Business Segments

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

We are a diversified global lodging company with operations in the following three reportable business segments, which included the following brands at the end of the 2016 second quarter:

• 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, TownePlace Suites, and Moxy Hotels properties located in the United States and Canada; and

• 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				Six Months Ended
($ in millions)	June 30, 2016		June 30, 2015		June 30, 2016		June 30, 2015
North American Full-Service Segment	$	2,360	$	2,252	$	4,681	$	4,427
North American Limited-Service Segment	906		821		1,739		1,559
International	571		549		1,127		1,091
Total segment revenues	3,837		3,622		7,547		7,077
Other unallocated corporate	65		67		127		125
Total consolidated revenues	$	3,902	$	3,689	$	7,674	$	7,202

Segment Profits

	Three Months Ended						Six Months Ended
($ in millions)	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
North American Full-Service Segment	$	173		$	152		$	358		$	298
North American Limited-Service Segment	191			179			346			330
International	75			57			150			134
Total segment profits	439			388			854			762
Other unallocated corporate	(45		)	3			(93		)	(36		)
Interest expense, net of interest income	(50		)	(36		)	(91		)	(64		)
Income taxes	(97		)	(115		)	(204		)	(215		)
Net income	$	247		$	240		$	466		$	447