Equibles

8-K

Philip Morris International Inc. (PM)

8-K 2024-02-08 For: 2024-02-08
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Added on April 02, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 8, 2024

Philip Morris International Inc.

(Exact name of registrant as specified in its charter)

Virginia 1-33708 13-3435103
(State or other jurisdiction<br><br>of incorporation) (Commission File Number) (I.R.S. Employer<br><br>Identification No.)
677 Washington Blvd, Ste. 1100 Stamford Connecticut 06901
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (203) 905-2410

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

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

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, no par value PM New York Stock Exchange 2.875% Notes due 2024 PM24 New York Stock Exchange
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2.875% Notes due 2024 PM24C New York Stock Exchange
0.625% Notes due 2024 PM24B New York Stock Exchange
3.250% Notes due 2024 PM24A New York Stock Exchange
2.750% Notes due 2025 PM25 New York Stock Exchange
3.375% Notes due 2025 PM25A New York Stock Exchange
2.750% Notes due 2026 PM26A New York Stock Exchange
2.875% Notes due 2026 PM26 New York Stock Exchange
0.125% Notes due 2026 PM26B New York Stock Exchange
3.125% Notes due 2027 PM27 New York Stock Exchange
3.125% Notes due 2028 PM28 New York Stock Exchange
2.875% Notes due 2029 PM29 New York Stock Exchange
3.375% Notes due 2029 PM29A New York Stock Exchange
0.800% Notes due 2031 PM31 New York Stock Exchange
3.125% Notes due 2033 PM33 New York Stock Exchange
2.000% Notes due 2036 PM36 New York Stock Exchange
1.875% Notes due 2037 PM37A New York Stock Exchange
6.375% Notes due 2038 PM38 New York Stock Exchange
1.450% Notes due 2039 PM39 New York Stock Exchange
4.375% Notes due 2041 PM41 New York Stock Exchange
4.500% Notes due 2042 PM42 New York Stock Exchange
3.875% Notes due 2042 PM42A New York Stock Exchange
4.125% Notes due 2043 PM43 New York Stock Exchange
4.875% Notes due 2043 PM43A New York Stock Exchange
4.250% Notes due 2044 PM44 New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company ☐
--- --- If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02. Results of Operations and Financial Condition.
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On February 8, 2024, Philip Morris International Inc. (the “Company”) issued a press release announcing its financial results for the quarter and the fiscal year ended December 31, 2023, as well as the accompanying glossary of key terms, definitions, explanatory notes, select financial information and reconciliations of non-GAAP financial measures. The earnings release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference to this Item 2.02. The glossary of key terms, definitions, explanatory notes, select financial information and reconciliations of non-GAAP financial measures is attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by reference to this Item 2.02.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing or document.

Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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99.1 Philip Morris International Inc. Press Release, dated February 8, 2024 (furnished pursuant to Item 2.02).
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99.2 Glossary of Key Terms, Definitions, Explanatory Notes, Select Financial Information and Reconciliations of Non-GAAP Financial Measures (furnished pursuant to Item 2.02).
--- --- 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101).
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SIGNATURES

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

PHILIP MORRIS INTERNATIONAL INC.
By: /s/ DARLENE QUASHIE HENRY
Name: Darlene Quashie Henry
Title: Vice President, Associate General Counsel & Corporate Secretary

Date: February 8, 2024

Document

Exhibit 99.1
PRESS RELEASE pmilogoera01a01a01a22.jpg
Investor Relations: Media:
Stamford, CT: +1 (203) 905 2413 Lausanne: +41 (0)58 242 4500
Lausanne: +41 (0)58 242 4666 Email: David.Fraser@pmi.com
Email: InvestorRelations@pmi.com

PHILIP MORRIS INTERNATIONAL REPORTS 2023 FOURTH-QUARTER

AND FULL-YEAR RESULTS;

DELIVERS 2023 FULL-YEAR REPORTED DILUTED EPS OF $ 5.02

AND ADJUSTED DILUTED EPS OF $ 6.01, REPRESENTING CURRENCY-NEUTRAL GROWTH OF 11.0%;

PROVIDES 2024 EPS FORECAST

STAMFORD, CT, February 8, 2024 – Philip Morris International Inc. (PMI) (NYSE: PM) today announces its 2023 fourth-quarter and full-year results. Further explanation of PMI's use of non-GAAP measures cited in this document and reconciliations to the most directly comparable U.S. GAAP measures can be found in the “Non-GAAP Measures, Glossary and Explanatory Notes” section of this release, in Exhibit 99.2 to the company's Form 8-K dated February 8, 2024, and at www.pmi.com/2023Q4earnings.

2023 FOURTH-QUARTER AND FULL-YEAR HIGHLIGHTS

Fourth-Quarter Full-Year
Amount Adjusted Amount Adjusted
Total Cig. & HTU Shipment Volume (units bn) 185.1 738.2
HTU Shipment Volume (units bn) 34.0 125.3
Oral Product Shipment Volume (mn cans) (1) 219.6 23.4% (2) 799.3 16.8% (2)
Net Revenues ($ bn) 9.0 8.3% (3) 35.2 7.8% (3)
Smoke-Free Product Net Revenues ($ bn) 3.6 13.6% (3) 12.8 12.8% (3)
- % of Total Net Revenues 39.3% 36.5%
Operating Income ($ bn) 2.9 8.0% (3) 11.6 3.7% (3)
Diluted Earnings per Share 1.41 5.02
Adjusted Diluted Earnings per Share 1.36 12.2% (4) 6.01 11.0% (4)
(1) Excludes snuff, snuff leaf and U.S. chew<br>(2) On a pro forma basis (including Swedish Match in all periods)<br>(3) On an organic basis<br>(4) Excluding currency

All values are in US Dollars.

Fourth-Quarter

•Smoke-free products accounted for 39.3% of total net revenues

•Adjusted in-market sales volume for HTUs, which excludes the net unfavorable impact of estimated distributor and wholesaler inventory movements, up by an estimated 13.9%

•Total IQOS users at quarter-end up by 1.2 million versus September 2023

•Market share for HTUs in IQOS markets up by 1.3 points to 9.7%

•ZYN nicotine pouch shipment volume in the U.S. of 116.3 million cans, representing growth of 78.2% versus fourth-quarter 2022 Swedish Match shipments of 65.3 million cans

•Combustible tobacco net revenue growth of 5.3% on both a reported and organic basis, driven by pricing of 9.9%

Full-Year

•Third consecutive year of volume growth driven by HTUs

•Adjusted in-market sales volume for HTUs, which excludes the net unfavorable impact of estimated distributor and wholesaler inventory movements, up by an estimated 14.8%

•Total IQOS users at year-end estimated at approximately 28.6 million (up by 3.7 million versus December 2022), of which approximately 20.8 million had switched to IQOS and stopped smoking

•Market share for HTUs in IQOS markets up by 1.2 points to 9.1%

•ZYN nicotine pouch shipment volume in the U.S. of 384.8 million cans, representing growth of 62.0% versus 2022 Swedish Match shipments of 237.5 million cans

•Increased regular quarterly dividend in September by 2.4% to $1.30 per share, or an annualized rate of $5.20 per share

•Combustible tobacco net revenue growth of 3.5%; growth of 5.5% on an organic basis, driven by pricing of 8.9%

•Organic growth in adjusted operating income driven by the performance of smoke-free products

"Our business delivered a strong finish to 2023 and we achieved a number of remarkable milestones on our path to becoming a smoke-free company," said Jacek Olczak, Chief Executive Officer.

"We are pleased that smoke-free products reached nearly 40% of our total net revenues and over 40% of our gross profit in the fourth quarter. This was led by the continued growth of IQOS, which has now surpassed Marlboro in terms of net revenues, confirming its position as the leading premium nicotine brand less than 10 years from launch. The fourth quarter also marked the first anniversary of our combination with Swedish Match, which delivered very strong results in 2023 driven by the stellar U.S. performance of ZYN."

"We are entering 2024 with strong momentum, and we expect it will be another year of excellent performance underpinned by an acceleration in organic smoke-free net revenue and profit growth."

2023 FULL-YEAR SUMMARY

Adjusted net revenues increased by 7.8% on an organic basis, driven by total cigarette and HTU shipment volume growth of 1.0% (reflecting growth of 14.7% for HTUs and a decline of 1.4% for cigarettes), favorable category mix of smoke-free products and positive pricing.

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Adjusted operating income increased by 3.7% on an organic basis with a substantial acceleration in the second half of the year, as supply chain disruptions and ILUMA-related factors continued to dissipate, coupled with an accelerating contribution from smoke-free products.

Adjusted diluted EPS of $6.01 increased by 11.0%, excluding currency, driven primarily by the organic growth in adjusted operating income, as well as the results of the Swedish Match business and its strong performance led by ZYN in the U.S. The $0.20 unfavorable currency variance in the fourth quarter includes a $0.09 balance-sheet-related currency impact in Argentina. While the company’s affiliate in Argentina remains subject to highly inflationary accounting treatment, with the U.S. dollar treated as the functional currency, the impact reflects the depreciation of Argentine peso-denominated monetary net assets, which impacts earnings on a periodic basis when translated to U.S. dollars and are also subject to capital controls.

Full-Year
2023 2022 Currency Var. excl. Currency
Reported Diluted EPS $ 5.02 $ 5.81 $ (0.63) (2.8) %
Asset impairment and exit costs 0.06 —
Termination of distribution arrangement in the Middle East 0.04 —
Income tax impact associated with Swedish Match AB financing (0.11) (0.13)
Swedish Match AB acquisition accounting related item 0.01 0.06
Impairment of goodwill and other intangibles 0.44 0.06
Amortization of intangibles 0.25 0.09
Charges related to the war in Ukraine 0.03 0.08
Costs associated with Swedish Match AB offer — 0.06
South Korea indirect tax charge 0.11 —
Termination of agreement with Foundation for a Smoke-Free World 0.07 —
Fair value adjustment for equity security investments (0.02) (0.02)
Tax items (1) 0.11 (0.03)
Adjusted Diluted EPS $ 6.01 $ 5.98 $ (0.63) 11.0 %
(1) 2023 Tax items relate to the unilateral suspension of certain Russian double tax treaties by the Russian government
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2024 FULL-YEAR FORECAST

Full-Year
2024<br>Forecast 2023
Reported Diluted EPS $5.90 - $6.02 5.02
Adjustments:
Asset impairment and exit costs — 0.06
Termination of distribution arrangement in the Middle East — 0.04
Income tax impact associated with Swedish Match AB financing — (0.11)
Amortization of intangibles 0.42 0.25
Impairment of goodwill and other intangibles — 0.44
Charges related to the war in Ukraine — 0.03
Swedish Match AB acquisition accounting related item — 0.01
Termination of agreement with Foundation for a Smoke-Free World — 0.07
South Korea indirect tax charge — 0.11
Fair value adj. for equity security investments — (0.02)
Tax items (1) — 0.11
Total Adjustments 0.42 0.99
Adjusted Diluted EPS $6.32 - $6.44 6.01
Less: Currency (0.11)
Adjusted Diluted EPS, excluding currency $6.43 - $6.55 6.01 - 9.0%
(1) 2023 Tax items relate to the unilateral suspension of certain Russian double tax treaties by the Russian government

All values are in US Dollars.

Reported diluted EPS is forecast to be in a range of $5.90 to $6.02, at prevailing exchange rates, versus reported diluted EPS of $5.02 in 2023. Excluding a total 2024 adjustment of $0.42 per share and an adverse currency impact of $0.11, at prevailing exchange rates, this forecast represents a projected increase of 7.0% to 9.0% versus adjusted diluted EPS of $6.01 in 2023, as outlined in the above table.

2024 Full-Year Forecast Assumptions

This forecast assumes:

•An estimated total international industry volume decline for cigarettes and HTUs, excluding China and the U.S., of -2% to flat;

•Total cigarette, HTU and oral smoke-free product shipment volume growth for PMI of flat to +1% driven by smoke-free products;

•14% to 16% adjusted in-market sales volume growth for HTUs, including an approximate 2 billion units adverse impact from consumer adjustment to the EU characterizing flavor ban, and essentially no growth in Russia, resulting in HTU shipment volumes of more than 140 billion units;

•Nicotine pouch shipment volume in the U.S. of approximately 520 million cans;

•Net revenue growth of 6.5% to 8% on an organic basis;

•Organic operating income growth of 8% to 9.5%;

•An acceleration in organic smoke-free net revenue and gross profit growth compared to 2023;

•Broadly unchanged net revenue and adjusted operating loss in Wellness and Healthcare segment;

•No earnings impact from any potential favorable court ruling related to the legality of a supplemental tax surcharge on HTUs in Germany, which went into effect in 2022 (see PMI's first-quarter 2023 press release

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from April 20, 2023, for additional detail). The company currently expects to have greater visibility on the outcome in the first quarter of 2024;

•Full-year amortization of acquired intangibles of $0.42 per share, which includes an estimate of amortization of IQOS commercialization rights in the U.S. following the closing of the agreement to end our commercial relationship with Altria Group, Inc. covering IQOS in the U.S. effective May 1, 2024. We currently estimate that the incremental increase in amortization expense in 2024, as a result of this transaction, will be approximately $370 million on a pre-tax basis for the remaining 8 months of the year. For full year 2025 through 2028, we currently estimate an annual impact of approximately $555 million on a pre-tax basis;

•Net financing costs of approximately $1.3 to $1.4 billion;

•An effective tax rate, excluding discrete tax events, of approximately 21% to 22%;

•Operating cash flow of $10 to $11 billion at prevailing exchange rates, subject to year-end working capital requirements;

•Capital expenditures of approximately $1.2 billion, partly reflecting investments in ZYN capacity in the U.S.;

•Net debt to adjusted EBITDA ratio improvement of 0.3x to 0.5x at prevailing exchange rates as we continue to target a ratio of around 2x by the end of 2026;

•No share repurchases in 2024; and

•A strong start to 2024 with first quarter adjusted diluted EPS of $1.37 to $1.42, including an estimated adverse currency impact of 10 cents at prevailing exchange rates.

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

New Segment Structure

Following the combination and the progress in 2023 toward integration of the Swedish Match business into the existing PMI regional segment structure, PMI will update its segment reporting by including Swedish Match results in the four existing geographical regions. As of the first quarter of 2024, PMI will report on this basis. The company plans to disclose select historical financial information for the 2021 to 2023 period reflecting the above mentioned change in the coming weeks.

Global Patent Settlement

On February 2, 2024 PMI announced that it has reached a global settlement with British American Tobacco p.l.c. that resolves all ongoing patent infringement litigation between the parties related to heated tobacco and vapor products. Please see the Form 8-K dated February 2, 2024 for additional detail.

Conference Call

A conference call hosted by Jacek Olczak, Chief Executive Officer, and Emmanuel Babeau, Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on February 8, 2024. Access the call at www.pmi.com/2023Q4earnings.

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TOTAL MARKET, CONSOLIDATED SHIPMENT VOLUME & MARKET SHARE

Total Market Volume

Full-Year

Estimated international industry volume (excluding China and the U.S.) for cigarettes and HTUs of 2.6 trillion, decreased by 1.6%, reflecting declines in the SSEA, CIS & MEA Region, the Europe Region and the Americas Region, partly offset by an increase in the EA, AU & PMI DF Region, as described in the Regional sections.

Consolidated Shipment Volume

PMI Cigarettes and HTUs Fourth-Quarter Full-Year
(million units) 2023 2022 Change 2023 2022 Change
Cigarettes 151,094 154,026 (1.9) % 612,949 621,908 (1.4) %
Heated Tobacco Units 33,972 32,021 6.1 % 125,263 109,169 14.7 %
Total Cigarettes and HTUs 185,066 186,047 (0.5) % 738,212 731,077 1.0 %
PMI Oral Products (1) Fourth-Quarter Full-Year
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(million cans) 2023 2022 Change 2023 2022 Change
Nicotine Pouches 125.7 39.8 +100% 421.1 42.5 +100%
Snus 61.8 42.8 44.4 % 240.4 54.8 +100%
Moist Snuff 31.2 16.0 95.5 % 133.7 16.0 +100%
Other 0.8 — — % 4.2 — — %
Total Oral Products 219.6 98.6 +100% 799.3 113.2 +100%
(1) Excluding snuff, snuff leaf and U.S. chew
Note: Sum may not foot due to roundings.

Fourth-Quarter

PMI's total cigarette and HTU shipment volume decreased by 0.5%, reflecting an 6.1% increase in HTU shipments across all regions except EA, AU & PMI DF Region, partly offset by a 1.9% decline in cigarette shipments with declines in the EA, AU & PMI DF Region, the Americas Region, as well as the SSEA, CIS & MEA Region, and broadly stable cigarette shipments in the Europe Region. Cigarette shipment volume for Marlboro decreased by 0.8% to 60.2 billion units, due primarily to the Philippines.

PMI’s total oral product shipment volume increased by over 100%, driven by the Swedish Match acquisition. On a pro forma basis (including Swedish Match in all periods), it increased by 23.4%, primarily reflecting growth in nicotine pouches (particularly in the U.S.), partly offset by a decline for snus (mainly in Scandinavia). Swedish Match's total oral product shipment volume increased by 21.9% versus its corresponding shipments in 2022.

Adjusted in-market sales for HTUs increased by 13.9%, including growth in Europe of 13.1%, Japan of 13.4%. Excluding Russia and Ukraine, adjusted in-market sales for HTUs increased by 15.0%. The net unfavorable impact of estimated distributor inventory movements for HTUs was driven primarily by Japan.

Full-Year

PMI's total cigarette and HTU shipment volume increased by 1.0%, reflecting an 14.7% increase in HTU shipments across all regions, partly offset by a 1.4% decline in cigarette shipments due to declines in the Europe, EA, AU & PMI DF, and Americas Regions, partly offset by the SSEA, CIS & MEA Region. Cigarette shipment volume for Marlboro decreased by 1.9% to 240.0 billion units, due primarily to the Philippines.

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PMI’s total oral product shipment volume increased by over 100%, driven by the Swedish Match acquisition. On a pro forma basis (including Swedish Match in all periods), it increased by 16.8%, primarily reflecting the same factors as in the quarter. Swedish Match's total oral product shipment volume increased by 17.1% versus its corresponding shipments in 2022.

Adjusted in-market sales for HTUs increased by 14.8% (in line with full-year HTUs shipment volume growth of 14.7%), including growth in Europe of 17.6% and Japan of 14.5%. Excluding Russia and Ukraine, adjusted in market sales for HTUs increased by 17.1%.

International Share of Market - Cigarettes and HTUs

Fourth-Quarter Full Year
2023 2022 Change (pp) 2023 2022 Change (pp)
Total International Market Share (1) 28.6 % 28.1 % 0.5 28.3 % 27.7 % 0.6
Cigarettes 23.7 % 23.7 % — 23.7 % 23.6 % 0.1
HTU 4.9 % 4.3 % 0.6 4.7 % 4.1 % 0.6
Cigarette over Cigarette Market Share (2) 25.3 % 25.2 % 0.1 25.2 % 25.0 % 0.2
(1) Defined as PMI's cigarette and heated tobacco unit in-market sales volume as a percentage of total industry cigarette and heated tobacco unit sales volume, excluding China and the U.S., including cigarillos in Japan
(2) Defined as PMI's cigarette in-market sales volume as a percentage of total industry cigarette sales volume, excluding China and the U.S., including cigarillos in Japan
Note: Sum of share of market by product categories might not foot to total due to roundings.
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CONSOLIDATED FINANCIAL SUMMARY

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 9,047 8,152 11.0 % 8.3 % 895 (78) 299 631 50 (7)
Cost of Sales (1) (3,462) (3,211) (7.8) % (3.8) % (251) (39) (90) — (103) (19)
Marketing, Administration and Research Costs (2) (2,696) (2,017) (33.7) % (19.0) % (679) (184) (112) — — (383)
Operating Income 2,889 2,924 (1.2) % 5.8 % (35) (301) 97 631 (53) (409)
Amortization of Intangibles (129) (58) -(100)% (51.7) % (71) — (41) — — (30)
Charges related to the war in Ukraine (34) (23) (47.8) % (47.8) % (11) — — — — (11)
Costs associated with Swedish Match AB offer — 154 -(100)% -(100)% (154) — — — — (154)
Swedish Match AB acquisition accounting related items — (125) +100% +100% 125 — — — — 125
Adjusted Operating Income 3,052 2,976 2.6 % 8.0 % 76 (301) 138 631 (53) (339)
Adjusted Operating Income Margin 33.7 % 36.5 (2.8)pp (0.1) pp
(1) Includes 18 million in 2023 and 157 million in 2022 related to the special items below.
(2) Includes 145 million in 2023 and (105) million in 2022 related to the special items below.

All values are in US Dollars.

Net revenues increased by 8.3% on an organic basis, mainly reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing; and favorable volume/mix, mainly driven by higher HTU volume, partially offset by lower cigarette volume.

Adjusted operating income increased by 8.0% on an organic basis, mainly reflecting: the favorable pricing variance; partially offset by higher marketing, administration and research costs (primarily due to inflationary impacts, notably related to wages) as well as higher manufacturing costs. Slightly unfavorable volume/mix, mainly driven by lower cigarette volume, was partly offset by higher HTU volume.

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Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
Total Excl.<br>Curr. & Acquis Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 35,174 31,762 10.7 % 7.6 % 3,412 (1,112) 2,113 1,940 664 (193)
Termination of distribution arrangement in the Middle East (80) — — % — % (80) — — — — (80)
Adjusted Net Revenues 35,254 31,762 11.0 % 7.8 % 3,492 (1,112) 2,113 1,940 664 (113)
Net Revenues 35,174 31,762 10.7 % 7.6 % 3,412 (1,112) 2,113 1,940 664 (193)
Cost of Sales (1) (12,893) (11,402) (13.1) % (8.4) % (1,491) 167 (695) — (755) (208)
Marketing, Administration and Research Costs (2) (10,060) (8,114) (24.0) % (13.5) % (1,946) (128) (724) — — (1,094)
Impairment of Goodwill (665) — — % — % (665) — — — — (665)
Operating Income 11,556 12,246 (5.6) % (2.5) % (690) (1,073) 694 1,940 (91) (2,160)
Asset Impairment & Exit Costs (109) — — % — % (109) — — — — (109)
Termination of distribution arrangement in the Middle East (3) (80) — — % — % (80) — — — — (80)
Impairment of Goodwill and Other Intangibles (4) (680) (112) -(100)% -(100)% (568) — — — — (568)
Amortization of Intangibles (497) (159) -(100)% (14.5) % (338) — (315) — — (23)
Charges related to the war in Ukraine (53) (151) 64.9 % 64.9 % 98 — — — — 98
Costs associated with Swedish Match AB offer — (115) +100% +100% 115 — — — — 115
Swedish Match AB acquisition accounting related items (18) (125) 85.6 % +100% 107 — (18) — — 125
South Korea Indirect Tax Charge (204) — — % — % (204) — — — — (204)
Termination of agreement with Foundation for a Smoke-Free World (140) — — % — % (140) — — — — (140)
Adjusted Operating Income 13,337 12,908 3.3 % 3.7 % 429 (1,073) 1,027 1,940 (91) (1,374)
Adjusted Operating Income Margin 37.8 % 40.6 (2.8)pp (1.5)pp
(1) Includes 90 million in 2023 and 356 million in 2022 related to the special items below.
(2) Includes 946 million in 2023 and 306 million in 2022 related to the special items below.
(3) Included in Net Revenues above.
(4) Includes 665 million impairment of goodwill.

All values are in US Dollars.

Adjusted net revenues increased by 7.8% on an organic basis, mainly reflecting: a favorable pricing variance, primarily driven by higher combustible tobacco pricing, and favorable volume/mix, mainly driven by higher HTU

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volume, partially offset by lower cigarette volume and lower fees for certain distribution rights billed to customers in certain markets.

Cost of sales, excluding currency and acquisitions, increased by 8.4%, driven by higher manufacturing costs (primarily due to inflationary impacts, notably related to direct materials, tobacco leaf and energy, partly offset by productivity) and unfavorable volume/mix, mainly reflecting unfavorable category mix (notably due to lower cigarette volume and higher HTU volume), as well as the technical impact of third-party manufacturing in Indonesia. This increase was partially offset by the Swedish Match AB acquisition accounting related item in 2022, the impairment charge of other intangible assets in 2022 and lower charges related to the War in Ukraine.

Adjusted operating income increased by 3.7% on an organic basis, mainly reflecting: the favorable pricing variance; partly offset by higher marketing, administration and research costs (primarily due to inflationary impacts, notably related to wages, and lower commercial investments in the prior year period); higher manufacturing costs (as explained for cost of sales); and the impact of lower fees for certain distribution rights, as noted for net revenues.

EUROPE REGION

Total Market, PMI Shipment & Market Share Commentaries

Europe Key Data Fourth-Quarter Full-Year
Change Change
2023 2022 % / pp 2023 2022 % / pp
PMI Shipment Volume (million units)
Cigarettes 39,330 39,339 — % 165,593 170,658 (3.0) %
Heated Tobacco Units 14,310 12,921 10.7 % 49,269 45,417 8.5 %
Total Europe 53,640 52,260 2.6 % 214,862 216,075 (0.6) %
PMI Market Share
Cigarettes 30.3 % 30.6 % (0.3) 30.3 % 31.1 % (0.8)
Heated Tobacco Units 10.0 % 8.9 % 1.1 9.1 % 7.8 % 1.3
Total Europe 40.3 % 39.5 % 0.8 39.4 % 39.0 % 0.4
Note: Sum may not foot due to roundings.

Fourth-Quarter

The estimated total market for cigarettes and HTUs in the Region decreased by 0.9% to 130.8 billion units, reflecting a 2.6% decline for cigarettes, partly offset by a 13.2% increase for HTUs. The decrease in the estimated total market was predominantly due to the UK (down by 16.7%), the Czech Republic (down by 14.7%) and France (down by 7.3%), partly offset by Italy (up by 2.5%).

PMI's total cigarette and HTU shipment volume in the Region increased by 2.6% to 53.6 billion units, mainly due to Poland (up by 10.6%), Italy (up by 4.0%) and Ukraine (up by 14.9%), partly offset by France (down by 13.7%; or by 8.3% excluding the net unfavorable impact of estimated distributor inventory movements) and Germany (down by 6.2%).

PMI's estimated HTU adjusted in-market sales volume in the Region increased by 13.1% in the quarter, reflecting the strong continued growth momentum for IQOS (including in Germany, where adjusted in-market sales volume for HTUs increased by 19.5%).

  • 10 -

PMI's HTU share of the total cigarette and HTU market in the Region increased by 1.1 points, or by 1.2 points on an adjusted basis.

Full-Year

The estimated total market for cigarettes and HTUs in the Region decreased by 1.3% to 542.3 billion units, reflecting a 3.0% decline for cigarettes, partly offset by a 15.6% increase for HTUs. The decrease in the estimated total market was predominantly due to the UK (down by 15.4%), France (down by 8.2%), Germany (down by 1.8%) and Spain (down by 2.4%), partly offset by Poland (up by 1.8%).

PMI's total cigarette and HTU shipment volume in the Region decreased by 0.6% to 214.9 billion units, mainly due to Germany (down by 6.0%), Italy (down by 2.8%; or up by 0.4% excluding the net unfavorable impact of estimated distributor inventory movements) and France (down by 7.3%), partly offset by Poland (up by 9.4%).

PMI's estimated HTU adjusted in-market sales volume in the Region increased by 17.6%, including growth in Germany and Italy of 29.7% and 16.6%, respectively.

PMI's HTU share of the total cigarette and HTU market in the Region increased by 1.3 points, or by 1.5 points on an adjusted basis.

Financial Summary

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 3,614 3,064 18.0 % 9.6 % 550 255 — 187 108 —
Operating Income 1,566 1,355 15.6 % 6.6 % 211 122 — 187 146 (244)
Adjustments (1) (44) 38 -(100)% -(100)% (82) — — — — (82)
Adjusted Operating Income 1,610 1,317 22.2 % 13.0 % 293 122 — 187 146 (162)
Adjusted Operating Income Margin 44.5 % 43.0 1.5pp 1.3pp
(1) See Schedule 8 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues increased by 9.6% on an organic basis, reflecting: a favorable pricing variance, mainly driven by higher combustible tobacco pricing; and favorable volume/mix, primarily driven by higher HTU volume and favorable mix, partly offset by lower cigarette volume, as well as unfavorable cigarette mix.

Adjusted operating income increased by 13.0% on an organic basis, primarily reflecting: the favorable pricing variance; favorable volume/mix, mainly reflecting higher HTU volume, partly offset by lower cigarette volume, as well as unfavorable cigarette mix; partly offset by higher marketing, administration and research costs (primarily due to inflationary impacts) as well as higher manufacturing costs.

  • 11 -

Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 13,598 12,869 5.7 % 3.7 % 729 249 — 540 (60) —
Operating Income 6,012 5,802 3.6 % 0.4 % 210 186 — 540 (79) (437)
Adjustments (1) (202) (242) 16.5 % 16.5 % 40 — — — — 40
Adjusted Operating Income 6,214 6,044 2.8 % (0.3) % 170 186 — 540 (79) (477)
Adjusted Operating Income Margin 45.7 % 47.0 (1.3)pp (1.8)pp
(1) See Schedule 9 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues increased by 3.7% on an organic basis, reflecting: a favorable pricing variance, mainly driven by higher combustible tobacco pricing; partially offset by unfavorable volume/mix, mainly due to lower cigarette volume, as well as unfavorable cigarette mix, partly offset by higher HTU volume.

Adjusted operating income decreased by 0.3% on an organic basis, primarily reflecting: higher marketing, administration and research costs (mainly due to inflationary impacts and lower commercial investments in the prior year period); higher manufacturing costs (primarily due to inflationary impacts); and unfavorable volume/mix, mainly due to the same factors as for net revenues; partly offset by the favorable pricing variance.

SSEA, CIS & MEA REGION

Total Market, PMI Shipment & Market Share Commentaries

PMI Shipment Volume Fourth-Quarter Full-Year
(million units) 2023 2022 Change 2023 2022 Change
Cigarettes 83,009 83,920 (1.1) % 333,353 331,026 0.7 %
Heated Tobacco Units 7,502 6,122 22.5 % 24,890 22,607 10.1 %
Total SSEA, CIS & MEA 90,511 90,042 0.5 % 358,243 353,633 1.3 %

Fourth-Quarter

The estimated total market for cigarettes and HTUs in the Region decreased by approximately 1% to 389.2 billion units, due to a decline for cigarettes. The decrease in the estimated total market was mainly due to Egypt (down by 21.8%) and Pakistan (down by 25.1%), partly offset by Turkey (up by 13.3%).

PMI's total cigarette and HTU shipment volume in the Region increased by 0.5% to 90.5 billion units, mainly driven by Turkey (up by 19.0%), partly offset by the Philippines (down by 25.5%). PMI's estimated HTU adjusted in-market sales volume increased by 13.0%, with 22.5% HTU shipment volume growth, primarily due to comparison effects, notably in Russia.

  • 12 -

Full-Year

The estimated total market for cigarettes and HTUs in the Region decreased by approximately 2% to 1,528.6 billion units, due to a decline for cigarettes. The decrease in the estimated total market was predominantly due to Egypt (down by 20.9%) and Pakistan (down by 35.1%), partly offset by Turkey (up by 16.9%).

Our Regional market share increased by 0.8 points to 23.4%.

PMI's total cigarette and HTU shipment volume in the Region increased by 1.3% to 358.2 billion units, mainly driven by Turkey (up by 23.0%), partly offset by the Philippines (down by 26.2%). PMI's estimated HTU adjusted in-market sales volume increased by 8.2% including limited growth in Russia.

Financial Summary

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 2,707 2,686 0.8 % 13.0 % 21 (327) — 257 97 (6)
Operating Income 676 855 (20.9) % 3.0 % (179) (205) — 257 (49) (182)
Adjustments (1) (5) 38 -(100)% -(100)% (43) — — — — (43)
Adjusted Operating Income 681 817 (16.6) % 8.4 % (136) (205) — 257 (49) (139)
Adjusted Operating Income Margin 25.2 % 30.4 (5.2)pp (1.2)pp
(1) See Schedule 8 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues increased by 13.0% on an organic basis, primarily reflecting: a favorable pricing variance, mainly driven by higher combustible tobacco pricing; and favorable volume/mix, driven by higher HTU volume and favorable cigarette mix, partly offset by lower cigarette volume.

Adjusted operating income increased by 8.4% on an organic basis, primarily reflecting: the favorable pricing variance, partly offset by higher marketing, administration and research costs; higher manufacturing costs (primarily due to inflationary impacts); and unfavorable volume/mix, mainly due to an unfavorable cigarette volume impact.

  • 13 -

Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 10,629 10,467 1.5 % 11.7 % 162 (1,060) — 1,008 400 (186)
Adjustment (1) (80) — — % — % (80) — — — — (80)
Adjusted Net Revenues 10,709 10,467 2.3 % 12.4 % 242 (1,060) — 1,008 400 (106)
Net Revenues 10,629 10,467 1.5 % 11.7 % 162 (1,060) — 1,008 400 (186)
Operating Income 3,047 3,864 (21.1) % (4.2) % (817) (653) — 1,008 (237) (935)
Adjustments (2) (178) (56) -(100)% -(100)% (122) — — — — (122)
Adjusted Operating Income 3,225 3,920 (17.7) % (1.1) % (695) (653) — 1,008 (237) (813)
Adjusted Operating Income Margin 30.1 % 37.5 (7.4)pp (4.5)pp
(1) Termination of distribution arrangement in the Middle East
(2) See Schedule 9 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Adjusted net revenues increased by 12.4% on an organic basis, primarily reflecting: a favorable pricing variance, mainly driven by higher combustible tobacco pricing, with HTU pricing also higher; favorable volume/mix, primarily driven by favorable cigarette mix, as well as higher volume for HTUs, partly offset by an unfavorable cigarette volume impact; and partially offset by lower fees for certain distribution rights billed to customers in certain markets, shown in "Cost/Other."

Adjusted operating income decreased by 1.1% on an organic basis, primarily reflecting: higher marketing, administration and research costs; higher manufacturing costs (primarily due to inflationary impacts); unfavorable volume/mix, mainly due to an unfavorable cigarette volume impact and unfavorable cigarette mix, partly offset by higher HTU volume; and the impact of lower fees for certain distribution rights, as noted for net

revenues; partially offset by the favorable pricing variance.

EA, AU AND PMI DF REGION

Total Market, PMI Shipment & Market Share Commentaries

PMI Shipment Volume Fourth-Quarter Full-Year
(million units) 2023 2022 Change 2023 2022 Change
Cigarettes 11,287 12,335 (8.5) % 50,689 54,251 (6.6) %
Heated Tobacco Units 11,958 12,785 (6.5) % 50,519 40,613 24.4 %
Total EA, AU & PMI DF 23,245 25,120 (7.5) % 101,208 94,864 6.7 %
  • 14 -

Fourth-Quarter

The estimated total market for cigarettes and HTUs in the Region, excluding China, decreased by around 1% to 80.7 billion units, with growth for HTUs more than offset by a decline for cigarettes. The decrease in the estimated total market was driven by Taiwan (down by 18.1%), partly offset by International Duty Free (up by 26.3%).

PMI's total cigarette and HTU shipment volume in the Region decreased by 7.5% to 23.2 billion units, driven by Japan (down by 13.3%).

PMI's estimated HTU adjusted in-market sales volume in the Region increased by 15.4% in the quarter, including growth in Japan of 13.4%, primarily due to comparison effects.

Full-Year

The estimated total market for cigarettes and HTUs in the Region, excluding China, increased by 1% to 319.8 billion units, reflecting growth for HTUs, partly offset by a decline for cigarettes. The increase in the estimated total market was mainly driven by International Duty Free (up by 35.7%), partly offset by Taiwan (down by 7.4%) and Australia (down by 19.4%).

Our Regional market share increased by 1.3 points to 30.0%.

PMI's total cigarette and HTU shipment volume in the Region increased by 6.7% to 101.2 billion units, mainly     driven by Japan (up by 9.7%) and International Duty Free (up by 14.5%).

PMI's estimated HTU adjusted in-market sales volume in the Region increased by 15.8%, including growth in Japan of 14.5%.

Financial Summary

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 1,430 1,478 (3.2) % (0.1) % (48) (46) — 133 (135) —
Operating Income 561 678 (17.3) % (5.2) % (117) (82) — 133 (133) (35)
Adjustments (1) — 31 -(100)% -(100)% (31) — — — — (31)
Adjusted Operating Income 561 647 (13.3) % (0.6) % (86) (82) — 133 (133) (4)
Adjusted Operating Income Margin 39.2 % 43.8 (4.6)pp (0.2)pp
(1) See Schedule 8 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues decreased by 0.1% on an organic basis, reflecting: unfavorable volume/mix, mainly driven by lower cigarette and HTU volume; largely offset by favorable pricing variance, driven by higher combustible tobacco pricing.

  • 15 -

Adjusted operating income decreased by 0.6% on an organic basis driven by the same factors as for net revenues.

Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 6,201 5,936 4.5 % 11.2 % 265 (400) — 206 459 —
Operating Income 2,481 2,424 2.4 % 18.6 % 57 (395) — 206 326 (80)
Adjustments (1) (254) (28) -(100)% -(100)% (226) — — — — (226)
Adjusted Operating Income 2,735 2,452 11.5 % 27.7 % 283 (395) — 206 326 146
Adjusted Operating Income Margin 44.1 % 41.3 2.8pp 6.1pp
(1) See Schedule 9 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues increased by 11.2% on an organic basis, reflecting: favorable volume/mix, mainly driven by higher HTU volume, partly offset by lower cigarette volume and unfavorable smoke-free product mix (for HTUs and devices); and a favorable pricing variance, driven by higher combustible tobacco and device pricing, partly offset by lower HTU (net) pricing (primarily related to Japan).

Adjusted operating income increased by 27.7% on an organic basis, mainly reflecting favorable volume/mix, primarily driven by higher HTU volume, partly offset by lower cigarette volume and unfavorable HTU mix; the favorable pricing variance; and lower supply chain costs (primarily related to Japan).

AMERICAS REGION

Total Market, PMI Shipment & Market Share Commentaries

PMI Shipment Volume Fourth-Quarter Full-Year
(million units) 2023 2022 Change 2023 2022 Change
Cigarettes 17,468 18,432 (5.2) % 63,314 65,973 (4.0) %
Heated Tobacco Units 202 193 4.7 % 585 532 10.0 %
Total Americas 17,670 18,625 (5.1) % 63,899 66,505 (3.9) %
  • 16 -

Fourth-Quarter

The estimated total market for cigarettes and HTUs in the Region, excluding the U.S., decreased by around 2% to 49.9 billion units, primarily reflecting a decline for cigarettes. The decrease in the estimated total market was mainly due to Mexico (down by 8.7%), Argentina (down by 8.1%) and Canada (down by 11.2%), partly offset by Brazil (up by 11.7%).

PMI's total cigarette and HTU shipment volume in the Region decreased by 5.1% to 17.7 billion units, mainly due to Mexico (down by 11.6%) and Argentina (down by 10.7%), partly offset by Brazil (up by 13.3%).

Full-Year

The estimated total market for cigarettes and HTUs in the Region, excluding the U.S., decreased by around 1% to 189.2 billion units, driven by a decline for cigarettes. The decrease in the estimated total market was mainly due to Mexico (down by 6.8%), Canada (down by 12.6%) and Argentina (down by 5.0%), partly offset by Brazil (up by 10.1%).

Our Regional market share, excluding the U.S., decreased by 1.1 points to 33.7%.

PMI's total cigarette and HTU shipment volume in the Region decreased by 3.9% to 63.9 billion units, mainly due to Mexico (down by 9.8%) and Argentina (down by 7.9%), partly offset by Brazil (up by 12.8%).

Financial Summary

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 545 536 1.7 % (4.9) % 9 35 — 34 (62) 2
Operating Income (79) 100 -(100)% (56.0) % (179) (123) — 34 (55) (35)
Adjustments (1) (1) 5 -(100)% -(100)% (6) — — — — (6)
Adjusted Operating Income (78) 95 -(100)% (52.6) % (173) (123) — 34 (55) (29)
Adjusted Operating Income Margin (14.3) % 17.7 (32.0)pp (8.9)pp
(1) See Schedule 8 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues decreased by 4.9% on an organic basis, primarily reflecting: unfavorable volume/mix, mainly due to lower cigarette volume and unfavorable cigarette mix; partly offset by a favorable pricing variance, driven by higher combustible tobacco pricing.

Adjusted operating income decreased by 52.6% on an organic basis, mainly reflecting: unfavorable volume/mix, mainly due to the same factors as for net revenues; higher marketing and administration costs (including incremental investments in the U.S. in preparation for smoke-free product commercialization); and higher manufacturing costs; partly offset by the favorable pricing variance.

  • 17 -

Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 1,944 1,903 2.2 % (2.9) % 41 96 — 128 (177) (6)
Operating Income 62 436 (85.8) % (40.6) % (374) (197) — 128 (139) (166)
Adjustments (1) (19) (14) (35.7) % (35.7) % (5) — — — — (5)
Adjusted Operating Income 81 450 (82.0) % (38.2) % (369) (197) — 128 (139) (161)
Adjusted Operating Income Margin 4.2 % 23.6 (19.4)pp (8.6)pp
(1) See Schedule 9 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues decreased by 2.9% on an organic basis, primarily reflecting: unfavorable volume/mix, mainly due to lower cigarette volume and unfavorable cigarette mix; partly offset by a favorable pricing variance, driven by higher combustible tobacco pricing.

Adjusted operating income decreased by 38.2% on an organic basis, mainly reflecting: higher marketing, administration and research costs (notably reflecting the same factors as in the quarter); unfavorable volume/mix, mainly due to the same factors as for net revenues; partly offset by the favorable pricing variance.

SWEDISH MATCH

PMI Shipment Commentary

Swedish Match Oral Product Shipment Volume (1) Fourth-Quarter Full-Year
(million cans) 2023 2022 Change 2023 2022 Change
Nicotine Pouches
U.S. 116.3 34.5 +100% 384.8 34.5 +100%
Scandinavia 7.1 3.7 90.9 % 28.7 3.7 +100%
Other 1.0 1.2 (15.1) % 4.6 1.2 +100%
Total Nicotine Pouches 124.4 39.4 +100% 418.2 39.4 +100%
Snus
Scandinavia 55.5 39.3 41.4 % 218.2 39.3 +100%
Other 1.6 1.1 41.4 % 6.8 1.1 +100%
Total Snus 57.1 40.4 41.4 % 224.9 40.4 +100%
Moist Snuff 31.2 16.0 95.5 % 133.7 16.0 +100%
Other 0.8 — — % 4.2 — — %
Total Oral Products 213.6 95.8 +100% 781.0 95.8 +100%
(1) Excluding U.S. chew
  • 18 -

Volume comparisons versus Swedish Match's 2022 results reflect data

sourced from its disclosures, available at www.swedishmatch.com/investors.

Fourth-Quarter

Swedish Match's total shipment volume for oral products increased by 21.9% versus its corresponding shipments of 175.2 million cans in the fourth quarter of 2022.

Nicotine pouch shipment volume increased by 68.6% compared to Swedish Match's fourth-quarter 2022 shipment volume of 73.8 million cans, mainly driven by 78.2% growth for ZYN in the U.S. -- an outstanding performance that reflected continued broad strength across the country. In Scandinavia, shipment volume for nicotine pouches grew by 3.0%.

Shipment volume for snus declined by 17.6% compared to Swedish Match's fourth-quarter 2022 shipment volume of 69.3 million cans. The decrease was primarily due to Scandinavia, mainly reflecting the comparison versus a strong total market in the prior year period.

Full-Year

Swedish Match's total shipment volume for oral products increased by 17.1% versus its corresponding shipments of 667.1 million cans in 2022.

Nicotine pouch shipment volume increased by 55.3% compared to Swedish Match's 2022 shipment volume of 269.2 million cans, reflecting 62.0% growth for ZYN in the U.S. In Scandinavia, shipment volume for nicotine pouches grew by 6.1%.

Shipment volume for snus declined by 13.8% compared to Swedish Match's 2022 shipment volume of 261.0 million cans.

Swedish Match's performance in the period primarily reflected the same factors as in the quarter, coupled with the impact of excise tax and price increases on snus in Scandinavia in the first quarter (including related inventory movements).

Swedish Match Combustible Product Shipment Volume Fourth-Quarter Full-Year
(million units) 2023 2022 Change 2023 2022 Change
Cigars 337.1 259.6 29.9 % 1,578.6 259.6 +100%

Fourth-Quarter

Cigar shipment volume declined by 26.4% compared to Swedish Match's fourth-quarter 2022 cigar shipment volume of 458.3 million units, primarily due to the impact of industry pricing effects.

Full-Year

Cigar shipment volume declined by 12.2% compared to Swedish Match's 2022 cigar shipment volume of 1,798.0 million units, mainly due to the same factor as in the quarter.

  • 19 -

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 682 316 +100% 21.2 % 366 — 299 25 42 —
Operating Income / (Loss) 227 (22) +100% +100% 249 (8) 97 25 38 97
Adjustments (1) (98) (151) 35.1 % 62.3 % 53 — (41) — — 94
Adjusted Operating Income 325 129 +100% 51.2 % 196 (8) 138 25 38 3
Adjusted Operating Income Margin 47.7 % 40.8 6.9pp 10.1pp
(1) See Schedule 8 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.
(2) Swedish Match's results beginning on November 11, 2022, when PMI became the owner of a majority position in the company, through December 31, 2022

All values are in US Dollars.

PMI recorded net revenues of $682 million in the Swedish Match segment for the fourth-quarter. Compared to Swedish Match's full fourth-quarter 2022 results, net revenues increased by 25.7%, excluding currency. This was mainly driven by the strong growth of smoke-free products, led by nicotine pouch volume growth in the U.S.

PMI recorded adjusted operating income of $325 million in the segment, reflecting an adjusted operating income margin of 47.7%.

Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 2,496 316 +100% 21.2 % 2,180 — 2,113 25 42 —
Operating Income 824 (22) +100% +100% 846 (8) 694 25 38 97
Adjustments (1) (390) (151) -(100)% 62.3 % (239) — (333) — — 94
Adjusted Operating Income 1,214 129 +100% 51.2 % 1,085 (8) 1,027 25 38 3
Adjusted Operating Income Margin 48.6 % 40.8 7.8pp 10.1pp
(1) See Schedule 9 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.
(2) Swedish Match's results beginning on November 11, 2022, when PMI became the owner of a majority position in the company, through December 31, 2022

All values are in US Dollars.

PMI recorded net revenues of $2.5 billion in the Swedish Match segment for the full-year period, with smoke-free products accounting for over 80% of the segment's total net revenues. Compared to Swedish Match's full 2022 results for the same period, net revenues increased by 20.1%, excluding currency. This was mainly driven by the strong growth of smoke-free products, led by nicotine pouch volume growth in the U.S., as well as higher pricing for cigars.

PMI recorded adjusted operating income of $1,214 million in the segment, reflecting an adjusted operating income margin of 48.6%.

  • 20 -

WELLNESS AND HEALTHCARE

The operating results of PMI’s Vectura Fertin Pharma business are reported in the Wellness and Healthcare segment.

Financial Summary

Fourth-Quarter

Financial Summary - Quarters Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 69 72 (4.2) % (11.1) % (3) 5 — (5) — (3)
Operating Income / (Loss) (62) (42) (47.6) % (35.7) % (20) (5) — (5) — (10)
Adjustments (1) (15) (13) (15.4) % (15.4) % (2) — — — — (2)
Adjusted Operating Income / (Loss) (47) (29) (62.1) % (44.8) % (18) (5) — (5) — (8)
Adjusted Operating Income / (Loss) Margin (68.1) % (40.3) (27.8)pp (25.3)pp
(1) See Schedule 8 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues decreased by 11.1% on an organic basis. The adjusted operating loss of $47 million was primarily due to commercial investments and higher administration costs.

Full-Year

Financial Summary - Years Ended December 31, Change<br>Fav./(Unfav.) Variance<br>Fav./(Unfav.)
2023 Total Excl.<br>Curr. & Acquis. Total Cur-<br>rency Acqui-sitions Price Vol/<br>Mix Cost/<br>Other
(in millions)
Net Revenues 306 271 12.9 % 11.8 % 35 3 — 33 — (1)
Operating Income / (Loss) (870) (258) -(100)% -(100)% (612) (6) — 33 — (639)
Adjustments (1) (738) (171) -(100)% -(100)% (567) — — — — (567)
Adjusted Operating Income / (Loss) (132) (87) (51.7) % (44.8) % (45) (6) — 33 — (72)
Adjusted Operating Income / (Loss) Margin (43.1) % (32.1) (11.0)pp (9.5)pp
(1) See Schedule 9 in Exhibit 99.2 to the Form 8-K dated February 8, 2024, for additional detail.

All values are in US Dollars.

Net revenues increased by 11.8% on an organic basis, notably reflecting the higher net revenues for smoking cessation products and select inhalation products.

The adjusted operating loss of $132 million was primarily due to commercial investments and higher administration costs.

  • 21 -

Philip Morris International: Delivering a Smoke-Free Future

Philip Morris International (PMI) is a leading international tobacco company, actively delivering a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company’s current product portfolio primarily consists of cigarettes and smoke-free products. Since 2008, PMI has invested $12.5 billion to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. In 2022, PMI acquired Swedish Match – a leader in oral nicotine delivery – creating a global smoke-free champion led by the companies’ IQOS and ZYN brands. The U.S. Food and Drug Administration has authorized versions of PMI’s IQOS Platform 1 devices and consumables and Swedish Match’s General snus as Modified Risk Tobacco Products. As of December 31, 2023, PMI's smoke-free products were available for sale in 84 markets, and PMI estimates that approximately 20.8 million adults around the world had already switched to IQOS and stopped smoking. Smoke-free products accounted for approximately 37% of PMI’s total full-year 2023 net revenues. With a strong foundation and significant expertise in life sciences, PMI announced in February 2021 its ambition to expand into wellness and healthcare areas and, through its Vectura Fertin Pharma business, aims to enhance life through the delivery of seamless health experiences. For more information, please visit www.pmi.com and www.pmiscience.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and goals and other forward-looking statements, including statements regarding expected financial or operational performance; capital allocation plans; investment strategies; regulatory outcomes; market expectations; and business plans and strategies. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.

PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; the impact of COVID-19 on PMI's business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as components and materials for our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies.

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PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; if it is unable to attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our reduced-risk product category's performance.

PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2022, Quarterly Report on Form 10-Q for the third quarter ended September 30, 2023, and the Form 10-K for the fourth quarter and year ended December 31, 2023, which will be filed later today. 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.

Non-GAAP Measures, Glossary and Explanatory Notes

Reconciliations of non-GAAP measures in this release to the most directly comparable U.S. GAAP measures can be found in Exhibit 99.2 to the Form 8-K dated February 8, 2024, and at www.pmi.com/2023Q4earnings. A glossary of key terms, definitions and explanatory notes is available in the aforementioned Exhibit 99.2 and on the same webpage, where additional financial schedules, as well as adjustments and other calculations have also been made available.

Management reviews net revenues, gross profit, operating income, operating income margin, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items. Additionally, starting in 2022 and on a comparative basis, for these measures other than net revenues and operating cash flow, PMI includes adjustments to add back amortization expense on acquisition related intangible assets that are recorded as part of purchase accounting and contribute to PMI’s revenue generation, as well as impairment of intangible assets, if any. While amortization expense on acquisition related intangible assets is excluded in these adjusted measures, the net revenues generated from these acquired intangible assets are included in the company's adjusted measures, unless otherwise stated. Currency-neutral and organic growth rates reflect the way management views underlying performance for these measures. PMI believes that such measures provide useful insight into underlying business trends and results. Management reviews these measures because they exclude changes in currency exchange rates and other factors that may distort underlying business trends, thereby improving the comparability of PMI’s business performance between reporting periods. Furthermore, PMI uses several of these measures in its management compensation program to promote internal fairness and a disciplined assessment of performance against company targets. PMI discloses these measures to enable investors to view the business through the eyes of management.

Non-GAAP measures used in this release should neither be considered in isolation nor as a substitute for the financial measures prepared in accordance with U.S. GAAP.

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Appendix 1
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Key Market Data
Quarters Ended December 31,
Market Total Market,<br><br>bio units PMI Shipments, bio units PMI Market Share, % (2)
Total Cigarette HTU Total HTU
2023 2022 % Change 2023 2022 % Change 2023 2022 % Change 2023 2022 % Change 2023 2022 pp Change 2023 2022 pp Change
Total (1) (2) 650.5 658.7 (1.2) 185.1 186.0 (0.5) 151.1 154.0 (1.9) 34.0 32.0 6.1 28.6 28.1 0.5 4.9 4.3 0.6
Europe
France 7.1 7.7 (7.3) 2.8 3.2 (13.7) 2.7 3.1 (13.1) — 0.1 (40.7) 43.1 43.6 (0.5) 0.7 0.8 (0.1)
Germany (3) 16.0 16.0 (0.2) 6.6 7.1 (6.2) 5.7 5.8 (2.2) 1.0 1.3 (24.3) 38.9 39.7 (0.8) 5.6 4.7 0.9
Italy 18.2 17.8 2.5 10.6 10.2 4.0 6.5 6.4 2.0 4.1 3.8 7.5 54.7 54.3 0.4 19.0 15.4 3.6
Poland 13.1 12.8 2.3 5.6 5.1 10.6 4.3 4.1 6.5 1.3 1.0 27.8 42.8 39.6 3.2 9.6 7.7 1.9
Spain 10.6 10.6 (0.7) 2.9 3.0 (2.5) 2.6 2.8 (6.4) 0.3 0.2 53.2 28.8 28.9 (0.1) 2.4 1.9 0.5
SSEA, CIS & MEA
Egypt 19.3 24.6 (21.8) 6.2 5.9 5.2 5.6 5.4 3.8 0.6 0.5 21.7 31.4 22.2 9.2 2.0 0.9 1.1
Indonesia 72.5 73.4 (1.2) 20.3 21.2 (4.1) 20.3 21.2 (4.1) — — — 28.0 28.9 (0.9) — — —
Philippines 10.7 13.0 (17.7) 5.8 7.7 (25.5) 5.7 7.6 (25.6) 0.1 0.1 (15.0) 53.7 59.4 (5.7) 0.6 0.6 —
Russia 52.4 52.1 0.6 16.5 16.1 2.4 11.4 12.0 (4.7) 5.1 4.1 23.3 31.3 31.8 (0.5) 8.3 7.8 0.5
Turkey 35.3 31.1 13.3 18.7 15.7 19.0 18.7 15.7 19.0 — — — 52.9 50.4 2.5 — — —
EA, AU & PMI DF
Australia 1.6 2.3 (32.4) 0.5 0.8 (32.9) 0.5 0.8 (32.9) — — — 32.7 32.9 (0.2) — — —
Japan (2) 37.8 37.8 — 13.9 16.1 (13.3) 3.9 5.0 (21.2) 10.0 11.1 (9.7) 40.0 38.0 2.0 27.6 24.4 3.2
South Korea 17.8 17.6 1.1 3.4 3.3 2.9 2.1 2.1 (2.3) 1.3 1.2 12.2 19.3 19.1 0.2 7.5 6.7 0.8
Americas
Argentina 7.1 7.8 (8.1) 4.4 4.9 (10.7) 4.4 4.9 (10.7) — — — 61.7 63.5 (1.8) — — —
Mexico 8.8 9.6 (8.7) 5.7 6.5 (11.6) 5.7 6.4 (11.5) — — — 65.3 67.4 (2.1) 0.5 0.5 —
(1) Market share estimates are calculated using IMS data, unless otherwise stated
(2) Total market and market share estimates include cigarillos in Japan
(3) PMI market share reflects estimated adjusted in-market sales volume share. Historical HTU adjusted in-market sales volume share: Q1, 2023 (5.4%); Q2, 2023 (5.4%); Q3 2023 (4.9%). Historical total adjusted in-market sales volume share: Q1, 2023 (39.4%); Q2, 2023 (39.2%); Q3, 2023 (38.4%);
Note: % change for Total Market and PMI shipments is computed based on millions of units. "-" indicates volume below 50 million units and market share below 0.1%
Appendix 2
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Key Market Data
Years Ended December 31,
Market Total Market,<br>bio units PMI Shipments, bio units PMI Market Share, %(2)
Total Cigarette HTU Total HTU
2023 2022 % Change 2023 2022 % Change 2023 2022 % Change 2023 2022 % Change 2023 2022 pp Change 2023 2022 pp Change
Total (1) (2) 2,579.9 2,621.5 (1.6) 738.2 731.1 1.0 612.9 621.9 (1.4) 125.3 109.2 14.7 28.3 27.7 0.6 4.7 4.1 0.6
Europe
France 29.8 32.5 (8.2) 13.0 14.0 (7.3) 12.8 13.7 (7.2) 0.2 0.2 (13.1) 42.5 43.6 (1.1) 0.7 0.7 —
Germany (3) 69.0 70.3 (1.8) 26.5 28.2 (6.0) 23.3 24.8 (5.7) 3.1 3.4 (8.3) 39.0 38.9 0.1 5.3 4.0 1.3
Italy 73.3 72.8 0.7 39.7 40.8 (2.8) 27.3 28.6 (4.5) 12.4 12.3 1.1 53.9 54.1 (0.2) 17.3 14.6 2.7
Poland 56.7 55.7 1.8 23.7 21.7 9.4 18.7 17.1 9.0 5.0 4.5 10.8 41.8 38.9 2.9 8.9 8.2 0.7
Spain 43.6 44.6 (2.4) 12.9 13.6 (5.5) 11.8 12.7 (7.4) 1.1 0.9 22.6 29.3 30.0 (0.7) 2.3 1.7 0.6
SSEA, CIS & MEA
Egypt 74.0 93.6 (20.9) 24.3 21.0 15.4 23.0 20.0 14.8 1.3 1.0 26.9 32.8 22.2 10.6 1.7 0.8 0.9
Indonesia 291.6 304.0 (4.1) 83.4 86.8 (4.0) 83.4 86.8 (4.0) — — — 28.6 28.6 — — — —
Philippines 42.9 53.4 (19.7) 23.8 32.2 (26.2) 23.5 32.0 (26.4) 0.2 0.2 (0.9) 55.4 60.3 (4.9) 0.5 0.4 0.1
Russia 203.4 208.8 (2.6) 64.8 64.7 0.1 47.9 49.3 (2.9) 16.9 15.4 9.8 31.8 31.2 0.6 8.0 7.6 0.4
Turkey 136.5 116.8 16.9 69.0 56.1 23.0 69.0 56.1 23.0 — — — 50.5 48.0 2.5 — — —
EA, AU & PMI DF
Australia 7.2 8.9 (19.4) 2.5 3.0 (16.0) 2.5 3.0 (16.0) — — — 34.8 33.4 1.4 — — —
Japan (2) 149.0 148.3 0.5 60.9 55.5 9.7 17.9 21.1 (15.4) 43.0 34.4 25.1 39.6 37.6 2.0 26.7 23.6 3.1
South Korea 72.0 72.6 (0.7) 14.0 13.9 0.9 8.9 9.4 (5.0) 5.1 4.5 13.1 19.5 19.2 0.3 7.1 6.2 0.9
Americas
Argentina 28.8 30.3 (5.0) 17.8 19.3 (7.9) 17.8 19.3 (7.9) — — — 61.9 63.8 (1.9) — — —
Mexico 30.0 32.2 (6.8) 18.9 21.0 (9.8) 18.8 20.8 (9.9) 0.1 0.1 2.4 63.1 65.2 (2.1) 0.5 0.4 0.1
(1) Market share estimates are calculated using IMS data, unless otherwise stated
(2) Total market and market share estimates include cigarillos in Japan
(3) PMI market share reflects estimated adjusted in-market sales volume share
Note: % change for Total Market and PMI shipments is computed based on millions of units. "-" indicates volume below 50 million units and market share below 0.1%

Document

Exhibit 99.2

Philip Morris International Inc.

Glossary of Key Terms, Definitions

and Explanatory Notes; and

Select Financial Information and Reconciliations of

Non-GAAP Financial Measures

2023 Full Year and Fourth-Quarter Results

February 8, 2024

Glossary of Key Terms, Definitions

and Explanatory Notes

General

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

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

•References to total industry (or total market), PMI shipment volume and PMI market share performance reflect cigarettes and heated tobacco units, unless otherwise stated.

•As of the first quarter of 2022, total industry volume, PMI in-market sales volume and PMI market share for the following geographies include the cigarillo category in Japan: the total international market, EA, AU & PMI DF Region, and Japanese domestic market.

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

•"Combustible tobacco products" is the term PMI uses to refer to cigarettes and other tobacco products that are combusted.

•In-market sales, or "IMS," is defined as sales to the retail channel, depending on the market and distribution model.

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

•"SSEA, CIS & MEA" stands for South & Southeast Asia, Commonwealth of Independent States, and Middle East & Africa.

•"EA, AU & PMI DF" stands for East Asia, Australia and PMI Duty Free.

•"Americas" refers to the former Latin America & Canada segment, which was renamed as the Americas segment as of the third quarter of 2021. References to "Americas" may, in defined instances, exclude the U.S.

•In the third quarter of 2021, PMI acquired Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. On March 31, 2022, PMI launched a new Wellness and Healthcare business consolidating these entities, Vectura Fertin Pharma. The operating results of this new business are reported in the Wellness and Healthcare segment. The business operations of PMI's Wellness and Healthcare segment are managed and evaluated separately from the geographical segments.

•As of December 31, 2022, Philip Morris Holland Holdings B.V. (“PMHH”), a wholly owned subsidiary of PMI, had acquired 94.81% of the outstanding shares of Swedish Match. On February 17, 2023, PMHH obtained "advanced title" under the Swedish Companies Act to the remaining issued and outstanding shares in Swedish Match, following the exercise of its right to compulsory redemption of all remaining shares. The operating results of Swedish Match are disclosed as a separate segment. The business operations of the Swedish Match segment are evaluated separately from the geographical segments. Following the combination and the progress in 2023 toward integration of the Swedish Match business into the existing PMI regional segment structure, PMI will update its segment reporting by including Swedish Match results in the four existing geographical regions. As of the first quarter of 2024, PMI will report on this basis.

•Following the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH) on March 22, 2019, PMI continues to report the volume and corresponding royalty revenues of brands sold by RBH for which other PMI subsidiaries are the trademark owner. These include HEETS, Next, Philip Morris and Rooftop. The volume and corresponding royalty revenues for these brands sold by RBH were not material to PMI for all periods presented.

•From time to time, PMI’s shipment volumes are subject to the impact of distributor inventory movements (or wholesaler inventory movements in certain markets where PMI does not sell to distributors), and estimated total industry/market volumes are subject to the impact of inventory movements in various trade channels

that include estimated trade inventory movements of PMI’s competitors arising from market-specific factors that significantly distort reported volume disclosures. Such factors may include changes to the manufacturing supply chain, shipment methods, consumer demand, timing of excise tax increases or other influences that may affect the timing of sales to customers. In such instances, in addition to reviewing PMI shipment volumes and certain estimated total industry/market volumes on a reported basis, management reviews these measures on an adjusted basis that excludes the impact of distributor and/or estimated trade inventory movements. Management also believes that disclosing PMI shipment volumes and estimated total industry/market volumes in such circumstances on a basis that excludes the impact of distributor and/or estimated trade inventory movements, such as on an IMS basis, improves the comparability of performance and trends for these measures over different reporting periods.

•Volume comparisons versus Swedish Match's 2022 fourth-quarter and full-year results reflect data sourced from its disclosures, available at www.swedishmatch.com/investors.

Financial

•Adjusted net revenues exclude the impact related to the termination of a distribution arrangement in the Middle East.

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

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

•"Cost/Other" in the Consolidated Financial Summary table of total PMI and the six segments of this release reflects the currency-neutral variances of: cost of sales (excluding the volume/mix cost component); marketing, administration and research costs (including asset impairment and exit costs); and amortization and impairment of intangibles. “Cost/Other” also includes the currency-neutral net revenue variance, unrelated to volume/mix and price components, attributable to: fees for certain distribution rights billed to customers in certain markets in the SSEA, CIS & MEA Region and the revenue adjustment for the termination of a distribution arrangement in the Middle East.

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

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

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

•Growth rates presented on an organic basis reflect adjusted results, excluding currency, acquisitions and disposals.

•Management reviews net revenues, gross profit, operating income, operating income margin, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items. Additionally, starting in 2022 and on a comparative basis, for these measures other than net revenues and operating cash flow, PMI includes adjustments to add back amortization expense on acquisition related intangible assets that are recorded as part of purchase accounting and contribute to PMI’s revenue generation, as well as impairment of intangible assets, if any. While amortization expense on acquisition related intangible assets is excluded in these adjusted measures, the net revenues generated from these acquired intangible assets are included in the company's adjusted measures, unless otherwise stated. Currency-neutral and organic growth rates reflect the way management views underlying performance for these measures. PMI believes that such measures provide useful insight into underlying business trends and results. Management reviews these measures because they exclude changes in currency exchange rates and other factors that may distort underlying business trends, thereby improving the comparability of PMI’s business performance between reporting periods. Furthermore, PMI uses several of these

measures in its management compensation program to promote internal fairness and a disciplined assessment of performance against company targets. PMI discloses these measures to enable investors to view the business through the eyes of management.

•Non-GAAP measures used by PMI should neither be considered in isolation nor as a substitute for the financial measures prepared in accordance with U.S. GAAP. For a reconciliation of non-GAAP measures to the most directly comparable U.S. GAAP measures, see the "Select Financial Information and Reconciliations of Non-GAAP Financial Measures" section of this document.

•U.S. GAAP Treatment of a country as a Highly Inflationary Economy. Following the categorization of a country by the International Practices Task Force of the Center for Audit Quality as having a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with U.S. GAAP. For such countries, PMI accounts for the operations of its local affiliates as highly inflationary, and to treat the U.S. dollar as the functional currency of the affiliates. Such treatment was effective July 1, 2018, for Argentina, and April 1, 2022, for Turkey.

•"Fair value adjustment for equity security investments" reflects the adjustment resulting from share price movements in passive investments for publicly traded entities that are not controlled or influenced by PMI. Under U.S. GAAP, such adjustments are required, since January 1, 2018, to be reflected directly in the income statement. 2022 adjustments reflect share price movements in PMI's investments in India and Sri Lanka.

•"Swedish Match AB acquisition accounting related item" refers to expenses associated with fair-value adjustments on Swedish Match inventories. In the fourth quarter of 2022, PMI recorded a total fair value step-up adjustment for inventories of $146 million related to the acquisition, of which $125 million was recognized in cost of sales in the fourth quarter of 2022, with the remaining amount recognized in the first quarter of 2023.

•"Income tax impact associated with Swedish Match AB financing" reflects a deferred tax benefit (cost) for unrealized foreign currency losses (gains) on intercompany loans related to the Swedish Match acquisition financing reflected in PMI's consolidated statements of earnings. The underlying pre-tax foreign currency movements fully offset in the consolidated statements of earnings and were reflected as currency translation adjustments in PMI's consolidated statements of stockholders' (deficit) equity.

•Termination of agreement with Foundation for a Smoke-Free World: On September 29, 2023, PMI and the Foundation for a Smoke-Free World (the "Foundation") entered into the Final Grant Agreement and Termination of the Second Amended and Restated Pledge Agreement ("Agreement"). Under the terms of the Agreement, PMI paid $140 million in the third quarter of 2023 in return for the termination of the pledge agreement between the parties. As a result, PMI recorded a pre-tax charge of $140 million in the quarter, commensurate with the early termination of this pledge agreement.

•Russia tax item: In the third quarter of 2023, PMI recorded a tax charge associated with an increase in deferred tax liabilities related to the unremitted earnings of PMI’s Russian subsidiaries ($173 million) due to the unilateral suspension of certain Russian double tax treaties by the Russian government on August 8, 2023, with respect to certain payments including dividends.

Smoke-Free Products

•Smoke-free products ("SFPs") is the term PMI primarily uses to refer to all of its products that are not combustible tobacco products, such as heat-not-burn, e-vapor, and oral nicotine. In addition, SFPs include wellness and healthcare products, as well as consumer accessories such as lighters and matches.

•Reduced-risk products (“RRPs”) is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continuing smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. PMI's RRPs are smoke-free products that contain and/or generate far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke.

•Wellness and Healthcare products primarily refer to products associated with inhaled therapeutics and oral and intra-oral delivery systems that are included in the operating results of PMI's new Wellness and Healthcare business, Vectura Fertin Pharma.

•"Heated tobacco units" or "HTU" is the term PMI uses to refer to heated tobacco consumables, which include our BLENDS, DELIA, HEETS, HEETS Creations, HEETS Dimensions (defined collectively as "HEETS"), Marlboro HeatSticks, SENTIA, TEREA, TEREA CRAFTED, and TEREA Dimensions, as well as the KT&G-licensed brands, Fiit and Miix (outside of South Korea). HTU's also include zero tobacco heat-not-burn consumables (LEVIA).

•Unless otherwise stated, market share for HTUs is defined as the in-market sales volume for HTUs as a percentage of the total estimated industry sales volume for cigarettes and HTUs. For Japan, total estimated industry sales volume also includes cigarillos.

•Unless otherwise stated, all references to IQOS are to PMI's Platform 1 IQOS devices and heated tobacco consumables.

•IQOS heat-not-burn devices are precisely controlled heating devices into which a specially designed and proprietary tobacco units are inserted and heated to generate an aerosol.

•"PMI heat-not-burn products" include licensed KT&G heat-not-burn products.

•"PMI HTUs" include licensed KT&G HTUs.

•“Total IQOS users” is defined as the estimated number of Legal Age (minimum 18 years) users of PMI heat-not-burn products, for which PMI HTUs represented at least a portion of their daily tobacco consumption over the past seven days.

The estimated number of adults who have "switched to IQOS and stopped smoking" reflects:

•for markets where there are no heat-not-burn products other than PMI heat-not-burn products: daily individual consumption of PMI HTUs represents the totality of their daily tobacco consumption in the past seven days;

•for markets where PMI heat-not-burn products are among other heat-not-burn products: daily individual consumption of HTUs represents the totality of their daily tobacco consumption in the past seven days, of which at least 70% is PMI HTUs.

Note: The above IQOS user metrics reflect PMI estimates, which are based on consumer claims and sample-based statistical assessments with an average margin of error of +/-5% at a 95% Confidence Interval in key volume markets. The accuracy and reliability of IQOS user metrics may vary based on individual market maturity and availability of information.

As of December 2020, PMI heat-not-burn products and HTUs include licensed KT&G heat-not-burn products and HTUs, respectively.

•Swedish Match nicotine pouch products reflect 15 pouches per can in the U.S. and 21 pouches per can outside the U.S.

•Oral smoke-free product volume excludes snuff, snuff leaf and U.S. chew and is measured in cans or, for the purposes of total shipment volumes, in pouches or pouch equivalents.

Select Financial Information and Reconciliations of Non-GAAP Financial Measures
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Diluted Earnings Per Share (EPS)
( in millions, except per share data) / (Unaudited)
Quarters Ended Diluted EPS Years Ended
December 31,
2023 Diluted Earnings Per Share (1)
2022 Diluted Earnings Per Share (1)
Change
% Change
Reconciliation:
2022 Diluted Earnings Per Share (1)
2022 Amortization of intangibles
2022 Impairment of goodwill and other intangibles
2022 Charges related to the war in Ukraine
2022 Costs associated with Swedish Match AB offer
2022 Swedish Match AB acquisition accounting related item
2022 Income tax impact associated with Swedish Match AB financing
2022 Tax Items
2022 Fair value adjustment for equity security investments
2023 Asset impairment and exit costs
2023 Impairment of goodwill and other intangibles
2023 Amortization of intangibles
2023 Swedish Match AB acquisition accounting related item
2023 Income tax impact associated with Swedish Match AB financing
2023 Termination of distribution arrangement in the Middle East
2023 South Korea indirect tax charge
2023 Termination of agreement with Foundation for a Smoke-Free World
2023 Charges related to the war in Ukraine
2023 Fair value adjustment for equity security investments
2023 Tax Items
Currency
Interest
Change in tax rate
Operations (2)
2023 Diluted Earnings Per Share (1)
(1) Basic and diluted EPS were calculated using the following (in millions):
Q4 2023 FY 2023
2,196 Net Earnings attributable to PMI 7,813
5 Less: Distributed and undistributed earnings attributable to share-based payment awards 22
2,191 Net Earnings for basic and diluted EPS 7,791
1,552 Weighted-average shares for basic EPS 1,552
2 Plus Contingently Issuable Performance Stock Units (3) 1
1,554 Weighted-average shares for diluted EPS 1,553
(2) Includes the impact of shares outstanding and share-based payments
(3) Including rounding adjustment

All values are in US Dollars.

Schedule 2
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency,
and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency
(Unaudited)
Quarters Ended December 31, Years Ended December 31,
2023 2022 % Change 2023 2022 % Change
$ 1.41 $ 1.54 (8.4) % Reported Diluted EPS $ 5.02 $ 5.81 (13.6) %
(0.20) Less: Currency (0.63)
$ 1.61 $ 1.54 4.5 % Reported Diluted EPS, excluding Currency $ 5.65 $ 5.81 (2.8) %
Quarters Ended December 31, Years Ended December 31,
2023 2022 % Change 2023 2022 % Change
$ 1.41 $ 1.54 (8.4) % Reported Diluted EPS $ 5.02 $ 5.81 (13.6) %
— — Asset impairment and exit costs 0.06 —
— — Termination of distribution arrangement in the Middle East 0.04 —
0.07 0.03 Amortization of intangibles 0.25 0.09
— — Impairment of goodwill and other intangibles 0.44 0.06
0.02 0.01 Charges related to the war in Ukraine 0.03 0.08
— (0.07) Costs associated with Swedish Match AB offer — 0.06
— 0.06 Swedish Match AB acquisition accounting related item 0.01 0.06
(0.14) (0.13) Income tax impact associated with Swedish Match AB financing (0.11) (0.13)
— — South Korea indirect tax charge 0.11 —
— — Termination of agreement with Foundation for a Smoke-Free World 0.07 —
— (0.05) Fair value adjustment for equity security investments (0.02) (0.02)
— — Tax items 0.11 (0.03)
$ 1.36 $ 1.39 (2.2) % Adjusted Diluted EPS $ 6.01 $ 5.98 0.5 %
(0.20) Less: Currency (0.63)
$ 1.56 $ 1.39 12.2 % Adjusted Diluted EPS, excluding Currency $ 6.64 $ 5.98 11.0 %
Schedule 3
--- --- --- --- --- --- --- --- --- --- --- ---
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions
( in millions) / (Unaudited)
NetRevenues Net<br>Revenues<br>excluding Currency Acqui-<br>sitions Net<br>Revenues excl. Currency & <br>Acquisitions Quarters Ended<br>December 31, Net<br>Revenues Total Excluding Currency Excluding Currency & Acquisitions
2023 Combustible Tobacco 2022 % Change
1,953 $ 1,816 $ — $ 1,816 Europe $ 1,698 15.0 % 7.0 % 7.0 %
2,333 2,539 — 2,539 SSEA, CIS & MEA 2,321 0.5 % 9.4 % 9.4 %
585 596 — 596 EA, AU & PMI DF 617 (5.1) % (3.3) % (3.3) %
519 485 — 485 Americas 508 2.2 % (4.5) % (4.5) %
98 98 44 54 Swedish Match 70 39.7 % 40.1 % (23.4) %
5,489 $ 5,534 $ 44 $ 5,489 Total Combustible Tobacco $ 5,214 5.3 % 6.1 % 5.3 %
2023 Smoke-free excl. W&H 2022 % Change
1,661 $ 1,543 $ — $ 1,543 Europe $ 1,366 21.6 % 13.0 % 13.0 %
374 495 — 495 SSEA, CIS & MEA 365 2.5 % 35.8 % 35.8 %
845 880 — 880 EA, AU & PMI DF 861 (1.9) % 2.2 % 2.2 %
26 25 — 25 Americas 28 (8.4) % (10.7) % (10.7) %
584 584 255 329 Swedish Match 246 +100% +100% 33.9 %
3,489 $ 3,527 $ 255 $ 3,273 Total Smoke-free excl. W&H $ 2,866 21.7 % 23.1 % 14.2 %
2023 Wellness and Healthcare 2022 % Change
69 $ 64 $ — $ 64 Wellness and Healthcare $ 72 (4.2) % (11.1) % (11.1) %
2023 Smoke-free incl. W&H 2022 % Change
3,558 $ 3,591 $ 255 $ 3,337 Smoke-free incl. W&H $ 2,938 21.1 % 22.2 % 13.6 %
2023 PMI 2022 % Change
3,614 $ 3,359 $ — $ 3,359 Europe $ 3,064 18.0 % 9.6 % 9.6 %
2,707 3,034 — 3,034 SSEA, CIS & MEA 2,686 0.8 % 13.0 % 13.0 %
1,430 1,476 — 1,476 EA, AU & PMI DF 1,478 (3.2) % (0.1) % (0.1) %
545 510 — 510 Americas 536 1.7 % (4.9) % (4.9) %
682 682 299 383 Swedish Match 316 +100% +100% 21.2 %
69 64 — 64 Wellness and Healthcare 72 (4.2) % (11.1) % (11.1) %
9,047 $ 9,125 $299 $ 8,826 Total PMI $ 8,152 11.0 % 11.9 % 8.3 %
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -0.5 million and +0.5 million

All values are in US Dollars.

Schedule 4
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions
( in millions) / (Unaudited)
NetRevenues Currency Net<br>Revenues<br>excluding Currency Acqui-<br>sitions Net<br>Revenues excl. Currency & <br>Acquisitions Years Ended<br>December 31, Net<br>Revenues Total Excluding Currency Excluding Currency & Acquisitions
2023 Combustible Tobacco 2022 % Change
8,037 $ 116 $ 7,921 $ — $ 7,921 Europe $ 7,694 4.5 % 3.0 % 3.0 %
9,321 (814) 10,135 — 10,135 SSEA, CIS & MEA 9,173 1.6 % 10.5 % 10.5 %
2,676 (117) 2,793 — 2,793 EA, AU & PMI DF 2,831 (5.5) % (1.3) % (1.3) %
1,869 96 1,773 — 1,773 Americas 1,804 3.6 % (1.7) % (1.7) %
431 — 431 378 54 Swedish Match 70 +100% +100% (23.4) %
22,334 $ (720) $ 23,053 $378 $ 22,676 Total Combustible Tobacco $ 21,572 3.5 % 6.9 % 5.1 %
2023 Smoke-free excl. W&H 2022 % Change
5,561 $ 133 $ 5,428 $ — $ 5,428 Europe $ 5,175 7.5 % 4.9 % 4.9 %
1,308 (246) 1,554 — 1,554 SSEA, CIS & MEA 1,294 1.0 % 20.1 % 20.1 %
3,525 (283) 3,808 — 3,808 EA, AU & PMI DF 3,105 13.5 % 22.6 % 22.6 %
75 — 75 — 75 Americas 99 (23.6) % (24.0) % (24.0) %
2,065 — 2,065 1,735 329 Swedish Match 246 +100% +100% 33.9 %
12,534 $ (395) $ 12,930 $ 1,735 $ 11,194 Total Smoke-free excl. W&H $ 9,919 26.4 % 30.3 % 12.9 %
2023 Wellness and Healthcare 2022 % Change
306 $ 3 $303 $— $ 303 Wellness and Healthcare $ 271 12.9 % 11.8 % 11.8 %
2023 Smoke-free incl. W&H 2022 % Change
12,840 $ (392) $ 13,233 $ 1,735 $ 11,497 Smoke-free incl. W&H $ 10,190 26.0 % 29.9 % 12.8 %
2023 PMI 2022 % Change
13,598 $ 249 $ 13,349 $ — $ 13,349 Europe $ 12,869 5.7 % 3.7 % 3.7 %
10,629 (1,060) 11,689 — 11,689 SSEA, CIS & MEA 10,467 1.5 % 11.7 % 11.7 %
6,201 (400) 6,601 — 6,601 EA, AU & PMI DF 5,936 4.5 % 11.2 % 11.2 %
1,944 96 1,848 — 1,848 Americas 1,903 2.2 % (2.9) % (2.9) %
2,496 — 2,496 2,113 383 Swedish Match 316 +100% +100% 21.2 %
306 3 303 — 303 Wellness and Healthcare 271 12.9 % 11.8 % 11.8 %
35,174 $ (1,112) $ 36,286 $2,113 $ 34,173 Total PMI $ 31,762 10.7 % 14.2 % 7.6 %
(1) Includes a reduction in net revenues of 80 million related to the termination of distribution arrangement in the Middle East
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -0.5 million and +0.5 million

All values are in US Dollars.

Schedule 5
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Net Revenues to Adjusted Net Revenues, excluding Currency and Acquisitions
( in millions) / (Unaudited)
NetRevenues Adjusted Net<br>Revenues Currency Adjusted Net<br>Revenues excluding Currency Acqui-<br>sitions Adjusted NetRevenues excluding Currency & Acqui-sitions Net<br>Revenues Special Items Adjusted Net<br>Revenues Total Excluding Currency Excluding Currency<br>& Acqui-<br>sitions
2023 2022 % Change
3,614 $ 3,614 $ 255 $ 3,359 $ — 3,359 Europe $ 3,064 $ — $ 3,064 18.0 % 9.6 % 9.6 %
2,707 2,707 (327) 3,034 — 3,034 SSEA, CIS & MEA 2,686 — 2,686 0.8 % 13.0 % 13.0 %
1,430 1,430 (46) 1,476 — 1,476 EA, AU & PMI DF 1,478 — 1,478 (3.2) % (0.1) % (0.1) %
545 545 35 510 — 510 Americas 536 — 536 1.7 % (4.9) % (4.9) %
682 682 — 682 299 383 Swedish Match 316 — 316 +100% +100% 21.2 %
69 69 5 64 — 64 Wellness and Healthcare 72 — 72 (4.2) % (11.1) % (11.1) %
9,047 $ 9,047 $ (78) $ 9,125 $ 299 8,826 Total PMI $ 8,152 $ — $ 8,152 11.0 % 11.9 % 8.3 %
2023 2022 % Change
13,598 $ 13,598 $ 249 $ 13,349 $ — 13,349 Europe $ 12,869 $ — $ 12,869 5.7 % 3.7 % 3.7 %
10,629 10,709 (1,060) 11,769 — 11,769 SSEA, CIS & MEA 10,467 — 10,467 2.3 % 12.4 % 12.4 %
6,201 6,201 (400) 6,601 — 6,601 EA, AU & PMI DF 5,936 — 5,936 4.5 % 11.2 % 11.2 %
1,944 1,944 96 1,848 — 1,848 Americas 1,903 — 1,903 2.2 % (2.9) % (2.9) %
2,496 2,496 — 2,496 2,113 383 Swedish Match 316 — 316 +100% +100% 21.2 %
306 306 3 303 — 303 Wellness and Healthcare 271 — 271 12.9 % 11.8 % 11.8 %
35,174 $ 35,254 $ (1,112) $ 36,366 $ 2,113 34,253 Total PMI $ 31,762 $ — $ 31,762 11.0 % 14.5 % 7.8 %
(1) Reflects a reduction in net revenues of 80 million related to the termination of distribution arrangement in the Middle East

All values are in US Dollars.

Schedule 6
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Gross Profit by Product Category to Adjusted Gross Profit, excluding Currency and Acquisitions
( in millions) / (Unaudited)
GrossProfit Adjusted<br>Gross<br>Profit Currency Adjusted Gross Profit<br>excluding Currency Acqui-<br>sitions Adjusted Gross Profit excl. Currency & <br>Acquisitions Quarters Ended<br>December 31, Gross<br>Profit Special<br>Items (1) Adjusted<br>Gross<br>Profit Total Excluding Currency Excluding Currency & Acquisitions
2023 2022 % Change
5,585 $ 5,603 $ (117) $ 5,720 $ 210 $ 5,510 Total PMI $ 4,941 $ (157) $ 5,098 9.9 % 12.2 % 8.1 %
2023 2022 % Change
3,304 $ 3,306 $ (67) $ 3,373 $ 24 $ 3,349 Total Combustible Tobacco $ 3,323 $ (34) $ 3,357 (1.5) % 0.5 % (0.2) %
2023 2022 % Change
2,281 $ 2,297 $ (50) $ 2,347 $ 186 $ 2,161 Total Smoke-free incl. W&H $ 1,618 $ (123) $ 1,741 32.0 % 34.8 % 24.1 %
(1) 2023 fourth-quarter includes amortization of intangibles (15 million in Smoke-free incl. W&H) and charges related to the war in Ukraine (4 million in Combustible Tobacco)2022 fourth-quarter includes Swedish Match AB acquisition accounting related items (125 million of which 18 million in Combustible Tobacco and 107 million in Smoke-free incl. W&H), amortization of intangibles (17 million in Smoke-free incl. W&H) and charges related to the war in Ukraine (16 in Combustible Tobacco)
Note: Sum of product categories and special items might not foot due to roundings.

All values are in US Dollars.

Schedule 7
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Gross Profit by Product Category to Adjusted Gross Profit, excluding Currency and Acquisitions
( in millions) / (Unaudited)
GrossProfit Adjusted<br>Gross<br>Profit Currency Adjusted Gross Profit<br>excluding Currency Acqui-<br>sitions Adjusted Gross Profit excl. Currency & <br>Acquisitions Years Ended<br>December 31, Gross<br>Profit Special<br>Items (1) Adjusted<br>Gross<br>Profit Total Excluding Currency Excluding Currency & Acquisitions
2023 2022 % Change
22,281 $ 22,451 $ (945) $ 23,396 $ 1,442 $ 21,954 Total PMI $ 20,360 $ (356) $ 20,716 8.4 % 12.9 % 6.0 %
2023 2022 % Change
14,085 $ 14,208 $ (571) $ 14,780 $ 200 $ 14,580 Total Combustible Tobacco $ 14,475 $ (57) $ 14,532 (2.2) % 1.7 % 0.3 %
2023 2022 % Change
8,196 $ 8,243 $ (374) $ 8,616 $ 1,242 $ 7,374 Total Smoke-free incl. W&H $ 5,885 $ (299) $ 6,184 33.3 % 39.3 % 19.2 %
(1) 2023 full-year includes termination of distribution arrangement in the Middle East (80 million in Combustible Tobacco), amortization of intangibles (58 million of which 12 million in Combustible Tobacco and 46 million in Smoke-free incl. W&H), Swedish Match AB acquisition accounting related items (18 million in Combustible Tobacco) and charges related to the war in Ukraine (15 million in Combustible Tobacco)2022 full-year includes Swedish Match AB acquisition accounting related items (125 million of which 18 million in Combustible Tobacco and 107 million in Smoke-free incl. W&H), impairment of goodwill and other intangibles (112 million in Smoke-free incl. W&H), charges related to the war in Ukraine (61 million of which 39 million in Combustible Tobacco and 22 million in Smoke-free incl. W&H) and amortization of intangibles (58 million in Smoke-free incl. W&H)
Note: Sum of product categories and special items might not foot due to roundings.

All values are in US Dollars.

Schedule 8
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments of Operating Income for the Impact of Currency and Acquisitions
( in millions) / (Unaudited)
Operating Income Operating Income excluding Currency Acqui-sitions Operating Income excluding Currency & <br>Acquisitions Operating Income Excluding Currency Excluding Currency & <br>Acquisitions
2023 2022
1,566 $ 122 $ 1,444 $ — 1,444 Europe 1,355 15.6 % 6.6 % 6.6 %
676 (205) 881 — 881 SSEA, CIS & MEA 855 (20.9) % 3.0 % 3.0 %
561 (82) 643 — 643 EA, AU & PMI DF 678 (17.3) % (5.2) % (5.2) %
(79) (123) 44 — 44 Americas 100 -(100)% (56.0) % (56.0) %
227 (8) 235 97 138 Swedish Match (22) +100% +100% +100%
(62) (5) (57) — (57) Wellness and Healthcare (42) (47.6) % (35.7) % (35.7) %
2,889 $ (301) $ 3,190 $ 97 3,093 Total PMI 2,924 (1.2) % 9.1 % 5.8 %
2023 2022
6,012 $ 186 $ 5,826 $ — 5,826 Europe 5,802 3.6 % 0.4 % 0.4 %
3,047 (653) 3,700 — 3,700 SSEA, CIS & MEA 3,864 (21.1) % (4.2) % (4.2) %
2,481 (395) 2,876 — 2,876 EA, AU & PMI DF 2,424 2.4 % 18.6 % 18.6 %
62 (197) 259 — 259 Americas 436 (85.8) % (40.6) % (40.6) %
824 (8) 832 694 138 Swedish Match (22) +100% +100% +100%
(870) (6) (864) — (864) Wellness and Healthcare (258) -(100)% -(100)% -(100)%
11,556 $ (1,073) $ 12,629 $ 694 11,935 Total PMI 12,246 (5.6) % 3.1 % (2.5) %

All values are in US Dollars.

Schedule 9
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Income to Adjusted Operating Income, excluding Currency and Acquisitions
( in millions) / (Unaudited)
Operating Income Currency Adjusted Operating Income excluding Currency Acqui-<br>sitions Adjusted Operating Income excluding Currency <br>& Acqui-<br>sitions Operating Income Special<br>Items (1) Adjusted Operating Income Total Excluding Currency <br>& Acqui-<br>sitions
2023 Quarters Ended<br>December 31, 2022 % Change
1,566 $ 1,610 $ 122 $ 1,488 $ — $ 1,488 Europe $ 1,355 $ 38 1,317 22.2 % 13.0 % 13.0 %
676 681 (205) 886 — 886 SSEA, CIS & MEA 855 38 817 (16.6) % 8.4 % 8.4 %
561 561 (82) 643 — 643 EA, AU & PMI DF 678 31 647 (13.3) % (0.6) % (0.6) %
(79) (78) (123) 45 — 45 Americas 100 5 95 -(100)% (52.6) % (52.6) %
227 325 (8) 333 138 195 Swedish Match (22) (151) 129 +100% +100% 51.2 %
(62) (47) (5) (42) — (42) Wellness and Healthcare (42) (13) (29) (62.1) % (44.8) % (44.8) %
2,889 $ 3,052 $ (301) $ 3,353 $ 138 $ 3,215 Total PMI $ 2,924 $ (52) 2,976 2.6 % 12.7 % 8.0 %
2023 Years Ended<br>December 31, 2022 % Change
6,012 $ 6,214 $ 186 $ 6,028 $ — $ 6,028 Europe $ 5,802 $ (242) 6,044 2.8 % (0.3) % (0.3) %
3,047 3,225 (653) 3,878 — 3,878 SSEA, CIS & MEA 3,864 (56) 3,920 (17.7) % (1.1) % (1.1) %
2,481 2,735 (395) 3,130 — 3,130 EA, AU & PMI DF 2,424 (28) 2,452 11.5 % 27.7 % 27.7 %
62 81 (197) 278 — 278 Americas 436 (14) 450 (82.0) % (38.2) % (38.2) %
824 1,214 (8) 1,222 1,027 195 Swedish Match (22) (151) 129 +100% +100% 51.2 %
(870) (132) (6) (126) — (126) Wellness and Healthcare (258) (171) (87) (51.7) % (44.8) % (44.8) %
11,556 $ 13,337 $ (1,073) $ 14,410 $ 1,027 $ 13,383 Total PMI $ 12,246 $ (662) 12,908 3.3 % 11.6 % 3.7 %
(1) See Schedule 10 and 11 for Special Items details

All values are in US Dollars.

Schedule 10 (1/2)
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Operating Income to Adjusted Operating Income
( in millions) / (Unaudited)
Change Fav./(Unfav.) Variance Fav./(Unfav.)
PMI 2022 Total Excl. Curr. & Acquisitions Total Currency Acquisitions Price Vol/Mix Cost/Other
Reported Operating Income $ 2,924 (1.2) % 5.8 % $ (35) $ (301) $ 97 $ 631 $ (53) $ (409)
Amortization of intangibles (58) -(100)% (51.7) % (71) — (41) — — (30)
Charges related to the war in Ukraine (23) (47.8) % (47.8) % (11) — — — — (11)
Costs associated with Swedish Match AB offer 154 -(100)% -(100)% (154) — — — — (154)
Swedish Match AB acquisition accounting related items (125) +100% +100% 125 — — — — 125
Adjusted Operating Income $ 2,976 2.6 % 8.0 % $ 76 $ (301) $ 138 $ 631 $ (53) $ (339)
Europe
Reported Operating Income $ 1,355 15.6 % 6.6 % $ 211 $ 122 $ — $ 187 $ 146 $ (244)
Amortization of intangibles (10) — % — % — — — — — —
Charges related to the war in Ukraine (23) (47.8) % (47.8) % (11) — — — — (11)
Costs associated with Swedish Match AB offer 71 -(100)% -(100)% (71) — — — — (71)
Adjusted Operating Income $ 1,317 22.2 % 13.0 % $ 293 $ 122 $ — $ 187 $ 146 $ (162)
SSEA, CIS & MEA
Reported Operating Income $ 855 (20.9) % 3.0 % $ (179) $ (205) $ — $ 257 $ (49) $ (182)
Amortization of intangibles (5) — % — % — — — — — —
Costs associated with Swedish Match AB offer 43 -(100)% -(100)% (43) — — — — (43)
Adjusted Operating Income $ 817 (16.6) % 8.4 % $ (136) $ (205) $ — $ 257 $ (49) $ (139)

All values are in US Dollars.

Schedule 10 (2/2)
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Operating Income to Adjusted Operating Income
( in millions) / (Unaudited)
Change Fav./(Unfav.) Variance Fav./(Unfav.)
EA, AU & PMI DF 2022 Total Excl. Curr. & Acquisitions Total Currency Acqui-sitions Price Vol/Mix Cost/Other
Reported Operating Income $ 678 (17.3) % (5.2) % $ (117) $ (82) $ — $ 133 $ (133) $ (35)
Amortization of intangibles (1) +100% +100% 1 — — — — 1
Costs associated with Swedish Match AB offer 32 -(100)% -(100)% (32) — — — — (32)
Adjusted Operating Income $ 647 (13.3) % (0.6) % $ (86) $ (82) $ — $ 133 $ (133) $ (4)
Americas
Reported Operating Income $ 100 -(100)% (56.0) % $ (179) $ (123) $ — $ 34 $ (55) $ (35)
Amortization of intangibles (3) 66.7 % 66.7 % 2 — — — — 2
Costs associated with Swedish Match AB offer 8 -(100)% -(100)% (8) — — — — (8)
Adjusted Operating Income $ 95 -(100)% (52.6) % $ (173) $ (123) $ — $ 34 $ (55) $ (29)
Swedish Match
Reported Operating Income $ (22) +100% +100% $ 249 $ (8) $ 97 $ 25 $ 38 $ 97
Amortization of intangibles (26) -(100)% -(100)% (72) — (41) — — (31)
Swedish Match AB acquisition accounting related items (125) +100% +100% 125 — — — — 125
Adjusted Operating Income $ 129 +100% 51.2 % $ 196 $ (8) $ 138 $ 25 $ 38 $ 3
Wellness & Healthcare
Reported Operating Income / (Loss) $ (42) (47.6) % (35.7) % $ (20) $ (5) $ — $ (5) $ — $ (10)
Amortization of intangibles (13) (15.4) % (15.4) % (2) — — — — (2)
Adjusted Operating Income / (Loss) $ (29) (62.1) % (44.8) % $ (18) $ (5) $ — $ (5) $ — $ (8)

All values are in US Dollars.

Schedule 11 (1/2)
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Operating Income to Adjusted Operating Income
( in millions) / (Unaudited)
Change Fav./(Unfav.) Variance Fav./(Unfav.)
PMI 2022 Total Excl. Curr. & Acquisitions Total Currency Acquisitions Price Vol/Mix Cost/Other
Reported Operating Income $ 12,246 (5.6) % (2.5) % $ (690) $ (1,073) $ 694 $ 1,940 $ (91) $ (2,160)
Asset Impairment & Exit Costs — — % — % (109) — — — — (109)
Termination of distribution arrangement in the Middle East — — % — % (80) — — — — (80)
Impairment of goodwill and other intangibles (112) -(100)% -(100)% (568) — — — — (568)
Amortization of intangibles (159) -(100)% (14.5) % (338) — (315) — — (23)
Charges related to the war in Ukraine (151) 64.9 % 64.9 % 98 — — — — 98
Costs associated with Swedish Match AB offer (115) +100% +100% 115 — — — — 115
Swedish Match AB acquisition accounting related items (125) 85.6 % +100% 107 — (18) — — 125
South Korea Indirect Tax Charge — — % — % (204) — — — — (204)
Termination of agreement with Foundation for a Smoke-Free World — — % — % (140) — — — — (140)
Adjusted Operating Income $ 12,908 3.3 % 3.7 % $ 429 $ (1,073) $ 1,027 $ 1,940 $ (91) $ (1,374)
Europe
Reported Operating Income $ 5,802 3.6 % 0.4 % $ 210 $ 186 $ — $ 540 $ (79) $ (437)
Asset Impairment & Exit Costs — — % — % (49) — — — — (49)
Amortization of intangibles (38) — % — % — — — — — —
Charges related to the war in Ukraine (151) 64.9 % 64.9 % 98 — — — — 98
Costs associated with Swedish Match AB offer (53) +100% +100% 53 — — — — 53
Termination of agreement with Foundation for a Smoke-Free World — — % — % (62) — — — — (62)
Adjusted Operating Income $ 6,044 2.8 % (0.3) % $ 170 $ 186 $ — $ 540 $ (79) $ (477)
SSEA, CIS & MEA
Reported Operating Income $ 3,864 (21.1) % (4.2) % $ (817) $ (653) $ — $ 1,008 $ (237) $ (935)
Asset Impairment & Exit Costs — — % — % (34) — — — — (34)
Termination of distribution arrangement in the Middle East — — % — % (80) — — — — (80)
Amortization of intangibles (23) 13.0 % 13.0 % 3 — — — — 3
Costs associated with Swedish Match AB offer (33) +100% +100% 33 — — — — 33
Termination of agreement with Foundation for a Smoke-Free World — — % — % (44) — — — — (44)
Adjusted Operating Income $ 3,920 (17.7) % (1.1) % $ (695) $ (653) $ — $ 1,008 $ (237) $ (813)

All values are in US Dollars.

Schedule 11 (2/2)
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Operating Income to Adjusted Operating Income
( in millions) / (Unaudited)
Change Fav./(Unfav.) Variance Fav./(Unfav.)
EA, AU & PMI DF 2022 Total Excl. Curr. & Acquisitions Total Currency Acquisitions Price Vol/Mix Cost/Other
Reported Operating Income $ 2,424 2.4 % 18.6 % $ 57 $ (395) $ — $ 206 $ 326 $ (80)
Asset Impairment & Exit Costs — — % — % (21) — — — — (21)
Amortization of intangibles (4) 50.0 % 50.0 % 2 — — — — 2
Costs associated with Swedish Match AB offer (24) +100% +100% 24 — — — — 24
South Korea Indirect Tax Charge — — % — % (204) — — — — (204)
Termination of agreement with Foundation for a Smoke-Free World — — % — % (27) — — — — (27)
Adjusted Operating Income $ 2,452 11.5 % 27.7 % $ 283 $ (395) $ — $ 206 $ 326 $ 146
Americas
Reported Operating Income $ 436 (85.8) % (40.6) % $ (374) $ (197) $ — $ 128 $ (139) $ (166)
Asset Impairment & Exit Costs — — % — % (5) — — — — (5)
Amortization of intangibles (9) 22.2 % 22.2 % 2 — — — — 2
Costs associated with Swedish Match AB offer (5) +100% +100% 5 — — — — 5
Termination of agreement with Foundation for a Smoke-Free World — — % — % (7) — — — — (7)
Adjusted Operating Income $ 450 (82.0) % (38.2) % $ (369) $ (197) $ — $ 128 $ (139) $ (161)
Swedish Match
Reported Operating Income $ (22) +100% +100% $ 846 $ (8) $ 694 $ 25 $ 38 $ 97
Amortization of intangibles (26) -(100)% -(100)% (346) — (315) — — (31)
Swedish Match AB acquisition accounting related items (125) 85.6 % +100% 107 — (18) — — 125
Adjusted Operating Income $ 129 +100% 51.2 % $ 1,085 $ (8) $ 1,027 $ 25 $ 38 $ 3
Wellness & Healthcare
Reported Operating Income / (Loss) $ (258) -(100)% -(100)% $ (612) $ (6) $ — $ 33 $ — $ (639)
Amortization of intangibles (59) 1.7 % 1.7 % 1 — — — — 1
Impairment of goodwill and other intangibles (112) -(100)% -(100)% (568) — — — — (568)
Adjusted Operating Income / (Loss) $ (87) (51.7) % (44.8) % $ (45) $ (6) $ — $ 33 $ — $ (72)

All values are in US Dollars.

Schedule 12
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions
( in millions) / (Unaudited)
Adjusted Operating Income(1) Adjusted Operating Income<br>Margin Adjusted Operating Income<br>excluding Currency<br>(1) Adjusted<br>Net Revenues excluding Currency<br>(2) Adjusted Operating Income Margin excluding Currency Adjusted Operating Income excluding Currency <br>& Acqui-<br>sitions<br>(1) Adjusted<br>Net Revenues excluding Currency <br>& Acqui-<br>sitions<br>(2) Adjusted Operating Income Margin excluding Currency <br>& Acqui-<br>sitions Adjusted Operating Income<br>(1) Adjusted<br>Net Revenues<br>(2) Adjusted Operating Income<br>Margin Adjusted Operating Income<br>Margin Adjusted Operating Income Margin excluding Currency Adjusted Operating Income Margin excluding Currency <br>& Acqui-<br>sitions
2023 Quarters Ended<br>December 31, 2022 % Points Change
1,610 44.5 % $ 1,488 $ 3,359 44.3 % $ 1,488 $ 3,359 44.3 % Europe $ 1,317 $ 3,064 43.0 % 1.5 1.3 1.3
681 25.2 % 886 3,034 29.2 % 886 3,034 29.2 % SSEA, CIS & MEA 817 2,686 30.4 % (5.2) (1.2) (1.2)
561 39.2 % 643 1,476 43.6 % 643 1,476 43.6 % EA, AU & PMI DF 647 1,478 43.8 % (4.6) (0.2) (0.2)
(78) (14.3) % 45 510 8.8 % 45 510 8.8 % Americas 95 536 17.7 % (32.0) (8.9) (8.9)
325 47.7 % 333 682 48.8 % 195 383 50.9 % Swedish Match 129 316 40.8 % 6.9 8.0 10.1
(47) (68.1) % (42) 64 (65.6) % (42) 64 (65.6) % Wellness and Healthcare (29) 72 (40.3) % (27.8) (25.3) (25.3)
3,052 33.7 % $ 3,353 $ 9,125 36.7 % $ 3,215 $ 8,826 36.4 % Total PMI $ 2,976 $ 8,152 36.5 % (2.8) 0.2 (0.1)
2023 Years Ended<br>December 31, 2022 % Points Change
6,214 45.7 % $ 6,028 $ 13,349 45.2 % $ 6,028 $ 13,349 45.2 % Europe $ 6,044 $ 12,869 47.0 % (1.3) (1.8) (1.8)
3,225 30.1 % 3,878 11,769 33.0 % 3,878 11,769 33.0 % SSEA, CIS & MEA 3,920 10,467 37.5 % (7.4) (4.5) (4.5)
2,735 44.1 % 3,130 6,601 47.4 % 3,130 6,601 47.4 % EA, AU & PMI DF 2,452 5,936 41.3 % 2.8 6.1 6.1
81 4.2 % 278 1,848 15.0 % 278 1,848 15.0 % Americas 450 1,903 23.6 % (19.4) (8.6) (8.6)
1,214 48.6 % 1,222 2,496 49.0 % 195 383 50.9 % Swedish Match 129 316 40.8 % 7.8 8.2 10.1
(132) (43.1) % (126) 303 (41.6) % (126) 303 (41.6) % Wellness and Healthcare (87) 271 (32.1) % (11.0) (9.5) (9.5)
13,337 37.8 % $ 14,410 $ 36,366 39.6 % $ 13,383 $ 34,253 39.1 % Total PMI $ 12,908 $ 31,762 40.6 % (2.8) (1.0) (1.5)
(1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to Schedule 10 and 11
(2) For the calculation of Adjusted Net Revenues excluding currency and acquisitions refer to Schedule 5

All values are in US Dollars.

Schedule 13
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Statements of Earnings
( in millions, except per share data) / (Unaudited)
Years Ended December 31,
2022 Change<br>Fav./(Unfav.) 2023 2022 Change<br>Fav./(Unfav.)
8,152 11.0 % Net Revenues 35,174 31,762 10.7 %
3,211 (7.8) % Cost of sales 12,893 11,402 (13.1) %
4,941 13.0 % Gross profit 22,281 20,360 9.4 %
2,017 (33.7) % Marketing, administration and research costs 10,060 8,114 (24.0) %
— — Impairment of goodwill 665 — —
2,924 (1.2) % Operating Income 11,556 12,246 (5.6) %
170 (60.6) % Interest expense, net 1,061 588 (80.4) %
8 (12.5) % Pension and other employee benefit costs 45 24 (87.5) %
2,746 (5.1) % Earnings before income taxes 10,450 11,634 (10.2) %
409 21.8 % Provision for income taxes 2,339 2,244 (4.2) %
(157) (83.4) % Equity investments and securities (income)/loss, net (157) (137) 14.6 %
2,494 (7.3) % Net Earnings 8,268 9,527 (13.2) %
97 (20.6) % Net Earnings attributable to noncontrolling interests 455 479 5.0 %
$ 2,397 (8.4) % Net Earnings attributable to PMI $ 7,813 $ 9,048 (13.6) %
Per share data: (1)
$ 1.54 (8.4) % Basic Earnings Per Share $ 5.02 $ 5.82 (13.7) %
$ 1.54 (8.4) % Diluted Earnings Per Share $ 5.02 $ 5.81 (13.6) %
(1) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters and for the years ended December 31, 2023 and 2022 are shown on Schedule 1, Footnote 1

All values are in US Dollars.

Schedule 14
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Balance Sheets
( in millions) / (Unaudited)
December 31,
2022
Assets
Cash and cash equivalents $ 3,060 $ 3,207
All other current assets 16,695 16,412
Property, plant and equipment, net 7,516 6,710
Goodwill 16,779 19,655
Other intangible assets, net 9,864 6,732
Equity investments 4,929 4,431
Other assets 6,461 4,534
Total assets $ 65,304 $ 61,681
Liabilities and Stockholders' (Deficit) Equity
Short-term borrowings $ 1,968 $ 5,637
Current portion of long-term debt 4,698 2,611
All other current liabilities 19,717 19,088
Long-term debt 41,243 34,875
Deferred income taxes 2,335 1,956
Other long-term liabilities 4,789 3,825
Total liabilities 74,750 67,992
Total PMI stockholders' deficit (11,225) (8,957)
Noncontrolling interests 1,779 2,646
Total stockholders' (deficit) equity (9,446) (6,311)
Total liabilities and stockholders' (deficit) equity $ 65,304 $ 61,681

All values are in US Dollars.

Schedule 15
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios
( in millions, except ratios) / (Unaudited)
Year Ended December 31, 2022
Net Earnings $ 9,527
Equity investments and securities (income)/loss, net (157) (137)
Provision for income taxes 2,339 2,244
Interest expense, net 1,061 588
Depreciation, amortization and impairment of goodwill and other intangibles 2,078 1,189
Asset impairment and exit costs and Others (1) 604 391
Adjusted EBITDA 14,193 $ 13,802
December 31, December 31,
2023 2022
Short-term borrowings $ 5,637
Current portion of long-term debt 4,698 2,611
Long-term debt 41,243 34,875
Total Debt $ 43,123
Cash and cash equivalents 3,060 3,207
Net Debt $ 39,916
Ratios:
Total Debt to Adjusted EBITDA 3.38 3.12
Net Debt to Adjusted EBITDA 3.16 2.89
(1) For year ended December 31, 2023 "Others" includes South Korea indirect tax charge 204 million, 140 million related to Termination of agreement with Foundation for a Smoke-Free World, a reduction in revenues of 80 million related to the termination of distribution arrangement in the Middle East, 53 million of charges related to the war in Ukraine and 18 million of Swedish Match AB acquisition accounting related items.For year ended December 31, 2022 "Others" includes 151 million of charges related to the war in Ukraine, 115 million of costs associated with Swedish Match AB offer and 125 million for Swedish Match AB acquisition accounting related item.

All values are in US Dollars.

Schedule 16
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency
( in millions) / (Unaudited)
Years Ended December 31,
2022 % Change 2023 2022 % Change
$ 3,093 6.8 % Net cash provided by operating activities (1) $ 9,204 $ 10,803 (14.8) %
Less: Currency (1,297)
$ 3,093 27.6 % Net cash provided by operating activities,<br>excluding currency $ 10,501 $ 10,803 (2.8) %
(1) Operating cash flow

All values are in US Dollars.

Schedule 17
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Restatement and Reconciliation of Adjusted Net Revenues – PMI and Swedish Match Combined
( in millions) / (Unaudited)
Quarters Ended December 31, Years Ended December 31,
2023 Total Var. Currency Var. excl. currency 2023 2022 Total Var. Currency Var. excl. currency
Total PMI
9,047 $ 895 11.0 % $ (78) 11.9 % Net Revenues $ 35,174 $ 31,762 $ 3,412 10.7 % $ (1,112) 14.2 %
— — — — — Adjustments (1) (80) — (80) — — —
9,047 $ 895 11.0 % $ (78) 11.9 % Adjusted Net Revenues $ 35,254 $ 31,762 $ 3,492 11.0 % $ (1,112) 14.5 %
Swedish Match
682 $ 366 +100% $ — +100% Net Revenues $ 2,496 $ 316 $ 2,180 +100% $ — +100%
Total PMI excl. Swedish Match
8,365 $ 529 6.8 % $ (78) 7.7 % Adjusted Net Revenues $ 32,758 $ 31,446 $ 1,312 4.2 % $ (1,112) 7.7 %
Pro Forma Swedish Match Financial Information
682 $ 93 15.7 % $ (59) 25.7 % Net Revenues $ 2,496 $ 2,133 $ 363 17.0 % $ (65) 20.1 %
9,047 $ 622 7.4 % $ (137) 9.0 % Combined Net Revenues $ 35,254 $ 33,579 $ 1,675 5.0 % $ (1,177) 8.5 %
(1) Reflects a reduction in net revenues related to the termination of distribution arrangement in the Middle East
The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of PMI and Swedish Match as disclosed in Form 10-Q for the 9 months ended September 30, 2023, Item 1, Note 2 AcquisitionsThe unaudited quarterly pro forma 2022 Swedish Match net revenues are prepared on the same basis as the pro forma Swedish Match financial information for the year ended December 31, 2022 as disclosed in Form 10-Q for the 9 months ended September 30, 2023, Item 1, Note 2 Acquisitions, utilizing the full year average exchange rates. The currency variance includes adjustments to the 2022 quarterly average exchange ratesThe unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2021. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company, nor does it reflect the expected realization of any synergies or cost savings associated with the acquisitionNote: Totals may not foot due to roundings

All values are in US Dollars.

26

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