?
The Latin America & Canada Region is headquartered in New York and covers the South American continent, Central America, Mexico, the Caribbean and Canada.
Net revenues and operating companies income* (together with a reconciliation to operating income) attributable to each segment for each of the last three years are set forth in Item 8.
Financial Statements and Supplementary Data of this Annual Report on Form 10-K ("Item 8") in Note 12.
Segment Reporting to the consolidated financial statements.
See Item 7 of this Annual Report on Form 10-K for a discussion of our operating results by business segment.
The relative percentages of operating companies income attributable to each reportable segment were as follows:
## Table 0 ##
* For all periods presented in this report, our management evaluated segment performance and allocated resources based on operating companies income, which we define as operating income, excluding general corporate expenses and amortization of intangibles, plus equity (income)/loss in unconsolidated subsidiaries, net.
The accounting policies of the segments are the same as those described in Note 2.
Summary of Significant Accounting Policies to the consolidated financial statements in Item 8.
We use the term net revenues to refer to our operating revenues from the sale of our products, net of sales and promotion incentives.
Our net revenues and operating income are affected by various factors, including the volume of products we sell, the price of our products, changes in currency exchange rates and the mix of products we sell.
Mix is a term used to refer to the proportionate value of premiumprice brands to mid-price or low-price brands in any given market (product mix).
Mix can also refer to the proportion of shipment volume in more profitable markets versus shipment volume in less profitable markets (geographic mix).
We often collect excise taxes from our customers and then remit them to local governments, and, in those circumstances, we include excise taxes in our net revenues and excise taxes on products.
Our cost of sales consists principally of tobacco leaf, non-tobacco raw materials, labor and manufacturing costs, as well as the cost of the IQOS devices produced by third-party electronics manufacturing service providers.
Our marketing, administration and research costs include the costs of marketing and selling our products, other costs generally not related to the manufacture of our products (including general corporate expenses), and costs incurred to develop new products.
The most significant components of our marketing, administration and research costs are marketing and sales expenses and general and administrative expenses.
To provide a greater focus on both parts of our business -- combustible and reduced-risk products -- and to support our transformation toward a smoke-free future, effective January 1, 2018, we began managing our business in six reportable segments as follows: ?
The European Union Region is headquartered in Lausanne, Switzerland and covers all the European Union countries and also Switzerland, Norway and Iceland, which are linked to the European Union through trade agreements; ?
The Eastern Europe Region is also headquartered in Lausanne and includes Southeast Europe, Central Asia, Ukraine, Israel and Russia; ?
The Middle East & Africa Region is also headquartered in Lausanne and covers the African continent, the Middle East, Turkey and our international duty free business; ?
The South & Southeast Asia Region is headquartered in Hong Kong and includes Indonesia, the Philippines and other markets in this region; ?
The East Asia & Australia Region is also headquartered in Hong Kong and includes Australia, Japan, South Korea, the People's Republic of China and other markets in this region, as well as Malaysia and Singapore; and ?
The Latin America & Canada Region is headquartered in New York and covers the South American continent, Central America, Mexico, the Caribbean and Canada.
our annual goodwill impairment test from the first quarter to the second quarter.
The change was made to more closely align the impairment testing date with our long-range planning and forecasting process.
We had determined that this change in accounting principle was preferable under the circumstances and believe that the change in the annual impairment testing date did not delay, accelerate, or avoid an impairment charge.
While the company has the option to perform a qualitative assessment for both goodwill and non-amortizable intangible assets to determine if it is more likely than not that an impairment exists, the company elects to perform the quantitative assessment for our annual impairment analysis.
The impairment analysis involves comparing the fair value of each reporting unit or non-amortizable intangible asset to the carrying value.
If the carrying value exceeds the fair value, goodwill or a non-amortizable intangible asset is considered impaired.
To determine the fair value of goodwill, we primarily use a discounted cash flow model, supported by the market approach using earnings multiples of comparable global and local companies within the tobacco industry.
At December 31, 2017, the carrying value of our goodwill was $7.7 billion, which is related to ten reporting units, each of which consists of a group of markets with similar economic characteristics.
The estimated fair value of each of our ten reporting units exceeded the carrying value as of December 31, 2017.
To determine the fair value of non-amortizable intangible assets, we primarily use a discounted cash flow model applying the relief-from-royalty method.
We concluded that the fair value of our non-amortizable intangible assets exceeded the carrying value.
These discounted cash flow models include management assumptions relevant for forecasting operating cash flows, which are subject to changes in business conditions, such as volumes and prices, costs to produce, discount rates and estimated capital needs.
Management considers historical experience and all available information at the time the fair values are estimated, and we believe these assumptions are consistent with the assumptions a hypothetical marketplace participant would use.
Since the March 28, 2008, spin-off from Altria Group, Inc. , we have not recorded a charge to earnings for an impairment of goodwill or non-amortizable intangible assets.
Marketing and Advertising Costs - We incur certain costs to support our products through programs that include advertising, marketing, consumer engagement and trade promotions.
The costs of our advertising and marketing programs are expensed in accordance with U. S.  GAAP.
Recognition of the cost related to our consumer engagement and trade promotion programs contain uncertainties due to the judgment required in estimating the potential performance and compliance for each program.
For volume-based incentives provided to customers, management continually assesses and estimates, by customer, the likelihood of the customer's achieving the specified targets, and records the reduction of revenue as the sales are made.
For other trade promotions, management relies on estimated utilization rates that have been developed from historical experience.
Changes in the assumptions used in estimating the cost of any individual marketing program would not result in a material change in our financial position, results of operations or operating cash flows.
Employee Benefit Plans - As discussed in Item 8, Note 13.
Benefit Plans to our consolidated financial statements, we provide a range of benefits to our employees and retired employees, including pensions, postretirement health care and postemployment benefits (primarily severance).
We record annual amounts relating to these plans based on calculations specified by U. S.  GAAP.
These calculations include various actuarial assumptions, such as discount rates, assumed rates of return on plan assets, compensation increases, mortality, turnover rates and health care cost trend rates.
We review actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so.
As permitted by U. S.  GAAP, any effect of the modifications is generally amortized over future periods.
We believe that the assumptions utilized in calculating our obligations under these plans are reasonable based upon our historical experience and advice from our actuaries.
Weighted-average discount rate assumptions for pensions and postretirement plans are as follows:
## Table 1 ##
We anticipate that assumption changes will decrease 2018 pre-tax pension and postretirement expense to approximately $164 million as compared with approximately $199 million in 2017, excluding amounts related to early retirement programs.
The anticipated decrease is primarily due to higher expected return on assets of $21 million, coupled with lower amortization out of other comprehensive earnings for prior service cost of $12 million and unrecognized actuarial gains/losses of $10 million, partially offset by other movements of $8 million.
Weighted-average expected rate of return and discount rate assumptions have a significant effect on the amount of expense reported for the employee benefit plans.
A fifty-basis-point decrease in our discount rate would increase our 2018 pension and postretirement expense by approximately $38 million, and a fifty-basis-point increase in our discount rate would decrease our 2018 pension and postretirement expense by approximately $54 million.
Similarly, a fifty-basis-point decrease (increase) in the expected return on plan assets would increase (decrease) our 2018 pension expense by approximately $45 million.
See Item 8, Note 13.
Benefit Plans to our consolidated financial statements for a sensitivity discussion of the assumed health care cost trend rates.
In Mexico, estimated industry size, our cigarette shipment volume and market share performance are shown in the table below.
## Table 2 ##
The estimated total cigarette market increased by 7.0%, or by 2.2% excluding the net impact of estimated trade inventory movements, primarily reflecting improved market conditions and a lower prevalence of illicit trade.
The increase in our cigarette shipment volume reflected the higher total market.
Our cigarette market share, benefiting from the impact of estimated inventory movements, was up by 0.5 points, with growth of Marlboro and Benson & Hedges, reflecting the impact of new product launches, partly offset by low-price Delicados.
Our share of the premium segment, representing 56.9% of the total market, increased by 1.0 point to 93.5%.
Financial Review Net Cash Provided by Operating Activities Net cash provided by operating activities of $8.9 billion for the year ended December 31, 2017, increased by $0.8 billion from the comparable 2016 period.
While the impacts of the Tax Cuts and Jobs Act reduced net earnings by $1.6 billion, there was no net impact on operating cash flows for the year, as the changes in deferred taxes and income taxes payable offset the net earnings impact.
Excluding the impact of the Tax Cuts and Jobs Act as well as favorable currency movements of $0.4 billion, the increase in cash flows provided by operating activities can be attributed to higher net earnings offset by working capital and other movements.
At December 31, 2017, PMI recorded an income tax payable of $1.7 billion representing the transition tax of $2.2 billion, partially offset by foreign tax credits related to foreign withholding taxes previously paid of $0.5 billion.
The income tax payable is due over an 8-year period beginning in 2018.
For further details, see Item 8, Note 11.
Income Taxes to our consolidated financial statements.
Net cash provided by operating activities of $8.1 billion for the year ended December 31, 2016, increased by $212 million from the comparable 2015 period.
Excluding unfavorable currency movements of $409 million, the change was due primarily to net earnings growth and lower cash payments related to exit costs, partly offset by higher working capital requirements and 2016 installment payments of security into a court trust pertaining to the Létourneau and Blais cases as well as a 2016 payment to the South Korean tax authorities (see Item 8, Note 18.
Contingencies for additional information).
Excluding currency, the unfavorable variance in working capital was due primarily to the following: ?
more cash used for accounts receivable, primarily due to the timing of sales and cash collections (including unfavorable comparisons to the cash flows provided for accounts receivable in 2015 following the expansion of arrangements to sell accounts receivable to unaffiliated financial institutions as disclosed in Item 8, Note 20.
Sale of Accounts Receivable), partly offset by ?
more cash provided by accrued liabilities and other current assets, primarily due to the timing of payments for excise taxes.
Aggregate Contractual Obligations – The following table summarizes our contractual obligations at December 31, 2017:
## Table 3 ##
(1) Amounts represent the expected cash payments of our long-term debt and capital lease obligations.
(2) Amounts represent the expected cash payments of our interest expense on our long-term debt, including the current portion of long-term debt.
Interest on our fixedrate debt is presented using the stated interest rate.
Interest on our variable debt is estimated using the rate in effect at December 31, 2017.
Amounts exclude the amortization of debt discounts, the amortization of loan fees and fees for lines of credit that would be included in interest expense in the consolidated statements of earnings.
(3) Amounts represent the minimum rental commitments under non-cancelable operating leases.
(4) Purchase obligations for inventory and production costs (such as raw materials, indirect materials and supplies, packaging, co-manufacturing arrangements, storage and distribution) are commitments for projected needs to be utilized in the normal course of business.
Other purchase obligations include commitments for marketing, advertising, capital expenditures, information technology and professional services.
Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transaction.
Amounts represent the minimum commitments under non-cancelable contracts.
Any amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
(5) Other long-term liabilities consist primarily of postretirement health care costs and accruals established for employment costs.
The following long-term liabilities included on the consolidated balance sheet are excluded from the table above: accrued pension and postemployment costs, tax contingencies, insurance accruals and other accruals.
We are unable to estimate the timing of payments (or contributions in the case of accrued pension costs) for these items.
Currently, we anticipate making pension contributions of approximately $53 million in 2018, based on current tax and benefit laws (as discussed in Item 8, Note 13.
Benefit Plans to our consolidated financial statements).
Equity and Dividends We discuss our stock awards as of December 31, 2017, in Item 8, Note 9.
Stock Plans to our consolidated financial statements.
During 2017, 2016 and 2015, we did not repurchase any shares under a share repurchase program and we do not presently intend to repurchase shares of our common stock in 2018.
Dividends paid in 2017 were $6.5 billion.
During the third quarter of 2017, our Board of Directors approved a 2.9% increase in the quarterly dividend to $1.07 per common share.
As a result, the present annualized dividend rate is $4.28 per common share.
Market Risk Counterparty Risk - We predominantly work with financial institutions with strong short- and long-term credit ratings as assigned by Standard & Poor’s and Moody’s.
These banks are also part of a defined group of relationship banks.
Non-investment grade institutions are only used in certain emerging markets to the extent required by local business needs.
We have a conservative approach when it comes to choosing financial counterparties and financial instruments.
As such we do not invest or hold investments in any structured or equitylinked products.
The majority of our cash and cash equivalents is currently invested in demand deposits maturing within less than 30 days.
We continuously monitor and assess the credit worthiness of all our counterparties.
Derivative Financial Instruments - We operate in markets outside of the U. S. , with manufacturing and sales facilities in various locations throughout the world.
Consequently, we use certain financial instruments to manage our foreign currency and interest rate exposure.
We use derivative financial instruments principally to reduce our exposure to market risks resulting from fluctuations in foreign

<table><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>European Union</td><td>32.0%</td><td>35.8%</td><td>32.6%</td></tr><tr><td>Eastern Europe, Middle East & Africa</td><td>24.4</td><td>27.1</td><td>31.2</td></tr><tr><td>Asia</td><td>35.1</td><td>28.7</td><td>26.3</td></tr><tr><td>Latin America & Canada</td><td>8.5</td><td>8.4</td><td>9.9</td></tr><tr><td></td><td>100.0%</td><td>100.0%</td><td>100.0%</td></tr></table>
<table><tr><td></td><td>2017</td><td>2016</td></tr><tr><td>Pension plans</td><td>1.51%</td><td>1.52%</td></tr><tr><td>Postretirement plans</td><td>3.79%</td><td>3.68%</td></tr></table>
<table><tr><td></td><td colspan="3">Mexico Key Market Data Full-Year</td></tr><tr><td></td><td></td><td></td><td>Change</td></tr><tr><td></td><td>2016</td><td>2015</td><td>% / p.p.</td></tr><tr><td>Total Cigarette Market (billion units)</td><td>36.2</td><td>33.8</td><td>7.0%</td></tr><tr><td>PMI Cigarette Shipments (million units)</td><td>25,080</td><td>23,246</td><td>7.9%</td></tr><tr><td>PMI Cigarette Market Share</td><td></td><td></td><td></td></tr><tr><td>Marlboro</td><td>49.0%</td><td>47.8%</td><td>1.2</td></tr><tr><td>Delicados</td><td>9.7%</td><td>10.7%</td><td>-1.0</td></tr><tr><td>Benson & Hedges</td><td>4.7%</td><td>4.5%</td><td>0.2</td></tr><tr><td>Others</td><td>5.9%</td><td>5.8%</td><td>0.1</td></tr><tr><td>Total</td><td>69.3%</td><td>68.8%</td><td>0.5</td></tr></table>
<table><tr><td></td><td></td><td colspan="4">Payments Due</td></tr><tr><td>(in millions)</td><td>Total</td><td>2018</td><td>2019-2020</td><td>2021-2022</td><td>2023 andThereafter</td></tr><tr><td>Long-term debt<sup>-1</sup></td><td>$34,120</td><td>$2,506</td><td>$8,221</td><td>$5,811</td><td>$17,582</td></tr><tr><td>Interest on borrowings<sup>-2</sup></td><td>11,131</td><td>981</td><td>1,656</td><td>1,372</td><td>7,122</td></tr><tr><td>Operating leases<sup>-3</sup></td><td>849</td><td>179</td><td>219</td><td>95</td><td>356</td></tr><tr><td>Purchase obligations<sup>-4</sup>:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Inventory and production costs</td><td>5,040</td><td>2,696</td><td>1,255</td><td>687</td><td>402</td></tr><tr><td>Other</td><td>2,230</td><td>1,437</td><td>588</td><td>194</td><td>11</td></tr><tr><td></td><td>7,270</td><td>4,133</td><td>1,843</td><td>881</td><td>413</td></tr><tr><td>Other long-term liabilities<sup>-5</sup></td><td>468</td><td>58</td><td>60</td><td>42</td><td>308</td></tr><tr><td></td><td>$53,838</td><td>$7,857</td><td>$11,999</td><td>$8,201</td><td>$25,781</td></tr></table>

Question: Does Inventory and production costs debt keeps increasing each year between 2018 and 2019?
Answer: no