Annual Meeting of Shareholders
Philip Morris International Inc.
May 1, 2019
New York, NY(SLIDE 1.)
Good morning, ladies and gentlemen, and welcome to Philip Morris International’s 2019
Annual Meeting of Shareholders. The meeting is now called to order.
I am Louis Camilleri, Chairman of the Board.
I would like to extend my warmest welcome to shareholders and employees who havejoined us on our webcast, as well as those who are here in person today.
It is my privilege to welcome our Board of Directors, who are sitting in the front row.
On stage with me are André Calantzopoulos, our Chief Executive Officer, and Jerry
Whitson, our Deputy General Counsel and Corporate Secretary.
In addition, I would like to introduce Chad Mueller of PricewaterhouseCoopers, ourauditors. He is in the audience and will be available to answer questions after the meeting.
It is our intention to proceed in accordance with the Agenda and the rules for the meetingthat have been placed on your seats.
(SLIDE 2.)
Our remarks today contain forward-looking statements and, accordingly, I direct yourattention to the Forward-Looking and Cautionary Statements section of today’spresentation. A glossary of terms, including the definition for reduced-risk products, or"RRPs," as well as adjustments, other calculations and reconciliations to the most directlycomparable U.S. GAAP measures, are at the end of today’s webcast slides, which areposted on our website.
(SLIDE 3.)
The Secretary will now present certain formal documents. Jerry.
Thank you, Mr. Chairman.

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I present to the meeting, together with Affidavits of Mailing, a copy of the Notice ofMeeting, form of Proxy, Proxy Statement and Annual Report, including financial
statements for the fiscal year ended December 31, 2018.
The holders of record of common stock at the close of business on March 8, 2019 areentitled to vote at this meeting. I am informed that more than 88% percent of Philip MorrisInternational Inc.’s common stock is represented here today and, therefore, a quorum ispresent for the transaction of business.
Thank you, Jerry.
Will you please file the documents with the records of the meeting.
I appoint as Inspectors of Election, Amilja Regan and Peter Duggan of Computershare,
the Transfer Agent for PMI’s common stock.
The Inspectors are instructed to execute the oath, and to take custody of all proxies, andof the certified list of holders of common stock as of the close of business on March 8,
2019.
The list contains the names and addresses of all holders of common stock, and thenumber of shares held by each.
This list is available for inspection throughout the meeting.
The Inspectors will certify the vote on each of the matters to be presented to the meeting.
Individual proxies and ballots are kept confidential, with exceptions outlined in the Proxy
Statement.
It is now my pleasure to give the floor to André, who will review our business performance.
Thank you, Louis, and good morning, everyone.
(SLIDE 4.)
We recorded a robust financial and strategic performance in 2018, demonstrating that theunderlying strength of our combustible business is increasingly complemented by thetremendous opportunity of our reduced-risk products – led by IQOS – to acceleratebusiness growth.
(SLIDE 5.)
While our total cigarette and heated tobacco unit shipment volume declined by 2.1%, it
was flat excluding estimated net distributor inventory movements, marking our best
annual performance on this basis since 2012 and comparing favorably to an estimateddecline in total industry volume of 1.6%.
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(SLIDE 6.)
Heated tobacco unit shipment volume increased by 14.2% to 41.4 billion units.
More importantly, our in-market sales volume for HTUs nearly doubled, reaching 44.3
billion units, a significant achievement driven by all IQOS launch markets.
(SLIDE 7.)
Our total international share of 28.4% increased by 0.5 points -- our highest organic
growth since 2008 -- driven by heated tobacco units, which reached a share of 1.6%.
Share grew in all six of our Regions, underlining the strength of our combined portfolio.
(SLIDE 8.)
Importantly, our share of the international cigarette category was stable at 27.4%, despite
over-indexed IQOS out-switching and the shift of resources to heated tobacco products.
Marlboro’s international share of the cigarette category was also stable, with share growthacross a range of markets.
(SLIDE 9.)
On a currency-neutral basis:Net revenues increased by 3.4%, driven by a combustible tobacco pricing
variance of 7.6% and the strong volume contribution from our reduced-risk
products;
Adjusted operating income was essentially flat, while adjusted operating income
margin decreased by 1.3 points, primarily reflecting the impact of net incremental
investments of approximately $600 million behind RRPs; andAdjusted diluted EPS increased by 10.4%, driven notably by both a lower effective
tax rate and lower net interest expense.
(SLIDE 10.)

Importantly, we are progressing against our ambition for a smoke-free future. In 2018,
RRPs accounted for over 5% of our total shipment volume and nearly 14% of our total
net revenues, or over $4 billion. This marks substantial progress since 2015.
Demonstrating our commitment to a smoke-free future, our R&D and commercial
expenditures behind RRPs reached 92% and 60%, respectively, of our total related
expenditures in 2018.

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(SLIDE 11.)
Building on our robust overall financial and strategic performance last year, we are off toa promising start in 2019.
Positive momentum for our combustible tobacco and smoke-free product portfolios drove
total volume and share growth in the first quarter of 1.1% and 1.0 percentage point,respectively…
(SLIDE 12.)…as well as strong currency-neutral adjusted financial results, including adjusted diluted
EPS growth of 15.0%.
(SLIDE 13.)
While our sequential HTU shipment volume progression in the first quarter was impacted
by inventory movements, our HTU in-market sales volume increased by nearly 11% toapproximately 13 billion units. In-market sales volume growth versus the first quarter oflast year was nearly 35%.
For the full year, we anticipate HTU shipment volume broadly in line with our in-market
sales volume, with any HTU net inventory movements in individual markets essentially
offsetting on an aggregate basis.
(SLIDE 14.)
I will now cover the strong fundamentals supporting our combustible tobacco business –which represents the majority of our earnings and cash flow – as well as our strategy forcontinued category leadership.
(SLIDE 15.)
The annual decline in total industry volume – including cigarettes and heated tobacco
units – has averaged 2.3% since 2014, the year we launched IQOS in pilot cities.
While total industry volume in a given year can be impacted by specific factors inindividual markets, we see no major changes to the underlying multi-year trend going
forward and anticipate a decline of 2.5% to 3.0% in 2019, which may prove to beconservative.
The growth of smoke-free products, led by IQOS, has driven a shift in the composition ofindustry volume, reflecting a higher decline rate for the cigarette category as adultsmokers out-switch to these alternatives, and we expect this to continue.

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(SLIDE 16.)
Combustible tobacco pricing also remains consistent with historical trends, largely
reflecting the rational global excise tax environment and competitive landscape.
Since 2008, our combustible tobacco annual pricing variance has ranged from 5.2% to
7.7%, with year-to-year variability that mainly reflects the timing and level of excise tax
and retail selling price increases. Importantly, cigarette price elasticities have remained
stable in a range of -0.3 to -0.5.
The fundamental strength of our cigarette brand portfolio continues. For 2019, we
anticipate a combustible tobacco pricing variance above 5%, despite a challenging
comparison with 2018.
(SLIDE 17.)
As we transition our product portfolio to reduced-risk products, we are committed tomaintaining our cigarette market leadership, and price positioning for our cigarette brands
at the top of their respective segments.
To achieve this, we have a focused innovation strategy that entails fewer, more impactful
initiatives that can be deployed swiftly in any market.
This strategy is complemented by portfolio rationalization, largely through brand morphing
and the elimination of low-volume SKUs.
(SLIDE 18.)
Turning to our reduced-risk product portfolio, it is our ambition to build our future on
smoke-free products that are a much better choice than cigarettes for the millions of adultsmokers, as well as for the people around them.
We offer, and will continue to offer, adult consumers an array of breakthrough products
so that they can make the better choices they undeniably deserve. This in turn will offer
our shareholders much more sustainable business growth for many years to come.
(SLIDE 19.)
I would like to reiterate the three strategic pillars supporting our smoke-free ambition:
adult consumer satisfaction, key external stakeholder engagement and organizational
readiness. We are absolutely focused on executing these seamlessly.

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(SLIDE 20.)Let’s begin with consumers. Convincing them to switch out of cigarettes is not an easytask. It depends on personal preferences and beliefs, health concerns, cultural traits,
regulatory environments and the point in time of their conversion journey.
One type of product is unlikely to be the answer. This is the reason we adopted a portfolio
approach for our smoke-free products, from heated tobacco to non-tobacco nicotinecontaining aerosol.
But all these products will carry certain fundamental characteristics for our consumers:






The best taste and satisfaction in their respective category;
A much better choice than smoking cigarettes for those who switch to them andthe people around them;
Unparalleled and transparent scientific substantiation of their harm reduction
potential, to build trust and understanding among consumers and regulators;
Iconic design language, user experience ecosystems and brand image; andExcellent service and care across all consumer touch points.

In other words, we aim for products that are the most worthy of adult smokers’ efforts toswitch out of cigarettes and never go back.
(SLIDE 21.)
Our vision of a smoke-free future is supported by a long-established policy to ensure that
our entire effort is to switch adult smokers. These Good Conversion Practices serve as
the company’s bedrock for encouraging adult smokers to switch while working to prevent
unintended use in the countries where we sell reduced-risk products.
(SLIDE 22.)And let me be clear about our unwavering focus on preventing youth from beginning tosmoke or use nicotine products.
We fully support legal age limits for the purchase of tobacco and nicotine products
worldwide. Age limits can play an important role in further guarding against youth use ofsuch products, together with access control through age verification at retail andeducation that has to expand from cigarette smoking prevention to the use of any nicotine
product.
However, that effort must first begin with companies themselves as technology evolves.
Smoke-free product manufacturers must have the right approach, the right product andthe right science, as well as robust post-market surveillance programs to ensure newtobacco and nicotine technologies reach their intended audience – the men and women
who currently smoke.
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(SLIDE 23.)
Our second strategy focuses on key external stakeholders, including regulators, thescientific community and NGOs. We are eager to see fiscal and regulatory measures
introduced that drive large-scale switching as quickly as possible.
In this regard, we have recently launched the “Year of Unsmoke,” an urgent call to action
to smokers, nonsmokers, regulators and agents of change across the world to drive a
better future for the world’s 1.1 billion smokers and their families, loved ones andcommunities. The message is simple: If you don’t smoke, don’t start. If you smoke, quit.
If you don't quit, change to alternatives that are less harmful than continued smoking.
With regard to our products, we have put in place a rigorous and transparent scientificpre- and post-market assessment program that is unmatched in the industry. This
program has become a cornerstone of our external engagement, in which we advocate
for public health authorities and policy makers to adopt the same evidence-based
approach to designing regulations that foster healthier consumer behavior compared tocontinued smoking.
(SLIDE 24.)In this context, we are very pleased that, yesterday, the U.S. Food and Drug
Administration (FDA) confirmed that IQOS is appropriate for the protection of public healthand has authorized it for sale in the United States. The FDA’s decision follows its
comprehensive assessment and rigorous science-based review of PMI’s premarket
tobacco product applications (PMTAs) filed with the Agency in 2017.
The FDA’s decision to authorize IQOS in the U.S. is a historic milestone and an important
step forward for the approximately 40 million American men and women who smoke.
Some will quit. Most won’t, and for them IQOS offers a smoke-free alternative to continued
smoking. Yesterday’s decision by the FDA makes this opportunity available to American
adult smokers.
The order sets out clear commercialization guidelines, including marketing requirements,that maximize the opportunity for adults to switch from cigarettes, while minimizing
unintended use. We fully support this approach. The FDA has set a high standard andwe look forward to working with them to implement the order so that IQOS is reaching theright audience – current adult smokers.
We will bring IQOS to the U.S. market through an exclusive license with Altria Group, Inc.,
whose subsidiary Philip Morris USA has the market expertise and infrastructure to ensure
a successful launch. PM USA is ready to deploy its initial lead market plans for IQOS.

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We submitted a comprehensive body of scientific evidence in support of the PMTAs andof the parallel applications for IQOS as a “Modified Risk Tobacco Product,” which FDA
continues to review.
(SLIDE 25.)
The third strategy focuses on our internal capabilities so that our organization is always
fit-for-purpose and at the leading edge of technology, science and user experience.
This means:Developing or acquiring new technical skills, and implementing more agile,
entrepreneurial structures and practices enabled by digitalization;
Developing new products and services not only internally, but also throughpartnerships and acquisitions; andDriving efficiency through every level of our operations to liberate resources andreallocate them to where they will have the maximum benefit.
(SLIDE 26.)

Let me now turn my remarks specifically to IQOS, the leading international smoke-free
product, which is now commercially available in key cities or nationwide in 47 markets
across five of our six Regions.
(SLIDE 27.)
IQOS reached a key milestone in the first quarter, surpassing ten million users.
Importantly, approximately 70% of the total have stopped smoking and switched to IQOS,
with the balance in various stages of conversion.
(SLIDE 28.)
As announced last year, we began the global launch of our IQOS 3 devices in midNovember, starting with our own retail and e-commerce channels. The upgraded IQOS 3
notably provides continued superior sensorial experience, longer battery life, a moreintuitive user interface and improved robustness, while the IQOS 3 MULTI addresses theconsumer need – in some markets – of sequential use. Importantly, both devices allow
for personalization through a broad portfolio of accessories.
Though still early, as full device availability and expansion to our main distribution
channels only occurred during the first quarter, we are very pleased by the initialconsumer reaction to the new device line-up across IQOS markets.

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(SLIDE 29.)
The success of IQOS is broad-based, as evidenced by the HTU national market sharedata on this slide, and reflects a range of countries with varying regulatory frameworks
and adult smoker preferences.
(SLIDE 30.)
In particular, I would like to highlight the recent performance of Japan, our most successful
IQOS market.
Our share for HeatSticks and HEETS reached 16.9% in the first quarter, marking our first
sequential share growth since the first quarter of 2018 and the highest quarterly sharethat we have achieved in the market.
This suggests that the range of initiatives for restoring share growth that I initially outlined
last May during this very meeting -- and introduced during the second half of the year -are indeed starting to pay off.
(SLIDE 31.)
I would also like to highlight our first-quarter offtake shares in select cities. These citylevel performances compare very favorably to the corresponding national shares andprovide an encouraging indicator of the opportunity that can come with broader focus andsupport in IQOS markets.
(SLIDE 32.)
I believe we have laid the foundation for strong business performance in 2019 andbeyond, thanks to significant investments in product portfolio development andorganizational capabilities.
As we announced in our press release today, we are re-affirming our 2019 reported
diluted EPS guidance provided on April 18th, at then prevailing exchange rates. Excluding
reporting adjustments of $0.22 per share, our guidance represents a currency-neutral,like-for-like adjusted growth rate of at least 8%, and assumes net revenue growth of atleast 5% and operating income margin expansion of at least 100 basis points, on thesame basis.
As explained in detail in our first-quarter earnings press release, the like-for-likecomparison reflects the adjustment of our 2018 results for the deconsolidation of our
Canadian subsidiary, Rothmans, Benson & Hedges Inc., effective March 22, 2019.

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(SLIDE 33.)
This forecast is consistent with the compound annual currency-neutral growth targets –outlined during our Investor Day last September – for net revenues and adjusted diluted
EPS of at least 5% and 8%, respectively, for the 2019 to 2021 period.
(SLIDE 34.)
The strong overall performance and favorable momentum for IQOS, supported by our
unmatched innovation machine, further underscores our confidence in the 90 to 100
billion heated tobacco unit shipment volume target for 2021 that we first provided at
Investor Day last year.
(SLIDE 35.)
Before concluding my business presentation today, I would like to share a few words on
the subject of sustainability.
Our ambition is to make PMI a true leader in sustainable business practices. We need to
excel in many areas, starting first and foremost with our products.
Our sustainability strategy is a key element of PMI's overall business strategy, and is
structured around four pillars that enable our vision of a smoke-free future.
These are:Transforming our business;
Driving operational excellence;Managing our social impact; andReducing our environmental impact.
(SLIDE 36.)

In this context, I would like to highlight two recent achievements. First, for the fifth year ina row, our company is on CDP’s Climate A-List for our comprehensive action to reducegreenhouse gas emissions and mitigate climate change, and for transparency in ourreporting practices. Second, earlier this year, PMl became the first international company
to achieve global EQUAL-SALARY certification, a key milestone on our inclusion anddiversity journey to creating a more gender-balanced organization.
Later this month, we will publish our 2018 Sustainability Report, which will be available
on our website. I would encourage you to read about these achievements in more detail,as well as the significant progress we are making in other important areas.

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(SLIDE 37.)
To conclude my remarks, I would like to leave you with some key messages.
We recorded robust overall results in 2018 and are positioned for strong businessperformance in 2019 and beyond.
Our combustible tobacco portfolio remains the foundation of our business, supported bypricing and other industry fundamentals consistent with historical trends.
IQOS continues to grow globally, with an increasing number of markets making animportant contribution to its success.
We are convinced that our smoke-free strategy continues to provide us with the singlelargest opportunity to accelerate business growth.
Finally, while dividends remain at the Board’s discretion, we are committed to generously
rewarding our shareholders over time.
(SLIDE 38.)
Thank you for your interest in our company. I will now turn the podium back to Louis.
(SLIDE 39.)
Thank you very much, André.
I will now open the meeting for questions and comments. This period will be followed by
the resolution of items for voting.
I would ask that we all remember that this meeting represents an opportunity forshareholders, or their representatives, to express their views, whether favorable orotherwise. While I value highly the chance to listen to your opinions and address yourquestions, I do expect the process to be based on mutual respect for the differing views
represented in the audience.
As noted in the Agenda, each speaker is kindly asked to limit his or her comments to two
minutes to allow everyone an opportunity to be heard. Shareholders should confine theirremarks to matters that relate directly to the business of the meeting.
Also, please note that those who wish to speak a second time may do so only after allothers who wish to speak have had their turn.
I have asked Jerry to serve as our timekeeper, so that everyone will have an equal amountof time.

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We have allowed up to one hour for questions. There is a microphone in each of the twoaisles.
If there is not enough time for all of your questions during this morning's meeting, pleasefeel free to ask an usher for a card, fill it out and return it to an usher at the end of themeeting. We will respond to you as soon as possible.
Please address all of your questions or comments directly to me, and be kind enough to
identify yourself.
Are there any questions or comments?
That concludes our question and comment period. We will now move on to the next stageof the meeting.
(SLIDE 40.)
The matters set forth in the notice of meeting will be put before the meeting at this time.
Comments on each matter can be made after each one has been formally presented.
Now, I would like to ask the ushers to distribute Proxy Cards to any shareholders who
may not have returned their proxies for voting on the matters to come before the meeting.
Shareholders who have already returned proxies need not submit a new Proxy Card. If
anyone requires a Proxy Card, please raise your hand.
The ushers will collect these cards, and deliver them to the Inspectors of Election, after
the final item of business has been presented.
(SLIDE 41.)
Before I continue, I would like to say that all of us at PMI were deeply saddened by thepassing of Board member Sergio Marchionne last year and former Board member Harold
Brown earlier this year; Mr. Brown had retired from the Board in October 2018.
Both had served as Directors with distinction since our transition to a public company inMarch 2008. They brought invaluable business and strategic insights to PMI’s Board, andwe benefited tremendously from their dedicated service. They will be sorely missed.
(SLIDE 42.)
The first order of business is the election of twelve directors.
The individuals on this slide have been nominated for election as director, each to holdoffice until the next Annual Meeting of Shareholders and until his or her successor shallhave been duly chosen.
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(SLIDE 43.)
In accordance with the Company's by-laws, no other nominations may be made at thistime.
If you would like to comment on the nominations, please proceed to a microphone.
Again, each speaker is asked to limit his or her comments to two minutes.
Please identify yourself before you begin.
The meeting is now open for comments on the nominations.
Are there any comments?
Thank you.
We will now turn to the second item on the agenda, that the Company’s shareholders
approve, on an advisory basis, the compensation of the named executive officers, as
disclosed in the Company’s Proxy Statement for the 2019 Annual Meeting of
Shareholders.
Are there any comments on this matter?
Thank you.
The final item is the ratification of the selection of PricewaterhouseCoopers as
independent auditors of the Company for the fiscal year ending December 31, 2019.
Are there any comments on this matter?
Thank you.
The matters to be voted on have now been formally presented to the meeting. If you havenot already done so, please complete your Proxy Card. After you have done so, raise
your hand and the ushers will collect all the Proxy Cards and deliver them to theInspectors of Election.
Since all shareholders have now had time to vote, I declare the polls closed.
The ushers should now have collected all the proxies, and they are directed to deliver theproxies to the Inspectors of Election for counting.
Before I ask the Inspectors of Election to deliver their final report, I would like to make a
few closing remarks.
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You heard from André earlier that we closed out 2018 with a robust financial and strategic
performance across the business and believe we have laid the foundation for an evenbetter performance in 2019 and beyond.
Our company is undergoing an unprecedented transformation to a smoke-free future, achange that is allowing us to play a pivotal role in improving the lives of adult smokers,
while securing the long-term future of the company and the sustainability of our earningsand dividend growth for years to come. It is the biggest shift in our history, and I am
convinced that it will prove to be the right change for our consumers, our company, ourshareholders, and society.
But change does not happen in a vacuum. It needs architects and champions. With a
Board of Directors of exceptional experience, a talented management leadership team,and some 77,000 supremely professional and dedicated employees around the world, I
have no doubt that we have the best people in place to make our vision a reality. It is my
privilege to ask you to join with me now in saluting them all.
Thank you.
I will now ask one of the Inspectors of Election to deliver their report to the Secretary.
Will the Secretary please read the report.
Mr. Chairman, the Inspectors of Election have completed the preliminary count of thevote, which I have now received. The preliminary voting results are as follows:
Each of the nominees for director has been elected.
The executive compensation has been approved on an advisory basis.
The selection of PricewaterhouseCoopers as independent auditors has been ratified.
Mr. Chairman, that concludes the report.
Thank you, Jerry.
I would now ask you to file with the records of the meeting, the Inspector's Report, theoath of the Inspectors of Election, their certificate and the proxies. Final voting results will
be included in a Form 8-K that we will file with the SEC in the next couple of days.
And now, there being no further business to come before the meeting, I hereby declarethe meeting adjourned. Thank you all very much for coming.

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