Document

Exhibit 99.1



PRESS RELEASE

Investor Relations:		Media:
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Email: [email protected]

PHILIP MORRIS INTERNATIONAL INC. REPORTS 2020 FIRST-QUARTER REPORTED DILUTED EPS OF $1.17 VERSUS $0.87 IN 2019, REFLECTING CURRENCY-NEUTRAL LIKE-FOR-LIKE ADJUSTED DILUTED EPS GROWTH OF 30.1%;

WITHDRAWS 2020 FULL-YEAR REPORTED DILUTED EPS FORECAST DUE SOLELY TO UNCERTAINTY RELATED TO COVID-19 PANDEMIC AND REPLACES WITH QUARTERLY FORECAST;

PROVIDES 2020 SECOND-QUARTER REPORTED DILUTED EPS FORECAST OF $1.00 TO $1.10, REFLECTING UNFAVORABLE CURRENCY IMPACT OF APPROXIMATELY $0.12

NEW YORK, April 21, 2020 – Philip Morris International Inc. (NYSE: PM) today announces its 2020 first-quarter results. Comparisons presented in this press release on a "like-for-like" basis reflect pro forma 2019 results, which have been adjusted for the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019 (the date of deconsolidation). In addition, reflecting the deconsolidation, PMI's total market share has been restated for previous periods.

2020 FIRST-QUARTER HIGHLIGHTS


•	Reported diluted EPS of $1.17, up by 34.5%; up by 49.4%, excluding currency


•	Adjusted diluted EPS of $1.21, up by 11.0%; up by 30.1% on a like-for-like basis, excluding currency


•	Cigarette and heated tobacco unit shipment volume down by 1.2% (reflecting cigarette shipment volume down by 4.4%, and heated tobacco unit shipment volume up by 45.5% to 16.7 billion units); down by 0.6% on a like-for-like basis


•	Market share of heated tobacco units in IQOS markets, excluding the U.S., up by 1.9 points to 6.6%


•	Net revenues up by 6.0%; up by 10.0% on a like-for-like basis, excluding currency


•	Operating income up by 36.0%; up by 45.6%, excluding currency


•	Adjusted operating income up by 25.5% on a like-for-like basis, excluding currency


•	Adjusted operating income margin up by 5.1 points to 41.3% on a like-for-like basis, excluding currency


•	Total IQOS users at quarter-end estimated at approximately 14.6 million, of which approximately 10.6 million have stopped smoking and switched to IQOS


•	During the quarter, PMI declared a regular quarterly dividend of $1.17 per common share, representing an annualized rate of $4.68


•	On March 30, 2020, PMI submitted a supplemental premarket tobacco product application (PMTA) for the IQOS 3 tobacco heating device with the U.S. Food and Drug Administration

"During these unprecedented times, our main focus is on the health and well-being of our employees and their families, our commercial partners and the broader communities in which we operate," said André Calantzopoulos, Chief Executive Officer. "To that end, we recently announced a new set of guiding principles to reassure our employees of the company’s commitment to job security. Thanks to our employees' efforts, our business continuity measures are operating effectively."

"We started the year with a very strong first quarter, reflecting continued structural growth momentum driven by our smoke-free portfolio and favorable combustible tobacco pricing. We experienced a limited impact on our performance from the early stages of the COVID-19 pandemic, as the onset of government restrictions related to social distancing and travel were generally only implemented in our key markets over the course of March."

"We expect that the pandemic will have adverse impacts on our full-year 2020 business results. Those already observable relate to a severe reduction of our duty-free sales, slower IQOS user acquisition and delayed minimum price enforcement in Indonesia. We also have to assume that, in certain markets, unemployment and related reductions in disposable income will have a temporary impact on market dynamics or the ability of certain small retailers to operate."

"The duration of the pandemic, the magnitude of its economic impact during the government restrictions, and the subsequent speed of recovery are today unknown. As we are currently unable to forecast with reasonable accuracy the impact of these factors for the remainder of the year, we are withdrawing our 2020 reported diluted EPS guidance of at least $5.50, originally provided on February 6, 2020, and are instead providing a forecast for the second quarter, for which we have relatively better visibility."

"Despite near-term uncertainty, our company is resilient with a robust financial position. I remain as confident as ever in the underlying fundamentals of our business over time and expect PMI to emerge from the current challenges even better positioned to deliver on our smoke-free ambition and reward our shareholders."

COVID-19: Q1 2020 Volume and Financial Impacts on Like-for-Like Change vs. Q1 2019

The estimated impacts of the COVID-19 pandemic on select PMI volume and currency-neutral financial metrics in the first quarter of 2020 are provided in the table below and primarily reflect favorable estimated distributor and trade inventory movements.



	Like-for-Like Change Fav./(Unfav.)⁽¹⁾	Est. Impact Attributable to COVID-19
PMI Total Shipment Volume	(0.6)%	+1.7 p.p.
Net Revenues	10.0%	+2.0 p.p.
Adjusted Operating Income	25.5%	+5.6 p.p.
Adjusted Diluted EPS	30.1%	+6.8 p.p.

(1) Changes for Net Revenues, Adjusted Operating Income and Adjusted Diluted EPS exclude currency.

Explanations and reconciliations to the most directly comparable U.S. GAAP measures are provided in Appendix 2 and Schedule 8.

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COVID-19: Business Continuity Update

Since the onset of COVID-19, PMI has undertaken a number of business continuity measures to mitigate potential disruption to its operations and route-to-market in order to preserve the availability of products to its customers and adult consumers.

Currently, PMI has sufficient access to the inputs for its products and is not facing any significant business continuity issues with respect to key suppliers.

The large majority of PMI's manufacturing facilities globally are currently operational, including all heated tobacco unit factories. Certain cigarette production facilities are temporarily impacted by government-mandated shutdowns or production limitations. Such facilities account for approximately 20% of PMI's total cigarette production capacity worldwide.

Based on current sales trends, there are adequate inventories of PMI finished goods, on average across all markets, of over two months for heated tobacco units, over three months for tobacco heating devices, and over one and a half months for cigarettes. While government-related restrictions have led to complexities in the company's route-to-market in select geographies, PMI does not currently anticipate out-of-stock situations in any major operating income markets and generally expects consumers to have adequate access to its products. In certain emerging markets, potential difficulties for some smaller general trade outlets could lead to temporary localized out-of-stock situations given less developed route-to-market infrastructures.

Currently, PMI has ample liquidity resources through cash on hand, the ongoing cash generation of its business, and continued access to commercial paper. As of March 31, 2020, the company had approximately $3.7 billion of cash and cash equivalents, $1.1 billion of commercial paper, with an average term of approximately 30 days, and $7.5 billion in stand-by revolving credit facilities. PMI repaid approximately $3.6 billion in bond maturities during the first quarter and paid approximately $3.6 billion in dividends to shareholders year-to-date April (reflecting dividends declared in the fourth quarter of 2019 and the first quarter of 2020). The company has a well laddered bond portfolio and $0.3 billion of bonds maturing through the end of 2020.

COVID-19: Primary Business Impacts

While the trajectory and duration of the COVID-19 pandemic -- and related government restrictions -- remain uncertain, PMI anticipates three primary areas of impact from temporary changes to its operating environment:

•

Reduced Duty-Free Sales: Government travel restrictions and related reductions in passenger travel are having a significant impact on the company's duty-free business, which contributed approximately 4% of total net revenues in 2019 and has relatively high unit margins reflecting its skew to premium brands. As a result of this premium skew, only a portion of the COVID-linked duty-free volume decline is expected to be recovered by the company's own brand portfolio in local markets, and generally at lower margins.

•

Delayed IQOS User Acquisition: Lock-down measures and other restrictions limit PMI's ability to engage with adult smokers through the company's field sales forces, as well as company-owned and third-party retail touch-points, and are only partly mitigated by PMI's increasing use of digital tools that enable virtual guided trials and other e-commerce activities. Based on trends since lock-down measures were introduced in various markets, the rate of new user acquisition is expected to be, on average, around 50% lower than anticipated for as long as government restrictions are in place, with variation depending on the level of restrictions by market.

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•

Indonesia - Minimum Retail Price Delay: The Indonesian government has announced that the enforcement of the new minimum price, originally scheduled for April 1, 2020, is delayed until June due to COVID-19 restrictions. This is expected to impact retail prices at the low end of the market and related price gaps with PMI's cigarette brands, with a corresponding negative impact on PMI's cigarette market share and timing of pricing.

PMI also anticipates uncertainty as to the general economic impact of the global pandemic and ultimate shape of the recovery, particularly with respect to unemployment, disposable income, consumption and the extent of any down-trading, as well as retail operations in certain developing markets.

2020 FULL-YEAR FORECAST WITHDRAWAL

Given the inherent uncertainty surrounding the COVID-19 pandemic and the related impact on PMI's business globally, the company is currently unable to forecast its full-year financial results with reasonable accuracy. PMI is therefore withdrawing its 2020 reported diluted EPS forecast of at least $5.50, originally provided on February 6, 2020.

The limited impact of COVID-19 on the company's first-quarter 2020 financial results primarily reflected the relatively late-quarter onset of the pandemic in many of PMI's key markets. However, as an increasing number of governments globally have now enforced self-isolation and lock-down measures -- the duration and severity of which remain uncertain -- the company anticipates an adverse impact on its full-year results that cannot be accurately quantified at this time.

Based on data from markets to date, particularly those that were impacted by COVID-19-related government restrictions earlier in the year, PMI believes that the adverse impacts on its business from the pandemic are temporary in nature, mainly subject to the duration of government lock-downs and the subsequent timing of recovery.

2020 SECOND-QUARTER FORECAST

Although the company is unable to assess with reasonable accuracy the impact of COVID-19 on its business over the full year, it has relatively better visibility on the second quarter of 2020.

As initially communicated on February 6th, PMI anticipated a soft second quarter in 2020, notably due to an unfavorable prior year comparison, existing dynamics in Indonesia and the phasing of certain costs. The company now anticipates a further adverse impact related to the COVID-19 pandemic, with the largest quarterly impact this year expected in the second quarter.

PMI forecasts second-quarter reported diluted EPS to be in a range of $1.00 to $1.10, including an unfavorable currency impact, at prevailing exchange rates, of approximately $0.12 per share.

This forecast assumes the following estimated unfavorable EPS impacts in the quarter related to COVID-19:


•	10 cents for distributor and trade inventory movements, mainly related to reversals from the first quarter;


•	9 cents for lost Duty-Free sales, net of domestic sales recapture, assuming no recovery in global travel in the period;


•	5 to 15 cents for the impact of the delay in minimum price enforcement in Indonesia and other COVID-19-related factors, including temporary reductions in daily consumption and down-trading in certain developing markets.

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The forecast also assumes:


•	a currency-neutral net revenue decline of approximately 8% to 12%, wholly attributable to COVID-19-related factors, including lower IQOS device sales; and


•	no additional disruption in the company's ability to supply its customers, based on its current operations and inventory levels.

Until PMI is able to estimate the full-year 2020 impact of COVID-19 on its business with greater certainty, the company plans to continue providing quarterly forecasts on a one quarter forward basis, with the exception of the following items forecasted for the full year:


•	capital expenditures of approximately $0.8 billion, compared to approximately $1.0 billion disclosed previously, with the reduction unrelated to reduced-risk product investments; and


•	an effective tax rate of approximately 23%, subject to changes in full-year earnings mix.

The forecasts in this press release exclude the impact of any future acquisitions, unanticipated asset impairment and exit cost charges, future changes in currency exchange rates, further developments related to the U.S. Tax Cuts and Jobs Act, further developments pertaining to the judgment in the two Québec Class Action lawsuits and the Companies’ Creditors Arrangement Act (CCAA) protection granted to RBH, any unusual events, and any COVID-19-related developments different from the assumptions set forth in the company's forecasts.

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

Conference Call

A conference call, hosted by André Calantzopoulos, Chief Executive Officer, and Martin King, Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on April 21, 2020. Access is at www.pmi.com/2020Q1earnings. The audio webcast may also be accessed on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.

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CONSOLIDATED SHIPMENT VOLUME & MARKET SHARE



PMI Shipment Volume by Region	First-Quarter
(million units)	2020	2019	Change
Cigarettes
European Union	40,646	39,488	2.9	%
Eastern Europe	21,419	20,320	5.4	%
Middle East & Africa	29,996	33,304	(9.9	)%
South & Southeast Asia	37,595	41,492	(9.4	)%
East Asia & Australia	12,299	12,113	1.5	%
Latin America & Canada	15,063	17,580	(14.3	)%
Total PMI	157,018	164,297	(4.4	)%

Heated Tobacco Units
European Union	4,661	2,293	+100%
Eastern Europe	4,366	1,548	+100%
Middle East & Africa	470	754	(37.7	)%
South & Southeast Asia	—	—	—	%
East Asia & Australia	7,122	6,849	4.0	%
Latin America & Canada ⁽¹⁾	108	54	+100%
Total PMI	16,727	11,498	45.5	%

Cigarettes and Heated Tobacco Units
European Union	45,307	41,781	8.4	%
Eastern Europe	25,785	21,868	17.9	%
Middle East & Africa	30,466	34,058	(10.5	)%
South & Southeast Asia	37,595	41,492	(9.4	)%
East Asia & Australia	19,421	18,962	2.4	%
Latin America & Canada	15,171	17,634	(14.0	)%
Total PMI	173,745	175,795	(1.2	)%
(1) Includes shipments to Altria Group, Inc., commencing in the third quarter of 2019, for sale in the United States under license.

During the quarter, PMI's total shipment volume decreased by 1.2%, or by 0.6% on a like-for-like basis, principally due to:


•	Middle East & Africa, reflecting lower cigarette shipment volume, notably in Saudi Arabia and Turkey, partly offset by North Africa;


•	South & Southeast Asia, reflecting lower cigarette shipment volume, primarily in Indonesia, Pakistan and the Philippines; and


•	Latin America & Canada, reflecting lower cigarette shipment volume, primarily in Argentina, Canada (mainly due to the impact of the deconsolidation of RBH), and Mexico. On a like-for-like basis, PMI's total shipment volume in the Region decreased by 8.8%;

partly offset by


•	the EU, reflecting higher heated tobacco unit shipment volume across the Region, particularly in Italy, as well as higher cigarette shipment volume, notably in Germany and Italy;


•	Eastern Europe, reflecting higher heated tobacco unit shipment volume across the Region, notably in Russia and Ukraine, as well as higher cigarette shipment volume, mainly in Russia, partly offset by Ukraine; and


•	East Asia & Australia, mainly reflecting higher cigarette and heated tobacco unit shipment volume in Japan.

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First-Quarter Impact of Inventory Movements

On a like-for-like basis, excluding the net favorable impact of estimated distributor inventory movements of approximately 5.4 billion units, PMI’s total in-market sales declined by 3.7%, due to a 6.7% decline in cigarettes, partly offset by a 35.6% increase in heated tobacco units.

The net favorable impact of estimated distributor inventory movements of approximately 5.4 billion units reflected:


•	A net favorable impact of 4.7 billion cigarettes, mainly driven by the EU Region, Japan, North Africa, PMI Duty Free and Russia, partly offset by Saudi Arabia; and


•	A net favorable impact of 0.7 billion heated tobacco units, mainly driven by the EU Region and Russia.

PMI Shipment Volume by Brand



PMI Shipment Volume by Brand	First-Quarter
(million units)	2020	2019	Change
Cigarettes
Marlboro	59,245	59,963	(1.2	)%
L&M	22,641	21,816	3.8	%
Chesterfield	12,903	14,298	(9.8	)%
Philip Morris	11,463	10,723	6.9	%
Sampoerna A	8,548	7,901	8.2	%
Parliament	7,573	8,830	(14.2	)%
Dji Sam Soe	6,175	6,651	(7.2	)%
Bond Street	5,612	5,671	(1.0	)%
Lark	4,025	5,270	(23.6	)%
Fortune	2,482	3,045	(18.5	)%
Others	16,351	20,129	(18.8	)%
Total Cigarettes	157,018	164,297	(4.4	)%
Heated Tobacco Units ⁽¹⁾	16,727	11,498	45.5	%
Total PMI	173,745	175,795	(1.2	)%
(1) Includes shipments to Altria Group, Inc., commencing in the third quarter of 2019, for sale in the United States under license.
Note: Sampoerna A includes Sampoerna; Philip Morris includes Philip Morris/Dubliss; and Lark includes Lark Harmony.

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


•	Marlboro, mainly due to the GCC, Indonesia, Mexico and Turkey, partially offset by Germany, Italy, Japan, North Africa and Russia;


•	Chesterfield, mainly due to Argentina, Russia, Saudi Arabia and Turkey, partly offset by Brazil;


•	Parliament, mainly due to Russia and Turkey;


•	Dji Sam Soe in Indonesia, mainly due to Dji Sam Soe Magnum Mild, reflecting adult smoker down-trading to super-low-price brands due to widened price gaps;


•	Bond Street, mainly due to Ukraine, partly offset by Russia;


•	Lark, mainly due to Japan and Turkey;


•	Fortune in the Philippines, mainly reflecting the impact of the August 2019 price increase, which widened price gaps with competitive brands; and


•	"Others," notably due to: the impact of the deconsolidation of RBH in Canada; mid-price Sampoerna U in Indonesia and Muratti in Turkey; and low-price Morven in Pakistan.

- -7 -

The increase in PMI's heated tobacco unit shipment volume was mainly driven by the EU (notably Italy), Eastern Europe (notably Russia and Ukraine) and Japan, partly offset by PMI Duty Free.

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


•	L&M, mainly driven by Mexico and North Africa (primarily Egypt), partly offset by Saudi Arabia;


•	Philip Morris, primarily driven by Japan and Russia, partly offset by Argentina; and


•	Sampoerna A in Indonesia, mainly driven by premium A Mild, notably reflecting reduced price gaps with directly competitive mid and low-price brands.

First-Quarter International Share of Market

PMI's total international market share (excluding China and the U.S.), defined as PMI's cigarette and heated tobacco unit sales volume as a percentage of total industry cigarette and heated tobacco unit sales volume, decreased by 0.2 points to 27.9%, reflecting:


•	Total international market share for cigarettes of 25.0%, down by 1.1 points; and


•	Total international market share for heated tobacco units of 2.9%, up by 0.9 points.

PMI's total international cigarette sales volume as a percentage of total industry cigarette sales volume was down by 0.8 points to 25.9%, mainly reflecting: out-switching to heated tobacco units, as well as lower cigarette market share, notably in Argentina, Indonesia, Mexico, Pakistan, Saudi Arabia and Turkey.

CONSOLIDATED FINANCIAL SUMMARY



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix	Cost/ Other⁽¹⁾
(in millions)	2020		2019		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix	Cost/ Other⁽¹⁾
Net Revenues	$ 7,153		$ 6,751		6.0	%	7.1	%	402	(74	)	323	381	(228	)
Cost of Sales	(2,402)		(2,465)		2.6	%	0.6	%	63	49		—	29	(15	)
Marketing, Administration and Research Costs ⁽²⁾	(1,944)		(2,217)		12.3	%	20.0	%	273	(171	)	—	—	444
Amortization of Intangibles	(18)		(19)		5.3	%	5.3	%	1	—		—	—	1
Operating Income	$ 2,789		$ 2,050		36.0	%	45.6	%	739	(196	)	323	410	202
Asset Impairment & Exit Costs ⁽³⁾	—		(20	)	+100%		+100%		20	—		—	—	20
Canadian Tobacco Litigation-Related Expense ⁽³⁾	—		(194	)	+100%		+100%		194	—		—	—	194
Loss on Deconsolidation of RBH ⁽³⁾	—		(239	)	+100%		+100%		239	—		—	—	239
Adjusted Operating Income	$ 2,789		$ 2,503		11.4	%	19.3	%	286	(196	)	323	410	(251	)

Adjusted Operating Income Margin	39.0	%	37.1	%	1.9pp		4.2pp
⁽¹⁾ Cost/Other variance includes the impact of the RBH deconsolidation.
⁽²⁾ Unfavorable Cost/Other variance of $9 million, excluding 2019 asset impairment and exit costs, the 2019 Canadian tobacco litigation-related expense and the 2019 Loss on deconsolidation of RBH.
⁽³⁾ Included in Marketing, Administration and Research Costs above.
Note: Net Revenues include revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc., commencing in the third quarter of 2019, for sale under license in the United States.

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During the quarter, net revenues, excluding unfavorable currency, increased by 7.1%, mainly reflecting: a favorable pricing variance, notably driven by Australia, the GCC, Germany, Mexico, the Philippines and Turkey, partly offset by Italy; and a favorable volume/mix, primarily driven by heated tobacco unit volume (notably in the EU and Eastern Europe, partly offset by PMI Duty Free), partially offset by lower IQOS device volume (notably in Japan) and lower cigarette volume (mainly due to Mexico, the Philippines, Saudi Arabia and Turkey, largely offset by Germany, Italy, Japan, North Africa and Russia). The currency-neutral growth in net revenues of 7.1% came despite the unfavorable impact of $228 million, shown in "Cost/Other," mainly resulting from the deconsolidation of RBH. On a like-for-like basis, net revenues, excluding unfavorable currency, increased by 10.0%, as detailed in Schedule 8.

Operating income, excluding unfavorable currency, increased by 45.6%, notably reflecting a favorable comparison to charges recorded in the first quarter of 2019 of $453 million, shown in "Cost/Other," related to the loss on deconsolidation of RBH, the Canadian tobacco litigation-related expense, and asset impairment and exit costs related to a plant closure in Pakistan.

Excluding the impact of these 2019 charges, adjusted operating income, excluding unfavorable currency, increased by 19.3%, primarily reflecting: a favorable pricing variance; and favorable volume/mix, primarily driven by heated tobacco unit volume (notably in the EU and Eastern Europe, partly offset by PMI Duty Free); partially offset by higher manufacturing costs; higher marketing, administration and research costs (notably reflecting increased investment behind reduced-risk products, mainly in the EU and Eastern Europe); and the net unfavorable impact resulting from the deconsolidation of RBH, included in "Cost/Other." On a like-for-like basis, adjusted operating income, excluding unfavorable currency, increased by 25.5%, as detailed in Schedule 8.

Adjusted operating income margin, excluding currency, increased by 4.2 points to 41.3%, as detailed in Schedule 7, or by 5.1 points to 41.3% on a like-for-like basis, as detailed in Schedule 8.

EUROPEAN UNION REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix	Cost/ Other
(in millions)	2020		2019		Total		Excl. Curr.		Total	Cur- rency		Price	Vol/ Mix	Cost/ Other
Net Revenues	$ 2,535		$ 2,159		17.4	%	20.7	%	376	(70	)	16	430	—

Operating Income	$ 1,158		$ 896		29.2	%	36.5	%	262	(65	)	16	378	(67	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—	—		—	—	—
Adjusted Operating Income	$ 1,158		$ 896		29.2	%	36.5	%	262	(65	)	16	378	(67	)

Adjusted Operating Income Margin	45.7	%	41.5	%	4.2pp		5.4pp

During the quarter, net revenues, excluding unfavorable currency, increased by 20.7%, primarily reflecting favorable volume/mix, mainly driven by higher heated tobacco unit volume across the Region (notably in the Czech Republic, Germany, Italy and Poland), as well as higher cigarette volume (notably in Germany and Italy). The favorable pricing variance reflected higher combustible pricing across the Region (notably in Germany), partly offset by lower heated tobacco unit pricing (notably in Italy) and lower IQOS device pricing.

Operating income, excluding unfavorable currency, increased by 36.5%, mainly reflecting: favorable volume/mix, driven by the same factors as for net revenues noted above; and a favorable pricing variance; partly offset by higher manufacturing costs; and higher marketing, administration and research costs, largely related to increased investments behind reduced-risk products.

Adjusted operating income margin, excluding currency, increased by 5.4 points to 46.9%, as detailed in Schedule 7.

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Total Market, PMI Shipment & Market Share Commentaries



European Union Key Data	First-Quarter
					Change
	2020		2019		% / pp
Total Market (billion units)	109.3		107.4		1.8	%

PMI Shipment Volume (million units)
Cigarettes	40,646		39,488		2.9	%
Heated Tobacco Units	4,661		2,293		+100%
Total EU	45,307		41,781		8.4	%

PMI Market Share
Marlboro	17.7	%	18.2	%	(0.5	)
L&M	6.5	%	6.7	%	(0.2	)
Chesterfield	5.7	%	5.9	%	(0.2	)
Philip Morris	2.6	%	2.8	%	(0.2	)
HEETS	3.9	%	2.1	%	1.8
Others	3.0	%	3.2	%	(0.2	)
Total EU	39.4	%	38.9	%	0.5

In the quarter, the estimated total market in the EU increased by 1.8% to 109.3 billion units, mainly driven by:


•	Denmark, up by +100%, mainly reflecting the net favorable impact of estimated trade inventory movements in advance of a significant excise tax increase on April 1, 2020. Excluding these movements, the total estimated market decreased by 2.0%; and


•	Germany, up by 3.7%, or down by 1.8% excluding the net favorable impact of estimated trade inventory movements, primarily reflecting the impact of price increases in March 2019;

partly offset by


•	France, down by 8.7%, primarily reflecting the impact of significant excise tax-driven price increases in November 2019 and March 2020, and a higher prevalence of illicit trade.

Excluding the net favorable impact of estimated trade inventory movements, the estimated total market in the EU was down by 0.4%.

PMI's total shipment volume increased by 8.4% to 45.3 billion units, reflecting:


•	higher heated tobacco unit shipment volume across the Region, driven by higher market share (notably in Germany, Italy and Poland) and the net favorable impact of estimated distributor inventory movements (partly driven by distributor inventory increases related to COVID-19, notably in Italy); and


•	higher cigarette shipment volume, mainly driven by the net favorable impact of estimated distributor inventory movements (partly driven by distributor inventory increases related to COVID-19, notably in Italy and Spain), partly offset by lower market share (notably in Italy and Poland, partially reflecting out-switching to heated tobacco units).

Excluding the net favorable impact of estimated distributor inventory movements, PMI's total in-market sales in the Region increased by 3.1%.

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EASTERN EUROPE REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix	Cost/ Other
(in millions)	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix	Cost/ Other
Net Revenues	$ 788		$ 579		36.1	%	35.1	%	209		6		14	189	—

Operating Income	$ 99		$ 129		(23.3	)%	48.1	%	(30	)	(92	)	14	129	(81	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—		—	—	—
Adjusted Operating Income	$ 99		$ 129		(23.3	)%	48.1	%	(30	)	(92	)	14	129	(81	)

Adjusted Operating Income Margin	12.6	%	22.3	%	(9.7)pp		2.1pp

During the quarter, net revenues, excluding favorable currency, increased by 35.1%, mainly reflecting: favorable volume/mix, predominantly driven by higher heated tobacco unit volume in Russia and Ukraine; and a favorable pricing variance, driven mainly by higher combustible pricing (notably in Russia and Ukraine), partly offset by lower IQOS device pricing (predominantly in Russia).

Operating income, excluding unfavorable currency (primarily related to an adverse transaction currency impact from the revaluation of foreign currency payables in Russia), increased by 48.1%, mainly reflecting: favorable volume/mix, reflecting the same drivers as for net revenues noted above; and a favorable pricing variance; partially offset by higher manufacturing costs and higher marketing, administration and research costs (primarily related to reduced-risk products in Russia and Ukraine).

Adjusted operating income margin, excluding currency, increased by 2.1 points to 24.4%, as detailed in Schedule 7.

Total Market, PMI Shipment & Market Share Commentaries

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


•	Russia, down by 0.1%, or by 3.9% excluding the net favorable impact of estimated trade inventory movements, primarily reflecting the impact of price increases, as well as an increase in the prevalence of illicit trade; and


•	Ukraine, down by 6.5%, mainly reflecting the impact of excise tax-driven price increases.



PMI Shipment Volume	First-Quarter
(million units)	2020	2019	Change
Cigarettes	21,419	20,320	5.4	%
Heated Tobacco Units	4,366	1,548	+100%
Total Eastern Europe	25,785	21,868	17.9	%

PMI's total shipment volume increased by 17.9% to 25.8 billion units, mainly driven by:


•	Kazakhstan, up by 15.6%, mainly reflecting a higher market share of heated tobacco units; and


•	Russia, up by 24.0%, or by 14.5% excluding the net favorable impact of estimated distributor inventory movements (primarily for cigarettes and driven by distributor inventory increases due to COVID-19), mainly reflecting a higher market share of heated tobacco units.

MIDDLE EAST & AFRICA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
(in millions)	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 876		$ 927		(5.5	)%	(5.3	)%	(51	)	(2	)	72	(76	)	(45	)

Operating Income	$ 321		$ 344		(6.7	)%	(1.2	)%	(23	)	(19	)	72	(30	)	(46	)
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—		—	—		—
Adjusted Operating Income	$ 321		$ 344		(6.7	)%	(1.2	)%	(23	)	(19	)	72	(30	)	(46	)

Adjusted Operating Income Margin	36.6	%	37.1	%	(0.5)pp		1.6pp

During the quarter, net revenues, excluding unfavorable currency, decreased by 5.3%, reflecting: unfavorable volume/mix, mainly due to lower heated tobacco unit and IQOS device volume in PMI Duty Free and lower cigarette volume (notably in Saudi Arabia and Turkey, partly offset by Kuwait and North Africa); and lower fees for certain distribution rights billed to customers in certain markets, shown in "Cost/Other"; partially offset by a favorable pricing variance, driven predominantly by the GCC and Turkey.

Operating income, excluding unfavorable currency, decreased by 1.2%, reflecting: unfavorable volume/mix, mainly due to lower heated tobacco unit volume in PMI Duty Free and lower cigarette volume (notably in Saudi Arabia, partly offset by Kuwait and North Africa); and unfavorable "Cost/Other," mainly due to lower fees for certain distribution rights, as for net revenues noted above, and higher manufacturing costs, partly offset by lower marketing, administration and research costs; partially offset by a favorable pricing variance.

Adjusted operating income margin, excluding currency, increased by 1.6 points to 38.7%, as detailed in Schedule 7.

Total Market, PMI Shipment & Market Share Commentaries

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


•	International Duty Free, down by 33.0%, primarily reflecting the impact of government travel restrictions and reduced passenger traffic due to the COVID-19 pandemic;


•	Saudi Arabia, down by 18.6%, notably reflecting the increased prevalence of non-domestic products following the implementation of plain packaging in the fourth quarter of 2019; and


•	Turkey, down by 24.1%, mainly reflecting a higher prevalence of illicit trade related to cut tobacco following significant industry-wide price increases in 2019;

partly offset by


•	Egypt, up by 5.9%, partly reflecting a lower prevalence of illicit trade and in-switching to cigarettes from other tobacco products.

- -11 -



PMI Shipment Volume	First-Quarter
(million units)	2020	2019	Change
Cigarettes	29,996	33,304	(9.9	)%
Heated Tobacco Units	470	754	(37.7	)%
Total Middle East & Africa	30,466	34,058	(10.5	)%

PMI's total shipment volume decreased by 10.5% to 30.5 billion units, notably due to:


•	PMI Duty Free, down by 12.8%, or by 28.1% excluding the net favorable impact of estimated distributor inventory movements (driven by cigarettes), mainly reflecting the lower total market;


•	Saudi Arabia, down by 72.6%. Excluding the net unfavorable impact of estimated distributor inventory movements of 2.3 billion cigarettes, largely attributable to the timing of shipments in 2019, PMI's in-market sales decreased by 20.4%, mainly due to the lower total market; and


•	Turkey, down by 27.0%, mainly reflecting the lower total market and lower market share due primarily to adult smoker down-trading following the price increases;

partly offset by


•	Egypt, up by 17.1%, or by 6.1% excluding the net favorable impact of estimated distributor inventory movements, mainly reflecting the higher total market.

SOUTH & SOUTHEAST ASIA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total	Cur- rency	Price	Vol/ Mix		Cost/ Other
(in millions)	2020		2019		Total		Excl. Curr.		Total	Cur- rency	Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 1,251		$ 1,113		12.4	%	10.7	%	138	19	159	(40	)	—

Operating Income	$ 599		$ 440		36.1	%	31.8	%	159	19	159	(18	)	(1	)
Asset Impairment & Exit Costs ⁽¹⁾	—		(20	)	+100%		+100%		20	—	—	—		20
Adjusted Operating Income	$ 599		$ 460		30.2	%	26.1	%	139	19	159	(18	)	(21	)

Adjusted Operating Income Margin	47.9	%	41.3	%	6.6pp		5.8pp
⁽¹⁾ Included in marketing, administration and research costs at the consolidated operating income level.

During the quarter, net revenues, excluding favorable currency, increased by 10.7%, reflecting a favorable pricing variance, principally driven by the Philippines, partly offset by unfavorable volume/mix, mainly due to lower cigarette volume in Indonesia and the Philippines, partially offset by favorable cigarette mix in Indonesia.

Operating income, excluding favorable currency, increased by 31.8%, partly reflecting a favorable comparison to a charge recorded in the first quarter of 2019, shown in "Cost/Other," for asset impairment and exit costs related to a plant closure in Pakistan.

Excluding the impact of the 2019 charge, adjusted operating income, excluding favorable currency, increased by 26.1%, reflecting a favorable pricing variance, partly offset by unfavorable volume/mix, due to the same factors as for net revenues noted above, and higher marketing, administration and research costs.

- -12 -

Adjusted operating income margin, excluding currency, increased by 5.8 points to 47.1%, as detailed in Schedule 7.

Total Market, PMI Shipment & Market Share Commentaries

In the quarter, the estimated total market in South & Southeast Asia decreased, notably due to:


•	Indonesia, down by 0.6%, or by approximately 7% excluding the net favorable impact of estimated trade inventory movements, mainly reflecting the impact of excise tax-driven price increases;


•	Pakistan, down by 25.3%, or by 41.9% excluding the net favorable impact of estimated trade inventory movements, mainly due to the impact of excise tax-driven price increases in June 2019; and


•	the Philippines, down by 8.9%, or by 13.2% excluding the net favorable impact of estimated trade inventory movements, mainly reflecting the impact of industry-wide price increases in the third quarter of 2019 and the implementation of quarantines related to COVID-19 in select geographies beginning in mid-March 2020.



PMI Shipment Volume	First-Quarter
(million units)	2020	2019	Change
Cigarettes	37,595	41,492	(9.4	)%
Heated Tobacco Units	—	—	—	%
Total South & Southeast Asia	37,595	41,492	(9.4	)%

PMI's total shipment volume decreased by 9.4% to 37.6 billion units, notably due to:


•	Indonesia, down by 7.6%, primarily reflecting lower market share, mainly due to Marlboro and Dji Sam Soe Magnum Mild, partly offset by Sampoerna A;


•	Pakistan, down by 35.0%, mainly due to the lower total market; and


•	the Philippines, down by 8.8%, mainly reflecting the lower total market.

EAST ASIA & AUSTRALIA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
(in millions)	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other
Net Revenues	$ 1,255		$ 1,321		(5.0	)%	(4.3	)%	(66	)	(9	)	13	(70	)	—

Operating Income	$ 486		$ 427		13.8	%	14.8	%	59		(4	)	13	(11	)	61
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—		—	—		—
Adjusted Operating Income	$ 486		$ 427		13.8	%	14.8	%	59		(4	)	13	(11	)	61

Adjusted Operating Income Margin	38.7	%	32.3	%	6.4pp		6.5pp

During the quarter, net revenues, excluding unfavorable currency, decreased by 4.3%, reflecting: unfavorable volume/mix, mainly due to lower IQOS device volume in Japan and unfavorable cigarette volume/mix in Australia, partly offset by higher cigarette and heated tobacco unit volume in Japan. The unfavorable volume/mix was partly offset by a favorable pricing variance, mainly driven by Australia.

- -13 -

Operating income, excluding unfavorable currency, increased by 14.8%, mainly reflecting lower manufacturing costs related to Japan; lower marketing, administration and research costs; and a favorable pricing variance; partly offset by unfavorable volume/mix, notably due to unfavorable cigarette volume/mix in Australia, partially offset by higher cigarette volume in Japan.

Adjusted operating income margin, excluding currency, increased by 6.5 points to 38.8%, as detailed in Schedule 7.

Total Market, PMI Shipment & Market Share Commentaries

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


•	Australia, down by 19.1%, or by 7.9% excluding the net unfavorable impact of estimated trade inventory movements, mainly due to the impact of excise tax-driven retail price increases;


•	Japan, down by 5.7%, mainly reflecting adult smoker out-switching from cigarettes to the cigarillo category; and


•	Taiwan, down by 14.4%, or by 3.2% excluding the net unfavorable impact of estimated trade inventory movements, notably due to an increase in the prevalence of illicit trade.



PMI Shipment Volume	First-Quarter
(million units)	2020	2019	Change
Cigarettes	12,299	12,113	1.5	%
Heated Tobacco Units	7,122	6,849	4.0	%
Total East Asia & Australia	19,421	18,962	2.4	%

PMI's total shipment volume increased by 2.4% to 19.4 billion units, notably in:

•

Japan, up by 5.6%, reflecting the net favorable impact of estimated distributor inventory movements of approximately 0.8 billion units (driven by a 0.9 billion favorable impact for cigarettes), partly due to accelerated cigarette and heated tobacco unit shipments to the distributor related to COVID-19. Excluding the impact of these inventory movements, PMI's in-market sales decreased by 0.9%, mainly due to the lower total market, partly offset by higher heated tobacco unit market share.

- -14 -

LATIN AMERICA & CANADA REGION



Financial Summary - Quarters Ended March 31,					Change Fav./(Unfav.)				Variance Fav./(Unfav.)
Financial Summary - Quarters Ended March 31,	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other⁽¹⁾
(in millions)	2020		2019		Total		Excl. Curr.		Total		Cur- rency		Price	Vol/ Mix		Cost/ Other⁽¹⁾
Net Revenues	$ 448		$ 652		(31.3	)%	(28.5	)%	(204	)	(18	)	49	(52	)	(183	)

Operating Income	$ 126		$ (186)		+100%		+100%		312		(35	)	49	(38	)	336
Asset Impairment & Exit Costs	—		—		—	%	—	%	—		—		—	—		—
Canadian Tobacco Litigation-Related Expense ⁽²⁾	—		(194	)	+100%		+100%		194		—		—	—		194
Loss on Deconsolidation of RBH ⁽²⁾	—		(239	)	+100%		+100%		239		—		—	—		239
Adjusted Operating Income	$ 126		$ 247		(49.0	)%	(34.8	)%	(121	)	(35	)	49	(38	)	(97	)

Adjusted Operating Income Margin	28.1	%	37.9	%	(9.8)pp		(3.4)pp
⁽¹⁾ Unfavorable Cost/Other variance includes the impact of the RBH deconsolidation.
⁽²⁾ Included in marketing, administration and research costs at the consolidated operating income level.
Note: Net Revenues include revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc., commencing in the third quarter of 2019, for sale under license in the United States.

During the quarter, net revenues, excluding unfavorable currency, decreased by 28.5%, reflecting: the unfavorable impact of the deconsolidation of RBH shown in "Cost/Other"; and unfavorable volume/mix, notably due to lower cigarette volume in Argentina and Mexico; partly offset by a favorable pricing variance, driven by Mexico. On a like-for-like basis, net revenues, excluding unfavorable currency, decreased by 1.3%, as detailed in Schedule 9.

Operating income, excluding unfavorable currency, increased by +100%, notably reflecting a favorable comparison to charges recorded in the first quarter of 2019 of $433 million, included in "Cost/Other," related to the loss on deconsolidation of RBH and the Canadian tobacco litigation-related expense.

Excluding the impact of these 2019 charges, adjusted operating income, excluding unfavorable currency, decreased by 34.8%, reflecting: the unfavorable impact of the deconsolidation of RBH, included in "Cost/Other"; and unfavorable volume/mix, due to the same factors as for net revenues noted above; partly offset by a favorable pricing variance and lower marketing, administration and research costs. On a like-for-like basis, excluding unfavorable currency, adjusted operating income increased by 30.3%, as detailed in Schedule 9.

Adjusted operating income margin, excluding currency, decreased by 3.4 points to 34.5%, as detailed in Schedule 7, or increased by 8.2 points to 34.0% on a like-for-like basis, as detailed in Schedule 9.

Total Market, PMI Shipment & Market Share Commentaries

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


•	Argentina, down by 5.7%, mainly reflecting the impact of price increases; and


•	Mexico, down by 10.5%, mainly due to the impact of excise tax-driven price increases in January 2020;

partly offset by


•	Brazil, up by 10.3%, mainly reflecting a lower prevalence of illicit trade due to reduced price gaps with legal products and improved macro-economic conditions.

- -15 -



PMI Shipment Volume	First-Quarter
(million units)	2020	2019	Change
Cigarettes	15,063	17,580	(14.3	)%
Heated Tobacco Units	108	54	+100%
Total Latin America & Canada	15,171	17,634	(14.0	)%

PMI's total shipment volume decreased by 14.0% to 15.2 billion units, or by 8.8% on a like-for-like basis, notably due to:


•	Argentina, down by 13.2%, primarily reflecting a lower market share due to adult smoker down-trading to ultra-low-price brands produced by local manufacturers, as well as the lower total market; and


•	Mexico, down by 14.0%, mainly due to the lower total market and lower market share due to adult smoker down-trading.

Philip Morris International: Delivering a Smoke-Free Future

Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a smoke-free future and ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, society, the company and its shareholders. PMI is a leading international tobacco company engaged in the manufacture and sale of cigarettes, as well as smoke-free products and associated electronic devices and accessories, and other nicotine-containing products in markets outside the United States. In addition, PMI ships a version of its IQOS Platform 1 device and its consumables authorized by the U.S. Food and Drug Administration to Altria Group, Inc. for sale in the U.S. under license. PMI is building a future on a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke. Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, PMI aims to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements. PMI's smoke-free IQOS product portfolio includes heat-not-burn and nicotine-containing vapor products. As of March 31, 2020, PMI estimates that approximately 10.6 million adult smokers around the world have already stopped smoking and switched to PMI's heat-not-burn product, available for sale in 53 markets in key cities or nationwide under the IQOS brand. 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 other forward-looking statements. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.

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

The COVID-19 pandemic has created significant societal and economic disruption, and resulted in closures of stores, factories and offices, and restrictions on manufacturing, distribution and travel, all of which will adversely impact our business, results of operations, cash flows and financial position during the continuation of the pandemic.

- -16 -

Although we have business continuity plans and other safeguards in place, there is no assurance that such plans and safeguards will be effective. While much of the COVID-19 pandemic and its effect on our business is still unknown, currently, significant risks include our diminished ability to convert adult smokers to our RRPs, significant volume declines in our duty-free business and certain other key markets, disruptions or delays in our manufacturing and supply chain, increased currency volatility, and delays in certain cost saving, transformation and restructuring initiatives. Our business could also be adversely impacted if key personnel or a significant number of employees or business partners become unavailable due to the COVID-19 outbreak. The significant adverse impact of COVID-19 on the economic or political conditions in markets in which we operate could result in changes to the preferences of our adult consumers, lower demand for our products, particularly for our mid-price or premium-price brands, and increased illicit trade. Continuation of the pandemic could disrupt our access to the credit markets or increase our borrowing costs. Governments may temporarily be unable to focus on the development of science-based regulatory frameworks for the development and commercialization of RRPs or on the enforcement or implementation of regulations that are significant to our business. In addition, messaging about the potential negative impacts of the use of our products on COVID-19 risks may lead to increasingly restrictive regulatory measures on the sale and use of our products, negatively impact demand for our products, the willingness of adult consumers to switch to our RRPs and our efforts to advocate for the development of science-based regulatory frameworks for the development and commercialization of RRPs.

Despite our efforts to manage these risks, their impact also depends on factors beyond our knowledge or control, including the duration and severity of the outbreak and actions taken to contain its spread and to mitigate its public health effects, and the ultimate economic consequences thereof.

PMI is further subject to other risks detailed from time to time in its publicly filed documents, including the Form 10-K for the year ended December 31, 2019. 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.

- -17 -

Key Terms, Definitions and Explanatory Notes

General


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


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


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

•

References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the U.S., total industry, total market and market shares are PMI estimates for tax-paid products based on the latest available data from a number of internal and external sources and may, in defined instances, exclude the People's Republic of China and/or PMI's duty free business. In addition, to reflect the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019, PMI's total market share has been restated for previous periods.


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


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


•	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.


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


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


•	Following the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), PMI will continue to report the volume of brands sold by RBH for which other PMI subsidiaries are the trademark owner. These include HEETS, Next, Philip Morris and Rooftop.

•

From time to time, PMI’s shipment volumes are subject to the impact of distributor inventory movements, 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.

Financial


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

•

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


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


•	"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

- -18 -

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 operating 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, the Canadian tobacco litigation-related expense and the charge related to the deconsolidation of RBH in Canada); and amortization 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 ME&A Region, as well as the impact of the deconsolidation in RBH.


•	"Adjusted Operating Income Margin" is calculated as adjusted operating income, divided by 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, and unusual items.


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

•

Management reviews net revenues, OI, OI margins, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items. For example, PMI’s adjusted diluted EPS and other impacted results reflect the loss on deconsolidation of RBH and the Canadian tobacco litigation-related expense, recorded in the first quarter of 2019, and the Russia excise & VAT charge, recorded in the third quarter of 2019. PMI believes that the adjusted measures, including pro forma measures, will provide useful insight into underlying business trends and results, and will provide a more meaningful performance comparison for the period during which RBH remains under CCAA protection. For PMI's 2018 pro forma adjusted diluted EPS by quarter and year-to-date, see Schedule 3 in PMI's first-quarter 2019 earnings release.

•

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


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

•

U.S. GAAP Treatment of Argentina as a Highly Inflationary Economy. Following the categorization of Argentina by the International Practices Task Force of the Center for Audit Quality as a country with a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with U.S. GAAP. Consequently, PMI began to account for the operations of its Argentinian affiliates as highly inflationary, and to treat the U.S. dollar as the functional currency of the affiliates, effective July 1, 2018.


•	"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.


•	The estimated impact from the COVID-19 pandemic primarily reflects management’s estimate for shipments to distributors and trade partners that have been made solely for the purpose of increasing safety stocks. The impact also includes the estimated reduction of shipments to duty free distributors and trade partners resulting from the pandemic-related decline in international travel.

Reduced-Risk Products

•

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 produce an aerosol that contains far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke.


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


•	Unless otherwise stated, all references to IQOS are to PMI's heat-not-burn products.

- -19 -


•	The IQOS heat-not-burn device is a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol.


•	“Total IQOS users” is defined as the estimated number of Legal Age (minimum 18 years) IQOS users that used PMI HTUs for at least 5% of their daily tobacco consumption over the past seven days.

•

The estimated number of people who have "stopped smoking and switched to IQOS" is defined as: for markets where IQOS is the only heat-not-burn product, daily individual consumption of PMI HTUs represents the totality of their daily tobacco consumption in the past seven days; for markets where IQOS is one 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% are PMI HTUs.

IQOS in the United States

•

On April 30, 2019, the U.S. Food and Drug Administration (FDA) announced that the marketing of a version of IQOS, PMI's heat-not-burn product, together with its heated tobacco units (the term PMI uses to refer to heated tobacco consumables), is appropriate for the protection of public health and authorized it for sale in the U.S. The FDA’s decision follows its comprehensive assessment of PMI’s premarket tobacco product applications (PMTAs) submitted to the Agency in 2017. In the third quarter of 2019, PMI brought a version of its IQOS Platform 1 device and three variants of its heated tobacco units to the U.S. through its license with Altria Group, Inc., whose subsidiary, Philip Morris USA Inc., is responsible for marketing the product and complying with the provisions set forth in the FDA's marketing order. On March 30, 2020, PMI submitted a supplemental PMTA for the IQOS 3 tobacco heating device with the FDA.


•	Shipment volume of heated tobacco units to the U.S. is included in the heated tobacco unit shipment volume of the Latin America & Canada segment. Revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc. for sale under license in the U.S. are included in Net Revenues of the Latin America & Canada segment.

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

	Quarters Ended March 31,
Market	Total Market, bio units				PMI Shipments, bio units												PMI Market Share, % ⁽¹⁾
	Total Market, bio units				Total				Cigarette				HTU				Total				HTU
	2020	2019	% Change		2020	2019	% Change		2020	2019	% Change		2020	2019	% Change		2020	2019	pp Change		2020	2019	pp Change

Total	606.6	624.7	(2.9	)	173.7	175.8	(1.2	)	157.0	164.3	(4.4	)	16.7	11.5	45.5		27.9	28.1	(0.2	)	2.9	2.0	0.9

European Union
France	8.3	9.1	(8.7	)	4.0	4.2	(3.0	)	4.0	4.1	(3.8	)	—	—	—		44.5	45.0	(0.5	)	0.4	0.2	0.2
Germany	16.0	15.4	3.7		6.7	6.1	10.8		6.4	5.9	7.3		0.4	0.2	+100		42.2	39.5	2.7		2.4	1.0	1.4
Italy	15.7	15.6	0.6		9.2	7.7	19.1		7.8	7.1	8.9		1.4	0.6	+100		51.9	51.0	0.9		7.4	3.7	3.7
Poland	10.8	10.6	2.0		4.3	4.2	2.4		3.9	4.0	(4.3	)	0.5	0.2	+100		40.0	39.9	0.1		4.3	1.8	2.5
Spain	10.4	10.2	1.8		3.7	3.6	1.8		3.5	3.5	(0.4	)	0.1	0.1	+100		31.0	31.7	(0.7	)	0.9	0.6	0.3

Eastern Europe
Russia	46.6	46.7	(0.1	)	15.0	12.1	24.0		12.4	11.3	9.8		2.6	0.8	+100		32.6	28.4	4.2		6.5	3.0	3.5

Middle East & Africa
Saudi Arabia	4.3	5.3	(18.6	)	1.1	3.8	(72.6	)	1.0	3.8	(72.8	)	—	—	—		40.8	41.7	(0.9	)	—	—	—
Turkey	22.4	29.5	(24.1	)	10.2	13.9	(27.0	)	10.2	13.9	(27.0	)	—	—	—		45.1	47.2	(2.1	)	—	—	—

South & Southeast Asia
Indonesia	67.2	67.6	(0.6	)	20.4	22.1	(7.6	)	20.4	22.1	(7.6	)	—	—	—		30.4	32.7	(2.3	)	—	—	—
Philippines	15.3	16.8	(8.9	)	10.7	11.7	(8.8	)	10.7	11.7	(8.8	)	—	—	—		70.2	70.1	0.1		—	—	—

East Asia & Australia
Australia	2.5	3.1	(19.1	)	0.7	0.8	(7.2	)	0.7	0.8	(7.2	)	—	—	—		28.0	24.4	3.6		—	—	—
Japan	35.5	37.7	(5.7	)	12.8	12.1	5.6		6.8	6.5	5.6		6.0	5.7	5.6		36.3	34.5	1.8		19.1	17.0	2.1
Korea	16.2	15.6	3.6		3.5	3.6	(2.8	)	2.4	2.5	(1.2	)	1.1	1.2	(6.2	)	21.8	23.3	(1.5	)	6.6	7.3	(0.7	)

Latin America & Canada
Argentina	8.0	8.5	(5.7	)	5.3	6.1	(13.2	)	5.3	6.1	(13.2	)	—	—	—		66.1	72.3	(6.2	)	—	—	—
Mexico	6.7	7.4	(10.5	)	4.1	4.7	(14.0	)	4.1	4.7	(14.2	)	—	—	—		61.1	63.6	(2.5	)	0.2	—	0.2

(1) Market share estimates are calculated using IMS data
Note: % change for Total Market and PMI shipments is computed based on millions of units; PMI Market Share estimates for previous periods are restated to reflect RBH deconsolidation and exclude RBH-owned brands.



								Appendix 2
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Shipment Volume Adjusted for the Impact of RBH Deconsolidation and COVID-19
(in million units) / (Unaudited)


	Total PMI	Quarters Ended March 31,
		2020			2019			% Change
	Total Shipment Volume	173,745			175,795			(1.2	)%
	Shipment Volume for RBH-owned brands ⁽¹⁾				(1,008	)	(2)
	Total Shipment Volume	173,745			174,787		(3)	(0.6	)%
	Estimated impact related to COVID-19	(3,000	)
	Total Shipment Volume	170,745		(4)	174,787		(3)	(2.3	)%

	Total Cigarette Shipment Volume	157,018			164,297			(4.4	)%
	Shipment Volume for RBH-owned brands ⁽¹⁾				(1,008	)	(2)
	Total Cigarette Shipment Volume	157,018			163,289		(3)	(3.8	)%
	Estimated impact related to COVID-19	(2,600	)
	Total Cigarette Shipment Volume	154,418		(4)	163,289		(3)	(5.4	)%

	Total HTU Shipment Volume	16,727			11,498			45.5	%
	Estimated impact related to COVID-19	(400	)
	Total HTU Shipment Volume	16,327		(4)	11,498			42.0	%

	Latin America & Canada

	Total Shipment Volume	15,171			17,634			(14.0	)%
	Shipment Volume for RBH-owned brands				(995	)	(2)
	Total Shipment Volume	15,171			16,639		(3)	(8.8	)%

	(1) Includes Duty Free sales in Canada
	(2) Represents volume for RBH-owned brands from January 1, 2019 through March 21, 2019
	(3) Pro forma
	(4) Pro forma, ex-COVID-19
	Note: Shipment Volume includes Cigarettes and Heated Tobacco Units; following the deconsolidation of RBH, we report the volume of brands sold by RBH for which other PMI subsidiaries are the trademark owners



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

	Diluted EPS	Quarters Ended
	Diluted EPS	March 31,
	2020 Diluted Earnings Per Share (1)		$	1.17
	2019 Diluted Earnings Per Share (1)		$	0.87
	Change		$	0.30
	% Change		34.5			%

	Reconciliation:
	2019 Diluted Earnings Per Share (1)		$	0.87
	2019 Asset impairment and exit costs		0.01
	2019 Canadian tobacco litigation-related expense		0.09
	2019 Loss on deconsolidation of RBH		0.12
	2019 Tax items		—
	2020 Asset impairment and exit costs		—
	2020 Fair value adjustment for equity security investments		(0.04			)
	2020 Tax items		—
	Currency		(0.13			)
	Interest		0.01
	Change in tax rate		(0.01			)
	Operations (2)		0.25
	2020 Diluted Earnings Per Share (1)		$	1.17

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

		Quarters Ended
		March 31,
		2020			2019
	Net Earnings attributable to PMI	$ 1,826			$ 1,354
	Less: Distributed and undistributed earnings attributable to share-based payment awards	5			4
	Net Earnings for basic and diluted EPS	$ 1,821			$ 1,350

	Weighted-average shares for basic EPS	1,557			1,555
	Plus Contingently Issuable Performance Stock Units	1			1
	Weighted-average shares for diluted EPS	1,558			1,556

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



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

		Quarters Ended March 31,
		2020		2019	% Change
	Reported Diluted EPS	$ 1.17		$ 0.87	34.5	%
	Less: Currency	(0.13	)
	Reported Diluted EPS, excluding Currency	$ 1.30		$ 0.87	49.4	%


		Quarters Ended March 31,						Year Ended
		2020		2019	% Change			2019
	Reported Diluted EPS	$ 1.17		$ 0.87	34.5	%		$ 4.61
	Asset impairment and exit costs	—		0.01				0.23
	Canadian tobacco litigation-related expense	—		0.09				0.09
	Loss on deconsolidation of RBH	—		0.12				0.12
	Russia excise and VAT audit charge	—		—				0.20
	Fair value adjustment for equity security investments	0.04		—				(0.02	)
	Tax items	—		—				(0.04	)
	Adjusted Diluted EPS	$ 1.21		$ 1.09	11.0	%		$ 5.19
	Less: Currency	(0.13	)
	Adjusted Diluted EPS, excluding Currency	$ 1.34		$ 1.09	22.9	%



																Schedule 3
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Reported Diluted EPS to Pro Forma Adjusted Diluted EPS
(Unaudited)


		Quarter Ended			Quarter Ended		Six Months Ended			Quarter Ended	Nine Months Ended			Quarter Ended		Year Ended
		March 31,			June 30,		June 30,			September 30,	September 30,			December 31,		December 31,
		2019			2019		2019			2019	2019			2019		2019
	Reported Diluted EPS	$ 0.87			$ 1.49		$ 2.36			$ 1.22	$ 3.57			$ 1.04		$	4.61
	Asset impairment and exit costs	0.01			0.01		0.02			0.01	0.03			0.20		0.23
	Canadian tobacco litigation-related expense	0.09			—		0.09			—	0.09			—		0.09
	Loss on deconsolidation of RBH	0.12			—		0.12			—	0.12			—		0.12
	Russia excise and VAT audit charge	—			—		—			0.20	0.20			—		0.20
	Fair value adjustment for equity security investments	—			—		—			—	—			(0.02	)	(0.02		)
	Tax items	—			(0.04	)	(0.04	)		—	(0.04	)		—		(0.04		)
	Adjusted Diluted EPS	$ 1.09			$ 1.46		$ 2.55			$ 1.43	$ 3.97			$ 1.22		$ 5.19
	Net earnings attributable to RBH	(0.06	)	(1)	—		(0.06	)	(1)	—	(0.06	)	(1)	—		(0.06		)	(1)
	Pro Forma Adjusted Diluted EPS	$ 1.03			$ 1.46		$ 2.49			$ 1.43	$ 3.91			$ 1.22		$ 5.13

	(1) Represents the impact of net earnings attributable to RBH from January 1, 2019 through March 21, 2019
	Note: EPS is computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year.



										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)

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

2020						Combustible Products	2019	% Change
$ 1,911	$ (53)		$ 1,963	—	$ 1,963	European Union	$ 1,812	5.4	%	8.4	%	8.4	%
523	(4	)	526	—	526	Eastern Europe	471	11.1	%	11.8	%	11.8	%
832	(2	)	835	—	835	Middle East & Africa	829	0.5	%	0.7	%	0.7	%
1,251	19		1,232	—	1,232	South & Southeast Asia	1,113	12.4	%	10.7	%	10.7	%
642	(7	)	649	—	649	East Asia & Australia	638	0.6	%	1.8	%	1.8	%
440	(18	)	458	—	458	Latin America & Canada	646	(31.9	)%	(29.2	)%	(29.2	)%
$ 5,598	$ (65)		$ 5,663	—	$ 5,663	Total Combustible	$ 5,508	1.6	%	2.8	%	2.8	%

2020						Reduced-Risk Products	2019	% Change
$ 624	$ (17)		$ 642	—	$ 642	European Union	$ 347	79.9	%	84.9	%	84.9	%
265	10		256	—	256	Eastern Europe	108	+100%		+100%		+100%
44	—		43	—	43	Middle East & Africa	98	(55.7	)%	(56.0	)%	(56.0	)%
—	—		—	—	—	South & Southeast Asia	—	—	%	—	%	—	%
613	(2	)	615	—	615	East Asia & Australia	683	(10.2	)%	(10.0	)%	(10.0	)%
8	—		8	—	8	Latin America & Canada⁽¹⁾	6	38.5	%	41.3	%	41.3	%
$ 1,555	$ (9)		$ 1,564	—	$ 1,564	Total RRPs	$ 1,243	25.1	%	25.8	%	25.8	%

2020						PMI	2019	% Change
$ 2,535	$ (70)		$ 2,605	—	$ 2,605	European Union	$ 2,159	17.4	%	20.7	%	20.7	%
788	6		782	—	782	Eastern Europe	579	36.1	%	35.1	%	35.1	%
876	(2	)	878	—	878	Middle East & Africa	927	(5.5	)%	(5.3	)%	(5.3	)%
1,251	19		1,232	—	1,232	South & Southeast Asia	1,113	12.4	%	10.7	%	10.7	%
1,255	(9	)	1,264	—	1,264	East Asia & Australia	1,321	(5.0	)%	(4.3	)%	(4.3	)%
448	(18	)	466	—	466	Latin America & Canada	652	(31.3	)%	(28.5	)%	(28.5	)%
$ 7,153	$ (74)		$ 7,227	—	$ 7,227	Total PMI	$ 6,751	6.0	%	7.1	%	7.1	%

(1) Net Revenues include revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc., commencing in the third quarter of 2019, for sale under license in the United States.
Note: Sum of product categories or Regions might not foot to Total PMI due to roundings. “-“ indicates amounts between -$0.5 million and +$0.5 million.



												Schedule 5
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments of Operating Income for the Impact of Currency and Acquisitions
($ in millions) / (Unaudited)

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

2020						Quarters Ended March 31,	2019			% Change
$ 1,158	$ (65)		$ 1,223	—	$ 1,223	European Union	$ 896			29.2	%	36.5	%	36.5	%
99	(92	)	191	—	191	Eastern Europe	129			(23.3	)%	48.1	%	48.1	%
321	(19	)	340	—	340	Middle East & Africa	344			(6.7	)%	(1.2	)%	(1.2	)%
599	19		580	—	580	South & Southeast Asia	440		(1)	36.1	%	31.8	%	31.8	%
486	(4	)	490	—	490	East Asia & Australia	427			13.8	%	14.8	%	14.8	%
126	(35	)	161	—	161	Latin America & Canada	(186	)	(2)	+100%		+100%		+100%
$ 2,789	$ (196)		$ 2,985	—	$ 2,985	Total PMI	$ 2,050			36.0	%	45.6	%	45.6	%

(1) Includes asset impairment and exit costs ($20 million)
(2) Includes the Canadian tobacco litigation-related expense ($194 million) and the loss on deconsolidation of RBH ($239 million)



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

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

2020								Quarters Ended March 31,		2019						% Change
$ 1,158	—	$ 1,158	$ (65)		$ 1,223	—	$ 1,223		European Union	$ 896		—			$ 896	29.2	%	36.5	%	36.5	%
99	—	99	(92	)	191	—	191		Eastern Europe	129		—			129	(23.3	)%	48.1	%	48.1	%
321	—	321	(19	)	340	—	340		Middle East & Africa	344		—			344	(6.7	)%	(1.2	)%	(1.2	)%
599	—	599	19		580	—	580		South & Southeast Asia	440		(20	)	(1)	460	30.2	%	26.1	%	26.1	%
486	—	486	(4	)	490	—	490		East Asia & Australia	427		—			427	13.8	%	14.8	%	14.8	%
126	—	126	(35	)	161	—	161		Latin America & Canada	(186	)	(433	)	(2)	247	(49.0	)%	(34.8	)%	(34.8	)%
$ 2,789	—	$ 2,789	$ (196)		$ 2,985	—	$ 2,985		Total PMI	$ 2,050		$ (453)			$ 2,503	11.4	%	19.3	%	19.3	%

(1) Represents asset impairment and exit costs
(2) Includes the Canadian tobacco litigation-related expense ($194 million) and the loss on deconsolidation of RBH ($239 million)



																				Schedule 7
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted Operating Income Margin, excluding Currency and Acquisitions
($ in millions) / (Unaudited)

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

2020												Quarters Ended March 31,		2019				% Points Change
$ 1,158	$ 2,535	45.7	%	$ 1,223	$ 2,605	46.9	%	$ 1,223	$ 2,605	46.9	%		European Union	$ 896	$ 2,159	41.5	%	4.2		5.4		5.4
99	788	12.6	%	191	782	24.4	%	191	782	24.4	%		Eastern Europe	129	579	22.3	%	(9.7	)	2.1		2.1
321	876	36.6	%	340	878	38.7	%	340	878	38.7	%		Middle East & Africa	344	927	37.1	%	(0.5	)	1.6		1.6
599	1,251	47.9	%	580	1,232	47.1	%	580	1,232	47.1	%		South & Southeast Asia	460	1,113	41.3	%	6.6		5.8		5.8
486	1,255	38.7	%	490	1,264	38.8	%	490	1,264	38.8	%		East Asia & Australia	427	1,321	32.3	%	6.4		6.5		6.5
126	448	28.1	%	161	466	34.5	%	161	466	34.5	%		Latin America & Canada	247	652	37.9	%	(9.8	)	(3.4	)	(3.4	)
$ 2,789	$ 7,153	39.0	%	$ 2,985	$ 7,227	41.3	%	$ 2,985	$ 7,227	41.3	%		Total PMI	$ 2,503	$ 6,751	37.1	%	1.9		4.2		4.2

(1) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to Schedule 6
(2) For the calculation of Net Revenues excluding currency and acquisitions refer to Schedule 4



								Schedule 8
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments for the Impact of RBH, COVID-19, excluding Currency
($ in millions, except per share data) / (Unaudited)

		Quarters Ended March 31,
		2020			2019			% Change
	Net Revenues	$ 7,153			$ 6,751			6.0	%
	Net Revenues attributable to RBH				(181	)	(1)
	Net Revenues	$ 7,153			$ 6,570		(2)	8.9	%
	Less: Currency	(75	)
	Net Revenues, ex. currency	$ 7,228			$ 6,570		(2)	10.0	%
	Estimated impact related to COVID-19	(130	)
	Net Revenues, ex. currency	$ 7,098		(3)	$ 6,570		(2)	8.0	%

	Adjusted Operating Income⁽⁴⁾	$ 2,789			$ 2,503			11.4	%
	Operating Income attributable to RBH				(126	)	(1)
	Adjusted Operating Income	$ 2,789			$ 2,377		(2)	17.3	%
	Less: Currency	(195	)
	Adjusted Operating Income, ex. currency	$ 2,984			$ 2,377		(2)	25.5	%
	Estimated impact related to COVID-19	(133	)
	Adjusted Operating Income, ex. currency	$ 2,851		(3)	$ 2,377		(2)	19.9	%

	Adjusted OI Margin	39.0	%		37.1	%		1.9
	Adjusted OI Margin attributable to RBH				(0.9	)	(1)
	Adjusted OI Margin	39.0	%		36.2	%	(2)	2.8
	Less: Currency	(2.3	)
	Adjusted OI Margin, ex. currency	41.3	%		36.2	%	(2)	5.1
	Estimated impact related to COVID-19	(1.1	)
	Adjusted OI Margin, ex. currency	40.2	%	(3)	36.2	%	(2)	4.0

	Adjusted Diluted EPS ⁽⁵⁾	$ 1.21			$ 1.09			11.0	%
	Net earnings attributable to RBH				(0.06	)	(1)
	Adjusted Diluted EPS	$ 1.21			$ 1.03		(2)	17.5	%
	Less: Currency	(0.13	)
	Adjusted Diluted EPS, ex. currency	$ 1.34			$ 1.03		(2)	30.1	%
	Estimated impact related to COVID-19	(0.07	)
	Adjusted Diluted EPS, ex. currency	$ 1.27		(3)	$ 1.03		(2)	23.3	%

	(1) Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019
	(2) Pro forma
	(3) Pro forma, ex-COVID-19
	(4) For the calculation of Adjusted Operating Income, see Schedule 6
	(5) For the calculation, see Schedule 2
	Note: Financials attributable to RBH include Duty Free sales in Canada



							Schedule 9
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments for the Impact of RBH, excluding Currency
($ in millions) / (Unaudited)

	Latin America & Canada	Quarters Ended March 31,
		2020		2019			% Change
	Net Revenues	$ 448		$ 652			(31.3	)%
	Net Revenues attributable to RBH			(179	)	(1)
	Net Revenues	$ 448		$ 473		(2)	(5.3	)%
	Less: Currency	(19	)
	Net Revenues, ex. currency	$ 467		$ 473		(2)	(1.3	)%

	Operating Income	$ 126		$ (186)			+100%
	Less:
	Asset impairment and exit costs	—		—
	Canadian tobacco litigation-related expense	—		(194	)
	Loss on deconsolidation of RBH	—		(239	)
	Adjusted Operating Income	$ 126		$ 247			(49.0	)%
	Operating Income attributable to RBH			(125	)	(1)
	Adjusted Operating Income	$ 126		$ 122		(2)	3.3	%
	Less: Currency	(33	)
	Adjusted Operating Income, ex. currency	$ 159		$ 122		(2)	30.3	%

	Adjusted OI Margin	28.1	%	37.9	%		(9.8	)
	Adjusted OI Margin attributable to RBH			(12.1	)	(1)
	Adjusted OI Margin	28.1	%	25.8	%	(2)	2.3
	Less: Currency	(5.9	)
	Adjusted OI Margin, ex. currency	34.0	%	25.8	%	(2)	8.2

	(1) Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019
	(2) Pro forma



			Schedule 10
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Statements of Earnings
($ in millions, except per share data) / (Unaudited)

		Quarters Ended March 31,
		2020	2019		Change Fav./(Unfav.)
	Revenues including Excise Taxes	$ 18,253	$ 17,705		3.1	%
	Excise Taxes on products	11,100	10,954		(1.3	)%
	Net Revenues	7,153	6,751		6.0	%
	Cost of sales	2,402	2,465		2.6	%
	Gross profit	4,751	4,286		10.8	%
	Marketing, administration and research costs (1)	1,944	2,217		12.3	%
	Amortization of intangibles	18	19
	Operating Income	2,789	2,050		36.0	%
	Interest expense, net	129	152		15.1	%
	Pension and other employee benefit costs	23	21		(9.5	)%
	Earnings before income taxes	2,637	1,877		40.5	%
	Provision for income taxes	596	424		(40.6	)%
	Equity investments and securities (income)/loss, net	54	(11	)
	Net Earnings	1,987	1,464		35.7	%
	Net Earnings attributable to noncontrolling interests	161	110
	Net Earnings attributable to PMI	$ 1,826	$ 1,354		34.9	%

	Per share data (2):
	Basic Earnings Per Share	$ 1.17	$ 0.87		34.5	%
	Diluted Earnings Per Share	$ 1.17	$ 0.87		34.5	%

(1) Includes in 2019 asset impairment and exit costs ($20 million), the Canadian tobacco litigation-related expense ($194 million) and the loss on deconsolidation of RBH ($239 million).
(2) Net Earnings and weighted-average shares used in the basic and diluted Earnings Per Share computations for the quarters ended March 31, 2020 and 2019 are shown on Schedule 1, Footnote 1.



					Schedule 11
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Condensed Balance Sheets
($ in millions, except ratios) / (Unaudited)

	March 31,				December 31,
	2020				2019
Assets
Cash and cash equivalents		$	3,746			$	6,861
All other current assets		13,115				13,653
Property, plant and equipment, net		6,107				6,631
Goodwill		5,284				5,858
Other intangible assets, net		1,850				2,113
Investments in unconsolidated subsidiaries and equity securities		4,390				4,635
Other assets		3,002				3,124
Total assets		$	37,494			$	42,875

Liabilities and Stockholders' (Deficit) Equity
Short-term borrowings		$	1,438			$	338
Current portion of long-term debt		1,933				4,051
All other current liabilities		13,213				14,444
Long-term debt		24,999				26,656
Deferred income taxes		838				908
Other long-term liabilities		6,136				6,077
Total liabilities		48,557				52,474

Total PMI stockholders' deficit		(12,944		)		(11,577		)
Noncontrolling interests		1,881				1,978
Total stockholders' (deficit) equity		(11,063		)		(9,599		)
Total liabilities and stockholders' (deficit) equity		$	37,494			$	42,875



												Schedule 12
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios
($ in millions, except ratios) / (Unaudited)

	Year Ended March 31, 2020											Year Ended December 31, 2019
	April ~ December				January ~ March			12 months
	2019				2020			rolling
Net Earnings		$	6,264			$	1,987		$	8,251			$	7,728
Equity investments and securities (income)/loss, net		(138		)		54			(84		)		(149		)
Provision for income taxes		1,869				596			2,465				2,293
Interest expense, net		418				129			547				570
Depreciation and amortization		724				241			965				964
Asset impairment and exit costs and Others (1)		776				—			776				1,229
Adjusted EBITDA		$	9,913			$	3,007		$	12,920			$	12,635

								March 31,				December 31,
								2020				2019
Short-term borrowings									$	1,438			$	338
Current portion of long-term debt									1,933				4,051
Long-term debt									24,999				26,656
Total Debt									$	28,370			$	31,045
Cash and cash equivalents									3,746				6,861
Net Debt									$	24,624			$	24,184

Ratios:
Total Debt to Adjusted EBITDA									2.20				2.46
Net Debt to Adjusted EBITDA									1.91				1.91

(1) For the period April to December 2019, Others include the Russia excise and VAT charge ($374 million). For the year ended December 31, 2019, Others include the Canadian tobacco litigation-related expense ($194 million), the loss on deconsolidation of RBH ($239 million) and the Russia excise and VAT audit charge ($374 million).



					Schedule 13
PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency
($ in millions) / (Unaudited)

		Quarters Ended March 31,
		2020		2019	% Change
	Net cash provided by operating activities (1)	$ 1,111		$ 1,241	(10.5	)%
	Less: Currency	(50	)
	Net cash provided by operating activities, excluding currency	$ 1,161		$ 1,241	(6.4	)%

(1) Operating cash flow

Exhibit 99.2

Philip Morris International Inc.

2020 First-Quarter Conference Call

April 21, 2020

NICK ROLLI


(SLIDE 1.)

Welcome. Thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2020 first-quarter results. You may access the release on www.pmi.com or the PMI Investor Relations App.


(SLIDE 2.)

A glossary of terms, including the definition for reduced-risk products, or "RRPs," as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures, additional heated tobacco unit market data and our business transformation metrics are at the end of today’s webcast slides, which are posted on our website. Unless otherwise stated, all references to IQOS are to our IQOS heat-not-burn products.

Comparisons are presented on a "like-for-like" basis reflecting pro forma 2019 results, which have been adjusted for the deconsolidation of our Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019.


(SLIDE 3.)

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


(SLIDE 4.)

Please note we now also include additional Forward-Looking and Cautionary Statements related to COVID-19.

It’s now my pleasure to introduce André Calantzopoulos, our Chief Executive Officer and Martin King, our Chief Financial Officer, both of whom will be available for the question and answer session.

André.

ANDRE CALANTZOPOULOS


(SLIDE 5.)

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

These are unprecedented times for all of us, and I hope everyone listening, and their families, are safe and well. I would also like to express our deep appreciation for the life-saving efforts of medical, social and other frontline workers during the COVID-19 pandemic.

Our main focus at this time is on the health and wellbeing of our employees, their families and the communities in which we operate.

We have implemented stringent policies and measures to minimize risks for those who continue to work in our facilities and offices. For all our employees, including those working from home, providing guidance and support is also essential. We recently announced a new set of guiding principles to reassure employees of the company’s commitment to job security throughout the global pandemic period in three areas: employment stability, financial stability and special recognition.

The strength and spirit shown in these challenging times by the people that make up our organization is a real inspiration to me and the PMI management team, and I'd like to take this opportunity to thank them for their outstanding efforts.

Indeed, our people continue to generate ideas on how they and PMI can contribute skills and resources to the wider societal effort. Ongoing and planned initiatives in more than 60 countries include providing protective equipment to our trade partners, support to care communities, procurement support to purchase items essential to fight against COVID-19, and financial support to institutions and NGOs working to end this crisis. In addition, our employees in many countries are volunteering to help elderly, low-income, and other at-risk populations, and some of our factories are producing hand sanitizer and masks for their local communities.

Lastly, but very importantly, we have also taken steps to ensure the continuity of supply to our customers and consumers, and to support our suppliers through these challenging times.


(SLIDE 6.)

Let me now comment on the overall impact of COVID-19 on our business and outlook before I hand over to Martin, who will cover this impact and the performance in the quarter in more detail.

We started the year with a very strong first quarter, with minimal disruption to business performance and continued structural growth momentum. While we have had a number of temporary shutdowns at different manufacturing facilities and some additional complexities in our route-to-market, we have activated contingency plans where required to ensure sufficient inventories and consumer access to our products.

Allied to a healthy balance sheet and liquidity position, our ability to generate cash will allow us to continue investing in our business, retire maturing debt and pay dividends.

Turning to the outlook, the inherent uncertainty in the global economic picture makes forecasting much more challenging than usual.

With social isolation measures placing day-to-day life on hold for much of the world's population, this temporarily impacts our operating environment. The most direct effect is on Duty-Free sales due to reduced travel, with additional impacts from delayed IQOS user acquisition and regulatory price enforcement in Indonesia. In total this is likely to have a negative impact on our 2020 currency-neutral performance, with recent exchange rate movements a further drag.

As visibility on the duration and extent of lockdown measures across the world is extremely limited, we are withdrawing our annual forecast and replacing it with quarterly guidance, where visibility is relatively better. Martin will talk through the key moving parts, and our EPS guidance for the second quarter, when the most impact is likely to be felt.

We are confident the strong momentum on IQOS user acquisition shown in recent quarters will start to resume as restrictions ease. In the meantime, our digital and commercial engine allows us to serve our existing adult consumers, maximize the conversion of adult smokers under the prevailing circumstances, and tailor our investments as required to optimize costs.

There is also considerable uncertainty as to the magnitude of the economic consequences of the current situation and the speed and shape of the recovery, including the impacts on disposable incomes and unemployment. While it is too early to fully assess potential effects on market dynamics in terms of consumption and downtrading, we have to assume there will be some impact. We also sense, in certain developing countries, difficulties in ensuring business continuity for some smaller general trade players, which may lead to localized out-of-stocks. However, as in previous times of economic and social turbulence, we expect to show resilient performance through these challenges.

Martin.

MARTIN KING


(SLIDE 7.)

Thank you André.

I'll start with a headline summary of our first quarter performance, which was very strong in terms of like-for-like ex-currency growth before any pandemic impact. We estimate COVID-19 effects, primarily distributor and trade inventory movements, accounted for 2.0 points of net revenue growth, 110 basis points of adjusted operating income margin and 6.8 points of adjusted diluted EPS growth.

HTU shipment volume grew 45% to 16.7 billion units, reflecting continued broad-based share gains. Total combined shipment volume decreased by a modest 0.6% on a like-for-like basis, benefiting from inventory movements.

Currency-neutral net revenues grew by 10.0% reflecting the volume growth and positive geographic mix of HTUs, in addition to a strong combustible tobacco pricing variance of 7.7%.

This robust revenue growth, combined with a positive margin mix, scale effects of higher HTU volumes, cost efficiencies and cost phasing drove a 510 basis point increase in our adjusted currency-neutral operating income margin, and 30.1% growth in currency-neutral adjusted diluted EPS.

This excellent start to the year, with encouraging progress in both our combustible and reduced-risk product businesses, is particularly important as we consider the impact of the COVID-19 pandemic.


(SLIDE 8.)

While we expect our core existing operations to continue performing well, there are three main areas of expected impact from temporary changes to our operating environment, in addition to the impact of currency movements, which I'll come back to.

The first, and likely longest in duration, is on Duty-Free sales, due to severely curtailed global travel. For context, PMI Duty-Free, with a market share of 37%, contributed almost 4% of our 2019 net revenues. It also enjoys higher unit margins relative to the global average, given the skew to premium brands such as Marlboro and HEETS. Consumer offtake trends exited March with declines of over 80%, and we expect similar trends to continue until travel starts to recover. Due to the premium skew of our Duty Free sales, we assume that only a portion of the volume will be recovered by our own brand portfolio in local markets, usually at lower margins.


(SLIDE 9.)

The second impact is on the rate of IQOS user acquisition. Lockdown measures and other restrictions hamper our ability to engage adult smokers. Our IQOS retail touchpoints are currently closed in a number of markets, and even where open, retail footfall is significantly down. Our investments in digital capabilities over recent quarters are now coming into their own, and we are reallocating further commercial spend to digital where required. Our commercial sales experts and coaches, although very limited in terms of physical consumer engagement, have a number of tools at their disposal to conduct virtual guided trials.

However, based on trends since lockdown measures were introduced, we expect our rate of user acquisition to be on average around 50% lower than previously anticipated, for as long as widespread restrictions continue. Variations by country also make the mix difficult to project. To be clear, we believe this is delayed rather than lost growth and we expect the strong underlying momentum witnessed in recent quarters to pick up as restrictions ease. Importantly, given our digital capabilities, we do not expect customer retention or conversion rates to be affected.

For illustrative purposes, each 1 million users acquired have an annualized consumption of around 5 billion heated tobacco units and, using pre-COVID market mix including device sales and cannibalization effects, would generate on average over $350 million in net revenues and over $200 million in marginal contribution.

We are also able to flex our commercial initiatives, and accordingly the timing of plans for IQOS VEEV, our improved e-vapor product, and the licensed KT&G products later this year could be delayed depending on how events unfold.


(SLIDE 10.)

The last main area of impact is in Indonesia. As explained previously, 2020 was already a year of catch-up on excise tax and pricing. A positive structural element of the new excise tax was a larger percentage increase at the mid-to-low segment of the market, with a new minimum retail selling price due to come into effect on April 1. However, the government has now said the enforcement of the new minimum price is delayed until June, due to COVID-19 restrictions. The prolonging of unfavorable price gaps is an added headwind for the risk of downtrading, the timing of price increases and for our market share.


(SLIDE 11.)

While the effects of pandemic-related measures on our operating environment, such as travel restrictions, are tangible, there is greater uncertainty as to the social and economic impact on consumer purchasing behavior during the crisis.

In developed markets, like the EU Region or Japan, which tend to have strong social support programs, we have so far observed only a limited impact.

There have been instances of pantry-loading in certain markets around the introduction of restrictions; however, these have been generally short-lived in nature and had a minimal impact on Q1 performance, with distributor and trade inventory movements being the bigger influence.

In certain developing markets, the high prevalence of daily wage workers, lower resources for social support and thus greater fragility of incomes create more vulnerability. We observe some initial signs of downtrading and reduced daily consumption in some countries. The most significant for us are Indonesia and the Philippines, the latter of which has the added dynamic of being a 'stick' market. We have to assume these trends will temporarily continue while pandemic-driven restrictions last.

As André mentioned, given less developed route-to-market infrastructure, we also sense potential difficulties in certain emerging markets for some smaller general trade outlets, which may lead to temporary localized out-of-stocks.


(SLIDE 12.)

Our own manufacturing and distribution operations continue to function well despite current challenges. This is made possible by the incredible efforts of our supply chain and market teams, who have implemented a number of contingency measures with regard to production and customer supply. On average, inventories of our products remain healthy, with over two months for heated tobacco units, over three months on IQOS devices and over one and a half months for cigarettes, including distributors.

After the one week suspension of production at our Bologna HTU facility in late-March, all our HTU factories are currently operating with sufficient capacity. Around 20% of our cigarette production capacity is currently affected by temporary shutdowns. However, we do not currently foresee any out-of-stocks in major operating income markets. One watch-out is Argentina, where we will be facing out-of-stocks if the factory does not reopen soon.


(SLIDE 13.)

Given investor focus on the liquidity of listed companies in the current environment, I want to highlight our robust position. We continue to have ample liquidity sources through the ongoing cash generation of our business, cash on hand and access to commercial paper. Our $7.5 billion revolving credit facility remains undrawn.

Our balance sheet remains strong with a well-laddered bond portfolio and net debt of 1.9 times adjusted EBITDA as of March 31, 2020. We repaid $3.6 billion of maturing bonds during the first quarter and distributed a total of $3.6 billion in dividends to shareholders in January and April.

We also expect that strong cash flows will exceed cash requirements, including the funding of dividends, to which we remain fully committed.

Our ability to invest appropriately in our business and retire debt is fully intact. However, further deleveraging of our balance sheet, at prevailing exchange rates, may be somewhat delayed versus our previous expectations.

It's also worth mentioning that our cost efficiency programs continue, and that we remain well on track to deliver over $1 billion in efficiencies by 2021. These programs are also flexible, and we are reprioritizing activities as events unfold. Related to this, we expect to reduce capital expenditures to approximately $0.8 billion for the year, with the reduction unrelated to RRP investments.


(SLIDE 14.)

We turn now to guidance. As covered in our earnings release, we have withdrawn our previous reported diluted full-year 2020 EPS forecast of at least $5.50, which absent COVID-19, our business was well on track to deliver. However, as we stand today there is simply not enough visibility on the duration or extent of lockdown and social isolation measures, and their wider consequences, to provide a sufficiently reliable full-year earnings estimate. Given comparatively better short-term visibility we are therefore introducing quarterly guidance, one quarter forward, in its place.

As previously flagged, we already expected a weak second quarter, notably due to an unfavorable prior year comparison, market dynamics in Indonesia, and cost phasing. We also expect the biggest quarterly impact of the COVID-19 pandemic on our business to occur in the period, which we additionally factor in.

Consequently we expect Q2, 2020 reported diluted EPS to be in a range of $1.00 to $1.10. This forecast assumes unfavorable impacts of:


–	12 cents for currency, at prevailing rates, reflecting the devaluation of many of our operating currencies vis-a-vis the U.S. Dollar, notably including the Russian Ruble, Indonesian Rupiah and Mexican Peso


–	10 cents for inventory movements, primarily reversals from the first quarter


–	9 cents for lost Duty-Free sales, net of domestic sales recapture, assuming no recovery in global travel in the period


–	5-15 cents for the delay in Indonesia minimum price enforcement and other COVID-19 related factors, including temporary reductions in daily consumption and downtrading in certain developing markets

These assumptions also reflect ex-currency net revenue declines of approximately 8-12%, with the expected decline being wholly attributable to COVID-19 related impacts, including on device sales.


(SLIDE 15.)

Let me now run through some of the main elements of our first quarter performance . We estimate the total international industry declined 2.9% in the

period. However, we recorded a total like-for-like shipment volume decline of only 0.6%, with cigarette declines of 3.8% largely offset by the impressive 45.5% growth of heated tobacco units, with notable contributions from the EU Region, Japan and Russia.

Excluding the net favorable impact of estimated distributor inventory movements, our total in-market sales volume declined by 3.7%. Inventory movements reflect two main factors; firstly the prior year comparison where shipment volumes in Q1, 2019 were below in-market sales; and secondly net distributor inventory build-up in Q1, 2020 to mitigate the risk of COVID-19 related disruption.

Importantly, our HTU in-market sales volume increased by 3.9% sequentially versus the fourth quarter, reaching over 17 billion units in what is typically the lowest volume quarter of the year.


(SLIDE 16.)

This strong performance means that heated tobacco units now make up nearly 10% of our total shipment volume, as compared to 8% in 2019, and almost nothing in 2015. We expect this proportion to grow further as our positive momentum on RRPs continues.


(SLIDE 17.)

Turning to our financial results, net revenues increased by 10.0% excluding currency, driven by pricing in combustibles, a favorable comparison versus Q1, 2019 and growth in heated tobacco units. We estimate the COVID-19 effect of higher trade inventories and, to a lesser extent, consumer pantry-loading contributed around one-fifth of the growth in net revenues, operating income and EPS.

We recorded a strong combustible tobacco pricing variance of 7.7%, with no significant impact of COVID-19 and notable contributions from the GCC, Germany, Mexico, the Philippines, Russia and Turkey.

Adjusted operating income increased by 25.5% ex-currency, while currency-neutral adjusted operating income margin grew by an excellent 510 basis points.

This strong margin expansion was driven by RRP scale effects and favorable geographic mix for HTUs. Additional drivers include pricing in combustibles, cost phasing and the underlying impact of our cost initiatives.

Adjusted diluted EPS increased strongly, growing by 30.1% excluding currency.

With regard to currency, we should point out that the unfavorable impact of 13 cents in the first quarter includes 7 cents of transactional impact incurred in March, primarily from the revaluation of Euro or Dollar denominated payables in certain markets, such as Russia, where the local currency has seen a significant devaluation. Such effects would only recur in future quarters if further sharp devaluations took place.


(SLIDE 18.)

RRP net revenues reached $1.6 billion, or close to 22% of PMI's total net revenues, with IQOS devices accounting for approximately 10% of RRP net revenues.


(SLIDE 19.)

Turning now to market share, our total international share was slightly lower at 27.9%, with higher share for heated tobacco units, which reached 2.9%, offset by lower share for cigarettes.

The share of our cigarette portfolio declined by 1.1 points, reflecting continued adult smoker out-switching to IQOS and lower share notably in Argentina and Indonesia, due to price gaps with tax-advantaged local competitors, trade inventory movements in Pakistan and an unfavorable prior year comparison in Turkey.


(SLIDE 20.)

Let's turn to Indonesia, where industry volumes declined by only 0.6% in the first quarter due to trade loading effects, which are likely to reverse in the second quarter. Pricing was taken on all main premium and mid-price brands, with PMI price increases since October 2019 representing approximately 85% of the weighted-average pass-on of the 2020 excise increase. Our share declined, despite a recovery in premium A Mild due to smaller price gaps with directly competitive brands. These gains were outweighed by our mid and low-priced brands, which lost share to super-low price manufacturers who are tax-advantaged due to smaller scale.

It follows that the delay in the enforcement of the minimum selling price extends this temporary share headwind. The prevalence of daily wage workers in Indonesia also introduces some uncertainty as to the effects of social restrictions on daily consumption. As such, we have to assume the total market decline will be higher than our previous estimate of 6-7%.


(SLIDE 21.)

Turning now to RRP performance, we estimate that there were 14.6 million total IQOS users as of March 31, representing the addition of more than 4 million adult users since the same time last year.

We further estimate that 73% of this total -- or 10.6 million IQOS users -- have stopped smoking and switched to IQOS, with the balance in various stages of conversion.

This reflects widespread user growth momentum across all key IQOS geographies, including Japan, Russia and the EU.


(SLIDE 22.)

The overall share performance of IQOS HTUs continues to see excellent progress. Indeed, in international markets where IQOS has been commercialized, IQOS HTUs were again the third-largest tobacco ‘brand’ in the first quarter with 6.6% share, increasing from 5.5% in Q4, 2019. This was achieved despite not having full national distribution in a number of markets.


(SLIDE 23.)

In the EU Region, first-quarter share for HEETS reached 3.9% of total industry volume, with an estimated 0.2 points due to consumer pantry-loading.

On a sequential basis share growth was also very strong, increasing by 0.7 points, with in-market sales volume 13% higher compared to Q4, 2019, despite a typically lower quarter. I also refer you to the appendix where we show shares by key EU market and global key cities.


(SLIDE 24.)

IQOS continued its strong performance in Russia, with HEETS share up by 3.5 points to reach 6.5%. On a sequential basis versus the fourth quarter of 2019, HEETS share increased by 1.5 points, while in-market sales increased by 3%.

With limited social restrictions in Russia in the period, there was minimal estimated impact of pantry-loading.


(SLIDE 25.)

In Japan, our total reported share for heated tobacco units increased by 2.1 points to reach 19.1% in the first quarter, supported by the launch of IQOS 3 DUO and line extensions in our Marlboro HeatSticks and HEETS line-ups.

On an adjusted total tobacco view including cigarillos and adjusted for trade inventory movements, the share for our HTU brands increased by 1.1 points versus the prior year quarter, and by 0.6 points sequentially, to 17.7%.

Q1, 2020 adjusted in-market sales volumes for our HTU brands grew 6.2% compared to an adjusted total tobacco market which declined by around 1%. This helped drive growth of the overall heated tobacco category to a first-quarter total tobacco share of over 24%.


(SLIDE 26.)

Lastly, following the 2019 launch of IQOS in the U.S. through our commercial arrangement with Altria, in March we submitted a supplemental PMTA for the IQOS 3 device to the FDA to further support the efforts to convert U.S. adult consumers who would otherwise continue to smoke.

FDA’s review of the company’s Modified Risk Tobacco Product (MRTP) applications for the IQOS tobacco heating system, which is separate from this PMTA application, continues.

Let me now hand back to André for closing remarks. André.

ANDRE CALANTZOPOULOS


(SLIDE 27.)

Thank you Martin.

In summary, the continued strong underlying momentum in our business, especially the impressive growth of RRPs, is again evident in our first quarter results.

The world has clearly now changed, with considerable uncertainty as to the development and duration of the pandemic and its economic and social consequences, including those which impact our operating environment and our consumers.

Our business has historically proven remarkably resilient, and we believe we can deliver a solid performance under the current challenging circumstances.

Importantly, we remain confident in our structural mid-term growth prospects and, when these headwinds have passed, expect to resume growth consistent with our 2019-2021 compound annual ex-currency growth targets of at least 5% net revenue growth and at least 8% adjusted EPS growth.

Crucially, our organization, liquidity and balance sheet are strong. We will continue to protect and support our employees, serve our consumers and reward our shareholders, which clearly includes our strong commitment to our dividend.

We remain resolute in our strategy for a smoke-free future and are convinced that we will emerge stronger from this crisis.


(SLIDE 28.)

Thank you. Martin and I are now happy to answer your questions.

NICK ROLLI

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

Exhibit 99.3 Delivering a Smoke-Free Future 2020 First-Quarter Results April 21, 2020

Introduction • A glossary of key terms and definitions, including the definition for reduced-risk products, or "RRPs," additional heated tobacco unit market data, as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures and our business transformation metrics are at the end of today’s webcast slides, which are posted on our website • Unless otherwise stated, all references to IQOS are to our IQOS heat-not-burn products • Comparisons are presented on a "like-for-like" basis reflecting pro forma 2019 results, which have been adjusted for the deconsolidation of our Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019 2

Forward-Looking and Cautionary Statements • This presentation and related discussion contain projections of future results and other forward-looking statements. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI • PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; changes in adult smoker behavior; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost and quality of tobacco and other agricultural products and raw materials; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; or if it is unable to attract and retain the best global talent. 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 those described under Item 1A. "Risk Factors" in PMI’s annual report on Form 10-K for the year ended December 31, 2019. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward- looking statement that it may make from time to time, except in the normal course of its public disclosure obligations 3

Forward-Looking and Cautionary Statements (COVID-19) • The COVID-19 pandemic has created significant societal and economic disruption, and resulted in closures of stores, factories and offices, and restrictions on manufacturing, distribution and travel, all of which will adversely impact our business, results of operations, cash flows and financial position during the continuation of the pandemic. Although we have business continuity plans and other safeguards in place, there is no assurance that such plans and safeguards will be effective. While much of the COVID-19 pandemic and its effect on our business is still unknown, currently, significant risks include our diminished ability to convert adult smokers to our RRPs, significant volume declines in our duty-free business and certain other key markets, disruptions or delays in our manufacturing and supply chain, increased currency volatility, and delays in certain cost saving, transformation and restructuring initiatives. Our business could also be adversely impacted if key personnel or a significant number of employees or business partners become unavailable due to the COVID-19 outbreak. The significant adverse impact of COVID-19 on the economic or political conditions in markets in which we operate could result in changes to the preferences of our adult consumers, lower demand for our products, particularly for our mid-price or premium-price brands, and increased illicit trade. Continuation of the pandemic could disrupt our access to the credit markets or increase our borrowing costs. Governments may temporarily be unable to focus on the development of science based regulatory frameworks for the development and commercialization of RRPs or on the enforcement or implementation of regulations that are significant to our business. In addition, messaging about the potential negative impacts of the use of our products on COVID-19 risks may lead to increasingly restrictive regulatory measures on the sale and use of our products, negatively impact demand for our products, the willingness of adult consumers to switch to our RRPs and our efforts to advocate for the development of science-based regulatory frameworks for the development and commercialization of RRPs • Despite our efforts to manage these risks, their impact also depends on factors beyond our knowledge or control, including the duration and severity of the outbreak and actions taken to contain its spread and to mitigate its public health effects, and the ultimate economic consequences thereof 4

Supporting Our Employees and Communities Through the COVID-19 Pandemic • Our main focus is the health and wellbeing of our employees, their families and the communities in which we operate • Implemented policies and measures to protect, support and reassure employees • Outstanding strength and spirit shown by all our people • Committed to supporting the wider effort to fight the pandemic, with numerous initiatives ongoing • Ensuring continuity of supply to our consumers, and supporting commercial partners through these challenging times 5

Our Business and Organization has Shown Resilience in Challenging Times • Very strong Q1, 2020, with continued structural growth momentum • Our business continues to function well: Sufficient inventories and consumer access to our products Strong balance sheet, liquidity and cash generation ⎼ ⎼ • Restrictions have temporary negative impact on operating environment: Main effects on Duty-Free sales, delayed IQOS user acquisition and regulatory price enforcement in Indonesia ⎼ • Withdrawing 2020 annual guidance and replacing with quarterly guidance (where visibility is relatively better) • Confident strong IQOS user acquisition will start to resume as restrictions ease Source: PMI Financials or estimates 6

Q1, 2020: Strong Start to Year Including (Variance vs. PY) estimated impact related to COVID-19 PMI HTU Shipment Volume (billion units) 16.7 (+45%) +0.4 PMI Total Shipment Volume % pp (like-for-like) (0.6) +1.7 Net Revenues % pp (ex-currency, like-for-like) +10.0 +2.0 Combustible Tobacco Pricing(a) % pp (like-for-like) +7.7 (0.1) Adjusted OI Margin bps bps (ex-currency, like-for-like) +510 +110 Adjusted Diluted EPS % pp (ex-currency, like-for-like) +30.1 +6.8 (a) As a percentage of PY combustible tobacco net revenues Note: For reconciliations to the most directly comparable U.S. GAAP measures for the estimated impact related to COVID-19, refer to slides 41, 43, 45, 47, and 49 Source: PMI Financials or estimates 7

Main Areas of Business Impact from COVID-19 IQOS Indonesia Duty-Free Sales User Acquisition Pricing Enforcement • Almost 4% of 2019 net revenues: 37% SoM ⎼ Skew to premium brands (e.g., Marlboro and HEETS) ⎼ • Consumer offtake trends: Declines of over 80% exiting March ⎼ Expect similar trends to continue until travel starts to recover ⎼ • Part of volume declines assumed to be recovered in local markets Source: PMI Financials or estimates 8

Main Areas of Business Impact from COVID-19 IQOS Indonesia Duty-Free Sales User Acquisition Pricing Enforcement • Almost 4% of 2019 net revenues: • Lockdown/restrictive measures 37% SoM hamper ability to engage with adult smokers ⎼ Skew to premium brands (e.g., Marlboro and HEETS) • IQOS retail touchpoints closed in a ⎼ number of markets; footfall • Consumer offtake trends: significantly down: Declines of over 80% exiting March Digital tools and flexible commercial Expect similar trends to continue engine allow us to mitigate the impact ⎼ ⎼ until travel starts to recover Average user acquisition rate ⎼ • • Part of volume declines assumed to expected to be around 50% lower be recovered in local markets than previously anticipated (for as long as widespread restrictions continue) • Expect strong underlying momentum to return as restrictions ease Source: PMI Financials or estimates 9

Main Areas of Business Impact from COVID-19 IQOS Indonesia Duty-Free Sales User Acquisition Pricing Enforcement • Almost 4% of 2019 net revenues: • Lockdown/restrictive measures • 2020, already an abnormal year of 37% SoM hamper ability to engage with adult catch-up on excise tax and pricing smokers • New minimum RSP enforcement ⎼ Skew to premium brands (e.g., Marlboro and HEETS) • IQOS retail touchpoints closed in a delayed until June, due to ⎼ number of markets; footfall COVID-19 restrictions • Consumer offtake trends: significantly down: Prolongs unfavorable price gaps, Declines of over 80% exiting March • Digital tools and flexible commercial an added headwind for: Expect similar trends to continue engine allow us to mitigate the impact ⎼ ⎼ The risk of down-trading until travel starts to recover • Average user acquisition rate ⎼ The timing of price increases • Part of volume declines assumed to expected to be around 50% lower ⎼ than previously anticipated (for as be recovered in local markets ⎼ Market share long as widespread restrictions continue) ⎼ • Expect strong underlying momentum to return as restrictions ease Source: PMI Financials or estimates 10

COVID-19 Impact on Consumption Patterns In Developed Markets In Certain Developing Markets • Stronger social support programs • High prevalence of daily wage workers, lower resources for social support, greater income • Only limited impact on consumption so far fragility • Instances of pantry-loading in certain markets • Initial signs of down-trading, reduced daily around the introduction of restrictions: consumption in some countries Generally short-lived • Assume this will temporarily continue while Minimal impact on Q1, 2020 performance ⎼ pandemic-driven restrictions last Distributor and trade inventory movements being ⎼ the bigger influence • Less developed route-to-market infrastructure: ⎼ Potential difficulties for some smaller general trade outlets, which may lead to temporary ⎼ localized out-of-stocks Source: PMI Financials or estimates 11

Our Supply Chain and Inventories are Resilient Manufacturing & Distribution Operations Functioning Well • Implemented contingency measures to ensure continuity of production and customer supply • Inventories remain healthy, on average: >2 months on HTUs >3 months on IQOS devices ⎼ >1.5 months on cigarettes ⎼ • All⎼ HTU factories are currently operating with sufficient capacity • Around 20% of cigarette production capacity currently affected by temporary shutdowns • Currently, do not expect any out-of-stocks in major operating income markets Source: PMI Financials or estimates (status on April 21, 2020) 12

Strong Liquidity, Balance Sheet and Cost Management Liquidity & Balance Sheet Cost Management • Ample liquidity sources • Our cost efficiency programs continue • Strong balance sheet • Well on track to deliver over $1 billion in efficiencies by 2021 • As of March 31, 2020: Approximately $3.7 billion in cash and cash equivalents • Reprioritizing spending plans $1.1 billion of commercial paper (around 30-day average term) Now forecast 2020 capital expenditures at $0.8 billion ⎼ $7.5 billion in stand-by revolving credit facilities • ⎼ Well-laddered bond portfolio ($0.3 billion of bonds maturing (vs. approximately $1.0 billion, previously): ⎼ through end of 2020) Reduction unrelated to RRP investments ⎼ Net debt of 1.9x adjusted EBITDA (12 months rolling) ⎼ • Cash⎼ outgoings: Repaid $3.6 billion in bond maturities in Q1, 2020 Paid around $3.6 billion in dividends to shareholders YTD April ⎼ Committed to the dividend ⎼ • Further⎼ deleveraging, at prevailing exchange rates, may be delayed vs. previous expectations Source: PMI Financials or estimates 13

Introducing Quarterly Guidance Given Reduced Visibility on Full-Year Outlook • Withdrawing full-year 2020 guidance (issued February 6th) due solely to uncertainty related to COVID-19 pandemic • Introducing quarterly guidance (one quarter forward), given comparatively better short-term visibility • Expect weak underlying Q2 (as previously flagged), exacerbated by most pronounced impact of COVID-19: Forecast reported diluted EPS to be in a range of $1.00 to $1.10 Assumes 12 cents of unfavorable currency impact, at prevailing exchange rates ⎼ Assumes unfavorable COVID-19-related impacts of: ⎼ • 10 cents for distributor and trade inventory movements, mainly related to the reversals from Q1, 2020 ⎼ • 9 cents for lost Duty-Free sales, net of domestic sales recapture, assuming no recovery in global travel • 5 to 15 cents for the delay in Indonesia minimum price enforcement and other COVID-19-related factors, including temporary reductions in daily consumption and down-trading in certain developing markets Assumptions also reflect currency-neutral net revenue decline of approximately 8% to 12%, wholly attributable to COVID-19-related factors, including lower IQOS device sales ⎼ Source: PMI Financials or estimates 14

Q1, 2020: Total PMI Shipment Volume Shipments Like-for Like Change vs. PY (billion units) (Shipments) (IMS) 175.8 173.7 Total (0.6)% (3.7)% 11.5 16.7 HTUs 45.5% 35.6% 164.3 157.0 Cigarettes (3.8)% (6.7)% 100 Q1, 2019 Q1, 2020 Source: PMI Financials or estimates 15

HTUs Now Make up Nearly 10% of Our Total Volume As a % of PMI Total Shipment Volume 9.6% 7.8% 5.3% 4.5% 0.9% —% 2015 2016 2017 2018 2019 Q1, 2020 0.4 7.4 36.2 41.4 59.7 16.7 Source: PMI Financials or estimates PMI HTU Shipment Volume (billion units) 16

Q1, 2020: Very Strong Adjusted Financial Results • Net revenue growth (ex-currency, like-for-like), Growth vs. PY driven by: (ex-currency, like-for-like) Combustible tobacco pricing Favorable comparison vs. Q1, 2019 ⎼ Higher HTU shipment volume ⎼ • 510bps⎼ adjusted OI margin expansion (ex-currency, like-for-like), driven by: Benefit from increasing scale in RRPs Favorable geographic mix of HTUs ⎼ Combustible tobacco pricing ⎼ Cost phasing and the underlying impact of cost ⎼ initiatives ⎼ % % % • Strong adjusted diluted EPS growth (ex-currency, 10.0 25.5 30.1 like-for-like): Net Adjusted Adjusted 13 cents unfavorable currency impact includes seven Revenues OI Diluted EPS cents of transactional impact in March ⎼ Source: PMI Financials or estimates 17

Strong RRP Net Revenue Growth Continues in Q1, 2020 As a % of Total PMI Net Revenues 21.7% 18.7% 13.8% 12.7% 2.7% —% 0.2% 2014 2015 2016 2017 2018 2019 Q1, 2020 $0.1 $0.7 $3.6 $4.1 $5.6 $1.6 Source: PMI Financials or estimates RRP Net Revenues ($ in billions) 18

Total Share Supported by HTUs PMI Total International Share 28.1% 27.9% 2.0% HTUs 2.9% +0.9pp 26.1% Cigarettes 25.0% (1.1)pp 20% Q1, 2019 Q1, 2020 Note: Excluding China and the U.S. Current view (reflecting the deconsolidation of RBH, PMI’s total market share has been restated for previous periods). Sales volume of PMI cigarettes and HTUs as a percentage of the total industry sales volume for cigarettes and HTUs Source: PMI Financials or estimates 19

Indonesia: 2020 Headwinds Exacerbated by COVID-19 • Cigarette industry volume down by 0.6% in PMI Cigarette Share Q1, 2020, reflecting favorable trade inventory movements (likely to reverse in Q2, 2020) 32.7% 30.4% • Pricing taken on all main premium and mid- price brands: PMI price increases since October 2019 representing approximately 85% of the ⎼ weighted-average pass-on of the 2020 excise increase • PMI share down in Q1, 2020, due to: Mid and low-priced brands (wide price gaps vs. super-low manufacturers) ⎼ Partly offset by premium Sampoerna A Mild (reduced price gap vs. directly competitive Q1, 2019 Q1, 2020 ⎼ brands) Source: PMI Financials or estimates 20

Approaching 15 Million IQOS Users (in millions) Total IQOS users(a) 14.6 Estimated users who are in various 13.6 stages of conversion to IQOS(a) Estimated users who have stopped 12.3 smoking and switched to IQOS(a) 11.3 10.4 9.6 8.8 8.3 7.6 67% 67% 67% 69% 70% 70% 71% 71% 73% 3.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 (a) See Glossary for definition Source: PMI Financials or estimates, IQOS user panels and PMI Market Research 21

Third-Largest Tobacco ‘Brand’ in IQOS Markets Share in IQOS Markets (Q1, 2020) 11.6% 6.6% 3.9% #3 Marlboro Winston PMI HTUs Rothmans L&M (cigarettes) Note: Excluding the U.S. Reflects sales volume as a percentage of the total industry sales volume for cigarettes and HTUs Source: PMI Financials or estimates 22

EU Region: Very Strong HEETS Share Growth 3.9% +1.8pp 2.1% Q1, 2019 Q1, 2020 Sequential Performance (vs. Q4, 2019) SoM: +0.7pp IMS Volume: +13.0% Source: PMI Financials or estimates 23

Russia: Continued Strong HEETS Share Growth 6.5% +3.5pp 3.0% Q1, 2019 Q1, 2020 Sequential Performance Important Information: (vs. Q4, 2019) IQOS is not risk-free SoM: +1.5pp IMS Volume: 3.1% Source: PMI Financials or estimates 24

Japan: PMI HTU Share Performance Adjusted Total 15.4% 16.6% 16.5% 16.3% 17.1% 17.7% Tobacco SoM(a) 19.1% 17.7% 17.1% 17.0% 16.6% 15.2% Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 (a) Excluding the impact of estimated trade inventory movements, and including the cigarillo category Source: PMI Financials or estimates 25

U.S.: IQOS Regulatory Authorizations •On March 30, 2020, PMI submitted a supplemental PMTA for IQOS 3 with the FDA •FDA’s review of PMI’s MRTP applications for IQOS 2.4 continues 26

Expect Robust Underlying Trends to Provide Resilience in Highly Uncertain Times • Continued strong underlying business momentum, especially the impressive growth of RRPs • Remain confident in structural mid-term growth prospects. When headwinds pass, expect to resume growth consistent with targeted 2019-2021 CAGR of: ≥5% in net revenues, ex-currency ≥8% in adjusted diluted EPS, ex-currency ⎼ • Strong⎼ organization, liquidity and balance sheet • Strong commitment to our dividend • Focused on our employees, consumers, shareholders and the Smoke-Free Future Source: PMI Financials or estimates 27

Delivering a Smoke-Free Future 2020 First-Quarter Results Questions & Answers Have you downloaded the PMI Investor Relations App yet? iOS Download Android Download The free IR App is available to download at the Apple App Store for iOS devices and at Google Play for Android mobile devices Or go to: www.pmi.com/irapp

Delivering a Smoke-Free Future 2020 First-Quarter Results April 21, 2020

Glossary of Key Terms and Definitions, Appendix, and Reconciliation of Non-GAAP Measures 30

Glossary: General Terms • "PMI" refers to Philip Morris International Inc. and its subsidiaries • Until March 28, 2008, PMI was a wholly owned subsidiary of Altria Group, Inc. ("Altria"). Since that time the company has been independent and is listed on the New York Stock Exchange (ticker symbol "PM") • "RBH" refers to PMI’s Canadian subsidiary, Rothmans, Benson & Hedges Inc. • The Companies’ Creditors Arrangement Act (CCAA) is a Canadian federal law that permits a Canadian business to restructure its affairs while carrying on its business in the ordinary course • Trademarks are italicized • Comparisons are made to the same prior-year period unless otherwise stated • Unless otherwise stated, references to total industry, total market, PMI shipment volume and PMI market share performance reflect cigarettes and heated tobacco units • References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the U.S., total industry, total market and market shares are PMI estimates for tax-paid products based on the latest available data from a number of internal and external sources and may, in defined instances, exclude the People's Republic of China and/or PMI's duty free business. In addition, to reflect the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019, PMI's total market share has been restated for previous periods • "OTP" is defined as "other tobacco products," primarily roll-your-own and make-your-own cigarettes, pipe tobacco, cigars and cigarillos, and does not include reduced-risk products • "Combustible products" is the term PMI uses to refer to cigarettes and OTP, combined • 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 31

Glossary: General Terms (cont.) • "EU" is defined as the European Union Region • "EE" is defined as the Eastern Europe Region • "ME&A" is defined as the Middle East & Africa Region and includes PMI's duty free business • "S&SA" is defined as the South & Southeast Asia Region • "EA&A" is defined as the East Asia & Australia Region • "LA&C" is defined as the Latin America & Canada Region • Following the deconsolidation of PMI's Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), PMI will continue to report the volume of brands sold by RBH for which other PMI subsidiaries are the trademark owner. These include HEETS, Next, Philip Morris and Rooftop • From time to time, PMI’s shipment volumes are subject to the impact of distributor inventory movements, 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 • "Illicit trade" refers to domestic non-tax paid products • "RSP" stands for retail selling price • "SoM" stands for share of market • "SoS" stands for share of segment 32

Glossary: Financial Terms • Net revenues related to combustible products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods • Net revenues related to RRPs represent the sale of heated tobacco units, IQOS devices and related accessories, and other nicotine- containing products, primarily e-vapor products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typically either upon shipment or delivery of goods • "Adjusted Operating Income (OI) Margin" is calculated as adjusted OI, divided by 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, and unusual items • "Net debt" is defined as total debt, less cash and cash equivalents • Management reviews net revenues, OI, OI margins, operating cash flow and earnings per share, or "EPS," on an adjusted basis, which may exclude the impact of currency and other items such as acquisitions, asset impairment and exit costs, tax items and other special items. For example, PMI’s adjusted diluted EPS and other impacted results reflect the loss on deconsolidation of RBH and the Canadian tobacco litigation-related expense, recorded in the first quarter of 2019, and the Russia excise & VAT charge, recorded in the third quarter of 2019. PMI believes that the adjusted measures, including pro forma measures, will provide useful insight into underlying business trends and results, and will provide a more meaningful performance comparison for the period during which RBH remains under CCAA protection. For PMI's 2018 pro forma adjusted diluted EPS by quarter and year-to-date, see Schedule 3 in PMI's first-quarter 2019 earnings release • "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 • The estimated impact from the COVID-19 pandemic primarily reflects management’s estimate for shipments to distributors and trade partners that have been made solely for the purpose of increasing safety stocks. The impact also includes the estimated reduction of shipments to duty free distributors and trade partners resulting from the pandemic-related decline in international travel 33

Glossary: Reduced-Risk Products • "Reduced-risk products," or "RRPs," is the term PMI uses to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continuing smoking. PMI has a range of RRPs in various stages of development, scientific assessment and commercialization. PMI RRPs are smoke-free products that produce an aerosol that contains far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke • "Aerosol" refers to a gaseous suspension of fine solid particles and/or liquid droplets • "Combustion" is the process of burning a substance in oxygen, producing heat and often light • "Smoke" is a visible suspension of solid particles, liquid droplets and gases in air, emitted when a material burns • "Heated tobacco units," or "HTUs," is the term PMI uses to refer to heated tobacco consumables, which for PMI include the company's HEETS, HEETS Creations, HEETS Marlboro and HEETS FROM MARLBORO, defined collectively as HEETS, as well as Marlboro HeatSticks and Parliament HeatSticks • The IQOS heat-not-burn device is a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol • HTU "offtake volume" represents the estimated retail offtake of HTUs based on a selection of sales channels that vary by market, but notably include retail points of sale and e-commerce platforms • HTU "offtake share" represents the estimated retail offtake volume of HTUs divided by the sum of estimated total offtake volume for cigarettes and HTUs • National market share for HTUs is defined as the total sales volume for HTUs as a percentage of the total estimated sales volume for cigarettes and HTUs • "Total IQOS users" is defined as the estimated number of Legal Age (minimum 18 years) IQOS users that used PMI HTUs for at least 5% of their daily tobacco consumption over the past seven days • "Converted IQOS Users" is defined as the estimated number of Legal Age (minimum 18 years) IQOS users that used PMI HTUs for over 95% of their daily tobacco consumption over the past seven days 34

Glossary: Reduced-Risk Products (cont.) • "Predominant IQOS Users" is defined as the estimated number of Legal Age (minimum 18 years) IQOS users that used PMI HTUs units for between 70% and 95% of their daily tobacco consumption over the past seven days • "Situational IQOS Users" is defined as the estimated number of Legal Age (minimum 18 years) IQOS users that used PMI HTUs for between 5% and less than 70% of their daily tobacco consumption over the past seven days • "Abandoned IQOS Users" is defined as the estimated number of Legal Age (minimum 18 years) IQOS users that used PMI HTUs for less than 5% of their daily tobacco consumption over the past seven days • The estimated number of people who have "stopped smoking and switched to IQOS" is defined as: for markets where IQOS is the only heat-not- burn product, daily individual consumption of PMI HTUs represents the totality of their daily tobacco consumption in the past seven days; for markets where IQOS is one 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% are PMI HTUs • "FDA" stands for the U.S. Food & Drug Administration • "MRTP" stands for Modified Risk Tobacco Product, the term used by the U.S. FDA to refer to RRPs • "MRTP application" stands for Modified Risk Tobacco Product application under section 911 of the FD&C Act • "PMTA" stands for Premarket Tobacco Application under section 910 of the FD&C Act 35

Glossary: IQOS in the United States • On April 30, 2019, the U.S. Food and Drug Administration (FDA) announced that the marketing of a version of IQOS, PMI's heat-not-burn product, together with its heated tobacco units (the term PMI uses to refer to heated tobacco consumables), is appropriate for the protection of public health and authorized it for sale in the U.S. The FDA’s decision follows its comprehensive assessment of PMI’s premarket tobacco product applications (PMTAs) submitted to the Agency in 2017. In the third quarter of 2019, PMI brought a version of its IQOS Platform 1 device and three variants of its heated tobacco units to the U.S. through its license with Altria Group, Inc., whose subsidiary, Philip Morris USA Inc., is responsible for marketing the product and complying with the provisions set forth in the FDA's marketing order. On March 30, 2020, PMI submitted a supplemental PMTA for the IQOS 3 tobacco heating device with the U.S. Food and Drug Administration • Shipment volume of heated tobacco units to the U.S. is included in the heated tobacco unit shipment volume of the Latin America & Canada segment. Revenues from shipments of Platform 1 devices, heated tobacco units and accessories to Altria Group, Inc. for sale under license in the U.S. are included in Net Revenues of the Latin America & Canada segment 36

HTU Offtake Shares in Key Cities PMI (Q1, 2020) Change vs. PY +4.4pp +3.1pp +8.9pp +3.3pp +2.5pp +4.8pp +6.2pp +2.2pp 18.5% 14.9% 18.1% 14.4% 9.4% 10.2% 8.2% 5.2% Athens Bratislava Kiev Kuala Lumpur Lisbon Milan Moscow Munich +2.2pp +5.9pp (1.2)pp (1.6)pp +1.6pp +8.8pp +6.2pp +1.7pp 29.7% 22.0% 14.5% 13.3% 10.1% 8.7% 11.9% 4.1% Prague Rome Seoul Sofia Tokyo(a) Vilnius Warsaw Zurich (a) Japan total market includes the cigarillo category Source: PMI Financials or estimates 37

EU Region: HEETS SoM Performance in Select Markets Growth Growth Growth Q1, 2020 vs. PY Q1, 2020 vs. PY Q1, 2020 vs. PY Bulgaria 4.7% (1.0)pp Hungary 7.4% 7.4 pp Portugal 7.5% 2.2 pp Croatia 4.3 +1.6 Italy 7.4 +3.7 Romania 3.0 +0.5 Czech Slovak Latvia Republic 9.4 +4.5 10.9 +7.7 Republic 9.4 +4.2 Germany 2.4 +1.4 Lithuania 20.7 +8.9 Slovenia 4.7 +2.0 Greece 11.5 +2.8 Poland 4.3 +2.5 Switzerland 3.7 +1.2 Note: Select markets where HEETS share is ≥ 1% Source: PMI Financials or estimates 38

Korea: Sequential Share Performance HEETS SoM Heated Tobacco Category SoM Adjusted(a) 7.8% 7.8% 7.0% 6.3% 6.4% 6.7% PMI Adjusted SoS(a) 8.5% 67.2% 66.2% 65.5% 7.3% 7.3% 65.1% 62.8% 6.2% 6.3% 6.6% Industry Adjusted(a) 11.7% 11.2% 9.6% 9.5% 10.3% Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 2019 2020 (a) Excluding the impact of estimated trade inventory movements Source: PMI Financials or estimates 39

Shifting Our Resources to Deliver a Smoke-Free Future Business Transformation Metrics(a) Aspiration(b) 2015 2016 2017 2018 2019 by 2025 R&D expenditure (smoke-free/total) 70% 72% 74% 92% 98% Commercial expenditure (smoke-free/total) 8% 15% 39% 60% 71% Net revenues(c) (smoke-free/total) 0.2% 2.7% 12.7% 13.8% 18.7% 38-42% Smoke-free product shipment ratio(d) (smoke-free/total) 0.1% 0.9% 4.4% 5.1% 7.6% >30% Estimated users who have stopped smoking and switched to IQOS(e) (in millions) n/a 1.5 4.7 6.6 9.7 >40 (a) As of December 31, 2019 (b) Assuming constant PMI market share. We do not set aspirational targets for R&D and commercial expenditure but we expect both ratios to continue increasing to enable the stated outcome in terms of shipment volume. Note: Aspirational targets do not constitute financial projections (c) Excluding excise taxes. For future periods, at today’s pricing and excise tax assumptions (d) The smoke-free product shipment ratio is computed based on millions of units. Smoke-free products include heated tobacco units and e-cigarettes. Total products include smoke-free products, cigarettes and other combustible products (e) See Glossary for definition Source: PMI Financials or estimates, IQOS user panels and PMI Market Research 40

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Shipment Volume Adjusted for the Impact of RBH Deconsolidation and COVID-19 (in million units) / (Unaudited) Total PMI Quarters Ended March 31, 2020 2019 % Change Total Shipment Volume 173,745 175,795 (1.2)% (a) Shipment Volume for RBH-owned brands (1,008) (b) (c) Total Shipment Volume 173,745 174,787 (0.6)% Estimated impact related to COVID-19 (3,000) (d) (c) Total Shipment Volume 170,745 174,787 (2.3)% Total HTU Shipment Volume 16,727 11,498 45.5% Estimated impact related to COVID-19 (400) (d) Total HTU Shipment Volume 16,327 11,498 42.0% (a) Includes Duty Free sales in Canada (b) Represents volume for RBH-owned brands from January 1, 2019 through March 21, 2019 (c) Pro forma (d) Pro forma, excluding COVID-19 Note: Shipment Volume includes Cigarettes and Heated Tobacco Units; following the deconsolidation of RBH, we report the volume of brands sold by RBH for which other PMI subsidiaries are the trademark owners 41

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Diluted EPS to Reported Diluted EPS, excluding Currency, and Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS, excluding Currency (Unaudited) Quarters Ended March 31, 2020 2019 % Change Reported Diluted EPS $ 1.17 $ 0.87 34.5% Less: Currency (0.13) Reported Diluted EPS, excluding Currency $ 1.30 $ 0.87 49.4% Quarters Ended March 31, Year Ended 2020 2019 % Change 2019 Reported Diluted EPS $ 1.17 $ 0.87 34.5% $ 4.61 Asset impairment and exit costs - 0.01 0.23 Canadian tobacco litigation-related expense - 0.09 0.09 Loss on deconsolidation of RBH - 0.12 0.12 Russia excise and VAT audit charge - - 0.20 Fair value adjustment for equity security investments 0.04 - (0.02) Tax items - - (0.04) Adjusted Diluted EPS $ 1.21 $ 1.09 11.0% $ 5.19 Less: Currency (0.13) Adjusted Diluted EPS, excluding Currency $ 1.34 $ 1.09 22.9% 42

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Adjustments for the Impact of RBH, COVID-19, excluding Currency (Unaudited) Quarters Ended March 31, 2020 2019 % Change Adjusted Diluted EPS (a) $ 1.21 $ 1.09 11.0% Net earnings attributable to RBH (0.06) (b) Adjusted Diluted EPS $ 1.21 $ 1.03 (c) 17.5% Less: Currency (0.13) Adjusted Diluted EPS, excluding Currency $ 1.34 $ 1.03 (c) 30.1% Estimated impact related to COVID-19 (0.07) Adjusted Diluted EPS, excluding Currency $ 1.27 (d) $ 1.03 (c) 23.3% (a) For the calculation, see previous slide (b) Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019 (c) Pro forma (d) Pro forma, excluding COVID-19 Note: Financials attributable to RBH include Duty Free 43

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions ($ in millions) / (Unaudited) Net Net Revenues Excluding Net Revenues Quarters Ended Net Excluding Currency Acquisitions excluding Total Currency & Revenues excluding March 31, Revenues Currency Currency & Acquisitions Currency Acquisitions 2020 Reduced-Risk Products 2019 % Change $ 624 $ (17) $ 642 $ - $ 642 European Union $ 347 79.9% 84.9% 84.9% 265 10 256 - 256 Eastern Europe 108 +100% +100% +100% 44 - 43 - 43 Middle East & Africa 98 (55.7)% (56.0)% (56.0)% - - - - - South & Southeast Asia - - - - 613 (2) 615 - 615 East Asia & Australia 683 (10.2)% (10.0)% (10.0)% 8 - 8 - 8 Latin America & Canada (a) 6 38.5% 41.3% 41.3% $ 1,555 $ (9) $ 1,564 $ - $ 1,564 Total RRPs $ 1,243 25.1% 25.8% 25.8% 2020 PMI 2019 % Change $ 2,535 $ (70) $ 2,605 $ - $ 2,605 European Union $ 2,159 17.4% 20.7% 20.7% 788 6 782 - 782 Eastern Europe 579 36.1% 35.1% 35.1% 876 (2) 878 - 878 Middle East & Africa 927 (5.5)% (5.3)% (5.3)% 1,251 19 1,232 - 1,232 South & Southeast Asia 1,113 12.4% 10.7% 10.7% 1,255 (9) 1,264 - 1,264 East Asia & Australia 1,321 (5.0)% (4.3)% (4.3)% 448 (18) 466 - 466 Latin America & Canada 652 (31.3)% (28.5)% (28.5)% $ 7,153 $ (74) $ 7,227 $ - $ 7,227 Total PMI $ 6,751 6.0% 7.1% 7.1% (a) Net Revenues include revenues from shipments of the IQOS heated tobacco device, heated tobacco units and accessories to Altria Group, Inc., commencing in the third quarter of 2019, for sale under license in the United States Note: Sum of Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million 44

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Adjustments for the Impact of RBH, COVID-19, excluding Currency ($ in millions) / (Unaudited) Quarters Ended March 31, 2020 2019 % Change Net Revenues $ 7,153 $ 6,751 6.0% Net Revenues attributable to RBH (181) (a) Net Revenues $ 7,153 $ 6,570 (b) 8.9% Less: Currency (75) Net Revenues, excluding Currency $ 7,228 $ 6,570 (b) 10.0% Estimated impact related to COVID-19 (130) Net Revenues, excluding Currency $ 7,098 (c) $ 6,570 (b) 8.0% (a) Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019 (b) Pro forma (c) Pro forma, excluding COVID-19 Note: Financials attributable to RBH include Duty Free 45

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) Adjusted Adjusted Operating Excluding Asset Adjusted Operating Income Asset Adjusted Operating Acqui- Operating Excluding Currency Impairment Operating Currency Income excluding Impairment Operating Total Income sitions Income Currency & Acqui- & Exit Costs Income excluding Currency & Exit Costs Income sitions Currency & Acqui- sitions Quarters Ended 2020 2019 % Change March 31, $ 1,158 $ - $ 1,158 $ (65) $ 1,223 $ - $ 1,223 European Union $ 896 $ - $ 896 29.2% 36.5% 36.5% 99 - 99 (92) 191 - 191 Eastern Europe 129 - 129 (23.3)% 48.1% 48.1% 321 - 321 (19) 340 - 340 Middle East & Africa 344 - 344 (6.7)% (1.2)% (1.2)% 599 - 599 19 580 - 580 South & Southeast Asia 440 (20) (a) 460 30.2% 26.1% 26.1% 486 - 486 (4) 490 - 490 East Asia & Australia 427 - 427 13.8% 14.8% 14.8% 126 - 126 (35) 161 - 161 Latin America & Canada (186) (433) (b) 247 (49.0)% (34.8)% (34.8)% $ 2,789 $ - $ 2,789 $ (196) $ 2,985 $ - $ 2,985 Total PMI $ 2,050 $ (453) $ 2,503 11.4% 19.3% 19.3% (a) Represents asset impairment and exit costs (b) Includes the Canadian tobacco litigation-related expense ($194 million) and the loss on deconsolidation of RBH ($239 million) 46

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Adjustments for the Impact of RBH, COVID-19, excluding Currency ($ in millions) / (Unaudited) Quarters Ended March 31, 2020 2019 % Change Operating Income $ 2,789 $ 2,050 36.0% Less: Asset impairment and exit costs - (20) Canadian tobacco litigation-related expense - (194) Loss on deconsolidation of RBH - (239) Adjusted Operating Income $ 2,789 $ 2,503 11.4% Operating Income attributable to RBH (126) (a) Adjusted Operating Income $ 2,789 $ 2,377 (b) 17.3% Less: Currency (195) Adjusted Operating Income, excluding Currency $ 2,984 $ 2,377 (b) 25.5% Estimated impact related to COVID-19 (133) Adjusted Operating Income, excluding Currency $ 2,851 (c) $ 2,377 (b) 19.9% (a) Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019 (b) Pro forma (c) Pro forma, excluding COVID-19 Note: Financials attributable to RBH include Duty Free 47

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 Adjusted Adjusted Adjusted Adjusted Net Operating Adjusted Operating Net Operating Adjusted Adjusted Operating Operating Revenues Income Adjusted Adjusted Adjusted Operating Income Revenues Income Operating Net Operating Income Income excluding Margin Operating Net Operating Operating Income Margin excluding excluding Income Revenues Income excluding Margin Currency excluding Income Revenues Income Income Margin excluding Currency Currency (a) Margin Currency excluding & Acqui- Currency (a) Margin Margin excluding Currency (b) & Acqui- (a) Currency sitions (b) & Acqui- Currency & Acqui- sitions (a) sitions sitions Quarters Ended 2020 2019 % Points Change March 31, $ 1,158 $ 2,535 45.7% $ 1,223 $ 2,605 46.9% $ 1,223 $ 2,605 46.9% European Union $ 896 $ 2,159 41.5% 4.2 5.4 5.4 99 788 12.6% 191 782 24.4% 191 782 24.4% Eastern Europe 129 579 22.3% (9.7) 2.1 2.1 321 876 36.6% 340 878 38.7% 340 878 38.7% Middle East & Africa 344 927 37.1% (0.5) 1.6 1.6 599 1,251 47.9% 580 1,232 47.1% 580 1,232 47.1% South & Southeast Asia 460 1,113 41.3% 6.6 5.8 5.8 486 1,255 38.7% 490 1,264 38.8% 490 1,264 38.8% East Asia & Australia 427 1,321 32.3% 6.4 6.5 6.5 126 448 28.1% 161 466 34.5% 161 466 34.5% Latin America & Canada 247 652 37.9% (9.8) (3.4) (3.4) $ 2,789 $ 7,153 39.0% $ 2,985 $ 7,227 41.3% $ 2,985 $ 7,227 41.3% Total PMI $ 2,503 $ 6,751 37.1% 1.9 4.2 4.2 (a) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to slide 46 (b) For the calculation of Net Revenues excluding currency and acquisitions refer to slide 44 48

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Adjustments for the Impact of RBH, COVID-19, excluding Currency ($ in millions) / (Unaudited) Quarters Ended March 31, 2020 2019 % Change Adjusted Operating Income (a) $ 2,789 $ 2,503 11.4% Net Revenues $ 7,153 $ 6,751 6.0% Adjusted OI Margin 39.0% 37.1% 1.9 Adjusted OI Margin attributable to RBH (0.9) (b) Adjusted OI Margin 39.0% 36.2% (c) 2.8 Less: Currency (2.3) Adjusted OI Margin, excluding Currency 41.3% 36.2% (c) 5.1 Estimated impact related to COVID-19 (1.1) Adjusted OI Margin, excluding Currency 40.2% (d) 36.2% (c) 4.0 (a) For the calculation of Adjusted Operating Income refer to slide 46 (b) Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019 (c) Pro forma (d) Pro forma, excluding COVID-19 Note: Financials attributable to RBH include Duty Free 49

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Calculation of Total Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Ratios ($ in millions, except ratios) / (Unaudited) Year Ended March 31, 2020 Year Ended April ~ December January ~ March 12 months December 31, 2019 2020 rolling 2019 Net Earnings $ 6,264 $ 1,987 $ 8,251 $ 7,728 Equity investments and securities (income)/loss, net (138) 54 (84) (149) Provision for income taxes 1,869 596 2,465 2,293 Interest expense, net 418 129 547 570 Depreciation and amortization 724 241 965 964 Asset impairment and exit costs and Others (a) 776 - 776 1,229 Adjusted EBITDA $ 9,913 $ 3,007 $ 12,920 $ 12,635 March 31, December 31, 2020 2019 Short-term borrowings $ 1,438 $ 338 Current portion of long-term debt 1,933 4,051 Long-term debt 24,999 26,656 Total Debt $ 28,370 $ 31,045 Cash and cash equivalents 3,746 6,861 Net Debt $ 24,624 $ 24,184 Ratios: Total Debt to Adjusted EBITDA 2.20 2.46 Net Debt to Adjusted EBITDA 1.91 1.91 (a) For the period April to December 2019, Others include the Russia excise and VAT charge ($374 million). For the year ended December 31, 2019, Others include the Canadian tobacco litigation-related expense ($194 million), the loss on deconsolidation of RBH ($239 million) and the Russia excise and VAT audit charge ($374 million) 50

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Reconciliation of Reported Diluted EPS to Pro Forma Adjusted Diluted EPS (Unaudited) Quarter Quarter Six Months Quarter Nine Months Quarter Year Ended Ended Ended Ended Ended Ended Ended Mar 31, Jun 30, Jun 30, Sept 30, Sept 30, Dec 31, Dec 31, 2019 2019 2019 2019 2019 2019 2019 Reported Diluted EPS $ 0.87 $ 1.49 $ 2.36 $ 1.22 $ 3.57 $ 1.04 $ 4.61 Asset impairment and exit costs 0.01 0.01 0.02 0.01 0.03 0.20 0.23 Canadian tobacco litigation-related expense 0.09 - 0.09 - 0.09 - 0.09 Loss on deconsolidation of RBH 0.12 - 0.12 - 0.12 - 0.12 Russia excise and VAT audit charge - - - 0.20 0.20 - 0.20 Fair value adjustment for equity security investments - - - - - (0.02) (0.02) Tax items - (0.04) (0.04) - (0.04) - (0.04) Adjusted Diluted EPS $ 1.09 $ 1.46 $ 2.55 $ 1.43 $ 3.97 $ 1.22 $ 5.19 Net earnings attributable to RBH (0.06) (a) - (0.06) (a) - (0.06) (a) - (0.06) (a) Pro Forma Adjusted Diluted EPS $ 1.03 $ 1.46 $ 2.49 $ 1.43 $ 3.91 $ 1.22 $ 5.13 (a) Represents the impact of net earnings attributable to RBH from January 1, 2019 through March 21, 2019 Note: EPS is computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not agree to the total for the year 51

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions ($ in millions) / (Unaudited) Net Net Revenues Excluding Net Revenues Years Ended Net Excluding Currency Acquisitions excluding Total Currency & Revenues excluding December 31, Revenues Currency Currency & Acquisitions Currency Acquisitions 2019 Reduced-Risk Products 2018 % Change $ 1,724 $ (98) $ 1,822 $ - $ 1,822 European Union $ 865 99.2% +100% +100% 844 (19) 864 - 864 Eastern Europe 324 +100% +100% +100% 321 (1) 322 - 322 Middle East & Africa 382 (15.8)% (15.7)% (15.7)% - - - - - South & Southeast Asia - - - - 2,671 13 2,658 - 2,658 East Asia & Australia 2,506 6.6% 6.0% 6.0% 27 (1) 28 - 28 Latin America & Canada (a) 19 41.9% 49.9% 49.9% $ 5,587 $ (106) $ 5,693 $ - $ 5,693 Total RRPs $ 4,096 36.4% 39.0% 39.0% 2019 PMI 2018 % Change $ 9,817 $ (563) $ 10,380 $ - $ 10,380 European Union $ 9,298 5.6% 11.6% 11.6% 3,282 (108) 3,390 - 3,390 Eastern Europe 2,921 12.4% 16.1% 16.1% 4,042 (162) 4,204 - 4,204 Middle East & Africa 4,114 (1.8)% 2.2% 2.2% 5,094 (10) 5,104 - 5,104 South & Southeast Asia 4,656 9.4% 9.6% 9.6% 5,364 (26) 5,390 - 5,390 East Asia & Australia 5,580 (3.9)% (3.4)% (3.4)% 2,206 (68) 2,274 - 2,274 Latin America & Canada 3,056 (27.8)% (25.6)% (25.6)% $ 29,805 $ (937) $ 30,742 $ - $ 30,742 Total PMI $ 29,625 0.6% 3.8% 3.8% (a) Net Revenues include revenues from shipments of the IQOS heated tobacco device, heated tobacco units and accessories to Altria Group, Inc., commencing in the third quarter of 2019, for sale under license in the United States Note: Sum of Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million 52

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions ($ in millions) / (Unaudited) Net Net Revenues Excluding Net Revenues Years Ended Net Excluding Currency Acquisitions excluding Total Currency & Revenues excluding December 31, Revenues Currency Currency & Acquisitions Currency Acquisitions 2017 Reduced-Risk Products 2016 % Change $ 269 $ 5 $ 264 $ - $ 264 European Union $ 57 +100% +100% +100% 55 3 52 - 52 Eastern Europe 6 +100% +100% +100% 94 (3) 98 - 98 Middle East & Africa 4 +100% +100% +100% - - - - - South & Southeast Asia - - - - 3,218 (94) 3,312 - 3,312 East Asia & Australia 666 +100% +100% +100% 4 - 4 - 4 Latin America & Canada 1 +100% +100% +100% $ 3,640 $ (89) $ 3,729 $ - $ 3,729 Total RRPs $ 733 +100% +100% +100% 2017 PMI 2016 % Change $ 8,318 $ 45 $ 8,273 $ - $ 8,273 European Union $ 8,162 1.9% 1.4% 1.4% 2,711 229 2,482 - 2,482 Eastern Europe 2,484 9.1% (0.1)% (0.1)% 3,988 (520) 4,508 - 4,508 Middle East & Africa 4,516 (11.7)% (0.2)% (0.2)% 4,417 (63) 4,480 - 4,480 South & Southeast Asia 4,396 0.5% 1.9% 1.9% 6,373 (74) 6,447 - 6,447 East Asia & Australia 4,285 48.7% 50.5% 50.5% 2,941 (54) 2,995 - 2,995 Latin America & Canada 2,842 3.5% 5.4% 5.4% $ 28,748 $ (437) $ 29,185 $ - $ 29,185 Total PMI $ 26,685 7.7% 9.4% 9.4% Note: Sum of Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million 53

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries Reconciliation of Non-GAAP Measures Net Revenues by Product Category and Adjustments of Net Revenues for the Impact of Currency and Acquisitions ($ in millions) / (Unaudited) Net Net Revenues Excluding Net Revenues Years Ended Net Excluding Currency Acquisitions excluding Total Currency & Revenues excluding December 31, Revenues Currency Currency & Acquisitions Currency Acquisitions 2016 Reduced-Risk Products 2015 % Change $ 57 $ (2) $ 60 $ - $ 60 European Union $ 29 96.4% +100% +100% 6 - 6 - 6 Eastern Europe - - - - 4 1 3 - 3 Middle East & Africa - - - - - - - - - South & Southeast Asia - - - - 666 70 597 - 597 East Asia & Australia 35 +100% +100% +100% 1 - 1 - 1 Latin America & Canada - - - - $ 733 $ 67 $ 666 $ - $ 666 Total RRPs $ 64 +100% +100% +100% 2016 PMI 2015 % Change $ 8,162 $ (147) $ 8,309 $ - $ 8,309 European Union $ 8,068 1.2% 3.0% 3.0% 2,484 (340) 2,824 - 2,824 Eastern Europe 2,735 (9.2)% 3.3% 3.3% 4,516 (260) 4,776 - 4,776 Middle East & Africa 4,629 (2.4)% 3.2% 3.2% 4,396 (71) 4,467 - 4,467 South & Southeast Asia 4,288 2.5% 4.2% 4.2% 4,285 63 4,222 - 4,222 East Asia & Australia 3,915 9.5% 7.8% 7.8% 2,842 (525) 3,367 - 3,367 Latin America & Canada 3,159 (10.0)% 6.6% 6.6% $ 26,685 $ (1,280) $ 27,965 $ - $ 27,965 Total PMI $ 26,794 (0.4)% 4.4% 4.4% Note: Sum of Regions might not foot to Total PMI due to roundings. "-" indicates amounts between -$0.5 million and +$0.5 million 54

Delivering a Smoke-Free Future 2020 First-Quarter Results April 21, 2020




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



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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	PM	New York Stock Exchange
1.875% Notes due 2021	PM21B	New York Stock Exchange
1.875% Notes due 2021	PM21C	New York Stock Exchange
4.125% Notes due 2021	PM21	New York Stock Exchange
2.900% Notes due 2021	PM21A	New York Stock Exchange
2.625% Notes due 2022	PM22A	New York Stock Exchange
2.375% Notes due 2022	PM22B	New York Stock Exchange
2.500% Notes due 2022	PM22	New York Stock Exchange
2.500% Notes due 2022	PM22C	New York Stock Exchange
2.625% Notes due 2023	PM23	New York Stock Exchange
2.125% Notes due 2023	PM23B	New York Stock Exchange
3.600% Notes due 2023	PM23A	New York Stock Exchange



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
2.875% Notes due 2024	PM24	New York Stock Exchange
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




PHILIP MORRIS INTERNATIONAL INC.

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



☐	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)



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



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).



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.	☐



99.1	Philip Morris International Inc. Press Release dated April 21, 2020 (furnished pursuant to Item 2.02).



99.2	Conference Call Script dated April 21, 2020 (furnished pursuant to Item 7.01).



99.3	Webcast Slides dated April 21, 2020 (furnished pursuant to Item 7.01).



104	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101)



Item 7.01.	Regulation FD Disclosure.



(d)	Exhibits