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Executives

Louis C. Camilleri – Chairman and Chief Executive Officer

Jerry Whitson – Deputy General Counsel and Corporate Secretary

André Calantzopoulos – Chief Operating Officer

Philip Morris International Inc. (PM) Annual Meeting of Stockholders Conference Call May 8, 2013 9:00 AM ET

Operator

Louis C. Camilleri

Good morning ladies and gentlemen, and welcome to the Philip Morris International’s 2013 Annul Meeting of Shareholders. The meeting is now called to order, I’m Loui Camilleri, Chairman of the Board and Chief Executive Officer, I would like to extend my warmest welcome to shareholders, and employees who’ve joined us via live audio webcast. As well as those who are here in person today.

It is my privilege to welcome our Board of Directors all of whom are in attendance, but the very understandable exception of Graham Mackay, who regretfully had to endure a major surgical intervention and Stephen Wolf who has recently suffered the loss of a close relative, our thoughts and prayers accompany both of them.

On stage with me is André Calantzopoulos, Chief Operating Officer of Philip Morris International who, as previously announced in March this year, succeeds me as Chief Executive Officer following this meeting. You will hear from André in a moment when he gives today’s business presentation.

André is superbly equipped to lead our company and to continue to deliver superior results and superior shareholder value. Since our spin-off in 2008, he has played an instrumental role in numerous key initiatives, including the new architecture that has revitalized the Marlboro brand, new product development and revamped consumer engagement activities that have driven our broad-based market share gains in both OECD and non-OECD markets.

Under his leadership as Chief Operating Officer, we have substantially increased our revenues even in difficult operating and economic environments, recorded strong productivity gains, driven relentlessly towards our goal of developing next generation products, and enhanced the caliber and depth of our organization and future leadership talent.

In short, André has been instrumental in driving our exceptional performance since we became a public company five years ago, and I am very confident that, under his leadership, our great company will continue to flourish and reach ever greater heights. On a more personal note, I have known André for more than 27 years. He is a very dear and loyal friend and it has truly been an immense pleasure to witness his impressive growth over the years as an accomplished leader and human being who admirably balances his incredibly superior intellect with his most generous heart. Ladies and gentlemen, please join with me in welcoming and congratulating André as our next Chief Executive Officer. Also on stage with me is Jerry Whitson, our wonderful Deputy General Counsel and Corporate Secretary.

In addition, I would like to introduce Barry Misthal of PricewaterhouseCoopers, our auditors. He is in the audience and will be available to answer questions if any after the meeting. It is our intention to proceed in accordance with the Agenda and the rules for the meeting that have been placed on your seats.

Our remarks today contain certain forward-looking statements and I direct your attention to the Forward-Looking and Cautionary Statements section on this slide. A glossary of terms and reconciliation slides of non-GAAP to GAAP measures are provided at the end of the presentation and will be posted on our website.

The Secretary will now present certain formal documents. Jerry please.

Jerry Whitson

Thank you, Mr. Chairman. I present to the meeting together with affidavits of mailings and a copy of the Notice of Meeting form of Proxy, Proxy Statement and Annual Report, including financial statements for the fiscal year ended December 31, 2012. The holders of record of common stock at the close of business on March 15, 2013 are entitled to vote at this meeting. I am informed that more than 86% percent of Philip Morris International Inc.’s common stock is represented here today, and, therefore, a quorum is present for the transaction of business.

Louis C. Camilleri

Thank you, Jerry. Will the Secretary please file the documents with the records of the meeting. I appoint as Inspectors of Election, Amilja Regan and Kevin Laurita of Computershare, the Transfer Agent for PMI’s common stock. The Inspectors are instructed to execute the oath, and to take custody of all proxies, and of the certified list of holders of common stock as of the close of business on March 15, 2013. The list contains the names and addresses of all holders of common stock, and the number of shares held by each. The list is available for inspection throughout the meeting. The Inspectors will certify the vote on each of the matters to be presented to the meeting. Individual proxies and ballots are kept confidential, except where Shareholders have written comments on them.

It’s now my pleasure to pass the microphone to André who will review our business performance. André?

André Calantzopoulos

Thank you, Louie and good morning everyone. A very warm welcome to those joining us on the webcast. When I joined PMI in 1985, I had no notion that I will be standing here now, poised to lead our tremendous company through the challenges and the exciting opportunities that lie ahead. I am profoundly honored that Louis and the Board of Directors have the confidence in me to continue to build on PMI’s extraordinary success as its Chief Executive Officer. Throughout my career it has been my great privilege to witness and participate in PMI’s astonishing results.

The cornerstone of our company’s success in the past and in the future lies upon our people and our unique culture that unites and inspires. I am convinced that, thanks to our supremely talented people and our exceptional senior management team, we can confidently look forward to a bright future.

As this year marks our fifth anniversary as an independent company, my business presentation today will focus on how we have successfully delivered against the goals that we established at the time of our spin-off in March 2008. I will then outline some of our many exciting opportunities for further growth and I will end with a brief summary of our recent results and our expectations for 2013.

In March 2008, we set out the eight key strategies for growth that are shown on this slide. Their successful implementation enabled us to develop a powerful business. These strategies will continue guiding our business growth in the years to come.

Through a combination of organic share and volume growth, judicious acquisitions and a creative approach to business development, we have profoundly transformed our geographic profile. Since 2007, Asia, which is economically the most promising part of the world, has become our most important Region, accounting in 2012 for 35% of our cigarette volume and 37% of our adjusted Operating Companies Income, or OCI. Over this period, we attained an excellent balance between high margin developed and high potential emerging markets. Non-OECD markets now account for 61% of our cigarette volume and 39% of our adjusted OCI, up from 53% and 32%, respectively, in 2007.

We have achieved overall leadership in the largest OECD and non-OECD markets. We have increased our share of the global cigarette market, excluding China and the United States, from 24.9% in 2007 to a record 28.8% last year. A key driver of our share growth has been our superior brand portfolio that spans all key consumer segments, with international brands, led by Marlboro and L&M, complemented by strong local heritage brands, such as Sampoerna A in Indonesia, Fortune in the Philippines and Delicados in Mexico. Shortly after the spin, we embarked on a transformation of Marlboro. The new Marlboro architecture comprises three pillars, Flavor, Gold and Fresh. These give us today the ability to compete successfully in all key growing consumer segments.

The new architecture for Marlboro, along with a wealth of creativity fostered by the spin, unleashed an unparalleled stream of successful innovative line extensions. Key innovations included Marlboro Filter Plus, with its unique tobacco plug in the filter, the slightly slimmer Marlboro Gold Touch, and a variety of Fresh capsule products. In 2012, these three innovations accounted for around 6% of the brand’s volume and added vigor to the entire brand family.

Last year, we rolled out a new marketing campaign for Marlboro, which is further strengthening the brand. Our efforts are paying off. Marlboro reached a global share, excluding China and the USA, of 9.4% in 2012 with growth in all four Regions. Our results in the European Union Region are particularly gratifying given the difficult economic context and the fact that Marlboro had been losing share in the Region since 2002.

Our second largest brand is L&M, which is positioned predominantly in the mid-price segment in non-OECD markets and in the low-price segment in OECD markets. L&M has been very successful in the European Union Region. The brand grew share for example in Germany and Poland from 5.1% to 10.5% and from 14.8% to 16.6%, respectively, between 2007 and 2012. L&M is today the industry’s second largest cigarette brand by volume in the EU Region after Marlboro. However, L&M was declining in the EEMA Region so we revamped the product, changed the marketing campaign and adjusted its pricing where appropriate. The turn-around occurred in 2011 and I am pleased to report that L&M is back on a steady growth path.

We own five additional international brands that are in the world’s top fifteen. In the aggregate, these have grown at an average rate of 3.1% since 2007. The outstanding performer has been Parliament, which has a luxury positioning, is sold in the above premium segment and generates very attractive margins. It’s volume increased at an average rate of 6.8%. During this period, Bond Street grew at an average rate of 5.4%, driven predominantly by its success in Russia, where it increased its market share from 3.5% in 2007 to 6.5% last year.

Our strong and broad portfolio has been the foundation of our pricing power. The favorable pricing environment has been a key element of our income growth. Over the last five years, our pricing actions have increased our income by an annual average of $1.7 billion. We operate in an industry where the elasticity of demand is relatively low generally in a range of -0.3 to -0.5 and our pricing actions have fallen well within this range.

An important element of our pricing strategy is excise taxation. Governments increasingly recognize that their excise tax revenues can be enhanced and become more predictable by instituting regular, reasonable increases, a higher proportion of specific elements in the excise tax structure, multi-year programs, inflation indexation, and the gradual harmonization of taxation between cigarettes and Other Tobacco Products, particularly fine cut. This is in line with their objective to secure excise tax revenue growth and lower the tobacco consumption base through moderately higher pricing.

That said, from time to time, a few governments have implemented unreasonable and disruptive increases. The inevitable result has been an increase in illicit trade, a failure to meet government revenue targets and disruption to the legitimate industry. This year, the Philippines chose to increase excise taxes by an unprecedented rate but to-date remains the exception. While the actual excise tax incidence is obviously important, its structure is of more paramount importance. In this regard, we have witnessed significant improvements since 2007, particularly in the European Union but also in many other parts of the world, notably in Brazil, Indonesia, Russia, Turkey and Ukraine.

The 2010 EU Excise Tax Directive was an important step. It allowed for a higher specific excise tax element, provided the European Union Governments with greater structural flexibility, incorporated manageable increases in excise tax incidences and yields, and set a reasonable framework through 2018. A number of EU Governments have taken advantage of the new rules. As a result, we have witnessed an increase in the average specific-to-total excise tax ratio from 30.2% in January 2011 to 35.1% in December 2012.

In addition to a fair and reasonable excise tax environment, we seek a comprehensive regulatory environment based on the broader goal of harm reduction, supported by robust scientific evidence. Unfortunately, the environment in which we operate has become more challenging given ever-growing proposals and actions to introduce arbitrary measures. Such measures rely on no scientific basis and, consequently, provide no sound evidence that they would reduce consumption, smoking incidence or youth smoking. Regretfully, they also silence or ignore the potential severe adverse consequences, notably an increase in illicit trade.

One example is plain packaging. Very regretfully, Australia has implemented this extraordinary measure. Other countries are closely watching this experiment, which we believe is doomed to failure and will not achieve its advertised goals. As you know, several countries have challenged this legislation under the auspices of the WTO and we have initiated our own claim for full compensation.

We will continue to vigorously oppose unreasonable and irrational regulatory proposals, including those elements in the EU’s Tobacco Products Directive that are frankly illogical and devoid of scientific evidence.

Expanding top-line growth is key to success in our industry. This entails judicious investments in our brands, innovation, infrastructure and our people. Nonetheless, we remain very focused on cost effectiveness. Since the spin, we have completed three productivity and cost reduction programs for total savings of over $2 billion. These have helped increase our industry-leading adjusted OCI margins from 40.1% in 2007 to 45.4% last year.

Perhaps our most distinguishing feature is our ability to generate increasingly large amounts of cash. Our free cash flow increased at a compound average rate of 13.3% from $4.5 billion in 2007 to $8.4 billion last year. Since our spin in March 2008 through the end of 2012, we returned $51.9 billion to our shareholders. $27.9 billion was spent on share repurchases and $24 billion was spent on dividends. In addition, we spent $2.3 billion on acquisitions. We increased our dividend each year since the spin, for a cumulative increase of 84.8% over the period through the end of 2012, a significantly higher growth rate compared to all the companies in our Compensation Survey Group with the exception of McDonald’s.

At the end of April, our dividend yield was a very attractive 3.6%. Through the end of March this year, we spent $29.4 billion to purchase 505.7 million shares. This represents 24% of the shares outstanding at the time of the spin. The average price was $58.05 per share. Our total shareholder return has been 135% since the spin, substantially outperforming that generated by both our Tobacco Peer Group at 83% and our Compensation Survey Group at 62%. It is also nearly four times the return generated by the S&P 500.

These strong results form the foundation upon which we will build our future expansion, though in the short-term total market declines in depressed economies will be a headwind to the realization of our full potential. I firmly believe that we still have great opportunities to continue to grow our existing tobacco business through the further expansion of our terrific brand portfolio, additional investments in consumer-relevant innovation and communication, the continued roll-out of our commercial approach, judicious pricing, and a continued focus on efficiency and productivity savings.

While ours is a relatively consolidated industry, nearly a quarter of cigarette industry volume outside of China and the USA representing about 750 billion units remains in the hands of private companies or state-owned monopolies. Our approach to these markets has tended to be a mixture of organic growth and partnerships with local companies. At the same time, we are continually seeking acquisitions or other form of business development initiatives that would provide a good strategic fit and would generate attractive returns on investment.

Algeria is a good example of recent success. We entered the market in 2005 with local partners, initially with imports and subsequently through local manufacturing. We commercialized two brands in Algeria: Marlboro in the premium segment and L&M in the mid-price segment. Our overall market share has grown rapidly to reach 40.3% in 2012. Vietnam is a good example of a market where we have strong potential. At 83 billion units in 2012, Vietnam is a sizeable market. The premium segment has increased from 2.0% to 5.3% of the market since 2009, driven by improvements in consumer purchasing power.

We established a partnership with the state-owned enterprise, Vinataba, to manufacture and sell Marlboro. We initially focused our efforts on the six major cities where the premium segment was over-represented. We successfully expanded our national share from 0.8% in 2009 to 2.8% in 2012. This year, we achieved a share of 3.1% in the first quarter, confirming our growth momentum.

Another exciting growth opportunity is the potential to curtail the illicit trade of cigarettes and consequently boost the legal market. Illicit trade accounts for an estimated 600 billion cigarettes worldwide. In the European Union alone, it is estimated that illicit cigarette volume reached 65.5 billion units in 2012, resulting in annual lost tax revenues of some €12.5 billion for Member States.

On a global basis, the volume of illicit trade appears to be fairly stable. It is, however, becoming a more important issue in a number of markets, notably in the European Union. Furthermore, the nature of illicit trade is changing, with the growth coming from so-called “illicit whites”. These are branded cigarettes manufactured mainly for large-scale illicit trafficking without paying appropriate taxes in the countries of intended destination. There is significant production capacity in countries such as Belarus, Bulgaria, Cyprus, Paraguay, Ukraine and the UAE for such products, which are essentially traded worldwide by organized criminal networks.

In contrast, the volume of counterfeit cigarettes appears to be stable, while the contraband of genuine products continues to decline thanks to tracking and tracing technologies and the strict policies implemented by the major international manufacturers. We have established a new dedicated global organization to deal with illicit trade as we recognize it as both a threat and an opportunity.

In addition, the changing nature of illicit trade requires new strategies to tackle it. We are addressing both the supply and the demand aspects. This requires a comprehensive approach that brings together the private and public sectors, as well as the legislative and enforcement framework.

On the supply side, the most promising approach is to work with the industry and raw material suppliers to increase the risks and controls on the production and distribution of illicit whites and counterfeit products. For example, we seek to restrict the access of these manufacturers to key components such as filter tow based on the levels of legitimate, tax-paid consumer demand.

We are also working with local authorities, customs officials, governments, OLAF and INTERPOL to restrict the ability of these producers to illegally distribute their products in third countries. To support these efforts, legislative changes are needed in many countries to reinforce the penalties, introduce more effective measures, and provide additional resources and a sense of urgency for enforcement.

On the demand side, we are developing educational programs designed to remind those smokers who buy illicit cigarettes that they are purchasing a product that has been manufactured with no controls over its content and that they are funding organizations that are involved in a wide range of criminal activities.

We are certainly on the right track. However, given the complexity of the issue, the implementation of these strategies will take some time before they have a noticeable impact. In the meantime, it is unfortunate to say the least, that from time-to-time, governments implement regulations, such as display bans and disruptively large excise tax increases, which fuel the problem rather than resolve it. A poster child is the current EU TPD proposal that calls for a ban of 10% of the European Union market, a measure that would dramatically fuel illicit trade.

Perhaps our most exciting growth opportunity is the advent of Next Generation Products, or “NGPs”. We have developed NGP platforms that closely approximate existing adult consumers’ taste, sensory and ritual preferences. We aim to demonstrate through our state-of-the-art risk assessment that the risk profile of our NGP platforms is similar to cessation. Recent consumer interest in electronic cigarettes, combined with relatively low adoption rates, confirms a strong demand for less harmful nicotine and tobacco products, but demonstrates that smokers are not yet finding a taste and sensory experience and a ritual that is close enough to that of traditional cigarettes.

This year will see us achieve a number of important milestones on our road to the successful commercialization of NGPs in 2016 or 2017. We will announce in the coming months where we will establish our first greenfield production facility and we’ll plan to break ground before the end of the year. As we have mentioned previously, we envisage capital expenditures of some €500 million to €600 million over a three-year period in this initial phase to build an annual capacity of approximately 30 billion units.

On the research side, we are initiating eight clinical studies in a range of geographies to ensure that the positive results from last year’s exploratory trials are confirmed across different populations. At the same time, we are making progress in our constructive dialogue with several regulatory bodies, notably the FDA.

In the longer term, the huge and growing Chinese cigarette market of 2.5 trillion cigarettes has a lot of potential. However, it is state-controlled and there is little incentive for the Government to make it accessible to foreign companies for conventional cigarettes. Through our two ventures with CNTC, we are seeking to obtain preferred partner status to take advantage of any opportunities that may arise for more extensive cooperation, notably in the area of NGPs.

We expect that the adoption of NGPs by adult consumers will be a gradual process. In the meantime, we will continue to build on our strong conventional business fundamentals. In 2012, we achieved robust organic cigarette volume growth of 1.3% to reach 927 billion units, although this result was partially flattered by some favorable inventory movements in the fourth quarter.

Our financial results last year were strong with net revenues and adjusted OCI up by 5.6% and 8.1%, respectively, excluding currency and acquisitions, while adjusted diluted earnings per share increased by 11.7%, excluding currency. While a decline in our volume and the overall difficult comparisons with the prior year impacted our results in the first quarter of this year, we achieved a solid EPS result. Net revenues and adjusted OCI grew by 3.2% and 2.9%, respectively, excluding currency and acquisitions, while adjusted diluted EPS increased by 8.8%, excluding currency.

Our business momentum continued as our market share increased in three of our four regions and remained essentially stable in the Asia Region, excluding the Philippines. We achieved organic volume growth in the first quarter, excluding the Philippines, in both the Asia and the EEMA Regions.

On April 18th, we announced a reported diluted 2013 EPS guidance a range of $5.55 to $5.65. This included an assumed $0.19 of unfavorable currency at the EPS level for the full year. While we do not provide quarterly guidance, I would like to emphasize that the bulk of our EPS growth this year is expected to occur in the latter part of the year, and we anticipate a particularly strong fourth quarter. This is mainly due to inventory fluctuations and higher investments in new products in Japan compared to last year.

In addition, we have substantially stepped up our spending in the Philippines behind price gap reductions that are already bringing sequential volume improvements and which will become more visible as of the third quarter. Finally, increased spending on our commercial infrastructure in Russia will become annualized as of the third quarter this year.

Our reported diluted EPS guidance for 2013 reflects a growth rate of approximately 10% to 12%, excluding currency, compared to our adjusted diluted EPS of $5.22 in 2012. This remains fully in line with our mid to long-term currency-neutral annual growth target for EPS that we have achieved or surpassed every year since the spin.

This projection highlights the continued strength of our underlying business model and the robustness of the growth algorithm that we established at the time of the spin. Our ability to maintain our growth algorithm at a time of global economic strain can be translated into one word for our investors, consistency.

What PMI offers investors today is what we have always offered, global leadership and scale, excellent geographic balance, a powerful brand portfolio led by Marlboro, the ability to grow profitability through pricing, market penetration, business development and productivity gains, world-class R&D capabilities, tremendous cash flows, significant returns to shareholders, and depth of management talent.

We are poised for long-term growth. Our strategies have proven to be right. We have a formidable organization and a superior brand portfolio to fuel our organic growth and the programs to reward our shareholders generously. There are going to be occasional bumps in the road due to economic challenges or taxes but, given our diversified footprint and market mix, we believe they will be manageable. I remain bullish about PMI’s prospects.

Thank you for your interest in our great company. I will now turn the podium back to Louis.

Louis C. Camilleri

Thank you very much André. I will now open the meeting for questions and comments. This period will be followed by the resolution of items for voting. I would ask that we all remember that this meeting represents an opportunity for shareholders, or their representatives, to express their views, whether favorable or otherwise. Whilst I value highly the chance to listen to your opinions and address your questions, I do expect the process to be based on mutual respect for the differing views represented in the audience.

As noted in the Agenda, each speaker is kindly asked to limit his or her comments to two minutes to allow everyone an opportunity to be heard. Shareholders should confine their remarks to matters that relate directly to the business of the meeting. Also, please note that those who wish to speak a second time may do so only after all others who wish to speak have had their turn.

I have asked Jerry to serve as our timekeeper, so that everyone will have an equal amount of time. We have allowed up to one hour for questions. There is a microphone in each of the two aisles. If there is not enough time for all of your questions during this morning's meeting, please feel free to ask an usher for a card, fill it out and return it to an usher will provide it to us at the end of the meeting. We will respond as soon as possible.

Please address all your questions or comments directly to me, and please be kind enough to identify yourself. I see we have lots of questions and comments. Sir, you got to kick it off.

Question-and-Answer Session

Unidentified Analyst

Okay. Good morning Mr. Chariman. [Sean Achilles] from Greenwich, Connecticut, I would like to thank you for your excellent stewardship of the company, since it is been five years ago. I applaud that.

Louis C. Camilleri

Thank you.

Unidentified Analyst

You certainly brought the company far. Our hope is that André Calantzopoulos will continue to aggressively push PMI forward. My business question today is, half of the Board and Management discussed and [showed] about some sort of the split up of the company along for example geographical regions.

As a shareholder, I’d be interested in increased exposure to the Asian market. As we have seen trees rarely growing to the sky, but there is a benefit in planting a forest. I’m interested in your thoughts about it. Next to comment about currency, as we have seen since the beginning of 2012, currency and especially an upward move of the U.S. dollar has been a drag on EPS growth. I take it that this drag has a potential to continue. I have followed the U.S. dollar since August 15, 1971 when Nixon ended the global convertibility of the U.S. dollar into gold.

Somehow second terms of democratic Presidents have the potential for a stronger dollar, just see what happened between April 1995 and October 2000. I have a few despite recent findings in a big internal study done last year by my friend that is with National Bank that the Europeans have done their homework whereas the U.S. is pushing their homework ahead of themselves.

It appears to me that some fundamental changes or at work today. First is the changing energy trade balance. Obama is about to approve a big liquid natural gas export terminal in Texas, that is symptomatic of what is happening. Second, the federal budget is improving, tax revenues are going up, there’s sequestration and the biggest expenditure defense is drastically going down.

The appointment of Chuck Hagel also speaks for that. Third, the federal reserves balance sheet will probably hit a feeling somewhere around $4 trillion. And fourth, the U.S. economy stressed more dynamics than many other developed economy, just compare this to the situation today in trend. These are just some very quick thoughts from my side on this important issue impacting PMI. Thank you very much, Mr. Chairman.

Louis C. Camilleri

Thank you very much and thank you for your very kind words in the introduction. I am touched by them. I think you should be aware it’s not just one individual, we should get the credits for a lot of things happening in a company. We will work as a team. Our board is to keep us on the straight and narrow and they do so in an extremely effective manner, and André and I’ve worked for 27 years together, so you can expect as much emphasis on our results and as much cautious optimism as you would have been used to.

In terms of your two specific questions related to split of the company, I think I know quite a lot about splitting companies and this instance, frankly, doesn’t make any sense. As André rightly point out in his presentation, there is significant growth coming from Asia, but there’s growth coming from a lot of other significant regions as well, most notably the EEMA region as well as Latin America and Canada.

And I think to have a geographic breadth that we have, which is probably the best in the industry, gives us a lot of strength and a sustainable competitive advantage. Currency comes and goes I think Winston Churchill used to say that try to project currency was a fool's era. From my experience over the years and there are basically around the same time as yours I have found that currency tends to even out all the time. So yes sometimes there are tailwinds and sometimes there are headwinds, but if you look at our record over time that tends to balance out. And I wouldn't be too unduly worried about it. So, thank you.

Unidentified Company Representative

Sir you have a question.

Unidentified Analyst

Mr. Chairman, my name is (inaudible) from Morgan Stanley. I have an observation and two questions. I want to congratulate you on the extraordinary value created for shareholders during your 10 years as CEO both Philip Morris’ as a predecessor company. Since being named CEO Philip Morris’ predecessor company assuming that all dividends are reinvested and all spun-off business retained. Investment has increased in value by 412% versus a decrease of 82% for the S&P 500. Congratulations.

Louis C. Camilleri

Thank you.

Unidentified Analyst

Two questions, how long do you envision remaining as the Chairman in the Chairman role and in your opinion what is the biggest piece of unfinished business? Thank you.

Louis C. Camilleri

Well the answer to your first question is I work at the pleasure of the Board, so the Board will decide how long I stay it’s obviously a new role for me. I'll look forward to it and we'll see how it goes. I'm sure I will enjoy it. As to the biggest unfinished businesses, we're a company that's never quite satisfied so there is a lot still to be done. André and then I have discussed the future and the priorities at great lanes. As I said we work together, the whole senior management teams work together. And I wouldn't anticipate any big changes. Clearly, the two huge paradigm shifts that were ahead of us are the ones André mentioned, which are the advent of next-generation products. And through that hopefully some form of entry into China, those are the two paradigm shifts. In the mean time, we could still do a lot in terms of our organic growth and in terms of business development initiatives. So thank you. Thank you for coming. Madam, Good morning.

Unidentified Analyst

Good morning, my name is Dr. Sharon Brown, I’m the Public Health Nurse and Advocate and also a member of Nightingale’s Nurses. We’ve met before I unfortunately have not been able to come to New York since she has moved from the New Jersey area for having her meetings. But I wanted to come back on this momentous occasion as you are stepping down as CEO. I wanted to ask you the question knowing what you know and giving your past statements.

Let me stop just a minute and review a bit. Since being that has happened in the past in terms of Philip Morris. Time and again (inaudible) insisted that if cigarettes were ever found to be causing harm they would start making them. In 1954, [Wisemen] Head of Marketing at Philip Morris announced his company would start business tomorrow. If you had any thought or knowledge in anyway we were selling our product harmful to consumers.

In 1972 [James Poland] Vice President of Public Relations at Philip Morris stated publicly and then no one for insurance. And if our product is harmful, we’ll start making it. (inaudible) Vice President of Research in Philip Morris 1976 stated publicly, as the company as a whole, believe that cigarettes were really harmful we would not be in the business. We’re very moralistic company to change it up a bit, R.J. Reynolds, our general long in 1986 stated that we ever saw or thought that they were any evidence person whoever that conclusively prove that in some way tobacco was harmful to people and I believe that in my heart and soul and I would get down to the business.

In 1997, Geoffrey Bible at Philip Morris under oath said that, what he would do, when asked what he would do with this company rip down the cigarettes were causing cancer said I’d probably shut it down instantly to get a better hold on things, Bible was asked about this in Minnesota versus Philip Morris in 1998 and reaffirmed that if even 1 person whoever found had died from smoking, he would reassess his duties as CEO.

And one of the clearest expressions of such an opinion was by [Laurel Lord] Chris Judge in 1984 deposition when asked about smoking and if he thought it was important for health? His answer because he was marketing a product that he knew caused cancer, he’d get out of the business. He wouldn’t be associated with marketing a product like that. When asked if it was proven to you that cigarette smoking caused lung cancer, do you think cigarettes should be marketed? No, he replied, no one should sell a product that has a proven cause of lung cancer.

Note that all of these are public assurances including several made under oath, all follow a script drawn by industries’ Public Relations Advisors and from the early stages of the conspiracy. So, Mr. Ken Larry to help the industry fulfill the decades of promises and knowing what you know and given your path, your company’s past statements, we honor your commitment to leave the business why or why not and before you answer that, I just wanted to say these comments are in memory of [Thomas] my very first patient at the VA Hospital in Durham, North Carolina. He was dying of head and neck cancer due to use – tobacco use. John, my father who died from lung cancer from using your product and Caroline, my mother who died second hand smoke exposures for over 50 year living with the man.

Louis C. Camilleri

Well, I am sorry for your loss and I thank you for your question. Many of the quotes you’ve just made were made at the time when I was still in shorts. and we’ve debated this subject several times in the past, I think, I’m presided this meeting for a 11 years, it would be extraordinarily nice to think that if Philip Morris shutdown factories people would stop smoking, it would be totally irrational people will continue to smoke cigarettes. So what is Philip Morris’s position, Philip Morris position is that it recognize this that its products create harm and therefore that is why we are in support of a lot of regulation that mirrors the FCTC.

Some of the regulation that is proposed is frankly stupid and that were oppose to but ultimately the solution to the products and the issue is the product itself, and that’s why we are investing a lot of, in terms of financial resources and human resources to come up with the products which we call the next generation products, to reduce the harm and the risk caused by those products. And I think that is the right thing to do, it is the ultimate solution to the industry and we are very proud, I’m very proud to be a member of this company and for what we are doing thank you. Sir?

Unidentified Analyst

(inaudible) from Jefferies.

Louis C. Camilleri

Hi, (inaudible).

Unidentified Analyst

Louis, you’ve certainly overseen tremendous changes in the company and tremendous growth in the company. The question is why it is now the right time to hand over the reins, why if this the right time for this juncture and what qualities would André bring to the COO role to tackle these projects that you just laid out?

Louis C. Camilleri

Why now? Why now is simple. Believe it or not, I’ve always been somewhat conscious of my self life, and conscious of what I could do overtime. I have had this job for a 11 years and I have always felt that new bloods was good for the company. And, presumably like good sportsmen you have to leave when you’re at the top, so that was what I was trying to achieve. That decision was made all the more these years, because I had a most deserving successor. Some of you know André; he has all the qualities that are required to run this company forward. I think, I said in my earlier remarks he has an intellect, many, many cannot reach.

He has a capacity for work, which is unbelievable. He has a incredible knowledge of the industry. He’s ambitious and he has got a heart. If you put all those together and I’m very confident that with André at the helm, PMI’s better years actually lie ahead. I hope I addressed your question. Thank you very much. Sir, you have a question?

Unidentified Analyst

Good morning Mr. Chairman, my name is Tyler Long, and I am the youth advocate from North Carolina. I just have question for you today. And it is knowing that Philip Morris International preys on countries where big business is favored over public health, what are you doing to assert your dominance in a way that will secure the company’s role in future public health legislation?

Louis C. Camilleri

There is a silence in the premise of your question. We enter countries some times and certain individuals feel that just by us entering a market suddenly people stop smoking. It’s a ridiculous premise people who have been smoking in this countries for centuries. What we do is obviously try to get existing smokers to switch to our brands. And quite often because we are there we try to render the industry more responsible and there are lot of examples of that happening. Last year Indonesia monopolized the annual meeting. We’ve said we were confident that there would be a tobacco control law instituted in Indonesia which we had been pushing against major oppositions for more than five years, well, a tobacco control law is now in place. And I think you should thank us for that rather than trying to say that we are doing the opposite, thank you. Sir, good morning.

Unidentified Analyst

Good morning Mr. Camilleri. My name is Alan Frankel, I’m a stockholder of both Altria and Philip Morris International. And I had touched on this in our last meeting, my concern as a stockholder, it appears to me the tobacco industry has become a punching bag for all the regulatory authorities around the world including the United States. Where other industries are marketing very dangerous products and are getting a free reign from the regulatory authorities. And I have a few quick examples from the food industry, energy drinks Red Bull and Monster there’s been a death of a 15 year old girl in Staten Island from excessive Red Bull consumption, cardiac arrest, there is a lawsuit going on right now, according to the newspaper.

There is a product called Aspartame which is an artificial sweetener appearing a NutraSweet very dangerous product with a laundry list of side effects. There are sugary beverages being marketed such as Soda, Snapple, fruit juices the United States right now is in the midst of the obesity and diabetes epidemic. No restrictions whatsoever on these products being marketed, various foods which are too enormous to mention have excess levels of sugar, salt, trans fat and saturated fat and I have an article from the Wall Street Journal, May 1, 2013 page B8, caffeinated snacks draw FDA scrutiny of the William Wrigley Jr. Company just introduced its Alert Energy Caffeine Gum.

This gum is the equivalent of four cups of coffee or about 320 milligrams of caffeine. The FDA recommends no more than 400 milligrams of caffeine for an adult. Food makers have been adding the stimulant for candy, potato chips, ruffles and range of other items without any FDA oversight or regulation. And finally, last but not least is the liquor industry which I referred to last year. We’ve lost 55,000 Americans on the highway last year many due to alcohol intoxication and DWI. There is very little if any regulation against the liquor industry.

They all basically have a free reign to market their products, and continue killing Americans with automobile crashes and in the liquor companies’ annual meeting, I would bet eventual that there are no demonstration outside as there were in front of this meeting. As a stockholder, I would like to know what Philip Morris, lobbyist’s, tax, corporate, marketing and legal department are doing to push back against a successive regulatory abuse this industry is taking and to protect the stockholders’ investments.

Louis C. Camilleri

Well, thank you for your question. I think in numerous participants in the industries you quoted, the food drinks; alcohol et cetera would not share your views. Regulation is here to stay and is becoming more stringent across all industries. And lot of regulation makes sense, and sometimes certain regulations are fundamentally flawed and create unintended consequences and those are the ones we fight. So I think we do everything in our power to ensure that regulations that are not based on any evidence, and scientific evidence. We will fight them and our record is there to show that we are prepared to fight them and we will continue to fight them going forward. So I wouldn’t be inadvertently worried about regulation. As for the demonstrations frankly if you go to other industries or companies you will find that demonstrations are there at the whole time. Go to some bank meeting these days and you’ll see how pleasant they are. Thank you. Madam.

Unidentified Analyst

Hi, Hello. My name is Michelle and young advocate from Hawaii I just wanted to start off by saying you are such an amazing, amazing businessman and within the years you’ve been CEO of PMI, you contributed to $20 million deaths a year in China, supported marketing that clearly targeted children in Indonesia, and in this year alone earned $32 million on addiction, illness and death. So my question to you is how does it feel to leave behind such a legacy that will serve as an example to your three children?

Louis C. Camilleri

Well, thank you. I’m actually proud of my legacy. I’m immensely grateful for the luck I had and for the privilege I had to I think positively impact thousands of lives despite what you said. Insults from you throwing the ills of the world at our doorstep are not cold sold, especially, when you say that we do things in China, when we are barely in China. Sedate your facts right. Thanks. Sir?

Unidentified Analyst

Good morning. My name is [Chris Renus] I’m from Syracuse, New York and my question is that in previous years you’ve stated that you do not advertise to youth in your marketing tactics. So with that said could you please explain the criteria a youth advertisement would intel from your point of view?

Louis C. Camilleri

We have a very strict code, it’s on the website. I would encourage you to go and read it and it will give you the rules. So let’s don’t waste everybody else’s time. Thank you. Ma’am.

Unidentified Analyst

Hello, my name [Coralie Lucie] and I’m an advocate from Mali, Huawei. I’m born a Pilipino descent and have lot of family members living in the Philippines. I’ve learned that more than 80 billion cigarettes are sold in the Philippines each year, and that Philip Morris International holds 90% of that market. So let me ask you, what responsibilities does Philip Morris International take for targeting my people and others like me who have families in these countries that you operate?

Louis C. Camilleri

Well, we’ve been in the Philippines for decades and another company called Fortune Tobacco is also present in the Philippines for decade. And we merged the two companies as opposed to what you just said; total consumption in the Philippines is not 80 its 90 billion units, but it has come down quite dramatically. It’s come down quite dramatically in terms of legitimate sales, because the government chose to institute very high excise tax increases and you know what happened? Illicit trade and counter food came cascading into the country. Therefore the society has to make a choice whether measures they take will actually just harm the legitimate tobacco industry and just help the criminal activities that are surging throughout the world. You should think about that. Thank you. Sir. Good morning.

Unidentified Analyst

Good morning. My name is (inaudible); I’m the Latin America Organization, Corporate for L&T International. I have traveled thousands of miles from my home country in Colombia to be here today, Mr. Camilleri. In Colombia and across Latin America Philip Morris International and its affiliate like Coal Tobacco are running aggressive campaigns to block one of the most effective means of preventing the spread of a global epidemic and youth addiction advents. Not only this is causing the hell on life of thousands of Colombians each year, but it’s also is regarding our laws. I have witnessed this few times PMI from their handed tactics under the (inaudible) fact it hurts on my people.

In 2009 Colombia legislator passed a most comprehensive ban on tobacco, their entitlement, promotion and sponsorship in all of South America, it includes a ban on ads at the point of sale in retail sports because that is where Colombian children see tobacco (inaudible). Since the law was implemented in 2011 PMI has been flooding retail stores with point of sale advertising in fact the authorities in Colombia had opened several investigation into the regulation of our law.

This is a picture of tobacco advertising and promotion at the point of selling (inaudible). This picture was taken just this past Saturday these violates our law. Mr. Camilleri my question to you is simple, it’s just why? If Colombia law bans all products of tobacco advertising and promotion does PMI continue their assignment it does makes problems at the point of sale, why?

Louis C. Camilleri

Thank you for coming, you are not the first to walk into this meeting and accuse of violating whatever law, in fact it’s not true. We have not violated laws in Colombia and you know that, I know you wanted a bit of publicity, but it’s unfortunate that you would go to that extreme. Thank you. Madam?

Unidentified Analyst

My name Victoria and I’m a youth advocate in Central New York. On your website that says, well we do not agree with total ban for marketing, because we do not agree that advertising causes people to smoke, we have been strong advocates for regulations limiting tobacco marketing. So I was wondering, if you do not think that marketing a product causes people to smoke and we no smokers are unlikely to switch brand, why do you spend money on marketing advertising at all?

Louis C. Camilleri

Smokers are unlikely to switch brands, I would love to know where you got that from, because frankly that makes no sense whatsoever and you should look at the difference between prevalence and brand preference, those are two vary separate things. And regretfully the anti-smoking tobacco community and you are an example of it today, always confuses prevalence and preference. So please don’t mess up oranges and apples, because it sort of confuses the argument. Thank you. Sir, good morning.

Unidentified Analyst

Good morning, Mr. Camilleri. My name is Mathew and I’m a youth advocate from Syracuse, New York.

Louis C. Camilleri

Welcome.

Unidentified Analyst

Thank you. Your claim that PMI is committed to improving eduction, ending domestic violence, world hunger and poverty. So why does PMI spend less than 1% of their profit on these initiatives while spending billions to market your deadly product to this most vulnerable population.

Louis C. Camilleri

We do as best as we can, you mentioned three of our key focus areas in terms of our contributions. We impacted the lives of 3 million last year, it’s not just the money its what we do with it and the efforts that all of these wonderful employees put in behind it, and again for the last 11 years I have people like you complaining about our contributions. My answer is a very simple one, why didn’t you take the plane and instead of coming here to this meeting go to the farmers, go to the schools and tell them they don’t deserve our help. Thank you. Madam, good morning.

Elisabeth Gundersen

Good morning. My name is Elisabeth Gundersen in case if you don’t remember me from our last meeting. I’m a nurse at UC San Francisco, a cancer nurse and a member of Nightingales Nurses the Advocacy Organization. Last time we met you told me that it wasn’t that hard to quit smoking.

Louis C. Camilleri

I remember you.

Elisabeth Gundersen

Good. Hello, I’m here to disagree, first of all and also to be a voice for my patients who have suffered and died from smoking. I’d like to just take a minute to point out to all of you that the alternative devices of which you speak are actually not proven to be safer, nicotine itself presents a significant cardiovascular risk which in addition to cancer is a leading cause of death among smokers. So please keep that in mind. I do have a question for you. But first, I’d like to tell you about a patient of mine, who recently died from throat cancer due to his smoking, he had a laryngectomy and couldn’t speak. He told me that after trying to quit smoking many times and failing, he turned to so-called light or low-tar cigarettes and cigarettes with so-called natural ingredients, believing that they were better for health than regular cigarettes, needless to say he came to understand that he had been misled by your industry. My question is are you now willing to admit that safer cigarette is a myth and that cigarette filters, low-tar and so called all natural versions of cigarettes are no less damaging to health and in fact lead many smokers to smoke more?

Louis C. Camilleri

I think we have been very clear in all our public communications on our website that cigarettes that have lower numbers in terms of constituents or lighter do not represent safer cigarettes, that’s crystal clear. I would however argue with you that whilst today you are right that next generation products have not found the appropriate regulatory framework, many governmental bodies are working on that regulatory framework and we are very hopeful that in the near future the industry and hopefully we will be the first, will be able to provide consumers with products that gives them the satisfaction of conventional cigarettes, but dramatically reduce the risk or harm associated with them. For you to know our target in developing those products and we are doing enormous amount of clinical research on this, our target is to try to ensure that the impact of these products will be very similar or proximate sensation. So thank you from coming all the way to California. Madam, good morning

Unidentified Analyst

Good morning. My name is (inaudible) I’m a youth advocate from Texas. CEO Camilleri, your website claims that PMI doesn’t market to children or youth, if so then how do you justify the uses of smoke rate in Indonesia doubling along with your company increasing advertising expenditures.

Louis C. Camilleri

Sorry. Can you say that again? What did you say about Indonesia?

Unidentified Analyst

Along with your company increasing advertising expenditures like 27% from 2011 to 2012 in that same country.

Louis C. Camilleri

Yeah.

Unidentified Analyst

Oh and by-the-way, I got that from the (inaudible) 2012 annual report to my facts history.

Louis C. Camilleri

I wasn’t questioning your facts.

Unidentified Analyst

It was just to read and to write of it.

Louis C. Camilleri

I think it’s the same answer as the other one. Its prevalence and brand preference Indonesia is a very important market. It’s developing economically very strongly. You probably don’t know this, but the tobacco industry is the second largest employer in the country, represents 10% to government revenues and that’s why there were so much opposition to tobacco control and we took a leadership position with several others, but there was considerable opposition. And the tobacco control was finally signed by president this year and will take effect in various phases over the next two years. So I think you should be proud of what your company if you assume it’s your company has actually achieved in Indonesia. So thank you. Madam good morning.

Unidentified Analyst

Good morning, Mr. Camilleri

Louis C. Camilleri

Good morning.

Unidentified Analyst

My name is Susan Priano. I’m a nurse and also a Nightingale from San Francisco, California. I’m also a daughter of a man who died from the results of smoking tobacco his life and left behind 10 of his children. I have family members who are also addicted to cigarettes that have tried numerous times to quit, but are unable. But I came here today to talk about and ask you some questions about this kind of egregious cause to the lives of humans. Recently we witnessed a lives loss in Boston bombing, collapsed buildings and kidnap children and I don’t understand how humankind can choose such acts in the name of success that you call success or your own desire. If tobacco is responsible for $5 million deaths per year and for every death 20 more people suffer serious illness due to smoking. I see these patients daily when they wake up from surgery, they don’t have the ability to breathe like you and I. I ask is Philip Morris ready to stop pedaling cigarettes to children, kidnapping and main mean lives through the powerful chemical addiction of tobacco and is Philip Morris ready to stop the death march and admits to the loss of millions of lives in order to profit billions of dollars?

Louis C. Camilleri

Well, thank you for your question. I think that your experiences obviously created a certain hatred towards us. You can’t put ordeals of the world at our doorstep, I’m sorry. You cannot do that, we are a responsible company that works in a very controversial industry. We have pushed for a lot of regulation. Don’t just say that we market to kids that’s just not true it’s a fable, it’s a fable. So we are very focused on arm reduction both on the regulatory front as well as on the products and we will continue to work in that band. So thank you for coming. Ma’am.

Laura Waterhouse

Hello, my name is Lara Waterhouse. I’m a program coordinator for Youth Advocacy Program in New York.

Louis C. Camilleri

We’re loosing a bit of balance here, somebody is following my party.

Laura Waterhouse

Well, is this a respond that you don’t market to children? On your website you quote, we don’t market to children or use images or contents that might appeal to minors. Mr. Camilleri, can you then explain why in Indonesia right now, you are selling Avolution brand of cigarettes in a thin lipstick teenager friendly container that look very similar to this.

Louis C. Camilleri

It’s very simple. Do you know who smokes those cigarettes?

Laura Waterhouse

Excuse me?

Louis C. Camilleri

Who smokes them?

Laura Waterhouse

Who smokes them? I know the female rate in those, in developing countries of young girls.

Louis C. Camilleri

No, no, no who smokes them?

Laura Waterhouse

I believe is young girls.

Louis C. Camilleri

No, so get your facts right, come back next year and then have go with me, thank you. Yes.

Unidentified Analyst

My name is Carol Southard, I’m a Masters preparing nurse, I’m from Chicago, I’m base with Northwestern Memorial Hospital. I’m also members of Nightingales. I have been here before. I’m a tobacco treatment specialist as of this month 28 years, I have helped over 3,000 people quit smoking and I note to you that’s this drop in the bucket.

I also know my facts, because it is the literature I read, I don’t really have a question for you, because your answers are unsatisfactory and they are deceitful, the bottom line is there has never been a topic studied as much as tobacco with so little resulting public health actions, you know that and I know that. The facts are that you are making profits over a product that is the most preventable cause of injury and death. So, if you are going to be honest, how you can call yourself a responsible company is beyond me, but if you are going to be truly honest, you would admit it, you are in it for the profit.

Now as a patient specialist, please don’t start saying that harm reduction is anywhere near what’s the patient result in. The benefit of cessation are unbelievable and that’s how I approach and that’s why I’m successful of what I do. I don’t talk about how dangerous cigarettes are which is very difficult for me not to. Why I’m successful and why I have a 50% success rate a year after treatment is, because I talk about how to quit, but I also make sure that it is all my clients know it is never too late to quit and that they will benefit no matter how much they have smoked.

I wish I had a question for you that I felt you could answer, but I just, I don’t have a question. But I do want to make another one more statement. And I know my minute, two minute is almost up, because you inference that why are we here, why are we spending money and flying on planes for coming here. Believe me I would ask to myself that too. I have to buy a share in order to get in here and I feel that its value keeps going up and its killing me. But I’m here, because I want you to know that those of us in the field know that what you are doing is for profit and profit only. The only reason you’re admitting that they are dangerous now and addicted now, is so that you cannot get too much. And those of us trying to defeat you, I’m never going to retire. I’m going to do everything I can to put you out of business as unrealistic as that is. So I can’t congratulate you for what you are doing, but I do thank you for letting us say what we’re saying for what its worth.

Louis C. Camilleri

I’m not asking you to congratulate me. I actually admire what you do and 3,000 is not a drop in the bucket. You should be congratulated for doing that. You accuse me of being the deceitful in my answers; I think that’s rather cheap shot. The fact is, you’ve shown a lot of honesty and that honesty is somewhat scary, because you just said that I’ll be very honest and I will do everything to ensure that you are out of business, which is fine, but who’s going to replace it. Did you ever think of that, did you ever think of how cigarettes will come to this country. Who will manufacture them, how they will be regulated, who will have the money to develop produced harm products, despite what you just said. Please think a bit more broadly and you’ll get that. Madam?

Unidentified Analyst

Hi I’m Samantha, I’m 15 and I’m a Youth Advocate of New York.

Louis C. Camilleri

Good morning.

Unidentified Analyst

Good morning. Everyday 80,000 to 100,000 kids become smokers, what is Philip Morris International doing to help youth not start smoking?

Louis C. Camilleri

In the United States nothing, because we don’t sell cigarettes in the United States and your number relates to the United States correct? You are in the wrong meeting, thank you. Madam?

Unidentified Analyst

Hello Mr. Camilleri my name is Shirley and I’m a Youth Advocate from Central New York. You have stated that there is no valid evidence of standardizing packaging will reduce smoking rates? Also on the PMI website.

Louis C. Camilleri

Sorry, can you slow down; I’m having difficulty hearing you.

Unidentified Analyst

You have stated that there is no valid evidence that standardizing packaging will reduce smoking rates. Also it says on your PMI website you have been a strong advocate for regulations limiting tobacco products marketing. So why do you oppose for standardized packaging?

Louis C. Camilleri

Why do?

Unidentified Analyst

You oppose standardized packaging?

Louis C. Camilleri

It’s very simple. There is no study in world. none whatsoever. There isn’t a shred of evidence to show that plain packaging will achieve its supposed advertised goals. As you know, Australia was the first country to implements plain packaging legislation that came into effect December 1. It’s still early days, but what has been the impact zip. It has done nothing in terms of total consumption. It has nothing in terms of sensation, and it has done nothing in terms of smoking initiation. It’s anything and partially because of the February price increase we’ve seen a modest acceleration in the growth of the low price segment.

And if you take away intellectual property, there are consequences to that, and that is why we are making claims. And that is why certain countries are going off to Australia under the auspices of the World Trade Organization. It’s a very slowed policy, it has huge unintended consequences, prices will come down, consumption will go up, that’s normal supply demand. And further more elicit trade oil explode. And by the way since December there have already been a number of seizures that can fit in contraband products that were destined for Australia.

So you have to look at the whole tobacco industry as a whole unit. You got to consider the other element there and you have to consider what is best ultimately. But thank you very much for coming. Sir, good morning a business question.

Unidentified Analyst

Good morning, yes, refreshing. Philip Berman., portfolio manager and shareholder, some comments and questions together. Over the past year, Philip Morris stock has steadily advanced to record consistent high against the backdrop of many countries varied economic problems specific to their various respective regions. Technically the stock now represents an enviable position whereby we can go across the 100 level to triple digits. Despite the steep rise in profits in Philip Morris’s stock price since last year’s meeting, Philip Morris is still providing one of the best dividend yields of all the stocks in the peer group and relative to all stocks in general.

It is highly remarkable that without the leadership skills and financial organization skills of our Chairman and CEO, Louis Camilleri, the highly complex launch of the new Philip Morris would never have been possible and we thank you for your intense focus on Philip Morris and its shareholders and now look forward to your guiding the company further as Chairman of the world’s greatest consumer product company.

Louis C. Camilleri

Thank you very much. That’s very gracious and generous of you but I accept that on behalf of everybody at PMI, thank you.

Unidentified Analyst

Yes, now some questions. What was the total earnings per share calculated maximum negative effect by European financial austerity, worldwide currency exchange problems and the illegal European cigarette problem for the first quarter?

Louis C. Camilleri

We don’t have that number and we haven’t divulged it. The first quarter, as André said in his remarks, I think very articulately was distorted by a very difficult comparison to the prior year, which as you know included a leap year and in several markets, we had two extra days past year. There were also some inventory movements that distorted the numbers and in fact, we had already mentioned those when we disclosed our fourth quarter earnings. I think the most important thing to note is what André said that was this year for several reasons that he explained, we believe that our income growth will be skewed to the second half of the year and particularly to the fourth quarter. We will still meet our mid to long-term target of 10% to 12% EPS growth rate.

I think over the last five years, if you take the average, we’ve exceeded those targets and I well remember that when we did the road show and we announced those targets, there was quite a lot of skepticism, so possible with five years and we’ve done it, and I am pretty sure we will continue to do so.

Unidentified Analyst

One more question, that Philip Morris is still a relatively new standalone company, has the board adopted a policy yet as to what level of stock would have to reach in order to effect the stock split, under the old MO, the level was usually around 100 plus?

Louis C. Camilleri

No, we haven’t established a definitive number, having been part of the deliberations at ultra, when we split the stock, there was no magic number. We looked at educationally and at one point decided what was in the best interest of shareholders, there is no magic number.

Philip Berman

Okay, thank you.

Louis C. Camilleri

Thank you. Sir, good morning.

Unidentified Analyst

Good morning, my name is [Darrian Skinner] and I am a youth advocate from Texas. Mr. Camilleri, in 2006 U.S. Surgeon General Report, it was stated that “secondhand smoke causes premature death and disease in children and in adults who do not smoke” because of the scientifically proven health risk associated with smoking, would you recommend your customers not smoke around others?

Louis C. Camilleri

Our position is very clear regarding environmental tobacco smoke and that is that smokers should adhere to the prescriptions and the recommendations of the public health community, thank you. Madam, good morning.

Unidentified Analyst

Good morning, Mr. Camilleri. I’m Claudia Miller, a youth advocate from the State of Nebraska. My question to you is that I’m sure that you have heard that two-thirds of New Yorkers are operating age to 21 of smoking and it will more than likely set a precedent for other countries to follow on. Will those bring any change to your company and if so how will you react to it?

Louis C. Camilleri

Again, we don’t sell cigarettes in New York, you are in the wrong meeting. We’ll send you the addresses, thank you.

Unidentified Analyst

Good morning.

Louis C. Camilleri

Madam, good morning.

Cloe Franko

My name is Cloe Franko, I’m the international organizer with Corporate Accountability International. Mr. Camilleri, Philip Morris International’s cradle to grave advertising promotion and sponsorship is the primary driver behind the world’s largest preventable epidemic. PMI spends billions annually on aggressive and deceptive marketing tactics to promote its deadly product, and more marketing equals more addiction and death and kids are uniquely vulnerable to tobacco marketing.

So PMI blocks ad bans that prevent youth addiction, employing dirty tactics to circumvent health measures and brazenly breaks the law. For example, in direct violation of National Law, the Philippines’ subsidiary of PMI by a full-page ad in Starweek Magazine extolling the virtues of the corporation’s so-called social responsibility effort. This subsidiary is now facing a legal challenge from a local NGO posing a huge liability for PMI’s shareholders. Now this World No Tobacco Day, a global movement of people and government is uniting to challenge PMI by removing the tobacco seat at the policy table and implementing the global tobacco treaty’s comprehensive ban on tobacco advertising, promotion and sponsorship.

A wide range of countries have already implemented strong laws countering Big Tobacco’s PR machine, even in PMI’s target expansion markets. Countries like the Ukraine, Russia, Kosovo, Vietnam, Cambodia and India. More over countries like Norway has effectively defended their ad bans from PMI’s legal onslaughts. And so momentum is on the side of public health, Mr. Camilleri. These countries are undoing your deadly legacy and with the change in corporate leadership, we’re calling on PMI’s to drop the lawsuits, the law being and the dirty tactics, so my question is this. What do you have to say to the governments whose laws you’ve broken repeatedly? And when will your Corporation address the risk that you face by violating advertising bans?

Louis C. Camilleri

Again, it’s, your statements is riddled with half-truth and inaccuracy. So I’m not going to convince you, [yourself], but I think it’s important to shelve this to understand. What you mentioned about Philippines is actually not true, this thing that you mentioned was about our contributions, that was an attack saying that the ad related to contributions could be viewed as tobacco advertising, we didn’t believe so. The consumer production agency asked us to pull it down, we pulled it down, that was a no fines, no nothing.

So to say, that our exposure is (inaudible) I think is somewhat tedious. You keeping trying dirty tactics at us, dirty tactics, I think it’s important that shareholders understand that, I think we’re very transparent in what we did. Corporate accountability and there is other institutions meet occasionally under the auspices SETC. The SETC has a recommendation that they should litigate against the tobacco industry. When we try to protect ourselves that’s a dirty tactic, but you are allowed to do it, further more when they met in Korea in November, they threw out all the media.

No media member was allowed into the meeting, I wonder what you are hiding, for one aspect they could be hiding is what they were trying to do to tobacco farmers, millions and millions of tobacco farmers, there was a proposal there which very luckily was rejected, but a strong proposal that’s the World Health Organization or some other institution to be formed should mandate quarters on tobacco should mandate the seasons which tobacco should be grown. Mandate that the tobacco industry could not. help farmers in terms of the sustainability of their crops or in terms of the quality of their crops.

And finally, in a sort of despotic way, mandate that farmers would be obliged to change to other crops, irrespective of the economic consequences to their likelihood. So don’t come in here and talk about dirty tactics. Thank you. We have time for one more question and [the honor], is all yours.

Unidentified Analyst

Hello, my name is [Kelly Bushey] and I’m a youth advocate in State of New York, Mr. Camilleri, your industry has a long history of funding junk science for institutions like tobacco institute that [cash dealt] on credible science about harmful health effects of your products. In fact, (inaudible) recent Supreme Court decision requires the industry to overturn decades of deception by funding in ad campaign admitting its wrong doing. So you claimed to turned over a new lease, PMI has recently funded an initiative called IMPROVER that would again cash dealt on credible science about the harmful effects of your products. Why does your corporation continue to mislead the public about your products highly addictive and deadly properties?

Louis Camilleri

Again, you are in the wrong meeting, you are confusing companies. Philip Morris International does not do business in this country, has never done so. So the Tobacco Institute was a U.S. institute, so go to the Renault’s meeting, go to the Laurel Lord meeting or another meeting, let them come to this one. Thank you. That concludes our question-and-comment period. We will now move on to the next stage of the meeting. The matters set forth in the notice of meeting will be put before the meeting at this time. Comments on each matter can be made after each one has been formally presented.

Now, I would like to ask the ushers to distribute proxy cards to any shareholders who may not have returned their proxies for voting on the matters to come before the meeting. Shareholders who have already returned proxies need not submit a new proxy card. If anyone requires a proxy card, please raise your hands now. There is one there.

The ushers will collect these cards, and deliver them to the Inspectors of Election, and the final item of business has been presented.

The first order of business is the election of 13 directors. The following individuals have been nominated for election as Director, each to hold office until the next Annual Meeting of Shareholders and until his or her successor shall have been duly chosen. Harold Brown, Mathis Cabiallavetta, André Calantzopolous, myself, J. Dudley Fishburn, Jennifer Li, Graham Mackay, Sergio Marchionne, Kalpana Morparia, Lucio A. Noto, Robert B. Polet, Carlos Slim Helú, and Stephen M. Wolf.

In accordance with the Company's by-laws, no other nominations may be made at this time. If you would like to comment on the nominations, please proceed to a microphone. Again, each speaker is asked to limit his or her comments to two minutes. Please identify yourself before you begin. The meeting is now open to comment on the nominations. Are there are no comments? Let’s move on to the next one. We will now turn to the ratification of the selection of PricewaterhouseCoopers as independent auditors of the company for the fiscal year ending December 31, 2013. Are there any comments on this matter? None.

We will now turn to the third item in the agenda, the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2013 Annual Meeting of Shareholders. Are there any comments on this matter? [Sir], you have a comment.

John Stewart

Thank you for the opportunity to speak, my name is John Stewart, I’m the Director of Corporate Accountability International of Challenge Big Tobacco Campaign [Mein], my question relates to executive compensation and particularly your compensation in last year, you personally Mr. Camilleri have received $4 for every tobacco related death this year. In fact in the time since you became CEO nearly 30 million people have died from tobacco related disease and your legacy is a trail of death and destruction and PMI bears responsibility for the millions of lives and livelihood lost.

PMI uses the same tactics fine-tuned in the U.S. decades to go to addict and the developing world today for 80% of tobacco related death already occurred. Of course, yet PMI uses its weight to undermine health measures around the world, attending to stop the implementation of a treaty that would save 200 million lives. This despite the fact that 175 countries have agreed unanimously that due to decades of abuse and deception, PMI and their tobacco have no place in health policy making.

On your watch, PMI continued to bully and buy off policy makers. It promoted junk science and abrade in this regard for national sovereignty, it launched a global litigation campaign to intimate countries that have adopting health policies, even colluding with its competitors to do so, and incredibility PMI even continues predatory marketing for children.

This is your legacy Mr. Camilleri, a corporation with some of most unethical and abusive practices in the world. Your reward that $4 for every death this year. So, I’m here representing a growing movement of people around the world who are asking why instead of being punished for obstructing health measures, you are perversely being celebrated by shareholders for a job well done. The same movement is now pushing for measures that protect health of…

(Multiple Speakers)

John Stewart

…absolutely.

Louis Camilleri

Thank you.

John Stewart

My question is very simple.

Louis Camilleri

There is no question; they’re comments.

John Stewart

Well, my comment is this you have a choice to continue, the next CEO has a choice, Mr. Calantzopoulos, you have a choice, to continue your deadly legacy of political interference or to chart a new course, allowing governments to fulfill their legal obligations to protect people from tobacco. That’s my comment.

Louis Camilleri

Thank you for your comments. The level of insults that you throw to me personally has zero impact. I’m actually very proud of the legacy of this company and my own legacy with this company. And what you are proposing is flawed and you’re blinded to the unintended consequences that most of your proposals that we oppose will have, the happening that before your eyes, that you are blinded, please look at what’s going on by the implementation of your very solid policy. Thank you.

The matters to be voted on have now been formally presented to the meeting. Oh, I’m sorry.

Adrian Longo

That’s quite alright.

Louis C. Camilleri

Apologies.

Adrian Longo

I think, that is quite right. My name is Adrian Longo and I’m a long time shareholder of Philip Morrison International and I believe you deserve every penny you’ve gotten as a Chairman and Chief Executive Officer of this company because you’ve done an absolutely great job. I also wish to point out that I think you’ve the patience of two saints not just one. I found the comments of the previous speaker told me repulsive and arrogant. I’m not going to comment on them, because they are not worth commenting on, I do believe to avoid habits to somewhat arrogant speakers here today that you should raise the minimum number of shares required to attend this meeting from one share which my dog owns more than to a 1000 shares. That way the meeting will be attended by true grateful shareholders. Thank you very much.

Louis C. Camilleri

Thank you very much. The matters to be voted on have now been formally presented to the meeting. If you have not already done so. Please complete your proxy card and if you have done so raise your hand and the ushers will collect all the proxy cards and deliver them to the Inspectors of Election. Since all shareholders have now had time to vote, I declare the polls closed.

The ushers should now have collected all the proxies and they are directed to deliver the proxies to the inspectors of election for counting. Earlier this morning, André shared with you our exceptional business performance since the spin-off, an outlook for this year and our prospects for the years to come. These results were not achieved in a vacuum, they were driven by the passionate and committed excellence of our employees our company's greatest asset. Indeed, our 2012 annual report is deservedly dedicated to all of them and many are in this room today.

In a few moments, I’m about to relinquish my executive responsibilities and I want to take this opportunity to share some parting thoughts with you, our loyal shareholders. As you can well imagine this great Company has been the center of my entire adult life. It has provided me with opportunities to develop as a man, the magnitude of which I will never be able to adequately articulate or be sufficiently grateful. Our Company has been enormously successful and it has been my incredible luck to witness and at times, to be closely associated with our growth and accomplishments.

As a shareholder you value our results and keep a close eye on our stock price and dividends. We have had the good fortune of meeting and perhaps surpassing your expectations on these metrics over time. I think you’ve had your moment out of respect for all other shareholders, can you please sit down. Can you please sit down, out of respect for other shareholders, or go to the back. I’m sorry for that rather rude interruption.

Numbers tend to rule everything and sometimes deservedly so, but they do not begin to explain why this Company is so special, what rendered it so successful and why it will continue to be so. The answer is a simple one; it is the people and the culture of the Company. It is not an amorphous entity. It is a vibrant, ever-evolving and living being represented by an admirable collection of human beings. Men and women of incredibly diverse nationalities, cultures, religions and backgrounds, who have all joined a family dedicated to serving you our shareholders and striving as best they can to make a difference both collectively and individually.

They all share admirable qualities, determination and a level of commitment to excellence that is not only inspiring but has always fed my sense of awe towards them. They have this rare incredible I would say truly unique, capacity to do the ordinary in an extraordinary manner and make the extraordinary look ordinary. I have been lucky to be part of this growing family for 35 years and I’m honored that I will continue to be so in my new role. For now, however, I would ask you to honor each and every one of our employees with the thunderous applause and ovation that all our employees so amply deserve.

André Calantzopoulos

Before we conclude today’s meeting, I would like to take this opportunity to say a few words about Louis. Can we have some medical assistance please?

On a personal level, I am especially grateful to Louis for his mentorship over the years. I have never ceased to be impressed by his passion for the company, his vision, critical and in spiteful analysis, his regard for the well-being and development of our people and his devotion to the integrity and transparency of communications to investors and to enhancing shareholder value. Louis has been an extraordinary source of inspiration and he has set the standard by which all future leaders of PMI will be judged, myself first of all.

We are very fortunate that Louis remains with us as Chairman of the Board. I, certainly, will continue to benefit from his immense experience. It is impossible to overstate the positive impact that Louis has had on all of us at Philip Morris. From when he joined in 1978 as a business analyst to today, he has not only been the architect and steward of many of our most notable achievements, he has also been personally responsible of the career trajectories of many of our most talented leaders.

Perhaps the single most outstanding characteristic of his stellar career, however, has been his ability to envision a future that few would have contemplated and have had the courage to craft the strategy and actions required to realize that future with resounding success. I refer particularly to the merger of SAB and Miller and the spin-offs of Kraft and Philip Morris International that led to the unlocking of unprecedented shareholder value.

As one of our investors put it, no one has done more in the history of consumer staples to realize shareholder value than Louis. Indeed, since Louis’ appointment as Chief Executive Officer of Altria on April 25, 2002 the market capitalization of the Altria family of companies at that time to the end of April this year has surged by almost $180 billion representing an increase of over 153%.

On the same basis, his appointment, and you kept your shares you would have received an annualized total shareholder return of more than 16%, which corresponds to a total shareholder recurring growth of 411% dwarfing, the 82% TSR of the S&P 500 over the same period. Over the last several weeks Louis and I have often discussed this management transition. I don’t think he will mind me saying that for Louis, the process has been rather emotional, because that extraordinary Chief Executive Officer, he is simply in a bubble and exceptionally human being full of generosity and kindness. They shall spare him in any additional discomfort now and (inaudible) and join me in saluting an industry and corporate leader of uncommon quality and unsurpassed accomplishment. Louis Camilleri.

Louis C. Camilleri

Thank you very much. Okay the last bit, but sure, it’s going to be long for me. Thank you so much. You touched my heart there. I’ll now ask one of the inspectors of election to deliver their reports to the secretary. Will you please read the report Jerry?

Jerry Whitson

Mr. Chairman, the Inspectors of Election have completed the preliminary count of the vote, which I have now received. The preliminary voting results are as follows; each of the nominees for Director has been elected with more than 91% of shares voting, voting for their election. The selection of PricewaterhouseCoopers as independent auditors has been ratified with more than 99% of shares voting, voting in favor. The advisory resolution to approve executive compensation has been approved with more than 96% of shares voting, voting in favor. Mr. Chairman, that concludes the report.

Louis C. Camilleri

Thank you, Jerry. I would now ask the Secretary to file with the records of the meeting, the Inspector's Report, the oath of the Inspectors of Election, their certificate and the proxies. Final voting results will be included in a Form 8-K that we will file with the SEC in the next couple of days. And now, there being no further business to come before the meeting, I hereby declare the meeting adjourned. Thank you all very much for coming. Thank you.

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