REG-Philip Morris International Inc. Philip Morris International Inc. (PMI) Reports 2010 First-Quarter Results

http://www.businesswire.com/news/home/20100422005692/en

* Reported net revenues, excluding excise taxes, up by 16.1%

* Excluding currency, reported net revenues, excluding excise taxes, up by 8.0%

* Operating companies income up by 17.1%

* Excluding currency, operating companies income up by 8.9%

* Reported and adjusted diluted earnings per share of $0.90, up by 21.6% versus
$0.74 in 2009

* Excluding currency, reported and adjusted diluted earnings per share up by
13.5%

* Free cash flow up by 42.3% to $1.8 billion

* Excluding currency, free cash flow up by 33.2%

* During the quarter, announced the combination of its affiliate in the
Philippines with Fortune Tobacco Corporation to create a new company called
PMFTC
* During the quarter, repurchased 36.1 million shares of its common stock for
$1.8 billion
* Declared a regular quarterly dividend of $0.58 during the quarter
* Reaffirms its forecast for 2010 full-year reported diluted earnings per share
to be in a range of $3.75 to $3.85 versus $3.24 in 2009. Excluding currency,
reported diluted earnings per share are projected to increase by approximately
10%-13%

NEW YORK--(Business Wire)--

Philip Morris International Inc. (NYSE / Euronext Paris: PM) today announced
both reported and adjusted diluted earnings per share of $0.90 in the first
quarter of 2010, up by 21.6% from $0.74 in the first quarter of 2009. Excluding
currency, both reported and adjusted diluted earnings per share were up by
13.5%. Free cash flow, defined as net cash provided by operating activities less
capital expenditures, increased by 42.3% to $1.8 billion, as detailed on
Schedule 11.

"Our financial performance sustained its strong momentum in the first quarter
helped, in part, by a currency benefit," said Louis Camilleri, Chairman and
Chief Executive Officer.

"Despite widespread share growth, across both OECD and non-OECD markets, our
organic volume declined by 2.3%. This was attributable to essentially four
markets, the Baltics, Romania, Turkey and Ukraine, which all suffered from the
compounding adverse effect of steep excise tax increases and weak economies.

"We again surpassed our longer term, constant currency annual financial growth
targets and remain on track to meet our earnings guidance for the year. The key
highlight of the quarter was our robust cash flow performance."

Conference Call

A conference call, hosted by Hermann Waldemer, Chief Financial Officer, with
members of the investment community and news media, will be webcast at 9:00
a.m., Eastern Time, on April 22, 2010. Access is available at www.pmi.com.

Dividends and Share Repurchase Program

PMI declared a regular quarterly dividend of $0.58 during the first quarter of
2010, which represents an annualized rate of $2.32 per common share.

During the first quarter, PMI spent $1.8 billion to repurchase 36.1 million
shares of its common stock. Since May 2008, when PMI began its
previously-announced $13 billion, two-year share repurchase program, the company
has spent a total of $12.7 billion to repurchase 272.6 million shares. The
program is expected to be completed on schedule by April 30, 2010. A new share
repurchase program, previously announced in February 2010, of $12 billion over
three years, is scheduled to commence in May 2010.

Acquisitions and Agreements

On February 25, 2010, PMI announced that its affiliate, Philip Morris
Philippines Manufacturing Inc. (PMPMI), and Fortune Tobacco Corporation (FTC),
had signed an agreement to unite their respective business activities by
transferring selected assets and liabilities of PMPMI and FTC to a new company
called PMFTC, with each party holding an equal economic interest. PMFTC's
incremental contribution to PMI's earnings per share in 2010, a year which will
focus on integration, is expected to be immaterial. It is anticipated that
PMFTC's contribution to PMI's earnings per share will be accretive in 2011, as
cost synergies begin to be realized.

2010 Full-Year Forecast

PMI reaffirms its forecast for 2010 full-year reported diluted earnings per
share to be in a range of $3.75 to $3.85 versus $3.24 in 2009. Excluding
currency, reported diluted earnings per share are projected to increase by
approximately 10%-13%. This guidance excludes the impact of any potential future
acquisitions, asset impairment and exit cost charges, and any unusual events.

The factors described in the Forward-Looking and Cautionary Statements section
of this release represent continuing risks to these projections.

FIRST-QUARTER CONSOLIDATED RESULTS

Management reviews operating companies income (OCI), which is defined as
operating income before corporate expenses and amortization of intangibles, to
evaluate segment performance and to allocate resources. In the following
discussion, the term "net revenues" refers to net revenues, excluding excise
taxes, unless otherwise stated. Management also reviews OCI, operating margins
and EPS on an adjusted basis (which may exclude the impact of currency and other
items such as acquisitions or asset impairment and exit charges), EBITDA, free
cash flow and net debt. Management believes it is appropriate to disclose these
measures to help investors analyze business performance and trends. For a
reconciliation of operating companies income to operating income, see the
Condensed Statements of Earnings provided with this release. Reconciliations of
adjusted measures to corresponding GAAP measures are also provided with this
release. References to total international cigarette market, total cigarette
market, total market and market shares are PMI estimates based on latest
available data from a number of sources. Comparisons are to the same prior-year
period unless otherwise stated.

NET REVENUES
PMI Net Revenues ($ Millions)
First-Quarter
Excl.
2010 2009 Change Curr,
European Union $2,184 $1,987 9.9% 1.0%
Eastern Europe, Middle East & Africa 1,746 1,452 20.2% 16.7%
Asia 1,873 1,590 17.8% 7.0%
Latin America & Canada 693 568 22.0% 13.0%
Total PMI $6,496 $5,597 16.1% 8.0%

Net revenues of $6.5 billion were up by 16.1%, including favorable currency of
$453 million. Excluding currency, net revenues increased by 8.0%, primarily
driven by favorable pricing of $449 million across all business segments that
more than offset unfavorable volume/mix of $107 million, mainly in the EU Region
and Japan. Excluding currency and acquisitions, net revenues increased by 6.1%.

OPERATING COMPANIES INCOME
PMI Operating Companies Income ($ Millions)
First-Quarter
Excl.
2010 2009 Change Curr,
European Union $1,062 $967 9.8% 1.6%
Eastern Europe, Middle East & Africa 770 586 31.4% 30.0%
Asia 724 661 9.5% (2.7)%
Latin America & Canada 217 155 40.0% 25.2%
Total PMI $2,773 $2,369 17.1% 8.9%

Operating income increased by 17.0% to $2.7 billion as shown on Schedule 1.
Reported operating companies income increased by 17.1% to $2.8 billion,
including favorable currency of $192 million. Excluding currency, operating
companies income was up by 8.9%, driven primarily by higher pricing, partly
offset by unfavorable volume/mix. Excluding currency and the favorable impact of
acquisitions of 0.2 percentage points of growth, operating companies income was
up by 8.7%. Adjusted operating companies income grew by 17.0% as shown in the
table below and detailed on Schedule 7.

PMI Operating Companies Income ($ Millions)
First-Quarter
2010 2009 Change
Reported OCI $2,773 $2,369 17.1%
Asset impairment & exit costs 0 1
Adjusted OCI $2,773 $2,370 17.0%
Adjusted OCI Margin* 42.7% 42.3% 0.4 p.p.
*Margins are calculated as adjusted OCI, divided by net
revenues, excluding excise taxes.

Excluding the impact of currency, adjusted operating companies income margin was
up for the first-quarter 2010 by 0.4 percentage points to 42.7%, as detailed on
Schedule 7.

SHIPMENT VOLUME & MARKET SHARE

PMI Cigarette Shipment Volume by Segment (Million Units)
First-Quarter
2010 2009 Change
European Union 52,329 54,940 (4.8)%
Eastern Europe, Middle East & Africa 64,145 67,678 (5.2)%
Asia 63,215 56,768 11.4%
Latin America & Canada 25,046 23,989 4.4%
Total PMI 204,735 203,375 0.7%

PMI`s cigarette shipment volume of 204.7 billion units was up by 0.7%,
reflecting gains: in Asia, primarily driven by Indonesia, double-digit growth in
Korea and incremental volume of 6.1 billion units from the new business
combination in the Philippines; and in Latin America & Canada, mainly from
growth in Canada, Colombia and Mexico. These gains offset declines: in the EU,
primarily due to the economic downturn in the Baltic States and Spain, where
PMI`s cigarette shipment volume declined by 52.8% and 13.7%, respectively; and
in EEMA, due to the impact of several significant tax-driven price increases in
Romania and Turkey, and weak economic conditions in Ukraine, where volumes
declined by 72.2%, 20.6% and 26.5%, respectively. On an organic basis, which
excludes acquisitions, PMI`s cigarette shipment volume was down by 2.3%.

Total cigarette shipments of Marlboro of 70.6 billion units were down moderately
by 0.6%, due primarily to decreases: in the EU, primarily reflecting a share
decline in Germany, lower share and trade inventory movements in Greece, and the
impact of the economic crisis in Spain; and in EEMA, mainly reflecting
tax-driven price increases in Romania and Turkey. These decreases were partially
offset by growth: in Asia, driven by strong volume in the Philippines and Korea;
and in Latin America & Canada, fueled by growth in Argentina, Colombia and
Mexico. Total cigarette shipments of L&M of 20.1 billion units were down by
6.3%, with robust growth in the EU of 6.6% offset by declines in the other
regions. Driven by a decrease in shipments in Spain and Ukraine, total cigarette
shipments of Chesterfield declined 11.7%. Total cigarette shipments of
Parliament were down by 11.6%, primarily in Turkey, reflecting the impact of the
January 2010 tax-driven price increase. Total cigarette shipments of Lark
decreased by 4.5%, with growth in Turkey offset by Japan, and Bond Street
increased by 6.5%, driven by double-digit growth in Russia.

Total shipment volume of other tobacco products (OTP), in cigarette equivalent
units, grew by 43.5%, primarily fueled by the acquisition of Swedish Match South
Africa (Proprietary) Limited. Excluding acquisitions, shipment volume of OTP was
down by 17.0%, primarily due to lower volume in Poland, reflecting the impact of
the excise tax alignment of pipe tobacco to roll-your-own in the first quarter
of 2009. Total shipment volume for cigarettes and OTP was up by 1.5%, and down
by 2.6% excluding acquisitions.

PMI`s market share performance registered a stable or growing trend in a number
of markets, including Algeria, Argentina, Austria, Australia, Belgium, Brazil,
Bulgaria, Canada, Egypt, Hungary, Indonesia, Italy, Japan, Korea, Malaysia,
Mexico, the Netherlands, the Philippines, Poland, Russia, Singapore, the Slovak
Republic, Switzerland and Ukraine.

EUROPEAN UNION (EU)

In the EU, net revenues increased by 9.9% to $2.2 billion, including favorable
currency of $178 million. Excluding the impact of currency, net revenues
increased by 1.0%, primarily reflecting higher pricing of $127 million across
most markets, which offset unfavorable volume/mix of $111 million, largely due
to total market declines, predominantly in the Baltic States and Spain.
Excluding the impact of currency and acquisitions, net revenues increased by
0.8%.

Operating companies income grew by 9.8% to $1.1 billion, including favorable
currency of $80 million, with growth in all major markets partially offset by
declines in the Baltic States and Greece. Excluding the impact of currency,
operating companies income grew by 1.6%, primarily reflecting favorable pricing
that more than offset unfavorable volume/mix. Excluding the impact of currency
and acquisitions, operating companies income grew by 1.3%. Adjusted operating
companies income grew by 9.7% as shown in the table below and detailed on
Schedule 7.

The total cigarette market in the EU declined by 2.7%, mainly reflecting the
impact of unfavorable economic conditions, primarily in the Baltic States and
Spain, significant tax-driven price increases during 2009 and, in January 2010,
price increases in Spain. These decreases were partly offset by a higher total
market in Poland, due mainly to in-switching from other tobacco products, and in
the Czech Republic.

PMI`s cigarette shipment volume in the EU declined by 4.8%, primarily reflecting
the impact of a lower total market as described above. Shipment volume of
Marlboro decreased by 6.2%, mainly due to the lower total market, unfavorable
economic conditions, primarily in Spain, and lower share in Germany.

PMI`s market share in the EU was down slightly by 0.2 share points to 38.4% as
gains in Belgium, Hungary, Italy, the Netherlands, Poland, the Slovak Republic
and Switzerland were partially offset by share declines in the Czech Republic,
France, Germany, Greece and Portugal. Marlboro`s share in the EU was down by 0.3
share points to 18.0%, reflecting a lower share in France, Germany, Greece and
Spain, partially offset by a higher share in Italy, the Netherlands, Poland,
Portugal and Switzerland. During the quarter, the continuing roll-out of
Marlboro brand initiatives included the Marlboro Red packupgrade in Germany,
Poland, Spain and Switzerland, the pack upgrade of Marlboro Goldin Portugal and
Spain, and the launch of Marlboro Gold Advance in Belgium and the Netherlands.
L&M`s market share in the EU grew by 0.5 points to 5.7%, primarily driven by
gains in Germany, the Slovak Republic and Spain where, in all three markets, it
was the fastest growing cigarette brand.

EU Operating Companies Income ($ Millions)
First-Quarter
2010 2009 Change
Reported OCI $1,062 $967 9.8%
Asset impairment & exit costs 0 1
Adjusted OCI $1,062 $968 9.7%
Adjusted OCI Margin* 48.6% 48.7% (0.1) p.p.
*Margins are calculated as adjusted OCI, divided by net
revenues, excluding excise taxes.

Excluding the impact of currency, adjusted operating companies income margin was
up by 0.3 percentage points to 49.0%, as detailed on Schedule 7.

EU Key Market Commentaries

In the Czech Republic, the total cigarette market was up 8.5%, primarily driven
by higher cross-border sales with Germany. Whilst PMI`s shipments were
marginally up by 0.2%, market share decreased by 4.0 points to 48.7%, partly
reflecting the impact of the delayed competitive implementation of price
increases in the second half of 2009.

In France, the total cigarette market was essentially flat, despite the impact
of the November 2009 price increase. PMI`s shipments were down by 0.9%. Market
share decreased by 0.7 points to 40.3%, due to a lower share for Marlboro, down
by 1.0 point to 25.9%, partially offset by a higher share for the premium Philip
Morris brand, up by 0.7 points.

In Germany, the total cigarette market was down by 2.7%, mainly reflecting the
impact of the June 2009 price increase. PMI`s shipments were down by 4.4%, due
primarily to the lower total market and a lower share of 35.2%, down by 0.6
share points. While L&M continued its strong performance, gaining 1.5 share
points to reach 9.1%, Marlboro`s share decreased by 1.7 share points to 21.3%,
reflecting the impact of price sensitivity in the market.

In Italy, the total cigarette market was down by 3.2%, primarily reflecting the
impact of the December 2009 price increase. Although PMI`s shipments were down
by 4.7%, largely due to the total market decline and adverse distributor
inventory movements, market share was up by 0.5 points to 54.1%, benefiting from
a 0.7 share point growth by Marlboro to 22.6%, fueled by the successful May 2009
launch of Marlboro Gold Touch, which registered a 1.4% share in the first
quarter 2010.

In Poland, the total cigarette market was up by 4.2%, despite the impact of the
January 2010 tax-driven price increase, reflecting in-switching from other
tobacco products as a result of excise tax harmonization in 2009, and trade
inventory movements. PMI`s shipments were up by 11.1%. Market share was up by
2.3 points to 37.2%, primarily reflecting higher Marlboro share, up by 1.2 share
points to 9.2%.

In Spain, the total cigarette market was down by 9.2%, due largely to the
adverse economic environment and the impact of the price increases of June 2009
and January 2010. PMI`s shipments were down by 13.7%, reflecting the lower total
market and the impact of unfavorable distributor inventory movements. Although
PMI`s market share was down slightly by 0.2 points to 31.6%, share was
essentially flat compared to the fourth quarter of 2009. While Marlboro`s share
decreased by 1.1 points to 14.5% and Chesterfield`s share declined by 0.8 points
to 9.2%, share of L&M increased by 1.6 share points to 6.6%.

EASTERN EUROPE, MIDDLE EAST & AFRICA (EEMA)

In EEMA, net revenues increased by 20.2% to $1.7 billion, including favorable
currency of $52 million. Excluding the impact of currency, net revenues
increased by 16.7%, primarily driven by favorable pricing of $238 million,
including an inventory windfall resulting from the sale of old taxed product at
new prices, more than offsetting unfavorable volume/mix of $22 million.
Excluding the impact of currency and acquisitions, net revenues grew by 14.9%.

Operating companies income increased by 31.4% to $770 million, including
favorable currency of $8 million. Excluding the impact of currency, operating
companies income increased by 30.0%, primarily reflecting favorable pricing that
more than offset unfavorable volume/mix. Excluding the impact of currency and
acquisitions, operating companies income was up by 28.5%.

PMI`s cigarette shipment volume decreased by 5.2%, principally due to Ukraine,
unfavorably impacted by a series of tax-driven price increases between 2008 and
2009, and worsening economic conditions; and Romania and Turkey, driven by the
significant tax-driven price increases of January 1, 2010. This decline was
partially offset by strong cigarette shipment volume growth in Algeria, Tunisia,
the Middle East and, to a lesser extent, Russia, where shipments have
stabilized. Shipment volume of Marlboro decreased by a more modest 1.2%, with
declines in Eastern Europe, Romania and Turkey, partially offset by overall
growth in the Middle East and Africa, as well as PMI Duty Free.

EEMA Operating Companies Income ($ Millions)
First-Quarter
2010 2009 Change
Reported OCI $770 $586 31.4%
Asset impairment & exit costs 0 0
Adjusted OCI $770 $586 31.4%
Adjusted OCI Margin* 44.1% 40.4% 3.7 p.p.
*Margins are calculated as adjusted OCI, divided by net
revenues, excluding excise taxes.

Excluding the impact of currency, adjusted operating companies income margin was
up by 4.6 percentage points to 45.0%, as detailed on Schedule 7.

EEMA Key Market Commentaries

In Russia, PMI`s shipment volume increased by 1.5%. Whilst shipment volume of
PMI`s premium portfolio was down by 10.4%, primarily due to a decline in
Marlboro of 15.8% reflecting down-trading from the premium segment, this
represented the lowest rate of segment decline since the first quarter of 2009.
In the mid-price segment, shipment volume of Chesterfield was up by 5.5%. In the
low price segment, shipment volume of Bond Street, Next and Optima was up by
29.3%, 12.1% and 10.1%, respectively. PMI`s market share of 25.6%, as measured
by A.C. Nielsen, was up by 0.5 points. Market share for Parliament, in the above
premium segment, was stable; Marlboro, in the premium segment, was down by 0.3
share points; Chesterfield in the mid-price segment was up by 0.3 share points;
and Bond Street in the low price segment was up by 1.5 share points.

In Turkey, the total cigarette market declined by 19.4%, primarily reflecting
the impact of the steep January 2010 excise tax increase. PMI`s shipment volume
declined by 20.6%. PMI`s market share, as measured by A.C. Nielsen, declined by
1.5 points to 40.9%, due to Parliament, down by 1.2 share points, Marlboro, down
by 0.9 share points, and L&M, down by 2.0 share points, partially offset by Lark
Recess Blue in the low price segment, up by 4.0 share points.

In Ukraine, PMI`s shipment volume declined 26.5%, reflecting a difficult
comparison with a still strong first quarter 2009, the current weak economy and
the impact of significant tax increases which, since January 2008, have resulted
in retail price increases for premium Marlboro of 80% and for low price Optima
of over 260%. PMI`s market share, as measured by A.C. Nielsen, was up by 0.4
share points to 36.2%, with share gains for both premium Parliament, mid-price
Chesterfield and low price Bond Street and Next, partially offset by slightly
lower Marlboro share.

ASIA

In Asia, net revenues increased by 17.8% to $1.9 billion, including favorable
currency of $172 million. Excluding the impact of currency, net revenues
increased by 7.0%, reflecting favorable pricing of $35 million, primarily in
Australia, Indonesia and Pakistan.

Operating companies income grew by 9.5% to reach $724 million. Excluding the
impact of currency, operating companies income declined by 2.7%. This decline
was primarily due to: unfavorable volume/mix, principally due to lower volume in
Japan resulting from a contracted total market and the timing of shipments; and
higher manufacturing costs of $36 million.

PMI`s cigarette shipment volume increased by 11.4%, mainly due to gains in
Indonesia, double-digit growth in Korea and volume from the new business
combination in the Philippines, partially offset by declines in Japan, driven by
a lower total market and the timing of shipments, and Pakistan, reflecting the
impact of excise tax-driven price increases in June 2009 and early 2010.
Shipment volume of Marlboro grew by 7.4%, reflecting improved market share
performance primarily in Australia, Korea, Malaysia, Thailand and Singapore.

Asia Operating Companies Income ($ Millions)
First-Quarter
2010 2009 Change
Reported OCI $724 $661 9.5%
Asset impairment & exit costs 0 0
Adjusted OCI $724 $661 9.5%
Adjusted OCI Margin* 38.7% 41.6% (2.9) p.p.
*Margins are calculated as adjusted OCI, divided by net
revenues, excluding excise taxes.

Excluding the impact of currency, adjusted operating companies income margin was
down by 3.8 percentage points to 37.8%, as detailed on Schedule 7. Excluding
currency and acquisitions, adjusted operating companies income margin was down
by 1.7 percentage points to 39.9%.

Asia Key Market Commentaries

In Indonesia, the total cigarette market increased by 5.8%. PMI`s shipment
volume increased by 5.7% and market share was stable at 29.0%, driven by strong
growth from A Mild, which has established itself as Indonesia`s leading
cigarette brand franchise in terms of market share with shipment volume up by
14.4%.

In Japan, the total cigarette market declined by 4.6%. Although, PMI`s shipments
were down by 6.7% due, in part, to timing, PMI`s market share of 24.2% was up by
0.3 points, representing the fourth consecutive year-on-year quarterly share
gain. Marlboro`s share increased to 10.8%, up by 0.4 points versus the first
quarter and fourth quarter of 2009, supported by the February 2010 national
roll-out of Marlboro Black Gold which recorded a 0.3% market share. Market share
of Lark was also up by 0.2 points to 6.7%.

In Korea, the total cigarette market was down by 9.0%, partly reflecting
competitors` inventory adjustments from late 2009. PMI`s shipment volume surged
14.5%, driven by market share increases. PMI`s market share reached 17.4%, up by
a strong 3.6 points, driven by Marlboro and Parliament, up by 1.2 and 1.7 share
points, respectively, and Virginia Slims, up by 0.4 share points.

In the Philippines, the total cigarette market was up by 30.8%, reflecting a
lower base in 2009 following accelerated trade inventory purchases in late 2008
prior to the January 2009 excise tax increase. On February 25, 2010, Philip
Morris Philippines Manufacturing Inc. combined with Fortune Tobacco Corporation
to form a new company called PMFTC. As a result of this combination, PMI`s
shipments were up by over 100% in the first quarter 2010, and market share in
March 2010 was approximately 90%.

LATIN AMERICA & CANADA

In Latin America & Canada, net revenues increased by 22.0% to $693 million,
including favorable currency of $51 million. Excluding the impact of currency,
net revenues increased by 13.0%, reflecting favorable pricing of $49 million,
primarily in Argentina, Brazil, Canada and Mexico, and favorable volume/mix of
$25 million.

Operating companies income increased by 40.0% to $217 million. Excluding the
impact of currency, operating companies income increased by 25.2%.

PMI`s cigarette shipment volume increasedby 4.4%, reflecting growth in
Argentina, Canada, Colombia, the Dominican Republic and Mexico. Shipment volume
of Marlboro grew by 1.5%, mainly driven by improved share performance in
Argentina and Mexico.

Latin America & Canada Operating Companies Income ($ Millions)
First-Quarter
2010 2009 Change
Reported OCI $217 $155 40.0%
Asset impairment & exit costs 0 0
Adjusted OCI $217 $155 40.0%
Adjusted OCI Margin* 31.3% 27.3% 4.0 p.p.
*Margins are calculated as adjusted OCI, divided by net
revenues, excluding excise taxes.

Excluding the impact of currency, adjusted operating companies income margin was
up by 2.9 percentage points to 30.2%, as detailed on Schedule 7.

Latin America & Canada Key Market Commentaries

In Argentina, PMI`s cigarette shipment volume increased by 1.6% and market share
increased by 0.9 points to a record 74.5%, fueled by Marlboro, up by 0.5 share
points to 23.5%, and the Philip Morris brand, up by 0.6 share points to 37.8%.

In Canada, the total tax-paid cigarette market was up by 10.4%, mainly
reflecting stronger government enforcement measures to reduce contraband sales.
PMI`s cigarette shipment volume increased by 10.9% and market share grew by 0.2
points to 34.1%, led by premium price Belmont, up by 0.2 points, and low price
brands Next and Quebec Classique, up by 3.8 and 1.9 share points, respectively,
partially offset by mid-price Number 7 and Canadian Classics, down by 1.7 and
2.0 share points, respectively.

In Mexico, the total cigarette market was up by 3.1%. PMI`s cigarette shipment
volume increased by 3.7% and market share increased by 0.4 points to 69.6%,
fueled by Marlboro, up by 0.4 points to 48.7%, and Delicados, up by 0.6 points
to 11.9%.

Philip Morris International Inc. Profile

Philip Morris International Inc. (PMI) is the leading international tobacco
company, with seven of the world`s top 15 brands, including Marlboro, the number
one cigarette brand worldwide. PMI has more than 77,000 employees and its
products are sold in approximately 160 countries. In 2009, the company held an
estimated 15.4% share of the total international cigarette market outside of the
U.S., or 26.0% excluding the People`s Republic of China and the U.S. For more
information, see www.pmi.com.

Trademarks and service marks mentioned in this release are the property of, or
licensed by, the subsidiaries of Philip Morris International Inc.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other
forward-looking statements that involve a number of risks and uncertainties and
are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. The following important factors could cause
actual results and outcomes to differ materially from those contained in such
forward-looking statements.

Philip Morris International Inc. and its tobacco subsidiaries (PMI) are subject
to intense price competition; changes in consumer preferences and demand for
their products; fluctuations in levels of customer inventories; increases in raw
material costs; the effects of foreign economies and local economic and market
conditions; unfavorable currency movements and changes to income tax laws. Their
results are dependent upon their continued ability to promote brand equity
successfully; to anticipate and respond to new consumer trends; to develop new
products and markets and to broaden brand portfolios in order to compete
effectively; and to improve productivity.

PMI is also subject to legislation and governmental regulation, including actual
and potential excise tax increases; discriminatory excise tax structures;
increasing marketing and regulatory restrictions; the effects of price increases
related to excise tax increases on consumption rates and consumer preferences
within price segments; health concerns relating to the use of tobacco products
and exposure to environmental tobacco smoke; privately imposed smoking
restrictions; and governmental investigations.

PMI is subject to litigation, including risks associated with adverse jury and
judicial determinations, and courts reaching conclusions at variance with the
company`s understanding of applicable law.

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, 2009.
PMI cautions that the foregoing list of important factors is not complete and
does not undertake to update any forward-looking statements that it may make,
except in the normal course of its public disclosure obligations.

Schedule 1
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Condensed Statements of Earnings
For the Quarters Ended March 31,
(in millions, except per share data)
(Unaudited)

2010 2009 % Change
Net revenues $ 15,587 $ 13,286 17.3 %
Cost of sales 2,372 1,971 20.3 %
Excise taxes on products (1) 9,091 7,689 18.2 %
Gross profit 4,124 3,626 13.7 %
Marketing, administration and research costs 1,351 1,256
Asset impairment and exit costs - 1
Operating companies income 2,773 2,369 17.1 %
Amortization of intangibles 20 15
General corporate expenses 38 34
Operating income 2,715 2,320 17.0 %
Interest expense, net 223 158
Earnings before income taxes 2,492 2,162 15.3 %
Provision for income taxes 738 645 14.4 %
Net earnings 1,754 1,517 15.6 %
Net earnings attributable to noncontrolling interests 51 41
Net earnings attributable to PMI $ 1,703 $ 1,476 15.4 %

Per share data:(2)
Basic earnings per share $ 0.90 $ 0.74 21.6 %
Diluted earnings per share $ 0.90 $ 0.74 21.6 %

(1) The segment detail of excise taxes on products sold for the quarters ended March 31, 2010 and 2009 is shown on Schedule 2.

(2) Net earnings and weighted-average shares used in the basic and diluted earnings per share computations for the quarters ended March 31, 2010 and 2009 are shown on Schedule 4, Footnote 1.

Schedule 2
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended March 31,
(in millions)
(Unaudited)

Net Revenues Excluding Excise Taxes
European EEMA Asia Latin Total

Union
America &

Canada

2010 Net Revenues (1) $ 6,748 $ 3,356 $ 3,562 $ 1,921 $ 15,587
Excise Taxes on Products (4,564 ) (1,610 ) (1,689 ) (1,228 ) (9,091 )
Net Revenues excluding Excise Taxes 2,184 1,746 1,873 693 6,496

2009 Net Revenues $ 6,050 $ 2,831 $ 2,857 $ 1,548 $ 13,286
Excise Taxes on Products (4,063 ) (1,379 ) (1,267 ) (980 ) (7,689 )
Net Revenues excluding Excise Taxes 1,987 1,452 1,590 568 5,597

Variance Currency 178 52 172 51 453
Acquisitions 3 26 75 - 104
Operations 16 216 36 74 342
Variance Total 197 294 283 125 899
Variance Total (%) 9.9 % 20.2 % 17.8 % 22.0 % 16.1 %

Variance excluding Currency 19 242 111 74 446
Variance excluding Currency (%) 1.0 % 16.7 % 7.0 % 13.0 % 8.0 %

Variance excluding Currency & Acquisitions 16 216 36 74 342
Variance excluding Currency & Acquisitions (%) 0.8 % 14.9 % 2.3 % 13.0 % 6.1 %

(1) 2010 Currency increased net revenues as follows:
European Union $ 569
EEMA 136
Asia 453
Latin America & Canada 123
$ 1,281

Schedule 3
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended March 31,
(in millions)
(Unaudited)

Operating Companies Income
European EEMA Asia Latin Total

Union
America &

Canada
2010 $ 1,062 $ 770 $ 724 $ 217 $ 2,773
2009 $ 967 $ 586 $ 661 $ 155 2,369
% Change 9.8 % 31.4 % 9.5 % 40.0 % 17.1 %

Reconciliation:
For the quarter ended March 31, 2009 $ 967 $ 586 $ 661 $ 155 $ 2,369

Asset impairment and exit costs - 2010 - - - - -
Asset impairment and exit costs - 2009 1 - - - 1

Acquired businesses 2 9 (5 ) - 6
Currency 80 8 81 23 192
Operations 12 167 (13 ) 39 205
For the quarter ended March 31, 2010 $ 1,062 $ 770 $ 724 $ 217 $ 2,773

Schedule 4
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Net Earnings Attributable to PMI and Diluted Earnings Per Share
For the Quarters Ended March 31,
(in millions, except per share data)
(Unaudited)

Net Earnings
Attributable to Diluted
PMI E.P.S.

2010 Net Earnings Attributable to PMI $ 1,703 $ 0.90 (1)
2009 Net Earnings Attributable to PMI $ 1,476 $ 0.74 (1)
% Change 15.4 % 21.6 %

Reconciliation:
2009 Net Earnings Attributable to PMI $ 1,476 $ 0.74 (1)

Special Items:
2010 Asset impairment and exit costs - -
2009 Asset impairment and exit costs 1 -

Currency 126 0.06
Interest (41 ) (0.02 )
Change in tax rate 5 -
Impact of lower shares outstanding and share-based payments 0.05
Operations 136 0.07
2010 Net Earnings Attributable to PMI $ 1,703 $ 0.90 (1)

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

Q1 2010 Q1 2009

Net earnings attributable to PMI $ 1,703 $ 1,476
Less distributed and undistributed earnings attributable
to share-based payment awards 8 5
Net earnings for basic and diluted EPS $ 1,695 $ 1,471

Weighted-average shares for basic EPS 1,874 1,993
Plus incremental shares from assumed conversions:
Stock Options 4 7
Weighted-average shares for diluted EPS 1,878 2,000

Schedule 5
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Condensed Balance Sheets
(in millions, except ratios)
(Unaudited)

March 31, December 31,
2010 2009
Assets
Cash and cash equivalents $ 850 $ 1,540
All other current assets 12,228 13,142
Property, plant and equipment, net 6,530 6,390
Goodwill 9,974 9,112
Other intangible assets, net 3,877 3,546
Other assets 714 822
Total assets $ 34,173 $ 34,552

Liabilities and Stockholders' Equity
Short-term borrowings $ 1,050 $ 1,662
Current portion of long-term debt 151 82
All other current liabilities 8,379 9,434
Long-term debt 14,809 13,672
Deferred income taxes 1,701 1,688
Other long-term liabilities 1,718 1,869
Total liabilities 27,808 28,407

Redeemable noncontrolling interests 1,171

Total PMI stockholders' equity 4,876 5,716
Noncontrolling interests 318 429
Total stockholders' equity 5,194 6,145
Total liabilities and stockholders' equity $ 34,173 $ 34,552

Total debt $ 16,010 $ 15,416
Total debt to EBITDA 1.41  (1) 1.42  (1)
Net debt to EBITDA 1.34  (1) 1.27  (1)

(1) For the calculation of Total Debt to EBITDA and Net Debt to EBITDA ratios, refer to
Schedule 10.

Schedule 6
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments for the Impact of Currency and Acquisitions
For the Quarters Ended March 31,
(in millions)
(Unaudited)

2010 2009 % Change in Reported Net Revenues

excluding Excise Taxes
Reported Net Less Reported Less Reported Net Less Reported Net Reported Less Reported Net Reported Reported Reported

Revenues
Excise
Net
Currency
Revenues
Acquisi-
Revenues
Net
Excise Revenues
excluding
excluding

Taxes
Revenues
excluding
tions
excluding
Revenues
Taxes
excluding
Currency
Currency &

excluding
Excise Taxes
Excise Taxes,
Excise Taxes
Acquisitions

Excise Taxes
& Currency
Currency &

Acquisitions

$ 6,748 $ 4,564 $ 2,184 $ 178 $ 2,006 $ 3 $ 2,003 European Union $ 6,050 $ 4,063 $ 1,987 9.9 % 1.0 % 0.8 %
3,356 1,610 1,746 52 1,694 26 1,668 EEMA 2,831 1,379 1,452 20.2 % 16.7 % 14.9 %
3,562 1,689 1,873 172 1,701 75 1,626 Asia 2,857 1,267 1,590 17.8 % 7.0 % 2.3 %
1,921 1,228 693 51 642 - 642 Latin America & Canada 1,548 980 568 22.0 % 13.0 % 13.0 %

$ 15,587 $ 9,091 $ 6,496 $ 453 $ 6,043 $ 104 $ 5,939 PMI Total $ 13,286 $ 7,689 $ 5,597 16.1 % 8.0 % 6.1 %

2010 2009 % Change in Reported Operating

Companies Income
Reported Less Reported Less Reported Reported Reported Reported Reported

Operating
Currency
Operating
Acquisi-
Operating
Operating
excluding
excluding

Companies
Companies
tions
Companies
Companies
Currency
Currency &

Income
Income
Income
Income
Acquisitions

excluding
excluding

Currency
Currency &

Acquisitions

$ 1,062 $ 80 $ 982 $ 2 $ 980 European Union $ 967 9.8 % 1.6 % 1.3 %
770 8 762 9 753 EEMA 586 31.4 % 30.0 % 28.5 %
724 81 643 (5 ) 648 Asia 661 9.5 % (2.7 )% (2.0 )%
217 23 194 - 194 Latin America & Canada 155 40.0 % 25.2 % 25.2 %

$ 2,773 $ 192 $ 2,581 $ 6 $ 2,575 PMI Total $ 2,369 17.1 % 8.9 % 8.7 %

Schedule 7
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Operating Companies Income to Adjusted Operating Companies Income &
Reconciliation of Adjusted Operating Companies Income Margin Excluding Currency and Acquisitions
For the Quarters Ended March 31,
(in millions)
(Unaudited)

2010 2009 % Change in Adjusted Operating

Companies Income
Reported Less Adjusted Less Adjusted Operating Companies Income excluding Currency Less Adjusted Reported Less Adjusted Adjusted Adjusted Adjusted

Operating
Asset
Operating
Currency Acquisi-
Operating
Operating
Asset
Operating
excluding
excluding

Companies
Impairment
Companies
tions
Companies
Companies
Impairment
Companies
Currency
Currency &

Income
& Exit Costs
Income
Income
Income
& Exit Costs
Income
Acquisitions

excluding

Currency &

Acquisitions

$ 1,062 $ - $ 1,062 $ 80 $ 982 $ 2 $ 980 European Union $ 967 $ (1 ) $ 968 9.7 % 1.4 % 1.2 %
770 - 770 8 762 9 753 EEMA 586 - 586 31.4 % 30.0 % 28.5 %
724 - 724 81 643 (5 ) 648 Asia 661 - 661 9.5 % (2.7 )% (2.0 )%
217 - 217 23 194 - 194 Latin America & Canada 155 - 155 40.0 % 25.2 % 25.2 %

$ 2,773 $ - $ 2,773 $ 192 $ 2,581 $ 6 $ 2,575 PMI Total $ 2,369 $ (1 ) $ 2,370 17.0 % 8.9 % 8.6 %

2010 2009 % Points Change
Adjusted Net Adjusted Adjusted Net Revenues Adjusted Adjusted Net Adjusted Adjusted Adjusted

Operating
Revenues
Operating
Operating
excluding
Operating
Operating
Revenues
Operating
Operating
Operating

Companies
excluding
Companies
Companies
Excise Taxes,
Companies
Companies
excluding
Companies
Companies
Companies

Income
Excise Taxes
Income
Income
Currency &
Income
Income
Excise
Income
Income
Income

excluding
&
Margin
excluding
Acquisitions(1)
Margin
Taxes(1)
Margin
Margin
Margin

Currency
Currency(1)
excluding
Currency &
excluding
excluding
excluding

Currency
Acquisitions
Currency &
Currency
Currency &

Acquisitions
Acquisitions

$ 982 $ 2,006 49.0 % $ 980 $ 2,003 48.9 % European Union $ 968 $ 1,987 48.7 % 0.3 0.2
762 1,694 45.0 % 753 1,668 45.1 % EEMA 586 1,452 40.4 % 4.6 4.7
643 1,701 37.8 % 648 1,626 39.9 % Asia 661 1,590 41.6 % (3.8 ) (1.7 )
194 642 30.2 % 194 642 30.2 % Latin America & Canada 155 568 27.3 % 2.9 2.9

$ 2,581 $ 6,043 42.7 % $ 2,575 $ 5,939 43.4 % PMI Total $ 2,370 $ 5,597 42.3 % 0.4 1.1

(1) For the calculation of net revenues excluding excise taxes, currency and acquisitions, refer to Schedule 6.

Schedule 8
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and Adjusted Diluted EPS, Excluding Currency
For the Quarters Ended March 31,
(Unaudited)

2010 2009 % Change

Reported Diluted EPS $ 0.90 $ 0.74 21.6%

Less:
Asset impairment and exit costs - -

Adjusted Diluted EPS $ 0.90 $ 0.74 21.6%

Less:
Currency Impact 0.06

Adjusted Diluted EPS, Excluding Currency $ 0.84 $ 0.74 13.5%

Schedule 9
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Diluted EPS to Reported Diluted EPS, Excluding Currency
For the Quarters Ended March 31,
(Unaudited)

2010 2009 % Change

Reported Diluted EPS $ 0.90 $ 0.74 21.6%

Less:
Currency Impact 0.06

Reported Diluted EPS, Excluding Currency $ 0.84 $ 0.74 13.5%

Schedule 10
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Calculation of Total Debt to EBITDA and Net Debt to EBITDA Ratios
(in millions, except ratios)
(Unaudited)

For the Year Ended
March 31, December 31,
2010 2009
April ~ December January ~ March 12 months
2009 2010 rolling

Earnings before income taxes $ 7,081 $ 2,492 $ 9,573 $ 9,243
Interest expense, net 639 223 862 797
Depreciation and amortization 660 223 883 853
EBITDA $ 8,380 $ 2,938 $ 11,318 $ 10,893

March 31, December 31,
2010 2009

Short-term borrowings $ 1,050 $ 1,662
Current portion of long-term debt 151 82
Long-term debt 14,809 13,672
Total Debt $ 16,010 $ 15,416
Less: Cash and cash equivalents 850 1,540
Net Debt $ 15,160 $ 13,876

Ratios
Total Debt to EBITDA 1.41 1.42
Net Debt to EBITDA 1.34 1.27

Schedule 11
PHILIP MORRIS INTERNATIONAL INC.
and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Cash Flow to Free Cash Flow and Free Cash Flow, excluding Currency
Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency
For the Quarters Ended March 31,
(in millions)
(Unaudited)

2010 2009 % Change

Net cash provided by operating activities(a) $ 1,974 $ 1,427 38.3%

Less:
Capital expenditures 150 145

Free cash flow $ 1,824 $ 1,282 42.3%

Less:
Currency impact 116

Free cash flow, excluding currency $ 1,708 $ 1,282 33.2%

2010 2009 % Change

Net cash provided by operating activities(a) $ 1,974 $ 1,427 38.3%

Less:
Currency impact 130

Net cash provided by operating activities, excluding currency $ 1,844 $ 1,427 29.2%

(a) Operating cash flow.

CONTACT: Philip Morris International Inc.
Investor Relations:
New York: +1 917-663-2233
Lausanne: +41 (0)58 242 4666
or
Media:
Lausanne: +41 (0)58 242 4500

Philip Morris International Inc.

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