Segment Reporting

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting:

PMI’s subsidiaries and affiliates are engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States of America. Reportable segments for PMI are organized and managed by geographic region. PMI’s reportable segments are European Union; Eastern Europe, Middle East & Africa; Asia; and Latin America & Canada.

PMI’s management evaluates segment performance and allocates resources based on operating companies income, which PMI defines as operating income, excluding general corporate expenses and amortization of intangibles, plus equity (income)/loss in unconsolidated subsidiaries, net. Interest expense, net, and provision for income taxes are centrally managed and, accordingly, such items are not presented by segment since they are excluded from the measure of segment profitability reviewed by management.

Segment data were as follows:

(in millions)	For the Six Months Ended June 30,						For the Three Months Ended June 30,
	2014			2013			2014			2013
Net revenues:
European Union	$	14,448		$	13,768		$	7,829		$	7,245
Eastern Europe, Middle East & Africa	10,236			9,800			5,674			5,377
Asia	9,572			10,632			5,097			5,381
Latin America & Canada	4,574			4,810			2,451			2,480
Net revenues	$	38,830		$	39,010		$	21,051		$	20,483
Earnings before income taxes:
Operating companies income:
European Union	$	1,689		$	2,020		$	711		$	1,082
Eastern Europe, Middle East & Africa	2,014			1,880			1,087			945
Asia	1,815			2,470			900			1,128
Latin America & Canada	467			509			265			255
Amortization of intangibles	(44		)	(48		)	(22		)	(24		)
General corporate expenses	(80		)	(112		)	(40		)	(54		)
Less:
Equity (income)/loss in unconsolidated subsidiaries, net	(36		)	9			(27		)	5
Operating income	5,825			6,728			2,874			3,337
Interest expense, net	(522		)	(482		)	(254		)	(246		)
Earnings before income taxes	$	5,303		$	6,246		$	2,620		$	3,091

Items affecting the comparability of results from operations are asset impairment and exit costs. See Note 2. Asset Impairment and Exit Costs for a breakdown of these costs by segment.