Phillip Morris' anticipated growth is based on several factors. Among these are historical returns of the tobacco index, the food index and Phillip Morris' own returns during the period 1982 - 1987. The average annual return on the tobacco index was 2%, due to a few years of negative return. Phillip Morris averaged a 5% return during the same period. It is stated in the case that tobacco sales are growing, due in large part to exports, which are expected to grow by 15% in 1988. Since tobacco makes up slightly more than half of Phillip Morris' business, near term growth is tempered by the anticipated growth of the other portion of their business: food. Since the food index has experienced very moderate growth in the two of the three years prior to the bid, along with a major downturn in 1986, Phillip Morris' growth is not expected to keep pace with their anticipated growth in tobacco sales. In the long term, growth is expected to slow down further based on declining U.S. sales and an eventual saturation, or regulatory control of the international market due to health concerns.