Audit Cmmittee Charter Membership The Audit Cmmittee (the "Cmmittee") f the Bard f Directrs (the "Bard") f Philip Mrris Internatinal Inc. (the "Cmpany") shall cnsist f at least three directrs all f whm the Bard shall determine meet the independence requirements fr audit cmmittee membership f the New Yrk Stck Exchange and any ther applicable laws, rules and regulatins, subject t the transitin rules f the New Yrk Stck Exchange and the Securities and Exchange Cmmissin ( SEC ). In additin, as determined by the Bard in its business judgment, all members f the Cmmittee shall be financially literate, at least ne member shall be an audit cmmittee financial expert in accrdance with the rules and regulatins f the SEC, and at least ne member (wh may als serve as the audit cmmittee financial expert) shall have accunting r related financial management expertise in accrdance with the New Yrk Stck Exchange listing standards. Based n the recmmendatin f the Nminating and Crprate Gvernance Cmmittee, the Bard shall elect the members and the Chair f the Cmmittee at its rganizatinal meeting fllwing the Annual Meeting f Stckhlders. The members f the Cmmittee may be remved by the Bard. Purpse, Authrity and Respnsibilities The Cmmittee shall assist the Bard in its versight f (i) the integrity f the Cmpany s financial statements and the Cmpany s financial reprting prcesses and systems f internal cntrl, (ii) the qualificatins, independence and perfrmance f the Cmpany s independent auditrs and the perfrmance f the Cmpany s internal auditrs and internal audit functin, and (iii) the Cmpany s cmpliance with legal and regulatry requirements, and shall prvide an avenue f cmmunicatin amng management, the independent auditrs, the internal auditrs, the chief cmpliance fficer and the Bard. In additin, the Cmmittee shall prepare the audit cmmittee reprt that SEC rules require t be included in the Cmpany s annual prxy statement. In the furtherance f this purpse, the Cmmittee shall have the fllwing authrity and respnsibilities: Independent Auditrs 1. The Cmmittee shall have the sle authrity fr appinting, cmpensating, retaining and verseeing the wrk f the independent auditrs f the Cmpany (subject, if applicable, t stckhlder ratificatin), and shall have the sle authrity t apprve all engagement fees and terms and all permissible nn-audit services t be prvided by the independent auditrs. The Cmmittee shall preapprve each such audit and nn-audit service t be prvided by the Cmpany s independent auditrs. The Cmmittee may, frm time t time, delegate its authrity t pre-apprve such services t ne r mre Cmmittee members,
prvided that such designees present any such apprvals t the full Cmmittee at the next Cmmittee meeting; 2. The Cmmittee shall review and discuss with the independent auditrs their audit prcedures, including the audit plan and its scpe with respect t the Cmpany s cnslidated financial statements; 3. The Cmmittee shall evaluate the independent auditrs qualificatins, perfrmance and independence, and shall present its cnclusins and recmmendatins with respect t the independent auditrs t the Bard n at least an annual basis. As part f such evaluatin, the Cmmittee shall: btain and review a reprt r reprts frm the Cmpany s independent auditrs describing: the independent auditrs internal quality-cntrl prcedures; any material issues raised by (i) the mst recent internal qualitycntrl review r peer review f the auditing firm, r (ii) any inquiry r investigatin by gvernmental r prfessinal authrities, within the preceding five years, regarding ne r mre independent audits carried ut by the independent auditrs, and any steps taken t deal with any such issues; and all relatinships between the independent auditrs and the Cmpany; review and evaluate the lead partner and senir members f the independent auditrs; assure the regular rtatin f the audit partners as required by law as well as cnsider whether the independent auditrs shuld be rtated, s as t assure cntinuing auditr independence; and btain the pinin f management and the internal auditrs f the independent auditrs perfrmance; 4. The Cmmittee shall establish plicies fr the Cmpany s hiring f current r frmer emplyees f the independent auditrs; Internal Auditrs 5. The Cmmittee shall, at least annually, evaluate the perfrmance f the Cmpany s internal audit functin and review and discuss with the internal auditrs the internal audit plan, activities, respnsibilities and staffing f the internal audit rganizatin; Chief Cmpliance Officer and Cmpliance Persnnel 6. The Cmmittee shall, at least annually, evaluate the perfrmance f the Cmpany s cmpliance functin and review and discuss with the chief 2
cmpliance fficer, and ther cmpliance persnnel as may be apprpriate, the plan, activities, respnsibilities and staffing f the cmpliance functin; Financial Statements, Disclsure and Other Risk Management and Cmpliance Matters 7. The Cmmittee shall review and discuss with the independent auditrs and with management the results f the annual audit f the Cmpany s cnslidated financial statements prir t the filing r distributin theref, including (i) the Cmpany s disclsures under Management s Discussin and Analysis f Financial Cnditin and Results f Operatins and (ii) any apprpriate matters regarding accunting principles, practices and judgments and the independent auditrs pinin as t the quality theref and any items required t be cmmunicated t the Cmmittee by the independent auditrs in accrdance with standards established and amended frm time t time by the Public Cmpany Accunting Oversight Bard and the American Institute f Certified Public Accuntants ( AICPA ); 8. The Cmmittee shall review and discuss with management and the independent auditrs the Cmpany s interim financial results t be included in the Cmpany s quarterly reprts t be filed with the SEC, including the Cmpany s disclsures under Management s Discussin and Analysis f Financial Cnditin and Results f Operatins and any items required t be cmmunicated t the Cmmittee by the independent auditrs in accrdance with existing AICPA guidance; 9. The Cmmittee shall review and discuss with management, the independent auditrs, and the internal auditrs the quality and adequacy f the Cmpany s financial reprting prcesses, internal cntrls and disclsure cntrls and prcedures, including whether there are any significant deficiencies in the design r peratin f such prcesses, cntrls and prcedures, material weaknesses in such prcesses, cntrls and prcedures, any crrective actins taken with regard t such deficiencies and weaknesses and any fraud invlving management r ther emplyees with a significant rle in such prcesses, cntrls and prcedures; 10. The Cmmittee shall review and discuss with the independent auditrs any audit prblems r difficulties and management s respnse theret, including thse matters required t be discussed with the Cmmittee by the independent auditrs pursuant t Statement n Auditing Standards N. 61; 11. The Cmmittee shall review with management, the internal auditrs and the independent auditrs, in separate meetings if the Cmmittee deems it apprpriate: any analyses r ther written cmmunicatins prepared by management, the internal auditrs and/r the independent auditrs setting frth significant financial reprting issues and judgments made in cnnectin with the preparatin f the cnslidated financial statements, including analyses f 3
the effects f alternative United States GAAP methds n the financial statements; the critical accunting plicies and practices f the Cmpany; related-party transactins and ff-balance sheet transactins and structures; any majr issues regarding accunting principles and financial statement presentatins, including any significant changes in the Cmpany s selectin r applicatin f accunting principles; and regulatry and accunting initiatives r actins applicable t the Cmpany (including any SEC investigatins r prceedings); 12. The Cmmittee shall recmmend t the Bard whether the Cmpany s cnslidated financial statements shuld be accepted fr inclusin in the Cmpany s annual reprt n Frm 10-K; 13. The Cmmittee shall discuss, in cnjunctin with management, the Cmpany s earnings press releases as well as financial infrmatin and earnings guidance prvided t analysts and rating agencies; 14. The Cmmittee shall review the Cmpany s plicies and practices with respect t risk assessment and risk management, including discussing with management the Cmpany s majr financial risk expsures and the steps that management has taken t mnitr and cntrl such expsures, including a review f the Cmpany s plicies and practices with respect t the management f: cybersecurity risks, the risk f excessive r discriminatry taxatin, the risk f illicit trade, and the risk f dilutin f the rule f law; 15. The Cmmittee shall apprve the Cmpany s Cde f Cnduct and review the implementatin and effectiveness f the Cmpany s cmpliance prgram, including vilatins f the Cde f Cnduct and respnses theret and the adequacy f resurces fr cmpliance; 16. The Cmmittee shall review the expense reprts f executive fficers and directrs; 17. The Cmmittee shall establish prcedures fr: the receipt, retentin and treatment f cmplaints received by the Cmpany regarding accunting, internal accunting cntrls r auditing matters; the cnfidential, annymus submissin by emplyees f the Cmpany f cncerns regarding questinable accunting r auditing matters; and the Cmmittee shall review any significant cmplaints regarding accunting, internal accunting cntrls r auditing matters received pursuant t such prcedures; 4
18. The Cmmittee shall prepare a reprt f the Audit Cmmittee t stckhlders t be included in the Cmpany s annual prxy statement as required by the SEC, and file with the New Yrk Stck Exchange any reprts that may be required with respect t the Cmmittee; Reprting t the Bard; Evaluatin f Perfrmance; Other Activities 19. The Cmmittee shall reprt t the Bard n a regular basis, and this reprt shall include a review f any issues that arise with respect t the quality r integrity f the Cmpany s financial statements, the Cmpany s cmpliance with legal and regulatry requirements, the qualificatins, independence and perfrmance f the Cmpany s independent auditrs and the perfrmance f the internal audit and cmpliance functins; 20. The Cmmittee shall, at least annually, (i) evaluate its wn perfrmance and reprt t the Bard n such evaluatin and (ii) review and assess the adequacy f this Charter; and 21. The Cmmittee shall perfrm any ther activities cnsistent with the Cmpany s Articles f Incrpratin, By-Laws and gverning law as the Cmmittee r the Bard deems necessary r apprpriate. Prcedures The Cmmittee shall meet at least fur times annually r mre frequently as it deems apprpriate t carry ut its duties. A majrity f the members f the Cmmittee shall cnstitute a qurum. The Chair f the Cmmittee, in cnsultatin with the ther Cmmittee members, shall set meeting agendas. The Cmmittee shall peridically meet separately in executive sessin with the independent auditrs, the internal audit staff, the chief cmpliance fficer, and management and as a Cmmittee t discuss any matters that the Cmmittee r persns with whm they meet believe shuld be discussed. In fulfilling its respnsibilities, the Cmmittee shall have full access t all bks, recrds, facilities and persnnel f the Cmpany. The Cmmittee shall have the sle authrity t retain and terminate any independent legal, accunting r ther advisrs t the Cmmittee as the Cmmittee may deem apprpriate, including sle authrity t apprve fees and retentin terms f any legal, accunting r ther advisrs that it retains. The Cmmittee may delegate its authrity t subcmmittees r the Chair f the Cmmittee when it deems apprpriate. 5