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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) 
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 001-33708
Philip Morris International Inc.
(Exact name of registrant as specified in its charter)
Virginia13-3435103
(State or other jurisdiction of
    incorporation or organization)		(I.R.S. Employer
    Identification No.)
120 Park AvenueNew YorkNew York10017
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code(917)663-2000
Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:
Title of each class                    Trading Symbol(s)Name of each exchange on which registered
Common Stock, no par valuePMNew York Stock Exchange
2.900% Notes due 2021PM21ANew York Stock Exchange
2.625% Notes due 2022PM22ANew York Stock Exchange
2.375% Notes due 2022PM22BNew York Stock Exchange
2.500% Notes due 2022PM22New York Stock Exchange
2.500% Notes due 2022PM22CNew York Stock Exchange
2.625% Notes due 2023PM23New York Stock Exchange
2.125% Notes due 2023PM23BNew York Stock Exchange
3.600% Notes due 2023PM23ANew York Stock Exchange
2.875% Notes due 2024PM24New York Stock Exchange
2.875% Notes due 2024PM24CNew York Stock Exchange
0.625% Notes due 2024PM24BNew York Stock Exchange
3.250% Notes due 2024PM24ANew York Stock Exchange
2.750% Notes due 2025PM25New York Stock Exchange
3.375% Notes due 2025PM25ANew York Stock Exchange
2.750% Notes due 2026PM26ANew York Stock Exchange
Title of each class                    Trading Symbol(s)Name of each exchange on which registered
2.875% Notes due 2026PM26New York Stock Exchange
0.125% Notes due 2026PM26BNew York Stock Exchange
3.125% Notes due 2027PM27New York Stock Exchange
3.125% Notes due 2028PM28New York Stock Exchange
2.875% Notes due 2029PM29New York Stock Exchange
3.375% Notes due 2029PM29ANew York Stock Exchange
0.800% Notes due 2031PM31New York Stock Exchange
3.125% Notes due 2033PM33New York Stock Exchange
2.000% Notes due 2036PM36New York Stock Exchange
1.875% Notes due 2037PM37ANew York Stock Exchange
6.375% Notes due 2038PM38New York Stock Exchange
1.450% Notes due 2039PM39New York Stock Exchange
4.375% Notes due 2041PM41New York Stock Exchange
4.500% Notes due 2042PM42New York Stock Exchange
3.875% Notes due 2042PM42ANew York Stock Exchange
4.125% Notes due 2043PM43New York Stock Exchange
4.875% Notes due 2043PM43ANew York Stock Exchange
4.250% Notes due 2044PM44New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ        No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ        No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer    þ                        Accelerated filer            ☐  
Non-accelerated filer    ☐                         Smaller reporting company    ☐
                                    Emerging growth company    ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  þ
At October 25, 2021, there were 1,556,827,680 shares outstanding of the registrant’s common stock, no par value per share.
1
PHILIP MORRIS INTERNATIONAL INC.
TABLE OF CONTENTS
 
  Page No.
PART I -
Item 1.
Condensed Consolidated Statements of Earnings for the
Nine Months Ended September 30, 2021 and 2020
Three Months Ended September 30, 2021 and 2020
Condensed Consolidated Statements of Comprehensive Earnings for the
Nine Months Ended September 30, 2021 and 2020
Three Months Ended September 30, 2021 and 2020
Condensed Consolidated Balance Sheets at
September 30, 2021 and December 31, 2020
7 – 8
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2021 and 2020
9 – 10
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the
Nine Months Ended September 30, 2021 and 2020
Three Months Ended September 30, 2021 and 2020
13 – 47
Item 2.
48 – 104
Item 4.
PART II -
Item 1.
Item 1A.
Item 2.
Item 6.

In this report, “PMI,” “we,” “us” and “our” refer to Philip Morris International Inc. and its subsidiaries.

Trademarks and service marks in this report are the registered property of, or licensed by, the subsidiaries of Philip Morris International Inc. and are italicized.
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)
 For the Nine Months Ended September 30,
 20212020
Revenues including excise taxes$61,393 $56,516 
Excise taxes on products38,092 35,266 
Net revenues (Note 8)23,301 21,250 
Cost of sales7,223 6,997 
Gross profit16,078 14,253 
Marketing, administration and research costs (Notes 16 & 17)5,995 5,435 
Amortization of intangibles55 55 
Operating income10,028 8,763 
Interest expense, net482 454 
Pension and other employee benefit costs (Note 3)82 68 
Earnings before income taxes9,464 8,241 
Provision for income taxes2,078 1,764 
Equity investments and securities (income)/loss, net(95)4 
Net earnings$7,481 $6,473 
Net earnings attributable to noncontrolling interests465 393 
Net earnings attributable to PMI$7,016 $6,080 

Per share data (Note 6):
Basic earnings per share$4.49 $3.90 
Diluted earnings per share$4.48 $3.90 









See notes to condensed consolidated financial statements.
3
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of dollars, except per share data)
(Unaudited)
 For the Three Months Ended September 30,
 20212020
Revenues including excise taxes$21,617 $20,444 
Excise taxes on products13,495 12,998 
Net revenues8,122 7,446 
Cost of sales2,596 2,416 
Gross profit5,526 5,030 
Marketing, administration and research costs (Notes 16 & 17)2,053 1,769 
Amortization of intangibles18 18 
Operating income3,455 3,243 
Interest expense, net154 163 
Pension and other employee benefit costs (Note 3)27 23 
Earnings before income taxes3,274 3,057 
Provision for income taxes735 640 
Equity investments and securities (income)/loss, net(49)(20)
Net earnings2,588 2,437 
Net earnings attributable to noncontrolling interests162 130 
Net earnings attributable to PMI$2,426 $2,307 

Per share data (Note 6):
Basic earnings per share$1.55 $1.48 
Diluted earnings per share$1.55 $1.48 








See notes to condensed consolidated financial statements.
4
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
(Unaudited)

For the Nine Months Ended September 30,
20212020
Net earnings$7,481 $6,473 
Other comprehensive earnings (losses), net of income taxes:
Change in currency translation adjustments:
Unrealized gains (losses), net of income taxes of $(34) in 2021 and $38 in 2020
245 (1,373)

Change in net loss and prior service cost:
Net gains (losses) and prior service costs, net of income taxes of $(7) in 2021 and $0 in 2020
27 — 
Amortization of net losses, prior service costs and net transition costs, net of income taxes of $(54) in 2021 and $(49) in 2020
241 223 

Change in fair value of derivatives accounted for as hedges:
Gains (losses) recognized, net of income taxes of $(15) in 2021 and $8 in 2020
85 (37)
(Gains) losses transferred to earnings, net of income taxes of $3 in 2021 and $1 in 2020
(4)(17)
Total other comprehensive earnings (losses)594 (1,204)
Total comprehensive earnings8,075 5,269 
Less comprehensive earnings attributable to:
Noncontrolling interests398 393 
Comprehensive earnings attributable to PMI$7,677 $4,876 


















See notes to condensed consolidated financial statements.
5
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of dollars)
(Unaudited)
For the Three Months Ended September 30,
20212020
Net earnings$2,588 $2,437 
Other comprehensive earnings (losses), net of income taxes:
Change in currency translation adjustments:
Unrealized gains (losses), net of income taxes of $(9) in 2021 and $78 in 2020
18 (588)

Change in net loss and prior service cost:
Net gains (losses) and prior service costs, net of income taxes of $(2) in 2021 and $0 in 2020
7 — 
Amortization of net losses, prior service costs and net transition costs, net of income taxes of $(18) in 2021 and $(15) in 2020
79 74 

Change in fair value of derivatives accounted for as hedges:
Gains (losses) recognized, net of income taxes of $(3) in 2021 and $7 in 2020
8 (31)
(Gains) losses transferred to earnings, net of income taxes of $3 in 2021 and $(1) in 2020
(6)(2)
Total other comprehensive earnings (losses)106 (547)
Total comprehensive earnings
2,694 1,890 
Less comprehensive earnings attributable to:
Noncontrolling interests123 141 
Comprehensive earnings attributable to PMI$2,571 $1,749 
















See notes to condensed consolidated financial statements.
6
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of dollars)
(Unaudited)
 
September 30,
2021		December 31,
2020
ASSETS
Cash and cash equivalents$4,491 $7,280 
Trade receivables (less allowances of $69 in 2021 and $23 in 2020)
3,379 2,905 
Other receivables (less allowances of $37 in 2021 and $38 in 2020)
803 856 

Inventories:
Leaf tobacco1,706 2,063 
Other raw materials1,931 1,712 
Finished product4,536 5,816 
8,173 9,591 
Other current assets1,000 860 

Total current assets		17,846 21,492 

Property, plant and equipment, at cost		14,906 14,909 
Less: accumulated depreciation8,845 8,544 
6,061 6,365 
Goodwill (Note 4)6,814 5,964 
Other intangible assets, net (Note 4)2,893 2,019 
Equity investments (Note 12)4,624 4,798 
Deferred income taxes1,083 1,410 
Other assets (less allowances of $20 in 2021 and $22 in 2020)
2,268 2,767 
TOTAL ASSETS$41,589 $44,815 









See notes to condensed consolidated financial statements.
Continued
7
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)
(in millions of dollars, except share data)
(Unaudited)
 
September 30,
2021		December 31,
2020
LIABILITIES
Short-term borrowings (Note 10)$223 $244 
Current portion of long-term debt (Note 10)3,114 3,124 
Accounts payable2,810 2,780 
Accrued liabilities:
Marketing and selling804 782 
Taxes, except income taxes5,063 6,403 
Employment costs1,058 1,189 
Dividends payable1,967 1,880 
Other1,891 2,122 
Income taxes947 1,091 
Total current liabilities17,877 19,615 

Long-term debt (Note 10)		25,768 28,168 
Deferred income taxes720 684 
Employment costs3,988 4,470 
Income taxes and other liabilities1,868 2,509 
Total liabilities50,221 55,446 

Contingencies (Note 8)

STOCKHOLDERS’ (DEFICIT) EQUITY

Common stock, no par value
   (2,109,316,331 shares issued in 2021 and 2020)
— — 
Additional paid-in capital2,181 2,105 
Earnings reinvested in the business32,935 31,638 
Accumulated other comprehensive losses(10,520)(11,181)
24,596 22,562 
Less: cost of repurchased stock
   (551,612,741 and 551,942,600 shares in 2021 and 2020, respectively)
35,147 35,129 
Total PMI stockholders’ deficit(10,551)(12,567)
Noncontrolling interests1,919 1,936 
Total stockholders’ deficit(8,632)(10,631)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY$41,589 $44,815 





See notes to condensed consolidated financial statements.
8
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of dollars)
(Unaudited)
 
 For the Nine Months Ended September 30,
 20212020
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net earnings$7,481 $6,473 
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization719 709 
Deferred income tax (benefit) provision(18)(187)
Asset impairment and exit costs, net of cash paid (Note 16)(34)(44)
Cash effects of changes, net of the effects from acquired companies:
Receivables, net(354)(141)
Inventories1,235 823 
Accounts payable165 (22)
Accrued liabilities and other current assets(1,020)(1,026)
Income taxes(264)(181)
Pension plan contributions(219)(62)
Other244 308 
Net cash provided by operating activities7,935 6,650 
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
Capital expenditures(459)(462)
Acquisitions, net of acquired cash (Note 17)(1,869)— 
Equity investments(26)(3)
Net investment hedges278 (138)
Other58 35 
Net cash used in investing activities(2,018)(568)
 















See notes to condensed consolidated financial statements.

Continued
9
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(in millions of dollars)
(Unaudited)
 
 For the Nine Months Ended September 30,
 20212020
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Short-term borrowing activity by original maturity:
    Net issuances (repayments) - maturities of 90 days or less$(18)$(159)
    Issuances - maturities longer than 90 days— 45 
    Repayments - maturities longer than 90 days— (45)
Long-term debt proceeds— 2,230 
Long-term debt repaid(1,979)(3,999)
Repurchases of common stock(94)— 
Dividends paid(5,628)(5,485)
Payments to noncontrolling interests and Other
(457)(618)
Net cash used in financing activities(8,176)(8,031)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(226)(89)
Cash, cash equivalents and restricted cash (1):
Increase (Decrease)(2,485)(2,038)
Balance at beginning of period7,285 6,865 
Balance at end of period$4,800 $4,827 

(1) The amounts for cash, cash equivalents and restricted cash shown above include restricted cash of $309 million and $6 million as of September 30, 2021 and 2020, respectively, and $5 million and $4 million as of December 31, 2020 and 2019, respectively, which were included in other current assets in the condensed consolidated balance sheets. As of September 30, 2021, the restricted cash was primarily related to the remaining funding of PMI’s acquisition of Vectura Group plc (“Vectura"). For further details, see Note 17. Acquisitions.







See notes to condensed consolidated financial statements.
10
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
For the Nine Months Ended September 30, 2021 and 2020
(in millions of dollars, except per share amounts)
(Unaudited)
 PMI Stockholders’ (Deficit) Equity  
 Common
Stock		Additional
Paid-in
Capital		Earnings
Reinvested in
the
Business		Accumulated
Other
Comprehensive Losses		Cost of
Repurchased
Stock		Noncontrolling
Interests		Total
Balances, January 1, 2020$— $2,019 $30,987 $(9,363)$(35,220)$1,978 $(9,599)
Net earnings6,080 393 6,473 
Other comprehensive earnings (losses), net of income taxes(1,204)(1,204)
Issuance of stock awards 35 87 122 
Dividends declared ($3.54 per share)
(5,530)(5,530)
Payments to noncontrolling interests(510)(510)
Other17 (14)3 
Balances, September 30, 2020$— $2,071 $31,537 $(10,567)$(35,133)$1,847 $(10,245)
Balances, January 1, 2021$— $2,105 $31,638 $(11,181)$(35,129)$1,936 $(10,631)
Net earnings7,016 465 7,481 
Other comprehensive earnings (losses), net of income taxes661 (67)594 
Issuance of stock awards 76 76 152 
Dividends declared ($3.65 per share)
(5,719)(5,719)
Payments to noncontrolling interests(459)(459)
Common stock repurchased(94)(94)
Acquisitions
44 44 
Balances, September 30, 2021$— $2,181 $32,935 $(10,520)$(35,147)$1,919 $(8,632)




See notes to condensed consolidated financial statements.
11
Philip Morris International Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
For the Three Months Ended September 30, 2021 and 2020
(in millions of dollars, except per share amounts)
(Unaudited)
 PMI Stockholders’ (Deficit) Equity  
 Common
Stock		Additional
Paid-in
Capital		Earnings
Reinvested in
the
Business		Accumulated
Other
Comprehensive Losses		Cost of
Repurchased
Stock		Noncontrolling
Interests		Total
Balances, July 1, 2020$— $2,044 $31,103 $(10,009)$(35,135)$1,877 $(10,120)
Net earnings  2,307   130 2,437 
Other comprehensive earnings (losses), net of income taxes   (558) 11 (547)
Issuance of stock awards 26   2  28 
Dividends declared ($1.20 per share)
  (1,873)   (1,873)
Payments to noncontrolling interests     (171)(171)
Other 1     1 
Balances, September 30, 2020$— $2,071 $31,537 $(10,567)$(35,133)$1,847 $(10,245)
Balances, July 1, 2021$— $2,143 $32,465 $(10,665)$(35,056)$1,913 $(9,200)
Net earnings  2,426   162 2,588 
Other comprehensive earnings (losses), net of income taxes   145  (39)106 
Issuance of stock awards 38   3  41 
Dividends declared ($1.25 per share)
  (1,956)   (1,956)
Payments to noncontrolling interests     (161)(161)
Common stock repurchased    (94) (94)
Acquisitions     44 44 
Balances, September 30, 2021$— $2,181 $32,935 $(