Form 8-K Philip Morris Internatio For: Apr 19

April 19, 2018 9:05 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 19, 2018

Philip Morris International Inc.

(Exact name of registrant as specified in its charter)






Virginia	1-33708	13-3435103
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)






120 Park Avenue, New York, New York				10017-5592
(Address of principal executive offices)				(Zip Code)

Registrant's telephone number, including area code: (917) 663-2000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.



Emerging growth company	o



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	o

Item 2.02. Results of Operations and Financial Condition.

On April 19, 2018, Philip Morris International Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2018. The earnings release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference to this Item 2.02.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing or document.

Item 7.01. Regulation FD Disclosure.

On April 19, 2018, the Company held a live audio webcast to discuss its financial results for the quarter ended March 31, 2018. In connection with the webcast, the Company is furnishing to the Securities and Exchange Commission the following documents attached as exhibits to this Current Report on Form 8-K and incorporated by reference to this Item 7.01: the conference call script attached as Exhibit 99.2 hereto and the webcast slides attached as Exhibit 99.3 hereto.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.2 and 99.3, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 7.01 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing or document.



Item 9.01.	Financial Statements and Exhibits.



(d)	Exhibits



99.1	Philip Morris International Inc. Press Release dated April 19, 2018 (furnished pursuant to Item 2.02)
99.2	Conference Call Script dated April 19, 2018 (furnished pursuant to Item 7.01)
99.3	Webcast Slides dated April 19, 2018 (furnished pursuant to Item 7.01)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




PHILIP MORRIS INTERNATIONAL INC.

By:		/s/ JERRY WHITSON
Name:		Jerry Whitson
Title:		Deputy General Counsel and Corporate Secretary

DATE: April 19, 2018

Exhibit 99.1



PRESS RELEASE

Investor Relations:		Media:
New York: +1 (917) 663 2233		Lausanne: +41 (0)58 242 4500
Lausanne: +41 (0)58 242 4666		Email: [email protected]
Email: [email protected]

PHILIP MORRIS INTERNATIONAL INC. (PMI) REPORTS 2018 FIRST-QUARTER RESULTS;

INCREASES, PRIMARILY TO REFLECT A LOWER EFFECTIVE TAX RATE, 2018 FULL-YEAR REPORTED DILUTED EPS, REFLECTING CURRENCY-NEUTRAL GROWTH OF APPROXIMATELY 8% TO 11% VS. 2017 ADJUSTED DILUTED EPS OF $4.72

2018 First-Quarter


•	Reported diluted earnings per share of $1.00, down by $0.02 or 2.0% versus $1.02 in 2017


•	Adjusted diluted earnings per share of $1.00, up by $0.02 or 2.0% versus $0.98 in 2017


•	Excluding favorable currency of $0.03, adjusted diluted earnings per share down by $0.01 or 1.0% versus $0.98 in 2017 as detailed in the attached Schedule 2


•	Cigarette and heated tobacco unit shipment volume of 173.8 billion, down by 2.3%, or by 1.1% excluding the net impact of total estimated inventory movements, reflecting:


•	Cigarette shipment volume of 164.3 billion units, down by 9.3 billion units or 5.3%


•	Heated tobacco unit shipment volume of 9.6 billion units, up by 5.1 billion units versus 2017


•	Net revenues of $6.9 billion, up by 13.7%


•	Excluding favorable currency of $327 million, net revenues up by 8.3% as detailed in the attached

Schedule 3


•	Operating income of $2.4 billion, up by 0.4%


•	Excluding favorable currency of $76 million, operating income down by 2.7% as detailed in the attached Schedule 4


•	Adjusted operating income, reflecting the items detailed in the attached Schedule 5, of $2.4 billion, up by 0.4%


•	Excluding favorable currency of $76 million, adjusted operating income down by 2.7% as detailed in the attached Schedule 5

2018 Full-Year Forecast


•	PMI increases, primarily to reflect a lower effective tax rate, its 2018 full-year reported diluted earnings per share forecast to be in a range of $5.25 to $5.40, at prevailing exchange rates, representing a projected increase of approximately 35% to 39% versus reported diluted earnings per share of $3.88 in 2017.


•	Excluding a favorable currency impact, at prevailing exchange rates, of approximately $0.16, the forecast range represents a projected increase of approximately 8% to 11% versus adjusted diluted earnings per share of $4.72 in 2017 as detailed in the attached Schedule 2.


•	This forecast assumes:


•	Currency-neutral net revenue growth of approximately 8.0%;


•	Operating cash flow of over $9.0 billion;


•	Capital expenditures of approximately $1.7 billion;


•	A full-year effective tax rate of approximately 26%; and


•	No share repurchases.


•	This forecast excludes the impact of any future acquisitions, unanticipated asset impairment and exit cost charges, future changes in currency exchange rates, further developments related to the Tax Cuts and Jobs Act, and any unusual events. Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.

2018 FIRST-QUARTER CONSOLIDATED RESULTS

NEW YORK, April 19, 2018 – Philip Morris International Inc. (NYSE: PM) today announced its 2018 first-quarter results.

"We began the year with strong, currency-neutral net revenue growth of more than 8% in the quarter, driven by higher volume for heated tobacco units and IQOS devices coupled with higher pricing from our combustible product portfolio," said André Calantzopoulos, Chief Executive Officer.

"Our increased full-year EPS guidance reflects the benefit of a lower effective tax rate and incorporates, at this early stage in the year, some caution regarding: on-going volume challenges in the GCC; the pricing environment in Russia; and less-rapid-than-initially-projected growth in sales of devices to consumers in Japan in the first quarter, as we are now reaching more conservative adult smoker segments that may require, at least at first, slightly more time for adoption. Even if this temporary dynamic in Japan persists, we remain on track to double our worldwide in-market sales of heated tobacco units compared to 2017."

"We are confident in our ability to deliver strong results this year and remain steadfast in our commitment to generously reward our shareholders."

Conference Call

A conference call, hosted by Martin King, Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on April 19, 2018. Access is at www.pmi.com/2018Q1earnings. The audio webcast may also be accessed on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.

Impact of U.S. Tax Reform

PMI's 2018 full-year diluted earnings per share forecast assumes a full-year effective tax rate of approximately 26%. The reduction in this rate compared to the full-year effective tax rate of 28% communicated in February 2018 mainly reflects two factors:


•	further analysis and interpretation of the scope and impact of the Tax Cuts and Jobs Act (the “Act”), primarily related to foreign tax credit limitations due to the Act's Global Intangible Low Taxed Income provisions; and


•	revised foreign income tax estimates due to a change in the mix of our foreign earnings.

The Act has significant complexity, and our final full-year effective tax rate may differ from this assumption, due to, among other things, additional guidance that may be issued by the U.S. Treasury Department and the Internal Revenue Service, related interpretations and clarifications of tax law, and earnings mix by taxing jurisdiction.

Dividends

During the quarter, PMI declared a regular quarterly dividend of $1.07, representing an annualized rate of $4.28 per common share.

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Key Terms, Definitions and Explanatory Notes

General


•	"PMI" refers to Philip Morris International Inc. and its subsidiaries. Trademarks and service marks that are the registered property of, or licensed by, the subsidiaries of PMI, are italicized.


•	Comparisons are made to the same prior-year period unless otherwise stated.


•	Unless otherwise stated, references to total industry, total market, PMI shipment volume and PMI market share performance reflect cigarettes and heated tobacco units.


•	[NEW] Key market data regarding total market size, PMI shipments and market share can be found in Appendix 1 provided with this press release.

•

References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the United States, total industry, total market and market shares are PMI estimates for tax-paid products based on the latest available data from a number of internal and external sources and may, in defined instances, exclude the People's Republic of China and/or PMI's duty free business.


•	"OTP" is defined as "other tobacco products," primarily roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos, and does not include reduced-risk products.


•	"Combustible products" is the term PMI uses to refer to cigarettes and OTP, combined.


•	"Total shipment volume" is defined as the combined total of cigarette shipment volume and heated tobacco unit shipment volume.


•	[NEW] Effective January 1, 2018, PMI began managing its business in six reporting segments as follows: the European Union Region (EU); the Eastern Europe Region (EE); the Middle East & Africa Region (ME&A), which includes PMI Duty Free; the South & Southeast Asia Region (S&SA); the East Asia & Australia Region (EA&A); and the Latin America & Canada Region (LA&C).


•	"North Africa" is defined as Algeria, Egypt, Libya, Morocco and Tunisia.


•	[NEW] "The GCC" (Gulf Cooperation Council) is defined as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

Financial


•	[NEW] Net revenues related to combustible products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods.

•

[NEW] PMI has adopted Accounting Standard Update ASU 2014-09 "Revenue from Contracts with Customers" as of January 1, 2018 on a retrospective basis. PMI made an accounting policy election to exclude excise taxes collected from customers from the measurement of the transaction price, thereby presenting revenues, net of excise taxes in all periods. The underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with PMI's current business model and practices.

•

[NEW] PMI adopted Accounting Standard Update ASU 2017-07 "Compensation - Retirement Benefits" as of January 1, 2018 on a retrospective basis. Previously, total pension and other employee benefit costs were included in operating income. Beginning January 1, 2018, only the service cost component is required to be shown in operating income, while all other cost components are presented in a new line item “pension and other employee benefit costs" below operating income.


•	[NEW] Prior to 2018, management evaluated business segment performance, and allocated resources, based on operating companies income, or OCI. Effective January 1, 2018, management began evaluating business segment performance, and allocating resources, based on operating income, or OI.


•	[NEW] "Cost of sales" consists principally of: tobacco leaf, non-tobacco raw materials, labor and manufacturing costs; shipping and handling costs; and the cost of IQOS devices produced by third-party electronics manufacturing service providers. Estimated costs associated with IQOS warranty programs are generally provided for in cost of sales in the period the related revenues are recognized.

•

[NEW] "Marketing, administration and research costs" include the costs of marketing and selling our products, other costs generally not related to the manufacture of our products (including general corporate expenses), and costs incurred to develop new products. The most significant components of our marketing, administration and research costs are marketing and sales expenses and general and administrative expenses.

- -3 -


•	[NEW] "Cost/Other" in the Financial Summary table of total PMI and the six reporting segments of this release reflects the currency-neutral variances of: cost of sales (excluding the volume/mix cost component); marketing, administration and research costs; asset impairment and exit costs; and amortization of intangibles.


•	[NEW] "Adjusted Operating Income Margin" is calculated as adjusted operating income, divided by net revenues.


•	[NEW] "Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation, amortization and equity (income)/loss in unconsolidated subsidiaries, excluding asset impairment and exit costs, and unusual items.


•	"Net debt" is defined as total debt, less cash and cash equivalents.


•	[NEW] Management reviews net revenues, OI, OI margins, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items.

•

Management reviews these measures because they exclude changes in currency exchange rates and other factors that may distort underlying business trends, thereby improving the comparability of PMI’s business performance between reporting periods. Furthermore, PMI uses several of these measures in its management compensation program to promote internal fairness and a disciplined assessment of performance against company targets. PMI discloses these measures to enable investors to view the business through the eyes of management.


•	Non-GAAP measures used in this release should neither be considered in isolation nor as a substitute for the financial measures prepared in accordance with U.S. GAAP. For a reconciliation of non-GAAP measures to the most directly comparable GAAP measures, see the relevant schedules provided with this press release.

Reduced-Risk Products

•

"Reduced-risk products," or "RRPs," is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. Because PMI's RRPs do not burn tobacco, they produce an aerosol that contains far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke.


•	[NEW] IQOS is a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol.


•	"Heated tobacco units," or "HTUs," is the term PMI uses to refer to heated tobacco consumables, which include the company's HEETS, HEETS Marlboro and HEETS FROM MARLBORO, defined collectively as HEETS, as well as Marlboro HeatSticks and Parliament HeatSticks.

•

[NEW] Net revenues related to RRPs represent the sale of heated tobacco units, IQOS devices and related accessories, and other nicotine-containing products, primarily e-vapor products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods.

- -4 -

SHIPMENT VOLUME



PMI Shipment Volume by Region	First-Quarter
(million units)	2018	2017	Change
Cigarettes
European Union	39,671	42,540	(6.7	)%
Eastern Europe	22,039	24,596	(10.4	)%
Middle East & Africa	29,248	31,978	(8.5	)%
South & Southeast Asia	40,218	37,899	6.1	%
East Asia & Australia	14,091	17,243	(18.3	)%
Latin America & Canada	19,013	19,296	(1.5	)%
Total PMI	164,280	173,552	(5.3	)%

Heated Tobacco Units
European Union	928	184	+100%
Eastern Europe	564	54	+100%
Middle East & Africa	709	51	+100%
South & Southeast Asia	—	—	—	%
East Asia & Australia	7,342	4,145	77.1	%
Latin America & Canada	23	1	+100%
Total PMI	9,566	4,435	+100%

Cigarettes and Heated Tobacco Units
European Union	40,599	42,724	(5.0	)%
Eastern Europe	22,603	24,650	(8.3	)%
Middle East & Africa	29,957	32,029	(6.5	)%
South & Southeast Asia	40,218	37,899	6.1	%
East Asia & Australia	21,433	21,388	0.2	%
Latin America & Canada	19,036	19,297	(1.4	)%
Total PMI	173,846	177,987	(2.3	)%

PMI's total shipment volume decreased by 2.3%, principally due to:


•	the EU, reflecting lower cigarette shipment volume mainly in France, Germany and Poland;


•	Eastern Europe, reflecting lower cigarette shipment volume mainly in Russia and Ukraine; and


•	Middle East & Africa, reflecting lower cigarette shipment volume mainly in the GCC, notably Saudi Arabia, and North Africa, notably Algeria, partly offset by higher cigarette shipment volume mainly in Turkey and PMI Duty Free;

partly offset by


•	South & Southeast Asia, reflecting higher cigarette shipment volume, driven mainly by Pakistan and Thailand, partly offset by Indonesia; and


•	East Asia & Australia, reflecting higher heated tobacco unit shipment volume, driven by Japan and Korea.

Excluding the net unfavorable impact of total estimated distributor inventory movements of approximately 2.1 billion units, driven mainly by Japan and Saudi Arabia, PMI's total shipment volume decreased by 1.1%.

PMI shipment volume by brand is shown in the table below.

- -5 -



PMI Shipment Volume by Brand	First-Quarter
(million units)	2018	2017	Change
Cigarettes
Marlboro	57,973	62,399	(7.1	)%
L&M	19,225	21,913	(12.3	)%
Chesterfield	13,875	11,544	20.2	%
Philip Morris	10,659	10,608	0.5	%
Sampoerna A	8,624	9,913	(13.0	)%
Parliament	8,460	9,199	(8.0	)%
Bond Street	6,975	8,485	(17.8	)%
Dji Sam Soe	6,696	4,459	50.2	%
Lark	5,517	6,526	(15.5	)%
Fortune	3,583	2,882	24.3	%
Others	22,693	25,624	(11.4	)%
Total Cigarettes	164,280	173,552	(5.3	)%
Heated Tobacco Units	9,566	4,435	+100.0%
Total PMI	173,846	177,987	(2.3	)%

Note: Sampoerna A includes Sampoerna.

PMI's cigarette shipment volume of the following brands decreased:


•	Marlboro, mainly due to Germany, Japan and Saudi Arabia, partly offset by Indonesia and Turkey;


•	L&M, mainly due to Germany, North Africa, Russia and Saudi Arabia, partly offset by Thailand;


•	Sampoerna A in Indonesia, partly reflecting the impact of its retail price increasing past its round pack price point in the fourth quarter of 2017;


•	Parliament, mainly due to Japan, Russia and Saudi Arabia, partly offset by Turkey;


•	Bond Street, mainly due to Russia and Ukraine;


•	Lark, mainly due to Japan, partly offset by Turkey; and


•	"Others," mainly due to: mid-price brands, notably Sampoerna U in Indonesia, partly reflecting the impact of above-inflation retail price increases; and the successful portfolio consolidation of local, low-price brands into international trademarks, notably in Russia; partly offset by low-price brands in Pakistan.

PMI's cigarette shipment volume of the following brands increased:


•	Chesterfield, mainly driven by Brazil, Colombia, Italy, Saudi Arabia and Turkey;


•	Philip Morris, mainly driven by Russia, partly offset by Argentina and Italy;


•	Dji Sam Soe in Indonesia, notably reflecting the continued strong performance of its Magnum Mild 16s variant launched in the second quarter of 2017; and


•	Fortune in the Philippines, reflecting the favorable impact of its narrowed retail price gap to competitors' products.

The increase in PMI's heated tobacco unit shipment volume was driven by East Asia & Australia, primarily Japan and Korea.

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FINANCIAL SUMMARY



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 6,896		$ 6,064		13.7	%	8.3	%	832		327		342	163		—
Cost of Sales	(2,615)		(2,177)		(20.1	)%	(13.9	)%	(438	)	(136	)	—	(335	)	33
Marketing, Administration and Research Costs	(1,833)		(1,449)		(26.5	)%	(18.6	)%	(384	)	(115	)	—	—		(269	)
Amortization of Intangibles	(22)		(22)		—	%	—	%	—		—		—	—		—
Operating Income	$ 2,426		$ 2,416		0.4	%	(2.7	)%	10		76		342	(172	)	(236	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—		—	—		—
Adjusted Operating Income	$ 2,426		$ 2,416		0.4	%	(2.7	)%	10		76		342	(172	)	(236	)

Adjusted Operating Income Margin	35.2	%	39.8	%	(4.6)pp		(4.0)pp

NET REVENUES BY PRODUCT CATEGORY



PMI Net Revenues	First-Quarter
(in millions)					Excl.
	2018	2017	Change		Curr.
Combustible Products
European Union	$ 1,836	$ 1,709	7.4	%	(5.8	)%
Eastern Europe	527	513	2.8	%	(2.6	)%
Middle East & Africa	884	957	(7.7	)%	(9.0	)%
South & Southeast Asia	1,081	1,031	4.8	%	5.6	%
East Asia & Australia	737	813	(9.4	)%	(12.2	)%
Latin America & Canada	704	605	16.3	%	16.5	%
Total PMI	$ 5,769	$ 5,629	2.5	%	(2.5	)%

RRPs
European Union	$ 152	$ 31	+100%		+100%
Eastern Europe	40	3	+100%		+100%
Middle East & Africa	77	4	+100%		+100%
South & Southeast Asia	—	—	—	%	—	%
East Asia & Australia	854	396	+100%		+100%
Latin America & Canada	4	—	—	%	—	%
Total PMI	$ 1,127	$ 435	+100%		+100%

Combustible Products and RRPs
European Union	$ 1,988	$ 1,740	14.3	%	0.2	%
Eastern Europe	567	516	9.9	%	4.3	%
Middle East & Africa	961	961	—	%	(1.5	)%
South & Southeast Asia	1,081	1,031	4.8	%	5.6	%
East Asia & Australia	1,591	1,210	31.5	%	27.5	%
Latin America & Canada	708	606	16.8	%	17.0	%
Total PMI	$ 6,896	$ 6,064	13.7	%	8.3	%
Note: Sum of product categories or Regions might not foot to total PMI due to rounding.

- -7 -

During the quarter, net revenues, excluding favorable currency, increased by 8.3%, driven by a favorable pricing variance from across all Regions, notably S&SA and LA&C, including higher IQOS device sales, mainly in EA&A, as well as favorable volume/mix, driven primarily by EA&A, despite the impact of the tax-driven cigarette industry volume decline and related down-trading in the GCC, principally Saudi Arabia.

Operating income, excluding favorable currency, decreased by 2.7%, mainly due to: unfavorable volume/mix, largely due to the GCC, principally Saudi Arabia; higher marketing, administration and research costs, primarily reflecting increased investment behind reduced-risk products, predominantly in the EU; and the full-year contribution of $80 million to the Foundation for a Smoke-Free World; partly offset by a favorable pricing variance across all Regions and favorable manufacturing costs, notably in S&SA and EA&A.

Adjusted operating income margin, excluding currency, decreased by 4.0 points to 35.8%, reflecting the factors mentioned above, as detailed in the attached Schedule 6.

EUROPEAN UNION REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total		Cur- rency	Price	Vol/ Mix		Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total		Cur- rency	Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 1,988		$ 1,740		14.3	%	0.2	%	248		245	46	(43	)	—

Operating Income	$ 740		$ 748		(1.1	)%	(15.8	)%	(8	)	110	46	(67	)	(97	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—	—	—		—
Adjusted Operating Income	$ 740		$ 748		(1.1	)%	(15.8	)%	(8	)	110	46	(67	)	(97	)

Adjusted Operating Income Margin	37.2	%	43.0	%	(5.8)pp		(6.9)pp

During the quarter, net revenues, excluding favorable currency, increased by 0.2%, mainly reflecting: a favorable pricing variance, driven principally by Germany, Poland and the United Kingdom, partly offset by France; and unfavorable volume/mix, notably in France and Germany, partly offset by Italy.

Operating income, excluding favorable currency, decreased by 15.8%, mainly due to: unfavorable volume/mix, notably in France and Germany, and higher marketing, administration and research costs, primarily reflecting increased investment behind reduced-risk products across the Region, partly offset by a favorable pricing variance.

Adjusted operating income margin, excluding currency, decreased by 6.9 points to 36.1%, reflecting the factors mentioned above, as detailed on Schedule 6.

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Total Market, PMI Shipment & Market Share Commentaries



European Union Key Data	First-Quarter
					Change
	2018		2017		% / pp
Total Market (billion units)	107.7		112.3		(4.1	)%

PMI Shipment Volume (million units)
Cigarettes	39,671		42,540		(6.7	)%
Heated Tobacco Units	928		184		+100.0%
Total EU	40,599		42,724		(5.0	)%

PMI Market Share
Marlboro	18.3	%	18.8	%	(0.5	)
L&M	6.7	%	7.0	%	(0.3	)
Chesterfield	5.9	%	6.1	%	(0.2	)
Philip Morris	3.1	%	3.2	%	(0.1	)
HEETS	0.8	%	0.1	%	0.7
Others	3.4	%	3.2	%	0.2
Total EU	38.2	%	38.4	%	(0.2	)

In the quarter, the estimated total market in the EU decreased by 4.1% to 107.7 billion units, or by 3.4% excluding the net impact of unfavorable estimated trade inventory movements, notably due to:


•	France, down by 9.4%, primarily reflecting the impact of significant excise-tax driven price increases in November 2017 and March 2018;


•	Germany, down by 7.9%, or by 3.0% excluding the net impact of estimated trade inventory movements largely related to the fourth quarter of 2017, primarily reflecting the impact of pricing in 2017 and in March 2018; and


•	Poland, down by 3.7%, or by 1.8% excluding the net impact of estimated trade inventory movements largely related to the fourth quarter of 2017.

PMI's total shipment volume decreased by 5.0% to 40.6 billion units, notably due to:


•	France, down by 8.9%, primarily due to a lower total market, partly offset by higher market share primarily driven by: Marlboro, partly resulting from the narrowing of its retail price gap with low price brands to €0.30/pack as of March 2018; and Philip Morris, reflecting its momentum during the first two months of 2018 driven by its price repositioning to €7.00/pack in November 2017;


•	Germany, down by 12.4%, primarily due to a lower total market and market share, reflecting the unfavorable impact of the estimated trade inventory movements; and


•	Poland, down by 9.2%, primarily due to: a lower total market, as well as lower market share, mainly due to: Marlboro, reflecting the impact of a widened retail price gap with the low price end of the market, as well as switching to reduced-risk products; and L&M, reflecting an unfavorable comparison with the first quarter of 2017 related to brand support;

partly offset by


•	Italy, up by 2.1%, driven by favorable comparisons to the first quarter of 2017 related to distributor inventory movements, as well as higher heated tobacco unit shipment volume; and

- -9 -


•	Spain, up by 1.9%, driven by favorable comparisons to the first quarter of 2017 related to distributor inventory movements.

PMI's total market share decreased by 0.2 points to 38.2%, with declines in Germany, mainly reflecting the unfavorable impact of the estimated trade inventory movements, and Poland, partly offset by gains in France, Italy, Romania and Spain.

EASTERN EUROPE REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total		Cur- rency	Price	Vol/ Mix		Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total		Cur- rency	Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 567		$ 516		9.9	%	4.3	%	51		29	60	(38	)	—

Operating Income	$ 151		$ 159		(5.0	)%	(10.1	)%	(8	)	8	60	(47	)	(29	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—	—	—		—
Adjusted Operating Income	$ 151		$ 159		(5.0	)%	(10.1	)%	(8	)	8	60	(47	)	(29	)

Adjusted Operating Income Margin	26.6	%	30.8	%	(4.2)pp		(4.2)pp

During the quarter, net revenues, excluding favorable currency, increased by 4.3%, principally driven by a favorable pricing variance, notably in Russia and Ukraine, partly offset by unfavorable volume/mix, primarily due to Russia.

Operating income, excluding favorable currency, decreased by 10.1%, principally due to: unfavorable volume/mix; higher manufacturing costs; and higher marketing, administration and research costs primarily reflecting increased investments behind IQOS in Russia; partly offset by a favorable pricing variance.

Adjusted operating income margin, excluding currency, decreased by 4.2 points to 26.6%, reflecting the factors mentioned above, as detailed on Schedule 6.

Total Market, PMI Shipment & Market Share Commentaries

In the quarter, the estimated total market in Eastern Europe decreased, notably due to:


•	Russia, down by 8.3%, or by 7.3% excluding the unfavorable impact of estimated trade inventory movements, primarily reflecting the timing and impact of retail price increases in 2017 and the quarter, as well as an increase in the prevalence of illicit trade; and


•	Ukraine, down by 11.4%, or by 9.4% excluding the net impact of estimated trade inventory movements related to the fourth quarter of 2017, primarily reflecting the impact of excise tax-driven retail price increases in 2017 and the quarter.



PMI Shipment Volume	First-Quarter
(million units)	2018	2017	Change
Cigarettes	22,039	24,596	(10.4	)%
Heated Tobacco Units	564	54	+100.0%
Total Eastern Europe	22,603	24,650	(8.3	)%

PMI's total shipment volume decreased by 8.3% to 22.6 billion units, notably in:

- -10 -


•	Russia, down by 13.9%, or by 12.7% excluding the unfavorable impact of estimated inventory movements, mainly due to the lower total market; lower market share, largely due to Bond Street, partly reflecting the impact of down-trading to competitive products in the low price segment, partly offset by higher share of premium-priced brands; and


•	Ukraine, down by 9.5%, mainly due to the lower total market;

partly offset by


•	higher heated tobacco unit shipment volume, notably in Russia and Ukraine.

MIDDLE EAST & AFRICA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 961		$ 961		—	%	(1.5	)%	—		14		19	(33	)	—

Operating Income	$ 374		$ 491		(23.8	)%	(17.3	)%	(117	)	(32	)	19	(50	)	(54	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—		—	—		—
Adjusted Operating Income	$ 374		$ 491		(23.8	)%	(17.3	)%	(117	)	(32	)	19	(50	)	(54	)

Adjusted Operating Income Margin	38.9	%	51.1	%	(12.2)pp		(8.2)pp

During the quarter, net revenues, excluding favorable currency decreased by 1.5%, principally due to unfavorable volume/mix, primarily due to Saudi Arabia, partly offset by Turkey. The unfavorable volume/mix was partly offset by a favorable pricing variance, driven mainly by Saudi Arabia, partly offset by Turkey.

Operating income, excluding unfavorable currency, decreased by 17.3%, predominantly due to unfavorable volume/mix and higher marketing, administration and research costs primarily related to Saudi Arabia, partly offset by a favorable pricing variance.

Adjusted operating income margin, excluding currency, decreased by 8.2 points to 42.9%, reflecting the factors mentioned above, as detailed on Schedule 6.

Total Market, PMI Shipment & Market Share Commentaries

In the quarter, the estimated total market in the Middle East & Africa decreased, notably due to:


•	Algeria, down by 26.7%, or by 4.4% excluding the net unfavorable impact of estimated trade inventory movements, primarily reflecting an increase in the prevalence of illicit trade;


•	Saudi Arabia, down by 40.8%, primarily reflecting the impact of retail price increases in 2017 and the quarter following the introduction of the new excise tax in June 2017 and VAT in January 2018;

partly offset by


•	Turkey, up by 12.4%, primarily reflecting a lower prevalence of illicit trade.

- -11 -



PMI Shipment Volume	First-Quarter
(million units)	2018	2017	Change
Cigarettes	29,248	31,978	(8.5	)%
Heated Tobacco Units	709	51	+100.0%
Total Middle East & Africa	29,957	32,029	(6.5	)%

PMI's total shipment volume decreased by 6.5% to 30.0 billion units, notably in:


•	Algeria, down by 29.1%, mainly reflecting the lower total market; and


•	Saudi Arabia, down by 74.5%, or by 57.9% excluding the unfavorable impact of adjustments to distributor inventory levels in the quarter, reflecting the lower total market and market share due to the impact of the aforementioned excise tax and VAT increases on retail prices;

partly offset by


•	Turkey, up by 16.8%, reflecting a higher total market and market share; and


•	higher heated tobacco shipment volume, notably in PMI Duty Free.

SOUTH & SOUTHEAST ASIA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix		Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 1,081		$ 1,031		4.8	%	5.6	%	50	(8	)	102	(44	)	—

Operating Income	$ 429		$ 370		15.9	%	19.2	%	59	(12	)	102	(54	)	23
Asset Impairment & Exit Costs	—		—		—	%	—	%	—	—		—	—		—
Adjusted Operating Income	$ 429		$ 370		15.9	%	19.2	%	59	(12	)	102	(54	)	23

Adjusted Operating Income Margin	39.7	%	35.9	%	3.8pp		4.6pp

During the quarter, net revenues, excluding unfavorable currency, increased by 5.6%, reflecting: a favorable pricing variance, driven principally by Indonesia and the Philippines, partly offset by Thailand. The favorable pricing variance was partly offset by unfavorable volume/mix, largely due to Indonesia, partly offset by Pakistan and Thailand.

Operating income, excluding unfavorable currency, increased by 19.2%, mainly driven by a favorable pricing variance, as well as a favorable manufacturing and marketing, administration and research cost comparison, notably in Indonesia and the Philippines. The favorable pricing variance and cost comparison were partly offset by unfavorable volume/mix, mainly in Indonesia, partly offset by Pakistan and Thailand.

Adjusted operating income margin, excluding currency, increased by 4.6 points to 40.5%, reflecting the factors mentioned above, as detailed on Schedule 6.

Total Market, PMI Shipment & Market Share Commentaries

In the quarter, the estimated total market in South & Southeast Asia increased, notably driven by:


•	Pakistan, up over 100% or approximately 8.4 billion units, or by 31.4% excluding the favorable impact of estimated trade inventory movements, notably reflecting an increase in the duty-paid market driven by a reduction in the prevalence of illicit trade resulting from excise tax reform in May 2017;

- -12 -

partly offset by


•	Indonesia, down by 2.3%, reflecting soft consumer spending and above inflation excise tax-driven retail price increases in the quarter;


•	the Philippines, down by 7.8%, reflecting the impact of excise tax-driven retail price increases in 2017 and an approximately 25% excise-tax driven increase to the industry weighted average retail pack price in the quarter; and


•	Thailand, down by 8.9%, primarily reflecting the impact of excise tax-driven price increases in the quarter.



PMI Shipment Volume	First-Quarter
(million units)	2018	2017	Change
Cigarettes	40,218	37,899	6.1	%
Heated Tobacco Units	—	—	—	%
Total South & Southeast Asia	40,218	37,899	6.1	%

PMI's total shipment volume increased by 6.1% to 40.2 billion units, mainly driven by:


•	Pakistan, up over 100%, reflecting the higher total market, primarily driven by the reduction in the prevalence of illicit trade and the favorable impact of estimated trade inventory movements; and


•	Thailand, up by 45.9%, mainly reflecting higher market share driven by the price repositioning of L&M;

partly offset by


•	Indonesia, down by 1.8%, mainly due to the lower total market, partially offset by higher market share, driven by Marlboro Filter Black 20s and Dji Sam Soe Magnum Mild 16s; and


•	the Philippines, down by 1.4%, mainly due to the lower total market, largely offset by higher market share.

EAST ASIA & AUSTRALIA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total	Cur- rency	Price	Vol/ Mix	Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total	Cur- rency	Price	Vol/ Mix	Cost/ Other
Net Revenues	$ 1,591		$ 1,210		31.5	%	27.5	%	381	48	15	318	—

Operating Income	$ 515		$ 472		9.1	%	5.7	%	43	16	15	46	(34	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—	—	—	—	—
Adjusted Operating Income	$ 515		$ 472		9.1	%	5.7	%	43	16	15	46	(34	)

Adjusted Operating Income Margin	32.4	%	39.0	%	(6.6)pp		(6.7)pp

During the quarter, net revenues, excluding favorable currency, increased by 27.5%, reflecting a favorable pricing variance, driven principally by Australia and Japan, as well as a favorable volume/mix, driven by heated tobacco unit volume in Japan and Korea.

Operating income, excluding favorable currency, increased by 5.7%, mainly driven by a favorable pricing variance, favorable volume/mix, mainly in Korea, and a favorable manufacturing cost comparison driven by Japan, partly offset by higher marketing, administration and research costs, principally related to increased investment behind reduced-risk products in Japan and Korea and affiliate reorganization costs in Australia.

- -13 -

Adjusted operating income margin, excluding currency, decreased by 6.7 points to 32.3%, reflecting the factors mentioned above, as detailed on Schedule 6.

Total Market, PMI Shipment & Market Share Commentaries

In the quarter, the estimated total market in East Asia & Australia decreased, notably due to:


•	Australia, down by 8.4%, primarily reflecting the impact of excise tax-driven retail price increases in 2017 and in the quarter;


•	Japan, down by 2.3%, primarily reflecting the decline of the total estimated cigarette market; and


•	Taiwan, down by 20.2%, primarily reflecting the impact of excise tax-driven retail price increases in June 2017.



PMI Shipment Volume	First-Quarter
(million units)	2018	2017	Change
Cigarettes	14,091	17,243	(18.3	)%
Heated Tobacco Units	7,342	4,145	77.1	%
Total East Asia & Australia	21,433	21,388	0.2	%

PMI's total shipment volume increased by 0.2% to 21.4 billion units, or by 11.2% excluding the unfavorable impact of an estimated 1.0 billion cigarette units and 1.4 billion heated tobacco units of distributor inventory movements in Japan compared to the first quarter of 2017, driven by:


•	higher heated tobacco unit shipment volume in Japan and Korea, reflecting higher market share;

largely offset by


•	lower cigarette shipment in Japan and Korea, down by 25.8% and 6.1%, respectively, primarily reflecting the lower total cigarette market and lower cigarette market share.

LATIN AMERICA & CANADA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2018		2017		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix	Cost/ Other
(in millions)	2018		2017		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix	Cost/ Other
Net Revenues	$ 708		$ 606		16.8	%	17.0	%	102	(1	)	100	3	—

Operating Income	$ 217		$ 176		23.3	%	31.3	%	41	(14	)	100	—	(45	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—	—		—	—	—
Adjusted Operating Income	$ 217		$ 176		23.3	%	31.3	%	41	(14	)	100	—	(45	)

Adjusted Operating Income Margin	30.6	%	29.0	%	1.6pp		3.6pp

During the quarter, net revenues, excluding unfavorable currency, increased by 17.0%, reflecting a favorable pricing variance across the Region, notably Argentina, Canada and Mexico.

Operating income, excluding unfavorable currency, increased by 31.3%, largely reflecting a favorable pricing variance, partly offset by higher manufacturing costs, mainly in Argentina, and higher marketing, administration and research costs, partly related to increased investment behind reduced-risk products in the Region.

Adjusted operating income margin, excluding currency, increased by 3.6 points to 32.6%, principally driven by the factors mentioned above, as detailed on Schedule 6.

- -14 -

Total Market, PMI Shipment & Market Share Commentaries

In the quarter, the estimated total market in Latin America & Canada decreased, notably due to:


•	Brazil, down by 8.0%, primarily reflecting the impact of retail price increases in 2017;


•	Colombia, down by 15.7%, primarily reflecting the impact of excise tax-driven retail price increases of approximately 25%; and


•	Mexico, down by 2.7%, primarily reflecting the impact of the retail price increases in January 2018.



PMI Shipment Volume	First-Quarter
(million units)	2018	2017	Change
Cigarettes	19,013	19,296	(1.5	)%
Heated Tobacco Units	23	1	+100.0%
Total Latin America & Canada	19,036	19,297	(1.4	)%

PMI's total shipment volume decreased by 1.4% to 19.0 billion units, notably in:


•	Argentina, down by 1.7%, reflecting the lower total market and lower market share; and


•	Mexico, down by 4.0%, reflecting the lower total market and lower market share.

- -15 -

Philip Morris International: Who We Are

We are a leading international tobacco company engaged in the manufacture and sale of cigarettes and other nicotine-containing products in markets outside the United States of America. We’re building our future on smoke-free products that are a much better consumer choice than continuing to smoke cigarettes. Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, we aim to ensure that our smoke-free products meet adult consumer preferences and rigorous regulatory requirements. Our vision is that these products ultimately replace cigarettes to the benefit of adult smokers, society, our company and our shareholders. For more information, see www.pmi.com and www.pmiscience.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other forward-looking statements. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.

PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke; litigation related to tobacco use; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; changes in adult smoker behavior; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost and quality of tobacco and other agricultural products and raw materials; and the integrity of its information systems. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; or if it is unable to attract and retain the best global talent.

PMI is further subject to other risks detailed from time to time in its publicly filed documents, including the Form 10-K for the year ended December 31, 2017. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations.

- -16 -



																						Appendix 1
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Key Market Data

		Quarters Ended March 31,
Market		Total Market, bio units				PMI Shipments, bio units											PMI Market Share, %
		Total Market, bio units				Total				Cigarette				HTU			Total				HTU
		2018	2017	% Change		2018	2017	% Change		2018	2017	% Change		2018	2017	% Change	2018	2017	pp Change		2018	2017	pp Change

European Union
France		9.8	10.8	(9.4	)	4.3	4.7	(8.9	)	4.3	4.7	(8.8	)	—	—	—	44.4	42.8	1.6		0.1	—	0.1
Germany		16.1	17.5	(7.9	)	5.8	6.7	(12.4	)	5.8	6.7	(13.2	)	0.1	—	—	36.3	38.2	(1.9	)	0.4	—	0.4
Italy		16.1	16.2	(0.9	)	8.0	7.8	2.1		7.7	7.7	(0.4	)	0.3	0.1	+100	52.1	51.7	0.4		1.5	0.5	1.0
Poland		9.8	10.2	(3.7	)	3.9	4.3	(9.2	)	3.9	4.3	(10.3	)	—	—	—	39.7	42.1	(2.4	)	0.5	—	0.5
Spain		9.9	9.9	0.3		3.2	3.2	1.9		3.2	3.2	2.2		—	—	—	32.3	32.1	0.2		0.3	0.1	0.2

Eastern Europe
Russia	(1)	51.2	55.8	(8.3	)	12.8	14.8	(13.9	)	12.5	14.8	(15.5	)	0.3	—	—	26.3	27.4	(1.1	)	—	—	—

Middle East & Africa
Saudi Arabia		4.9	8.2	(40.8	)	1.1	4.2	(74.5	)	1.1	4.2	(74.5	)	—	—	—	41.6	54.1	(12.5	)	—	—	—
Turkey	(1)	24.7	22.0	12.4		11.5	9.8	16.8		11.5	9.8	16.8		—	—	—	43.1	42.9	0.2		—	—	—

South & Southeast Asia
Indonesia		69.3	71.0	(2.3	)	23.0	23.4	(1.8	)	23.0	23.4	(1.8	)	—	—	—	33.2	33.0	0.2		—	—	—
Philippines		15.3	16.6	(7.8	)	10.8	11.0	(1.4	)	10.8	11.0	(1.4	)	—	—	—	70.5	65.9	4.6		—	—	—

East Asia & Australia
Australia		2.9	3.2	(8.4	)	0.8	0.9	(5.6	)	0.8	0.9	(5.6	)	—	—	—	28.7	27.8	0.9		—	—	—
Japan		39.7	40.6	(2.3	)	14.1	14.8	(4.9	)	7.9	10.7	(25.8	)	6.2	4.1	49.3	34.7	30.0	4.7		15.8	7.1	8.7
Korea		15.8	16.1	(2.2	)	4.0	3.0	31.7		2.9	3.0	(6.1	)	1.2	—	—	25.5	19.1	6.4		7.3	—	7.3

Latin America & Canada
Argentina		9.2	9.3	(1.0	)	6.8	6.9	(1.7	)	6.8	6.9	(1.7	)	—	—	—	74.2	74.8	(0.6	)	—	—	—
Canada		4.7	4.8	(3.6	)	1.8	1.8	2.5		1.8	1.8	2.2		—	—	—	39.0	35.2	3.8		0.1	—	0.1
Mexico		7.6	7.9	(2.7	)	4.9	5.1	(4.0	)	4.9	5.1	(4.0	)	—	—	—	63.5	64.4	(0.9	)	—	—	—

(1) PMI Cigarette Market Share February QTD as measured by Nielsen
Note: % change for Total Market and PMI shipments is computed based on million units



					Schedule 1
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Diluted Earnings Per Share (EPS)
($ in millions, except per share data) / (Unaudited)

	Diluted EPS	Quarters Ended
	Diluted EPS	March 31,
	2018 Diluted Earnings Per Share (1)		$	1.00
	2017 Diluted Earnings Per Share (1)		$	1.02
	Change		$	(0.02		)
	% Change		(2.0			)%

	Reconciliation:
	2017 Diluted Earnings Per Share (1)		$	1.02
	2017 Asset impairment and exit costs		—
	2017 Tax items		(0.04			)
	2018 Asset impairment and exit costs		—
	2018 Tax items		—
	Currency		0.03
	Interest		—
	Change in tax rate		0.03
	Operations (2)		(0.04			)
	2018 Diluted Earnings Per Share (1)		$	1.00

(1) Basic and diluted EPS were calculated using the following (in millions):

		Quarters Ended
		March 31,
		2018			2017
	Net Earnings attributable to PMI	$ 1,556			$ 1,590
	Less distributed and undistributed earnings attributable to share-based payment awards	3			3
	Net Earnings for basic and diluted EPS	$ 1,553			$ 1,587

	Weighted-average shares for basic EPS	1,553			1,552
	Plus Contingently Issuable Performance Stock Units	1			1
	Weighted-average shares for diluted EPS	1,554			1,553

(2) Includes the impact of shares outstanding and share-based payments



							Schedule 2
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency,
and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency
(Unaudited)

		Quarters Ended March 31,
		2018	2017		% Change
	Reported Diluted EPS	$ 1.00	$ 1.02		(2.0	)%
	Currency	0.03
	Reported Diluted EPS, excluding Currency	$ 0.97	$ 1.02		(4.9	)%


		Quarters Ended March 31,						Year Ended
		2018	2017		% Change			2017
	Reported Diluted EPS	$ 1.00	$ 1.02		(2.0	)%		$ 3.88
	Asset impairment and exit costs	—	—					—
	Tax items	—	(0.04	)				0.84
	Adjusted Diluted EPS	$ 1.00	$ 0.98		2.0	%		$ 4.72
	Currency	0.03
	Adjusted Diluted EPS, excluding Currency	$ 0.97	$ 0.98		(1.0	)%



										Schedule 3
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions
($ in millions) / (Unaudited)

Net Revenues	Currency		Net Revenues excluding Currency	Acquisitions	Net Revenues excluding Currency & Acquisitions	Quarters Ended March 31,	Net Revenues	Total		Excluding Currency		Excluding Currency & Acquisitions

2018						Combustible Products	2017	% Change
$ 1,836	$ 226		$ 1,610	—	$ 1,610	European Union	$ 1,709	7.4	%	(5.8	)%	(5.8	)%
527	27		500	—	500	Eastern Europe	513	2.8	%	(2.6	)%	(2.6	)%
884	12		871	—	871	Middle East & Africa	957	(7.7	)%	(9.0	)%	(9.0	)%
1,081	(8	)	1,089	—	1,089	South & Southeast Asia	1,031	4.8	%	5.6	%	5.6	%
737	22		715	—	715	East Asia & Australia	813	(9.4	)%	(12.2	)%	(12.2	)%
704	(1	)	705	—	705	Latin America & Canada	605	16.3	%	16.5	%	16.5	%
$ 5,769	$ 279		$ 5,490	—	$ 5,490	Total Combustible	$ 5,629	2.5	%	(2.5	)%	(2.5	)%

2018						Reduced-Risk Products	2017	% Change
$ 152	$ 19		$ 133	—	$ 133	European Union	$ 31	+100%		+100%		+100%
40	2		38	—	38	Eastern Europe	3	+100%		+100%		+100%
77	2		76	—	76	Middle East & Africa	4	+100%		+100%		+100%
—	—		—	—	—	South & Southeast Asia	—	—	%	—	%	—	%
854	26		828	—	828	East Asia & Australia	396	+100%		+100%		+100%
4	—		4	—	4	Latin America & Canada	—	—	%	—	%	—	%
$ 1,127	$ 48		$ 1,079	—	$ 1,079	Total RRPs	$ 435	+100%		+100%		+100%

2018						PMI	2017	% Change
$ 1,988	$ 245		$ 1,743	—	$ 1,743	European Union	$ 1,740	14.3	%	0.2	%	0.2	%
567	29		538	—	538	Eastern Europe	516	9.9	%	4.3	%	4.3	%
961	14		947	—	947	Middle East & Africa	961	—	%	(1.5	)%	(1.5	)%
1,081	(8	)	1,089	—	1,089	South & Southeast Asia	1,031	4.8	%	5.6	%	5.6	%
1,591	48		1,543	—	1,543	East Asia & Australia	1,210	31.5	%	27.5	%	27.5	%
708	(1	)	709	—	709	Latin America & Canada	606	16.8	%	17.0	%	17.0	%
$ 6,896	$ 327		$ 6,569	—	$ 6,569	Total PMI	$ 6,064	13.7	%	8.3	%	8.3	%

Note: Sum of product categories or Regions might not foot to total PMI due to roundings. “-“ indicates amounts between -$0.5 million and +$0.5 million.



										Schedule 4
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments of Operating Income for the Impact of Currency and Acquisitions
($ in millions) / (Unaudited)

Operating Income	Currency		Operating Income excluding Currency	Acquisitions	Operating Income excluding Currency & Acquisitions		Operating Income	Total		Excluding Currency		Excluding Currency & Acquisitions

2018						Quarters Ended March 31,	2017	% Change
$ 740	$ 110		$ 630	—	$ 630	European Union	$ 748	(1.1	)%	(15.8	)%	(15.8	)%
151	8		143	—	143	Eastern Europe	159	(5.0	)%	(10.1	)%	(10.1	)%
374	(32	)	406	—	406	Middle East & Africa	491	(23.8	)%	(17.3	)%	(17.3	)%
429	(12	)	441	—	441	South & Southeast Asia	370	15.9	%	19.2	%	19.2	%
515	16		499	—	499	East Asia & Australia	472	9.1	%	5.7	%	5.7	%
217	(14	)	231	—	231	Latin America & Canada	176	23.3	%	31.3	%	31.3	%
$ 2,426	$ 76		$ 2,350	—	$ 2,350	Total PMI	$ 2,416	0.4	%	(2.7	)%	(2.7	)%



															Schedule 5
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions
($ in millions) / (Unaudited)

Operating Income	Asset Impairment & Exit Costs	Adjusted Operating Income	Currency		Adjusted Operating Income excluding Currency	Acqui-sitions	Adjusted Operating Income excluding Currency & Acqui-sitions			Operating Income	Asset Impairment & Exit Costs	Adjusted Operating Income	Total		Excluding Currency		Excluding Currency & Acqui-sitions

2018								Quarters Ended March 31,		2017			% Change
$ 740	—	$ 740	$ 110		$ 630	—	$ 630		European Union	$ 748	—	$ 748	(1.1	)%	(15.8	)%	(15.8	)%
151	—	151	8		143	—	143		Eastern Europe	159	—	159	(5.0	)%	(10.1	)%	(10.1	)%
374	—	374	(32	)	406	—	406		Middle East & Africa	491	—	491	(23.8	)%	(17.3	)%	(17.3	)%
429	—	429	(12	)	441	—	441		South & Southeast Asia	370	—	370	15.9	%	19.2	%	19.2	%
515	—	515	16		499	—	499		East Asia & Australia	472	—	472	9.1	%	5.7	%	5.7	%
217	—	217	(14	)	231	—	231		Latin America & Canada	176	—	176	23.3	%	31.3	%	31.3	%
$ 2,426	—	$ 2,426	$ 76		$ 2,350	—	$ 2,350		Total PMI	$ 2,416	—	$ 2,416	0.4	%	(2.7	)%	(2.7	)%



																				Schedule 6
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions
($ in millions) / (Unaudited)

Adjusted Operating Income (1)	Net Revenues	Adjusted Operating Income Margin		Adjusted Operating Income excluding Currency (1)	Net Revenues excluding Currency (2)	Adjusted Operating Income Margin excluding Currency		Adjusted Operating Income excluding Currency & Acqui-sitions (1)	Net Revenues excluding Currency & Acqui-sitions (2)	Adjusted Operating Income Margin excluding Currency & Acqui-sitions				Adjusted Operating Income (1)	Net Revenues	Adjusted Operating Income Margin		Adjusted Operating Income Margin		Adjusted Operating Income Margin excluding Currency		Adjusted Operating Income Margin excluding Currency & Acqui-sitions

2018												Quarters Ended March 31,		2017				% Points Change
$ 740	$ 1,988	37.2	%	$ 630	$ 1,743	36.1	%	$ 630	$ 1,743	36.1	%		European Union	$ 748	$ 1,740	43.0	%	(5.8	)	(6.9	)	(6.9	)
151	567	26.6	%	143	538	26.6	%	143	538	26.6	%		Eastern Europe	159	516	30.8	%	(4.2	)	(4.2	)	(4.2	)
374	961	38.9	%	406	947	42.9	%	406	947	42.9	%		Middle East & Africa	491	961	51.1	%	(12.2	)	(8.2	)	(8.2	)
429	1,081	39.7	%	441	1,089	40.5	%	441	1,089	40.5	%		South & Southeast Asia	370	1,031	35.9	%	3.8		4.6		4.6
515	1,591	32.4	%	499	1,543	32.3	%	499	1,543	32.3	%		East Asia & Australia	472	1,210	39.0	%	(6.6	)	(6.7	)	(6.7	)
217	708	30.6	%	231	709	32.6	%	231	709	32.6	%		Latin America & Canada	176	606	29.0	%	1.6		3.6		3.6
$ 2,426	$ 6,896	35.2	%	$ 2,350	$ 6,569	35.8	%	$ 2,350	$ 6,569	35.8	%		Total PMI	$ 2,416	$ 6,064	39.8	%	(4.6	)	(4.0	)	(4.0	)

(1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to Schedule 5
(2) For the calculation of Net Revenues excluding currency and acquisitions refer to Schedule 3



				Schedule 7
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Statements of Earnings
($ in millions, except per share data) / (Unaudited)

		Quarters Ended March 31,
		2018		2017		Change Fav./(Unfav.)
	Revenues including Excise Taxes	$ 18,426		$ 16,556		11.3	%
	Excise Taxes on products	11,530		10,492		(9.9	)%
	Net Revenues	6,896		6,064		13.7	%
	Cost of sales	2,615		2,177		(20.1	)%
	Gross profit	4,281		3,887		10.1	%
	Marketing, administration and research costs	1,833		1,449		(26.5	)%
	Asset impairment and exit costs	—		—
	Amortization of intangibles	22		22
	Operating Income	2,426		2,416		0.4	%
	Interest expense, net	227		219		(3.7	)%
	Pension and other employee benefit costs	6		20		70.0	%
	Earnings before income taxes	2,193		2,177		0.7	%
	Provision for income taxes	559		541		(3.3	)%
	Equity investments and securities (income)/loss, net	(13	)	(22	)
	Net Earnings	1,647		1,658		(0.7	)%
	Net Earnings attributable to noncontrolling interests	91		68
	Net Earnings attributable to PMI	$ 1,556		$ 1,590		(2.1	)%

	Per share data (1):
	Basic Earnings Per Share	$ 1.00		$ 1.02		(2.0	)%
	Diluted Earnings Per Share	$ 1.00		$ 1.02		(2.0	)%

(1) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters ended March 31, 2018 and 2017 are shown on Schedule 1, Footnote 1.



					Schedule 8
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Balance Sheets
($ in millions, except ratios) / (Unaudited)

	March 31,				December 31,
	2018				2017
Assets
Cash and cash equivalents		$	7,200			$	8,447
All other current assets		13,393				13,147
Property, plant and equipment, net		7,459				7,271
Goodwill		7,667				7,666
Other intangible assets, net		2,455				2,432
Investments in unconsolidated subsidiaries and equity securities		1,395				1,074
Other assets		3,501				2,931
Total assets		$	43,070			$	42,968

Liabilities and Stockholders' (Deficit) Equity
Short-term borrowings		$	608			$	499
Current portion of long-term debt		4,662				2,506
All other current liabilities		12,418				12,957
Long-term debt		29,578				31,334
Deferred income taxes		822				799
Other long-term liabilities		5,464				5,103
Total liabilities		53,552				53,198

Total PMI stockholders' deficit		(12,350		)		(12,086		)
Noncontrolling interests		1,868				1,856
Total stockholders' (deficit) equity		(10,482		)		(10,230		)
Total liabilities and stockholders' (deficit) equity		$	43,070			$	42,968



													Schedule 9
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios
($ in millions, except ratios) / (Unaudited)

	Year Ended March 31, 2018												Year Ended December 31, 2017
	April ~ December				January ~ March				12 months
	2017				2018				rolling
Net Earnings		$	4,683			$	1,647			$	6,330			$	6,341
Equity (income)/loss in unconsolidated subsidiaries, net		(37		)		(11		)		(48		)		(59		)
Provision for income taxes		3,766				559				4,325				4,307
Interest expense, net		695				227				922				914
Depreciation and amortization		678				242				920				875
Asset impairment and exit costs		—				—				—				—
Adjusted EBITDA		$	9,785			$	2,664			$	12,449			$	12,378

									March 31,				December 31,
									2018				2017
Short-term borrowings										$	608			$	499
Current portion of long-term debt										4,662				2,506
Long-term debt										29,578				31,334
Total Debt										$	34,848			$	34,339
Cash and cash equivalents										7,200				8,447
Net Debt										$	27,648			$	25,892

Ratios:
Total Debt to Adjusted EBITDA										2.80				2.77
Net Debt to Adjusted EBITDA										2.22				2.09



				Schedule 10
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency
($ in millions) / (Unaudited)

		Quarters Ended March 31,
		2018	2017	% Change
	Net cash provided by operating activities (1)	$ 1,380	$ 843	63.7	%
	Currency	137
	Net cash provided by operating activities, excluding currency	$ 1,243	$ 843	47.4	%

(1) Operating cash flow

Exhibit 99.2

Philip Morris International Inc.

2018 First-Quarter Results Conference Call

April 19, 2018

NICK ROLLI


(SLIDE 1.)

Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2018 first-quarter results. You may access the release on www.pmi.com or the PMI Investor Relations App.


(SLIDE 2.)

A glossary of terms, including the definition for reduced-risk products, or "RRPs," as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures, are at the end of today’s webcast slides, which are posted on our website.

As a reminder, effective January 1, 2018, we began managing our business in six reporting segments reflecting a new regional structure. Three years of historical data reflecting the new structure are available on our website and in the Form 8-K that we submitted to the SEC on March 23rd.

Please also note that we are now using operating income to evaluate business segment performance and allocate resources, replacing operating companies income, or "OCI," which was used prior to January 1, 2018. OCI was defined as operating income, excluding general corporate expenses and the amortization of intangibles, plus equity (income)/loss in unconsolidated subsidiaries, net.


(SLIDE 3.)

Today’s remarks contain forward-looking statements and projections of future results. I direct your attention to the Forward-Looking and Cautionary Statements disclosure in today’s presentation and press release for a review of the various factors that could cause actual results to differ materially from projections or forward-looking statements.

It’s now my pleasure to introduce Martin King, our Chief Financial Officer.

Martin.

MARTIN KING


(SLIDE 4.)

Thank you, Nick, and welcome, ladies and gentlemen.

As announced this morning, we are increasing our 2018 reported diluted EPS guidance, at prevailing exchange rates, by five cents to a range of $5.25 to $5.40. The change reflects a lower estimated full-year effective tax rate of approximately 26%.

Our guidance includes 16 cents of favorable currency, at prevailing exchange rates. Excluding currency, our guidance represents a growth rate of approximately 8% to 11% compared to our adjusted diluted EPS of $4.72 in 2017.


(SLIDE 5.)

The reduction in our estimated effective tax rate for 2018 to approximately 26%, versus the 28% that we had previously communicated, is driven by two main factors:


1.	Further analysis and interpretation of the Tax Cuts and Jobs Act , primarily related to foreign tax credit limitations due to the Global Intangible Low Taxed Income provisions of the Act; and


2.	Revised foreign income tax estimates due to a change in the mix of our foreign earnings.

I must caveat that this estimate reflects our current capital structure, as well as our current interpretation of the new tax law, which may change as further regulations and clarifications become available. It also reflects current assumptions regarding earnings mix and tax rates by taxing jurisdiction, which may also change.


(SLIDE 6.)

Our revised guidance also incorporates some caution related to the evolution over the balance of the year of three elements -- which I will cover in more detail later in my remarks -- namely:


•	the timing of price increases in Russia, although the start to the year has been encouraging;


•	slower-than-initially-projected RRP category growth in Japan during the quarter -- given the phenomenal category evolution, we are now reaching different socio-economic strata with more conservative adult smokers who may have slightly slower patterns of adoption; and


•	the pace of recovery of cigarette industry volume and our market share in the GCC, particularly Saudi Arabia.

Consequently, we have not passed through the full benefit of the lower estimated tax rate to our 2018 guidance at this early stage of the year, but will monitor how these dynamics and our related initiatives progress as the year unfolds.

Our revised guidance reflects currency-neutral net revenue growth of around 8%.


(SLIDE 7.)

Turning to our first-quarter results, we recorded strong currency-neutral net revenue growth of 8.3%, driven by higher volume for heated tobacco units and IQOS devices across IQOS markets, coupled with higher pricing for our combustible tobacco portfolio across all Regions, notably South & Southeast Asia and Latin America & Canada.


(SLIDE 8.)

Adjusted operating income declined by 2.7%, excluding currency, mainly due to the following three factors, which André outlined previously during our year-end call in February:


•	the impact of the tax-driven cigarette industry volume decline, as well as the related down-trading and our corresponding market share decrease, in the GCC, principally Saudi Arabia;


•	higher RRP investments, primarily in the EU Region; and


•	our full-year 2018 contribution of $80 million to the Foundation for a Smoke-Free World, which was expensed entirely in the first quarter.


(SLIDE 9.)

Adjusted diluted EPS of $1.00 declined by 1.0%, excluding three cents of favorable currency.


(SLIDE 10.)

Our reported diluted EPS in the quarter came in 13 cents above the $0.87 forecast that we provided in February.

Underpinned by our strong business performance, this better-than-anticipated result was helped by the lower effective tax rate, as well as the timing of certain RRP investments. Nevertheless, our projection of net incremental investment behind RRPs of approximately $600 million in 2018 remains unchanged.


(SLIDE 11.)

Combined cigarette and heated tobacco unit shipment volume declined by 2.3% in the first quarter, or by 1.1%, excluding estimated inventory movements, primarily in Japan and Saudi Arabia.

The decline was principally due to lower cigarette industry volume, notably in Japan, Russia and Saudi Arabia, partly offset by strong growth in heated tobacco unit volume, particularly in Japan and Korea.

For the full-year, we continue to anticipate a combined shipment volume decline of around 2%, compared to an industry volume decline of 2% to 3%, on the same basis.


(SLIDE 12.)

Heated tobacco unit volume is growing rapidly across launch geographies.

In Japan, we lifted the IQOS device sales restriction during the first quarter of 2018. We observed, however, that device sales were slower than our ambitious expectations. This was due to still limited awareness of IQOS's increased availability and, more importantly, to the fact that we were reaching -- earlier in the year than we had anticipated -- the more conservative consumers, especially the age 50+ smoker segment, which represents approximately 40% of the total adult smoker population.

In general, these consumers are likely to display, at least initially, a slower pace in entering the RRP category -- that is, they are less likely to be in the "Innovators" and "Early Adopters" groups shown on this chart. Instead, they are relatively overrepresented in the "Late Majority" and "Laggard" groups, which are larger in size. This is common with any new product category, and especially RRPs, and IQOS in particular, given their phenomenal speed of growth in Japan.

We are therefore adjusting our commercial plans in terms of the timing, intensity and content of communication to specifically address the needs of these adult smokers. In parallel, we are strengthening our loyalty programs for existing IQOS users as competition intensifies.

However, this temporary dynamic may affect our full-year total heated tobacco unit shipment volume, which we have cautiously reflected in our revised guidance.

IQOS continued to record strong heated tobacco category share in Japan in the quarter, at an estimated 80%, and is the undisputed iconic RRP brand. In fact, as the availability of competitive RRP products has increased, there has naturally been experimentation by certain IQOS users -- especially "Innovators" and "Early Adopters" -- with competitive products. This has also been due to the IQOS device sales restriction. However, only an estimated 1% of converted IQOS users fully switch to these competitive products. This is remarkable, particularly given the premium positioning of IQOS, and is a testament to its potential.

Before closing on this topic, I think it is important to highlight the underlying growth in heated tobacco unit demand. Even if the aforementioned dynamic persists, we remain on track to double our worldwide in-market sales of heated tobacco units compared to 2017.


(SLIDE 13.)

Moving to our market share performance, total international share, excluding China and the U.S., increased by 0.4 points in the quarter, driven by higher share for our heated tobacco brands, which were up by one full share point to 1.5%.

Over half of the 0.6 point share decline for our cigarette portfolio was due to Saudi Arabia, where the decrease in cigarette industry volume and related down-trading put pressure on the shares of both Marlboro and L&M.


(SLIDE 14.)

I will now discuss a few of our key geographies, beginning with the EU Region.

Total industry volume declined by 4.1% in the first quarter, or by 3.4% excluding estimated inventory movements. The decline was due mainly to the impact of price increases, including sizable excise tax-driven price increases in France. For the year, we anticipate a total industry volume decline of approximately 2% to 3%, consistent with the structural decline rate.

Our total Regional market share was down by 0.2 points in the quarter, largely reflecting the impact of estimated inventory movements, partly offset by the strong growth of HEETS, which reached a Regional share of 0.8%.

As expected, Regional adjusted operating income, which declined by 15.8% on a currency-neutral basis, was heavily impacted by incremental RRP investments. For the year, we anticipate adjusted operating income growth in the low- to mid-single-digits, excluding currency.


(SLIDE 15.)

In Russia, total industry volume declined by 8.3% in the quarter, due mainly to the impact of price increases and higher illicit trade. For the full year, we expect a total industry volume decline of approximately 7%, consistent with 2017.

Quarter-to-date February cigarette market share declined by 1.1 point, primarily due to our low-price brands. Despite continued down-trading in the market, as well as adult smoker out-switching to IQOS, share for premium Marlboro increased by 0.4 points, while share for above premium Parliament was down only slightly.

We recorded a favorable pricing variance in the quarter, reflecting the annualization of 2017 price increases, as well as additional price increases earlier this year. While this is a welcome development, the pricing environment remains a watch-out, particularly after the scheduled excise tax increase in July.


(SLIDE 16.)

Turning to Saudi Arabia, cigarette industry volume remains under considerable pressure following the June 2017 excise tax-driven price increases. First-quarter

industry volume declined by over 40% and was impacted by a further VAT-driven price increase in January.

Our cigarette market share declined by 12.5 points, largely reflecting the impact of significant industry-wide down-trading following the price increases given the premium positioning of our portfolio vis-a-vis competitors.

We anticipate a moderation in the cigarette industry volume decline in the second half of the year, when the June 2017 price increases have been lapped. As I mentioned earlier, the market nonetheless remains a watch-out, along with the broader GCC, due to the differing stages of tax enactment.


(SLIDE 17.)

In Indonesia, cigarette industry volume declined by 2.3% in the first quarter, largely reflecting the soft consumer spending environment coupled with above-inflation excise tax-driven price increases. For the year, we continue to anticipate an industry decline of 1% to 3%.

Cigarette market share increased by 0.2 points in the quarter to 33.2%, driven by the strong performance of Marlboro Filter Black, as well as Dji Sam Soe Magnum Mild, a lighter-tasting machine-made kretek line extension from the Dji Sam Soe brand family, launched in May 2017.


(SLIDE 18.)

In the Philippines, excise tax-driven price increases drove further profit growth in the quarter.

We also recorded strong market share growth, led by Marlboro and Fortune. We are particularly pleased by Marlboro's performance following its price increase in December 2017.

We continue to be very encouraged by the outlook for profit growth in this important market.


(SLIDE 19.)

I will now turn to the performance of IQOS, beginning in Japan.

HeatSticks continued their strong sequential growth trend in the first quarter, reaching a national market share of 15.8%. This represents growth of 8.7 points and 1.9 points versus the first and fourth quarters of 2017, respectively.


(SLIDE 20.)

Looking at IQOS's performance in Sendai specifically, HeatSticks offtake share growth in the first quarter continued to drive an increase in our heated tobacco category share.

It is worth highlighting that the category’s share growth in the first quarter was driven primarily by IQOS.


(SLIDE 21.)

The quarterly share progression of HEETS in Korea also continues to stand out, reaching 7.3% in the first quarter. To put this performance into perspective, HEETS is now a top-5 tobacco brand in Korea less than one year after launch, with a quarterly share approaching those of our leading cigarette brands in the market, Marlboro and Parliament.


(SLIDE 22.)

Outside Japan and Korea, we continue to record strong sequential national share growth in other advanced IQOS launch markets, with first-quarter market shares ranging from 1.5% in Italy to 3.5% in Greece.

This performance demonstrates that we are successfully leveraging our learnings across markets to drive improved execution, higher IQOS awareness and strong conversion.

It is important to also remember that these national shares have been achieved despite not having a full national presence in these markets. We believe that the even higher quarterly offtake shares in focus cities -- such as 3.0% in Rome and 5.9% in Athens -- augur well for IQOS in these markets going forward.


(SLIDE 23.)

As seen on this chart, we are observing similar trends with our focus area offtake shares in IQOS launch markets that remain more targeted within a limited number of key cities.

This gives us further confidence that our investments behind the heated tobacco category are increasingly paying off.


(SLIDE 24.)

The growth of our RRP portfolio, coupled with the enduring strength of our combustible tobacco brands, is supporting strong anticipated cash generation in 2018.

For the year, we continue to target operating cash flow of over $9.0 billion. We plan to use this cash primarily for capital expenditures to support the growth of our business, and for dividends, at the Board’s discretion.

We anticipate capital expenditures of approximately $1.7 billion this year, with RRP-related investment expected to account for around 60% of the total.


(SLIDE 25.)

We remain committed to restoring, over time, our leverage multiples to the ranges associated with our current credit rating.

Importantly, both Moody's and S&P have recently confirmed our rating, with S&P revising its outlook from "negative" to "stable."


(SLIDE 26.)

In conclusion, our first quarter results came in better than expected, with the delta compared to our February forecast driven mainly by a lower effective tax rate and the timing of certain RRP investments.

Our leading combustible tobacco portfolio continues to support strong pricing, while contributing the lion's share of our earnings and cash flow.

In parallel, IQOS is recording strong sequential quarterly share growth across launch markets, demonstrating our ability to effectively invest and apply learnings in a wide range of geographies.

Finally, the full-year outlook for our business remains strong. Our increased 2018 EPS guidance reflects a growth rate of approximately 8% to 11%, excluding currency, compared to adjusted diluted EPS of $4.72 in 2017.


(SLIDE 27.)

Thank you. I am now happy to answer your questions.

NICK ROLLI

That concludes our call today. Thank you for joining us. If you have any follow-up questions, please contact the Investor Relations team.

Thank you again and have a nice day.

2018 First-Quarter Results April 19, 2018 Exhibit 99.3

Introduction • A glossary of terms, including the definition for reduced-risk products, or "RRPs," as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures, are at the end of today’s webcast slides, which are posted on our website • Effective January 1, 2018, we began managing our business in six reporting segments reflecting a new regional structure. Three years of historical data reflecting the new structure are available on our website and in the Form 8-K that we submitted to the SEC on March 23, 2018 •We are now using operating income, or "OI," to evaluate business segment performance and allocate resources, replacing operating companies income, or "OCI," which was used prior to January 1, 2018 2

Forward-Looking and Cautionary Statements • This presentation and related discussion contain projections of future results and other forward-looking statements. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI • PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke; litigation related to tobacco use; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; changes in adult smoker behavior; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost and quality of tobacco and other agricultural products and raw materials; and the integrity of its information systems. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; or if it is unable to attract and retain the best global talent • PMI is further subject to other risks detailed from time to time in its publicly filed documents, including the Form 10-K for the year ended December 31, 2017. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations 3

2018: Increasing EPS Guidance for PMI Effective Tax Rate • Increasing 2018 reported diluted EPS guidance to a range of $5.25 to $5.40 at prevailing exchange rates, compared to $3.88 in 2017: ⎼ Change reflects a lower estimated full-year effective tax rate of approximately 26% • Guidance includes 16 cents of favorable currency, at prevailing exchange rates • Ex-currency, our guidance represents a growth rate of approximately 8% to 11% compared to adjusted diluted EPS of $4.72 in 2017 4 Source: PMI Financials or estimates

Note: This estimate reflects our current capital structure, as well as our current interpretation of the new tax law, which may change as further regulations and clarifications become available. It also reflects current assumptions regarding earnings mix and tax rates by taxing jurisdiction, which may also change Source: PMI Financials or estimates 2018: PMI Effective Tax Rate • Reduction in our estimated effective tax rate to approximately 26% (vs. 28% previously communicated), driven by: 1. Further analysis and interpretation of the Tax Cuts and Jobs Act, primarily related to foreign tax credit limitations due to the Global Intangible Low Taxed Income provisions of the Act 2. Revised foreign income tax estimates due to a change in the mix of our foreign earnings 5

2018: Revised Guidance • Revised guidance also incorporates some caution related to the evolution over the balance of the year of three elements, namely: ⎼ The timing of price increases in Russia (although the start to 2018 has been encouraging) ⎼ Slower-than-initially-projected RRP category growth in Japan during Q1, 2018 (we are now reaching different socio-economic strata with more conservative adult smokers who may have slightly slower patterns of adoption) ⎼ The pace of recovery of cigarette industry volume and our market share in the GCC (particularly Saudi Arabia) • Consequently, we have not passed through the full benefit of the lower estimated tax rate to our 2018 guidance at this early stage of the year • Revised guidance reflects currency-neutral net revenue growth of around 8% 6 Source: PMI Financials or estimates

Q1, 2018: Strong Net Revenue Growth, ex-Currency 7 • Higher volume for heated tobacco units and IQOS devices across IQOS markets • Higher pricing for our combustible tobacco portfolio across all Regions, notably: ⎼ South & Southeast Asia ⎼ Latin America & Canada Source: PMI Financials or estimates 8.3 Net Revenues % Variance vs. PY

Q1, 2018: Financial Results, ex-Currency 8 • Decline in adjusted OI mainly due to: ⎼ Impact of tax-driven cigarette industry volume decline, as well as the related down- trading and our corresponding market share decrease, in the GCC (principally Saudi Arabia) ⎼ Higher RRP investments (primarily EU Region) ⎼ Full-year 2018 contribution of $80 million to the Foundation for a Smoke-Free World (expensed entirely in Q1) Source: PMI Financials or estimates 8.3 (2.7) Net Revenues Adjusted OI % Variance vs. PY

Q1, 2018: Financial Results, ex-Currency 9 Source: PMI Financials or estimates 8.3 (2.7) (1.0) Net Revenues % Variance vs. PY Adjusted OI Adjusted Diluted EPS • Adjusted diluted EPS of $1.00, down by 1.0%, excluding three cents of favorable currency

Q1, 2018: Reported Diluted EPS Better-Than-Anticipated • Reported diluted EPS was 13 cents above our February forecast of $0.87 • Better-than-anticipated result was helped by: ⎼ The lower effective tax rate ⎼ Timing of certain RRP investments • Full-year 2018: ⎼ Our projection of net incremental investment behind RRPs of approximately $600 million remains unchanged 10 Source: PMI Financials or estimates

Q1, 2018: PMI Total Volume 11 • PMI total volume down by 2.3%, or by 1.1% excluding estimated inventory movements (primarily in Japan and Saudi Arabia), principally due to: ⎼ Lower cigarette industry volume (notably in Japan, Russia and Saudi Arabia) ⎼ Partly offset by strong growth in heated tobacco unit volume (particularly in Japan and Korea) • Full-year 2018: anticipate a decline of around 2% 4 (6) (2) 178 174 Q1 2017 Industry SoM Inventory Q1 2018 PMI Total Volume (billion units) Note: PMI total volume includes cigarettes and heated tobacco units Source: PMI Financials or estimates

(a) As of December 2017 Note: Reflects ownership of any heat-not-burn (HnB) product Source: PMI Financials or estimates, and PMI Market Research (March 2018) 12 INNOVATORS ̴ EARLY ADOPTERS EARLY MAJORITY LATE MAJORITY LAGGARDS 75% 60% 40% 30% 15% ̴ ̴ ̴ ̴ Japan: Heat-not-Burn Product Ownership % of Total Adult Smoker & HnB User Population(a) 15% 37% 33% 13% 3%

Note: Excluding China and the U.S. Source: PMI Financials or estimates PMI: International Share Growth in Q1, 2018 13 26.4 25.8 0.5 1.5 26.9 27.3 Q1, 2017 Q1, 2018 +0.4pp (%) Cigarettes Heated Tobacco Units

0.1 0.8 38.4 38.2 Q1, 2017 Q1, 2018 Source: PMI Financials or estimates EU Region: Strong Growth of HEETS in Q1, 2018 14 • Total industry volume down by 4.1%, due mainly to the impact of price increases: ⎼ Full-year 2018: anticipate a decline of approximately 2% to 3% • Regional share decline, largely reflecting: ⎼ Impact of estimated inventory movements ⎼ Partly offset by strong growth of HEETS • As expected, Regional adjusted OI, which declined by 15.8%, ex-currency, was heavily impacted by incremental RRP investments: ⎼ Full-year 2018: anticipate low to mid-single-digit, adjusted OI growth, ex-currency PMI Regional Market Share (%) (0.2)pp HEETS

Source: PMI Financials or estimates, and Nielsen Russia: Favorable Pricing Variance in Q1, 2018 15 • Total industry volume down by 8.3%, due mainly to: ⎼ Impact of price increases and higher illicit trade ⎼ Full-year 2018: anticipate a decline of approximately 7% (consistent with 2017) • Cigarette share decline due primarily to our low-price brands • Favorable pricing variance, reflecting: ⎼ Annualization of 2017 price increases ⎼ Additional price increases in Q1, 2018 1.3 1.7 3.6 3.5 27.4 26.3 QTD February 2017 QTD February 2018 PMI Cigarette Market Share (%) (1.1)pp Marlboro Parliament Other

Source: PMI Financials or estimates Saudi Arabia: Significant Tax-Driven Industry Decline 16 • Cigarette industry volume remains under considerable pressure following the June 2017 excise tax-driven price increases: ⎼ Q1, 2018: volume down by 40.8%; impacted by a further VAT-driven price increase in January ⎼ H2, 2018: anticipate a moderation in the decline when the June 2017 price increases have been lapped • Significant industry-wide down-trading • Market remains a watch-out, along with the broader GCC 29.1 13.9 18.7 13.1 1.8 13.0 54.1 41.6 Q1, 2017 Q1, 2018 PMI Cigarette Market Share (%) (12.5)pp Marlboro Chesterfield L&M Other

Source: PMI Financials or estimates Indonesia: Cigarette Market Share Growth in Q1, 2018 17 • Cigarette industry volume down by 2.3%, largely reflecting: ⎼ Soft consumer spending environment ⎼ Above-inflation excise tax-driven price increases ⎼ Full-year 2018: anticipate a decline of 1% to 3% • Cigarette share growth driven by strong performances of Marlboro Filter Black and Dji Sam Soe Magnum Mild 33.0 33.2 Q1, 2017 Q1, 2018 PMI Cigarette Market Share (%) +0.2pp

Source: PMI Financials or estimates Philippines: Further Profit Growth in Q1, 2018 18 • Further profit growth from excise tax-driven price increases • Strong market share growth led by: ⎼ Fortune: benefitting from narrowed price gaps vs. lower-priced brands ⎼ Marlboro: solid performance following its price increase in December 2017 32.4 33.0 17.3 23.4 65.9 70.5 Q1, 2017 Q1, 2018 PMI Cigarette Market Share (%) +4.6pp Marlboro Fortune Other

19 Japan: Strong HeatSticks National Share Momentum Continues Source: PMI Financials or estimates, and Tobacco Institute of Japan 7.1 10.0 11.9 13.9 15.8 Q1 Q2 Q3 Q4 Q1 2018 2017 (%)

Note: Offtake share represents select C-Store sales volume for HeatSticks as a percentage of the total retail sales volume for cigarettes and heated tobacco units in these C-Stores Source: PMI Financials or estimates Japan: Solid HeatSticks Offtake Share Performance in Sendai 20 13.8 20.3 Q1, 2017 65.1 67.9 Q1, 2017 HeatSticks Offtake Share (%) PMI Share of Heated Tobacco Category (%) Q1, 2018 Q1, 2018

21 Korea: Strong HEETS National Share Momentum Continues ̶ 0.2 2.5 5.5 7.3 Q1 Q2 Q3 Q4 Q1 2018 2017 (%) (a) As of Q1, 2018 Source: PMI Financials or estimates, and Hankook Research #5 Tobacco Brand(a)

Outside Asia: Growing PMI National HTU Market Shares 22 0.5 0.6 0.7 1.2 1.5 Q1 Q2 Q3 Q4 0.9 0.9 1.0 1.2 1.6 Q1 Q2 Q3 Q4 0.4 0.7 0.8 1.9 2.7 Q1 Q2 Q3 Q4 0.6 1.0 1.4 2.8 3.5 Q1 Q2 Q3 Q4 0.4 0.5 0.8 1.5 2.2 Q1 Q2 Q3 Q4 Italy Switzerland Portugal Greece (%) 2017 2017 2018 Q1 2018 Q1 2017 2018 Q1 2017 2018 Q1 Note: Underlying share data is unrounded Source: PMI Financials or estimates Romania 2018 Q1 2017

Outside Asia: Growing PMI Focus Area HTU Offtake Shares 23 Note: Underlying share data is unrounded Source: PMI Financials or estimates 0.5 0.6 0.8 1.4 2.6 Q1 Q2 Q3 Q4 0.1 0.6 1.4 2.1 3.0 Q1 Q2 Q3 Q4 ̶ ̶ 0.4 1.6 3.3 Q1 Q2 Q3 Q4 0.3 0.7 1.3 2.4 4.5 Q1 Q2 Q3 Q4 ̶ ̶ 0.6 1.8 3.1 Q1 Q2 Q3 Q4 0.3 0.4 0.6 0.7 1.0 Q1 Q2 Q3 Q4 0.1 0.2 0.2 0.4 0.5 Q1 Q2 Q3 Q4 Spain Germany Russia Colombia Czech Republic Slovakia Ukraine (%) 2017 2018 Q1 2017 2018 Q1 2017 2018 Q1 2017 2018 Q1 2017 2018 Q1 2017 2018 Q1 2017 2018 Q1 Focus Area (March 2018) Barcelona & Madrid 7 cities Moscow Bogota 9 cities 9 cities 5 cities

2018: Operating Cash Flow; Capital Expenditures Operating Cash Flow(a) • Continue to target operating cash flow of over $9.0 billion, supported by: ⎼ Growth of our RRP portfolio ⎼ Enduring strength of our combustible tobacco brands • Plan to use cash primarily for: ⎼ Capital expenditures to support the growth of our business ⎼ Dividends to our shareholders Capital Expenditures • Anticipate capital expenditures of approximately $1.7 billion: ⎼ RRP-related investment expected to account for around 60% of the total 24 (a) Operating cash flow is defined as net cash provided by operating activities Source: PMI Financials or estimates

Solid Capital Structure • Remain committed to restoring, over time, our leverage multiples to the ranges associated with our current credit rating 25 Long-Term Credit Rating and Outlook Moody’s A2 Stable Standard & Poor’s A Stable

Conclusion: 2018 Business Outlook Remains Strong • Better-than-expected Q1 results: ⎼ Delta compared to our February forecast driven mainly by a lower effective tax rate and the timing of certain RRP investments • Leading combustible tobacco portfolio: ⎼ Continues to support strong pricing, while contributing the lion's share of our earnings and cash flow • IQOS performing exceptionally: ⎼ Strong sequential quarterly share growth across launch markets • Increased 2018 reported diluted EPS guidance: ⎼ Reflects a growth rate of approximately 8% to 11%, ex-currency, compared to adjusted diluted EPS of $4.72 in 2017 26 Source: PMI Financials or estimates

2018 First-Quarter Results Questions & Answers iOS Download Android Download Have you downloaded the PMI Investor Relations App yet? The free IR App is available to download at the Apple App Store for iOS devices and at Google Play for Android mobile devices Or go to: www.pmi.com/irapp

28 Appendix, Glossary and Reconciliation of Non-GAAP Measures

Glossary: General Terms • "PMI" refers to Philip Morris International Inc. and its subsidiaries • Until March 28, 2008, PMI was a wholly owned subsidiary of Altria Group, Inc. ("Altria"). Since that time the company has been independent and is listed on the New York Stock Exchange (ticker symbol "PM") • Trademarks are italicized • Comparisons are made to the same prior-year period unless otherwise stated • Unless otherwise stated, references to total industry, total market, PMI shipment volume and PMI market share performance reflect cigarettes and heated tobacco units • References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the United States, total industry, total market and market shares are PMI estimates for tax-paid products based on the latest available data from a number of internal and external sources and may, in defined instances, exclude the People's Republic of China and/or PMI's duty free business • "OTP" is defined as "other tobacco products," primarily roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos, and does not include reduced-risk products • "Combustible products" is the term PMI uses to refer to cigarettes and OTP, combined • "PMI volume" is defined as the combined total of cigarette shipment volume and heated tobacco unit shipment volume • Effective January 1, 2018, PMI began managing its business in six reporting segments as follows: the European Union Region (EU); the Eastern Europe Region (EE); the Middle East & Africa Region (ME&A), which includes PMI Duty Free; the South & Southeast Asia Region (S&SA); the East Asia & Australia Region (EA&A); and the Latin America & Canada Region (LA&C) • "The GCC" (Gulf Cooperation Council) is defined as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) • "SoM" stands for share of market 29

Glossary: Financial Terms • Net revenues related to combustible products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods • PMI has adopted Accounting Standard Update ASU 2014-09 "Revenue from Contracts with Customers" as of January 1, 2018 on a retrospective basis. PMI made an accounting policy election to exclude excise taxes collected from customers from the measurement of the transaction price, thereby presenting revenues, net of excise taxes in all periods. The underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with PMI's current business model and practices • PMI adopted Accounting Standard Update ASU 2017-07 "Compensation - Retirement Benefits" as of January 1, 2018 on a retrospective basis. Previously, total pension and other employee benefit costs were included in operating income. Beginning January 1, 2018, only the service cost component is required to be shown in operating income, while all other cost components are presented in a new line item "pension and other employee benefit costs" below operating income • Prior to 2018, management evaluated business segment performance, and allocated resources, based on operating companies income, or "OCI." Effective January 1, 2018, management began evaluating business segment performance, and allocating resources, based on operating income, or "OI" • OCI was defined as operating income, excluding general corporate expenses and the amortization of intangibles, plus equity (income)/loss in unconsolidated subsidiaries, net • "Adjusted OI margin" is calculated as adjusted OI, divided by net revenues • Management reviews net revenues, OI, OI margins, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items 30

Glossary: Reduced-Risk Products • "Reduced-risk products," or "RRPs," is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. Because PMI's RRPs do not burn tobacco, they produce an aerosol that contains far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke • "Aerosol" refers to a gaseous suspension of fine solid particles and/or liquid droplets • "Combustion" is the process of burning a substance in oxygen, producing heat and often light • "Smoke" is a visible suspension of solid particles, liquid droplets and gases in air, emitted when a material burns • "IQOS" is a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol • "Heated tobacco product" is a manufactured tobacco product that delivers a nicotine containing vapor (aerosol), without combustion of the tobacco mixture • "Heated tobacco units," or "HTUs," is the term PMI uses to refer to heated tobacco consumables, which include the company's HEETS, HEETS Marlboro and HEETS FROM MARLBORO, defined collectively as HEETS, as well as Marlboro HeatSticks and Parliament HeatSticks • Heated tobacco unit "offtake volume" represents the estimated retail offtake of heated tobacco units based on a selection of sales channels that vary by market, but notably include retail points of sale and e-commerce platforms • Heated tobacco unit "offtake share" represents the estimated retail offtake volume of heated tobacco units divided by the sum of estimated total offtake volume for cigarettes, heated tobacco units and, where the data is available, other RRPs • National market share for heated tobacco units is defined as the total sales volume for heated tobacco units as a percentage of the total estimated sales volume for cigarettes and heated tobacco units • Net revenues related to RRPs represent the sale of heated tobacco units, IQOS devices and related accessories, and other nicotine- containing products, primarily e-vapor products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods 31

• Andorra • Austria • Baltic States • Belgium • Bulgaria • Canary Islands • Croatia • Czech Republic • Denmark • Finland • France • Germany • Greece • Hungary • Iceland 32 • Italy • Luxembourg • Netherlands • Norway • Poland • Portugal • Romania • Slovak Republic • Slovenia • Spain • Sweden • Switzerland • United Kingdom European Union Eastern Europe PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries New Geographic Segmentation (effective January 1, 2018) • Albania • Armenia • Belarus • Bosnia & Herzegovina • Georgia • Israel • Kazakhstan • Kosovo • Kyrgyzstan • Macedonia • Moldova • Mongolia • Montenegro • Russia • Serbia • Tajikistan • Turkmenistan • Ukraine • Uzbekistan

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries New Geographic Segmentation (effective January 1, 2018) • Algeria • Bahrain • Central Africa(a) • Duty Free • Eastern Africa(b) • Egypt • Iraq • Jordan • Kuwait • Lebanon • Libya • Morocco • Oman • Palestine Auth. Area • Qatar 33 • Saudi Arabia • Southern Africa(c) • Tunisia • Turkey • Turkish Cyprus • United Arab Emirates (UAE) • West Africa(d) • Yemen Middle East & Africa South & Southeast Asia (a) Central Africa includes Angola, Cameroon, Democratic Republic of the Congo, Equatorial Guinea and Gabon (b) Eastern Africa includes Djibouti, Ethiopia, Kenya, Malawi, Mozambique, Somalia and Tanzania (c) Southern Africa includes Botswana, Lesotho, Mauritius, Mayotte, Namibia, Reunion and Swaziland (d) West Africa includes Benin, Burkina Faso, Cape Verde, The Gambia, Guinea, Ivory Coast, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo • Afghanistan • Bangladesh • Cambodia • East Timor • India • Indonesia • Laos • Maldives • Nepal • Pakistan • Philippines • Sri Lanka • Thailand • Vietnam

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries New Geographic Segmentation (effective January 1, 2018) 34 East Asia & Australia Latin America & Canada (a) South Pacific includes Christmas Islands, French Polynesia, Marshall Islands, Nauru, New Caledonia, Palau, Papua New Guinea, Tonga, Vanuatu and other South Pacific islands (b) Caribbean includes Aruba, Bahamas, Bermuda, Bonaire, Cayman Islands, Curacao, Guadeloupe, Martinique, St. Barth's, St. Maarten, St. Martin and other Caribbean markets • Australia • Hong Kong • Japan • Macau • Malaysia • New Zealand • People's Republic of China • Singapore • South Korea • South Pacific(a) • Taiwan • Argentina • Bolivia • Brazil • Canada • Caribbean(b) • Chile • Colombia • Costa Rica • Dominican Republic • Ecuador • El Salvador • Guatemala • Honduras • Mexico • Nicaragua • Panama • Paraguay • Peru • Uruguay • Venezuela

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures 35 Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency, and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency (Unaudited) Quarters Ended March 31, 2018 2017 % Change Reported Diluted EPS $ 1.00 $ 1.02 (2.0)% Currency 0.03 Reported Diluted EPS, excluding Currency $ 0.97 $ 1.02 (4.9)% Quarters Ended March 31, Year Ended 2018 2017 % Change 2017 Reported Diluted EPS $ 1.00 $ 1.02 (2.0)% $ 3.88 Asset impairment and exit costs - - - Tax m - (0.04) 0.84 Adjusted Diluted EPS $ 1.00 $ 0.98 2.0% $ 4.72 Currency 0.03 Adjusted Diluted EPS, excluding Currency $ 0.97 $ 0.98 (1.0)%

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures 36 Adjustments of Net Revenues for the Impact of Currency and Acquisitions ($ in millions) / (Unaudited) Net Revenues Currency Net Revenues excluding Currency Acquisitions Net Revenues excluding Currency & Acquisitions Quarters Ended March 31, Net Revenues Total Excluding Currency Excluding Currency & Acquisitions 2018 PMI 2017 % Change $ 1,988 $ 245 $ 1,743 $ - $ 1,743 European Union $ 1,740 14.3% 0.2% 0.2% 567 29 538 - 538 Eastern Europe 516 9.9% 4.3% 4.3% 961 14 947 - 947 Middle East & Africa 961 - % (1.5)% (1.5)% 1,081 (8) 1,089 - 1,089 South & Southeast Asia 1,031 4.8% 5.6% 5.6% 1,591 48 1,543 - 1,543 East Asia & Australia 1,210 31.5% 27.5% 27.5% 708 (1) 709 - 709 Lat in America & Canada 606 16.8% 17.0% 17.0% $ 6,896 $ 327 $ 6,569 $ - $ 6,569 Total PMI $ 6,064 13.7% 8.3% 8.3%

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures 37 Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions ($ in millions) / (Unaudited) Operating Income Asset Impairment & Exit Costs Adjusted Operating Income Currency Adjusted Operating Income excluding Currency Acqui- sitions Adjusted Operating Income excluding Currency & Acqui- sitions Operating Income Asset Impairment & Exit Costs Adjusted Operating Income Total Excluding Currency Excluding Currency & Acqui- sitions 2018 2017 $ 740 $ - $ 740 $ 110 $ 630 $ - $ 630 European Union $ 748 $ - $ 748 (1.1)% (15.8)% (15.8)% 151 - 151 8 143 - 143 Eastern Europe 159 - 159 (5.0)% (10.1)% (10.1)% 374 - 374 (32) 406 - 406 Middle East & Africa 491 - 491 (23.8)% (17.3)% (17.3)% 429 - 429 (12) 441 - 441 South & Southeast Asia 370 - 370 15.9% 19.2% 19.2% 515 - 515 16 499 - 499 East Asia & Australia 472 - 472 9.1% 5.7% 5.7% 217 - 217 (14) 231 - 231 Lat in America & Canada 176 - 176 23.3% 31.3% 31.3% $ 2,426 $ - $ 2,426 $ 76 $ 2,350 $ - $ 2,350 Total PMI $ 2,416 $ - $ 2,416 0.4% (2.7)% (2.7)% % Change Quarters Ended March 31,

2018 First-Quarter Results April 19, 2018

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