Andreas Gembler Retires as President and C.E.O. of Philip Morris International; Paul Hendrys Appointed to Succeed Him.

NEW YORK--(BUSINESS WIRE)--Dec. 4, 1998--Philip Morris Companies Inc. (NYSE: MO) today announced that Mr. Andreas Gembler has decided to retire as president and chief executive officer of Philip Morris International Inc. ("PMI") after a 30-year career with Philip Morris. Mr. Gembler, who is retiring for personal reasons, will assist with PMI's leadership transition through February 1, 1999.

"Andreas is one of the true heroes of our international tobacco growth, and I accept his decision to retire with great regret," said Geoffrey C. Bible, chairman and chief executive officer of Philip Morris Companies Inc. "He helped us establish our first beachheads in Eastern Europe back in the 1970s, and he has shaped our growth in many of our most successful markets today, including Western, Central and Eastern Europe as well as Turkey and the Middle East. His bold vision and incisive intellect not only have built PMI into a powerhouse but also have inspired everyone who knows him. All of us at Philip Morris salute him, and wish him and his family the very best."

Mr. Gembler joined Philip Morris Europe in 1969, and advanced rapidly through a series of assignments in PMI's small but growing Eastern European business. From 1979 through 1985, he served as president for the international business of Philip Morris' former Seven-Up subsidiary. He returned to PMI in 1985, and he was appointed president of PMI's business in Eastern Europe, the Middle East and Africa in 1990. He has held his current position as president and chief executive officer of PMI since April 1997.

"Andreas will be keenly missed by all of us, both personally and professionally," commented William H. Webb, chief operating officer of Philip Morris Companies Inc. "However, he has built a strong organization, and we have great confidence in the next generation of leaders he has helped to develop. We believe that PMI has the people and brands to widen its lead as the most dynamic international consumer packaged goods company in the world."

Effective February 1, 1999, Mr. Gembler will be succeeded by Paul Hendrys. Mr. Hendrys, 51, joined Philip Morris Germany in 1980 as a sales director, and became national sales director in 1982. Mr. Hendrys helped to build the market into one of PMI's largest and most profitable businesses, and became managing director of Philip Morris Germany in 1990, shortly after the fall of the Berlin Wall. Mr. Hendrys has had a prominent public profile as chairman of the National Cigarette Manufacturers' Association in Germany, and most recently he has been president, Philip Morris European Union.

Hans Fluri, 46, currently president, Philip Morris Eastern Europe, will succeed Mr. Hendrys as president, Philip Morris European Union. Mr. Fluri joined Philip Morris as an auditor in 1979 after working three years at Kraft, Inc. He became director of finance and information systems of Philip Morris Germany in 1985, and in this position he led the team managing the purchase of a cigarette factory in Dresden, PMI's first acquisition in the former Warsaw Pact markets. He has headed PMI's Eastern European business since 1993.

Andre Calantzopolous, 40, who has served as managing director for PMI's business in Poland since 1996, will succeed Mr. Fluri as president, Philip Morris Eastern Europe. Mr. Calantzopoulos joined PMI in 1985, and he has been responsible for PMI's business in a number of markets, including Finland, the former Czechoslovakia, Romania, Bulgaria and Hungary.

With 1997 operating revenues of $72 billion, the Philip Morris family of companies is the world's largest producer and marketer of consumer packaged goods. Philip Morris Companies Inc. has five principal operating companies: Kraft Foods, Inc. (comprising Kraft Foods North America and Kraft Foods International), Miller Brewing Company, Philip Morris International Inc., Philip Morris Incorporated (PM USA) and Philip Morris Capital Corporation.