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.

We did not allocate Legacy-Starwood’s results to our segments for the eight days ended September 30, 2016. Therefore, in the tables below, for the three and nine months ended September 30, 2016, the impact of Legacy-Starwood operations after the Merger Date is included in “Other unallocated corporate” and not in the segment results.

Segment Revenues



	Three Months Ended				Nine Months Ended
($ in millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
North American Full-Service	$	3,436	$	2,222	$	10,631	$	6,903
North American Limited-Service	1,061		936		3,017		2,675
Asia Pacific	337		141		968		428
Other International	688		404		1,966		1,244
Total segment revenues	5,522		3,703		16,582		11,250
Other unallocated corporate	141		239		437		366
Total consolidated revenues	$	5,663	$	3,942	$	17,019	$	11,616

Segment Profits



	Three Months Ended						Nine Months Ended
($ in millions)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
North American Full-Service	$	258		$	148		$	879		$	506
North American Limited-Service	228			193			629			539
Asia Pacific	88			24			237			78
Other International	120			43			304			139
Total segment profits	694			408			2,049			1,262
Other unallocated corporate	(51		)	(231		)	(201		)	(324		)
Interest expense, net of interest income	(63		)	(46		)	(191		)	(137		)
Income taxes	(188		)	(61		)	(486		)	(265		)
Net income	$	392		$	70		$	1,171		$	536

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⁾	$	664	$	255		$	276	$	223	$	1,418
Foreign currency translation	19		12			54		81		166

September 30, 2017 balance:
Goodwill	$	3,588	$	1,825		$	1,902	$	1,921	$	9,236
Accumulated impairment losses	—		(54		)	—		—		(54		)
	$	3,588	$	1,771		$	1,902	$	1,921	$	9,182


⁽¹⁾	The table reflects adjustments to our goodwill from the Starwood Combination during the measurement period. See Footnote 2 “Acquisitions and Dispositions” for more information.