Delivering a Smoke-Free Future2019 Third-Quarter Results
October 17, 2019

Introduction• A glossary of key terms and definitions, including the definition for reduced-risk
products, or "RRPs," as well as adjustments, other calculations and reconciliations to themost directly comparable U.S. GAAP measures, 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 2018 results,
which have been adjusted for the deconsolidation of our Canadian subsidiary, Rothmans,
Benson & Hedges, Inc. (RBH), effective March 22, 20192

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; healthconcerns relating to the use of tobacco products and exposure to environmental tobacco smoke; litigation related to tobacco use; intensecompetition; 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; adversechanges 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 brandequity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brandportfolio 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 the Form 10-Q for the quarter
ended June 30, 2019. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks anduncertainties. 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 obligations3Q3, 2019: Strong Underlying Business PerformanceQ3, 2019 Growth vs. PY(ex-currency, like-for-like basis)(July 18th)

Disclosure

ActualNet Revenues

<6%

7.0%

Adjusted
Diluted EPS

Essentially
flat

5.9%

Source: PMI Financials or estimates• Includes better-than-anticipated timingof pricing and costs vs. previously
communicated assumptions• Reported results impacted by a $315
million after-tax charge in Russia:⎼ Final assessment by the Moscow tax
authorities related to excise taxes and VAT forthe 2015-2017 period4Q3, 2019: Total PMI Volume(Like-for-Like Change vs. PY)

IMS Volume Decline Notably Due To:
Shipments

Pakistan

IMS(a)
Pakistan(0.8)pp

Turkey(1.4)%(0.8)ppIndonesia(0.7)ppOther(3.6)%(a) Excluding China and the U.S.
Source: PMI Financials or estimates̴ 2/3• Timing of excise tax increase announcements
vs. last year
• Impact of price increases

Turkey• Impact of two price increases in 2019, whichdisproportionately impacted our share (given
timing of our price increases vs. competition)

Indonesia• Lower share primarily due to widened pricegaps
5Q3, 2019: PMI HTU Shipment Growth Continues

16billion unitsHTU IMS Volume:+28.3% vs. PY
Source: PMI Financials or estimates6

Q3, 2019: Adjusted Financial Results
Growth vs. PY(ex-currency, like-for-like basis)• Currency-neutral like-for-like net revenue growth driven by:⎼ Higher HTU shipment volume⎼ Favorable pricing for combustible tobacco portfolio⎼ Partly offset by lower cigarette shipment volume

7.0%
Net
Revenues
Source: PMI Financials or estimates

Adjusted
OI

Adjusted
Diluted EPS
7

Q3, 2019: Strong Combustible Tobacco Pricing

Variance of 5.9%(a)Driven notably byGermany, Indonesia, Mexico,
the Philippines, Russia and Turkey(a) Reflects combustible tobacco pricing as a % of PY combustible tobacco net revenues, on a like-for-like basis
Source: PMI Financials or estimates8

Q3, 2019: Adjusted Financial Results
Growth vs. PY(ex-currency, like-for-like basis)• Currency-neutral like-for-like net revenue growth driven by:⎼ Higher HTU shipment volume⎼ Favorable pricing for combustible tobacco portfolio⎼ Partly offset by lower cigarette shipment volume• 40bps currency-neutral like-for-like adjusted OI marginincrease, despite net incremental investment behind RRPs
of approximately $170 million:⎼ Driven primarily by favorable geographic mix related to HTUs
⎼ Also benefited from the timing of costs, as certain expenditures
initially planned for Q3 were not incurred by quarter-end

7.0%

8.0%

Net
Revenues

Adjusted
OI

Source: PMI Financials or estimates

Adjusted
Diluted EPS
9

Q3, 2019: Adjusted Financial Results
Growth vs. PY(ex-currency, like-for-like basis)• Currency-neutral like-for-like net revenue growth driven by:⎼ Higher HTU shipment volume⎼ Favorable pricing for combustible tobacco portfolio⎼ Partly offset by lower cigarette shipment volume• 40bps currency-neutral like-for-like adjusted OI marginincrease, despite net incremental investment behind RRPs
of approximately $170 million:⎼ Driven primarily by favorable geographic mix related to HTUs
⎼ Also benefited from the timing of costs, as certain expenditures
initially planned for Q3 were not incurred by quarter-end

7.0%

8.0%

5.9%

Net
Revenues

Adjusted
OI

Adjusted
Diluted EPS

Source: PMI Financials or estimates• Lower like-for-like currency-neutral growth in adjusted
diluted EPS vs. adjusted OI, notably reflected high relative
growth contribution from markets with sizable noncontrolling interests (e.g., the Philippines with 50%)10

Q3, 2019: Essentially Flat Total SoM; Strong HTU Growth

20%

28.9%

Total PMI

28.8%

1.7%

HTUs

2.3%

+0.6pp27.1%

Cigarettes

26.5%(0.6)ppQ3, 2018

Q3, 2019

Note: Excluding China and the U.S. Current view (reflecting the deconsolidation, PMI’s total market share has been restated for previous periods). Sales volume of PMI cigarettes and HTUs as apercentage of the total industry sales volume for cigarettes and HTUs. Sum of product categories does not foot due to rounding
Source: PMI Financials or estimates11Q3, 2019: Strong Marlboro Cigarette Share Performance
27.7%

Total PMI

27.3%

Other

10.0
Q3, 2018

Marlboro

10.2+0.2ppQ3, 2019

Note: Excluding China and the U.S. Current view (reflecting the deconsolidation, PMI’s total market share has been restated for previous periods). Sales volume of PMI cigarettes as a percentageof the total industry sales volume for cigarettes
Source: PMI Financials or estimates
12Indonesia: PMI Cigarette Market Share
(%)

33.0

31.7
Other

12.8

Sampoerna A

11.0

9.4

Dji Sam Soe

10.9

5.9

Marlboro

5.8

Q3, 2018
Source: PMI Financials or estimates• Share decline primarily reflects theimpact of widened price gaps
between Sampoerna A (notably A Mild)and competitive brands, particularly
at the bottom of the market• We increased prices in late-2018 inanticipation of a 2019 excise tax
increase that ultimately did notmaterialize:⎼ Competitors largely maintained their prices,leading to the widened price gaps this year

Q3, 2019
13

Q3, 2019: Surpassed 12 Million IQOS Users(in millions)

Total IQOS users(a)Estimated users who are in various
stages of conversion to IQOS(a)Estimated users who havestopped smoking and switched
to IQOS(a)

8.3

12.4
11.3

10.4
9.6

8.8

7.6

3.0

67%

67%

67%

69%

70%

70%

71%

Q1

Q2
Q3
2018

Q4

Q1

Q2
2019

Q3

(a) See Glossary for definition
Source: PMI Financials or estimates, IQOS user panels and PMI Market Research

14

IQOS Available for Sale in 51 Markets Worldwide
Available for sale(a)(a) IQOS 2.4 Plus internationally, IQOS 2.4 in the U.S.
Note: Status at October 17, 2019. Reflects markets where IQOS is available in key cities or nationwide. The number of markets includes Duty Free

15

IQOS
Now Available
in the U.S.
Only heat-not-burn productauthorized through
FDA’s PMTA pathway as"appropriate for theprotection of public health"16

Global IQOS 3 DUO Launch Initiated# Uses Before
Recharging
Holder2

1

1

Average Holder
Recharge Timeafter 1 use

1min 50secs(a)3mins 30secs

4mins 10secs(a) Charging time from 0 to 1 use: 1min 50secs; from 1 to 2 uses: 3mins 25secs; from 0 to 2 uses: 5mins 15secs

17

Q3, 2019: PMI HTUs – Fourth-Largest Tobacco Brand
in IQOS Markets
Share in IQOS Markets
10.8%

5.1%

4.0%

#4
Marlboro

WinstonRothmans

PMI HTUs

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

L&M
18

EU Region: HEETS Share Growth Continues
2.5%

Sequential Performance(vs. Q2, 2019)+1.3pp

SoM: +0.1pp
IMS Volume: +9.3%

1.2%

Q3, 2018

Q3, 2019

Note: HTU market shares for select EU Region markets provided in the appendix
Source: PMI Financials or estimates

19

Russia: Strong HEETS Share Growth Continues
4.0%

Sequential Performance(vs. Q2, 2019)

SoM: +1.1pp
IMS Volume: +41.0%+2.9pp1.1%

Q3, 2018
Note: Includes Parliament HeatSticks in Q3, 2018
Source: PMI Financials or estimates

Q3, 2019
20

Japan: H2, 2018 Initiatives Driving Step-up in
PMI HTU Share Performance
17.0%
15.5%

+1.5ppSequential Performance(vs. Q2, 2019)

SoM: +0.4pp
Adjusted SoM: Stable(a)Q3, 2018

Q3, 2019(a) Excluding the impact of estimated trade inventory movements
Source: PMI Financials or estimates

21

Japan: PMI HTU Offtake Share Growth
2019 Weekly Offtake SoM
18.3%

17.5%

Jun 30

17.8%
17.4%

Jul 28

Sept 1

Sept 29

Week Ending
Note: Offtake shares represent select C-Store sales volume for PMI HTUs as a percentage of the total retail sales volume for cigarettes and HTUs in these C-StoresSource: PMI Financials or estimates

22

Korea: A Highly Competitive Environment
HEETS IMS SoM
Adjusted(a):7.3%(1.0)pp2019 HEETS Weekly Offtake SoS

6.3%

7.4%

65.7%
(1.2)ppQ3, 2018

64.7%
6.2%

Q3, 2019

March 31

63.5%

June 30

September 29

Week Ending(a) Excluding the impact of estimated trade inventory movements
Source: PMI Financials or estimates

23

2019: Revising EPS Guidance for Russia Tax Audit Charge• Revising our 2019 reported diluted EPS guidance, at prevailing exchange rates, to beat least $4.73, compared to $5.08 in 2018
• 21-cent decrease (vs. July 18th guidance) predominantly due to the $315 million aftertax charge in Russia• Guidance continues to include an unfavorable currency impact, at prevailing exchange
rates, of approximately $0.14 per share

Source: PMI Financials or estimates24

2019: EPS Guidance($/share)Full-Year2019
Forecast2018≥ $4.73 (a)$5.08- Tax items(0.04)

0.02- Asset impairment and exit costs

0.04
̶- Canadian tobacco litigation-related expense

0.09
̶- Loss on deconsolidation of RBH

0.12
̶

- Russia excise and VAT audit charge

0.20
̶

$5.14

$5.10

Reported Diluted EPS

Adjusted Diluted EPS(0.26)(b)- Net earnings attributable to RBH
Adjusted Diluted EPS- Currency
Adjusted Diluted EPS, excluding currency

Adjusted
Growth$5.14$4.84 (c)(0.14)≥ $5.28$4.84 (c)≥ 9%(a) Reflects the exclusion of previously anticipated net EPS of approximately $0.28 attributable to RBH from March 22, 2019 through December 31, 2019. The impact relating to the eight-day
stub period was not material(b) Net reported diluted EPS attributable to RBH from March 22, 2018 through December 31, 2018(c) Pro forma
Source: PMI Financials or estimates25

2019: Select Guidance Assumptions
Industry
Total Volume

%
(2.5)
̴

excluding China and the U.S.

PMI Total
Shipments(a)%%(1.0) -(1.5)

PMI HTU
Shipments

Broadly in line with
our HTU IMS volume(a) Like-for-like basis
Source: PMI Financials or estimates̴vs. (1.0)% previously

Reflects impact of recent cigaretteprice increases in select markets(notably the Philippines and Turkey)

Inventory movements this year inindividual markets essentially
offsetting on an aggregate basis

26

2019: Select Guidance Assumptions (cont.)
Net
Revenue Growth≥6%

Net Incremental
Investments in RRPs

̴ $400

millionex-currency, like-for-like basis

ex-currency

Combustible Tobacco
Pricing Variance(a)Adjusted OI
Margin Expansion

%
̴6

bps
̴ 150

like-for-like basis(vs. >5% previously)

ex-currency, like-for-like basis(vs. ≥100bps previously)(a) Reflects combustible tobacco pricing as a % of PY combustible tobacco net revenues
Source: PMI Financials or estimates27

2019: Cash Flow
• Anticipate operating cash flow of approximately $9.2 billion, subject to year-end working
capital requirements (vs. approximately $9.5 billion, previously):⎼ Change reflects the impact of the after-tax charge in Russia• Expect capital expenditures of approximately $1 billion (vs. approximately $1.1 billion,
previously)• Dividends remain the primary use of our operating cash flow after capital expenditures• In September, we increased our quarterly dividend rate by 2.6% to $1.17 per share

Note: Operating cash flows is net cash provided by operating activities
Source: PMI Financials or estimates28

Q4, 2019: Outlook
Net Revenues and Adjusted Operating Income• We expect like-for-like currency-neutral growth to be in line with YTD September, 2019 results

Adjusted Diluted EPS• Like-for-like currency-neutral growth will be lower than our YTD September, 2019 performancedue to the following factors:⎼ An unfavorable income tax rate comparison of roughly four percentage points vs. Q4, 2018, during which ourthree-month tax rate benefited from the full-year impact of further clarifications related to the U.S. Tax Cuts
and Jobs Act⎼ A continued high relative adjusted OI growth contribution from markets with sizable non-controlling interests

Source: PMI Financials or estimates

29

Strong Underlying
Q3 Performance• Fundamentals supporting our strong
combustible tobacco portfolio are intact• Favorable momentum for IQOS
continues across geographies:⎼ Confidence in HTU shipment volume target of
90 to 100 billion units by 2021

• On a currency-neutral like-for-like basis,
maintaining:⎼ 2019 growth assumption for net revenues of ≥6%⎼ Anticipated 2019 growth rate for adjusted
diluted EPS of ≥9%
Source: PMI Financials or estimates

30

Delivering a Smoke-Free Future2019 Third-Quarter Results
Questions & Answers
Have you downloaded the PMI Investor Relations App yet?
The free IR App is available to download at the Apple App Storefor iOS devices and at Google Play for Android mobile devices
Or go to: www.pmi.com/irapp

iOS Download

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Delivering a Smoke-Free Future2019 Third-Quarter Results
October 17, 2019

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

33

EU Region: HEETS Share Growth Across Markets
Q3, 2019

Growthvs. PYQ3, 2019

Growthvs. PY

Bulgaria

3.7%+0.6ppCroatia

3.1

Czech
Republic

Q3, 2019

Growthvs. PY

Hungary

2.2%+2.2ppPortugal

6.2%+3.4pp

+2.2

Italy

4.6

+2.6

Romania

2.1

+0.5

5.8

+3.3

Latvia5.9+5.2

SlovakRepublic

7.0

+3.6

Germany

1.1+0.6

Lithuania

14.9

+9.3

Slovenia

3.0

+1.5

Greece7.8+3.1

Poland2.4+1.5

Switz.

2.5+0.9

Note: Select markets where HEETS share is ≥ 1%. Switz. is Switzerland
Source: PMI Financials or estimates

34

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 performancereflect cigarettes and heated tobacco units• References to total international market, defined as worldwide cigarette and heated tobacco unit volume excluding the UnitedStates, total industry, total market and market shares are PMI estimates for tax-paid products based on the latest available datafrom 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 andcigarillos, 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
35

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 toreport the volume of brands sold by RBH for which other PMI subsidiaries are the trademark owner. These include HEETS, Next,
Philip Morris and Rooftop, which accounted for approximately 40% of RBH's total shipment volume in 2018

• From time to time, PMI’s shipment volumes are subject to the impact of distributor inventory movements, and estimated totalindustry/market volumes are subject to the impact of inventory movements in various trade channels that include estimatedtrade 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, timingof excise tax increases or other influences that may affect the timing of sales to customers. In such instances, in addition toreviewing 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 insuch 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• "SoM" stands for share of market• "SoS" stands for share of segment
36

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 othernicotine-containing products, primarily e-vapor products, including shipping and handling charges billed to customers, net ofsales and promotion incentives, and excise taxes. PMI recognizes revenue when control is transferred to the customer, typicallyeither upon shipment or delivery of goods.
• "Adjusted Operating Income (OI) Margin" is calculated as adjusted OI, divided by net revenues• 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 andother 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 quarterand year-to-date, see Schedule 3 in PMI's third-quarter 2019 earnings release37

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 thepotential 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 cigarettesmoke• "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 thecompany's HEETS, 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 bymarket, 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

38

Glossary: Reduced-Risk Products (cont.)• "Total IQOS users" means the estimated number of Legal Age (minimum 18-year-old) IQOS users that used PMI HTUs for atleast 5% of their daily tobacco consumption over the past seven days• "Converted IQOS Users" means the estimated number of Legal Age (minimum 18-year-old) IQOS users that used PMI HTUs
for over 95% of their daily tobacco consumption over the past seven days
• "Predominant IQOS Users" means the estimated number of Legal Age (minimum 18-year-old) 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" means the estimated number of Legal Age (minimum 18-year-old) 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" means the estimated number of Legal Age (minimum 18-year-old) IQOS users that used PMI HTUs
for less than 5% of their daily tobacco consumption over the past seven days
• New PMI methodology as of 2018 for estimating the number of people who have stopped smoking and made the change to
IQOS: for markets where IQOS is the only heated tobacco product, daily individual consumption of PMI HTUs represents thetotality of their daily tobacco consumption in the past seven days. For markets where IQOS is one among other heated
tobacco products, daily individual consumption of HTUs represents the totality of their daily tobacco consumption in the pastseven 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

39

Glossary: IQOS in the United States• On April 30, 2019, the U.S. Food and Drug Administration (FDA) announced that the marketing of IQOS, PMI's electricallyheated tobacco system, is appropriate for the protection of public health and authorized it for sale in the United States. 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 the IQOS device and three variants of its heated tobacco
units (the term PMI uses to refer to heated tobacco consumables) to the U.S. through its license with Altria Group, Inc., whosesubsidiary, Philip Morris USA, will market the product and comply with the provisions set forth in the FDA's marketing order• Shipment volume of heated tobacco units to the United States is included in the heated tobacco unit shipment volume of theLatin America & Canada segment. Revenues from shipments of the IQOS heated tobacco device, heated tobacco units andaccessories to Altria Group, Inc. for sale under license in the United States are included in Net Revenues of the Latin America& Canada segment

40

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 September 30,
Reported Diluted EPS
Currency
Reported Diluted EPS, excluding Currency

2019

2018

% Change$ 1.22$ 1.44(15.3)%$ 1.44(15.3)%$ 1.22

Quarters Ended September 30,

Year Ended

2019

2018

% Change$ 1.22$ 1.44(15.3)%

Asset impairment and exit costs

0.01

-

-

Russia excise and VAT audit charge

0.20

-

-

Tax items

-

-

0.02

$ 1.43$ 1.44(0.7)%$ 1.44(0.7)%

Reported Diluted EPS

Adjusted Diluted EPS
Currency
Adjusted Diluted EPS, excluding Currency

2018$ 5.08$ 5.10$ 1.4341

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

Quarters Ended September 30,
Adjusted Diluted EPS

(a)

2019

2018

% Change$ 1.43$ 1.44(0.7)%Net earnings attributable to RBH
Adjusted Diluted EPS
Currency
Adjusted Diluted EPS, excluding Currency(a) For the calculation, see previous slide(b) Pro forma(0.09)$ 1.43$ 1.35 (b)5.9%$ 1.35 (b)5.9%$ 1.4342

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

Net
Revenues
excludingCurrency

Currency

Acquisitions

Net
Revenues
excludingCurrency &Acquisitions

2019

Quarters Ended
September 30,

Net
Revenues

Reduced-Risk Products

2018

ExcludingCurrency &Acquisitions

ExcludingCurrency

Total% Change$ 467$ (17)

$ 484

$-

$ 484

European Union

$ 242

92.5%

99.6%

99.6%

235

(3)

238

-

238

Eastern Europe

73

+100%

+100%

+100%

63

1

62

-

62

Middle East & Africa

124(49.2)%(49.9)%(49.9)%

-

-

-

-

-

South & Southeast Asia

-

-

-

-

572

7

566

-

566

East Asia & Australia

377

51.6%

49.9%

49.9%

7

-

8

-

8

Latin America & Canada(a)

5

44.2%

50.5%

50.5%

$ 1,344$ (13)$ 1,358$-$ 1,358

Total RRPs

$ 823

63.4%

65.1%

65.1%

$ 2,645$ (98)$ 2,743$-$ 2,743

European Union

PMI

2019

% Change2018$ 2,467

7.2%

11.2%

11.2%
16.5%

899

(7)

906

-

906

Eastern Europe

778

15.6%

16.5%

1,127

(16)

1,143

-

1,143

Middle East & Africa

1,143(1.4)%

-

-

1,246

15

1,231

-

1,231

South & Southeast Asia

1,197

4.1%

2.8%

2.8%

1,252

(1)

1,253

-

1,253

East Asia & Australia

1,166

7.4%

7.5%

7.5%

473

(8)

481

-

481

Latin America & Canada

753(37.2)%(36.1)%(36.1)%$ 7,642$ (115)$ 7,757$-$ 7,757$ 7,504

1.8%

3.4%

3.4%

Total PMI(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

43

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

Quarters Ended September 30,
Net Revenues

2019

2018

% Change$ 7,642$ 7,504

1.8%

Net Revenues attributable to RBH
Net Revenues
Currency
Net Revenues, excluding Currency(a) Pro forma(253)$ 7,642$ 7,251 (a)5.4%$ 7,251 (a)

7.0%

(116)
$ 7,758

44

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
IncomeAsset
Impairment& Exit Costs

Adjusted
Operating
IncomeCurrency

Adjusted
Operating
IncomeexcludingCurrency

Adjusted
Operating
IncomeexcludingCurrency& Acquisitions

Acquisitions

Quarters Ended
September 30,

2019$ 1,255

Asset
Impairment& Exit Costs

Adjusted
Operating
Income

Total

2018

ExcludingCurrency

ExcludingCurrency& Acquisitions% Change$ 1,255$ (66)$ 1,321$-$ 1,321

European Union$ 1,179$-$ 1,179

6.4%

12.0%

12.0%

(101)

(374) (a)

273

25

248

-

248

Eastern Europe

270

-

270

1.1%

(8.1)%(8.1)%

519

-

519

4

515

-

515

Middle East & Africa

491

-

491

5.7%

4.9%

4.9%

539

-

539

19

520

-

520

South & Southeast Asia

455

-

455

18.5%

14.3%

14.3%

451

-

451

12

439

-

439

East Asia & Australia

426

-

426

5.9%

3.1%

3.1%

125

(22) (b)Latin America & Canada$ 2,788$-

Operating
Income$ (396)

147

(6)

153

-

153

$ 3,184$ (12)$ 3,196$-$ 3,196(a) Represents the Russia excise and VAT audit charge(b) Represents asset impairment and exit costs

Total PMI

335

-

335

(56.1)%(54.3)%(54.3)%$ 3,156$-$ 3,156

0.9%

1.3%

1.3%

45

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

Quarters Ended September 30,
Operating Income

2019

2018

% Change$ 2,788$ 3,156(11.7)%

Asset impairment and exit costs

(22)

-

Russia excise and VAT audit charge

(374)

-

Adjusted Operating Income$ 3,184

Operating Income attributable to RBH
Adjusted Operating Income
Currency
Adjusted Operating Income, excluding Currency(a) Pro forma$ 3,156

0.9%

(197)
$ 3,184$ 2,959 (a)7.6%$ 2,959 (a)

8.0%

(12)
$ 3,19646

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
OperatingNet
Operating
Income Revenues Income(a)MarginAdjusted
Adjusted
Net
OperatingOperating
Revenues
IncomeIncomeexcludingexcludingMarginCurrency
Currency
excluding(b)(a)
Currency

Adjusted
Operating
IncomeexcludingCurrency& Acquisitions (a)Adjusted
Net
Operating
Revenues Income
excluding Margin
Currency excluding& Acqui- Currency
sitions (b) & Acquisitions

Adjusted
Adjusted
OperatingNet
Operating
Income Revenues Income(a)MarginAdjusted
Adjusted Operating
Adjusted Operating Income
Operating Income
MarginIncomeMargin excluding
Margin excluding Currency
Currency & Acquisitions

2018% Points Change

Quarters Ended
September 30,

2019$ 1,255$ 2,64547.4%$ 1,321$ 2,743

48.2%$ 1,321$ 2,743

48.2%

European Union$ 1,179$ 2,467

47.8%

(0.4)

0.4

0.4

273

899

30.4%

248

906

27.4%

248

906

27.4%

Eastern Europe

270

778

34.7%

(4.3)

(7.3)

(7.3)

519

1,127

46.1%

515

1,143

45.1%

515

1,143

45.1%

Middle East & Africa

491

1,143

43.0%

3.1

2.1

2.1

539

1,246

43.3%

520

1,231

42.2%

520

1,231

42.2%

South & Southeast Asia

455

1,197

38.0%

5.3

4.2

4.2

451

1,252

36.0%

439

1,253

35.0%

439

1,253

35.0%

East Asia & Australia

426

1,166

36.5%

(0.5)

(1.5)

(1.5)

147

473

31.1%

153

481

31.8%

153

481

31.8%

Latin America & Canada$ 3,184$ 7,64241.7%$ 3,196$ 7,757

41.2%$ 3,196$ 7,757

41.2%

Total PMI

335

753

44.5%

(13.4)(12.7)(12.7)$ 3,156$ 7,504

42.1%

(0.4)

(0.9)

(0.9)

(a) For the calculation of Adjusted Operating Income and Adjusted Operating Income excluding currency and acquisitions refer to slide 45(b) For the calculation of Net Revenues excluding currency and acquisitions refer to slide 43

47

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

Quarters Ended September 30,
Adjusted Operating Income(a)

Net Revenues
Adjusted OI Margin

2019

2018

% Change$ 3,184$ 3,156

0.9%$ 7,642$ 7,504

1.8%

41.7%

42.1%

(0.4)

Adjusted OI Margin attributable to RBH
Adjusted OI Margin
Currency
Adjusted OI Margin, excluding Currency(a) For the calculation of Adjusted Operating Income refer to slide 45(b) Pro forma

(1.3)
41.7%

40.8% (b)0.9

40.8% (b)

0.4

0.5
41.2%

48

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

Reported Diluted EPS

QuarterEnded
Mar 31,

QuarterEnded
Jun 30,Six Months
Ended
Jun 30,Quarter
Ended
Sept 30,

Nine Months
Ended
Sept 30,

QuarterEnded
Dec 31,Year
Ended
Dec 31,

QuarterEnded
Mar 31,

2018

2018

2018

2018

2018

2018

2018

2019

$ 1.00$ 1.41$ 2.41$ 1.44$ 3.85$ 1.23$ 5.08$ 0.87

Asset impairment and exit costs

-

-

-

-

-

-

-

0.01

Canadian tobacco litigation-related expense

-

-

-

-

-

-

-

0.09

Loss on deconsolidation of RBH

-

-

-

-

-

-

-

0.12

Tax items

-

-

-

-

-

0.02

0.02

-

$ 1.00$ 1.41$ 2.41$ 1.44$ 3.85$ 1.25$ 5.10$ 1.09(c)(0.08)(0.08)(0.09)(0.18)(0.08)(0.26)-(b)$ 1.33$ 2.33$ 1.35$ 3.67$ 1.17$ 4.84

Adjusted Diluted EPS
Net earnings attributable to RBH-

Pro Forma Adjusted Diluted EPS$ 1.00

(a)

(a)

(a)

(a) Represents the impact of net earnings attributable to RBH from March 22, 2018 through end of period date(b) Represents the impact of net earnings attributable to RBH from March 22, 2019 through end of period date(c) Includes approximately $0.06 per share 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

(a)

49

Delivering a Smoke-Free Future2019 Third-Quarter Results
October 17, 2019