Philip Morris Capital Corporation

Philip Morris Capital Corporation (PMCC) announced a shift in its strategic focus during 2003, from an emphasis on the growth of its portfolio of finance leases through new investments to one of maximizing investment gains and generating cash flows from its existing portfolio of assets through an orderly and systematic disposition of assets over an extended period of time.  PMCC reported operating companies income of $313 million for the full year 2003, significantly above results for 2002, which included a $290 million provision for exposure related to the airline industry.  However, in view of its new strategy, PMCC’s operating companies income is expected to decline in 2004 and future periods.