Note 6.

Assets and Liabilities Held for Sale

In June 2016, we entered into a purchase and sale agreement to sell our leasehold interest in a hotel in France. Since we had a definitive agreement and believed it was unlikely that the agreement would be withdrawn, we classified this hotel as held for sale. During the three months ended June 30, 2016, we recognized an impairment charge of $23 million, which was recorded to the gain (loss) on asset dispositions and impairments, net line item, to reflect the fair market value of the hotel based on its purchase price less costs to sell, including $8 million related to a cumulative translation adjustment loss due to anticipated substantial liquidation of our owned and leased hotel holdings in France. The net book value of the hotel and the estimated goodwill of approximately $1 million expected to be allocated to the sale were classified as assets held for sale as of June 30, 2016 and December 31, 2015. This sale was completed in July 2016 subject to a long-term management agreement.

Additionally, in May 2016 we completed a spin-off through a Reverse Morris Trust transaction involving our vacation ownership business (see Note 4) which represented a material strategic shift in our business, and in accordance with ASC 205, Presentation of Financial Statements, the related assets and liabilities associated with the discontinued operations have been reclassified as held for sale in the December 31, 2015 consolidated balance sheet.