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 U.S. and Canada;


•	North American Limited-Service, which includes our Select brands located in the U.S. and Canada; and


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

The following operating segments do not meet the applicable accounting criteria for separate disclosure as reportable business segments: Caribbean and Latin America, Europe, and Middle East and Africa. We present these operating segments together as “Other International” in the tables below.

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 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. “Unallocated corporate” represents a portion of our revenues, including license fees we receive from our credit card programs and fees from vacation ownership licensing agreements, general, administrative, and other expenses, equity in earnings or losses, and other gains or losses that we do not allocate to our segments. Beginning in the 2018 first quarter, “Unallocated corporate” also includes revenues and expenses for our Loyalty Program, and we reflected this change in the prior period amounts shown in the tables below. Additionally, in 2016, “Unallocated corporate” also included the impact of Legacy-Starwood operations for the eight days ended September 30, 2016, as we did not allocate Legacy-Starwood’s results to our segments for the period between the Merger Date and the end of the 2016 third quarter.

Our President and Chief Executive Officer, who is our “chief operating decision maker” (“CODM”), 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

The following tables present our revenues disaggregated by major revenue stream as of year-end 2018, year-end 2017, and year-end 2016:



	2018
($ in millions)	North American Full-Service			North American Limited-Service			Asia Pacific			Other International			Total
Gross fee revenues	$	1,255		$	903		$	479		$	518		$	3,155
Contract investment amortization	(33		)	(12		)	(2		)	(11		)	(58		)
Net fee revenues	1,222			891			477			507			3,097
Owned, leased, and other revenue	593			128			182			668			1,571
Cost reimbursement revenue	11,257			2,198			459			1,091			15,005
Total segment revenue	$	13,072		$	3,217		$	1,118		$	2,266		$	19,673
Unallocated corporate													1,085
Total revenue													$	20,758



	2017
($ in millions)	North American Full-Service			North American Limited-Service			Asia Pacific			Other International			Total
Gross fee revenues	$	1,202		$	842		$	431		$	476		$	2,951
Contract investment amortization	(25		)	(11		)	(1		)	(13		)	(50		)
Net fee revenues	1,177			831			430			463			2,901
Owned, leased, and other revenue	697			132			191			685			1,705
Cost reimbursement revenue	11,035			2,256			433			1,140			14,864
Total segment revenue	$	12,909		$	3,219		$	1,054		$	2,288		$	19,470
Unallocated corporate													982
Total revenue													$	20,452



	2016
($ in millions)	North American Full-Service			North American Limited-Service			Asia Pacific			Other International			Total
Gross fee revenues	$	856		$	746		$	231		$	312		$	2,145
Contract investment amortization	(21		)	(9		)	(1		)	(9		)	(40		)
Net fee revenues	835			737			230			303			2,105
Owned, leased, and other revenue	390			119			127			438			1,074
Cost reimbursement revenue	8,199			2,038			274			922			11,433
Total segment revenue	$	9,424		$	2,894		$	631		$	1,663		$	14,612
Unallocated corporate													795
Total revenue													$	15,407

Revenues attributed to operations located outside the U.S. were $4,246 million in 2018, $3,830 million in 2017, and $3,187 million in 2016.

Segment Profits



($ in millions)	2018			2017			2016
North American Full-Service	$	1,153		$	1,238		$	801
North American Limited-Service	786			827			702
Asia Pacific	456			361			160
Other International	570			420			222
Other unallocated corporate	(302		)	386			(447		)
Interest expense, net of interest income	(318		)	(250		)	(199		)
Income taxes	(438		)	(1,523		)	(431		)
Net income	$	1,907		$	1,459		$	808

Segment profits attributed to operations located outside the U.S. were $1,155 million in 2018, $837 million in 2017, and $446 million in 2016. The 2018 segment profits consisted of segment profits of $456 million from Asia Pacific, $266 million from Europe, $242 million from the Caribbean and Latin America, $62 million from the Middle East and Africa, and $129 million from other locations.

Depreciation, Amortization, and Other



($ in millions)	2018		2017		2016
North American Full-Service	$	82	$	82	$	43
North American Limited-Service	15		14		13
Asia Pacific	26		32		8
Other International	70		71		34
Unallocated corporate	33		30		21
	$	226	$	229	$	119

Capital Expenditures



($ in millions)	2018		2017		2016
North American Full-Service	$	290	$	21	$	35
North American Limited-Service	15		10		7
Asia Pacific	6		12		1
Other International	40		42		38
Unallocated corporate	205		155		118
	$	556	$	240	$	199