Philip Morris USA's Cigarette Brand Advertising Drops for Sixth Consecutive Year; Company Also Reports Increase in Combined Spending on Price and Product Promotions at Retail for 2003 Federal Trade Commission Report

Business Wire, August 11, 2005

RICHMOND, Va. -- Philip Morris USA's spending on cigarette brand advertising reported to the Federal Trade Commission (FTC) decreased for the sixth consecutive year as the Company continued to reduce magazine, newspaper and retail point-of-sale advertising in 2003. Spending on cigarette brand advertising decreased by 10 percent from 2002.

"Since 1998, Philip Morris USA's spending on cigarette brand advertising has decreased significantly as a result of voluntary reductions in magazine, newspaper and retail advertising and the elimination of certain brand advertising under the tobacco settlement agreements," said Peggy Roberts, senior director of Communications.

"The overwhelming majority of 2003 expenditures Philip Morris USA reported to the FTC represents price and product promotions to adult smokers," said Roberts. "Even with the 2003 level of spending on price and product promotions, the average retail price of cigarettes increased dramatically, by more than 50 percent since 1998."

For more information about the Company's products and positions on tobacco-related issues, please visit the Philip Morris USA web site at www.philipmorrisusa.com.