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☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Philip Morris International Inc.

Virginia			13-3435103
(State or other jurisdiction of     incorporation or organization)			(I.R.S. Employer     Identification No.)

120 Park Avenue			New York			New York			10017
(Address of principal executive offices)									(Zip Code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

PM

New York Stock Exchange

2.375% Notes due 2022

PM22B

New York Stock Exchange

2.500% Notes due 2022

PM22

New York Stock Exchange

2.500% Notes due 2022

PM22C

New York Stock Exchange

2.625% Notes due 2023

PM23

New York Stock Exchange

2.125% Notes due 2023

PM23B

New York Stock Exchange

3.600% Notes due 2023

PM23A

New York Stock Exchange

2.875% Notes due 2024

PM24

New York Stock Exchange

2.875% Notes due 2024

PM24C

New York Stock Exchange

0.625% Notes due 2024

PM24B

New York Stock Exchange

3.250% Notes due 2024

PM24A

New York Stock Exchange

2.750% Notes due 2025

PM25

New York Stock Exchange

3.375% Notes due 2025

PM25A

New York Stock Exchange

2.750% Notes due 2026

PM26A

New York Stock Exchange

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

2.875% Notes due 2026

PM26

New York Stock Exchange

0.125% Notes due 2026

PM26B

New York Stock Exchange

3.125% Notes due 2027

PM27

New York Stock Exchange

3.125% Notes due 2028

PM28

New York Stock Exchange

2.875% Notes due 2029

PM29

New York Stock Exchange

3.375% Notes due 2029

PM29A

New York Stock Exchange

0.800% Notes due 2031

PM31

New York Stock Exchange

3.125% Notes due 2033

PM33

New York Stock Exchange

2.000% Notes due 2036

PM36

New York Stock Exchange

1.875% Notes due 2037

PM37A

New York Stock Exchange

6.375% Notes due 2038

PM38

New York Stock Exchange

1.450% Notes due 2039

PM39

New York Stock Exchange

4.375% Notes due 2041

PM41

New York Stock Exchange

4.500% Notes due 2042

PM42

New York Stock Exchange

3.875% Notes due 2042

PM42A

New York Stock Exchange

4.125% Notes due 2043

PM43

New York Stock Exchange

4.875% Notes due 2043

PM43A

New York Stock Exchange

4.250% Notes due 2044

PM44

New York Stock Exchange

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. ¨

						Page No.
PART I -			FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)
			Condensed Consolidated Statements of Earnings for the
			Three Months Ended March 31, 2022 and 2021			3
			Condensed Consolidated Statements of Comprehensive Earnings for the
			Three Months Ended March 31, 2022 and 2021			4
			Condensed Consolidated Balance Sheets at
			March 31, 2022 and December 31, 2021			5 – 6
			Condensed Consolidated Statements of Cash Flows for the
			Three Months Ended March 31, 2022 and 2021			7 – 8
			Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the
			Three Months Ended March 31, 2022 and 2021			9
			Notes to Condensed Consolidated Financial Statements			10 – 43
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			44 – 92
Item 4.			Controls and Procedures			93
PART II -			OTHER INFORMATION
Item 1.			Legal Proceedings			94
Item 1A.			Risk Factors			94
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			95
Item 6.			Exhibits			96
Signature						97

			For the Three Months Ended March 31,
			2022						2021
Revenues including excise taxes			$	19,341					$	19,355
Excise taxes on products			11,595						11,770
Net revenues			7,746						7,585
Cost of sales (Note 18)			2,608						2,274
Gross profit			5,138						5,311
Marketing, administration and research costs (Notes 16 & 18)			1,802						1,849
Amortization of intangibles			38						18
Operating income			3,298						3,444
Interest expense, net			154						167
Pension and other employee benefit costs (Note 3)			4						28
Earnings before income taxes			3,140						3,249
Provision for income taxes			619						697
Equity investments and securities (income)/loss, net			56						(43)
Net earnings			2,465						2,595
Net earnings attributable to noncontrolling interests			134						177
Net earnings attributable to PMI			$	2,331					$	2,418
Per share data (Note 6):
Basic earnings per share			$	1.50					$	1.55
Diluted earnings per share			$	1.50					$	1.55

						For the Three Months Ended March 31,
						2022						2021
Net earnings						$	2,465					$	2,595
Other comprehensive earnings (losses), net of income taxes:
Change in currency translation adjustments:
Unrealized gains (losses), net of income taxes of $(31) in 2022 and $(85) in 2021						(194)						223
Change in net loss and prior service cost:
Amortization of net losses, prior service costs and net transition costs, net of income taxes of $(13) in 2022 and $(18) in 2021						55						81
Change in fair value of derivatives accounted for as hedges:
Gains (losses) recognized, net of income taxes of $(20) in 2022 and $(14) in 2021						110						76
(Gains) losses transferred to earnings, net of income taxes of $2 in 2022 and $0 in 2021						(9)						21
Total other comprehensive earnings (losses)						(38)						401
Total comprehensive earnings						2,427						2,996
Less comprehensive earnings attributable to:
Noncontrolling interests						279						143
Comprehensive earnings attributable to PMI						$	2,148					$	2,853

			March 31, 2022						December 31, 2021
ASSETS
Cash and cash equivalents			$	4,622					$	4,496
Trade receivables (less allowances of $32 in 2022 and $70 in 2021)			3,650						3,123
Other receivables (less allowances of $36 in 2022 and $36 in 2021)			768						817
Inventories:
Leaf tobacco			1,691						1,642
Other raw materials			2,297						1,652
Finished product			4,696						5,426
			8,684						8,720
Other current assets			1,000						561
Total current assets			18,724						17,717
Property, plant and equipment, at cost			14,563						14,732
Less: accumulated depreciation			8,559						8,564
			6,004						6,168
Goodwill (Note 4)			6,632						6,680
Other intangible assets, net (Note 4)			2,786						2,818
Equity investments (Note 12)			4,312						4,463
Deferred income taxes			694						895
Other assets (less allowances of $21 in 2022 and $21 in 2021)			2,581						2,549
TOTAL ASSETS			$	41,733					$	41,290

			March 31, 2022						December 31, 2021
LIABILITIES
Short-term borrowings (Note 10)			$	2,441					$	225
Current portion of long-term debt (Note 10)			2,897						2,798
Accounts payable			3,203						3,331
Accrued liabilities:
Marketing and selling			678						811
Taxes, except income taxes			5,618						6,324
Employment costs			864						1,146
Dividends payable			1,958						1,958
Other			1,854						1,637
Income taxes			904						1,025
Total current liabilities			20,417						19,255
Long-term debt (Note 10)			24,019						24,783
Deferred income taxes			751						726
Employment costs			2,880						2,968
Income taxes and other liabilities			1,869						1,766
Total liabilities			49,936						49,498
Contingencies (Note 8)
STOCKHOLDERS’ (DEFICIT) EQUITY
Common stock, no par value    (2,109,316,331 shares issued in 2022 and 2021)			—						—
Additional paid-in capital			2,118						2,225
Earnings reinvested in the business			33,468						33,082
Accumulated other comprehensive losses			(9,760)						(9,577)
			25,826						25,730
Less: cost of repurchased stock    (559,231,389 and 559,146,338 shares in 2022 and 2021, respectively)			35,924						35,836
Total PMI stockholders’ deficit			(10,098)						(10,106)
Noncontrolling interests			1,895						1,898
Total stockholders’ deficit			(8,203)						(8,208)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY			$	41,733					$	41,290

			For the Three Months Ended March 31,
			2022						2021
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net earnings			$	2,465					$	2,595
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization			253						245
Deferred income tax (benefit) provision			(1)						33
Asset impairment and exit costs, net of cash paid (Note 16)			(28)						(36)
Cash effects of changes, net of the effects from acquired companies:
Receivables, net			(553)						(427)
Inventories			(232)						305
Accounts payable			14						(67)
Accrued liabilities and other current assets			(835)						(2,108)
Income taxes			(93)						(91)
Pension plan contributions			(34)						(30)
Other			162						16
Net cash provided by operating activities			1,118						435
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
Capital expenditures			(229)						(179)
Equity investments			(20)						—
Net investment hedges			121						199
Other			(68)						35
Net cash provided by (used in) investing activities			(196)						55

			For the Three Months Ended March 31,
			2022						2021
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Short-term borrowing activity by original maturity:
Net issuances (repayments) - maturities of 90 days or less			$	1,916					$	(49)
Issuances - maturities longer than 90 days			305						—
Long-term debt repaid			(496)						(1,632)
Repurchases of common stock			(209)						—
Dividends paid			(1,952)						(1,879)
Payments to noncontrolling interests and Other (Note 17)			(265)						(89)
Net cash used in financing activities			(701)						(3,649)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(95)						(220)
Cash, cash equivalents and restricted cash (1):
Increase (Decrease)			126						(3,379)
Balance at beginning of period			4,500						7,285
Balance at end of period			$	4,626					$	3,906

(1) The amounts for cash, cash equivalents and restricted cash shown above include restricted cash of $4 million and $4 million as of March 31, 2022 and 2021, respectively, and $4 million and $5 million as of December 31, 2021 and 2020, respectively, which were included in other current assets in the condensed consolidated balance sheets.

			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, 2021			$	—					$	2,105					$	31,638					$	(11,181)					$	(35,129)					$	1,936								$	(10,631)
Net earnings															2,418																		177									2,595
Other comprehensive earnings (losses), net of income taxes																					435												(34)									401
Issuance of stock awards									(25)																		69															44
Dividends declared ($1.20 per share)															(1,878)																											(1,878)
Payments to noncontrolling interests																																	(105)									(105)
Balances, March 31, 2021			$	—					$	2,080					$	32,178					$	(10,746)					$	(35,060)					$	1,974								$	(9,574)
Balances, January 1, 2022			$	—					$	2,225					$	33,082					$	(9,577)					$	(35,836)					$	1,898								$	(8,208)
Net earnings															2,331																		134									2,465
Other comprehensive earnings (losses), net of income taxes																					(12)												(26)									(38)
Issuance of stock awards									(77)																		111															34
Dividends declared ($1.25 per share)															(1,945)																											(1,945)
Payments to noncontrolling interests																																	(101)									(101)
Common stock repurchased																											(199)															(199)
Other (Note 17)									(30)												(171)												(10)									(211)
Balances, March 31, 2022			$	—					$	2,118					$	33,468					$	(9,760)					$	(35,924)					$	1,895								$	(8,203)

In the third quarter of 2021, PMI acquired Fertin Pharma A/S, Vectura Group plc. and OtiTopic, Inc. On March 31, 2022, PMI launched a new Wellness and Healthcare business consolidating these entities, Vectura Fertin Pharma. The operating results of this new business is reported in an Other category. For further details, see Note 7. Segment Reporting and Note 17. Acquisitions.

Certain prior years' amounts have been reclassified to conform with the current year's presentation. During the first quarter of 2022, one of Fertin Pharma's product lines was moved from the Other category to the European Union segment (reduced-risk product category). For further details, see Note 4. Goodwill and Other Intangible Assets, net. The change did not have a material impact on PMI's consolidated financial position, results of operations or cash flows in any of the periods presented.

			Number of Shares Granted						Weighted-Average Grant Date Fair Value Per RSU Award Granted						Compensation Expense Related to RSU Awards (in millions)
2022			1,551,050						$ 105.04						$	39
2021			1,972,770						$  81.86						$	40

•Product Sustainability (20% weight) measuring progress on PMI's efforts to maximize the benefits of smoke-free products, purposefully phase out cigarettes, seek net positive impact in wellness and healthcare, and reduce post-consumer waste; and

•Operational Sustainability (10% weight) measuring progress on PMI's efforts to tackle climate change, preserve nature, improve the quality of life of people in its supply chain, and foster an empowered, and inclusive workplace.

			Number of Shares Granted			Grant Date  Fair Value Subject to Other Performance Metrics			Grant Date  Fair Value Subject to TSR Performance Metric			Compensation Expense Related to PSU Awards (in millions)
						(Per Share)			(Per Share)
2022			451,790			$ 105.07			$ 143.94			$	21
2021			574,410			$  81.86			$ 106.93			$	12

			2022						2021
Risk-free interest rate (a)			1.6		%				0.2		%
Expected volatility (b)			28.6		%				31.7		%

(a) Based on the U.S. Treasury yield curve.

(b) Determined using the observed historical volatility.

									For the Three Months Ended March 31,
(in millions)															2022						2021
Net pension costs (income)															$	(25)					$	(1)
Net postemployment costs															27						28
Net postretirement costs															2						1
Total pension and other employee benefit costs															$	4					$	28

															Pension (1)
									For the Three Months Ended March 31,
(in millions)															2022						2021
Service cost															$	60					$	75
Interest cost															20						13
Expected return on plan assets															(92)						(95)
Amortization:
Net loss															48						80
Prior service cost															(1)						1
Net periodic pension cost															$	35					$	74

(1) Primarily non-U.S. based defined benefit retirement plans.

(in millions)			European Union			Eastern Europe			Middle East & Africa			South & Southeast Asia			East Asia & Australia			Americas			Other			Total
Balances, December 31, 2021			$	1,397		$	295		$	79		$	2,828		$	539		$	611		$	931		$	6,680
Changes due to:
Currency			(19)			(8)			8			(29)			(7)			27			(20)			(48)
Balances, March 31, 2022			$	1,378		$	287		$	87		$	2,799		$	532		$	638		$	911		$	6,632

As discussed in Note 1. Background and Basis of Presentation, during the first quarter of 2022, one of Fertin Pharma's product lines was moved from the Other category to the European Union segment. As a result, the December 31, 2021 opening goodwill balance in the table above included a reclassification of $24 million from the Other category to the European Union segment.

						March 31, 2022												December 31, 2021
(in millions)			Weighted-Average Remaining Useful Life			Gross Carrying Amount			Accumulated Amortization			Net						Gross Carrying Amount			Accumulated Amortization			Net
Non-amortizable intangible assets						$	1,321					$	1,321					$	1,312					$	1,312
Amortizable intangible assets:
Trademarks			11 years			1,205			$	656		549						1,201			$	639		562
Developed technology, including patents			12 years			855			82			773						859			63			796
Other(1)			11 years			238			95			143						238			90			148
Total other intangible assets						$	3,619		$	833		$	2,786					$	3,610		$	792		$	2,818

(1) Primarily includes distribution networks and customer relationships.

			Derivative Assets																		Derivative Liabilities
									Fair Value																		Fair Value
									At						At												At						At
(in millions)			Balance Sheet Classification						March 31, 2022						December 31, 2021						Balance Sheet Classification						March 31, 2022						December 31, 2021
Derivative contracts designated as hedging instruments			Other current assets						$	291					$	173					Other accrued liabilities						$	46					$	34
			Other assets						63						22						Income taxes and other liabilities						182						190
Derivative contracts not designated as hedging instruments			Other current assets						55						37						Other accrued liabilities						83						75
			Other assets						—						—						Income taxes and other liabilities						14						—
Total gross amount derivatives contracts presented in the condensed consolidated balance sheets									$	409					$	232											$	325					$	299
Gross amounts not offset in the condensed consolidated balance sheets
Financial instruments									(199)						(126)												(199)						(126)
Cash collateral received/pledged									(200)						(93)												(87)						(151)
Net amount									$	10					$	13											$	39					$	22

(pre-tax, in millions)			For the Three Months Ended March 31,
			Amount of Gain/(Loss) Recognized in Other Comprehensive Earnings/(Losses) on Derivatives																		Statement of Earnings Classification of Gain/(Loss) on Derivatives						Amount of Gain/(Loss) Reclassified from Other Comprehensive Earnings/(Losses) into Earnings												Amount of Gain/(Loss) Recognized in Earnings
			2022						2021																		2022						2021						2022						2021
Derivative contracts designated as hedging instruments:
Cash flow hedges			$	130					$	90
																					Net revenues						$	17					$	—
																					Cost of sales						—						—
																					Marketing, administration and research costs						(3)						(18)
																					Interest expense, net						(3)						(3)
Fair value hedges																					Interest expense, net																		$	(37)					$	—
Net investment hedges (a)			105						318												Interest expense, net (b)																		33						42
Derivative contracts not designated as hedging instruments:																					Interest expense, net																		8						11
																					Marketing, administration and research costs (c)																		(1)						287
Total			$	235					$	408																	$	11					$	(21)					$	3					$	340

(a) Amount of gains (losses) on hedges of net investments principally related to changes in exchange and interest rates between the Euro and U.S. dollar

(b) Represent the gains for amounts excluded from the effectiveness testing

(c) The gains (losses) from these contracts attributable to changes in foreign currency exchange rates substantially offset the (losses) and gains generated by the underlying intercompany and third-party loans being hedged

(in millions)									For the Three Months Ended March 31,
												2022			2021
Gain/(loss) as of January 1,												$	4		$	(85)
Derivative (gains)/losses transferred to earnings												(9)			21
Change in fair value												110			76
Gain/(loss) as of March 31,												$	105		$	12

(in millions)									For the Three Months Ended March 31,
												2022			2021
Net earnings attributable to PMI												$	2,331		$	2,418
Less distributed and undistributed earnings attributable to share-based payment awards												7			7
Net earnings for basic and diluted EPS												$	2,324		$	2,411
Weighted-average shares for basic EPS												1,550			1,558
Plus contingently issuable performance stock units (PSUs)												2			2
Weighted-average shares for diluted EPS												1,552			1,560

PMI’s subsidiaries and affiliates are primarily engaged in the manufacture and sale of cigarettes and RRPs, including heat-not-burn, vapor and oral nicotine products, in markets outside of the United States of America. PMI's segments are generally organized by geographic region and managed by segment managers who are responsible for the operating and financial results of the regions inclusive of combustible and reduced-risk product categories sold in the region. PMI currently has six geographical segments: the European Union; Eastern Europe; Middle East & Africa; South & Southeast Asia; East Asia & Australia; and Americas; as well as an Other category. Other consists of the operating results of PMI's new Wellness and Healthcare business, Vectura Fertin Pharma. For further details on these acquisitions, see Note 17. Acquisitions. PMI records net revenues and operating income to its geographical segments based upon the geographic area in which the customer resides.

(in millions)									For the Three Months Ended March 31,
												2022			2021
Net revenues:
European Union												$	3,012		$	2,909
Eastern Europe												726			796
Middle East & Africa												991			801
South & Southeast Asia												1,123			1,173
East Asia & Australia												1,404			1,472
Americas												424			434
Other												66			—
Net revenues												$	7,746		$	7,585
Operating income (loss):
European Union												$	1,527		$	1,490
Eastern Europe												144			261
Middle East & Africa												521			335
South & Southeast Asia												445			529
East Asia & Australia												571			695
Americas												121			134
Other												(31)			—
Operating income												$	3,298		$	3,444

•Asset impairment and exit costs - See Note 16. Asset Impairment and Exit Costs for details of the $48 million pre-tax charge and a breakdown of these costs by segment for the three months ended March 31, 2021.

•Charges related to the war in Ukraine - See Note 18. War in Ukraine for details of the $42 million pre-tax charges in the Eastern Europe segment for the three months ended March 31, 2022.

(in millions)									For the Three Months Ended March 31,
												2022			2021
Net revenues:
Combustible products:
European Union												$	1,810		$	1,950
Eastern Europe												456			492
Middle East & Africa												929			780
South & Southeast Asia												1,118			1,171
East Asia & Australia												601			648
Americas												416			422
Total combustible products												$	5,330		$	5,463
Reduced-risk products:
European Union												$	1,202		$	959
Eastern Europe												270			304
Middle East & Africa												62			21
South & Southeast Asia												5			2
East Asia & Australia												803			824
Americas												8			12
Total reduced-risk products												$	2,350		$	2,122
Other:
Other												$	66		$	—
Total PMI net revenues												$	7,746		$	7,585

Net revenues related to reduced-risk products refer to the operating revenues generated from the sale of these products, including shipping and handling charges billed to customers, net of sales and promotion incentives, and excise taxes. These net revenue amounts consist of the sale of PMI's heated tobacco units, heat-not-burn devices and related accessories, and other nicotine-containing products, which primarily include PMI's e-vapor and oral nicotine products.

We and our subsidiaries record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, except as stated otherwise in this Note 8. Contingencies, while it is reasonably possible that an unfavorable outcome in a case may occur, after assessing the information available to it (i) management has not concluded that it is probable that a loss has been incurred in any of the pending tobacco-related cases; (ii) management is unable to estimate the possible loss or range of loss for any of the pending tobacco-related cases; and (iii) accordingly, no estimated loss has been accrued in the consolidated financial statements for unfavorable outcomes in these cases, if any. Legal defense costs are expensed as incurred.

As a result of the Court of Appeal of Quebec’s decision in both the Létourneau and Blais cases described below, our subsidiary, Rothmans, Benson & Hedges Inc. (“RBH”), and the other defendants, JTI Macdonald Corp., and Imperial Tobacco Canada Limited, sought protection in the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (“CCAA”) on March 22, March 8, and March 12, 2019, respectively. CCAA is a Canadian federal law that permits a Canadian business to restructure its affairs while carrying on its business in the ordinary course. The initial CCAA order made by the Ontario Superior Court on March 22, 2019 authorizes RBH to pay all expenses incurred in carrying on its business in the ordinary course after the CCAA filing, including obligations to employees, vendors, and suppliers. As further described in Item 8, Note 20. Deconsolidation of RBH of PMI's Annual Report on Form 10-K for the year ended December 31, 2021, RBH's financial results have been deconsolidated from our consolidated financial statements since March 22, 2019. As part of the CCAA proceedings, there is currently a comprehensive stay up to and including September 30, 2022 of all tobacco-related litigation pending in Canada against RBH and the other defendants, including PMI and our indemnitees (PM USA and Altria), namely, the smoking and health class actions filed in various Canadian provinces and health care cost recovery actions. These proceedings are presented below under the caption “Stayed Litigation — Canada.” Ernst & Young Inc. has been appointed as monitor of RBH in the CCAA proceedings. In accordance with the CCAA process, as the parties work towards a plan of arrangement or compromise in a confidential mediation, it is anticipated that the court will set additional hearings and further extend the stay of proceedings. On April 17, 2019, the Ontario Superior Court ruled that RBH and the other defendants will not be allowed to file an application to the Supreme Court of Canada for leave to appeal the Court of Appeal’s decision in the Létourneau and the Blais cases so long as the comprehensive stay of all tobacco-related litigation in Canada remains in effect and that the time period to file the application would be extended by the stay period. While RBH believes that the findings of liability and damages in both Létourneau and the Blais cases were incorrect, the CCAA proceedings will provide a forum for

In the first class action pending in Canada, Conseil Québécois Sur Le Tabac Et La Santé and Jean-Yves Blais v. Imperial Tobacco Ltd., Rothmans, Benson & Hedges Inc. and JTI-Macdonald Corp., Quebec Superior Court, Canada, filed in November 1998, RBH and other Canadian cigarette manufacturers (Imperial Tobacco Canada Ltd. and JTI-Macdonald Corp.) are defendants. The plaintiffs, an anti-smoking organization and an individual smoker, sought compensatory and punitive damages for each member of the class who suffers allegedly from certain smoking-related diseases. The class was certified in 2005. The trial court issued its judgment on May 27, 2015. The trial court found RBH and two other Canadian manufacturers liable and found that the class members’ compensatory damages totaled approximately CAD 15.5 billion, including pre-judgment interest (approximately $12.2 billion). The trial court awarded compensatory damages on a joint and several liability basis, allocating 20% to our subsidiary (approximately CAD 3.1 billion, including pre-judgment interest (approximately $2.4 billion)). In addition, the trial court awarded CAD 90,000 (approximately $70,800) in punitive damages, allocating CAD 30,000 (approximately $23,600) to RBH. The trial court estimated the disease class at 99,957 members. RBH appealed to the Court of Appeal of Quebec. In October 2015, the Court of Appeal ordered RBH to furnish security totaling CAD 226 million (approximately $178 million) to cover both the Létourneau and Blais cases, which RBH has paid in installments through March 2017. The Court of Appeal ordered Imperial Tobacco Canada Ltd. to furnish security totaling CAD 758 million (approximately $596 million) in installments through June 2017. JTI Macdonald Corp. was not required to furnish security in accordance with plaintiffs’ motion. The Court of Appeal ordered that the security is payable upon a final judgment of the Court of Appeal affirming the trial court’s judgment or upon further order of the Court of Appeal.

On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court’s findings of liability and the compensatory and punitive damages award while reducing the total amount of compensatory damages to approximately CAD 13.5 billion including interest (approximately $10.6 billion) due to the trial court’s error in the calculation of interest. The compensatory damages award is on a joint and several basis with an allocation of 20% to RBH (approximately CAD 2.7 billion, including pre-judgment interest (approximately $2.1 billion)). The Court of Appeal upheld the trial court’s findings that defendants violated the Civil Code of Quebec, the Quebec Charter of Human Rights and Freedoms, and the Quebec Consumer Protection Act by failing to warn adequately of the dangers of smoking and by conspiring to prevent consumers from learning of the dangers of smoking. The Court of Appeal further held that the plaintiffs either need not prove, or had adequately proven, that these faults were a cause of the class members’ injuries. In accordance with the judgment, defendants were required to deposit their respective portions of the damages awarded in both the Létourneau case described below and the Blais case, approximately CAD 1.1 billion (approximately $865 million), into trust accounts within 60 days. RBH’s share of the deposit was approximately CAD 257 million (approximately $194 million). PMI recorded a pre-tax charge of $194 million in its consolidated results, representing $142 million net of tax, as tobacco litigation-related expense, in the first quarter of 2019. The charge reflects PMI’s assessment of the portion of the judgment that represents probable and estimable loss prior to the deconsolidation of RBH and corresponds to the trust account deposit required by the judgment.

In the second class action pending in Canada, Cecilia Létourneau v. Imperial Tobacco Ltd., Rothmans, Benson & Hedges Inc. and JTI-Macdonald Corp., Quebec Superior Court, Canada, filed in September 1998, RBH and other Canadian cigarette manufacturers (Imperial Tobacco Canada Ltd. and JTI-Macdonald Corp.) are defendants.  The plaintiff, an individual smoker, sought compensatory and punitive damages for each member of the class who is deemed addicted to smoking. The class was certified in 2005. The trial court issued its judgment on May 27, 2015. The trial court found RBH and two other Canadian manufacturers liable and awarded a total of CAD 131 million (approximately $103 million) in punitive damages, allocating CAD 46 million (approximately $36 million) to RBH. The trial court estimated the size of the addiction class at 918,000 members but declined to award compensatory damages to the addiction class because the evidence did not establish the claims with sufficient accuracy. The trial court found that a claims process to allocate the awarded punitive damages to individual class members would be too expensive and difficult to administer. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court’s findings of liability and the total amount of punitive damages awarded allocating CAD 57 million including interest (approximately $45 million) to RBH. See the Blais description above and Item 8, Note 20. Deconsolidation of RBH in PMI's Annual Report on Form 10-K for the year ended December 31, 2021 for further detail concerning the security order pertaining to both Létourneau and Blais cases and the impact of the decision on PMI’s financial statements.

RBH and PMI believe the findings of liability and damages in both Létourneau and the Blais cases were incorrect and in contravention of applicable law on several grounds including the following: (i) defendants had no obligation to warn class members who knew, or should have known, of the risks of smoking; (ii) defendants cannot be liable to class members who would have smoked regardless of what warnings were given; and (iii) defendants cannot be liable to all class members given the individual differences between class members.

In the third class action pending in Canada, Kunta v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Winnipeg, Canada, filed June 12, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic obstructive pulmonary disease (“COPD”), severe asthma, and mild reversible lung disease resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products.

In the fourth class action pending in Canada, Adams v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Saskatchewan, Canada, filed July 10, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and COPD resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who have smoked a minimum of 25,000 cigarettes and have allegedly suffered, or suffer, from COPD, emphysema, heart disease, or cancer, as well as restitution of profits.

In the fifth class action pending in Canada, Semple v. Canadian Tobacco Manufacturers' Council, et al., The Supreme Court (trial court), Nova Scotia, Canada, filed June 18, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and COPD resulting from the use of tobacco products. He is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, as well as restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products.

In the sixth class action pending in Canada, Dorion v. Canadian Tobacco Manufacturers' Council, et al., The Queen's Bench, Alberta, Canada, filed June 15, 2009, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and chronic bronchitis and severe sinus infections resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers, their estates, dependents and family members, restitution of profits, and reimbursement of government health care costs allegedly caused by tobacco products. To date, we, our subsidiaries, and our indemnitees have not been properly served with the complaint.

In the seventh class action pending in Canada, McDermid v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada, filed June 25, 2010, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges his own addiction to tobacco products and heart disease resulting from the use of tobacco products. He is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from heart disease allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed.

In the eighth class action pending in Canada, Bourassa v. Imperial Tobacco Canada Limited, et al., Supreme Court, British Columbia, Canada, filed June 25, 2010, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, the heir to a deceased smoker, alleges that the decedent was addicted to tobacco products and suffered from emphysema resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised of all smokers who were alive on June 12, 2007, and who suffered from chronic respiratory diseases allegedly caused by smoking, their estates, dependents and family members, plus disgorgement of revenues earned by the defendants from January 1, 1954, to the date the claim was filed. In December 2014, plaintiff filed an amended statement of claim.

In the ninth class action pending in Canada, Suzanne Jacklin v. Canadian Tobacco Manufacturers' Council, et al., Ontario Superior Court of Justice, filed June 20, 2012, we, RBH, and our indemnitees (PM USA and Altria), and other members of the industry are defendants. The plaintiff, an individual smoker, alleges her own addiction to tobacco products and COPD resulting from the use of tobacco products. She is seeking compensatory and punitive damages on behalf of a proposed class comprised

In the first health care cost recovery case pending in Canada, Her Majesty the Queen in Right of British Columbia v. Imperial Tobacco Limited, et al., Supreme Court, British Columbia, Vancouver Registry, Canada, filed January 24, 2001, we, RBH, our indemnitee (PM USA), and other members of the industry are defendants. The plaintiff, the government of the province of British Columbia, brought a claim based upon legislation enacted by the province authorizing the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, resulting from a “tobacco related wrong.”

In the second health care cost recovery case filed in Canada, Her Majesty the Queen in Right of New Brunswick v. Rothmans Inc., et al., Court of Queen's Bench of New Brunswick, Trial Court, New Brunswick, Fredericton, Canada, filed March 13, 2008, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of New Brunswick based on legislation enacted in the province. This legislation is similar to the law introduced in British Columbia that authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the third health care cost recovery case filed in Canada, Her Majesty the Queen in Right of Ontario v. Rothmans Inc., et al., Ontario Superior Court of Justice, Toronto, Canada, filed September 29, 2009, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Ontario based on legislation enacted in the province. This legislation is similar to the laws introduced in British Columbia and New Brunswick that authorize the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the fourth health care cost recovery case filed in Canada, Attorney General of Newfoundland and Labrador v. Rothmans Inc., et al., Supreme Court of Newfoundland and Labrador, St. Johns, Canada, filed February 8, 2011, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Newfoundland and Labrador based on legislation enacted in the province that is similar to the laws introduced in British Columbia, New Brunswick and Ontario. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the fifth health care cost recovery case filed in Canada, Attorney General of Quebec v. Imperial Tobacco Limited, et al., Superior Court of Quebec, Canada, filed June 8, 2012, we, RBH, our indemnitee (PM USA), and other members of the industry are defendants. The claim was filed by the government of the province of Quebec based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the sixth health care cost recovery case filed in Canada, Her Majesty in Right of Alberta v. Altria Group, Inc., et al., Supreme Court of Queen's Bench Alberta, Canada, filed June 8, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Alberta based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the seventh health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Manitoba v. Rothmans, Benson & Hedges, Inc., et al., The Queen's Bench, Winnipeg Judicial Centre, Canada, filed May 31, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Manitoba based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the eighth health care cost recovery case filed in Canada, The Government of Saskatchewan v. Rothmans, Benson & Hedges Inc., et al., Queen's Bench, Judicial Centre of Saskatchewan, Canada, filed June 8, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Saskatchewan based on legislation enacted in the province that is similar to the laws enacted in several other Canadian

In the ninth health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Prince Edward Island v. Rothmans, Benson & Hedges Inc., et al., Supreme Court of Prince Edward Island (General Section), Canada, filed September 10, 2012, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Prince Edward Island based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

In the tenth health care cost recovery case filed in Canada, Her Majesty the Queen in Right of the Province of Nova Scotia v. Rothmans, Benson & Hedges Inc., et al., Supreme Court of Nova Scotia, Canada, filed January 2, 2015, we, RBH, our indemnitees (PM USA and Altria), and other members of the industry are defendants. The claim was filed by the government of the province of Nova Scotia based on legislation enacted in the province that is similar to the laws enacted in several other Canadian provinces. The legislation authorizes the government to file a direct action against cigarette manufacturers to recover the health care costs it has incurred, and will incur, as a result of a “tobacco related wrong.”

Type of Case						Number of Cases Pending as of March 31, 2022						Number of Cases Pending as of March 31, 2021
Individual Smoking and Health Cases						41						43
Smoking and Health Class Actions						9						9
Health Care Cost Recovery Actions						17						17
Label-Related Class Actions						—						—
Individual Label-Related Cases						5						5
Public Civil Actions						1						2

Date

Location of Court/Name of Plaintiff

Type of Case

Verdict

Post-Trial Developments

May 27, 2015

Canada/Conseil Québécois Sur Le Tabac Et La Santé and Jean-Yves Blais

Class Action

On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the Blais class on liability and found the class members’ compensatory damages totaled approximately CAD 15.5 billion (approximately $12.2 billion), including pre-judgment interest. The trial court awarded compensatory damages on a joint and several liability basis, allocating 20% to our subsidiary (approximately CAD 3.1 billion including pre-judgment interest (approximately $2.4 billion)). The trial court awarded CAD 90,000 (approximately $70,800) in punitive damages, allocating CAD 30,000 (approximately $23,600) to our subsidiary. The trial court ordered defendants to pay CAD 1 billion (approximately $786 million) of the compensatory damage award, CAD 200 million (approximately $157 million) of which is our subsidiary’s portion, into a trust within 60 days.

In June 2015, RBH commenced the appellate process with the Court of Appeal of Quebec. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court's decision. (See “Stayed Litigation — Canada” for further detail.)

Date

Location of Court/Name of Plaintiff

Type of Case

Verdict

Post-Trial Developments

May 27, 2015

Canada/Cecilia Létourneau

Class Action

On May 27, 2015, the Superior Court of the District of Montreal, Province of Quebec ruled in favor of the Létourneau class on liability and awarded a total of CAD 131 million (approximately $103 million) in punitive damages, allocating CAD 46 million (approximately $36 million) to RBH. The trial court ordered defendants to pay the full punitive damage award into a trust within 60 days. The court did not order the payment of compensatory damages.

In June 2015, RBH commenced the appellate process with the Court of Appeal of Quebec. On March 1, 2019, the Court of Appeal issued a decision largely affirming the trial court's decision. (See “Stayed Litigation — Canada” for further detail.)

Date

Location of Court/Name of Plaintiff

Type of Case

Verdict

Post-Trial Developments

August 5, 2016

Argentina/Hugo Lespada

Individual Action

On August 5, 2016, the Civil Court No. 14 - Mar del Plata, issued a verdict in favor of plaintiff, an individual smoker, and awarded him ARS 110,000 (approximately $963), plus interest, in compensatory and moral damages. The trial court found that our subsidiary failed to warn plaintiff of the risk of becoming addicted to cigarettes.

On August 23, 2016, our subsidiary filed its notice of appeal. On October 31, 2017, the Civil and Commercial Court of Appeals of Mar del Plata ruled that plaintiff's claim was barred by the statute of limitations and it reversed the trial court's decision. On May 17, 2021 plaintiff filed a federal extraordinary appeal. On November 1, 2021, the Supreme Court of the Province of Buenos Aires dismissed plaintiff's federal extraordinary appeal. On November 10, 2021, plaintiff filed a direct appeal before the Federal Supreme Court.