treasury Note matures 12/31/1998 5.75% 1,801,674 1,801,674 U. S. Treasury Note matures 5/15/1999 6.38% 11,137,269 11,137,269 U. S. Treasury Note matures 11/15/1999 5.88% 916,316 916,316 U. S. Treasury Note matures 6/30/2001 6.63% 2,469,791 2,469,791 U. S. Treasury Note matures 9/30/2001 6.38% 279,189 279,189 U. S. Treasury Note matures 12/31/2001 6.13% 3,595,726 3,595,726 U. S. Treasury Note matures 5/15/2006 6.88% 1,592,869 1,592,869 Federal National Mortgage Association Pool matures 11/1/2002 7.00% 55,748 55,748 Federal National Mortgage Association Pool matures 4/1/2003 7.00% 151,031 151,031 Federal National Mortgage Association Pool matures 5/1/2003 7.00% 192,231 192,231 Federal National Mortgage Association Pool matures 6/1/2003 7.00% 342,011 342,011 Federal National Mortgage Association Pool matures 4/1/2026 7.00% 130,578 130,578 Federal National Mortgage Association Pool matures 5/1/2026 7.00% 189,143 189,143 Federal National Mortgage Association Pool matures 6/1/2026 7.00% 181,817 181,817 Federal National Mortgage Association Pool matures 7/1/2026 7.00% 10,098 10,098 Federal National Mortgage Association Pool matures 8/1/2026 7.00% 33,608 33,608 Federal National Mortgage Association Pool matures 9/1/2026 7.00% 167,014 167,014 Federal National Mortgage Association Pool matures 10/1/2026 7.00% 245,231 245,231
S-4 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 - ---------------------------------- --------------- ----------- ---------- Financial Institution Pools (continued) Trans America Life Insurance Company (continued) Federal National Mortgage Association Pool matures 12/1/2026 7.00% $ 959,819 $ 959,819 Federal National Mortgage Association matures 9/1/2021 8.00% 2,576,286 2,576,286 Government National Mortgage Association matures 2/1/2021 9.00% 612,717 612,717 Federal Home Loan Mtg. Corporation matures 5/1/2007 7.50% 1,128,692 1,128,692 Federal Home Loan Mtg. Corporation matures 7/1/2026 6.50% 2,376,643 2,376,643 ---------------- --------------- Total Trans America Life Insurance Company Contract 41,802,690 41,802,690 ---------------- --------------- Commonwealth Life Insurance Company No. ADA00199TR, 6.22%, Peoples Life Insurance Company No. BDA00291TR, 6.37% & Trans America Life Insurance Company No. 76586, 5.62% GEBT Short-Term Investment Fund 32,146,777 32,146,777 U. S. Treasury Note matures 6/30/1998 6.25% 2,429,586 2,429,586 U. S. Treasury Note matures 9/30/1998 6.00% 9,204,797 9,204,797 U. S. Treasury Note matures 12/31/1998 5.75% 9,249,548 9,249,548 U. S. Treasury Note matures 5/15/1999 6.38% 20,682,257 20,682,257 U. S. Treasury Note matures 11/15/1999 5.88% 12,997,667 12,997,667 U. S. Treasury Note matures 2/29/2000 7.13% 2,251,283 2,251,283 U. S. Treasury Note matures 6/30/2001 6.63% 9,517,681 9,517,681 U. S. Treasury Note matures 9/30/2001 6.38% 1,176,769 1,176,769 U. S. Treasury Note matures 12/31/2001 6.13% 16,589,539 16,589,539 U. S. Treasury Note matures 7/15/2006 7.00% 667,757 667,757 Federal National Mortgage Association matures 11/23/2001 6.35% 341,296 341,296 Federal National Mortgage Association matures 9/9/2003 5.97% 514,159 514,159 Federal National Mortgage Association matures 10/25/2004 8.40% 665,643 665,643 Federal National Mortgage Association matures 11/10/2004 8.63% 1,257,242 1,257,242
S-5 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 - --------------------------------- --------------- ----------- ---------- Financial Institution Pools (continued) Commonwealth Life Insurance Company, Peoples Life Insurance Company & Trans America Life Insurance Company (continued) Federal National Mortgage Association Pool matures 6/1/2001 10.50% $ 1,169,781 $ 1,169,781 Federal National Mortgage Association Pool matures 12/1/2002 6.00% 45,064 45,064 Federal National Mortgage Association Pool matures 2/1/2003 6.00% 987,864 987,864 Federal National Mortgage Association Pool matures 3/1/2003 6.00% 30,101 30,101 Federal National Mortgage Association Pool matures 4/1/2003 6.00% 96,329 96,329 Federal National Mortgage Association Pool matures 9/1/2007 7.00% 254,869 254,869 Federal National Mortgage Association Pool matures 6/1/2008 7.00% 126,761 126,761 Federal National Mortgage Association Pool matures 8/1/2008 7.00% 1,229,298 1,229,298 Federal National Mortgage Association Pool matures 12/1/2008 6.00% 326,260 326,260 Federal National Mortgage Association Pool matures 2/1/2009 6.00% 797,532 797,532 Federal National Mortgage Association Pool matures 3/1/2009 6.00% 355,401 355,401 Federal National Mortgage Association Pool matures 3/1/2011 6.50% 475,099 475,099 Federal National Mortgage Association Pool matures 2/1/2023 7.00% 387,455 387,455 Federal National Mortgage Association Pool matures 5/1/2023 8.00% 2,234,254 2,234,254 Federal National Mortgage Association Pool matures 2/1/2024 6.50% 461,246 461,246 Federal National Mortgage Association Pool matures 2/1/2024 7.00% 1,267,814 1,267,814 Federal National Mortgage Association Pool matures 4/1/2024 6.50% 154,870 154,870 Federal National Mortgage Association Pool matures 5/1/2024 6.50% 420,761 420,761 Federal National Mortgage Association Pool matures 6/1/2024 6.50% 657,839 657,839 Federal National Mortgage Association Pool matures 11/1/2024 9.00% 445,065 445,065 Federal National Mortgage Association Pool matures 7/1/2025 7.00% 1,060,349 1,060,349 Federal National Mortgage Association Pool matures 8/1/2025 7.00% 586,886 586,886
S-6 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 - --------------------------------- --------------- ----------- ---------- Financial Institution Pools (continued) Commonwealth Life Insurance Company, Peoples Life Insurance Company & Trans America Life Insurance Company (continued) Federal National Mortgage Association Pool matures 4/1/2026 7.00% $1,772,204 $1,772,204 Federal National Mortgage Association Pool matures 10/1/2026 7.00% 293,720 293,720 Government National Mortgage Association Pool matures 11/15/2017 9.50% 1,640,665 1,640,665 Government National Mortgage Association Pool matures 12/15/2019 9.00% 311,303 311,303 Government National Mortgage Association Pool matures 1/15/2020 9.00% 157,022 157,022 Government National Mortgage Association Pool matures 5/15/2020 9.00% 348,067 348,067 Government National Mortgage Association Pool matures 11/15/2020 9.00% 284,443 284,443 Government National Mortgage Association Pool matures 12/15/2020 9.00% 255,567 255,567 Government National Mortgage Association Pool matures 8/15/2021 9.00% 438,442 438,442 Government National Mortgage Association Pool matures 10/15/2021 9.00% 377,590 377,590 Government National Mortgage Association Pool matures 10/20/2021 9.50% 1,052,170 1,052,170 Government National Mortgage Association Pool matures 11/15/2021 9.00% 188,364 188,364 Government National Mortgage Association Pool matures 1/15/2022 9.00% 51,323 51,323 Government National Mortgage Association Pool matures 3/15/2024 6.50% 401,633 401,633 Government National Mortgage Association Pool matures 4/15/2024 6.50% 390,394 390,394 Government National Mortgage Association Pool matures 5/15/2024 6.50% 1,999,237 1,999,237 Government National Mortgage Association Pool matures 7/15/2024 6.50% 1,361,039 1,361,039 Government National Mortgage Association Pool matures 1/15/2025 9.00% 873,781 873,781 Federal Home Loan Mtg. Corporation matures 11/1/2008 6.00% 3,640,485 3,640,485 Federal Home Loan Mtg. Corporation matures 3/1/2009 6.50% 1,490,923 1,490,923 Federal Home Loan Mtg. Corporation matures 4/1/2009 6.00% 109,466 109,466 Federal Home Loan Mtg. Corporation matures 4/1/2009 6.50% 153,765 153,765
S-7 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 --------------------------------- --------------- ----------- ---------- Financial Institution Pools (continued) Commonwealth Life Insurance Company, Peoples Life Insurance Company & Trans America Life Insurance Company (continued) Federal Home Loan Mtg. Corporation matures 10/1/2011 6.50% $ 1,499,186 $ 1,499,186 Federal Home Loan Mtg. Corporation matures 12/15/2019 6.00% 544,917 544,917 Federal Home Loan Mtg. Corporation matures 4/15/2021 9.00% 1,369,729 1,369,729 Federal Home Loan Mtg. Corporation matures 1/1/2026 6.00% 936,908 936,908 Federal Home Loan Mtg. Corporation matures 7/1/2026 6.50% 519,682 519,682 Student Loan Marketing Association matures 8/1/2007 7.13% 701,902 701,902 Banc One Auto TR matures 11/15/1997 6.85% 163,478 163,478 Premier Auto TR matures 2/4/1999 7.15% 1,894,195 1,894,195 Bayerische Landesbank Girozentrale matures 7/19/1999 6.55% 2,297,149 2,297,149 MBNA Master Credit Card TR matures 8/16/1999 6.20% 2,527,260 2,527,260 Standard Credit Card Master TR matures 6/7/2000 6.75% 785,382 785,382 Standard Credit Card Master TR matures 4/7/2001 6.80% 522,286 522,286 Asian Development Bank NTS matures 5/2/2001 8.50% 1,473,645 1,473,645 American Express Master TR matures 7/15/2001 5.38% 1,366,641 1,366,641 MBNA Master Credit Card TR matures 1/15/2003 6.60% 1,014,626 1,014,626 Japan Fin Corp matures 4/27/2005 7.38% 1,453,580 1,453,580 International BK for Recon & Dev matures 7/21/2005 6.38% 1,620,393 1,620,393 Bayerische Landesbank Girozentrale matures 2/1/2006 6.17% 1,663,401 1,663,401 KFW Int'l Fin Inc matures 6/1/2006 8.20% 983,074 983,074 General Electric Cap Corp matures 7/24/2008 8.50% 1,050,622 1,050,622 Landesbank Hessen matures 11/10/2008 6.25% 1,607,286 1,607,286 International BK for Recon & Dev matures 3/1/2026 8.88% 548,882 548,882 ----------- -----------
S-8 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 --------------------------------- --------------- ----------- ---------- Commonwealth Life Insurance Company, Peoples Life Insurance Company & Trans America Life Insurance Company (continued) Total Commonwealth, Peoples & Trans America Contract $177,398,726 $177,398,726 ------------ ------------ Total Pools 271,231,688 271,231,688 ------------ ------------ Total Investment Contracts 719,262,691 719,262,691 ------------ ------------ Short-Term Investments -- 1.20% GEBT Short-Term Investment Fund 25,748,659 25,748,659 25,748,659 GEBT Stable Value Government Fund 5,501,801 5,501,801 5,501,801 ------------ ------------ Total Short-Term Investments 31,250,460 31,250,460 ------------ ------------ Total Interest Income Fund 750,513,151 750,513,151 ------------ ------------ GOVERNMENT SECURITIES FUND -- 1.13% Government Securities -- 0.99% United States Treasury Notes 7.25% due 2/15/1998 1,650,000 1,666,601 1,677,076 United States Treasury Notes 7.125% due 9/30/1999 4,350,000 4,502,688 4,470,321 United States Treasury Notes 7.125% due 2/29/2000 4,350,000 4,510,313 4,478,456 United States Treasury Notes 5.875% due 6/30/2000 4,350,000 4,343,360 4,317,375 United States Treasury Notes 5.625% due 2/28/2001 750,000 736,582 735,120 United States Treasury Notes 6.375% due 8/15/2002 4,900,000 4,961,787 4,932,144 United States Treasury Notes 6.50% due 5/15/2005 3,000,000 3,060,541 3,020,160 United States Treasury Notes 6.50% due 8/15/2005 1,300,000 1,332,109 1,308,333 United States Treasury Notes 6.50% due 10/15/2006 750,000 759,023 754,103 ------------ ------------ Total Government Securities 25,873,004 25,693,088 ------------ ------------ Federal Agency Obligations -- 0.11% Federal Home Loan Mtg. Corporation SER A 5.5% due 2/2/2001 3,000,000 2,978,775 2,911,410 ------------ ------------
S-9 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 - --------------------------------- --------------- ----------- ---------- Total Federal Agency Obligations $ 2,978,775 $ 2,911,410 ---------------- --------------- Short-Term Investments -- 0.03% BT Pyramid Government Securities Cash Fund 811,717 811,717 811,717 ---------------- --------------- Total Government Securities Fund 29,663,496 29,416,215 ---------------- --------------- GOVERNMENT SECURITIES FUND (GF) -- 0.05% Government Securities -- 0.05% United States Treasury Bills due 5/01/1997 500,000 473,324 473,324 United States Treasury Bills due 7/24/1997 500,000 472,400 472,400 United States Treasury Bills due 11/13/1997 250,000 238,077 238,077 ---------------- --------------- Total Government Securities 1,183,801 1,183,801 ---------------- --------------- Short-Term Investments -- 0.00% BT Pyramid Government Securities Cash Fund 109,585 109,585 109,585 ---------------- --------------- Total Government Securities Fund (GF) 1,293,386 1,293,386 ---------------- --------------- PHILIP MORRIS STOCK FUND -- 41.67% Common Stock -- 40.57% Tobacco -- 40.57% Philip Morris Companies Inc. 9,343,555 * 439,309,053 1,055,821,715 Short-Term Investments -- 1.10% GEBT Short-Term Investment Fund 28,613,393 28,613,393 28,613,393 ---------------- --------------- Total Philip Morris Stock Fund 467,922,446 1,084,435,108 ---------------- ---------------
* On February 26, 1997, Philip Morris Companies Inc. announced a three-for-one split of its Common Stock, to be effected by a distribution on April 10, 1997, of two shares for each share held of record at the close of business on March 17, 1997. S-10 KRAFT FOODS MASTER DEFINED CONTRIBUTION TRUST SCHEDULE I - INVESTMENTS as of December 31, 1996
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 --------------------------------- --------------- ----------- ---------- INTERNATIONAL EQUITY FUND -- 2.17% Japanese Equity Index Fund -- 0.57% 174,579 $ 16,928,012 $ 14,865,375 Non Japanese Equity Index Fund -- 1.60% 282,909 35,371,872 41,535,576 -------------- -------------- Total Equity Index Funds 52,299,884 56,400,951 -------------- -------------- Short-Term Investments -- 0.00% GEBT Short-Term Investment Fund 114,499 114,499 114,499 -------------- -------------- Total International Equity Index Fund 52,414,383 56,515,450 -------------- -------------- BALANCED FUND -- 2.97% Balanced Fund -- 2.96% 6,451,741 72,890,632 77,162,828 Short-Term Investments -- 0.01% GEBT Short-Term Investment Fund 188,536 188,536 188,536 -------------- -------------- Total Balanced Fund 73,079,168 77,351,364 -------------- -------------- GROWTH EQUITY FUND -- 4.71% Growth Equity Fund -- 4.70% 10,123,806 117,556,907 122,194,340 Short-Term Investments -- 0.01% GEBT Short-Term Investment Fund 312,426 312,426 312,426 -------------- -------------- Total Growth Equity Fund 117,869,333 122,506,766 -------------- -------------- PARTICIPANTS' LOAN ACCOUNT -- 1.43% Loans to Participants -- 1.43% 37,374,798 37,374,798 37,374,798 -------------- -------------- Total Participants' Loan Account 37,374,798 37,374,798 -------------- -------------- TOTAL INVESTMENTS $1,827,152,112 $2,602,501,815 ============== ==============
S-11 EX-23 2 CONSENT OF COOPERS & LYBRAND L.L.P. 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. 33-1479) of the Kraft Foods Employee Thrift-Investment Plan of our report dated March 28, 1997, on our audits of the financial statements of the Kraft Foods Employee Thrift-Investment Plan as of December 31, 1996 and 1995 and for the years ended December 31, 1996, 1995 and 1994, and the financial statement schedule as of December 31, 1996, which report is included in this annual report on Form 11-K. COOPERS & LYBRAND L.L.P. Chicago, Illinois April 14, 1997 -----END PRIVACY-ENHANCED MESSAGE-----