BUSINESS SEGMENTS

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


•	North American Full-Service, which includes our Luxury and Premium brands located in the United States and Canada;


•	North American Limited-Service, which includes our Select brands located in the United States and Canada;


•	Asia Pacific, which includes all brand tiers in our Asia Pacific region; and


•	Other International, which includes all brand tiers in our Europe, Middle East and Africa, and Caribbean and Latin America regions.

Our North American Full-Service, North American Limited-Service, and Asia Pacific segments meet the applicable accounting criteria to be reportable segments. Our Europe, Middle East and Africa, and Caribbean and Latin America operating segments individually do not meet the criteria for separate disclosure as reportable segments, and accordingly we combined them into an “all other category” which we refer to as “Other 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, indirect general, administrative, and other expenses, or merger-related costs and charges. We assign gains and losses, equity in earnings or losses from our joint ventures, and direct general, administrative, and other expenses to each of our segments. “Other unallocated corporate” represents a portion of our revenues, general, administrative, and other expenses, merger-related costs and charges, 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 fees from vacation ownership licensing agreements, which we present in the “Franchise fees” caption of our Income Statements.

Our President and Chief Executive Officer, who is 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, 2017		June 30, 2016		June 30, 2017		June 30, 2016
North American Full-Service	$	3,619	$	2,360	$	7,195	$	4,681
North American Limited-Service	1,032		906		1,956		1,739
Asia Pacific	319		146		631		287
Other International	676		425		1,278		840
Total segment revenues	5,646		3,837		11,060		7,547
Other unallocated corporate	149		65		296		127
Total consolidated revenues	$	5,795	$	3,902	$	11,356	$	7,674

Segment Profits



	Three Months Ended						Six Months Ended
($ in millions)	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
North American Full-Service	$	332		$	173		$	621		$	358
North American Limited-Service	224			191			401			346
Asia Pacific	67			27			149			54
Other International	98			48			184			96
Total segment profits	721			439			1,355			854
Other unallocated corporate	(64		)	(45		)	(150		)	(93		)
Interest expense, net of interest income	(65		)	(50		)	(128		)	(91		)
Income taxes	(178		)	(97		)	(298		)	(204		)
Net income	$	414		$	247		$	779		$	466

Goodwill



($ in millions)	North American Full-Service		North American Limited-Service			Asia Pacific		Other International		Total Goodwill
Year-end 2016 balance:
Goodwill	$	2,905	$	1,558		$	1,572	$	1,617	$	7,652
Accumulated impairment losses	—		(54		)	—		—		(54		)
	2,905		1,504			1,572		1,617		7,598

Adjustments ⁽¹⁾	$	370	$	162		$	213	$	125	$	870
Foreign currency translation	8		3			40		63		114

June 30, 2017 balance:
Goodwill	$	3,283	$	1,723		$	1,825	$	1,805	$	8,636
Accumulated impairment losses	—		(54		)	—		—		(54		)
	$	3,283	$	1,669		$	1,825	$	1,805	$	8,582


⁽¹⁾	The table reflects adjustments to our preliminary estimate of goodwill from the Starwood Combination. Because we have not yet finalized the fair values of assets acquired and liabilities assumed, the assignment of goodwill to our reporting units may continue to change during the measurement period. See Footnote 2 “Acquisitions and Dispositions” for more information.