' Profits Take Breath Away'

[Guest guest]

FYI! This is more than 'disgusting news', yet we appreciate Reporter, Burns, who provided the 'real story'!

MM / NSIF

Sunday | July 22, 2001

Philip profits take breath away 07/22/2001 By SCOTT BURNS / The Dallas Morning News

What would we do without Philip ?

This is a serious question. Philip Cos. Inc. now ranks as the 14th most valuable stock in the country. Even more impressive, Philip is high on the Big Cap list in spite of its paltry price-to-earnings multiple, not because of it. The earnings multiples of the 13 companies with higher market capitalization average 34.6.

Philip clocks in at 13.7 times earnings.

Give Philip a multiple such as GE's 38.3, and it would rank as the second most valuable company in America. It would surpass Microsoft Corp. It would leave familiar names such as Pfizer Inc., Wal-Mart Stores Inc. and Intel Corp. in the dust. Philip is worth nearly twice as much as the combined market value of Ford Motor Co. and General Motors Corp.

We're talking big, big money.

'Benefit' to humanity

Another impressive thing about Philip is its immense cost/benefit contribution to humanity. I say humanity because Philip is a global company, deriving more than half of its earnings abroad. According to a recent Associated Press story, the company has been distributing an interesting analysis in the Czech Republic. It says its cigarettes are a boon to the economy of the Czech Republic.

Why?

Because the early deaths of smokers help offset medical expenses. Indeed, the report values the contribution of cigarettes to the Czech government at $146 million.

If such a lugubrious accounting bothers you, get over it.

Governments do economic impact and cost-benefit studies all the time. What is surprising is that this study comes up with a positive number.

The earliest similar study that I know of, done by the British government more than 20 years ago, asked quite directly whether smoking might be good for government because of the possible savings in public pensions due to premature death.

The expenses

The study concluded that there was no economic benefit because pension savings were more than offset by medical expenses directly related to smoking. Sadly, the long and painful deaths associated with lung cancer and emphysema are also very expensive.

In the Czech Republic, smoking kills about 23,000 people each year. In the United States, the number is 400,000.

That's a lot of people.

To put the carnage in some perspective, smoking in the United States kills:

• About five times the combined total of murders (about 30,000) and suicides (about 50,000) in any year.

• About nine times the number of people who die in motor vehicle accidents each year.

• About 11 times the number of people who die from accidents with firearms each year.

• Nearly three times as many people as die from all forms of accidents.

• More than all the battlefield deaths in World War I (53,000), World War II (292,000) and Vietnam (47,000) combined. Unlike the deaths in those wars – or the 37,000 who died in Korea – this killing never stops.

In The Arithmetic of Life and Death (Ballantine Books, paperback, $10.95), writer Shaffner calculates that if you have a circle of 1,000 friends and acquaintances, about 160 of them will die before their time because they smoke cigarettes.

"That is 160 funerals that you should plan to attend, unless you also smoke, in which case you should be planning your own," he concludes.

Imagine now that the Dallas/Fort Worth area, population 5.2 million, is in the shadow of a prolific, seemingly unstoppable serial killer.

Every day, 20 people are found dead, all killed by the same subtle but painful method. Imagine that this happens week after week.

Do you think people would be upset? Do you think they would want something done?

No doubt.

But what if there was also a serial killer in every major city, one that killed four people out of every million, every day?

Well, that's what smoking, the product sold by Philip , does. It's the biggest serial killer of all time.

Don't take it personally. Philip does this worldwide. That's its business.

And a killer investment.

Questions about personal finance and investments may be sent to: Burns, The Dallas Morning News, P.O. Box 655237, Dallas, 75265; faxed to 214-977-8776; or e-mailed to scott@.... Check the Web site: www.scottburns.com. Questions of general interest will be answered in future columns.

MM / NSIF

Martha Murdock, DirectorNational Silicone Implant FoundationDallas, Texas Headquarters

Purposes for which the Corporation (NSIF) is organized are to perform the charitable activities within the meaning of Internal Revenue Code Section 501©(3) and Texas Tax Code Section 11.18 ©(1).Specifically, the Corporation is organized for the purposes of education and research of Silicone-related disease.

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