Business Segments

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

We are a diversified global lodging company with operations in the following three reportable business segments:

• North American Full-Service, which includes The Ritz-Carlton, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Delta Hotels and Resorts, and Gaylord Hotels located in the United States and Canada;

• North American Limited-Service, which includes AC Hotels by Marriott, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, and TownePlace Suites properties located in the United States and Canada;

• International, which includes The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Marriott Executive Apartments, AC Hotels by Marriott, Courtyard, Residence Inn, Fairfield Inn & Suites, Protea Hotels, and Moxy Hotels located outside the United States and Canada.

Our North American Full-Service and North American Limited-Service segments meet the applicable accounting criteria to be reportable business segments. The following four operating segments do not meet the criteria for separate disclosure as reportable business segments: Asia Pacific, Caribbean and Latin America, Europe, and Middle East and Africa, and accordingly, we combined these four operating segments into an “all other category” which we refer to as “International.”

We evaluate the performance of our operating segments using “segment profits” which is based largely on the results of the segment without allocating corporate expenses, income taxes, or indirect general, administrative, and other expenses. We allocate gains and losses, equity in earnings or losses from our joint ventures, and direct general, administrative, and other expenses to each of our segments. The caption “Other unallocated corporate” in the subsequent discussion represents a portion of our revenues, general, administrative, and other expenses, equity in earnings or losses, and other gains or losses that we do not allocate to our segments. It also includes license fees we receive from our credit card programs and license fees from MVW.

Our chief operating decision maker monitors assets for the consolidated company but does not use assets by operating segment when assessing performance or making operating segment resource allocations.

Segment Revenues

	Three Months Ended				Nine Months Ended
($ in millions)	September 30, 2015		September 30, 2014		September 30, 2015		September 30, 2014
North American Full-Service Segment	$	2,128	$	2,042	$	6,555	$	6,190
North American Limited-Service Segment	846		806		2,405		2,223
International	532		546		1,623		1,634
Total segment revenues	3,506		3,394		10,583		10,047
Other unallocated corporate	72		66		197		190
Total consolidated revenues	$	3,578	$	3,460	$	10,780	$	10,237

Segment Profits

	Three Months Ended						Nine Months Ended
($ in millions)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
North American Full-Service Segment	$	126		$	122		$	424		$	407
North American Limited-Service Segment	180			177			510			443
International	69			62			203			201
Total segment profits	375			361			1,137			1,051
Other unallocated corporate	(28		)	(50		)	(64		)	(173		)
Interest expense, net of interest income	(38		)	(21		)	(102		)	(72		)
Income taxes	(99		)	(98		)	(314		)	(250		)
Net Income	$	210		$	192		$	657		$	556

The following table details the carrying amount of our goodwill at the end of the 2015third quarter and year-end 2014:

Goodwill

($ in millions)	North American Full-Service Segment		North American Limited-Service Segment			International		Total Goodwill
Year-end 2014 balance:
Goodwill	$	392	$	125		$	431	$	948
Accumulated impairment losses	—		(54		)	—		(54		)
	392		71			431		894
Additions	$	19	$	—		$	—	$	19
Adjustments	—		—			57		57
September 30, 2015 balance:
Goodwill	$	411	$	125		$	488	$	1,024
Accumulated impairment losses	—		(54		)	—		(54		)
	$	411	$	71		$	488	$	970

See Footnote No. 2, “Acquisitions and Dispositions” for information on goodwill additions and adjustments we recorded in the 2015 second quarter.