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Segment Reporting | 9 Months Ended
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Sep. 30, 2014
Segment Reporting | Note 16. Segment Reporting Our operations, management structure and segments are organized into five reportable operating segments:
| • |  | Latin America
| • |  | Asia Pacific
| • |  | EEMEA
| • |  | Europe
| • |  | North America
We manage the operations within Latin America, Asia Pacific and EEMEA by location and Europe and North America by product category. We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, the benefit from the Cadbury acquisition-related indemnification resolution (which is a component of selling, general and administrative expenses), gains and losses on divestitures or acquisitions and acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. We exclude these items from segment operating income in order to provide better transparency of our segment operating results. Furthermore, we centrally manage interest and other expense / (income). Accordingly, we do not present these items by segment because they are excluded from the segment profitability measure that management reviews. Our segment net revenues and earnings were:
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
|  | (in millions) |
Net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Latin America |  | $ | 1,315 |  |  | $ | 1,308 |  |  | $ | 3,913 |  |  | $ | 4,045 |
Asia Pacific |  |  | 1,153 |  |  |  | 1,136 |  |  |  | 3,460 |  |  |  | 3,743 |
EEMEA |  |  | 894 |  |  |  | 948 |  |  |  | 2,740 |  |  |  | 2,850 |
Europe |  |  | 3,215 |  |  |  | 3,295 |  |  |  | 10,151 |  |  |  | 10,026 |
North America |  |  | 1,760 |  |  |  | 1,785 |  |  |  | 5,150 |  |  |  | 5,147 |
Net revenues |  | $ | 8,337 |  |  | $ | 8,472 |  |  | $ | 25,414 |  |  | $ | 25,811 |
Earnings before income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Latin America |  | $ | 120 |  |  | $ | 171 |  |  | $ | 304 |  |  | $ | 425 |
Asia Pacific |  |  | 65 |  |  |  | 81 |  |  |  | 364 |  |  |  | 399 |
EEMEA |  |  | 93 |  |  |  | 109 |  |  |  | 303 |  |  |  | 282 |
Europe |  |  | 368 |  |  |  | 403 |  |  |  | 1,294 |  |  |  | 1,178 |
North America |  |  | 272 |  |  |  | 279 |  |  |  | 744 |  |  |  | 643 |
Unrealized gains / (losses) on hedging activities |  |  | 39 |  |  |  | 12 |  |  |  | (8 | ) |  |  | 55 |
General corporate expenses |  |  | (56 | ) |  |  | (74 | ) |  |  | (191 | ) |  |  | (219 | )
Amortization of intangibles |  |  | (48 | ) |  |  | (55 | ) |  |  | (157 | ) |  |  | (164 | )
Benefit from indemnification resolution |  |  | – |  |  |  | 336 |  |  |  | – |  |  |  | 336 |
Gains on acquisition and divestitures, net |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 28 |
Acquisition-related costs |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (2 | )
Operating income |  |  | 853 |  |  |  | 1,262 |  |  |  | 2,653 |  |  |  | 2,961 |
Interest and other (expense) / income |  |  | 227 |  |  |  | (218 | ) |  |  | (717 | ) |  |  | (732 | )
Earnings before income taxes |  | $ | 1,080 |  |  | $ | 1,044 |  |  | $ | 1,936 |  |  | $ | 2,229 |
Items impacting our segment operating results are discussed in Note 1, Basis of Presentation, including the Venezuelan currency remeasurements, Note 2, Divestitures and Acquisition, Note 6, Restructuring Programs, Note 7, Integration Program, and Note 9, Financial Instruments. Net revenues by consumer sector were:
|  | For the Three Months Ended September 30, 2014 |
|  | Latin |  |  | Asia |  |  |  |  |  |  |  |  | North |  |  |  |
| America |  |  | Pacific |  |  | EEMEA |  |  | Europe |  |  | America |  |  | Total |
|  | (in millions) |
Biscuits |  | $ | 338 |  |  | $ | 294 |  |  | $ | 165 |  |  | $ | 724 |  |  | $ | 1,367 |  |  | $ | 2,888 |
Chocolate |  |  | 253 |  |  |  | 408 |  |  |  | 287 |  |  |  | 1,214 |  |  |  | 75 |  |  |  | 2,237 |
Gum & Candy |  |  | 314 |  |  |  | 190 |  |  |  | 151 |  |  |  | 217 |  |  |  | 304 |  |  |  | 1,176 |
Beverages |  |  | 232 |  |  |  | 100 |  |  |  | 227 |  |  |  | 723 |  |  |  | – |  |  |  | 1,282 |
Cheese & Grocery |  |  | 178 |  |  |  | 161 |  |  |  | 64 |  |  |  | 337 |  |  |  | 14 |  |  |  | 754 |
Total net revenues |  | $ | 1,315 |  |  | $ | 1,153 |  |  | $ | 894 |  |  | $ | 3,215 |  |  | $ | 1,760 |  |  | $ | 8,337 |
|  | For the Three Months Ended September 30, 2013 |
|  | Latin |  |  | Asia |  |  |  |  |  |  |  |  | North |  |  |  |
| America |  |  | Pacific |  |  | EEMEA |  |  | Europe |  |  | America |  |  | Total |
|  | (in millions) |
Biscuits |  | $ | 329 |  |  | $ | 285 |  |  | $ | 165 |  |  | $ | 750 |  |  | $ | 1,369 |  |  | $ | 2,898 |
Chocolate |  |  | 253 |  |  |  | 378 |  |  |  | 294 |  |  |  | 1,224 |  |  |  | 83 |  |  |  | 2,232 |
Gum & Candy |  |  | 353 |  |  |  | 209 |  |  |  | 160 |  |  |  | 227 |  |  |  | 312 |  |  |  | 1,261 |
Beverages |  |  | 211 |  |  |  | 99 |  |  |  | 260 |  |  |  | 759 |  |  |  | – |  |  |  | 1,329 |
Cheese & Grocery |  |  | 162 |  |  |  | 165 |  |  |  | 69 |  |  |  | 335 |  |  |  | 21 |  |  |  | 752 |
Total net revenues |  | $ | 1,308 |  |  | $ | 1,136 |  |  | $ | 948 |  |  | $ | 3,295 |  |  | $ | 1,785 |  |  | $ | 8,472 |
|  | For the Nine Months Ended September 30, 2014 |
|  | Latin |  |  | Asia |  |  |  |  |  |  |  |  | North |  |  |  |
| America |  |  | Pacific |  |  | EEMEA |  |  | Europe |  |  | America |  |  | Total |
|  | (in millions) |
Biscuits |  | $ | 998 |  |  | $ | 898 |  |  | $ | 483 |  |  | $ | 2,269 |  |  | $ | 4,078 |  |  | $ | 8,726 |
Chocolate |  |  | 833 |  |  |  | 1,155 |  |  |  | 751 |  |  |  | 3,804 |  |  |  | 188 |  |  |  | 6,731 |
Gum & Candy |  |  | 893 |  |  |  | 584 |  |  |  | 498 |  |  |  | 678 |  |  |  | 842 |  |  |  | 3,495 |
Beverages |  |  | 684 |  |  |  | 359 |  |  |  | 782 |  |  |  | 2,348 |  |  |  | – |  |  |  | 4,173 |
Cheese & Grocery |  |  | 505 |  |  |  | 464 |  |  |  | 226 |  |  |  | 1,052 |  |  |  | 42 |  |  |  | 2,289 |
Total net revenues |  | $ | 3,913 |  |  | $ | 3,460 |  |  | $ | 2,740 |  |  | $ | 10,151 |  |  | $ | 5,150 |  |  | $ | 25,414 |
|  | For the Nine Months Ended September 30, 2013 |
|  | Latin |  |  | Asia |  |  |  |  |  |  |  |  | North |  |  |  |
| America |  |  | Pacific |  |  | EEMEA |  |  | Europe |  |  | America |  |  | Total |
|  | (in millions) |
Biscuits |  | $ | 953 |  |  | $ | 1,028 |  |  | $ | 490 |  |  | $ | 2,231 |  |  | $ | 4,011 |  |  | $ | 8,713 |
Chocolate |  |  | 901 |  |  |  | 1,190 |  |  |  | 806 |  |  |  | 3,680 |  |  |  | 214 |  |  |  | 6,791 |
Gum & Candy |  |  | 1,049 |  |  |  | 638 |  |  |  | 505 |  |  |  | 702 |  |  |  | 868 |  |  |  | 3,762 |
Beverages |  |  | 666 |  |  |  | 371 |  |  |  | 849 |  |  |  | 2,399 |  |  |  | – |  |  |  | 4,285 |
Cheese & Grocery |  |  | 476 |  |  |  | 516 |  |  |  | 200 |  |  |  | 1,014 |  |  |  | 54 |  |  |  | 2,260 |
Total net revenues |  | $ | 4,045 |  |  | $ | 3,743 |  |  | $ | 2,850 |  |  | $ | 10,026 |  |  | $ | 5,147 |  |  | $ | 25,811 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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