Philip Morris International (PM) 8-K Philip Morris International Inc. (Pmi) Reports

2009 Second-Quarter Results

23 July 2009

Exhibit 99.3

Philip Morris International

2

Introduction

Introduction

Unless otherwise stated, we will be talking about

results in the second quarter 2009 and comparing

them with the same period in 2008

References to PMI volumes refer to shipment data

Industry volume and market shares are sourced from

A.C. Nielsen, other third party sources and internal

estimates

Net revenues exclude excise taxes

Data tables showing adjustments to revenues and

Operating Companies Income (OCI) for currency and

acquisitions, adjustments to EPS, and reconciliations

to U.S. GAAP measures are at the end of today’s web

cast slides and are posted on our web site

Philip Morris International

3

Forward-Looking and Cautionary Statements

Forward-Looking and Cautionary Statements

This presentation and related discussion contain statements that, to

the extent they do not relate strictly to historical or current facts,

constitute “forward-looking statements”

within the meaning of the

Private Securities Litigation Reform Act of 1995. Such forward-

looking statements are based on current plans, estimates and

expectations, and are not guarantees of future performance. They

are based on management’s expectations that involve a number of

business risks and uncertainties, any of which could cause actual

results to differ materially from those expressed in or implied by the

forward-looking statements. PMI undertakes no obligation to

publicly update or revise any forward-looking statements, except in

the normal course of its public disclosure obligations. The risks and

uncertainties relating to the forward-looking statements in this

presentation include those described under Item 1A. “Risk Factors”

in PMI’s Form 10-K for the year ended December 31, 2008, and Form

10-Q for the quarter ended March 31, 2009, filed with the Securities

and Exchange Commission.

Philip Morris International

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PMI Financials

PMI Financials

9.5

6.1 %

Q2

% Variance vs. 2008 excl.

Currency & Acquisitions

5.0

11.7

H1

7.5

2.6

Adjusted OCI

(b)

5.1 %

6.1

($ billion)

Net Revenues

(a)

H1

Q2

2009 Results

(a)

Excluding excise taxes

(b)

Less asset impairment and exit costs

Source: PMI Financials

Philip Morris International

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PMI Financials

PMI Financials

($ / share)

17.2

Q2

% Variance vs. 2008

excl. Currency

1.56

H1

14.4

0.83

Adjusted Diluted EPS

H1

Q2

2009 Results

Source: PMI Financials

Philip Morris International

6

PMI Volume

PMI Volume

% Variance vs. 2008

2009 Results

-

%

Reported

H1

-

%

Reported

Q2

(1.1) %

(1.1) %

426.5

223.2

Cigarette Volume

Organic

(a)

Organic

(a)

H1

Q2

(units billion)

(a)

Excludes acquisitions

Source: PMI Financials

Philip Morris International

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Asia Region

Asia Region

Volume increased in Indonesia, Korea and Pakistan

Increased profitability net of currency in almost all our

main markets in Asia

Marlboro

turnaround in Japan

Source: PMI Financials and Tobacco Institute of Japan

Philip Morris International

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Japan –

Japan –

Market Shares

Market Shares

(%)

Q2, 2008

Q2, 2009

Marlboro

Black

Menthol

Source: Tobacco Institute of Japan

Marlboro

Marlboro

9.8

23.9

10.6

24.0

Total PMI

Total PMI

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Korea –

Korea –

Market Shares

Market Shares

(%)

Q2, 2008

Q2, 2009

Source: PMI GIMS estimates

Marlboro

Marlboro

Parliament

Parliament

3.3

4.8

11.8

4.0

5.6

13.7

PMI

PMI

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Argentina –

Argentina –

Market Shares

Market Shares

(%)

Q2, 2008

Q2, 2009

Source: PMI GIMS estimates

Marlboro

Marlboro

Philip Morris

Philip Morris

22.8

33.1

70.2

23.1

36.4

73.0

PMI

PMI

Philip Morris International

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Mexico –

Mexico –

Market Shares

Market Shares

(%)

Q2, 2008

Q2, 2009

Source: PMI GIMS estimates

Delicados

Delicados

Benson

& Hedges

Marlboro

Benson

& Hedges

Marlboro

9.7

53.9

67.2

11.2

54.1

69.0

Premium

PMI

Premium

PMI

Philip Morris International

12

Russia

Russia

Consumer downtrading

Product mix has deteriorated

Shipments declined by 1.3% in Q2, 2009

Oil prices and banking sector stability key to business

outlook

Source: PMI Financials and A.C. Nielsen

Philip Morris International

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Russia –

Russia –

Market Shares

Market Shares

(a)

April / May

Source: A.C. Nielsen

(%)

Premium

Mid

Low / Super-low

(a)

(a)

10.2

11.3

8.2

7.8

6.3

6.1

24.7

25.2

Q2, 2008

Q2, 2009

Philip Morris International

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Ukraine

Ukraine

Difficult economic and political environment

Tax-driven

retail

price

increases

of

22%

–

50%

this

May

Product mix remains relatively stable so far

PMI shipments down 14.1% in Q2, 2009

Our market share in the April/May period was up 1.0

pp at 36.2%

Market evolution in the second half is difficult to

predict

Source: PMI Financials and A.C. Nielsen

Philip Morris International

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EEMA Region

EEMA Region

Net revenues increased by 8.5% excluding currency

and acquisitions in Q2, 2009

OCI up 10.7% excluding currency and acquisitions in

Q2, 2009

PMI gained market share in Q2, 2009, across the

Region:

–

notably in Algeria, Bulgaria, Egypt, Romania, Russia, Turkey

and Ukraine

Successful implementation of higher prices

Source: PMI Financials, GIMS estimates and A.C. Nielsen

Philip Morris International

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EU Region

EU Region

The situation in the EU Region is clearly improving

PMI gained market share in 15 out of the top 20 EU

Region markets in Q2, 2009:

notably in France, Germany and Spain

Marlboro

share

in

EU

Region

remained

stable

at

18.9%

in Q2, 2009

PMI volume declined by 3.0% in Q2, 2009

Source: PMI Financials, GIMS estimates and A.C. Nielsen

Philip Morris International

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Spain

Spain

Economic recession and rising unemployment

Industry volume declined by 6.2% in Q2, 2009

Minimum Excise Tax increased in May

PMI implemented a €0.35 / pack price increase across

its cigarette portfolio, thus generating higher unit

margins

Source: PMI GIMS estimates

Philip Morris International

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Marlboro

Marlboro

Shipment

Shipment

Volume

Volume

by

by

Region

Region

EU

LA &

Canada

Asia

EEMA

Q2, 2009 Volume: 78.3 billion

(Down 1.1% vs. Q2, 2008)

Source: PMI Financials

38.3%

26.4%

22.6%

12.7%

Philip Morris International

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Marlboro

Marlboro

Architecture

Architecture

“Flavor

enjoyment”

“Smooth taste

and style”

“Fresh taste

sensations”

Red

Gold

Fresh

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Red Line :

Red Line :

Marlboro Filter Plus / Flavor Plus

Marlboro Filter Plus / Flavor Plus

1.4

0.7

1.0

2.4

2.5

1.3

Lithuania

Slovakia

Kazakhstan

Kuwait

Romania

Paraguay

Market Shares Q2, 2009

(a)

(a)

Kazakhstan, Kuwait and Paraguay are April / May

Source: PMI GIMS Estimates, Business Analytica and A.C. Nielsen

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Gold Line : Marlboro Gold Touch / Gold Edge

Gold Line : Marlboro Gold Touch / Gold Edge

Marlboro Gold Touch

Marlboro Gold Edge

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Fresh Line : Marlboro Black Menthol

Fresh Line : Marlboro Black Menthol

1.3% market share in Japan

in Q2, 2009, including recent

line extension into 1 mg

flavor segment

3.1% market share in Hong

Kong in June, three months

after launch

Introduced in Indonesia

Such innovative new

products are boosting the

performance of Marlboro

Source: Tobacco Institute of Japan and A.C. Nielsen

Philip Morris International

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Pricing

Pricing

Revenue growth significantly more than offsetting

volume softness and slightly unfavorable product mix

Pricing variance was $549 million in Q2, 2009

In last twelve months, PMI has increased prices

notably in:

Argentina

Brazil

Canada

Dominican Rep.

Mexico

Australia

Indonesia

Pakistan

Philippines

Thailand

Romania

Russia

South Africa

Turkey

Ukraine

Germany

Italy

Poland

Spain

UK

LA & Canada

Asia

EEMA

EU

Source: PMI Financials

Philip Morris International

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Germany / Spain –

Germany / Spain –

Pricing

Pricing

2.85

2.50

L&M

3.20

2.85

Chesterfield

€

3.45

€

3.10

Marlboro

4.25

4.35

€

4.70

New Prices

(a)

(per 19)

New Prices

(per 20)

Old Prices

(per 20)

Spain

3.80

3.60

L&M

3.90

3.70

F6

€

4.20

€

4.00

Marlboro

Current Prices

(per 17)

Old Prices

(per 17)

Germany

(a)

New prices for Germany have been published in the Tabakzeitung

Philip Morris International

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Fiscal Environment

Fiscal Environment

Higher retail prices resulting in higher government

revenues

Fiscal environment remains reasonable:

–

key exceptions are Brazil and Ukraine

Philip Morris International

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Productivity and Brand Building

Productivity and Brand Building

On track to deliver $500 million in productivity

improvements and cost savings in 2009

None of the savings are coming from reduced

marketing expenditures

We continue to invest appropriately behind our

brands

Source: PMI Financials

Philip Morris International

27

Share Repurchases

Share Repurchases

Two-year $13 billion share repurchase program

In Q2, 2009, $1.4 billion spent to buy 34.7 million

shares at average price of $40.33 per share

Source: PMI Financials

Philip Morris International

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Acquisitions

Acquisitions

Strategically and financially attractive deals

South Africa: acquisition of pipe tobacco and nasal

snuff business for some $222 million

Colombia: acquisition of Protabaco

for $452 million

Transactions expected to close in Q4, 2009, subject to

regulatory approval

Source: PMI 

Philip Morris International

29

Cash Flow

Cash Flow

Free cash flow reached $4.25 billion during the first

half of 2009 in spite of:

–

$730 million negative currency impact on net earnings

–

$241 million increase in pension fund contributions

PMI has returned $12.4 billion in cash to its

shareholders since becoming an independent

company

Note: Free cash flow equals operating cash flow less capital expenditures. In the first half of 2009, operating cash flow was $4,573 million and capital

expenditures $323 million

Source: PMI Financials

Philip Morris International

30

2009 EPS Guidance

2009 EPS Guidance

Previous 2009 EPS guidance, established in February, of

$2.85 –

$3.00 per share included 80 cents in unfavorable

currency

Unfavorable currency in the first half of the year was 35

cents

During the second half, we expect a further 20 cents in

unfavorable currency based on current exchange rates

New

2009

EPS

guidance

is

$3.10

-

$3.20

per

share

This reflects strong business fundamentals, the improved

currency outlook and the 4 cent charge for Colombia

Revised EPS guidance translates into currency neutral

growth of approximately 10-13%

Questions & Answers

Philip Morris International

32

PHILIP MORRIS INTERNATIONAL INC.

(in millions)

(Unaudited)

For the Quarters Ended June 30,

and Subsidiaries

Reconciliation of Non-GAAP Measures

Adjustments for the Impact of Currency and Acquisitions

Reported Net

Revenues

Less

Excise

Taxes

Reported Net

Revenues

excluding

Excise Taxes

Less

Currency

Reported Net

Revenues

excluding

Excise Taxes

& Currency

Less

Acquisi-

tions

Reported Net

Revenues

excluding

Excise

Taxes, 

Currency &

Acquisitions

Reported Net

Revenues

Less

Excise

Taxes

Reported Net

Revenues

excluding

Excise Taxes

Reported

Reported

excluding

Currency

Reported

excluding

Currency &

Acquisitions

7,155

$        

(4,875)

$ 

2,280

$        

(453)

$    

2,733

$        

22

$       

2,711

$        

European Union

8,279

$          

(5,635)

$  

2,644

$          

(13.8)%

3.4%

2.5%

3,400

(1,760)

1,640

(461)

2,101

3

2,098

EEMA

3,802

(1,869)

1,933

(15.2)%

8.7%

8.5%

2,947

(1,374)

1,573

(139)

1,712

-

1,712

Asia

3,170

(1,566)

1,604

(1.9)%

6.7%

6.7%

1,711

(1,070)

641

(113)

754

158

596

Latin America & Canada

1,452

(924)

528

21.4 %

42.8%

12.9%

15,213

$      

(9,079)

$ 

6,134

$        

(1,166)

$ 

7,300

$        

183

$     

7,117

$        

PMI Total

16,703

$        

(9,994)

$  

6,709

$          

(8.6)%

8.8%

6.1%

Reported

Operating

Companies

Income

Less

Currency

Reported

Operating

Companies

Income

excluding

Currency

Less

Acquisi-

tions

Reported

Operating

Companies

Income

excluding

Currency &

Acquisitions

Reported

Operating

Companies

Income

Reported

Reported

excluding

Currency

Reported

excluding

Currency &

Acquisitions

1,163

$        

(241)

$    

1,404

$        

16

$       

1,388

$        

European Union

1,287

$          

(9.6)%

9.1%

7.8%

635

(267)

902

2

900

EEMA

813

(21.9)%

10.9%

10.7%

619

4

615

-

615

Asia

523

18.4 %

17.6%

17.6%

71

(47)

118

70

48

Latin America & Canada

23

100+ %

100+ %

100+ %

2,488

$        

(551)

$    

3,039

$        

88

$       

2,951

$        

PMI Total

2,646

$          

(6.0)%

14.9%

11.5%

2009

2008

% Change on Reported Operating

Companies Income

2009

2008

% Change on Reported Net

Revenues excluding Excise Taxes

Philip Morris International

33

(1)

Represents 2009 Colombian investment and cooperation agreement charge

(2)

Represents 2008 equity loss from RBH legal settlement

(3)

For

the

calculation

of

net

revenues

excluding

excise

taxes

and

currency,

refer

to

Slide

32

Reported

Operating

Companies

Income

Less

Asset

Impairment/

Exit Costs

and Other

Adjusted

Operating

Companies

Income

Less

Currency

Adjusted

Operating

Companies

Income

excluding

Currency

Less

Acquisi-

tions

Adjusted

Operating

Companies

Income

excluding

Currency &

Acquisitions

Reported

Operating

Companies

Income

Less

Asset

Impairment/

Exit Costs

and Other

Adjusted

Operating

Companies

Income

Adjusted

Adjusted

excluding

Currency

Adjusted

excluding

Currency &

Acquisitions

1,163

$       

(1)

$           

1,164

$       

(241)

$       

1,405

$       

16

$          

1,389

$         

European Union

1,287

$        

(48)

$           

1,335

$      

(12.8)%

5.2%

4.0%

635

-

635

(267)

902

2

900

EEMA

813

-

813

(21.9)%

10.9%

10.7%

619

-

619

4

615

-

615

Asia

523

-

523

18.4 %

17.6%

17.6%

71

(135)

(1)

206

(47)

253

70

183

Latin America & Canada

23

(124)

(2)

147

40.1 %

72.1%

24.5%

2,488

$       

(136)

$       

2,624

$       

(551)

$       

3,175

$       

88

$          

3,087

$         

PMI Total

2,646

$        

(172)

$         

2,818

$      

(6.9)%

12.7%

9.5%

% Points Change

Adjusted

Operating

Companies

Income

excluding

Currency

Net

Revenues

excluding

Excise

Taxes &

Currency

(3)

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

Adjusted

Operating

Companies

Income

Net

Revenues

excluding

Excise

Taxes

(3)

Adjusted

Operating

Companies

Income

Margin

Adjusted

Operating

Companies

Income Margin

excluding

Currency

1,405

$       

2,733

$     

51.4%

European Union

1,335

$        

2,644

$       

50.5%

0.9

pp

902

2,101

42.9%

EEMA

813

1,933

42.1%

0.8

pp

615

1,712

35.9%

Asia

523

1,604

32.6%

3.3

pp

253

754

33.6%

Latin America & Canada

147

528

27.8%

5.8

pp

3,175

$       

7,300

$     

43.5%

PMI Total

2,818

$        

6,709

$       

42.0%

1.5

pp

2009

2008

2009

2008

% Change on Adjusted Operating

Companies Income

Reconciliation of Adjusted Operating Companies Income Margin Excluding Currency

(in millions)

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

(Unaudited)

Reconciliation of Reported Operating Companies Income to Adjusted Operating Companies Income &

For the Quarters Ended June 30,

Philip Morris International

34

2009

2008

% Change

Reported Diluted EPS

0.79

$            

0.80

$            

(1.3)%

Adjustments:

Colombian investment and cooperation agreement charge

0.04

-

Asset impairment and exit costs

-

0.01

Equity loss from RBH legal settlement

-

0.06

Adjusted Diluted EPS

0.83

$            

0.87

$            

(4.6)%

Add:

Currency Impact

0.19

Adjusted Diluted EPS, Excluding Currency

1.02

$            

0.87

$            

17.2 %

Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and Adjusted Diluted EPS, Excluding Currency

For the Quarters Ended June 30,

(Unaudited)

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Philip Morris International

35

2009

2008

% Change

Reported Diluted EPS

0.79

$              

0.80

$          

(1.3)%

Add:

Currency Impact

0.19

Reported Diluted EPS, Excluding Currency

0.98

$              

0.80

$          

22.5 %

Reconciliation of Reported Diluted EPS to Reported Diluted EPS, Excluding Currency

For the Quarters Ended June 30,

(Unaudited)

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Philip Morris International

36

(in millions)

For the Six Months Ended June 30,

and Subsidiaries

Reconciliation of Non-GAAP Measures

Adjustments for the Impact of Currency and Acquisitions

(Unaudited)

PHILIP MORRIS INTERNATIONAL INC.

(1) 

As discussed in Note 1. Background and Basis of Presentation of our 2008 consolidated financial statements which appears in our Annual Report on Form 10-K, prior to 2008, certain of our subsidiaries reported

their

results

up

to

ten

days

before

the

end

of

December,

rather

than

on

December

31.

During

2008,

these

subsidiaries

moved

to

a

December

31

closing

date.

As

a

result,

certain

amounts

in

the

first

quarter

of

2008

were revised to reflect this change

Reported Net

Revenues

Less

Excise

Taxes

Reported Net

Revenues

excluding

Excise Taxes

Less

Currency

Reported Net

Revenues

excluding

Excise Taxes

& Currency

Less

Acquisi-

tions

Reported Net

Revenues

excluding

Excise

Taxes, 

Currency &

Acquisitions

Reported Net

Revenues

Less

Excise

Taxes

Reported Net

Revenues

excluding

Excise Taxes

Reported

Reported

excluding

Currency

Reported

excluding

Currency &

Acquisitions

13,205

$      

(8,938)

$ 

4,267

$        

(704)

$   

4,971

$        

38

$       

4,933

$        

European Union

14,976

$      

(10,086)

$

4,890

$        

(12.7)%

1.7%

0.9%

6,231

(3,139)

3,092

(773)

3,865

3

3,862

EEMA

7,085

(3,490)

3,595

(14.0)%

7.5%

7.4%

5,804

(2,641)

3,163

(188)

3,351

-

3,351

Asia

6,146

(3,039)

3,107

1.8 %

7.9%

7.9%

3,259

(2,050)

1,209

(198)

1,407

282

1,125

Latin America & Canada

2,850

(1,812)

1,038

16.5 %

35.5%

8.4%

28,499

$      

(16,768)

$

11,731

$      

(1,863)

$

13,594

$      

323

$     

13,271

$      

PMI Total

31,057

$      

(18,427)

$

12,630

$      

(7.1)%

7.6%

5.1%

Reported

Operating

Companies

Income

Less

Currency

Reported

Operating

Companies

Income

excluding

Currency

Less

Acquisi-

tions

Reported

Operating

Companies

Income

excluding

Currency &

Acquisitions

Reported

Operating

Companies

Income

Reported

Reported

excluding

Currency

Reported

excluding

Currency &

Acquisitions

2,130

$        

(425)

$   

2,555

$        

27

$       

2,528

$        

European Union

2,454

$        

(13.2)%

4.1%

3.0%

1,221

(468)

1,689

2

1,687

EEMA

1,493

(18.2)%

13.1%

13.0%

1,280

23

1,257

-

1,257

Asia

1,073

19.3 %

17.1%

17.1%

226

(82)

308

125

183

Latin America & Canada

172

31.4 %

79.1%

6.4%

4,857

$        

(952)

$   

5,809

$        

154

$     

5,655

$        

PMI Total

5,192

$        

(6.5)%

11.9%

8.9%

2009

2008

(1)

% Change on Reported Net

Revenues excluding Excise Taxes

2009

2008

(1)

% Change on Reported Operating

Companies Income

Philip Morris International

37

As discussed in Note 1. Background and Basis of Presentation of our 2008 consolidated financial statements which appears in our Annual Report on Form 10-K, prior to 2008, certain of our subsidiaries   

reported their results up to ten days before the end of December, rather than on December 31.  During 2008, these subsidiaries moved to a December 31 closing date.  As a result, certain amounts in the 

first quarter of 2008 were revised to reflect this change 

Represents 2009 Colombian investment and cooperation agreement charge 

Represents 2008 equity loss from RBH legal settlement 

For the calculation of net revenues excluding excise taxes and currency, refer to Slide 36 

Reported

Operating

Companies

Income

Less

Asset

Impairment

/Exit Costs

and Other

Adjusted

Operating

Companies

Income

Less

Currency

Adjusted

Operating

Companies

Income

excluding

Currency

Less

Acquisi-

tions

Adjusted

Operating

Companies

Income

excluding

Currency &

Acquisitions

Reported

Operating

Companies

Income

Less

Asset

Impairment

/Exit Costs

and Other

Adjusted

Operating

Companies

Income

Adjusted

Adjusted

excluding

Currency

Adjusted

excluding

Currency &

Acquisitions

2,130

$       

(2)

$           

2,132

$       

(425)

$     

2,557

$        

27

$          

2,530

$         

European Union

2,454

$       

(56)

$         

2,510

$        

(15.1)%

1.9%

0.8%

1,221

-

1,221

(468)

1,689

2

1,687

EEMA

1,493

(1)

1,494

(18.3)%

13.1%

12.9%

1,280

-

1,280

23

1,257

-

1,257

Asia

1,073

(14)

1,087

17.8 %

15.6%

15.6%

226

(135)

(2)

361

(82)

443

125

318

Latin America & Canada

172

(124)

(3)

296

22.0 %

49.7%

7.4%

4,857

$       

(137)

$       

4,994

$       

(952)

$     

5,946

$        

154

$        

5,792

$         

PMI Total

5,192

$       

(195)

$       

5,387

$        

(7.3)%

10.4%

7.5%

% Points Change

Adjusted

Operating

Companies

Income

excluding

Currency

Net

Revenues

excluding

Excise

Taxes &

Currency

(4)

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

Adjusted

Operating

Companies

Income

Net

Revenues

excluding

Excise

Taxes

(4)

Adjusted

Operating

Companies

Income

Margin

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

2,557

$        

4,971

$     

51.4%

European Union

2,510

$       

4,890

$     

51.3%

0.1

pp

1,689

3,865

43.7%

EEMA

1,494

3,595

41.6%

2.1

pp

1,257

3,351

37.5%

Asia

1,087

3,107

35.0%

2.5

pp

443

1,407

31.5%

Latin America & Canada

296

1,038

28.5%

3.0

pp

5,946

$        

13,594

$   

43.7%

PMI Total

5,387

$       

12,630

$   

42.7%

1.0

pp

2009

2008

2009

2008

(1)

% Change on Adjusted Operating

Companies Income

Reconciliation of Adjusted Operating Companies Income Margin Excluding Currency

(Unaudited)

For the Six Months Ended June 30,

(in millions)

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Reconciliation of Reported Operating Companies Income to Adjusted Operating Companies Income &

(3)

(4)

(2)

(1) 

Philip Morris International

38

2009

2008

% Change

Reported Diluted EPS

1.52

$              

1.59

$          

(4.4)%

Adjustments:

Colombian investment and cooperation agreement charge

0.04

-

Asset impairment and exit costs

-

0.02

Equity loss from RBH legal settlement

-

0.06

Adjusted Diluted EPS

1.56

$              

1.67

$          

(6.6)%

Add:

Currency Impact

0.35

Adjusted Diluted EPS, Excluding Currency

1.91

$              

1.67

$          

14.4 %

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS and Adjusted Diluted EPS, Excluding Currency

For the Six Months Ended June 30,

(Unaudited)

Philip Morris International

39

2009

2008

% Change

Reported Diluted EPS

1.52

$              

1.59

$          

(4.4)%

Add:

Currency Impact

0.35

Reported Diluted EPS, Excluding Currency

1.87

$              

1.59

$          

17.6 %

Reconciliation of Reported Diluted EPS to Reported Diluted EPS, Excluding Currency

For the Six Months Ended June 30,

(Unaudited)

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Philip Morris International

40

Calculation of Total Debt to EBITDA and Net Debt to EBITDA Ratios

(in millions, except ratios)

(Unaudited)

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

For the Year Ended

June 30,

December 31,

2009

2008

July~December

January~June

12 months

2008

2009

rolling

Earnings before income taxes

4,941

$         

4,398

$        

9,339

$          

9,937

$                       

Interest expense, net

175

351

526

311

Depreciation and amortization

438

395

833

842

EBITDA

5,554

$         

5,144

$        

10,698

$        

11,090

$                     

June 30,

December 31,

2009

2008

Short-term borrowings

399

$             

375

$                          

Current portion of long-term debt

195

209

Long-term debt

13,480

11,377

Total debt

14,074

$        

11,961

$                     

Less: Cash and cash equivalents

2,602

1,531

Net Debt

11,472

$        

10,430

$                     

Ratios

Total Debt to EBITDA

1.32

1.08

Net Debt to EBITDA

1.07

0.94

2009 Second-Quarter Results

23 July 2009