Global cigarette manufacturer Philip Morris International Inc. (NYSE: PM), best known for its iconic Marlboro brand, had its genesis in a cigarette and tobacco shop opened in London by Mr. Philip Morris in 1847. Although you might think that all the secrets of the major tobacco companies have long been exposed, the following are five interesting and surprising facts about Philip Morris and its Marlboro cigarettes.

1. High Annual Taxes

Most people are aware that cigarette taxes are among the most severe sin taxes levied anywhere on anything, but it's doubtful that many people really understand the heavy tax burden faced by tobacco companies. In fact, major cigarette manufacturers such as Philip Morris have to hand over more than half of their annual revenues to the taxman. In 2016, Philip Morris paid taxing authorities $48.2 billion of its $74 billion in total revenues, roughly 64%. Basically, the government is getting paid for 12.5 cigarettes out of every pack of 20 sold by Philip Morris.

In December 2017, the Tax Cuts and Jobs Act was signed into law, which reduced the company's corporate tax rate to 21%.

2. Marlboro Originally Marketed as Cigarette for Women

Although the Marlboro Man is one of the most widely recognized advertising images in history, a little known fact is that the Marlboro brand was originally marketed, in the 1920s, as a cigarette for women using the ad slogan "Mild as May." The cigarettes even featured a red band around the filter to hide lipstick stains. Famed advertising executive, Leo Burnett, was the man charged with transforming the brand into a cigarette for men, and came up with the iconic cowboy figure that came to be known as simply "the Marlboro Man."

Another little-known fact is that the company's move to reposition Marlboro as a cigarette for men was spurred by a study in the early 1950s that linked smoking to lung cancer. Filtered cigarettes were seen as safer than unfiltered cigarettes, but prior to the 1950s, filtered cigarettes were almost exclusively marketed to women. Because of this, men were reluctant to smoke filtered cigarettes until the advent of the ultra-macho Marlboro Man cowboy.

3. Philip Morris Has Been a Good Investment

Given the fact that tobacco companies have to operate under such onerous marketing restrictions, with expensive settlement fees and such a huge tax burden, it is reasonable to conclude that firms such as Philip Morris offer little, if any, profit potential. However, surprisingly enough, Philip Morris has continued to manage net and operating margins in the 20 to 40% range, and to consistently show investors solid returns on investment. As of April 2018, the company's stock offered a forward dividend yield of 4.16%, and the company has increased its dividend every year for the past eight years. The company's stock has more than doubled in price since its 2008 spinoff from parent Altria Group Inc. (MO).

4. Rights to the Entire E-cigarette Technology

In 2000, Philip Morris considered buying the rights to the technology behind electronic cigarettes, but company executives eventually decided that the price was too high. The company has, however, entered the e-cigarette marketplace with its MarkTen and iQOS brands, recently making an appeal to the Food and Drug Administration (FDA) that their e-cig (or vape) should be considered safer than cigarettes, were they to win approval, they would officially be able to advertise their device as safer than cigarettes, which is currently illegal. These vapes don't release smoke but do still contain tobacco and nicotine. Their plea was rejected by the FDA, which surely dealt a blow to morale at the company. It remains to be seen if Phillip Morris will try again, but it seems they have their eyes on changing a nation of smokers into a nation of vapers. 

As of June 2018, Philip Morris International Inc. plans to launch its iQOS smoking device in India, multiple sources told Reuters, as the tobacco giant attempts to grow their presence in the world’s second-biggest smoker population. iQOS heats but does not burn tobacco, producing a vapor that contains nicotine rather than smoke. The company says it wants to one day stop selling cigarettes altogether. India has strict laws aimed at decreasing tobacco use. However, the country still has 106 million adult smokers, second only to China according to the World Health Organization, making it a lucrative market for Philip Morris to target.

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