Philip Morris International, Inc. (NYSE:PM) Q4 2017 Earnings Conference Call Transcript

Feb 08, 2018 • 09:00 am ET

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Philip Morris International, Inc. (NYSE:PM) Q4 2017 Earnings Conference Call Transcript

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Presentation
Operator
operator

Good day, and welcome to the Philip Morris International 2017 Fourth Quarter and Full Year Results Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Philip Morris International management and the question-and-answer session. (Operator Instructions) Media representatives on the call will also be invited to ask questions at the conclusion of questions from the investment community. I will now turn the call over to Mr. Nick Rolli, Vice President of Investor Relations and Financial Communications. Please go ahead, sir.

Executive
Nicholas Rolli

Welcome, and thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2017 fourth quarter and full year results. You may access the release on www.pmi.com or the PMI Investor Relations app. During our call today, please note the following, unless otherwise stated. First, we will be talking about results for the fourth quarter and full year 2017, and comparing them to the same period in 2016. Second, references to total industry, total market, PMI volume and PMI market share performance reflect cigarettes and heated tobacco units.

A glossary of terms, adjustments and other calculations as well as reconciliations to the most directly comparable U.S. GAAP measures are at the end of today's webcast slides, which are posted on our website. Reduced-risk products, or RRPs, is the term we use to refer to products that present, are likely to present or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. (Forward-Looking Cautionary Statements). It's now my pleasure to introduce Andre Calantzopoulos, our Chief Executive Officer. Martin King, our Chief Financial Officer will join Andre for the question-and-answer period. Andre?

Executive
Andre Calantzopoulos

Thank you, Nick. And welcome, ladies and gentlemen. Before I get into a discussion of our 2017 results, let me share my thoughts on last month's Tobacco Product Scientific Advisory Committee or TPSAC meeting in the U.S., which I recognize is top of mind for investors.

For reference, we have posted our full presentation to the committee on www.pmiscience.com. The meeting was part of the U.S. Food & Drug Administration's FDA review of PMI's request to commercialize IQOS in the U.S. as a Modified Risk Tobacco Product or MRTP. To advise the FDA on PMI's applications, the Committee covered a wide range of scientific, technical, and consumer-communications topic. It raised questions and probed the likelihood and magnitude of potential benefits, as well as how best to address possible unintended use.

We believe the Committee's interactions with presenters and its discussion reflected respect for the integrity of our scientific data and our commitment to bring IQOS to the U.S. Although the Committee did not agree with some of the specific language related to consumer communications, it confirmed that the evidence supported the statement that switching completely to IQOS significantly reduces exposure to harmful chemicals.

The meeting with TPSAC was just one step in a broader, on-going review of our MRTP applications by the FDA, and the recommendations and votes of the Committee,