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Philip Morris International Inc.: Philip Morris International Inc. (PMI) Reports 2012 Results; Provides 2013 Earnings Per Share

  Philip Morris International Inc.: Philip Morris International Inc. (PMI)
  Reports 2012 Results; Provides 2013 Earnings Per Share Forecast

UK Regulatory Announcement

NEW YORK

Regulatory News:

2012 Full-Year

  *Reported diluted earnings per share of $5.17, up by 6.6% versus $4.85 in
    2011
  *Adjusted diluted earnings per share of $5.22, up by 7.0% versus $4.88 in
    2011, or up by 11.7% excluding currency, as detailed in the attached
    Schedule 16
  *Cigarette shipment volume, excluding acquisitions, up by 1.3%
  *Reported net revenues, excluding excise taxes, up by 0.9% to $31.4 billion

       *Excluding currency and acquisitions, reported net revenues, excluding
         excise taxes, up by 5.6%

  *Reported operating companies income up by 4.0% to $14.2 billion

       *Excluding currency and acquisitions, reported operating companies
         income up by 8.4%

  *Adjusted operating companies income, which reflects the items detailed in
    the attached Schedule 15, up by 3.7% to $14.2 billion

       *Excluding currency and acquisitions, adjusted operating companies
         income up by 8.1%

  *Operating income up by 3.9% to $13.8 billion
  *Increased its regular quarterly dividend during the year by 10.4% to an
    annualized rate of $3.40 per common share
  *Repurchased 74.9 million shares of its common stock for $6.5 billion
  *Commenced a new three-year share repurchase program during the year of $18
    billion

2012 Fourth-Quarter

  *Reported diluted earnings per share of $1.25, up by 15.7% versus $1.08 in
    2011
  *Adjusted diluted earnings per share of $1.24, up by 12.7% versus $1.10 in
    2011, or up by 16.4% excluding currency, as detailed in the attached
    Schedule 12
  *Cigarette shipment volume, excluding acquisitions, up by 2.9%,
  *Reported net revenues, excluding excise taxes, up by 2.8% to $7.9 billion

       *Excluding currency and acquisitions, reported net revenues, excluding
         excise taxes, up by 6.4%

  *Reported operating companies income up by 9.5% to $3.3 billion

       *Excluding currency and acquisitions, reported operating companies
         income up by 13.0%

  *Adjusted operating companies income, which reflects the items detailed in
    the attached Schedule 11, up by 8.8% to $3.3 billion

       *Excluding currency and acquisitions, adjusted operating companies
         income up by 12.3%

  *Operating income up by 9.5% to $3.2 billion
  *Repurchased 22.4 million shares of its common stock for $2.0 billion

2013

  *Forecasts 2013 full-year reported diluted earnings per share to be in a
    range of $5.68 to $5.78, at prevailing exchange rates, versus $5.17 in
    2012. Excluding a forecasted total unfavorable currency impact of
    approximately $0.06 for the full-year 2013, the reported diluted earnings
    per share range represents a projected increase of 10% to 12% versus
    adjusted diluted earnings per share of $5.22 in 2012, as detailed in the
    attached Schedule 16
  *Forecast includes a one-year gross productivity and cost savings target
    for 2013 of approximately $300 million
  *Forecast includes a share repurchase target amount for 2013 of $6.0
    billion

Philip Morris International Inc. (NYSE / Euronext Paris: PM) today announced
its 2012 full-year and fourth-quarter results.

“Our robust performance in 2012 across key operational metrics was all the
more impressive given the spectacular results in 2011 and the continuing
economic woes affecting all southern European nations,” said Louis C.
Camilleri, Chairman of the Board and Chief Executive Officer.

“We achieved organic volume growth of 1.3%, grew reported net revenues and
operating companies income, excluding currency and acquisitions, by 5.6% and
8.4%, respectively, and increased our total international market share as well
as that of our flagship brand, Marlboro.

“Every year since our spin-off in 2008, we have met or exceeded our adjusted
diluted mid to long-term annual EPS growth target, excluding currency, of
10%-12%. The forecast we issued today for 2013 projects another year of solid
performance. This consistency underpins our ability to generously reward our
long-term shareholders with superior returns.”

Conference Call

A conference call, hosted by Louis C. Camilleri, Chairman of the Board and
Chief Executive Officer, and Jacek Olczak, Chief Financial Officer, with
members of the investment community and news media, will be webcast at 1:00
p.m., Eastern Time, on February 7, 2013. Access is available at www.pmi.com.

Dividends and Share Repurchase Program

PMI increased its regular quarterly dividend during the year to $0.85, up by
10.4% from $0.77, which represents an annualized rate of $3.40 per common
share. Since its spin-off in March 2008, PMI has increased its regular
quarterly dividend five times, or by 84.8% from the initial annualized rate of
$1.84 per common share.

In July 2012, PMI completed ahead of schedule its three-year share repurchase
program of $12 billion that began in May 2010, and, in August 2012, initiated
a new three-year share repurchase program of $18 billion. During the fourth
quarter, PMI spent $2.0 billion to repurchase 22.4 million shares. For the
full-year 2012, PMI spent $6.5 billion to repurchase 74.9 million shares, as
shown in the table below.

 2012 PMI Share Repurchases
                                       Value       Shares
                                            ($ Mio.)       000
  $12 billion, three-year program
  January - March                           1,500          18,057
  April - June                              1,535          17,774
  July                                      612            6,861
  $18 billion, three-year program
  August - September                        893            9,825
  October-December                          1,960          22,380
  Total                                     6,500          74,897
                                                                  

Since May 2008, when PMI began its first share repurchase program of $13
billion, which was completed in April 2010, the company has spent an aggregate
of $27.9 billion to repurchase 489.0 million shares at an average price of
$56.96 per share, or 23.2% of the shares outstanding at the time of the
spin-off in March 2008.

Included in PMI’s 2013 EPS forecast is a share repurchase target for the
full-year of $6.0 billion.

Productivity and Cost Savings Program

In 2012, PMI exceeded its one-year gross productivity and cost savings target
of $300 million primarily through the rationalization of tobacco blends and
product specifications and other manufacturing and procurement initiatives.

PMI announces a one-year gross productivity and cost savings target for 2013
of approximately $300 million.

2013 Full-Year Forecast

PMI forecasts 2013 full-year reported diluted earnings per share to be in a
range of $5.68 to $5.78, at prevailing exchange rates, versus $5.17 in 2012.
Excluding a forecasted total unfavorable currency impact of approximately
$0.06 for the full-year 2013, the reported diluted earnings per share range
represents a projected increase of 10% to 12% versus adjusted diluted earnings
per share of $5.22 in 2012, as detailed in the attached Schedule 16.

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

This guidance excludes the impact of any potential future acquisitions,
unanticipated asset impairment and exit cost charges, and any unusual events.

            2012 FULL-YEAR AND FOURTH-QUARTER CONSOLIDATED RESULTS

In this press release, “PMI” refers to Philip Morris International Inc. and
its subsidiaries. References to total international cigarette market, defined
as worldwide cigarette volume excluding the United States,total cigarette
market, total market and market shares are PMI estimates 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. The term “net revenues” refers to operating revenues from
the sale of our products, excluding excise taxes and net of sales and
promotion incentives. Operating companies income, or “OCI”, is defined as
operating income before general corporate expenses and the amortization of
intangibles. PMI’s management evaluates business segment performance and
allocates resources based on OCI. Management also reviews OCI, OCI margins 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, discrete tax items and unusual items), earnings before interest,
taxes, depreciation, and amortization, or “EBITDA”, free cash flow, defined as
net cash provided by operating activities less capital expenditures, and net
debt. PMI believes it is appropriate to disclose these measures as they
improve comparability and help investors analyze business performance and
trends. Non-GAAP measures used in this release should be considered neither in
isolation nor as a substitute for the financial measures prepared in
accordance with U.S. GAAP. Comparisons are to the same prior-year period
unless otherwise stated. For a reconciliation of non-GAAP measures to
corresponding GAAP measures, see the relevant schedules provided with this
release.

NET REVENUES
                                                                            
PMI Net Revenues ($ Millions)
               Fourth-Quarter                              Full-Year
                                                Excl.                                         Excl.
               2012       2011       Change     Curr.      2012        2011        Change     Curr.
European       $2,063     $2,208     (6.6)%     (0.5)%     $8,526      $9,212      (7.4)%     0.3%
Union
Eastern
Europe,
Middle         2,139      1,972      8.5%       11.3%      8,332       7,881       5.7%       11.6%
East &
Africa
Asia           2,805      2,647      6.0%       8.1%       11,198      10,705      4.6%       5.7%
Latin
America        882        844        4.5%       7.3%       3,321       3,299       0.7%       6.6%
& Canada
Total          $7,889     $7,671     2.8%       6.4%       $31,377     $31,097     0.9%       5.7%
PMI
                                                                                                    

2012 Full-Year

Net revenues of $31.4 billion were up by 0.9%, including unfavorable currency
of $1.5 billion. Excluding currency and acquisitions, net revenues increased
by 5.6%, driven by favorable pricing across all Regions of $1.8 billion.
Volume/mix was essentially flat with gains in EEMA and Asia offset by declines
in the EU and Latin America & Canada.

2012 Fourth-Quarter

Net revenues of $7.9 billion were up by 2.8%, including unfavorable currency
of $270 million. Excluding currency and acquisitions, net revenues increased
by 6.4%, driven by favorable pricing across all Regions of $422 million, and
favorable volume/mix of $66 million driven by EEMA and Asia, partly offset by
the EU.

OPERATING COMPANIES INCOME
                                                                                                   
PMI Reported Operating Companies Income ($ Millions)
            Fourth-Quarter                           Full-Year
                                          Excl.                                  Excl.
               2012       2011       Change     Curr.     2012        2011        Change     Curr.
European       $955       $1,012     (5.6)%     2.1%      $4,187      $4,560      (8.2)%     0.2%
Union
Eastern
Europe,
Middle         921        747        23.3%      25.4%     3,726       3,229       15.4%      21.6%
East &
Africa
Asia           1,129      1,036      9.0%       9.7%      5,197       4,836       7.5%       6.7%
Latin
America        290        214        35.5%      37.4%     1,043       988         5.6%       11.9%
& Canada
Total          $3,295     $3,009     9.5%       13.0%     $14,153     $13,613     4.0%       8.4%
PMI
                                                                                                   

2012 Full-Year

Reported operating companies income was up by 4.0% to $14.2 billion, including
unfavorable currency of $607 million. Excluding currency and acquisitions,
operating companies income was up by 8.4%, driven by higher pricing, partly
offset by unfavorable volume/mix of $233 million, higher manufacturing costs,
and increased marketing, sales and distribution investments notably in
Germany, Indonesia and Russia. Adjusted operating companies income increased
by 3.7% as shown in the table below and detailed on Schedule 15. Adjusted
operating companies income, excluding currency and acquisitions, increased by
8.1%. Adjusted operating companies income margin, excluding the impact of
currency and acquisitions, was up by 1.1 percentage points to 45.2%, as
detailed on Schedule 15.

2012 Fourth-Quarter

Reported operating companies income was up by 9.5% to $3.3 billion, including
unfavorable currency of $106 million. Excluding currency, operating companies
income was up by 13.0%, driven by higher pricing, marginally offset by
unfavorable volume/mix of $12 million. Adjusted operating companies income
increased by 8.8% as shown in the table below and detailed on Schedule 11.
Adjusted operating companies income, excluding currency and acquisitions,
increased by 12.3%. Adjusted operating companies income margin, excluding the
impact of currency and acquisitions, was up by 2.2 percentage points to 42.1%,
as detailed on Schedule 11.

PMI Operating Companies Income ($ Millions)
                                                                      
                   Fourth-Quarter                         Full-Year
                   2012         2011         Change       2012          2011          Change
Reported           $3,295       $3,009       9.5%         $14,153       $13,613       4.0%
OCI
Asset
impairment         (33    )     (49    )                  (83     )     (109    )
& exit
costs
Adjusted           $3,328       $3,058       8.8%         $14,236       $13,722       3.7%
OCI
Adjusted                                     2.3                                      1.3
OCI                42.2   %     39.9   %     p.p.         45.4    %     44.1    %     p.p.
Margin*

 *Margins are calculated as adjusted OCI, divided by net revenues, excluding
                                excise taxes.

                                                                                     
SHIPMENT VOLUME & MARKET SHARE
                                                                                     
PMI Cigarette Shipment Volume by Segment (Million Units)
                                                              
                 Fourth-Quarter                       Full-Year
                 2012        2011        Change       2012        2011        Change
European         46,744      49,580      (5.7)%       197,966     211,493     (6.4)%
Union
Eastern
Europe,
Middle           77,356      72,218      7.1%         303,828     290,250     4.7%
East &
Africa
Asia             82,573      78,095      5.7%         326,582     313,282     4.2%
Latin
America          26,446      26,729      (1.1)%       98,660      100,241     (1.6)%
& Canada
Total            233,119     226,622     2.9%         927,036     915,266     1.3%
PMI
                                                                                     

2012 Full-Year

PMI’s cigarette shipment volume was up by 1.3%, excluding acquisitions.
Excluding acquisitions and the Japan hurdle of 6.3 billion units related to
additional volume shipped in the second quarter of 2011 following the
disruption of PMI’s principal competitor’s supply chain, PMI’s cigarette
shipment volume was up by a robust 2.0%.

In the EU, PMI’s total cigarette shipment volume decreased by 6.4%,
predominantly due to France and southern Europe. In EEMA, PMI’s total
cigarette shipment volume grew by 4.7%, driven mainly by Egypt, Russia and
Turkey. In Asia, PMI’s total cigarette shipment volume increased by 4.2%,
driven mainly by Indonesia, the Philippines, Thailand and Vietnam, partially
offset by Japan and Korea. Excluding the Japan hurdle, PMI’s cigarette
shipment volume in Asia was up by 6.4%. In Latin America & Canada, PMI’s total
cigarette shipment volume decreased by 1.6%.

Total cigarette shipment volume of Marlboro of 301.6 billion units was up by
0.5%, or by 1.1% excluding the Japan hurdle, reflecting growth in: EEMA of
3.6%, notably in the Middle East, North Africa and Turkey, partly offset by
Romania, Russia and Ukraine; Asia of 3.6%, principally driven by Indonesia,
the Philippines and Vietnam, partly offset by Japan and Korea; and Latin
America & Canada of 0.7%, notably in Brazil and Colombia, partly offset by
Argentina. Cigarette shipments of Marlboro declined in the EU by 4.6%, notably
in France, Italy and Spain.

Total cigarette shipment volume of L&M of 93.7 billion units was up by 4.0%,
reflecting growth in: EEMA of 8.6%, notably in Egypt, Russia and Turkey; Asia
of 14.8%, mainly in Thailand; and Latin America & Canada of 6.9%, mainly in
Brazil and Colombia. Cigarette shipment volume of L&M declined in the EU by
4.1%, notably in Greece, Poland and Spain, partly offset by growth in France.

Total cigarette shipment volume of Bond Street of 46.8 billion units increased
by 4.1%, led mainly by growth in Kazakhstan and Ukraine, partly offset by a
decline in Hungary.

Total cigarette shipment volume of Parliament of 43.4 billion units was up by
10.1%, or by 11.1% excluding the Japan hurdle, fueled by strong growth in EEMA
of 16.5%, driven by Kazakhstan, Russia, Turkey and Ukraine. Cigarette shipment
volume of Parliament declined in Asia by 4.3%, notably in Japan and Korea.

Total cigarette shipment volume of Philip Morris of 38.0 billion units
decreased by 3.2%, or by 1.4% excluding the Japan hurdle, mainly reflecting a
decline in Japan and the Philippines, partly offset by growth in Argentina and
Portugal.

Total cigarette shipment volume of Chesterfield of 35.5 billion units was down
by 3.2%, due mainly to Ukraine, partly offset by growth in the EU, notably in
Poland, Portugal and the United Kingdom.

Total cigarette shipment volume of Lark of 32.1 billion units decreased by
4.6%, or increased by 3.5% excluding the Japan hurdle.

Excluding acquisitions, total shipment volume of other tobacco products (OTP),
in cigarette equivalent units, grew by 9.8%, notably in Belgium, France,
Germany, Greece, Italy and Spain, partly offset by Poland.

Excluding acquisitions, total shipment volume for cigarettes and OTP combined
was up by 1.5%. Excluding acquisitions and the Japan hurdle, total shipment
volume for cigarettes and OTP combined was up by 2.2%. OTP, which is primarily
sold within the EU Region, is not significant to PMI’s net revenues.

PMI’s market share in its top 30 OCI markets was 37.4%, up by 0.6 points.
PMI’s market share grew in a number of markets, notably Algeria, Argentina,
Australia, Belgium, Brazil, Colombia, Egypt, Greece, Indonesia, Mexico,
Poland, Russia, Thailand, Turkey and Ukraine.

2012 Fourth-Quarter

PMI’s cigarette shipment volume was up by 2.9%, excluding acquisitions.

In the EU, PMI’s total cigarette shipment volume decreased by 5.7%,
predominantly due to France and southern Europe. In EEMA, PMI’s total
cigarette shipment volume grew by 7.1%, driven mainly by Egypt and Turkey. In
Asia, PMI’s total cigarette shipment volume increased by 5.7%, driven mainly
by Indonesia and the Philippines. In Latin America & Canada, PMI’s total
cigarette shipment volume decreased by 1.1%, mainly due to Mexico, partly
offset by Brazil reflecting market share gains.

Total cigarette shipment volume of Marlboro of 75.4 billion units was up by
1.2%, reflecting growth in EEMA of 3.2%, notably in North Africa and Turkey,
partly offset by Romania, Russia and the Middle East, and Asia of 5.6%,
principally driven by Indonesia, the Philippines and Vietnam, partly offset by
Japan and Korea. Cigarette shipment volume of Marlboro declined in the EU by
3.2%, notably in France, partly offset by Germany and Italy, and in Latin
America & Canada by 1.0%, mainly in Argentina and Mexico, partly offset by
Brazil.

Total cigarette shipment volume of L&M of 24.1 billion units was up by 9.7%,
reflecting growth in: EEMA of 20.1%, notably in Egypt, Russia and Turkey; Asia
of 12.4%, mainly in Thailand; and Latin America & Canada of 5.0%, mainly in
Brazil and Colombia. Cigarette shipment volume of L&M declined in the EU by
3.4%, notably in Greece, Poland and Spain, partly offset by growth in France.

Total cigarette shipment volume of Bond Street of 11.3 billion units increased
by 2.2%, led mainly by growth in Kazakhstan and Ukraine, partly offset by a
decline in Hungary.

Total cigarette shipment volume of Parliament of 11.3 billion units was up by
12.4%, fueled by strong growth in EEMA of 22.4%, driven by Kazakhstan, Russia,
Turkey and Ukraine. Cigarette shipment volume of Parliament declined in Asia
by 10.2%, notably in Japan and Korea.

Total cigarette shipment volume of Philip Morris of 9.5 billion units
decreased by 2.0%, mainly reflecting a decline in Japan, the Philippines and
Spain, partly offset by growth in Argentina and Portugal.

Total cigarette shipment volume of Chesterfield of 8.4 billion units was down
by 5.9%, due mainly to Ukraine, partly offset by growth in the EU, notably in
the Czech Republic, Germany and the United Kingdom.

Total cigarette shipment volume of Lark of 7.9 billion units increased by
7.8%, notably in Turkey, partly offset by Japan and Korea.

Excluding acquisitions, total shipment volume of OTP, in cigarette equivalent
units, grew by 2.7%, notably in Spain, partly offset by Poland.

Excluding acquisitions, total shipment volume for cigarettes and OTP combined
was up by 2.9%. OTP, which is primarily sold within the EU Region, is not
significant to PMI’s net revenues.

PMI’s market share in its top 30 OCI markets was 37.9%, up by 1.1 points.
PMI’s market share grew in a number of markets, notably Algeria, Argentina,
Australia, Belgium, Brazil, Colombia, Egypt, Indonesia, Italy, Poland, Russia,
Spain, Thailand, Turkey, the United Kingdom and Ukraine.

                          EUROPEAN UNION REGION (EU)

2012 Full-Year

In the EU, net revenues decreased by 7.4% to $8.5 billion, due primarily to
unfavorable currency of $716 million. Excluding currency, net revenues
increased by 0.3%, mainly reflecting favorable pricing of $475 million, driven
by France, Germany, Italy, the Netherlands, Poland, Spain and Switzerland,
partly offset by unfavorable volume/mix of $445 million, predominantly due to
a lower total market and share in Italy, France, Portugal and Spain.

Operating companies income decreased by 8.2% to $4.2 billion, due primarily to
unfavorable currency of $384 million. Excluding the unfavorable impact of
currency, operating companies income increased by 0.2%, reflecting higher
pricing and favorable asset impairment and exit costs compared to 2011, offset
by: an unfavorable volume/mix of $380 million; higher manufacturing costs,
mainly related to the mandated implementation of reduced cigarette ignition
propensity standards which began in the fourth quarter of 2011; and higher
marketing costs, principally reflecting marketing investment behind new brand
launches and the roll-out of the “Be Marlboro” marketing campaign.

Adjusted operating companies income decreased by 9.0%, as shown in the table
below and detailed on Schedule 15. Adjusted operating companies income,
excluding currency, decreased by 0.6%.

EU Operating Companies Income ($ Millions)
                                                                  
                   Fourth-Quarter                       Full-Year
                   2012       2011         Change       2012         2011         Change
Reported           $955       $1,012       (5.6)%       $4,187       $4,560       (8.2)%
OCI
Asset
impairment         (5   )     (22    )                  (5     )     (45    )
& exit
costs
Adjusted           $960       $1,034       (7.2)%       $4,192       $4,605       (9.0)%
OCI
Adjusted                                   (0.3)                                  (0.8)
OCI                46.5 %     46.8   %     p.p.         49.2   %     50.0   %     p.p.
Margin*

 *Margins are calculated as adjusted OCI, divided by net revenues, excluding
                                excise taxes.

Excluding the impact of currency, adjusted operating companies income margin
declined by 0.5 percentage points to 49.5%, as detailed on Schedule 15,
primarily as a result of the aforementioned higher manufacturing and marketing
costs.

The total cigarette market in the EU declined by 6.3% to 520 billion units,
due primarily to tax-driven price increases, the unfavorable economic and
employment environment, particularly in southern Europe, the growth of the OTP
category, and the increased prevalence of illicit trade.

PMI’s cigarette shipment volume in the EU declined by 6.4%, due principally to
a lower total market across the Region. Shipment volume of Marlboro decreased
by 4.6%, mainly due to a lower total market, partially offset by higher share.
Shipment volume of L&M was down by 4.1%. Shipment volume of Chesterfield was
up by 4.7%.

PMI’s market share in the EU was essentially flat at 38.1% as gains, notably
in Belgium, Greece, Finland, Hungary and Poland were offset by declines,
primarily in the Czech Republic, France and Portugal. Marlboro’s share was up
by 0.3 points to 18.3%, its first year-on-year share gain since 2002,
reflecting a higher share mainly in Belgium, Greece, Hungary, Italy and
Poland, which more than offset lower share mainly in France, the Netherlands,
Portugal and Spain. L&M’s market share was flat at 6.6%, with gains in
Finland, Germany, Poland and the Slovak Republic offset by declines notably in
Greece and Portugal. Chesterfield’s market share was up by 0.4 points to 3.7%,
driven notably by gains in Austria, the Czech Republic, France, Hungary,
Poland, Portugal, Spain and the United Kingdom. Philip Morris’ market share
was up by 0.1 point to 2.1%, with gains, notably in the Czech Republic and
Italy, partly offset by a decline in Portugal and Spain.

PMI’s shipments of OTP, in cigarette equivalent units, grew by 16.1%,
reflecting a higher total market and share. PMI’s OTP total market share was
12.2%, up by 1.1 points, driven by gains in the fine cut category, notably in
Belgium, up by 3.2 points to 16.3%, France, up by 0.9 points to 25.2%,
Germany, up by 0.7 points to 14.7%, Greece, up by 4.7 points to 12.8%, Italy,
up by 16.0 points to 27.9% and Spain, up by 1.1 points to 11.7%.

2012 Fourth-Quarter

In the EU, net revenues decreased by 6.6% to $2.1 billion, due primarily to
unfavorable currency of $133 million, largely reflecting the strengthening of
the U.S. dollar to the Euro compared to the fourth quarter of 2011. Excluding
currency, net revenues decreased by 0.5%, mainly due to unfavorable volume/mix
of $105 million, predominantly reflecting a lower total market and share, and
unfavorable trade inventory movements, in France and Italy, and a lower total
market and share in Portugal. The decrease was partly offset by favorable
pricing of $93 million, driven by France, Germany, the Netherlands, Poland,
Switzerland and the United Kingdom.

Operating companies income decreased by 5.6% to $955 million, due primarily to
unfavorable currency of $78 million. Excluding the unfavorable impact of
currency, operating companies income increased by 2.1%, reflecting higher
pricing and favorable asset impairment and exit costs compared to the fourth
quarter of 2011, partly offset by higher marketing costs, principally
reflecting marketing investment behind the “Be Marlboro” marketing campaign.

Adjusted operating companies income decreased by 7.2%, as shown in the table
above and detailed on Schedule 11. Adjusted operating companies income,
excluding currency, increased by 0.4%.

Excluding the impact of currency, adjusted operating companies income margin
was up by 0.5 percentage points to 47.3%, as detailed on Schedule 11.

The total cigarette market in the EU declined by 5.7% to 124.3 billion units,
due primarily to tax-driven price increases, the unfavorable economic and
employment environment, particularly in southern Europe, the growth of the OTP
category, and the increased prevalence of illicit trade.

PMI’s cigarette shipment volume in the EU declined by 5.7%, due principally to
a lower total market across the Region. Shipment volume of Marlboro decreased
by 3.2%, mainly due to a lower total market, partially offset by higher share.
Shipment volume of L&M was down by 3.4%. Shipment volume of Chesterfield was
up by 4.7%.

PMI’s market share in the EU was up by 0.4 points to 38.4%. Market share of
Marlboro was up by 0.5 points to 18.5%, reflecting gains mainly in Belgium,
Greece, Hungary, Italy and Poland, which more than offset lower share mainly
in France, the Netherlands and Portugal. L&M’s market share was up by 0.1
point to 6.8%. Chesterfield’s market share was up by 0.4 points to 3.8%,
driven notably by gains in Austria, the Czech Republic, France, Portugal,
Spain and the United Kingdom. Philip Morris’ market share was up by 0.2 points
to 2.1%, with gains, notably in the Czech Republic, France, Italy and
Portugal.

PMI’s shipments of OTP, in cigarette equivalent units, grew by 4.1%,
reflecting a higher total market and share. The decline in the growth rate
compared to the 2012 full-year growth rate principally reflects the impact of
excise tax-driven price increases, notably in Italy. PMI’s OTP total market
share was 12.3%, up by 0.6 points, driven by gains in the fine cut category,
notably in Belgium, up by 2.0 points to 16.3%, France, up by 1.1 points to
26.1%, Greece, up by 3.7 points to 13.1%, Italy, up by 6.6 points to 27.8% and
Spain, up by 3.0 points to 13.1%.

EU Key Market Commentaries

In the Czech Republic, the total cigarette market was down by 2.8% to 20.5
billion units in 2012, mainly reflecting the impact of excise tax-driven price
increases in the first and second quarters of 2012 and a more than 20% growth
of the fine cut category over the full year. In the fourth quarter of 2012,
the total cigarette market was down by 0.7% to 5.3 billion units. PMI’s
shipments were down by 7.4% in 2012 and by 5.7% in the fourth quarter. Market
share was down by 2.1 points to 42.2% in 2012, principally reflecting
continued share declines for lower-margin local brands, such as Petra and
Sparta, down by a combined 1.2 points to 6.1%, and Red & White, down by 1.2
points to 11.7%. This decline was partly offset by a higher share for
Marlboro, Chesterfield and Philip Morris,  up by 0.2, 0.5 and 0.6 points to
7.4%, 0.8% and 2.9%, respectively. Market share of L&M was essentially flat at
7.1%. PMI’s 2012 fourth-quarter market share was down by 2.1 points to 40.0%.

In France, the total cigarette market was down by 4.9% to 51.5 billion units
in 2012, mainly reflecting the impact of price increases in the fourth
quarters of 2011 and 2012. In the fourth quarter of 2012, the total cigarette
market was down by 7.2% to 11.6 billion units, reflecting the unfavorable
impact of the aforementioned price increase which raised premium price
products to €6.60 per pack, an increase in illicit trade and growth of the OTP
category. PMI’s shipments were down by 7.7% in 2012 and by 11.9% in the fourth
quarter. PMI’s market share was down by 0.9 points to 39.6% in 2012, mainly
due to Marlboro, down by 0.9 points to 24.8%, and to L&M, down by 0.3 points
to 2.7%. Market share of premium Philip Morris was up by 0.1 point to 8.3% and
share of Chesterfield was up by 0.2 points to 3.3%. PMI’s 2012 fourth-quarter
market share was essentially flat at 40.1%. PMI’s market share of the fine cut
category was up by 0.9 points to 25.2% in 2012 and up by 1.1 points to 26.1%
in the fourth quarter.

In Germany, the total cigarette market was down by 1.2% to 83.4 billion units
in 2012, flattered by trade inventory movements of competitors’ products in
December ahead of the January 2013 excise tax increase. In the fourth quarter
of 2012, the total cigarette market was down by 0.2% to 20.5 billion units,
reflecting the favorable impact of the aforementioned inventory movements.
PMI’s shipments were down by 1.5% in 2012 and by 2.4% in the fourth quarter.
PMI’s market share was essentially unchanged at 35.8% in 2012, with Marlboro
essentially flat at 21.3%, L&M up by 0.1 point to 10.5% and Chesterfield flat
at 2.3%. While PMI’s 2012 fourth quarter market share was down by 0.8 points
to 35.6%, reflecting the impact of the aforementioned inventory movements,
share of Marlboro was up by 0.1 point to 21.6%. PMI’s market share of the fine
cut category was up by 0.7 points to 14.7% in 2012 and up by 0.3 points to
14.6% in the fourth quarter.

In Italy, the total cigarette market was down by 7.9% to 78.7 billion units in
2012, reflecting the impact of price increases in 2011 and March 2012, an
unfavorable economic environment, strong growth in the fine cut category, and
an increase in illicit trade. In the fourth quarter of 2012, the total
cigarette market was down by 4.0% to 19.0 billion units. PMI’s shipments were
down by 7.3% in 2012 and by 4.8% in the fourth quarter. PMI’s market share was
essentially flat at 53.0% in 2012, with Marlboro, up by 0.6 points to 23.1%,
fueled by the March 2012 and June 2012 launches of Marlboro Silver and
Marlboro Pocket Pack, and Philip Morris, up by 0.4 points to 3.7%, benefiting
from the first-quarter 2012 launch of Philip Morris Selection in the low-price
segment, offset by low-price Diana, down by 0.8 points to 12.4%. PMI’s 2012
fourth quarter market share was up by 0.9 points to 53.2%, driven by Marlboro,
up by 1.3 points to 23.5%. PMI’s market share of the fine cut category was up
by 16.0 points to 27.9% in 2012 and up by 6.6 points to 27.8% in the fourth
quarter.

In Poland, the total cigarette market was down by 6.1% to 52.1 billion units
in 2012, mainly reflecting the impact of price increases in the first quarter
of 2012 and growth in the availability of non-duty paid OTP products. In the
fourth quarter of 2012, the total cigarette market was down by 10.0% to 11.5
billion units, reflecting the unfavorable impact of the aforementioned
factors. PMI’s shipments were down by 3.1% in 2012, and by 4.3% in the fourth
quarter. Market share was up by 1.1 points to 36.4% in 2012, benefiting from
the launch of two new Marlboro super slims variants in the second quarter.
Market shares of Marlboro, Chesterfield and L&M were up by 0.9, 0.4 and 0.7
points to 11.3%, 1.8% and 16.6%, respectively. PMI’s 2012 fourth-quarter
market share was up by 2.3 points to 39.2%. PMI’s market share of the fine cut
category was up by 0.5 points to 17.8% in 2012 and down by 1.5 points to 15.5%
in the fourth quarter.

In Spain, the total cigarette market was down by 11.7% to 53.5 billion units
in 2012, mainly reflecting the impact of price increases in the second half of
2011 and second quarter of 2012, the unfavorable economic environment, the
growth of the OTP category and illicit trade. In the fourth quarter of 2012,
the total cigarette market was down by 14.0% to 12.1 billion units, reflecting
the aforementioned factors and the unfavorable impact of trade inventory
movements. PMI’s shipments were down by 11.4% in 2012 and by 5.7% in the
fourth quarter. Market share was down by 0.3 points to 30.6% in 2012, with
higher share of Chesterfield, revamped in the first quarter of 2012, up by 0.6
points to 9.0%, offset by Marlboro, down by 0.4 points to 14.3% and Philip
Morris, down by 0.3 points to 0.7%. Market share of L&M was down by 0.2 points
to 6.3%. PMI’s 2012 fourth quarter market share was up by 0.7 points to 31.3%.
PMI’s market share of the fine cut category was up by 1.1 points to 11.7% in
2012 and up by 3.0 points to 13.1% in the fourth quarter.

              EASTERN EUROPE, MIDDLE EAST & AFRICA REGION (EEMA)

2012 Full-Year

In EEMA, net revenues increased by 5.7% to $8.3 billion, including unfavorable
currency of $467 million. Excluding the impact of currency and acquisitions,
net revenues increased by 11.3%, primarily due to both favorable pricing and
volume/mix of $466 million and $425 million, respectively.

Operating companies income increased by 15.4% to $3.7 billion, despite
unfavorable currency of $199 million. Excluding the impact of currency and
acquisitions, operating companies income increased by a strong 21.4%, due
primarily to higher pricing, and favorable volume/mix of $317 million, partly
offset by higher costs, principally related to investments in marketing and
business infrastructure mainly in Russia.

Adjusted operating companies income increased by 14.7%, as shown in the table
below and detailed on Schedule 15. Adjusted operating companies income,
excluding currency and acquisitions, increased by 20.7%.

 EEMA Operating Companies Income ($ Millions)
                                                                 
                     Fourth-Quarter                    Full-Year
                     2012       2011      Change       2012         2011         Change
  Reported           $921       $747      23.3 %       $3,726       $3,229       15.4%
  OCI
  Asset
  impairment         (5   )     (7)                    (5     )     (25    )
  & exit
  costs
  Adjusted           $926       $754      22.8 %       $3,731       $3,254       14.7%
  OCI
  Adjusted                                5.1                                    3.5
  OCI                43.3 %     38.2%     p.p.         44.8   %     41.3   %     p.p.
  Margin*

 *Margins are calculated as adjusted OCI, divided by net revenues, excluding
                                excise taxes.

Excluding the impact of currency and acquisitions, adjusted operating
companies income margin was up by 3.5 percentage points to 44.8%, as detailed
on Schedule 15.

PMI’s cigarette shipment volume in EEMA increased by 4.7%, mainly reflecting
improved market conditions and higher share in Egypt, a higher market share in
Russia, and a higher total market and share in Turkey.

PMI’s cigarette shipment volume of premium brands grew by 6.7%, driven by
record volumes for Marlboro, up by 3.6%, and Parliament, up by 16.5%.

2012 Fourth-Quarter

In EEMA, net revenues increased by 8.5% to $2.1 billion, including unfavorable
currency of $56 million. Excluding the impact of currency, net revenues
increased by 11.3%, primarily due to both favorable pricing and volume/mix of
$101 million and $122 million, respectively.

Operating companies income increased by 23.3% to $921 million, including
unfavorable currency of $16 million. Excluding the impact of currency and
acquisitions, operating companies income increased by 25.4%, due primarily to
higher pricing, and favorable volume/mix of $84 million.

Adjusted operating companies income increased by 22.8%, as shown in the table
above and detailed on Schedule 11. Adjusted operating companies income,
excluding currency, increased by 24.9%.

Excluding the impact of currency, adjusted operating companies income margin
was up by 4.7 percentage points to 42.9%, as detailed on Schedule 11.

PMI’s cigarette shipment volume in EEMA increased by 7.1%, mainly reflecting
improved market conditions and higher share in Egypt and a higher total market
and share in Turkey.

PMI’s cigarette shipment volume of premium brands grew by 7.7%, driven by
Marlboro, up by 3.2%, and by Parliament, up by 22.4%.

EEMA Key Market Commentaries

In Russia, the total cigarette market declined by an estimated 1.3% to 370
billion units. PMI’s shipment volume increased by 3.8% in 2012, mainly
reflecting a higher market share, and by 0.6% in the fourth quarter. Shipment
volume of PMI’s premium portfolio in 2012 was up by 7.0%, driven by
Parliament, up by 15.0%. In the mid-price segment, shipment volume was up by
4.8%, mainly due to L&M, up by 20.4%. In the low-price segment, shipment
volume was up by 2.3%, driven by Apollo Soyuz, Bond Street and Next, up by
3.7%, 0.5% and 11.7%, respectively. PMI’s market share of 26.3%, as measured
by Nielsen, was up by 0.5 points. Market share of Parliament was up by 0.3
points to 3.2%; Marlboro was essentially flat at 1.9%; L&M was up by 0.2
points to 2.6% and Chesterfield was flat at 3.4%; Bond Street was up by 0.3
points to 6.5%; Next was up by 0.2 points to 2.9%; and Apollo Soyuz and Optima
were flat at 1.4% and 3.2%, respectively. PMI’s 2012 fourth-quarter market
share of 26.4%, as measured by Nielsen, was up by 0.2 points.

In Turkey, the total cigarette market increased by an estimated 8.8% to 99.2
billion units in 2012, reflecting: the favorable impact of trade inventory
movements in the fourth quarter of 2012 ahead of the January 2013 excise tax
increase; a decrease in illicit trade; and a favorable comparison with 2011
which experienced a 10.6% total cigarette market decline in the last three
months of the year resulting from excise tax-driven price increases in the
fourth quarter. In the fourth quarter of 2012, the total cigarette market
increased by an estimated 24.8% to 26.7 billion units, reflecting the
favorable impact of the aforementioned factors. PMI’s shipment volume
increased by 12.7% in 2012, across each of the premium, mid-price and low
price segments, up by 15.0%, 16.6% and 9.8%, respectively, and by 33.8% in the
fourth quarter. PMI’s market share, as measured by Nielsen, grew by 0.9 points
to 45.7% in 2012, driven by premium Parliament, mid-price Muratti and
low-price Lark,  up by 0.9, 0.4 and 0.3 share points to 9.0%, 6.6% and 12.2%,
respectively, partly offset by a decline in low-price L&M, down by 0.3 points
to 8.4%. Market share of Marlboro was down by 0.1 point to 9.2%. PMI’s 2012
fourth-quarter market share, as measured by Nielsen, grew by 1.7 points to
46.5%.

In Ukraine, the total cigarette market declined by an estimated 2.6% to 83.4
billion units in 2012. In the fourth quarter of 2012, the total cigarette
market was up by 0.7% to 18.6 billion units. PMI’s shipment volume decreased
by 0.6% in 2012 and increased by 3.8% in the fourth quarter. PMI’s market
share, as measured by Nielsen, was up by 0.2 points to 32.4%. Share for
premium Parliament was up by 0.4 points to 3.2%. Share of Marlboro was flat at
5.8%, Chesterfield was down by 0.5 points to 7.0% and Bond Street was up by
1.2 points to 8.4%. PMI’s 2012 fourth-quarter market share, as measured by
Nielsen, was up by 0.3 points to 32.8%.

                                 ASIA REGION

2012 Full-Year

In Asia, net revenues increased by 4.6% to $11.2 billion, including
unfavorable currency of $116 million. Excluding the impact of currency, net
revenues increased by 5.7%, reflecting the favorable impact of pricing of $551
million, principally in Australia, Indonesia, Korea and the Philippines, and
favorable volume/mix of $57 million.

Operating companies income increased by 7.5% to $5.2 billion. Excluding the
favorable impact of currency of $39 million, operating companies income
increased by 6.7%, primarily reflecting higher pricing, and favorable shipping
costs related to the Japan hurdle, partly offset by unfavorable volume/mix of
$99 million, mainly in Japan. Excluding Japan, volume/mix was favorable,
driven by Indonesia.

Adjusted operating companies income increased by 7.9% as shown in the table
below and detailed on Schedule 15. Adjusted operating companies income,
excluding currency, increased by 7.1%.

 Asia Operating Companies Income ($ Millions)
                                                                      
                     Fourth-Quarter                         Full-Year
                     2012         2011         Change       2012         2011         Change
  Reported           $1,129       $1,036       9.0%         $5,197       $4,836       7.5%
  OCI
  Asset
  impairment         (15    )     (8     )                  (39    )     (15    )
  & exit
  costs
  Adjusted           $1,144       $1,044       9.6%         $5,236       $4,851       7.9%
  OCI
  Adjusted                                     1.4                                    1.5
  OCI                40.8   %     39.4   %     p.p.         46.8   %     45.3   %     p.p.
  Margin*

 *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 0.6 percentage points to 45.9%, as detailed on Schedule 15.

PMI’s cigarette shipment volume in Asia increased by 4.2%, driven by growth in
Indonesia, the Philippines, Thailand and Vietnam, partly offset by a decline
in Japan and Korea. PMI’s cigarette shipment volume in Asia increased by 6.4%
excluding the 6.3 billion units associated with the 2011 Japan hurdle.

Shipment volume of Marlboro was up by 3.6%, driven by Indonesia, the
Philippines and Vietnam, partly offset by Japan and Korea. Shipment volume of
Marlboro was up by 6.0% excluding the related Japan hurdle volume.

2012 Fourth-Quarter

In Asia, net revenues increased by 6.0% to $2.8 billion, including unfavorable
currency of $57 million. Excluding the impact of currency, net revenues
increased by 8.1%, reflecting the favorable impact of pricing of $158 million,
principally in Australia, Indonesia, Korea and the Philippines, and favorable
volume/mix of $57 million.

Operating companies income increased by 9.0% to $1.1 billion. Excluding the
unfavorable impact of currency of $8 million, operating companies income
increased by 9.7%, reflecting higher pricing and slightly favorable volume/mix
of $8 million, partly offset by higher costs, mainly related to manufacturing
in Indonesia.

Adjusted operating companies income increased by 9.6% as shown in the table
above and detailed on Schedule 11. Adjusted operating companies income,
excluding currency, increased by 10.3%.

Excluding the impact of currency, adjusted operating companies income margin
was up by 0.9 percentage points to 40.3%, as detailed on Schedule 11.

PMI’s cigarette shipment volume in Asia increased by 5.7%, driven by growth
notably in Indonesia and the Philippines, partly offset by a decline in Japan
and Korea.

Shipment volume of Marlboro was up by 5.6%, driven by Indonesia, the
Philippines and Vietnam, largely offset by Japan and Korea.

Asia Key Market Commentaries

In Indonesia, the total cigarette market was up by 8.2% to 302.5 billion units
in 2012, driven by growth in the premium and mid-price segments, and up by
9.4% in the fourth quarter to 79.2 billion units. PMI’s shipment volume grew
by 17.5% in 2012 and by 15.4% in the fourth quarter. PMI’s market share was up
by 2.8 points to 35.6% in 2012, driven notably by Sampoerna A in the premium
segment, up by 1.1 points to 13.8%, and mid-price U Mild, up by 1.2 points to
3.3%. Marlboro’s market share was up by 0.3 points to 4.8% and its share of
the “white” cigarettes segment increased by 4.9 points to 71.2%. Market share
of Dji Sam Soe was essentially flat at 7.8%. PMI’s 2012 fourth-quarter market
share was up by 1.9 points to 36.2%.

In Japan, the total cigarette market increased by 0.7% to 196.6 billion units
in 2012, reflecting a favorable comparison with 2011 driven by trade inventory
de-loading in the first quarter following the October 2010 excise tax-driven
price increase. The estimated underlying decline of the total cigarette market
in 2012 was approximately 1%. In the fourth quarter of 2012, the total
cigarette market decreased by 2.0% to 50.1 billion units, mainly due to an
unfavorable comparison with the fourth quarter of 2011 which marked the first
full quarter of product supply by PMI’s principal competitor following the
March earthquake. PMI’s shipment volume was down by 9.7% in 2012, or up by
0.6% excluding the additional hurdle volume of 6.3 billion units associated
with 2011. PMI’s 2012 fourth-quarter shipment volume decreased by 6.7%,
reflecting an unfavorable quarter-on-quarter comparison in respect of
distributor inventory movements, and lower market share. PMI’s market share
was down by 3.0 points to 27.7% in 2012, or down by 0.5 points compared to the
2011 exit share of 28.2%. While share of Marlboro was down by 0.7 points to
12.4%, it was essentially flat compared to its 2011 exit share, supported by
the introduction of new Marlboro menthol variants during the year, and up by
1.0 point compared to its pre-earthquake level. Share of Lark was down by 1.3
points to 8.4%, or by 0.2 points compared to its 2011 exit share of 8.6%.
Share of Philip Morris was down by 0.5 points to 2.3%, or by 0.2 points
compared to its 2011 exit share of 2.5%. While PMI’s 2012 fourth-quarter
market share was down by 0.5 points to 27.7%, it grew by 0.2 points versus the
third quarter of 2012.

In Korea, the total cigarette market was down by 0.9% to 89.3 billion units in
2012. In the fourth quarter of 2012, the total cigarette market decreased by
4.6% to 21.8 billion units. PMI’s shipment volume decreased by 4.0% in 2012
and by 10.9% in the fourth quarter, reflecting the impact of PMI’s price
increases in February 2012. PMI’s market share in 2012 of 19.2% was down by
0.6 points. Market share of Marlboro and Parliament was down by 0.8 points and
0.1 point to 7.8% and 6.6%, respectively, partly offset by Virginia Slims, up
by 0.7 points to 4.1%. PMI’s 2012 fourth-quarter market share of 18.9% was
down by 1.3 points.

In the Philippines, the total cigarette market increased by 5.0% to 102.2
billion units in 2012, reflecting the growth in the low price segment and
trade loading of competitive products ahead of the excise tax-driven price
increase in January 2013. In the fourth quarter of 2012, the total cigarette
market increased by 12.1% to 27.5 billion units, reflecting the impact of the
aforementioned factors. PMI’s shipment volume increased by 1.3% in 2012 and
was up by 5.0% in the fourth quarter. PMI’s market share was down by 3.3
points to 90.7% in 2012, due primarily to share declines of Champion and Hope.
Marlboro’s market share was down by 0.2 points to 20.9%. Market share of
Fortune was up by 2.4 points to 49.4%. PMI’s 2012 fourth-quarter market share
of 87.2% was down by 5.9 points, reflecting the impact of the aforementioned
trade inventory movements.

                        LATIN AMERICA & CANADA REGION

2012 Full-Year

In Latin America & Canada, net revenues increased by 0.7% to $3.3 billion,
including unfavorable currency of $196 million. Excluding the impact of
currency, net revenues increased by 6.6%, reflecting favorable pricing of $267
million, principally in Argentina, Brazil and Canada, partially offset by
unfavorable volume/mix of $49 million.

Operating companies income increased by 5.6% to $1.0 billion. Excluding the
unfavorable impact of currency of $63 million, operating companies income
increased by 11.9%, primarily reflecting favorable pricing, partially offset
by unfavorable volume/mix of $71 million and higher costs, mainly related to
the restructuring of manufacturing facilities and distribution infrastructure.
Adjusted operating companies income increased by 6.4% as shown in the table
below and detailed on Schedule 15. Adjusted operating companies income,
excluding currency, increased by 12.6%.

 Latin America & Canada Operating Companies Income ($ Millions)
                                                                  
                     Fourth-Quarter                     Full-Year
                     2012       2011       Change       2012         2011         Change
  Reported           $290       $214       35.5%        $1,043       $988         5.6%
  OCI
  Asset
  impairment         (8   )     (12  )                  (34    )     (24    )
  & exit
  costs
  Adjusted           $298       $226       31.9%        $1,077       $1,012       6.4%
  OCI
  Adjusted                                 7.0                                    1.7
  OCI                33.8 %     26.8 %     p.p.         32.4   %     30.7   %     p.p.
  Margin*

 *Margins are calculated as adjusted OCI, divided by net revenues, excluding
                                excise taxes.

Excluding the impact of currency, adjusted operating companies income margin
increased by 1.7 percentage points to 32.4%, as detailed on Schedule 15.

PMI’s cigarette shipment volume in Latin America & Canada decreased  by 1.6%,
mainly due to a lower total market in Argentina, Colombia and Mexico and lower
share in Canada. Shipment volume of Marlboro increased by 0.7%, mainly
reflecting market share growth in Brazil, Colombia and Mexico.

2012 Fourth-Quarter

In Latin America & Canada, net revenues increased by 4.5% to $882 million,
including unfavorable currency of $24 million. Excluding the impact of
currency, net revenues increased by 7.3%, reflecting favorable pricing of $70
million, principally in Argentina, Brazil, Canada and Mexico, partially offset
by unfavorable volume/mix of $8 million.

Operating companies income increased by 35.5% to $290 million. Excluding the
unfavorable impact of currency of $4 million, operating companies income
increased by 37.4%, primarily reflecting favorable pricing and lower costs,
mainly related to manufacturing and the restructuring of manufacturing
facilities, partially offset by unfavorable volume/mix of $19 million.
Adjusted operating companies income increased by 31.9% as shown in the table
above and detailed on Schedule 11. Adjusted operating companies income,
excluding currency, increased by 33.6%.

Excluding the impact of currency, adjusted operating companies income margin
increased by 6.5 percentage points to 33.3%, as detailed on Schedule 11.

PMI’s cigarette shipment volume in Latin America & Canada decreased  by 1.1%,
principally due to a lower total market in Mexico. Shipment volume of Marlboro
decreased by 1.0%, mainly reflecting total market declines in Argentina and
Mexico, partly offset by market share gains in Brazil and Colombia.

Latin America & Canada Key Market Commentaries

In Argentina, the total cigarette market declined by 0.9% to 43.4 billion
units in 2012 and by 1.0% to 11.3 billion units in the fourth quarter. PMI’s
cigarette shipment volume in 2012 decreased by 0.3% and by 1.1% in the fourth
quarter. PMI’s 2012 market share was up by 0.9 points to 74.9%, reflecting
growth of mid-price Philip Morris, up by 1.4 share points to 39.4%, partly
offset by low-price Next, down by 0.5 points to 3.1%. Market share of Marlboro
was flat at 24.1%. PMI’s 2012 fourth quarter market share was up by 0.4 points
to 74.6%.

In Canada, the estimated total tax-paid cigarette market was essentially flat
at 32.2 billion units in 2012 and down by 1.2% to 8.1 billion units in the
fourth quarter. PMI’s cigarette shipment volume in 2012 declined by 1.5% and
was essentially flat in the fourth quarter. PMI’s market share was down in
2012 by 0.6 points to 33.5%, primarily reflecting share losses in the
mid-price segment, reflecting fierce price competition. Market share of
premium brand Benson & Hedges was essentially flat at 2.1%, premium Belmont
was up by 0.2 points to 2.0% and low-price brand Next was up by 0.8 points to
7.7%, offset by mid-price Number 7 and Canadian Classics, and low-price Accord
and Quebec Classique, down by 0.2, 0.3, 0.4 and 0.3 share points, to 3.9%,
8.4%, 3.2% and 2.4%, respectively. PMI’s 2012 fourth quarter market share was
down by 0.7 points to 33.5%.

In Mexico, the total cigarette market was down by 2.2% to 33.6 billion units
in 2012, reflecting the impact of price increases in January 2012 and the
continued wide prevalence of illicit products. The total cigarette market was
down by 4.5% to 9.0 billion units in the fourth quarter. PMI’s cigarette
shipment volume decreased by 0.6% in 2012 and by 4.7% in the fourth quarter.
PMI’s market share grew in 2012 by 1.2 points to 73.5%, led by Marlboro, up by
1.3 share points to a record 53.6%. Market share of premium Benson & Hedges,
the second-largest brand in the premium segment,  was up by 0.1 point at 6.2%
while share of low-price Delicados decreased by 0.5 points to 10.4%. PMI’s
2012 fourth quarter market share was essentially flat at 73.0%.

Philip Morris International Inc. Profile

Philip Morris International Inc. (PMI) is the leading international tobacco
company, with seven of the world’s top 15 international brands, including
Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in
more than 180 countries. In 2012, the company held an estimated 16.3% share of
the total international cigarette market outside of the U.S., or 28.8%
excluding the People’s Republic of China and the U.S. For more information,
see www.pmi.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other
forward-looking statements. Achievement of projected 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: significant increases in cigarette-related
taxes; the imposition of discriminatory excise tax structures; fluctuations in
customer inventory levels due to increases in product taxes and prices;
increasing marketing and regulatory restrictions, often with the goal of
reducing or preventing the use of tobacco 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;
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; 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 products with
the potential to reduce the risk of smoking-related diseases; 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-Q for the quarter ended
September 30, 2012. 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.

                                                                  
                                                                                    
  Schedule 1
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Condensed Statements of Earnings
  For the Quarters Ended December 31,
  ($ in millions, except per share data)
  (Unaudited)
                                                                                    
                        2012                2011               % Change   
  Net revenues           $     19,742       $    18,876         4.6      %
  Cost of sales                    2,681                2,692          (0.4 )   %
  Excise taxes
  on products                11,853        11,205        5.8      %
  ^(1)
  Gross profit                     5,208                4,979          4.6      %
  Marketing,
  administration                   1,880                1,921
  and research
  costs
  Asset
  impairment and             33            49     
  exit costs
  Operating
  companies                        3,295                3,009          9.5      %
  income
  Amortization                     24                   25
  of intangibles
  General
  corporate                  55            48     
  expenses
  Operating                        3,216                2,936          9.5      %
  income
  Interest                   226           187    
  expense, net
  Earnings
  before income                    2,990                2,749          8.8      %
  taxes
  Provision for              799           803           (0.5 )   %
  income taxes
  Net earnings                     2,191                1,946          12.6     %
  Net earnings
  attributable
  to                         96            60     
  noncontrolling
  interests
  Net earnings
  attributable          $     2,095     $    1,886         11.1     %
  to PMI
                                                                                    
  Per share
  data:^(2)
  Basic earnings        $     1.25      $    1.08          15.7     %
  per share
  Diluted
  earnings per          $     1.25      $    1.08          15.7     %
  share


  (1) The segment detail of excise taxes on products sold for the quarters
  ended December 31, 2012 and 2011 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 December 31, 2012
  and 2011 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 December 31,
  ($ in millions)
  (Unaudited)
                                                                                                                          
                                    Net Revenues excluding Excise Taxes
                                                                                             Latin
                                    European
                                                     EEMA             Asia             America &      Total
                                    Union
                                                                                             Canada
                                                                                                                          
  2012         Net Revenues         $   6,684          $   5,016        $   5,403        $  2,639        $ 19,742
               ^(1)
               Excise Taxes            (4,621  )       (2,877 )      (2,598 )     (1,757 )    (11,853 )
               on Products
               Net Revenues
               excluding                2,063                2,139              2,805            882            7,889
               Excise Taxes
                                                                                                                          
  2011         Net Revenues         $   7,118          $     4,257        $     5,013        $   2,488        $ 18,876
               Excise Taxes            (4,910  )       (2,285 )      (2,366 )     (1,644 )    (11,205 )
               on Products
               Net Revenues
               excluding                2,208                1,972              2,647            844            7,671
               Excise Taxes
                                                                                                                          
  Variance     Currency                 (133    )            (56    )           (57    )         (24    )       (270    )
               Acquisitions             -                    -                  -                -              -
               Operations              (12     )       223          215         62         488     
               Variance                 (145    )            167                158              38             218
               Total
               Variance                 (6.6)%              8.5%              6.0%            4.5%          2.8%    
               Total (%)
                                                                                                                          
               Variance
               excluding                (12     )            223                215              62             488
               Currency
               Variance
               excluding                (0.5)%              11.3%             8.1%            7.3%          6.4%    
               Currency (%)
                                                                                                                          
               Variance
               excluding                (12     )            223                215              62             488
               Currency &
               Acquisitions
               Variance
               excluding
               Currency &               (0.5)%              11.3%             8.1%            7.3%          6.4%    
               Acquisitions
               (%)
                                                                                                                          
  ^(1) 2012 Currency decreased net revenues as follows:
               European             $   (421    )
               Union
               EEMA                     (131    )
               Asia                     (131    )
               Latin
               America &               (107    )
               Canada
                                    $   (790    )


                                                                                                                   
  Schedule 3
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Selected Financial Data by Business Segment
  For the Quarters Ended December 31,
  ($ in millions)
  (Unaudited)
                                                                                        
                          Operating Companies Income
                                                                                     Latin
                          European
                                             EEMA            Asia              America &     Total
                          Union
                                                                                     Canada
  2012                    $    955             $   921         $    1,129       $  290         $   3,295
  2011                         1,012                 747                 1,036           214               3,009
  % Change                     (5.6)%               23.3%              9.0%           35.5%            9.5%  
                                                                                                                   
  Reconciliation:
  For the quarter
  ended December          $    1,012           $     747         $       1,036       $   214         $     3,009
  31, 2011
                                                                                                                   
  2011 Asset
  impairment and               22                    7                   8               12                49
  exit costs
  2012 Asset
  impairment and               (5      )             (5    )             (15   )         (8    )           (33   )
  exit costs
                                                                                                                   
  Acquired                     -                     -                   -               -                 -
  businesses
  Currency                     (78     )             (16   )             (8    )         (4    )           (106  )
  Operations                  4               188          108        76          376   
  For the quarter
  ended December          $    955          $   921      $    1,129    $  290      $   3,295 
  31, 2012

                                                              
                                                                               
  Schedule 4
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Diluted Earnings Per Share
  For the Quarters Ended December 31,
  ($ in millions, except per share data)
  (Unaudited)
                                                                               
                                                      Diluted
                                                     E.P.S.
                                                                               
  2012 Diluted
  Earnings Per                                        $      1.25       ^(1)
  Share
  2011 Diluted
  Earnings Per                                        $        1.08       ^(1)
  Share
  Change                                              $        0.17
  % Change                                                     15.7       %
                                                                               
  Reconciliation:
  2011 Diluted
  Earnings Per                                        $        1.08       ^(1)
  Share
                                                                               
                                                                               
  Special Items:
  2012 Asset
  impairment and                                               (0.01  )
  exit costs
  2012 Tax items                                               0.02
  2011 Asset
  impairment and                                               0.02
  exit costs
  2011 Tax items                                               -
                                                                               
                                                                               
  Currency                                                     (0.04  )
  Interest                                                     (0.02  )
  Change in tax                                                0.02
  rate
  Impact of lower
  shares
  outstanding and                                              0.05
  share-based
  payments
  Operations                                                0.13   
  2012 Diluted
  Earnings Per                                        $      1.25      ^(1)
  Share
                                                                               
  ^(1) Basic and diluted EPS were calculated using the following (in
  millions):
                                                                               
                           Q4             Q4
                                                  
                           2012           2011
                                                                               
  Net earnings
  attributable to          $       2,095           $        1,886
  PMI
  Less distributed
  and
  undistributed
  earnings
  attributable
  to share-based                 12                   11     
  payment awards
  Net earnings for
  basic and               $       2,083          $      1,875  
  diluted EPS
                                                                               
  Weighted-average
  shares for basic                    1,664                    1,733
  EPS
  Plus incremental
  shares from
  assumed
  conversions:
  Stock Options                  -                    -      
  Weighted-average
  shares for                     1,664                1,733  
  diluted EPS

                                                              
                                                                             
  Schedule 5
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Condensed Statements of Earnings
  For the Years Ended December 31,
  ($ in millions, except per share data)
  (Unaudited)
                                                                             
                        2012            2011              % Change
  Net revenues           $   77,393       $    76,346       1.4      %
  Cost of sales                10,373               10,678       (2.9 )   %
  Excise taxes on          46,016        45,249      1.7      %
  products ^(1)
  Gross profit                 21,004               20,419       2.9      %
  Marketing,
  administration               6,768                6,697
  and research
  costs
  Asset impairment         83            109    
  and exit costs
  Operating                    14,153               13,613       4.0      %
  companies income
  Amortization of              97                   98
  intangibles
  General
  corporate                210           183    
  expenses
  Operating income             13,846               13,332       3.9      %
  Interest                 859           800    
  expense, net
  Earnings before              12,987               12,532       3.6      %
  income taxes
  Provision for            3,833         3,653       4.9      %
  income taxes
  Net earnings                 9,154                8,879        3.1      %
  Net earnings
  attributable to          354           288    
  noncontrolling
  interests
  Net earnings
  attributable to       $   8,800     $    8,591       2.4      %
  PMI
                                                                             
  Per share
  data:^(2)
  Basic earnings        $   5.17      $    4.85        6.6      %
  per share
  Diluted earnings      $   5.17      $    4.85        6.6      %
  per share


  (1) The segment detail of excise taxes on products sold for the years
  ended December 31, 2012 and 2011 is shown on Schedule 6.
                                                                             
  (2) Net earnings and weighted-average shares used in the basic and diluted
  earnings per share computations for the years ended December 31, 2012 and
  2011 are shown on Schedule 8, Footnote 1.


                                                                                                                               
  Schedule 6
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Selected Financial Data by Business Segment
  For the Years Ended December 31,
  ($ in millions)
  (Unaudited)
                                                                                                  
                                    Net Revenues excluding Excise Taxes
                                                                                                Latin
                                    European
                                                       EEMA              Asia             America      Total
                                    Union                                               &

                                                                                                Canada
                                                                                                                               
  2012         Net Revenues         $   27,338           $   19,272        $   21,071       $  9,712        $  77,393
               ^(1)
               Excise Taxes            (18,812   )       (10,940 )      (9,873 )     (6,391 )     (46,016 )
               on Products
               Net Revenues
               excluding                8,526                  8,332               11,198           3,321            31,377
               Excise Taxes
                                                                                                                               
  2011         Net Revenues         $   29,768           $     17,452        $     19,590       $   9,536        $   76,346
               Excise Taxes            (20,556   )       (9,571  )      (8,885 )     (6,237 )     (45,249 )
               on Products
               Net Revenues
               excluding                9,212                  7,881               10,705           3,299            31,097
               Excise Taxes
                                                                                                                               
  Variance     Currency                 (716      )            (467    )           (116   )         (196   )         (1,495  )
               Acquisitions             -                      27                  1                -                28
               Operations              30               891           608         218         1,747   
               Variance                 (686      )            451                 493              22               280
               Total
               Variance                 (7.4)%                5.7%               4.6%            0.7%            0.9%    
               Total (%)
                                                                                                                               
               Variance
               excluding                30                     918                 609              218              1,775
               Currency
               Variance
               excluding                0.3%                  11.6%              5.7%            6.6%            5.7%    
               Currency (%)
                                                                                                                               
               Variance
               excluding                30                     891                 608              218              1,747
               Currency &
               Acquisitions
               Variance
               excluding
               Currency &               0.3%                  11.3%              5.7%            6.6%            5.6%    
               Acquisitions
               (%)
                                                                                                                               
  ^(1) 2012 Currency decreased net revenues as follows:
               European             $   (2,423    )
               Union
               EEMA                     (1,468    )
               Asia                     (431      )
               Latin
               America &               (681      )
               Canada
                                    $   (5,003    )

                                                                                      
                                                                                                                  
                                                                                                    Schedule 7
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Selected Financial Data by Business Segment
  For the Years Ended December 31,
  ($ in millions)
  (Unaudited)
                                                                                                                  
                          Operating Companies Income
                                                                                   Latin
                          European
                                             EEMA            Asia            America     Total
                          Union                                            &

                                                                                   Canada
  2012                    $     4,187         $   3,726       $   5,197       $   1,043       $   14,153
  2011                           4,560               3,229             4,836            988              13,613
  % Change                       (8.2)%             15.4%            7.5%            5.6%            4.0%   
                                                                                                                  
  Reconciliation:
  For the year
  ended December          $      4,560         $     3,229       $     4,836       $    988         $    13,613
  31, 2011
                                                                                                                  
  2011 Asset
  impairment and                 45                  25                15               24               109
  exit costs
  2012 Asset
  impairment and                 (5     )            (5    )           (39   )          (34   )          (83    )
  exit costs
                                                                                                                  
  Acquired                       -                   4                 -                -                4
  businesses
  Currency                       (384   )            (199  )           39               (63   )          (607   )
  Operations                   (29    )       672         346         128         1,117  
  For the year
  ended December          $     4,187      $   3,726    $   5,197    $   1,043    $   14,153 
  31, 2012

                                              
                                                                             
  Schedule 8
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Diluted Earnings Per Share
  For the Years Ended December 31,
  ($ in millions, except per share data)
  (Unaudited)
                                                                             
                                                     Diluted
                                                     E.P.S.
                                                                             
  2012 Diluted Earnings                              $      5.17       ^(1)
  Per Share
  2011 Diluted Earnings                              $       4.85       ^(1)
  Per Share
  Change                                             $       0.32
  % Change                                                   6.6        %
                                                                             
  Reconciliation:
  2011 Diluted Earnings                              $       4.85       ^(1)
  Per Share
                                                                             
                                                                             
  Special Items:
  2012 Asset impairment                                      (0.03   )
  and exit costs
  2012 Tax items                                             (0.02   )
  2011 Asset impairment                                      0.05
  and exit costs
  2011 Tax items                                             (0.02   )
                                                                             
                                                                             
  Currency                                                   (0.23   )
  Interest                                                   (0.03   )
  Change in tax rate                                         0.02
  Impact of lower shares
  outstanding and                                            0.20
  share-based payments
  Operations                                               0.38    
  2012 Diluted Earnings                              $      5.17      ^(1)
  Per Share
                                                                             
                                                                             
  ^(1) Basic and diluted EPS were calculated using the following (in
  millions):
                                                                             
                                YTD December     YTD December

                                2012             2011
                                                                             
  Net earnings                  $       8,800      $       8,591
  attributable to PMI
  Less distributed and
  undistributed earnings
  attributable
  to share-based payment               48               49      
  awards
  Net earnings for basic        $       8,752      $      8,542   
  and diluted EPS
                                                                             
  Weighted-average shares                 1,692              1,761
  for basic EPS
  Plus incremental shares
  from assumed
  conversions:
  Stock Options                        -                1       
  Weighted-average shares              1,692            1,762   
  for diluted EPS

                                                             
                                                                             
  Schedule 9
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Condensed Balance Sheets
  ($ in millions, except ratios)
  (Unaudited)
                                                                             
                                  December               December
                                  31,                    31,
                                  2012                 2011
  Assets
  Cash and cash                   $  2,983                 $  2,550
  equivalents
  All other current                  13,607                   12,309
  assets
  Property, plant and                6,645                    6,250
  equipment, net
  Goodwill                           9,900                    9,928
  Other intangible                   3,619                    3,697
  assets, net
  Other assets                      916                    754
  Total assets                    $  37,670               $  35,488
                                                                             
  Liabilities and
  Stockholders'
  (Deficit) Equity
  Short-term borrowings           $  2,419                 $  1,511
  Current portion of                 2,781                    2,206
  long-term debt
  All other current                  11,816                   11,077
  liabilities
  Long-term debt                     17,639                   14,828
  Deferred income taxes              1,875                    1,976
  Other long-term                   2,993                  2,127
  liabilities
  Total liabilities                  39,523                   33,725
                                                                             
  Redeemable
  noncontrolling                     1,301                    1,212
  interest
                                                                             
  Total PMI
  stockholders'                      (3,476  )                229
  (deficit) equity
  Noncontrolling                    322                    322
  interests
  Total stockholders'               (3,154  )               551
  (deficit) equity
  Total liabilities and
  stockholders'                   $  37,670               $  35,488
  (deficit) equity
                                                                             
  Total debt                      $  22,839                $  18,545
  Total debt to EBITDA               1.55       ^(1)          1.29      ^(1)
  Net debt to EBITDA                 1.35       ^(1)          1.12      ^(1)
                                                                             
  ^(1) For the calculation of Total Debt to EBITDA and Net Debt to EBITDA
  ratios, refer to Schedule 18.

                                                                                                                                                          
                                                                                                                                                                           
  Schedule 10
  PHILIP MORRIS INTERNATIONAL INC.
  and Subsidiaries
  Reconciliation of Non-GAAP Measures
  Adjustments for the Impact of Currency and Acquisitions
  For the Quarters Ended December 31,
  ($ in millions)
  (Unaudited)
                                                                                                                                                                           
                                                                                                                                   % Change in Reported Net Revenues
  2012                                                                                           2011
                                                                                                                                   excluding Excise Taxes
                                                                      

                         Reported               Reported               Reported Net                                    Reported
                         Net                    Net                                                                    Net                                Reported
              Less                                          Less       Revenues                  Reported   Less                              Reported
  Reported               Revenues    Less       Revenues                                                               Revenues                           excluding
  Net         Excise                                        Acquisi-   excluding                 Net        Excise                 Reported  excluding 
                         excluding   Currency   excluding                                                              excluding                          Currency &
  Revenues    Taxes                                         tions      Excise                    Revenues   Taxes                             Currency
                         Excise                 Excise                 Taxes,                                          Excise                             Acquisitions
                         Taxes                  Taxes                                                                  Taxes
                                                                       Currency &
                                                &
                                                Currency               Acquisitions
                                                                                                                                                                           
  $  6,684    $ 4,621    $  2,063    $ (133 )   $  2,196    $    -     $    2,196     European   $ 7,118    $ 4,910    $  2,208    (6.6  )%   (0.5  )%    (0.5    )%
                                                                                      Union
     5,016      2,877       2,139      (56  )      2,195         -          2,195     EEMA         4,257      2,285       1,972    8.5   %    11.3  %     11.3    %
     5,403      2,598       2,805      (57  )      2,862         -          2,862     Asia         5,013      2,366       2,647    6.0   %    8.1   %     8.1     %
                                                                                      Latin
     2,639      1,757       882        (24  )      906           -          906       America      2,488      1,644       844      4.5   %    7.3   %     7.3     %
                                                                                      & Canada
                                                                                                             
  $  19,742   $ 11,853   $  7,889    $ (270 )   $  8,159    $    -     $    8,159     PMI        $ 18,876   $ 11,205   $  7,671    2.8   %    6.4   %     6.4     %
                                                                                      Total
                                                                                                                                                                           
                                                                                                                                   % Change in Reported Operating
  2012                                                                                           2011
                                                                                                                                   Companies Income
                                                                       Reported
                                                Reported
                                                                       Operating
  Reported                                      Operating                                                              Reported                           Reported
                                                            Less       Companies                                                              Reported
  Operating                          Less       Companies                                                              Operating                          excluding
                                                            Acquisi-   Income                                                      Reported  excluding 
  Companies                          Currency   Income                                                                 Companies                          Currency &
                                                            tions      excluding                                                              Currency
  Income                                        excluding                                                              Income                             Acquisitions
                                                                       Currency &
                                                Currency
                                                                       Acquisitions
                                                                                                                                                                           
  $  955                             $ (78  )   $  1,033    $    -     $    1,033     European                         $  1,012    (5.6  )%   2.1   %     2.1     %
                                                                                      Union
     921                               (16  )      937           -          937       EEMA                                747      23.3  %    25.4  %     25.4    %
     1,129                             (8   )      1,137         -          1,137     Asia                                1,036    9.0   %    9.7   %     9.7     %
                                                                                      Latin
     290                               (4   )      294           -          294       America                             214      35.5  %    37.4  %     37.4    %
                                                                                      & Canada
                                                                                                                 
  $  3,295                           $ (106 )   $  3,401    $    -     $    3,401     PMI                              $  3,009    9.5   %    13.0  %     13.0    %
                                                                                      Total

<td class="bwpadl0 b*Story too large*
                                                                                                                                                
                                                                                                                                                                            
  Schedule 11
  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 December 31,
  ($ in millions)
  (Unaudited)
                                                                                                                                                                            
                                                                                                                                        % Change in Adjusted Operating
  2012                                                                                             2011
                                                                                                                                        Companies Income
                                                                         

                                                  Adjusted               Adjusted
              Less                                                                                             Less
  Reported                 Adjusted               Operating              Operating                 Reported                 Adjusted                           Adjusted
              Asset                                           Less                                             Asset                               Adjusted
  Operating                Operating   Less       Companies              Companies                 Operating                Operating                          excluding
              Impairment                                      Acquisi-                                         Impairment               Adjusted  excluding 
  Companies   &            Companies   Currency   Income                 Income                    Companies                Companies                          Currency &
                                                              tions                                            & Exit                              Currency
  Income      Exit Costs   Income                 excluding              excluding                 Income      Costs        Income                             Acquisitions

                                                  Currency               Currency &

                                                                         Acquisitions
                                                                                                                                                                            
  $  955      $  (5   )    $ 960       $ (78  )   $  1,038    $    -     $    1,038     European   $  1,012    $  (22  )    $  1,034    (7.2  )%   0.4    %    0.4     %
                                                                                        Union
     921         (5   )      926         (16  )      942           -          942       EEMA          747         (7   )       754      22.8  %    24.9   %    24.9    %
     1,129       (15  )      1,144       (8   )      1,152         -          1,152     Asia          1,036       (8   )       1,044    9.6   %    10.3   %    10.3    %
                                                                                        Latin
     290         (8   )      298         (4   )      302           -          302       America       214         (12  )       226      31.9  %    33.6   %    33.6    %
                                                                                        & Canada
                                                                                                                  
  $  3,295    $  (33  )    $ 3,328    $ (106 )   $  3,434    $    -

[TRUNCATED]