Investments in Unconsolidated Subsidiaries:

At December 31, 2017 and 2016, PMI had total investments in unconsolidated subsidiaries of $1,074 million and $1,011 million, respectively, which were accounted for under the equity method of accounting. Equity method investments are initially recorded at cost. Under the equity method of accounting, the investment is adjusted for PMI's proportionate share of earnings or losses and movements in currency translation adjustments. The carrying value of our equity method investments at December 31, 2017 and 2016 exceeded our share of the unconsolidated subsidiaries' book value by $927 million and $867 million, respectively. The difference between the investment carrying value and the amount of underlying equity in net assets, excluding $873 million and $810 million attributable to goodwill as of December 31, 2017 and 2016, respectively, is being amortized on a straight-line basis over the underlying assets' estimated useful lives of 10 to 20 years. At December 31, 2017 and 2016, PMI received year-to-date dividends from unconsolidated subsidiaries of $120 million and $117 million, respectively.

PMI holds a 49% equity interest in United Arab Emirates-based Emirati Investors-TA (FZC) (“EITA”). PMI holds an approximate 25% economic interest in Société des Tabacs Algéro-Emiratie (“STAEM”), an Algerian joint venture that is 51% owned by EITA and 49% by the Algerian state-owned enterprise Société Nationale des Tabacs et Allumettes SpA. STAEM manufactures and distributes under license some of PMI’s brands.

PMI holds a 23% equity interest in Megapolis Distribution BV, the holding company of CJSC TK Megapolis, PMI's distributor in Russia.

The initial investments in EITA and Megapolis Distribution BV were recorded at cost and are included in investments in unconsolidated subsidiaries on the consolidated balance sheets.

PMI’s earnings activity from unconsolidated subsidiaries was as follows:



	For the Years Ended December 31,
(in millions)	2017		2016
Net revenues	$	4,425	$	3,985

PMI’s balance sheet activity related to unconsolidated subsidiaries was as follows:



	At December 31,
(in millions)	2017		2016
Receivables	$	293	$	289

The activity primarily related to agreements with PMI’s unconsolidated subsidiaries within the Eastern Europe, Middle East & Africa segment. These agreements, which are in the ordinary course of business, are primarily for distribution, contract manufacturing and licenses. PMI eliminated its respective share of all significant intercompany transactions with the equity method investees.