[Intl-tobacco] Philip Morris Intl CEO Remarks

[robert weissman]

Excerpts:

- In the first quarter of 2005, PMI volume rose 2.1% to 201 billion units.

- In 2004, the total cigarette market in Western Europe declined 45
billion units, or 8%, mainly due to sharp drops in Germany and France
following tax-driven price increases.

- In Central Europe, our volume was up 5.2% in the first quarter of
2005, including gains in Poland and Romania.

- Since 2000, our share of the Russian market is up a cumulative 10.5
points.

- In the markets of Eastern Europe, Middle East and Africa (EEMA), PMI
volume grew 7.8% in the first quarter.

- In the Asia Pacific region, our volume was down 1.1% in the first
quarter, due to lower industry volume in Korea, Japan and Malaysia.
(this excludes Sampoerna)

- In Japan, a major change this year has been the take back of the
Marlboro brand from Japan Tobacco (JT) on May 1.  In anticipation of
this change, we have made significant vending machine investments to
ensure optimal consumer availability of our products.  We have also
improved our Marlboro merchandising materials, upgraded outdoor signage
and prepared a range of exciting promotions.

- In the Latin America region, PMI volume was down 3.7% in the first
quarter.  This was due primarily to lower volume in Argentina and
Brazil, resulting from a market decline in Argentina and consumer down
trading to ultra low-price brand


Remarks by Andr=E9 Calantzopoulos, President and Chief Executive Officer,
PMI at JP Morgan Conference
London, UK
June 29, 2005

Good morning everyone. It is a pleasure to be here today.  Before I
begin, let me say that my remarks today contain projections of future
results.  I direct your attention to the Forward Looking and Cautionary
Statements section at the end of today=92s news release for a review of
the various factors that could cause actual results to differ from
projections.  A copy of my remarks will be posted later today to the
Altria Web site.

This morning, I will cover first-quarter 2005 results for Philip Morris
International Inc. (PMI), including a region-by-region review.
Thereafter, I will discuss the global strategies we have in place for
driving long-term growth.  I will conclude with an outlook for our 2005
full-year results.

In the first quarter of 2005, PMI volume rose 2.1% to 201 billion units.
  This performance was driven by higher volume in Italy as a result of a
one-time inventory sale to our new distributor, volume recovery in
France and gains in many Central European, Eastern European and Asian
markets, partially offset by lower shipments in Germany.  Excluding the
inventory sale in Italy, PMI first quarter volume was 197 billion units,
essentially flat versus the same period a year ago.

Operating companies income (OCI) rose 13.1% to $2.1 billion.  The
increase was generated by higher pricing, favorable currency and the
inventory sale in Italy, partially offset by unfavorable mix, expenses
related to the European Community (EC) agreement and a one-time charge
for a factory closure in Hungary.  Excluding the one-time charges and
inventory sales, underlying OCI was up 8% to $2.0 billion.

Now, let me review our business on a regional basis.  PMI volume in
Western Europe rose 0.6% during the first quarter of 2005.  However,
excluding the one-time inventory sales in Italy, our regional volume
declined 7.2%, principally due to the continuing contraction of the
overall cigarette market in Western Europe.

In 2004, the total cigarette market in Western Europe declined 45
billion units, or 8%, mainly due to sharp drops in Germany and France
following tax-driven price increases.  A portion of the German decline
was also due to consumer switching from cigarettes to lower-taxed and
lower-priced tobacco portions.  In the first quarter of 2005, aggregate
market volume fell 9%.

In Germany, cigarette sales declined 20%, reflecting one less selling
day, the impact of tax-driven price increases in March and December
2004, and down trading to the tobacco portions segment, which almost
tripled versus the first quarter of 2004 to over five billion units.
The decline in Italy is attributable to December 2004 tax-driven price
increases and to recently enacted smoking restrictions.  In Spain, the
decrease reflects declines in smoking incidence and some down trading to
roll-your-own products.  The notable exception to these trends was
France, where the market was flat, reflecting recent price stability.

While these market declines impaired our shipment volume performance in
the first quarter, we nevertheless increased our leading share of this
high-margin region.  Our overall regional share grew 0.1 percentage
point to 38.6% and we held or added share in seven of 10 Western
European markets.

As I mentioned earlier, the total market in France has stabilized, after
declining more than 20% in 2004 following tax and price increases that
raised the Marlboro retail price from 3.80 euros to 5.00 euros.

Another important development in France has been the government=92s
introduction in July 2004 of a minimum reference price law, which
prohibits pricing below a certain level.  Overall price gaps are
currently reasonable, and we have been able to generate share gains for
Marlboro and for our overall portfolio.  We also successfully entered
the roll-your-own segment with Chesterfield in mid-2004.  Despite the
sharp tax-driven retail price increases, the gap between the lowest
price in the market and Marlboro is 50 euro cents or 10%.  With the
minimum reference price set by government at 4.46 euros per pack of 20
cigarettes, gaps should remain at or near current levels.  In the
context of higher prices and lower consumption, we have nevertheless
continued to gain market share.  Driven by Marlboro, we have added more
than two share points since the first quarter of 2004, to attain a
leading 41.5% share of the market.

We also continue to gain share in Spain.  Our share in the first quarter
improved 0.1 point to 36.7%, with three of our key brands, Marlboro,
Chesterfield and Philip Morris, each contributing to this growth.  More
recently, we have witnessed the rapid emergence of an ultra low-price
segment in Spain.  Facing significant tax revenue losses, the Spanish
government has announced it will undertake a full review of tobacco
fiscal and regulatory policies.  We are hopeful that this review will
lead to the introduction of a minimum excise tax.

Clearly, our biggest challenge in Western European today is Germany.
The cigarette market is in severe decline, prompted by both tax-driven
price increases and significant down trading to other tobacco products,
mainly tobacco portions, which benefit from lower taxation.  Since
September 2001, cigarette excise taxes have increased four times, and
are scheduled to increase further this coming September.

A look at the relative retail prices and tax levels clearly illustrates
the issue posed by other tobacco products.  Tax represents 75% of the
retail price of Marlboro cigarettes, but just 51% of the price of
Marlboro portions.  As a result, portions sell at a much lower price but
generate similar net manufacturers=92 selling prices and margins as
cigarettes.

The impact on tobacco consumption patterns has been dramatic.  Last
year, the cigarette segment lost over 20 billion units, while cigarette
portions volume more than doubled to 14 billion units.  This trend
continued during the first quarter.  Cigarette volumes were down 20%
versus the first quarter of 2004 and the volume of portions almost
tripled to five billion units.

While the European Commission has started proceedings to challenge
Germany=92s application of the excise law on portions, this process will
be lengthy.  Consequently, we entered the portions segment last April
with Marlboro and Next.   We held 13% of the segment in the first quarter.

Despite the challenging operating environment, Marlboro remains by far
the leading brand in Germany.  To broaden its appeal, we introduced
Marlboro Blend 29 in October last year.  Marlboro Blend 29 is a new
American blend of high-quality tobaccos that provides a new mix of
flavor, new and fresh packaging and a novel way of presenting Marlboro=92s
core values and imagery. The launch focused on legal age meeting places
in selected cities.  First results have been encouraging and we have
since extended Marlboro Blend 29=92s distribution.

In Italy, we have witnessed a number of positive developments.
Following the government=92s implementation of a minimum excise tax in
mid-2004, retail price gaps have narrowed and we have begun to increase
market share for the first time since early 2002.  The wide gap of 1.10
euros between Marlboro and super low-price brands fuelled the emergence
of this segment, which contained competitive international brands such
as Pall Mall, Winston and Benson & Hedges American Blend.  After the
government=92s implementation of the minimum excise tax, retail prices of
the super low-price brands increased and their price gap to Marlboro
narrowed to 80 euro cents in September.

With closer price gaps, our market share began to improve and we have
added a full percentage point since July of 2004.  Importantly, Marlboro
remains vibrant and relevant for legal-age to 24-year-old smokers, with
a 47% smoker share of this group versus its total smoker share of 22%.
In addition, we have entered into new distribution arrangements that
provide better service levels, lower costs and improved cash flow.

In summary, tax increases have become a fact of life in Western Europe,
but fiscal structures have and should improve with the implementation of
minimum excise tax or reference prices in many regional markets.  While
overall consumption has declined sharply in recent years, we expect the
decline rates to ease.  Importantly, PMI is gaining share overall in the
region and in most individual markets.  We are also improving our total
profitability in the region through selective price increases, which
have more than offset the impact of volume declines this year.

In Central Europe, our volume was up 5.2% in the first quarter of 2005,
including gains in Poland and Romania.  While industry volume declined
in the region, we gained share.  Regionally, we added 1.7 share points,
to reach a leading 37.3%.  We recorded share gains of two percentage
points or better in Slovakia, Poland, Romania and Hungary.  However, we
lost share in the Czech Republic, due to intense price competition at
the bottom of the market.

In Poland, our first quarter volume and share were up significantly
versus 2004, aided by the November 2004 introduction of a minimum excise
tax and the May 2004 reduction of the tax differential between
cigarettes and other tobacco products.  PMI also entered the sizeable
roll-your-own segment last year, and garnered 35% of this segment in the
first quarter of 2005.

Low-price Red & White, launched in July 2004, has driven our recent
share improvement of nearly five points.  Our overall share of 40.1%,
achieved in the first quarter, was a new record for PMI in Poland.

In the Czech Republic, our share erosion is principally due to
competitive launches in the ultra low-price segment.  In response, we
have launched Clea, Next and Bond Street into the segment, and we
presently hold a segment share of nearly 70%.  We also are supporting
the government=92s consideration of an increase in the level of minimum
excise tax or the introduction of a minimum reference price mechanism to
protect government revenues and avert a debilitating tax increase.
While we have not yet reversed the share loss, the success of Clea and
Next have served to moderate the share decline.

The 10 new EU member states within our Central Europe region are
undergoing significant change.  The gradual harmonization with EU tax
norms has forced tax-driven price increases and has led to a decline in
industry volumes, some down trading to low-price brands and increased
inflow of contraband and counterfeit product.  We are successfully
addressing these challenges by leveraging our comprehensive brand
portfolio, supporting improved fiscal structures and working with
governments to fight illicit trade.  As a result, we continue to add
volume and share in the overall Central Europe region.

In the markets of Eastern Europe, Middle East and Africa (EEMA), PMI
volume grew 7.8% in the first quarter.  Our estimated share of the vast
EEMA region increased 2.5 percentage points in the first quarter, to
reach 22.7%.  Among individual markets, we added share in Russia,
Ukraine, Turkey and Saudi Arabia, our four most important income
contributors in the region.

In Russia, we increased our leading share position to 27.2% in the first
quarter.  One of our priorities this year is to improve distribution of
our brands in major urban areas through direct store delivery.  We have
also improved the presentation of L&M, the leading international brand
on the Russian market, through pack upgrades.

Since 2000, our share of the Russian market is up a cumulative 10.5
points.  While we have a broad portfolio in Russia, L&M has been a
particularly important contributor to our share gains, super
premium-price Parliament has captured nearly 2% of the Russian market,
and Marlboro volume is growing steadily.

In addition to holding a leading 27.2% share of volume in Russia, we are
by far the most profitable competitor in the market, and generated an
estimated 50% share of industry income in the first quarter.

In Turkey, PMI achieved record market shares last year and in the first
quarter of 2005.  This performance has been achieved despite frequent
changes to the cigarette excise tax system that have encouraged the
launch of new brands and blends.

Since January 2004, the government has enacted five different excise tax
regimes in Turkey in an effort to support the privatization of Tekel,
including a fully ad valorem system, a mixed system with a multi-tiered
specific component based on retail price levels, and a mixed system with
a multi-tiered specific component based on blend inclusion rates of
Turkish oriental tobacco.  In response, we have made significant changes
to our blends and portfolio, including increases in the Turkish oriental
tobacco component for L&M, and launches of new brands such as Bond
Street and a fully oriental blend brand, Turku.  However, the current
ill-conceived tax regime has regretfully put pressure on both industry
profitability and government revenues, and we are actively pursuing
revisions to the fiscal structure.

As a result of timely PMI responses to these frequent tax changes, our
overall share has continued to increase during this period of market
instability.  Bond Street has been an important contributor to our share
performance, while Marlboro share growth has resumed.   Notably, PMI has
recently surpassed Tekel as the leading cigarette company in Turkey.

In Ukraine, our portfolio has benefited from general consumer up trading
and we continue to record strong volume and share gains in this sizeable
market of over 100 billion units.  In order to meet the increased demand
for our products, we are in the process of completing a new
manufacturing facility near Kharkiv that will be fully operational in
the fourth quarter.

Ukraine has been one of PMI=92s strongest growth markets over the past
several years.  This is reflected in our share performance since 2002,
as we have added more than eight share points with gains generated by
L&M, Marlboro and Bond Street.

In the EEMA region, PMI is generating outstanding volume and share
opportunities with the prospect of margin improvements over the longer
term.  While we are working to improve the excise tax situation in
Turkey, this will remain a short-term challenge.  Finally, there are
plentiful opportunities for geographic expansion to markets where PMI is
currently not present or is under-represented.   Recent market entries
have included South Africa, Nigeria, Algeria, Iraq and Libya.

In the Asia Pacific region, our volume was down 1.1% in the first
quarter, due to lower industry volume in Korea, Japan and Malaysia.  We
recorded share gains in our key Asian markets in the first quarter and
our regional share was up by 0.7 percentage points to 12.7%.  While our
Malaysia share was up in the quarter, the situation there has become
more volatile due to increased price competition.

Please note that these statistics exclude Sampoerna, a leading kretek
manufacturer in Indonesia, which we acquired in the second quarter.
This was the largest acquisition PMI has ever made, and the combination
of Sampoerna=92s business with our existing Marlboro business makes us the
number two company in the world=92s fifth-largest cigarette market.

In 2004, Sampoerna was the third-largest tobacco company in the growing
and profitable Indonesian market.  It held a 19.4% market share,
recorded volume of 41 billion units and generated operating income
equivalent to U.S. $351 million.  The company=92s strong portfolio, its
premium focus, proven Low Tar and Nicotine (LTN) kretek brands and
strong business performance provide excellent platforms to accelerate
PMI growth in the region.

In Japan, a major change this year has been the take back of the
Marlboro brand from Japan Tobacco (JT) on May 1.  In anticipation of
this change, we have made significant vending machine investments to
ensure optimal consumer availability of our products.  We have also
improved our Marlboro merchandising materials, upgraded outdoor signage
and prepared a range of exciting promotions.  Our recent performance in
Japan was also marked by the very successful launch last year of
Virginia Slims Ros=E9, which captured a 0.6% share of market in the first
quarter of 2005.

The vending machine channel in Japan accounts for over 40% of total
cigarette sales.  Consequently, we have substantially increased our
machine pool and vending columns.  We have improved the quality of the
Marlboro presentation by consistently merchandising the brand family in
the machine.  We have also introduced unique Marlboro-only vending units
in selected high-quality locations.

In the increasingly competitive Japanese market, PMI was the only
company to have gained market share in 2004 and our share reached a
record 24.8% in the first quarter of 2005.  Cumulatively, our share has
grown more than four points since 1999.

We are well positioned demographically for continued share growth in
Japan.  Our share among smokers in their early twenties greatly exceeds
our overall share and is larger than the JT share of this critical
consumer group.

In summary, tax-driven price increases are driving declines in several
regional markets, particularly Korea and Malaysia.  However, the
Marlboro take back in Japan will significantly improve Asia Pacific
profitability and we are strengthening our regional position via
acquisitions.  In particular, recently purchased Sampoerna offers
outstanding growth prospects.

In the Latin America region, PMI volume was down 3.7% in the first
quarter.  This was due primarily to lower volume in Argentina and
Brazil, resulting from a market decline in Argentina and consumer down
trading to ultra low-price brands of small manufacturers in both
markets.  As a result of Argentina and Brazil, our regional market share
decreased by one point to 30.4% during the first quarter of 2005.

However, we continued to extend our leadership position in Mexico,
adding 2.5 share points in the first quarter.  The continued share
growth momentum in Mexico was supported by a number of important line
extensions.  We launched two new variants of Marlboro and introduced a
filter version of Delicados in the low-price segment.  Marlboro Medium
and Marlboro Mild Flavor achieved a combined share of 1.6 points in the
first quarter, while Delicados Filter had a 2.7% share of market in
April.  Driven by the outstanding performance of Marlboro, we have added
more than 10 share points in Mexico since 1998 and achieved a record
share of 61.6% in the first quarter.

In Argentina, we have improved our profitability, but tax-driven price
increases have resulted in overall market contraction and down trading
to the ultra low-price segment.  As an initial response, we introduced
Bond Street in the low-price segment last October.  We also understand
the minimum reference price and minimum tax concepts are currently under
discussion by the Argentine authorities.

Our second 2005 acquisition was the purchase of Coltabaco.  We now own
98% of the largest tobacco entity in Colombia, the fourth-largest market
in Latin America.  The company holds approximately half of the Colombian
market, led by its key brands, Boston, Caribe and Green.  The
acquisition also strengthens our overall presence in the Andean Pact zone.

In summary, we have improved profitability in our two Latin America
strongholds, Mexico and Argentina, and have substantially improved our
Andean presence through the Coltabaco acquisition.

Globally, PMI is focused on three key long-term strategies.  First, we
actively promote harm reduction to address the regulatory and societal
issues of our products.  Next, we strive to build and maintain an agile
and winning organization that is talented, diverse, responsive, decisive
and cost-effective.  Finally, we continually pursue profitable business
growth, both organically and through acquisitions and other new business
development activities.

Harm reduction can be accomplished through three related approaches:
fiscal measures, regulatory measures and the development of potentially
less harmful products.  We seek to work closely with regulators and we
encourage and support regulation of our industry, including licensing of
the supply chain to support the fight against counterfeit and
contraband.  In this regard, we are delighted with the actions taken to
date under our wide-ranging agreement with the EU to combat illicit
trade and with the agreement=92s impact on our relationships with relevant
EU and member state institutions.

Second, we pursue fiscal policies that provide equal, non-discriminatory
treatment of all tobacco products and that address both harm reduction
and government revenue objectives.  These include minimum excise taxes,
minimum reference prices and fully specific tax structures, elements of
which have been implemented in 17 of our top 20 income markets thus far.

Third, we continue to invest in research and development to improve our
understanding of smoking-related disease mechanisms and to develop
potentially reduced exposure products.

Finally, we have and will transparently communicate the health effects
of smoking.  In this regard, we have a worldwide program to provide
relevant information through cigarette pack onserts and other
communications, including our Internet Web site.  We also continue to
support Youth Smoking Prevention initiatives with 100 programs in almost
70 markets.

Our ability to succeed in an increasingly competitive operating
environment will also depend on an agile, winning and cost-effective
organization.  Our people are the cornerstone of our current and future
success.  Consequently, we are committed to hiring and retaining the
best talent.  We have a wide range of programs to assess and develop our
current and future leaders.  We also keep a close eye on our
organizational structure and processes to ensure they are efficient and
cost effective.

Our productivity efforts are targeted to generate annual cost reductions
of at least $100 million.  Part of these savings is invested in product
quality improvements.  We have a wide range of productivity initiatives
to address direct materials and leaf, our two largest cost components,
and to optimize our manufacturing base.  Recently, these have included
the repatriation of PMI brand volume from third-party manufacturers, and
PMI factory closures in Belgium and Hungary.  A current productivity
initiative will streamline our support organization.

Our third global strategy is the pursuit of profitable business growth.
  This strategy has three principal components: organic growth through
the strengthening of our existing brand portfolio, new business
development and investments to support this growth.  For example, we
increased our spending behind marketing, field forces and research and
development a cumulative 15% between 2001 and 2004.

Our growth strategy is focused on improving our share of all profitable
segments and markets.  These include the premium, blended, LTN and
menthol segments, where we are relatively well represented.  More
recently, we have increased our focus on areas where we are
under-represented and where it makes sense to participate, including
mid- and low-price segments in various individual markets and the kretek
segment in Indonesia.

Within our portfolio, our focus remains on Marlboro, the world=92s
best-selling cigarette.  In an increasingly restricted marketing
environment, Marlboro is the greatest asset in the industry, and we will
use all means to enhance its equity and expand the appeal of the brand
through new offerings.

The Marlboro marketing strategy is built on strong support behind
superior products and innovative line extensions, the selective use of
special packaging, outstanding advertising, exciting equity-building
promotional programs, and a leading presence at the point of sale.

We continue to develop innovative line extensions and special packaging
that provide a wider range of blends and formats that are true to the
Marlboro spirit.  These initiatives include the launch of Marlboro Blend
29 in Germany, Austria and Switzerland last October.

In the UK, we introduced Marlboro Blend 28, a full-flavor offering that
addresses consumer taste preferences in a predominantly Virginia market.
  The distinctive and modern pack incorporates the Marlboro red rooftop
design and initial distribution has focused on high-end bars and clubs.

Smooth tasting Marlboro Mild was successfully launched in Mexico and has
been introduced more recently in Brazil.  The unconventional advertising
under the copy line, =93Born Blue,=94 reinforces the novel character of the
product and the innovative use of the electric blue color within the
Marlboro family.

We also make selective use of innovative Marlboro packaging.  This year,
we are expanding the availability of the racing edition pack, which
complements our sponsorship of the world champion Ferrari Formula 1 team.

We continue to add depth and vitality to the unique Marlboro Country
advertising campaign with strong, fresh executions.  Our latest print
advertising uses a variety of new backgrounds and shapes to present the
traditional themes of Marlboro Country.

We are also strengthening Marlboro=92s appeal through a variety of
promotional platforms.  Our successful Marlboro Adventure Team program
features summer and winter programs and will run in 32 markets this
year.  Our sponsorship of the Ferrari and Ducatti racing teams provides
us with exciting promotional opportunities, such as this ad for the
Marlboro Red Racing School promotion, which offers a consumer or
retailer the chance to ride in a specially adapted three-seater F1
Ferrari.  For legal-age meeting points, we have developed specific
Marlboro materials for age-controlled venues, such as bars and
discotheques.  Among our Marlboro activities at the point of sale, we
are building a premium brand environment in the high-end trade with
Marlboro Experience Outlets in 19 markets around the world.

While the most significant part of our marketing activities is behind
Marlboro, we also support the growth of L&M, the world=92s third-largest
cigarette brand.  L&M has generated outstanding growth over the last
four years, more than doubling its volume.  A contributing factor to
this growth has been L&M=92s geographic expansion from 59 to 76 markets
between 2001 and 2004.  L&M has established significant shares in
diverse markets throughout the world and is the number one international
brand in key markets such as Russia, Turkey, Ukraine, Poland and
Romania.  We are continually evolving L&M advertising with visuals such
as this one from the latest campaign created around the theme, =93Our
taste, our world.=94

We also seek to develop a wide range of differentiated brands to tap
particular segments and markets.  We have a formidable and diverse
portfolio to work with.  In addition to Marlboro and L&M, we have five
other brands among the world=92s top 20: Philip Morris, Chesterfield,
Lark, Bond Street and Parliament.

We have also developed our value brand portfolio in order to capture
down traders or address competitive products in all price segments.  For
example, we have expanded the international presence of Next and Basic,
and they are now available in 25 and 13 markets, respectively.  Both
Next and Basic have performed well, and their combined volume was up
over 62% in 2004.

In the other tobacco products category, we are present in various
segments and markets.  In some cases, the segments offer interesting
income opportunities.  In other cases, our entry may be more defensive,
particularly when these segments unfairly benefit from discriminatory
taxation versus cigarettes.

In order to supplement organic growth generated by our existing
portfolio, we pursue all new business development opportunities that
offer strategic fit, strong trademarks, strong growth potential,
attractive returns and entry into new markets or segments.  There are a
myriad of markets where we have less than 15% share and that
consequently offer substantial development opportunities.

PMI has been particularly active in the business development area over
the past three years.  The most significant recent events include the
acquisition of Sampoerna in Indonesia, Coltabaco in Colombia, DIN in
Serbia, Papastratos in Greece, the tobacco assets of Amer Tobacco in
Finland, the cigarette trademarks of Sterling Tobacco in the Philippines
and market entry in South Africa, Nigeria, Algeria, Libya and Iraq.

Clearly, one of our greatest long-term opportunities is China, a growing
market of 1.8 trillion cigarettes, or about one third of the world=92s
consumption.  We are currently exploring different opportunities for
this market.

In conclusion, I would like to share our current outlook for PMI
total-year performance in 2005.  We expect volume growth to be
approximately 5% this year, including the acquisitions of Coltabaco and
Sampoerna.  Excluding acquisitions, we project volume growth of
approximately 1%, reflecting the adverse impact of the excise tax
increase scheduled for this September in Germany and continuing changes
to the tax system in Turkey.  In addition, we project double-digit
operating companies=92 income growth for the full year 2005, including the
benefit of the Sampoerna acquisition, and despite challenges in Germany
and Turkey and the recent strengthening of the U.S. dollar.

Longer term, PMI continues to have outstanding growth prospects.  With
only a 15% share of world cigarette consumption, the world=92s leading
brands, the strongest international infrastructure, the best people and
a host of business development opportunities, I believe that PMI is very
well placed to continue to add volume, share and profitability in the
years ahead.

Thank you very much.


=A9 2005 Altria Group, Inc.