Philip Morris International Inc. (PM)

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Philip Morris International Inc., adjustment to Net Earnings Attributable To PMI

USD $ in millions

12 months ended	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Net earnings attributable to PMI (as reported)	8,800	8,591	7,259	6,342	6,890
Add: Change in fair value of debt and equity securities, net of income taxes	–	(1)	(10)	12	(1)
Net earnings attributable to PMI (adjusted)	8,800	8,590	7,249	6,354	6,889

Philip Morris International Inc., adjusted ratios

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Net Profit Margin
Reported net profit margin	11.37%	11.25%	10.72%	10.22%	10.83%
Adjusted net profit margin	11.37%	11.25%	10.71%	10.24%	10.82%
Return on Equity (ROE)
Reported ROE	–%	3,751.53%	207.05%	110.95%	91.87%
Adjusted ROE	–%	3,751.09%	206.76%	111.16%	91.85%
Return on Assets (ROA)
Reported ROA	23.36%	24.21%	20.71%	18.35%	20.90%
Adjusted ROA	23.36%	24.21%	20.68%	18.39%	20.89%

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Philip Morris International Inc.'s adjusted net profit margin improved from 2010 to 2011 and from 2011 to 2012.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders' equity.	Philip Morris International Inc.'s adjusted ROE improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Philip Morris International Inc.'s adjusted ROA improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
As Reported
Net earnings attributable to PMI (USD $ in millions)	8,800	8,591	7,259	6,342	6,890
Net revenues (USD $ in millions)	77,393	76,346	67,713	62,080	63,640

Net profit margin¹	11.37%	11.25%	10.72%	10.22%	10.83%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net earnings attributable to PMI (USD $ in millions)	8,800	8,590	7,249	6,354	6,889
Net revenues (USD $ in millions)	77,393	76,346	67,713	62,080	63,640

Adjusted net profit margin²	11.37%	11.25%	10.71%	10.24%	10.82%

2012 Calculations

¹ Net profit margin = 100 × Net earnings attributable to PMI ÷ Net revenues
= 100 × 8,800 ÷ 77,393 = 11.37%

² Adjusted net profit margin = 100 × Adjusted net earnings attributable to PMI ÷ Net revenues
= 100 × 8,800 ÷ 77,393 = 11.37%

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Philip Morris International Inc.'s adjusted net profit margin improved from 2010 to 2011 and from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
As Reported
Net earnings attributable to PMI (USD $ in millions)	8,800	8,591	7,259	6,342	6,890
Total PMI stockholders' equity (deficit) (USD $ in millions)	(3,476)	229	3,506	5,716	7,500

ROE¹	–%	3,751.53%	207.05%	110.95%	91.87%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net earnings attributable to PMI (USD $ in millions)	8,800	8,590	7,249	6,354	6,889
Total PMI stockholders' equity (deficit) (USD $ in millions)	(3,476)	229	3,506	5,716	7,500

Adjusted ROE²	–%	3,751.09%	206.76%	111.16%	91.85%

2012 Calculations

¹ ROE = 100 × Net earnings attributable to PMI ÷ Total PMI stockholders' equity (deficit)
= 100 × 8,800 ÷ -3,476 = –%

² Adjusted ROE = 100 × Adjusted net earnings attributable to PMI ÷ Total PMI stockholders' equity (deficit)
= 100 × 8,800 ÷ -3,476 = –%

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders' equity.	Philip Morris International Inc.'s adjusted ROE improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
As Reported
Net earnings attributable to PMI (USD $ in millions)	8,800	8,591	7,259	6,342	6,890
Total assets (USD $ in millions)	37,670	35,488	35,050	34,552	32,972

ROA¹	23.36%	24.21%	20.71%	18.35%	20.90%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net earnings attributable to PMI (USD $ in millions)	8,800	8,590	7,249	6,354	6,889
Total assets (USD $ in millions)	37,670	35,488	35,050	34,552	32,972

Adjusted ROA²	23.36%	24.21%	20.68%	18.39%	20.89%

2012 Calculations

¹ ROA = 100 × Net earnings attributable to PMI ÷ Total assets
= 100 × 8,800 ÷ 37,670 = 23.36%

² Adjusted ROA = 100 × Adjusted net earnings attributable to PMI ÷ Total assets
= 100 × 8,800 ÷ 37,670 = 23.36%

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Philip Morris International Inc.'s adjusted ROA improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.