8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 21, 2011

Philip Morris International Inc.

(Exact name of registrant as specified in its charter)

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)

Registrant’s telephone number, including area code: (917) 663-2000

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

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

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On July 21, 2011, Philip Morris International Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2011 and held a live audio webcast to discuss such results. In connection with this webcast, the Company is furnishing to the Securities and Exchange Commission the following documents attached as exhibits to this Current Report on Form 8-K and incorporated herein by reference to this Item 2.02: the earnings release attached as Exhibit 99.1 hereto, the conference call transcript attached as Exhibit 99.2 hereto and the webcast slides attached as Exhibit 99.3 hereto.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing or document.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1	Philip Morris International Inc. Press Release dated July 21, 2011 (furnished pursuant to Item 2.02)
99.2	Conference Call Transcript dated July 21, 2011 (furnished pursuant to Item 2.02)
99.3	Webcast Slides dated July 21, 2011 (furnished pursuant to Item 2.02)

SIGNATURES

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

PHILIP MORRIS INTERNATIONAL INC.
By:	/s/ JERRY WHITSON
Name:	Jerry Whitson
Title:	Deputy General Counsel and Corporate Secretary

DATE: July 21, 2011

EXHIBIT INDEX

Exhibit No.	Description
99.1	Philip Morris International Inc. Press Release dated July 21, 2011 (furnished pursuant to Item 2.02)
99.2	Conference Call Transcript dated July 21, 2011 (furnished pursuant to Item 2.02)
99.3	Webcast Slides dated July 21, 2011 (furnished pursuant to Item 2.02)

EX-99.1

Exhibit 99.1

PHILIP MORRIS INTERNATIONAL INC. (PMI) REPORTS 2011 SECOND-QUARTER RESULTS;

INCREASES 2011 EPS GUIDANCE BY $0.15 TO A RANGE OF $4.70 TO $4.80

• Reported diluted earnings per share of $1.35, up by 26.2%, or by 14.0% excluding currency, versus $1.07 in 2010

• Adjusted diluted earnings per share of $1.34, as detailed in the attached Schedule 12, up by 34.0%, or by 21.0% excluding currency, versus $1.00 in 2010

• Reported net revenues, excluding excise taxes, up by 17.2% to $8.3 billion, or by 10.2% excluding currency

• Reported operating companies income up by 27.1% to $3.8 billion, or by 16.5% excluding currency

• Adjusted operating companies income, which reflects the items detailed in the attached Schedule 11, up by 27.2% to $3.8 billion, or by 16.5% excluding currency

• Operating income up by 27.7% to $3.7 billion

• Free cash flow for the first half of the year, defined as net cash provided by operating activities less capital expenditures, up by 20.5% to $6.2 billion, or by 15.4% excluding currency, as detailed in the attached Schedule 19

• Repurchased 22.7 million shares of its common stock for $1.5 billion during the quarter

• PMI increases its forecast for 2011 full-year reported diluted earnings per share by $0.15 to a range of $4.70 to $4.80, up by approximately 20% to 22.5% versus $3.92 in 2010

• Approximately $0.10 of the increased guidance are attributable to an improved business outlook, driven largely by Japan, and approximately $0.05 reflect favorable currency at prevailing rates

• Excluding a total favorable currency impact of approximately $0.25 for the full-year 2011, reported diluted earnings per share are projected to increase by approximately 13.5% to 16.0%, or by approximately 15.0% to 17.5% versus adjusted diluted earnings per share of $3.87 in 2010

NEW YORK, July 21, 2011 – Philip Morris International Inc. (NYSE / Euronext Paris: PM) today announced its 2011 second-quarter results.

“Our strong second-quarter results are testament to our continued growth momentum, particularly in Asia, strong pricing in numerous key markets and our excellent executional capability, as exemplified by our performance in Japan,” said Louis C. Camilleri, Chairman and Chief Executive Officer.

“Our progress is such that we are again raising our EPS guidance for 2011, reflecting our confidence in the future.”

Conference Call

A conference call, hosted by Hermann Waldemer, Chief Financial Officer, with members of the investment community and news media, will be webcast at 9:00 a.m., Eastern Time, on July 21, 2011. Access is available at www.pmi.com.

Dividends and Share Repurchase Program

During the second quarter, PMI spent $1.5 billion to repurchase 22.7 million shares of its common stock, as shown in the table below.

Current $12 Billion, Three-Year Program

	Value		Shares
	($ Mio.)		000
May-December 2010		2,953		55,933
January-March 2011		1,356		22,154
April-June 2011		1,548		22,660
Total Under Program		5,857		100,747

PMI’s 2011 full-year forecast includes planned share repurchases of approximately $5.0 billion against its previously communicated three-year share repurchase program of $12 billion, initiated in May 2010.

Since May 2008, when PMI began its first share repurchase program, the company has spent an aggregate of $18.9 billion to repurchase 378.4 million shares, or 17.9% of the shares outstanding at the time of the spin-off in March 2008.

2011 Full-Year Forecast

PMI increases its forecast for 2011 full-year reported diluted earnings per share by $0.15 to a range of $4.70 to $4.80, up by approximately 20% to 22.5% versus $3.92 in 2010. Approximately $0.10 of the increased guidance are attributable to an improved business outlook, driven largely by Japan, and approximately $0.05 reflect favorable currency at prevailing rates. Excluding a total favorable currency impact of approximately $0.25 for the full-year 2011, reported diluted earnings per share are projected to increase by approximately 13.5% to 16.0%, or by approximately 15.0% to 17.5% versus adjusted diluted earnings per share of $3.87 in 2010.

This guidance excludes the impact of any potential future acquisitions, asset impairment and exit cost charges, and any unusual events. The factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.

2011 SECOND-QUARTER CONSOLIDATED RESULTS

Management reviews operating companies income (OCI), which is defined as operating income before corporate expenses and amortization of intangibles, to evaluate segment performance and to allocate resources. In the following discussion, the term “net revenues” refers to net revenues, excluding excise taxes, unless otherwise stated. Management also reviews OCI, operating margins and EPS on an adjusted basis (which may exclude the impact of currency and other items such as acquisitions or asset impairment and exit costs), EBITDA, free cash flow and net debt. Management believes it is appropriate to disclose these measures to help investors analyze business performance and trends. For a reconciliation of operating companies income to operating income, see the Condensed Statements of Earnings provided with

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this release. Reconciliations of non-GAAP measures to corresponding GAAP measures are also provided with this release. References to total international cigarette market, total cigarette market, total market and market shares are PMI estimates based on latest available data from a number of sources. Comparisons are to the same prior-year period unless otherwise stated.

NET REVENUES

	PMI Net Revenues ($ Millions)
	Second-Quarter										Six Months Year-To-Date
	2011		2010		Change			Excl. Curr.			2011		2010		Change			Excl. Curr.
European Union	$	2,497	$	2,295		8.8	%		0.7	%	$	4,498	$	4,479		0.4	%		(1.4	)%
Eastern Europe, Middle East & Africa		2,012		1,889		6.5	%		3.6	%		3,699		3,635		1.8	%		1.0	%
Asia		2,936		2,123		38.3	%		27.8	%		5,259		3,996		31.6	%		22.8	%
Latin America & Canada		828		754		9.8	%		5.8	%		1,608		1,447		11.1	%		7.4	%
Total PMI	$	8,273	$	7,061		17.2	%		10.2	%	$	15,064	$	13,557		11.1	%		7.3	%

Net revenues of $8.3 billion were up by 17.2%, including favorable currency of $494 million. Excluding currency, net revenues increased by 10.2%, primarily driven by favorable pricing of $617 million, primarily in Asia, and favorable volume/mix of $98 million. The favorable volume/mix was driven by Asia, mainly Indonesia, Japan and Korea, and was partly offset by: in the EU, mainly Greece, Portugal and Spain; and, in Latin America & Canada, primarily Brazil, Canada and Mexico. Volume/mix in EEMA was essentially flat. Excluding currency and acquisitions, net revenues increased by 10.1%.

OPERATING COMPANIES INCOME

	PMI Operating Companies Income ($ Millions)
	Second-Quarter										Six Months Year-To-Date
	2011		2010		Change			Excl. Curr.			2011		2010		Change			Excl. Curr.
European Union	$	1,280	$	1,105		15.8	%		2.1	%	$	2,286	$	2,167		5.5	%		(0.6	)%
Eastern Europe, Middle East & Africa		835		786		6.2	%		4.8	%		1,557		1,556		0.1	%		0.1	%
Asia		1,398		845		65.4	%		48.3	%		2,491		1,569		58.8	%		43.0	%
Latin America & Canada		268		238		12.6	%		8.8	%		519		455		14.1	%		11.9	%
Total PMI	$	3,781	$	2,974		27.1	%		16.5	%	$	6,853	$	5,747		19.2	%		12.5	%

Operating income increased by 27.7% to $3.7 billion. Reported operating companies income was up by 27.1% to $3.8 billion, including favorable currency of $317 million. Excluding currency and acquisitions, operating companies income was up by 16.5%, primarily driven by higher pricing and favorable volume/mix, partly offset by unfavorable costs, mostly related to airfreight of product to Japan in response to in-market shortages of competitors’ products.

Adjusted operating companies income grew by 27.2% as shown in the table below and detailed on Schedule 11. Adjusted operating companies income, excluding currency and acquisitions, increased by 16.5%.

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PMI Operating Companies Income ($ Millions)

	Second-Quarter									Six Months Year-To-Date
	2011			2010			Change			2011			2010			Change
Reported OCI	$	3,781		$	2,974			27.1	%	$	6,853		$	5,747			19.2	%
Asset impairment & exit costs		(1	)		0						(17	)		0
Adjusted OCI	$	3,782		$	2,974			27.2	%	$	6,870		$	5,747			19.5	%
Adjusted OCI Margin*		45.7	%		42.1	%		3.6p.p.			45.6	%		42.4	%		3.2p.p.

* Margins are calculated as adjusted OCI, divided by net revenues, excluding excise taxes.

Adjusted operating companies income margin, excluding the impact of currency, was up by 2.4 percentage points to 44.5%, as detailed on Schedule 11. Excluding currency and acquisitions, adjusted operating companies income margin was up by 2.5 percentage points to 44.6%.

SHIPMENT VOLUME & MARKET SHARE

PMI Cigarette Shipment Volume by Segment (Million Units)

	Second-Quarter							Six Months Year-To-Date
	2011		2010		Change			2011		2010		Change
European Union		57,193		59,024		(3.1	)%		105,715		111,353		(5.1	)%
Eastern Europe, Middle East & Africa		75,336		77,892		(3.3	)%		138,979		142,037		(2.2	)%
Asia		84,042		78,185		7.5	%		156,134		141,400		10.4	%
Latin America & Canada		24,606		25,858		(4.8	)%		48,269		50,904		(5.2	)%
Total PMI		241,177		240,959		0.1	%		449,097		445,694		0.8	%

PMI’s cigarette shipment volume of 241.2 billion units was up slightly by 0.1%. In the EU, cigarette shipment volume decreased by 3.1%, predominantly due to lower total markets, mainly in Spain, lower market share, mainly in Poland, and unfavorable distributor inventory movements, partly offset by total market growth in Germany. In EEMA, cigarette shipment volume declined by 3.3%, primarily due to: a lower total market in Russia and a lower total market and share in Ukraine; the suspension of our business activities following the imposition of sanctions in Libya; and an unfavorable comparison with the second quarter of 2010 in Ukraine, impacted by trade inventory movements; partly offset by growth in Algeria and Turkey. In Asia, PMI’s cigarette shipment volume increased by 7.5%, primarily driven by double-digit growth in Indonesia, Japan and Korea. In Latin America & Canada, cigarette shipment volume decreased by 4.8%, due mainly to: Mexico, reflecting a lower total market resulting from the significant January 1, 2011, excise tax increase; and Brazil, reflecting the depletion of trade inventories established ahead of the April 2011 price increase; partly offset by growth in Argentina.

On an organic basis, which excludes acquisitions, PMI’s cigarette shipment volume was up slightly by 0.1%.

Total cigarette shipments of Marlboro of 78.1 billion units were up by 0.2%, driven primarily by growth in EEMA of 0.9%, in particular in Algeria, and in Asia of 5.9%, notably in Indonesia, Japan, Korea and Vietnam. The growth was partly offset by decreases: in the EU of 3.3%, reflecting mainly lower total markets and share, primarily in Portugal and Spain; and in Latin America & Canada of 2.8%, due mainly to the unfavorable impact of the aforementioned excise tax increase in Mexico.

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Total cigarette shipments of L&M of 23.9 billion units were up by 3.1%, driven by growth in the EU of 5.4%, notably in Germany and Greece, and in EEMA of 3.6%, led by Turkey.

Total cigarette shipments of Chesterfield of 9.8 billion units were down by 4.9%, with declines, primarily in Spain and Ukraine, partly offset by growth, mainly in Portugal. Total cigarette shipments of Parliament of 10.3 billion units were up by 4.9%, driven by growth in the EU, EEMA and Latin America & Canada.

Total cigarette shipments of Lark of 10.1 billion units increased by 10.2%, due primarily to growth in Japan, partly offset by a decline in Turkey. Total cigarette shipments of Bond Street of 12.0 billion units decreased by 2.3%, due mainly to declines in Turkey and Ukraine, partly offset by growth in Russia and Kazakhstan.

Total shipment volume of other tobacco products (OTP), in cigarette equivalent units, excluding acquisitions, grew by 7.9%, notably in Belgium, France and Germany. Total shipment volume for cigarettes and OTP combined was up by 0.2%, excluding acquisitions.

PMI’s market share performance was stable, or registered growth, in a number of key markets, including Algeria, Austria, Belgium, Canada, Egypt, France, Germany, Hong Kong, Indonesia, Japan, Korea, Mexico, the Netherlands, the Philippines, Singapore, Thailand and Turkey.

EUROPEAN UNION REGION (EU)

2011 Second-Quarter Results

In the EU, net revenues increased by 8.8% to $2.5 billion, including favorable currency of $187 million. Excluding currency, net revenues grew by 0.7%, primarily reflecting higher pricing of $49 million, driven mainly by France, Italy and Poland, partly offset by Spain. The favorable pricing variance more than offset the unfavorable volume/mix of $34 million. The unfavorable volume/mix was primarily attributable to a lower total market and share in Greece, Portugal, Spain and the UK, partly offset by a higher total market in Germany.

Operating companies income increased by 15.8% to $1.3 billion, due predominantly to favorable pricing, and favorable currency of $152 million, partly offset by unfavorable volume/mix of $28 million. Excluding the impact of currency, operating companies income was up by 2.1%.

Adjusted operating companies income increased by 15.9%, as shown in the table below and detailed on Schedule 11. Adjusted operating companies income, excluding currency and acquisitions, increased by 2.3%.

EU Operating Companies Income ($ Millions)

	Second-Quarter									Six Months Year-To-Date
	2011			2010			Change			2011			2010			Change
Reported OCI	$	1,280		$	1,105			15.8	%	$	2,286		$	2,167			5.5	%
Asset impairment & exit costs		(1	)		0						(12	)		0
Adjusted OCI	$	1,281		$	1,105			15.9	%	$	2,298		$	2,167			6.0	%
Adjusted OCI Margin*		51.3	%		48.1	%		3.2 p.p.			51.1	%		48.4	%		2.7 p.p.

* Margins are calculated as adjusted OCI, divided by net revenues, excluding excise taxes.

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Excluding the favorable impact of currency, adjusted operating companies income margin was up by 0.8 percentage points to 48.9%, as detailed on Schedule 11.

The total cigarette market in the EU declined by 1.7%, due mainly to Spain, reflecting the unfavorable impact of continued adverse economic conditions. Excluding Spain, the total cigarette market in the EU grew slightly by 0.2%.

PMI’s cigarette shipment volume in the EU declined by 3.1%, due primarily to the impact of the lower total market in Spain, lower share, mainly in Poland, and unfavorable distributor inventory movements, mainly in Austria, France and Spain, partly offset by total market growth in Germany. Shipment volume of Marlboro decreased by 3.3%, due mainly to lower total markets, unfavorable distributor inventory movements, and lower share, primarily in Portugal and Spain, the former reflecting the impact of price increases in July and November 2010 and January 2011. Shipment volume of L&M was up by 5.4%, driven mainly by higher share in Germany.

PMI’s market share in the EU was down slightly by 0.2 share points to 38.6% as gains, primarily in Belgium, France, Germany, the Netherlands and the Nordics, were more than offset by share declines, mainly in the Czech Republic, Italy, Poland and Portugal. While Marlboro’s share in the EU was flat at 18.1%, reflecting a higher share in Belgium, the Czech Republic, Greece, Hungary and the Netherlands, offset by lower share in Germany, Italy, Portugal and the UK, it grew by 0.3 points compared to the first quarter 2011. L&M’s market share in the EU grew by 0.3 points to 6.6%, its best performance since the spin-off in March 2008, primarily driven by gains in Germany, Poland and Spain.

EU Key Market Commentaries

In the Czech Republic, the total cigarette market was up by 3.3%. PMI’s shipments were down by 2.5%. Market share was down by 2.7 points to 45.5%, reflecting continued share declines for lower-margin local brands, partly offset by a higher share for Marlboro, up by 0.6 points to 7.5%, and for Red & White, up by 0.6 points to 13.1%.

In France, the total cigarette market was up by 1.8%. Whilst PMI’s shipments were down slightly by 0.5%, unfavorably impacted by distributor inventory movements, market share was up slightly by 0.1 point to 40.9%, reflecting a higher share for the premium Philip Morris brand, up by 0.5 points to 8.3%, partly offset by a lower share for Marlboro, down by 0.3 points to 26.0%. Compared to the first quarter 2011, PMI’s market share was up by 0.5 points, driven by Marlboro, up by 0.5 points.

In Germany, the total cigarette market was up by 4.6%. PMI’s shipments were up by 5.3% and market share was up by 0.2 points to 36.1%, driven by L&M, up by 1.0 points to 10.4%. Compared to the first quarter of 2011, PMI’s market share was up by 0.4 points. Although share of Marlboro in the second quarter was down by 0.5 points to 21.1%, it was essentially flat compared to the first quarter of 2011.

In Italy, the total cigarette market was up by 0.2%. PMI’s shipments were down by 0.9%. Although PMI’s market share declined by 0.7 points to 53.4%, share was essentially flat compared to the first quarter of 2011. Marlboro’s market share in the second quarter of 2011 of 22.7% was down by 0.3 points compared to the second quarter 2010, but up by 0.2 points compared to the first quarter 2011.

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In Poland, the total cigarette market was down by 1.5%, reflecting the unfavorable impact of tax-driven price increases in the fourth quarter of 2010 and second quarter of 2011, and the introduction of an indoor public smoking ban in the fourth quarter of 2010. PMI’s shipments were down by 9.7%. Whilst PMI’s market share was down by 3.2 points to 34.9%, due mainly to lower share of low-price Red & White, down by 3.3 points to 5.1%, share of Marlboro was up slightly by 0.1 point to 10.3%, and share of L&M grew by 0.8 points to 15.9%.

In Spain, the total cigarette market was down by 14.6%, largely due to the continuing adverse economic environment, the impact of the June 2010 VAT-driven price increase and the December 2010 excise tax-driven price increase, and the introduction of a total indoor public smoking ban in January 2011. PMI’s shipments were down by 17.6%. PMI’s market share was down by 0.2 points to 31.0%, due mainly to a lower share of Chesterfield, down by 0.5 points to 8.4%. Share of Marlboro was essentially flat at 14.6%. PMI’s market share was up by 0.6 points versus the first quarter 2011, driven by Marlboro, up by 0.5 points, reflecting the positive consumer reaction to the price movements of May and June 2011.

EASTERN EUROPE, MIDDLE EAST & AFRICA REGION (EEMA)

2011 Second-Quarter Results

In EEMA, net revenues increased by 6.5% to $2.0 billion, including favorable currency of $55 million. Excluding the impact of currency, net revenues increased by 3.6%, primarily due to favorable pricing of $69 million, primarily in Russia and Ukraine.

Operating companies income increased by 6.2% to $835 million, including favorable currency of $11 million. Excluding the impact of currency, operating companies income increased by 4.8%, due primarily to higher pricing and favorable volume/mix, partly offset by higher costs, principally related to business building initiatives in Russia. Adjusted operating companies income increased by 6.2%, as shown in the table below and detailed on Schedule 11. Adjusted operating companies income, excluding currency, increased by 4.8%.

EEMA Operating Companies Income ($ Millions)

	Second-Quarter									Six Months Year-To-Date
	2011			2010			Change			2011			2010			Change
Reported OCI	$	835		$	786			6.2	%	$	1,557		$	1,556			0.1	%
Asset impairment & exit costs		0			0						(2	)		0
Adjusted OCI	$	835		$	786			6.2	%	$	1,559		$	1,556			0.2	%
Adjusted OCI Margin*		41.5	%		41.6	%		(0.1	) p.p.		42.1	%		42.8	%		(0.7	) p.p.

* Margins are calculated as adjusted OCI, divided by net revenues, excluding excise taxes.

Excluding the favorable impact of currency, adjusted operating companies income margin was up by 0.5 percentage points to 42.1%, as detailed on Schedule 11.

PMI’s cigarette shipment volume in EEMA decreased by 3.3%, principally due to: Libya, reflecting the imposition of sanctions; Russia, primarily reflecting a lower total market; and Ukraine, due to an unfavorable comparison with the second quarter of 2010, impacted by trade inventory movements ahead of

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the July 2010 excise tax-driven price increase, a lower total market and lower share. These declines were partly offset by growth in Algeria and Turkey.

PMI’s cigarette shipment volume of premium brands grew by 2.7% in EEMA, driven by Marlboro and Parliament, up by 0.9% and 10.0%, respectively, reflecting the second consecutive quarter of growth following eight quarters of decline.

EEMA Key Market Commentaries

In Russia, the total cigarette market declined by an estimated annualized rate of 2-3%. PMI’s shipment volume decreased by 4.1%. Whilst shipment volume of PMI’s premium portfolio was down by 1.7%, primarily due to a decline in Marlboro of 7.3%, shipment volume of above premium Parliament was up by 1.9%. In the mid-price segment, shipment volume was down by 3.3%, with growth in Chesterfield, up by 0.6%, more than offset by a decline in L&M, down by 8.3%. In the low price segment, shipment volume of Bond Street was up by 2.1%. PMI’s quarter-to-date May market share of 25.4%, as measured by A.C. Nielsen, was essentially flat. Market share for Parliament, in the above premium segment, was up slightly by 0.1 point; Marlboro, in the premium segment, was down by 0.2 points; L&M in the mid-price segment was down by 0.4 share points; Chesterfield in the mid-price segment was up slightly by 0.1 share point; and Bond Street in the low-price segment was up by 0.4 share points.

In Turkey, the total cigarette market declined by an estimated 0.8%, having stabilized following the steep January 2010 excise tax increase. PMI’s shipment volume increased by 12.1%. PMI’s quarter-to-date May market share, as measured by A.C. Nielsen, grew by 3.8 points to 44.6%, driven by Parliament, Muratti and L&M, up by 1.1, 0.5 and 4.3 share points, respectively, partly offset by declines in Lark and Bond Street, down by 1.3 and 0.8 points, respectively. Market share of Marlboro was flat at 9.1%.

In Ukraine, the total cigarette market declined by an estimated 15.0%, due mainly to: an unfavorable comparison with the second quarter of 2010 which was impacted by trade inventory movements ahead of the July 2010 excise tax-driven price increase; the unfavorable impact of excise tax-driven price increases in July 2010 and January 2011; and the underlying market decline. PMI’s shipment volume decreased by 24.8%, reflecting the aforementioned factors, as well as lower share driven by low-price competition. Whilst PMI’s market share, as measured by A.C. Nielsen, was down by 3.5 points to 32.1%, shares for premium Marlboro and Parliament were up by 0.3 and 0.2 points, respectively.

ASIA REGION

2011 Second-Quarter Results

In Asia, net revenues increased strongly by 38.3% to $2.9 billion, including favorable currency of $222 million. Excluding the impact of currency, net revenues increased by 27.8%, reflecting the favorable impact of pricing of $413 million, primarily in Australia, Indonesia, Japan and the Philippines, and favorable volume/mix of $175 million, mainly in Japan, reflecting increased shipments in response to in-market shortages of competitors’ products, Indonesia and Korea. Excluding the impact of currency and acquisitions, net revenues increased by 27.7%.

Operating companies income surged by 65.4% to reach $1.4 billion, despite significant costs related to airfreight of product to Japan. Excluding the favorable impact of currency of $145 million, operating

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companies income increased by 48.3%, driven by strong growth in Australia, Indonesia, Japan and the Philippines. Excluding the impact of currency and acquisitions, operating companies income increased by 48.2%. Adjusted operating companies income increased by 65.4% as shown in the table below and detailed on Schedule 11. Adjusted operating companies income, excluding currency, increased by 48.3%, or by 48.2% excluding both currency and acquisitions.

Asia Operating Companies Income ($ Millions)

	Second-Quarter									Six Months Year-To-Date
	2011			2010			Change			2011			2010			Change
Reported OCI	$	1,398		$	845			65.4	%	$	2,491		$	1,569			58.8	%
Asset impairment & exit costs		0			0						(2	)		0
Adjusted OCI	$	1,398		$	845			65.4	%	$	2,493		$	1,569			58.9	%
Adjusted OCI Margin*		47.6	%		39.8	%		7.8 p.p.			47.4	%		39.3	%		8.1 p.p.

* Margins are calculated as adjusted OCI, divided by net revenues, excluding excise taxes.

Excluding the impact of currency and acquisitions, adjusted operating companies income margin was up by 6.4 percentage points to 46.2%, as detailed on Schedule 11.

PMI’s cigarette shipment volume in Asia increased by 7.5%, predominantly due to growth in Indonesia, Japan and Korea. The growth was partly offset by a decline in Pakistan of 6.6% due to the continued growth of illicit products.

Shipment volume of Marlboro was up by 5.9%, driven mainly by growth in Indonesia, Japan, Korea and Vietnam.

Asia Key Market Commentaries

In Indonesia, the total cigarette market was up by 13.9%, driven mainly by growth in the low-price segment and moderate price increases compared to 2010. PMI’s shipment volume increased by 20.7%, with all key brand families recording growth. Market share was up by 1.6 points to a record 30.2%, driven by growth from premium Sampoerna A, mid-price Sampoerna Kretek and low-price U Mild and Vegas Mild. Although Marlboro’s market share declined by 0.3 points to 4.2%, shipments grew by 6.7% and share of the “white” cigarettes segment increased by 3.3 points to 64.2%.

In Japan, the total cigarette market decreased by 19.1%, reflecting the unfavorable impact of the significant October 1, 2010, tax-driven price increases and the underlying market decline. PMI’s shipment volume was up by 11.0%, driven by increased trade purchases compensating for in-market shortages of competitors’ products. Market share of 42.0% was up by 17.7 points, reflecting growth of Marlboro, Lark and the Philip Morris brand by 5.6, 7.7 and 1.6 points, to 16.4%, 14.4% and 4.0%, respectively.

In Korea, the total cigarette market declined by 1.9%. PMI’s shipment volume increased by 17.6%, driven by market share increases. PMI’s market share reached a record 19.9%, up by 3.3 points, driven by Marlboro and Parliament, up by 1.8 and 1.2 points, respectively.

In the Philippines, the total market declined by 2.9%, partly reflecting the impact of PMFTC Inc.’s excise-tax driven price increase of its key brand variants in January 2011. PMI’s shipments were down by

9

1.5%. PMI’s market share was up by 1.3 points to 94.1%. Share of Marlboro increased by 0.4 points to 21.1%.

LATIN AMERICA & CANADA REGION

2011 Second-Quarter Results

In Latin America & Canada, net revenues increased by 9.8% to $828 million, including favorable currency of $30 million. Excluding the impact of currency, net revenues increased by 5.8%, reflecting favorable pricing of $86 million, primarily in Argentina, Brazil, Canada and Mexico, that more than offset unfavorable volume/mix of $42 million.

Operating companies income increased by 12.6% to $268 million. Excluding the impact of currency, operating companies income increased by 8.8%, primarily reflecting favorable pricing. Adjusted operating companies income grew by 12.6% as shown in the table below and detailed on Schedule 11. Adjusted operating companies income, excluding currency, grew by 8.8%.

Latin America & Canada Operating Companies Income ($ Millions)

	Second-Quarter									Six Months Year-To-Date
	2011			2010			Change			2011			2010			Change
Reported OCI	$	268		$	238			12.6	%	$	519		$	455			14.1	%
Asset impairment & exit costs		0			0						(1	)		0
Adjusted OCI	$	268		$	238			12.6	%	$	520		$	455			14.3	%
Adjusted OCI Margin*		32.4	%		31.6	%		0.8 p.p.			32.3	%		31.4	%		0.9 p.p.

* Margins are calculated as adjusted OCI, divided by net revenues, excluding excise taxes.

Excluding the impact of currency, adjusted operating companies income margin increased by 0.9 percentage points to 32.5%, as detailed on Schedule 11.

PMI’s cigarette shipment volume in Latin America & Canada decreased by 4.8%, due mainly to Mexico and Brazil, partly offset by an increase in Argentina. Shipment volume of Marlboro decreased by 2.8%.

Latin America & Canada Key Market Commentaries

In Argentina, the total cigarette market grew by 8.7%. PMI’s cigarette shipment volume increased by 8.4%. Although PMI’s market share was down by 0.4 points to 74.4%, share of Marlboro was up by 0.6 points to 24.0%, offset by the mid-price Philip Morris brand, down by 0.4 share points to 37.9%, and low-price Next, down by 0.2 points to 3.7%.

In Canada, the total tax-paid cigarette market was down by 4.5%, due mainly to trade inventory movements in June 2010 in anticipation of harmonized sales tax implementation in the provinces of Ontario and British Columbia and a lower total market. Although PMI’s cigarette shipment volume decreased by 1.9%, market share grew by 1.0 point to 34.0%, with low-price brands Next and Quebec Classique, up by 2.7 and 0.3 share points, respectively, partly offset by mid-price Number 7 and Canadian Classics, and low-

10

price Accord, down by 0.5, 0.5 and 0.8 share points, respectively. Market share of premium Belmont was up slightly by 0.1 point to 1.8%.

In Mexico, the total cigarette market was down by 13.2%, primarily due to the significant January 1, 2011, excise tax increase which drove a 26.7% increase in the retail price of Marlboro. Although PMI’s cigarette shipment volume decreased by 10.3%, market share grew by 2.3 points to 72.2%, led by Marlboro, up by 3.8 share points to a quarterly record 52.0%, and Benson & Hedges, up by 0.5 points to 6.1%. Market share of low-price Delicados, the second best-selling brand in the market, declined by 1.1 points to 11.1%.

Philip Morris International Inc. Profile

Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in approximately 180 countries. In 2010, the company held an estimated 16.0% share of the total international cigarette market outside of the U.S., or 27.6% excluding the People’s Republic of China and the U.S. For more information, see www.pmi.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The following important factors could cause actual results and outcomes to differ materially from those contained in such forward-looking statements.

Philip Morris International Inc. and its tobacco subsidiaries (PMI) are subject to intense price competition; changes in consumer preferences and demand for their products; fluctuations in levels of customer inventories; increases in raw material costs; the effects of global economic developments and individual country economic and market conditions; unfavorable currency movements and changes to income tax laws. Their results are dependent upon their continued ability to promote brand equity successfully; to anticipate and respond to new consumer trends; to develop new products and markets and to broaden brand portfolios in order to compete effectively; to be able to protect and enhance margins through price increases; and to improve productivity.

PMI is also subject to legislation and governmental regulation, including actual and potential excise tax increases; discriminatory excise tax structures; increasing marketing and regulatory restrictions; the effects of price increases related to excise tax increases on consumption rates and consumer preferences within price segments; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke; privately imposed smoking restrictions; and governmental investigations.

PMI is subject to litigation, including risks associated with adverse jury and judicial determinations, and courts reaching conclusions at variance with PMI’s understanding of applicable law.

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 March 31, 2011. PMI cautions that the foregoing list of important factors is not complete and does not undertake to update any forward-looking statements that it may make, except in the normal course of its public disclosure obligations.

###

11

Schedule 1

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Condensed Statements of Earnings

For the Quarters Ended June 30,

($ in millions, except per share data)

(Unaudited)

	2011		2010		% Change
Net revenues	$	20,234	$	17,383		16.4	%
Cost of sales		2,844		2,550		11.5	%
Excise taxes on products (1)		11,961		10,322		15.9	%
Gross profit		5,429		4,511		20.4	%
Marketing, administration and research costs		1,647		1,537
Asset impairment and exit costs		1		—
Operating companies income		3,781		2,974		27.1	%
Amortization of intangibles		24		23
General corporate expenses		45		45
Operating income		3,712		2,906		27.7	%
Interest expense, net		208		223
Earnings before income taxes		3,504		2,683		30.6	%
Provision for income taxes		1,019		641		59.0	%
Net earnings		2,485		2,042		21.7	%
Net earnings attributable to noncontrolling interests		76		60
Net earnings attributable to PMI	$	2,409	$	1,982		21.5	%
Per share data:(2)
Basic earnings per share	$	1.35	$	1.07		26.2	%
Diluted earnings per share	$	1.35	$	1.07		26.2	%

(1) The segment detail of excise taxes on products sold for the quarters ended June 30, 2011 and 2010 is shown on Schedule 2.

(2) Net earnings and weighted-average shares used in the basic and diluted earnings per share computations for the quarters ended June 30, 2011 and 2010 are shown on Schedule 4, Footnote 1.

Schedule 2

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Selected Financial Data by Business Segment

For the Quarters Ended June 30,

($ in millions)

(Unaudited)

		Net Revenues excluding Excise Taxes
		European Union			EEMA			Asia			Latin America & Canada			Total
2011	Net Revenues (1)	$	8,080		$	4,603		$	5,146		$	2,405		$	20,234
	Excise Taxes on Products		(5,583	)		(2,591	)		(2,210	)		(1,577	)		(11,961	)
	Net Revenues excluding Excise Taxes		2,497			2,012			2,936			828			8,273
2010	Net Revenues	$	7,260		$	4,125		$	3,903		$	2,095		$	17,383
	Excise Taxes on Products		(4,965	)		(2,236	)		(1,780	)		(1,341	)		(10,322	)
	Net Revenues excluding Excise Taxes		2,295			1,889			2,123			754			7,061
Variance	Currency		187			55			222			30			494
	Acquisitions		—			—			3			—			3
	Operations		15			68			588			44			715
	Variance Total		202			123			813			74			1,212
	Variance Total (%)		8.8	%		6.5	%		38.3	%		9.8	%		17.2	%
	Variance excluding Currency		15			68			591			44			718
	Variance excluding Currency (%)		0.7	%		3.6	%		27.8	%		5.8	%		10.2	%
	Variance excluding Currency & Acquisitions		15			68			588			44			715
	Variance excluding Currency & Acquisitions (%)		0.7	%		3.6	%		27.7	%		5.8	%		10.1	%
(1)       2011 Currency increased net revenues as follows:
	European Union	$	609
	EEMA		94
	Asia		368
	Latin America & Canada		76
		$	1,147

Schedule 3

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Selected Financial Data by Business Segment

For the Quarters Ended June 30,

($ in millions)

(Unaudited)

	Operating Companies Income
	European Union			EEMA			Asia			Latin America & Canada			Total
2011	$	1,280		$	835		$	1,398		$	268		$	3,781
2010		1,105			786			845			238			2,974
% Change		15.8	%		6.2	%		65.4	%		12.6	%		27.1	%
Reconciliation:
For the quarter ended June 30, 2010	$	1,105		$	786		$	845		$	238		$	2,974
2010 Asset impairment and exit costs		—			—			—			—			—
2011 Asset impairment and exit costs		(1	)		—			—			—			(1	)
Acquired businesses		(1	)		—			1			—			—
Currency		152			11			145			9			317
Operations		25			38			407			21			491
For the quarter ended June 30, 2011	$	1,280		$	835		$	1,398		$	268		$	3,781

Schedule 4

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Net Earnings Attributable to PMI and Diluted Earnings Per Share

For the Quarters Ended June 30,

($ in millions, except per share data)

(Unaudited)

	Net Earnings Attributable  to PMI			Diluted E.P.S.
2011 Net Earnings Attributable to PMI	$	2,409		$	1.35	(1)
2010 Net Earnings Attributable to PMI	$	1,982		$	1.07	(1)
% Change		21.5	%		26.2	%
Reconciliation:
2010 Net Earnings Attributable to PMI	$	1,982		$	1.07	(1)
Special Items:
2011 Asset impairment and exit costs		(1	)		—
2011 Tax items		15			0.01
2010 Asset impairment and exit costs		—			—
2010 Tax items		(121	)		(0.07	)
Currency		235			0.13
Interest		15			0.01
Change in tax rate		(35	)		(0.02	)
Impact of lower shares outstanding and share-based payments		5			0.05
Operations		314			0.17
2011 Net Earnings Attributable to PMI	$	2,409		$	1.35	(1)
(1)        Basic and diluted EPS were calculated using the following (in millions):
	Q2 2011			Q2 2010
Net earnings attributable to PMI	$	2,409		$	1,982
Less distributed and undistributed earnings attributable to share-based payment awards		14			9
Net earnings for basic and diluted EPS	$	2,395		$	1,973
Weighted-average shares for basic EPS		1,772			1,846
Plus incremental shares from assumed conversions:
Stock Options		—			3
Weighted-average shares for diluted EPS		1,772			1,849

Schedule 5

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Condensed Statements of Earnings

For the Six Months Ended June 30,

($ in millions, except per share data)

(Unaudited)

	2011		2010		% Change
Net revenues	$	36,764	$	32,970		11.5	%
Cost of sales		5,139		4,922		4.4	%
Excise taxes on products (1)		21,700		19,413		11.8	%
Gross profit		9,925		8,635		14.9	%
Marketing, administration and research costs		3,055		2,888
Asset impairment and exit costs		17		—
Operating companies income		6,853		5,747		19.2	%
Amortization of intangibles		48		43
General corporate expenses		86		83
Operating income		6,719		5,621		19.5	%
Interest expense, net		421		446
Earnings before income taxes		6,298		5,175		21.7	%
Provision for income taxes		1,826		1,379		32.4	%
Net earnings		4,472		3,796		17.8	%
Net earnings attributable to noncontrolling interests		144		111
Net earnings attributable to PMI	$	4,328	$	3,685		17.4	%
Per share data:(2)
Basic earnings per share	$	2.42	$	1.97		22.8	%
Diluted earnings per share	$	2.42	$	1.97		22.8	%

(1) The segment detail of excise taxes on products sold for the six months ended June 30, 2011 and 2010 is shown on Schedule 6.

(2) Net earnings and weighted-average shares used in the basic and diluted earnings per share computations for the six months ended June 30, 2011 and 2010 are shown on Schedule 8, Footnote 1.

Schedule 6

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Selected Financial Data by Business Segment

For the Six Months Ended June 30,

($ in millions)

(Unaudited)

		Net Revenues excluding Excise Taxes
		European Union			EEMA			Asia			Latin America & Canada			Total
2011	Net Revenues (1)	$	14,495		$	8,274		$	9,434		$	4,561		$	36,764
	Excise Taxes on Products		(9,997	)		(4,575	)		(4,175	)		(2,953	)		(21,700	)
	Net Revenues excluding Excise Taxes		4,498			3,699			5,259			1,608			15,064
2010	Net Revenues	$	14,008		$	7,481		$	7,465		$	4,016		$	32,970
	Excise Taxes on Products		(9,529	)		(3,846	)		(3,469	)		(2,569	)		(19,413	)
	Net Revenues excluding Excise Taxes		4,479			3,635			3,996			1,447			13,557
Variance	Currency		81			26			350			54			511
	Acquisitions		—			—			108			—			108
	Operations		(62	)		38			805			107			888
	Variance Total		19			64			1,263			161			1,507
	Variance Total (%)		0.4	%		1.8	%		31.6	%		11.1	%		11.1	%
	Variance excluding Currency		(62	)		38			913			107			996
	Variance excluding Currency (%)		(1.4	)%		1.0	%		22.8	%		7.4	%		7.3	%
	Variance excluding Currency & Acquisitions		(62	)		38			805			107			888
	Variance excluding Currency & Acquisitions (%)		(1.4	)%		1.0	%		20.1	%		7.4	%		6.6	%
(1)       2011 Currency increased net revenues as follows:
	European Union	$	281
	EEMA		8
	Asia		603
	Latin America & Canada		130
		$	1,022

Schedule 7

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Selected Financial Data by Business Segment

For the Six Months Ended June 30,

($ in millions)

(Unaudited)

	Operating Companies Income
	European Union			EEMA			Asia			Latin America & Canada			Total
2011	$	2,286		$	1,557		$	2,491		$	519		$	6,853
2010		2,167			1,556			1,569			455			5,747
% Change		5.5	%		0.1	%		58.8	%		14.1	%		19.2	%
Reconciliation:
For the six months ended June 30, 2010	$	2,167		$	1,556		$	1,569		$	455		$	5,747
2010 Asset impairment and exit costs		—			—			—			—			—
2011 Asset impairment and exit costs		(12	)		(2	)		(2	)		(1	)		(17	)
Acquired businesses		(1	)		—			24			—			23
Currency		131			(1	)		247			10			387
Operations		1			4			653			55			713
For the six months ended June 30, 2011	$	2,286		$	1,557		$	2,491		$	519		$	6,853

Schedule 8

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Net Earnings Attributable to PMI and Diluted Earnings Per Share

For the Six Months Ended June 30,

($ in millions, except per share data)

(Unaudited)

	Net Earnings Attributable  to PMI			Diluted E.P.S.
2011 Net Earnings Attributable to PMI	$	4,328		$	2.42	(1)
2010 Net Earnings Attributable to PMI	$	3,685		$	1.97	(1)
% Change		17.4	%		22.8	%
Reconciliation:
2010 Net Earnings Attributable to PMI	$	3,685		$	1.97	(1)
Special Items:
2011 Asset impairment and exit costs		(11	)		(0.01	)
2011 Tax items		26			0.02
2010 Asset impairment and exit costs		—			—
2010 Tax items		(121	)		(0.07	)
Currency		291			0.16
Interest		19			0.01
Change in tax rate		(26	)		(0.01	)
Impact of lower shares outstanding and share-based payments		7			0.10
Operations		458			0.25
2011 Net Earnings Attributable to PMI	$	4,328		$	2.42	(1)
(1)       Basic and diluted EPS were calculated using the following (in millions):
	YTD June 2011			YTD June 2010
Net earnings attributable to PMI	$	4,328		$	3,685
Less distributed and undistributed earnings attributable to share-based payment awards		24			17
Net earnings for basic and diluted EPS	$	4,304		$	3,668
Weighted-average shares for basic EPS		1,782			1,860
Plus incremental shares from assumed conversions:
Stock Options		—			3
Weighted-average shares for diluted EPS		1,782			1,863

Schedule 9

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Condensed Balance Sheets

($ in millions, except ratios)

(Unaudited)

		December 31,			December 31,
	June 30, 2011			December 31, 2010
Assets
Cash and cash equivalents	$	2,178		$	1,703
All other current assets		12,155			12,053
Property, plant and equipment, net		6,793			6,499
Goodwill		10,652			10,161
Other intangible assets, net		4,020			3,873
Other assets		996			761
Total assets	$	36,794		$	35,050
Liabilities and Stockholders’ Equity
Short-term borrowings	$	570		$	1,747
Current portion of long-term debt		3,314			1,385
All other current liabilities		10,879			9,672
Long-term debt		13,037			13,370
Deferred income taxes		2,067			2,027
Other long-term liabilities		1,747			1,728
Total liabilities		31,614			29,929
Redeemable noncontrolling interest		1,204			1,188
Total PMI stockholders’ equity		3,669			3,506
Noncontrolling interests		307			427
Total stockholders’ equity		3,976			3,933
Total liabilities and stockholders’ equity	$	36,794		$	35,050
Total debt	$	16,921		$	16,502
Total debt to EBITDA		1.28	(1)		1.36	(1)
Net debt to EBITDA		1.11	(1)		1.22	(1)

⁽¹⁾  For the calculation of Total Debt to EBITDA and Net Debt to EBITDA ratios, refer to Schedule 18.

Schedule 10

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Adjustments for the Impact of Currency and Acquisitions

For the Quarters Ended June 30,

($ in millions)

(Unaudited)

2011																2010						% Change in Reported Net Revenues excluding Excise Taxes
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
$	8,080	$	5,583	$	2,497	$	187	$	2,310	$	—		$	2,310	European Union	$	7,260	$	4,965	$	2,295		8.8	%		0.7	%		0.7	%
	4,603		2,591		2,012		55		1,957		—			1,957	EEMA		4,125		2,236		1,889		6.5	%		3.6	%		3.6	%
	5,146		2,210		2,936		222		2,714		3			2,711	Asia		3,903		1,780		2,123		38.3	%		27.8	%		27.7	%
	2,405		1,577		828		30		798		—			798	Latin America & Canada		2,095		1,341		754		9.8	%		5.8	%		5.8	%
$	20,234	$	11,961	$	8,273	$	494	$	7,779	$	3		$	7,776	PMI Total	$	17,383	$	10,322	$	7,061		17.2	%		10.2	%		10.1	%
2011																2010						% Change in Reported Operating Companies Income
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
$	1,280					$	152	$	1,128	$	(1	)	$	1,129	European Union					$	1,105		15.8	%		2.1	%		2.2	%
	835						11		824		—			824	EEMA						786		6.2	%		4.8	%		4.8	%
	1,398						145		1,253		1			1,252	Asia						845		65.4	%		48.3	%		48.2	%
	268						9		259		—			259	Latin America & Canada						238		12.6	%		8.8	%		8.8	%
$	3,781					$	317	$	3,464	$	—		$	3,464	PMI Total					$	2,974		27.1	%		16.5	%		16.5	%

Schedule 11

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

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

Reconciliation of Adjusted Operating Companies Income Margin, excluding Currency and Acquisitions

For the Quarters Ended June 30,

($ in millions)

(Unaudited)

2011																			2010							% Change in Adjusted Operating Companies Income
Reported Operating Companies Income		Less Asset Impairment & Exit Costs			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		Adjusted Operating Companies Income			Adjusted			Adjusted excluding Currency			Adjusted excluding Currency & Acquisitions
$	1,280	$	(1	)	$	1,281		$	152	$	1,129	$	(1	)	$	1,130		European Union	$	1,105	$	—	$	1,105			15.9	%		2.2	%		2.3	%
	835		—			835			11		824		—			824		EEMA		786		—		786			6.2	%		4.8	%		4.8	%
	1,398		—			1,398			145		1,253		1			1,252		Asia		845		—		845			65.4	%		48.3	%		48.2	%
	268		—			268			9		259		—			259		Latin America & Canada		238		—		238			12.6	%		8.8	%		8.8	%
$	3,781	$	(1	)	$	3,782		$	317	$	3,465	$	—		$	3,465		PMI Total	$	2,974	$	—	$	2,974			27.2	%		16.5	%		16.5	%
2011																			2010							% Points Change
Adjusted Operating Companies Income excluding Currency		Net Revenues excluding Excise Taxes & Currency(1)			Adjusted Operating Companies Income Margin excluding Currency					Adjusted Operating Companies Income excluding Currency  & Acquisitions		Net Revenues excluding Excise Taxes, Currency & Acquisitions(1)			Adjusted Operating Companies Income Margin excluding Currency  & Acquisitions				Adjusted Operating Companies Income		Net Revenues excluding Excise Taxes(1)		Adjusted Operating Companies Income Margin						Adjusted Operating Companies Income Margin excluding Currency			Adjusted Operating Companies Income Margin excluding Currency  & Acquisitions
$	1,129	$	2,310			48.9	%			$	1,130	$	2,310			48.9	%	European Union	$	1,105	$	2,295		48.1	%					0.8			0.8
	824		1,957			42.1	%				824		1,957			42.1	%	EEMA		786		1,889		41.6	%					0.5			0.5
	1,253		2,714			46.2	%				1,252		2,711			46.2	%	Asia		845		2,123		39.8	%					6.4			6.4
	259		798			32.5	%				259		798			32.5	%	Latin America & Canada		238		754		31.6	%					0.9			0.9
$	3,465	$	7,779			44.5	%			$	3,465	$	7,776			44.6	%	PMI Total	$	2,974	$	7,061		42.1	%					2.4			2.5

⁽¹⁾  For the calculation of net revenues excluding excise taxes, currency and acquisitions, refer to Schedule 10.

Schedule 12

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 Quarters Ended June 30,

(Unaudited)

	2011			2010			% Change
Reported Diluted EPS	$	1.35		$	1.07			26.2	%
Adjustments:
Asset impairment and exit costs		—			—
Tax items		(0.01	)		(0.07	)
Adjusted Diluted EPS	$	1.34		$	1.00			34.0	%
Less:
Currency impact		0.13
Adjusted Diluted EPS, excluding Currency	$	1.21		$	1.00			21.0	%

Schedule 13

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

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

For the Quarters Ended June 30,

(Unaudited)

	2011		2010		% Change
Reported Diluted EPS	$	1.35	$	1.07		26.2	%
Less:
Currency impact		0.13
Reported Diluted EPS, excluding Currency	$	1.22	$	1.07		14.0	%

Schedule 14

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Adjustments for the Impact of Currency and Acquisitions

For the Six Months Ended June 30,

($ in millions)

(Unaudited)

2011																	2010						% Change in Reported Net Revenues excluding Excise Taxes
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
$	14,495	$	9,997	$	4,498	$	81		$	4,417	$	—		$	4,417	European Union	$	14,008	$	9,529	$	4,479		0.4	%		(1.4	)%		(1.4	)%
	8,274		4,575		3,699		26			3,673		—			3,673	EEMA		7,481		3,846		3,635		1.8	%		1.0	%		1.0	%
	9,434		4,175		5,259		350			4,909		108	(1)		4,801	Asia		7,465		3,469		3,996		31.6	%		22.8	%		20.1	%
	4,561		2,953		1,608		54			1,554		—			1,554	Latin America & Canada		4,016		2,569		1,447		11.1	%		7.4	%		7.4	%
$	36,764	$	21,700	$	15,064	$	511		$	14,553	$	108		$	14,445	PMI Total	$	32,970	$	19,413	$	13,557		11.1	%		7.3	%		6.6	%
2011																	2010						% Change in Reported Operating Companies Income
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
$	2,286					$	131		$	2,155	$	(1	)	$	2,156	European Union					$	2,167		5.5	%		(0.6	)%		(0.5	)%
	1,557						(1	)		1,558		—			1,558	EEMA						1,556		0.1	%		0.1	%		0.1	%
	2,491						247			2,244		24	(2)		2,220	Asia						1,569		58.8	%		43.0	%		41.5	%
	519						10			509		—			509	Latin America & Canada						455		14.1	%		11.9	%		11.9	%
$	6,853					$	387		$	6,466	$	23		$	6,443	PMI Total					$	5,747		19.2	%		12.5	%		12.1	%

⁽¹⁾  Includes the business combination in the Philippines ($105).

⁽²⁾  Includes the business combination in the Philippines ($23).

Schedule 15

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

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

Reconciliation of Adjusted Operating Companies Income Margin, excluding Currency and Acquisitions

For the Six Months Ended June 30,

($ in millions)

(Unaudited)

2011																				2010							% Change in Adjusted Operating Companies Income
Reported Operating Companies Income		Less Asset Impairment & Exit Costs			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		Adjusted Operating Companies Income			Adjusted			Adjusted excluding Currency			Adjusted excluding Currency & Acquisitions
$	2,286	$	(12	)	$	2,298		$	131		$	2,167	$	(1	)	$	2,168		European Union	$	2,167	$	—	$	2,167			6.0	%		—	%		—	%
	1,557		(2	)		1,559			(1	)		1,560		—			1,560		EEMA		1,556		—		1,556			0.2	%		0.3	%		0.3	%
	2,491		(2	)		2,493			247			2,246		24	(1)		2,222		Asia		1,569		—		1,569			58.9	%		43.1	%		41.6	%
	519		(1	)		520			10			510		—			510		Latin America & Canada		455		—		455			14.3	%		12.1	%		12.1	%
$	6,853	$	(17	)	$	6,870		$	387		$	6,483	$	23		$	6,460		PMI Total	$	5,747	$	—	$	5,747			19.5	%		12.8	%		12.4	%
2011																				2010							% Points Change
Adjusted Operating Companies Income excluding Currency		Net Revenues excluding Excise Taxes & Currency(2)			Adjusted Operating Companies Income Margin excluding Currency						Adjusted Operating Companies Income excluding Currency & Acquisitions		Net Revenues excluding Excise Taxes, Currency & Acquisitions(2)			Adjusted Operating Companies Income Margin excluding Currency & Acquisitions				Adjusted Operating Companies Income		Net Revenues excluding Excise Taxes(2)		Adjusted Operating Companies Income Margin						Adjusted Operating Companies Income Margin excluding Currency			Adjusted Operating Companies Income Margin excluding Currency & Acquisitions
$	2,167	$	4,417			49.1	%				$	2,168	$	4,417			49.1	%	European Union	$	2,167	$	4,479		48.4	%					0.7			0.7
	1,560		3,673			42.5	%					1,560		3,673			42.5	%	EEMA		1,556		3,635		42.8	%					(0.3	)		(0.3	)
	2,246		4,909			45.8	%					2,222		4,801			46.3	%	Asia		1,569		3,996		39.3	%					6.5			7.0
	510		1,554			32.8	%					510		1,554			32.8	%	Latin America & Canada		455		1,447		31.4	%					1.4			1.4
$	6,483	$	14,553			44.5	%				$	6,460	$	14,445			44.7	%	PMI Total	$	5,747	$	13,557		42.4	%					2.1			2.3

⁽¹⁾  Includes the business combination in the Philippines ($23).

⁽²⁾  For the calculation of net revenues excluding excise taxes, currency and acquisitions, refer to Schedule 14.

Schedule 16

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)

	2011			2010			% Change
Reported Diluted EPS	$	2.42		$	1.97			22.8	%
Adjustments:
Asset impairment and exit costs		0.01			—
Tax items		(0.02	)		(0.07	)
Adjusted Diluted EPS	$	2.41		$	1.90			26.8	%
Less:
Currency impact		0.16
Adjusted Diluted EPS, excluding Currency	$	2.25		$	1.90			18.4	%

Schedule17

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

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

For the Six Months Ended June 30,

(Unaudited)

	2011		2010		% Change
Reported Diluted EPS	$	2.42	$	1.97		22.8	%
Less:
Currency impact		0.16
Reported Diluted EPS, excluding Currency	$	2.26	$	1.97		14.7	%

Schedule 18

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

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

($ in millions, except ratios)

(Unaudited)

	For the Year Ended June 30, 2011						For the Year Ended December 31, 2010
	July ~ December		January ~ June		12 months
	2010		2011		rolling
Earnings before income taxes	$	5,149	$	6,298	$	11,447	$	10,324
Interest expense, net		430		421		851		876
Depreciation and amortization		485		488		973		932
EBITDA	$	6,064	$	7,207	$	13,271	$	12,132
					June 30, 2011		December 31, 2010
Short-term borrowings					$	570	$	1,747
Current portion of long-term debt						3,314		1,385
Long-term debt						13,037		13,370
Total Debt					$	16,921	$	16,502
Less: Cash and cash equivalents						2,178		1,703
Net Debt					$	14,743	$	14,799
Ratios
Total Debt to EBITDA						1.28		1.36
Net Debt to EBITDA						1.11		1.22

Schedule 19

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Reconciliation of Operating Cash Flow to Free Cash Flow and Free Cash Flow, excluding Currency

Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency

For the Quarters and Six Months Ended June 30,

($ in millions)

(Unaudited)

	For the Quarters  Ended June 30,							For the Six Months  Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Net cash provided by operating activities(a)	$	4,120	$	3,465		18.9	%	$	6,515	$	5,439		19.8	%
Less:
Capital expenditures		186		169					345		319
Free cash flow	$	3,934	$	3,296		19.4	%	$	6,170	$	5,120		20.5	%
Less:
Currency impact		236							264
Free cash flow, excluding currency	$	3,698	$	3,296		12.2	%	$	5,906	$	5,120		15.4	%
	For the Quarters Ended June 30,							For the Six Months Ended June 30,
	2011		2010		% Change			2011		2010		% Change
Net cash provided by operating activities(a)	$	4,120	$	3,465		18.9	%	$	6,515	$	5,439		19.8	%
Less:
Currency impact		250							279
Net cash provided by operating activities, excluding currency	$	3,870	$	3,465		11.7	%	$	6,236	$	5,439		14.7	%

(a) Operating cash flow.

Schedule 20

PHILIP MORRIS INTERNATIONAL INC.

and Subsidiaries

Reconciliation of Non-GAAP Measures

Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS

For the Year Ended December 31,

(Unaudited)

	2010
Reported Diluted EPS	$	3.92
Adjustments:
Tax items		(0.07	)
Asset impairment and exit costs		0.02
Adjusted Diluted EPS	$	3.87

EX-99.2

Exhibit 99.2

Philip Morris International Inc.

2011 Second-Quarter Results Conference Call

July 21, 2011

NICK ROLLI

(SLIDE 1.)

Welcome. Thank you for joining us. Earlier today, we issued a news release containing detailed information on our 2011 second-quarter results. You may access the release on our web site at www.pmi.com.

(SLIDE 2.)

During our call today, we will be talking about results for the second-quarter 2011 and comparing them with the same period in 2010 unless otherwise stated. References to PMI volumes are for PMI shipments. Industry volume and market shares are the latest data available from a number of internal and external sources. Organic volume refers to volume excluding acquisitions. Net revenues exclude excise taxes. Operating Companies Income, or “OCI”, is defined as operating income before general corporate expenses and the amortization of intangibles.

You will find data tables showing how we made adjustments to net revenues and OCI for currency, acquisitions, asset impairment, exit and other costs, free cash flow calculations, and adjustments to Earnings per Share, or “EPS”, as well as reconciliations to U.S. GAAP measures, at the end of today’s web cast slides, which are posted on our web site.

(SLIDE 3.)

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

It’s now my pleasure to introduce Hermann Waldemer, Chief Financial Officer.

Hermann.

HERMANN WALDEMER

(SLIDE 4.)

1

Welcome, ladies and gentlemen. We reported another very strong performance during the second quarter. We achieved stable organic cigarette volumes; net revenues, excluding currency and acquisitions, grew by a strong 10.1%; adjusted OCI, excluding currency and acquisitions, surged 16.5%; and adjusted diluted EPS were 21.0% above the prior year’s level, excluding currency.

These excellent results can be attributed in particular to the Asia Region, with Indonesia, Japan, Korea and the Philippines all performing very strongly, and higher prices in a wide range of markets.

(SLIDE 5.)

During the second quarter, our pricing variance reached $617 million, for a total of $1.1 billion during the first half of the year. In the last three months, we implemented or announced price increases in markets such as Algeria, Argentina, Australia, Canada, Egypt, Germany, Italy, the Netherlands, Russia and Saudi Arabia, thus reinforcing our strong pricing momentum. Furthermore, the pricing situation in Spain improved in July.

(SLIDE 6.)

We also have strong overall business momentum. Our share in the second quarter for our top 30 OCI markets was up 2.3 points to 38.5%.

(SLIDE 7.)

Marlboro had stable volume in the quarter on a global PMI basis, as higher volume in the Asia and EEMA Regions offset the impact of lower industry volume in the EU and Latin America & Canada Regions. The brand’s share was up or stable in all four Regions and its global share, excluding China and the USA, grew by 0.4 points to 9.3%.

(SLIDE 8.)

During the second quarter, L&M, our second largest brand, increased its volume by 3.1%, accelerating its growth in the EU Region and part of the EEMA Region. These results were achieved by strong share growth in a wide range of markets, including Egypt, Germany, the Netherlands, Poland, Slovakia, and Turkey.

(SLIDE 9.)

In light of our excellent results, strong pricing and good share and business momentum going into the second half of the year, as well as a more favorable currency outlook at prevailing exchange rates, we announced today a further 15 cents increase in our reported diluted EPS guidance for 2011. Ten cents of the increased guidance relate to the business, the improvement being largely attributable to Japan. Five cents relate to currency, though it should be noted that exchange rates may still experience some volatility over the balance of the year.

2

The new guidance range is $4.70 to $4.80. Compared to our adjusted diluted EPS of $3.87 in 2010, this corresponds to an increase of approximately 21.5-24% at prevailing exchange rates, and approximately 15-17.5% excluding currency.

(SLIDE 10.)

Our excellent results in the first half and our favorable outlook for the second half of 2011 demonstrate the benefits of our global footprint and highlight our success with attractive acquisitions and organic volume growth over the last ten years in Asia, where half of the world population lives. Our strong results in the second quarter reflect the strength of our management teams in these markets and especially in Japan, where they took the calculated risk to commit around $100 million in air freight when the extent of the additional demand for our brands was still difficult to judge. Our efficient, yet flexible, global manufacturing footprint and effective market response enabled us to fill the void caused by the shortage of JT and, more recently, BAT products.

In the second quarter, net revenues in the Asia Region grew by 27.7%, excluding currency and acquisitions, and adjusted OCI was 48.2% higher on the same basis. As a result, the Region is now our largest contributor to these measures, accounting for 35% and 36%, respectively, of PMI’s net revenues and adjusted OCI during the first half of this year, and this contribution is expected to increase further as our business in the Region continues to expand.

(SLIDE 11.)

During the second quarter, PMI shipments to Japan reached 19.5 billion units, up 1.9 billion, or 11.0%, compared to the same period last year. This increase was achieved despite the unfavorable impact of the large October 2010 tax-driven price increases and the boost to our shipments that occurred in the second quarter of last year ahead of that increase. Our market share reached 42.0%, 17.7 points above the prior year level and 16.4 points above our share in the first quarter of 2011. As we ensured full product availability throughout the period, all our brands gained share, and in particular Lark and Marlboro.

Determining exactly how the rest of the year will pan out remains very difficult due to the complex interaction of multiple factors. These include the impact of the tax-driven price increase in October last year, the consumer and trade’s prior year loading and subsequent de-loading patterns, the underlying market decline trend, the price elasticity and whether it will diminish over time, the disruption of JT supplies and shortages of certain BAT products, the precise impact of our efficient response, and our level of smoker share retention once a full range of competitive products are available. The new trend for industry volume and the new base for PMI’s future market share growth will not be clear until the fourth quarter of this year at the earliest.

(SLIDE 12.)

3

Our business is also doing very well in Indonesia. Thanks to a strong economy and a favorable comparison with a relatively soft second quarter 2010, industry volume grew an exceptional 13.9% in the second quarter of this year. For the full year, we expect the annual growth rate to be in a range of 4-6%.

Our volume in the quarter was up by 20.7% to 22.6 billion units, and our market share grew by 1.6 points to 30.2%, with all our kretek brands gaining or maintaining their market share and Marlboro increasing its volume and its share within the “white” cigarette segment, despite a reduction in its overall market share.

The growing volume, along with continual moderate price increases, is driving strong profitability growth in Asia’s second largest cigarette market after China.

(SLIDE 13.)

In Korea, we continued to achieve strong volume and share growth behind Marlboro and Parliament. Our market share grew by 3.3 points to 19.9% in the quarter, with a 1.0 share point contribution from innovative Marlboro menthol line extensions. Korea is one of the few key markets worldwide where we have not increased retail prices in the past year, in light of the more important need to secure excise tax reform for the long term.

(SLIDE 14.)

PMI’s organic volume in the EEMA Region declined by 3.4% in the second quarter, due primarily to Ukraine. For the full year, we expect our volume to be stable in the Region.

Net revenues were up by 3.6% during Q2, excluding currency and acquisitions. Adjusted OCI was 4.8% higher, excluding currency and acquisitions, driven primarily by increased volumes in Turkey and North Africa and higher prices across many markets, in particular Russia. This was partly offset by lower volumes in Eastern Europe and additional investments in business building initiatives in Russia.

(SLIDE 15.)

These investments will further boost the momentum of Parliament, Chesterfield and Bond Street in Russia, while addressing the issues surrounding Marlboro. These efforts will, however, take some time to have a measurable impact on our market share, which declined by 0.1 point to 25.4% in the second quarter through the end of May, due mainly to a temporary price disadvantage to competitive products.

At the beginning of this month, we announced to the trade a further price increase of 3 Rubles on Marlboro and 2 Rubles on average across the rest of our portfolio. Our lowest price in the market will now be 21 Rubles a pack for Optima, up 27% from a year ago.

These price increases, along with lower disposable incomes, as wage increases have failed to keep pace with inflation, are limiting the extent of consumer uptrading. Industry

4

volume, meanwhile, is expected to decline at an annualized rate of some 2-3% this year, in line with 2010.

Earlier this month, the Russian Government approved its Tax Policy Guidelines, or “TPG”, for the period 2012 through 2014, including a detailed three-year excise tax development plan for tobacco products. The TPG foresees that excise taxes will be indexed periodically in line with inflation and economic conditions in Russia. In addition to the excise tax increases already foreseen for January 2012 in the current law, the TPG calls for an additional increase in July 2012 of 8.3% in the specific element to 390 Rubles per thousand and 10.9% in the Minimum Excise Tax to 510 Rubles per thousand. While the proposed increases are significant, we believe they should be manageable. It should, however, be highlighted that this is the first step in the process and that the plan needs to be submitted to the Duma and the Federation Council for approval. The final adoption of the law is not expected to take place until November this year.

(SLIDE 16.)

In Ukraine, the estimated 15% decline in industry volume in the second quarter masks an improving underlying trend, as the data is distorted by the heavy trade loading that took place in the same period last year ahead of tax-driven price increases. We expect the market to stabilize during the second half of the year.

The Ukrainian market is tending to polarize with the premium and the super-low price segments both expanding, while several small local manufacturers and illicit trade continue to grow volume. PMI’s market share was down 3.5 points in the quarter to 32.1%, as we are under-represented in the super-low price segment. We have reduced the price gap between Bond Street and the bottom of the market to address this issue. Meanwhile, both Parliament and Marlboro are performing well and increased their market share during the quarter.

(SLIDE 17.)

Overall, the Turkish cigarette market has now stabilized. Our volume grew by 12.1% in the second quarter, though it remains below the levels prior to the tax increase of January 2010. Our market share reached 44.6% in the quarter through the end of May, up 3.8 points. This impressive share improvement covers all three price segments, and is led by premium Parliament, mid-price Muratti and low-price L&M.

(SLIDE 18.)

Despite the issues that continued to impact Spain and to a lesser extent Greece, the results in the EU Region in the second quarter were more positive from a number of standpoints. Industry volume declined by a modest 1.7% and was actually up in markets such as the Czech Republic, France and Germany. PMI volume was 3.1% lower due to an 8.4% decline in Greece, a 17.6% reduction in Spain and a decrease of 9.7% in Poland, where we shed share at the lowest and least profitable end of the market. Our key brands,

5

Marlboro and L&M performed well: Marlboro’s Regional share was stable at 18.1% and L&M’s grew a further 0.3 points to 6.6%.

Net revenues and adjusted OCI were up 0.7% and 2.3% respectively, excluding currency and acquisitions. While we are not entirely satisfied with the situation, there are some clear signs for renewed optimism concerning the future contribution of the EU Region to PMI’s profitability growth going forward.

(SLIDE 19.)

Germany has again become one of the strongest tobacco markets in the EU. During the first half of the year, industry volume was up 1.9% for cigarettes and 4.8% for fine cut. PMI increased its market share by 0.3 and 0.4 points, to 35.9% and 14.8%, respectively, during this period. L&M continues to perform very strongly, gaining a further 1.0 points in the second quarter to reach a cigarette share of 10.4%. Unit margin-enhancing price increases have been implemented. A remaining concern is the growth of discounted larger pack sizes. While the market share of “big” packs, defined as 22 to 25 cigarettes per pack, appears to have stabilized, the share of “maxi” packs, that is packs with over 26 cigarettes, continues to increase and may receive a boost from the recent introduction of packs of 40 cigarettes.

(SLIDE 20.)

The Spanish economy continues to suffer from high unemployment levels with few signs of improvement. Consequently, cigarette industry volumes have been contracting at double-digit rates and consumers have been downtrading to cheaper brands and illicit trade products. This is the special context in which price competition was exacerbated in May/June this year. However, recent developments indicate the situation has improved.

(SLIDE 21.)

Industry volume increased 1.8% in France and was stable in Italy during the second quarter. Our cigarette market share was up slightly in France to 40.9%, as the continued growth of the Philip Morris brand, also positioned in the premium segment, more than offset a slight decline of Marlboro’s share. At the same time, following the entry of Marlboro into the category, we also became the market leader in fine cut with a quarterly share of 25.0%, up 5.6 points.

Our market share in Italy was down 0.7 points to 53.4%, with Marlboro down 0.3 points. This was attributable to the relative decline of the premium segment, where PMI has a 95% share. Our profitability, however, continued to improve in both markets, with high single digit increases in the quarter. Furthermore, we recently announced a 10 Euro Cent price increase across our portfolio in Italy.

(SLIDE 22.)

6

After increasing the specific to total component in its excise tax last December, earlier this month the Greek Government increased the Minimum Excise Tax from 75% to 100% of the excise tax levied on the Weighted Average Price. This implies a pass-on of nearly 50 Euro Cents for 20 cigarettes at the very bottom end of the market, where cigarettes retail at €2.40. PMI has announced an increase in the price of its main low-price brand, L&M 25s, from €3.20 to €3.70 per pack. The reduction in price gaps should help the continued recovery of Marlboro’s market share in Greece.

(SLIDE 23.)

Our volume in the Latin America & Canada Region was 4.8% lower in the quarter, driven by a double digit market contraction in Mexico following the large tax-driven price increases at the end of last year, and by the timing of shipments in Brazil. Despite a challenging pricing environment, our market share in Mexico reached 72.2%, with Marlboro surging 3.8 points to reach a 52.0% share. Our business in Argentina performed very well, with volume growth of over 8% and gains for Marlboro, which added 0.6 points to reach a 24.0% market share.

Net revenues for the Region increased by 5.8% in the quarter, excluding currency and acquisitions, and adjusted OCI was 8.8% higher on the same basis.

(SLIDE 24.)

On the regulatory front, the main focus remains on plain packaging. Although certain other governments have expressed their opposition to such a measure, the Australian Government continues to appear intent on mandating the implementation of plain packaging in 2012 and has submitted a proposed bill to Parliament.

Plain packaging will result in the illegal confiscation of our very valuable trademarks and branded assets, in violation of international trade laws and treaties. We have, therefore, served notice of our intention to file an arbitration claim against the Australian Government under the Hong Kong – Australia Bilateral Investment Treaty. We are now in a mandatory three month period set aside for negotiation under this procedure. Consequently, we have written to the Government seeking a meeting.

(SLIDE 25.)

Strong pricing and very moderate increases in tobacco and non-tobacco material costs, as well as our continued focus on productivity improvements, resulted in a 2.5 point increase in PMI’s adjusted OCI margin, excluding currency and acquisitions, during the second quarter.

(SLIDE 26.)

Our free cash flow increased by $638 million, or 19.4% in the quarter to $3.9 billion. Excluding currency, the increase was $402 million, or 12.2%. The increase was driven

7

mainly by our excellent business results. During the first half of the year, our free cash flow was up more than $1 billion to nearly $6.2 billion.

(SLIDE 27.)

During the second quarter, we spent $1.5 billion to repurchase 22.7 million shares at an average price of $68.32. Since the March 2008 spin, we have now repurchased 17.9% of the shares outstanding at that time.

(SLIDE 28.)

In conclusion, PMI had an excellent quarter. Our adjusted diluted EPS growth reached 21.0%, excluding currency. Our outlook is promising, with strong market share and business momentum. Pricing remains a very strong driver of profitability, with Spain a special case. We are not under any significant input cost pressures and expect to exceed our annual productivity savings target of $250 million this year.

We have increased our 2011 EPS guidance by a further 15 cents, bringing it to a range of $4.70 to $4.80. Compared to an adjusted diluted EPS of $3.87 in 2010, this corresponds to an increase of approximately 21.5-24% at prevailing exchange rates, and approximately 15-17.5% excluding currency.

And finally, and most importantly, our cash flow continues to grow and we are focused on generously rewarding our shareholders through dividends and share repurchases.

(SLIDE 29.)

Thank you. I will now be happy to answer your questions.

NICK ROLLI

Well, thank you for joining us. That concludes our call today. If you have any follow-up questions, please contact the investor relations team here in Lausanne.

Thank you again and have a nice day.

8

EX-99.3

2011 Second-Quarter

Earnings Results

July 21, 2011

Exhibit 99.3

2

Introduction

Unless otherwise stated, we will be talking about results for the

second-quarter 2011 and comparing them with the same period in

2010

References to PMI volumes refer to PMI shipment data, unless

otherwise stated

Industry volume and market shares are the latest data available from

a number of internal and external sources

Organic volume refers to volume excluding acquisitions

Net revenues exclude excise taxes

OCI stands for Operating Companies Income, which is defined as

operating income before general corporate expenses and the

amortization of intangibles. OCI growth rates are on an adjusted

basis, which excludes asset impairment, exit and other costs

Data tables showing adjustments to net revenues and OCI for

currency, acquisitions, asset impairment, exit and other costs, free

cash flow calculations, 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

3

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-Q

for

the

quarter ended March 31, 2011, filed with the Securities and Exchange

Commission

4

Second-Quarter 2011 Results

Very strong financial performance:

Key drivers:

Excellent results in the Asia Region, led by Indonesia, Japan,

Korea and the Philippines

Higher prices in a wide range of markets

Q2,

2011

Results

(a)

Organic Cigarette Volume

+0.1%

Net Revenues                 

+10.1%

Adjusted OCI

+16.5%

Adjusted Diluted EPS

+21.0%

(a)

All financial growth rates exclude currency. Net revenues and OCI growth rates also exclude acquisitions

Source: PMI Financials

5

Pricing Variance

Pricing remains the key

driver of our increased

profitability

During the last three

months, PMI implemented

or announced price

increases in numerous

markets

Pricing situation in Spain

improved in July

Source: PMI Financials

($ mio)

790

1,070

Q2

Q1

449

453

341

617

0

600

1,200

2010

2011

6

PMI Market Share Developments

(%)

Top 30 PMI OCI Markets

Source: PMI Financials and estimates

36.2

38.5

30

35

40

Q2, 2010

Q2, 2011

7

Marlboro

Market Share Developments

Market Shares

Q2, 2010

Q2, 2011

Variance

EU

18.1 %

18.1 %

-

pp

EEMA

6.3

6.9

0.6

Asia

(a)

6.0

6.7

0.7

LA&C

13.6

13.7

0.1

Total

(a)(b)

8.9

9.3

0.4

(a)

Excluding PRC

(b)

Also excluding the USA

Source: PMI estimates

8

L&M

Market Share Developments

Market Share Increases

Q2, 2011 vs. Q2, 2010

(pp)

Turkey

(a)

Netherlands

Germany

Poland

Slovakia

Egypt

4.3

1.6

0.8

1.0

0.8

0.4

(a)

QTD May

Source: A.C. Nielsen and PMI estimates

0

5

9

2011 EPS Guidance

Reported diluted EPS guidance for 2011 is being raised

by a further 15 cents to $4.70 to $4.80

Ten cents of the increase are attributable to

improvements in the business, largely Japan

Five cents relate to a more favorable currency outlook at

prevailing exchange rates

Compared to our adjusted diluted EPS of $3.87 in 2010,

this corresponds to a growth rate of approximately 21.5 to

24% at prevailing exchange rates, and approximately

15% to 17.5% excluding currency

Source: PMI forecasts

10

PMI Results by Region

Asia

(a)

Eastern Europe, Middle East & Africa Region

Source: PMI Financials

H1, 2011 Net Revenues:

$15.1 billion

H1, 2011 Adjusted OCI:

$6.9 billion

EEMA

(a)

EU

Latin America

& Canada

Latin America

& Canada

Asia

EU

EEMA

(a)

24%

35%

30%

11%

23%

36%

33%

8%

11

Japan

Source: PMI Financials and Tobacco Institute of Japan

Total PMI

PMI shipments to Japan

reached 19.5 billion units 

in Q2, 2011, up 1.9 billion,

or 11.0%

Second half impact subject

to complex interaction of

multiple factors

New base for industry

volume and PMI share will

not be clear until Q4, 2011,

at the earliest 

Other

Lark

Marlboro

24.3

42.0

2010

2011

(%)

PMI Market Share

10.8

16.4

6.7

14.4

11.2

6.8

0

50

Q2

Q2

12

Indonesia

Strong economy and

relatively soft Q2, 2010,

drove industry volume up

13.9% in Q2, 2011

PMI volume up 20.7% to

22.6 billion units in the

same period

Strong profitability growth

in Asia’s second largest

market after China

Source: PMI estimates and PMI Financials

2010

2011

Other

Marlboro

Dji Sam Soe

Sampoerna A

28.6

30.2

(%)

PMI Market Share

Total PMI

11.7

11.8

7.3

7.3

4.2

4.5

0

30

Q2

Q2

13

Korea

Strong volume and share

growth momentum

continued, driven by

Marlboro

and

Parliament

Innovative Marlboro

menthol line extensions

contributed 1.0 share

points in Q2, 2011

PMI seeking to secure

excise tax reform

Source: PMI Financials and Hankook Research

(%)

2010

2011

Other

Parliament

Marlboro

16.6

19.9

Total PMI

PMI Market Share

6.8

8.6

5.5

6.7

0

20

Q2

Q2

14

EEMA Region

PMI’s organic volume declined by 3.4% due primarily to

Ukraine

Full-year Regional volume expected to be stable

Net revenues and adjusted OCI, excluding currency and

acquisitions, were up 3.6% and 4.8%, respectively in Q2

Profitability improvement driven by:

Increased volumes in Turkey and North Africa, and

Higher prices across the Region, most notably in Russia,

partly offset by

Lower volumes in Eastern Europe, and

Increased investments in business building initiatives in Russia

Source: PMI Financials 

15

Russia

Investments to support strong

performance of Parliament,

Chesterfield

and Bond Street, 

and address Marlboro

issues

Market share down 0.1pp QTD

May, 2011, to 25.4%

PMI price increase announced

earlier this month

Limited consumer uptrading and

expected overall market decline

of  2-3% this year, in line with

2010

Russian Government has

approved new road map for

excise taxes

Source: A.C. Nielsen, PMI estimates and Russian Ministry of Finance

16

Ukraine

Estimated industry volume

decline of 15% distorted by

trade loading in Q2, 2010

Total market expected to

stabilize during second half

PMI share down 3.5pp to

32.1% in the second quarter,

due to under-representation in

super-low segment. Issue

being addressed through

more attractive pricing of

Bond Street

Market

shares

of

Parliament

and

Marlboro

are

growing

Source: PMI estimates and A.C. Nielsen

(%)

2010

2011

Industry Price Segments

Premium

Mid/Low

2010

Super-

Low

44.9

45.7

46.5

42.1

40.5

39.5

13.8

14.0

13.0

0

100

H1

H2

H1

17

Turkey

Total market has stabilized

PMI volume up 12.1% in Q2,

2011

PMI reached a market share

of 44.6% in QTD May, 2011,

up 3.8pp

PMI share improvement in

all three price segments, led

by Parliament, Muratti

and

L&M

(%)

2010

2011

Total

PMI

Premium

Mid

Low

40.8

44.6

PMI Market Share

(a)

QTD May

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

(a)

19.0

21.4

5.8

6.2

17.0

16.0

0

45

Q2

Q3

Q4

Q1

Q2

18

EU Region

Despite the issues that continued to impact Spain and to

a lesser extent Greece, the results in the second quarter

were more positive:

-

Industry volume declined by a modest 1.7%

-

PMI volume was 3.1% lower due to Greece, Poland and Spain

-

further 0.3pp to 6.6%

-

Net revenues and adjusted OCI were up 0.7% and 2.3%,

respectively, excluding currency and acquisitions

Source: PMI estimates and PMI Financials

Marlboro’s

Regional

share

was

stable

at

18.1%

and

L&M

grew

a

19

Cigarettes

Fine cut

Germany

Total industry volumes of

cigarettes and fine cut have

increased this year

PMI cigarette and fine cut

market shares are growing

Very strong performance of

L&M

Unit margin-enhancing price

increases implemented

Continued growth of “maxi”

pack segment

(a)  Big packs (22-25 cigs) and Maxi packs (26+ cigs)

Source: PMI estimates

(%)

2011

2010

PMI Market Share

2011

(%)

Big and Maxi Packs

(a)

SoM

Maxi

Big

35.6

35.9

14.4

14.8

2009

2010

36.4

40.5

40.2

5.2

7.1

10.0

0

50

FY

FY

H1

0

40

H1

H1

20

Spain

Source: PMI estimates

(%)

2010

2011

PMI Market Share

High unemployment

Cigarette industry contracting at

double-digit rate and consumer

downtrading

Price competition exacerbated in

May/June this year

Recent developments indicate the

situation has improved

BUT

31.2

31.3

31.0

30.4

32.6

31.6

25

35

Q1

Q2

Q3

Q4

Q1

Q2

21

France and Italy

Industry cigarette volume up

1.8% in France and stable in

Italy during Q2, 2011

Following entry of Marlboro,

PMI became market leader in

fine cut in France in Q2 with a

share of 25.0%, up 5.6pp

High single digit profitability

increases in both markets

PMI has announced a price

increase of €0.10/pack in Italy

Source: PMI estimates 

Other

Marlboro

40.8

40.9

(%)

54.1

53.4

2010

2011

2010

2011

France

France

Italy

PMI Market Shares

Total

PMI

26.3

26.0

23.0

22.7

14.5

14.9

31.1

30.7

0

60

Q2

Q2

Q2

Q2

22

Greece

Government has increased

Minimum Excise Tax from

75% to 100% of excise tax on

“WAP”

(Weighted Average

Price)

Tax pass-on at bottom of the

market (€2.40/20) is almost

€0.50/20

PMI has announced price

increase on L&M

25s from

€3.20 to €3.70 per pack

Price gap reduction should

help spur Marlboro

share

recovery

Source: Greek Ministry of Finance and PMI estimates

2010

2011

Marlboro

Market Share

(%)

19.7

19.4

18.7

20.0

19.3

21.7

15

25

Q1

Q2

Q3

Q4

Q1

Q2

23

Latin America & Canada Region

Regional volume down

4.8%, driven by impact of

tax-driven price increases

in Mexico and timing of

shipments in Brazil

Strong Marlboro

performance

Regional net revenues

grew by 5.8% and

adjusted OCI was up

8.8%, both excluding

currency and acquisitions

Source: PMI Financials and PMI estimates

(%)

2010

2011

Mexico

Marlboro

Market Share

Argentina

Marlboro

Market Share

(%)

2010

2011

48.2

52.0

45

50

55

Q2

Q2

23.4

24.0

20

25

Q2

Q2

24

Australia -

Plain Packaging

Australian Government appears intent on mandating the

implementation of plain packaging

Plain packaging will result in the illegal confiscation of our

very valuable trademarks and branded assets

PMI has served notice of its intention to file an arbitration

claim for compensation under the Hong Kong –

Australia

Bilateral Investment Treaty

25

Adjusted OCI Margins

Second-Quarter

2011

(a)

2010

Variance

(a)

EU

48.9 %

48.1 %

0.8 pp

EEMA

42.1

41.6

0.5

Asia

46.2

39.8

6.4

LA&C

32.5

31.6

0.9

Total

44.6

42.1

2.5

(a)

Excluding currency and acquisitions

Source: PMI Financials

26

Free Cash Flow                            

(a)

Free cash flow equals net cash provided by operating activities less capital expenditures

Source: PMI Financials

Free Cash Flow

(a)

($ million)

+19.4%

Quarterly increase of $402

million, or 12.2%,

excluding currency

Driven mainly by our

excellent business results

For the first half, free cash

flow is up more than $1

billion to nearly $6.2 billion

Currency

3,296

3,934

236

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Q2, 2010

Q2, 2011

27

Share Repurchases

During the second quarter, PMI spent $1.5 billion to

purchase a further 22.7 million shares at an average price

of $68.32 per share

Since the March 2008 spin, 17.9% of shares outstanding 

at that time have been repurchased

Source: PMI Financials

28

Summary

Very strong second-quarter results

Adjusted diluted EPS growth of 21.0%, excluding

currency

Outlook is promising, with strong market share and

business momentum

Pricing remains the key driver of profitability, with Spain a

special case

Very limited input cost pressures and we expect to

exceed our $250 million annual productivity target

2011 reported diluted EPS guidance raised by another 15

cents to a range of $4.70-$4.80

We continue to use our growing cash flow to generously

reward our shareholders

Source: PMI Financials

Questions & Answers

2011 Second-Quarter Results

30

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries

Reconciliation of Non-GAAP Measures

Adjustments for the Impact of Currency and Acquisitions

For the Quarters Ended June 30,

($ in millions)

(Unaudited)

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

8,080

$           

5,583

$  

2,497

$           

187

$      

2,310

$               

-

$         

2,310

$           

European Union

7,260

$     

4,965

$  

2,295

$           

8.8%

0.7%

0.7%

4,603

2,591

2,012

55

1,957

-

1,957

EEMA

4,125

2,236

1,889

6.5%

3.6%

3.6%

5,146

2,210

2,936

222

2,714

3

2,711

Asia

3,903

1,780

2,123

38.3%

27.8%

27.7%

2,405

1,577

828

30

798

-

798

Latin America & Canada

2,095

1,341

754

9.8%

5.8%

5.8%

20,234

$         

11,961

$

8,273

$           

494

$      

7,779

$              

3

$        

7,776

$           

PMI Total

17,383

$   

10,322

$

7,061

$           

17.2%

10.2%

10.1%

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

1,280

$           

152

$      

1,128

$               

(1)

$       

1,129

$           

European Union

1,105

$           

15.8%

2.1%

2.2%

835

11

824

-

824

EEMA

786

6.2%

4.8%

4.8%

1,398

145

1,253

1

1,252

Asia

845

65.4%

48.3%

48.2%

268

9

259

-

259

Latin America & Canada

238

12.6%

8.8%

8.8%

3,781

$           

317

$      

3,464

$              

-

$         

3,464

$           

PMI Total

2,974

$           

27.1%

16.5%

16.5%

2011

2010

% Change in Reported Operating

Companies Income

2011

2010

% Change in Reported Net Revenues

excluding Excise Taxes

31

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries

Reconciliation of Non-GAAP Measures

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

Reconciliation of Adjusted Operating Companies Income Margin, excluding Currency and Acquisitions

For the Quarters Ended June 30,

($ in millions)

(Unaudited)

(a) For the calculation of net revenues excluding excise taxes, currency and acquisitions, refer to previous slide

Reported

Operating

Companies

Income

Less

Asset

Impairment &

Exit Costs

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

Adjusted

Operating

Companies

Income

Adjusted

Adjusted

excluding

Currency

Adjusted

excluding

Currency &

Acquisitions

1,280

$           

(1)

$                   

1,281

$        

152

$      

1,129

$         

(1)

$                   

1,130

$           

European Union

1,105

$       

-

$                                

1,105

$       

15.9%

2.2%

2.3%

835

-

835

11

824

-

824

EEMA

786

-

786

6.2%

4.8%

4.8%

1,398

-

1,398

145

1,253

1

1,252

Asia

845

-

845

65.4%

48.3%

48.2%

268

-

268

9

259

-

259

Latin America & Canada

238

-

238

12.6%

8.8%

8.8%

3,781

$           

(1)

$                   

3,782

$        

317

$      

3,465

$         

-

$                     

3,465

$           

PMI Total

2,974

$       

-

$                                

2,974

$       

27.2%

16.5%

16.5%

% Points Change

Adjusted

Operating

Companies

Income

excluding

Currency

Net Revenues

excluding

Excise Taxes &

Currency

(a)

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

Adjusted

Operating

Companies

Income

excluding

Currency &

Acquisitions

Net Revenues

excluding

Excise Taxes,

Currency &

Acquisitions

(a)

Adjusted

Operating

Companies

Income Margin

excluding

Currency &

Acquisitions

Adjusted

Operating

Companies

Income

Net Revenues

excluding Excise

Taxes

(a)

Adjusted

Operating

Companies

Income

Margin

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

Adjusted

Operating

Companies

Income Margin

excluding

Currency &

Acquisitions

1,129

$           

2,310

$            

48.9%

1,130

$         

2,310

$             

48.9%

European Union

1,105

$       

2,295

$                        

48.1%

0.8

0.8

824

1,957

42.1%

824

1,957

42.1%

EEMA

786

1,889

41.6%

0.5

0.5

1,253

2,714

46.2%

1,252

2,711

46.2%

Asia

845

2,123

39.8%

6.4

6.4

259

798

32.5%

259

798

32.5%

Latin America & Canada

238

754

31.6%

0.9

0.9

3,465

$           

7,779

$            

44.5%

3,465

$         

7,776

$             

44.6%

PMI Total

2,974

$       

7,061

$                        

42.1%

2.4

2.5

% Change in Adjusted Operating

Companies Income

2010

2011

2010

2011

32

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 Quarters Ended June 30,

(Unaudited)

2011

2010

% Change

Reported Diluted EPS

1.35

$                     

1.07

$                     

26.2%

Adjustments:

Asset impairment and exit costs

-

-

Tax items

(0.01)

(0.07)

Adjusted Diluted EPS

1.34

$                     

1.00

$                     

34.0%

Less:

Currency impact

0.13

Adjusted Diluted EPS, excluding Currency

1.21

$                     

1.00

$                     

21.0%

For the Quarters Ended

For the Six Months Ended

June 30,

June 30,

2011

2010

% Change

2011

2010

% Change

Net

cash

provided

by

operating

activities

(a)

4,120

$                

3,465

$                

18.9%

6,515

$                

5,439

$                

19.8%

Less:

Capital expenditures

186

169

345

319

Free cash flow

3,934

$                

3,296

$                

19.4%

6,170

$                

5,120

$                

20.5%

Less:

Currency impact

236

264

Free cash flow, excluding currency

3,698

$                

3,296

$                

12.2%

5,906

$                

5,120

$                

15.4%

33

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries

Reconciliation of Non-GAAP Measures

Reconciliation

of

Operating

Cash

Flow

to

Free

Cash

Flow

and

Free

Cash

Flow,

excluding

Currency

For the Quarters and Six Months Ended June 30,

($ in millions)

(Unaudited)

(a) Operating Cash Flow

34

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries

Reconciliation of Non-GAAP Measures

Adjustments for the Impact of Currency and Acquisitions

For the Six Months Ended June 30,

($ in millions)

(Unaudited)

(a) Includes the business combination in the Philippines ($105)

(b) Includes the business combination in the Philippines ($23)

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

14,495

$         

9,997

$  

4,498

$           

81

$        

4,417

$               

-

$         

4,417

$           

European Union

14,008

$   

9,529

$  

4,479

$           

0.4%

(1.4)%

(1.4)%

8,274

4,575

3,699

26

3,673

-

3,673

EEMA

7,481

3,846

3,635

1.8%

1.0%

1.0%

9,434

4,175

5,259

350

4,909

108

(a)

4,801

Asia

7,465

3,469

3,996

31.6%

22.8%

20.1%

4,561

2,953

1,608

54

1,554

-

1,554

Latin America & Canada

4,016

2,569

1,447

11.1%

7.4%

7.4%

36,764

$         

21,700

$

15,064

$         

511

$      

14,553

$            

108

$    

14,445

$         

PMI Total

32,970

$   

19,413

$

13,557

$         

11.1%

7.3%

6.6%

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

2,286

$           

131

$      

2,155

$               

(1)

$       

2,156

$           

European Union

2,167

$           

5.5%

(0.6)%

(0.5)%

1,557

(1)

1,558

-

1,558

EEMA

1,556

0.1%

0.1%

0.1%

2,491

247

2,244

24

(b)

2,220

Asia

1,569

58.8%

43.0%

41.5%

519

10

509

-

509

Latin America & Canada

455

14.1%

11.9%

11.9%

6,853

$           

387

$      

6,466

$              

23

$      

6,443

$           

PMI Total

5,747

$           

19.2%

12.5%

12.1%

% Change in Reported Net Revenues

excluding Excise Taxes

2011

2010

% Change in Reported Operating

Companies Income

2011

2010

35

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries

Reconciliation of Non-GAAP Measures

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

Reconciliation of Adjusted Operating Companies Income Margin, excluding Currency and Acquisitions

For the Six Months Ended June 30,

($ in millions)

(Unaudited)

(a) Includes the business combination in the Philippines ($23)

(b) For the calculation of net revenues excluding excise taxes, currency and acquisitions, refer to previous slide

Reported

Operating

Companies

Income

Less

Asset

Impairment &

Exit Costs

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

Adjusted

Operating

Companies

Income

Adjusted

Adjusted

excluding

Currency

Adjusted

excluding

Currency &

Acquisitions

2,286

$           

(12)

$                 

2,298

$        

131

$      

2,167

$         

(1)

$                   

2,168

$           

European Union

2,167

$       

-

$                                

2,167

$       

6.0%

-

%

-

%

1,557

(2)

1,559

(1)

1,560

-

1,560

EEMA

1,556

-

1,556

0.2%

0.3%

0.3%

2,491

(2)

2,493

247

2,246

24

(a)

2,222

Asia

1,569

-

1,569

58.9%

43.1%

41.6%

519

(1)

520

10

510

-

510

Latin America & Canada

455

-

455

14.3%

12.1%

12.1%

6,853

$           

(17)

$                 

6,870

$        

387

$      

6,483

$         

23

$                   

6,460

$           

PMI Total

5,747

$       

-

$                                

5,747

$       

19.5%

12.8%

12.4%

% Points Change

Adjusted

Operating

Companies

Income

excluding

Currency

Net Revenues

excluding

Excise Taxes &

Currency

(b)

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

Adjusted

Operating

Companies

Income

excluding

Currency &

Acquisitions

Net Revenues

excluding

Excise Taxes,

Currency &

Acquisitions

(b)

Adjusted

Operating

Companies

Income Margin

excluding

Currency &

Acquisitions

Adjusted

Operating

Companies

Income

Net Revenues

excluding Excise

Taxes

(b)

Adjusted

Operating

Companies

Income

Margin

Adjusted

Operating

Companies

Income

Margin

excluding

Currency

Adjusted

Operating

Companies

Income Margin

excluding

Currency &

Acquisitions

2,167

$           

4,417

$            

49.1%

2,168

$         

4,417

$             

49.1%

European Union

2,167

$       

4,479

$                        

48.4%

0.7

0.7

1,560

3,673

42.5%

1,560

3,673

42.5%

EEMA

1,556

3,635

42.8%

(0.3)

(0.3)

2,246

4,909

45.8%

2,222

4,801

46.3%

Asia

1,569

3,996

39.3%

6.5

7.0

510

1,554

32.8%

510

1,554

32.8%

Latin America & Canada

455

1,447

31.4%

1.4

1.4

6,483

$           

14,553

$          

44.5%

6,460

$         

14,445

$           

44.7%

PMI Total

5,747

$       

13,557

$                      

42.4%

2.1

2.3

2010

2011

2010

2011

% Change in Adjusted Operating

Companies Income

36

PHILIP MORRIS INTERNATIONAL INC. and Subsidiaries

Reconciliation of Non-GAAP Measures

Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS

For the Year Ended December 31,

(Unaudited)

2010

Reported Diluted EPS

3.92

$                     

Adjustments:

Tax items

(0.07)

Asset impairment and exit costs

0.02

Adjusted Diluted EPS

3.87

$                     

2011 Second-Quarter Results

July 21, 2011