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BUSINESS SEGMENTS
 9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
BUSINESS SEGMENTS
18.
BUSINESS SEGMENTS
We define our reportable segments based on the way in which the chief operating decision maker (“CODM”), currently our chief executive officer, manages the operations of the company for purposes of allocating resources and assessing performance. We operate in two operating and reportable business segments:
•
Vacation Ownership includes a diverse portfolio of resorts that includes seven vacation ownership brands licensed under exclusive, long-term relationships with Marriott International and Hyatt Hotels Corporation. We are the exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton, Westin and Hyatt Residence Club brands, as well as under Marriott Vacation Club Pulse, an extension to the Marriott Vacation Club brand. We are also the exclusive worldwide developer, marketer and seller of vacation ownership and related products under The Ritz-Carlton Destination Club brand, we have the non-exclusive right to develop, market and sell whole ownership residential products under The Ritz-Carlton Residences brand and have a license to use the St. Regis brand for specified fractional ownership resorts.
Our Vacation Ownership segment generates most of its revenues from four primary sources: selling vacation ownership products; managing vacation ownership resorts, clubs and owners’ associations; financing consumer purchases of vacation ownership products; and renting vacation ownership inventory.
•
Exchange & Third-Party Management, includes exchange networks and membership programs, as well as management of resorts and lodging properties. We provide these services through a variety of brands including Interval International, Trading Places International, Vacation Resorts International, Aqua-Aston and Great Destinations. Exchange & Third-Party Management revenue generally is fee-based and derived from membership, exchange and rental transactions, property and association management, and other related products and services.
Our CODM evaluates the performance of our segments based primarily on the results of the segment without allocating corporate expenses or income taxes. We do not allocate corporate interest expense or indirect general and administrative expenses to our segments. We include interest income specific to segment activities within the appropriate segment. We allocate depreciation, other gains and losses, equity in earnings or losses from our joint ventures and noncontrolling interest to each of our segments as appropriate. Corporate and other represents that portion of our results that are not allocable to our segments, including those relating to property owners’ associations consolidated under the voting interest model, as our CODM does not use this information to make operating segment resource allocations. Prior year segment information has been reclassified to conform to the current reportable segment presentation.
Our CODM uses Adjusted EBITDA to evaluate the profitability of our operating segments, and the components of net income attributable to common shareholders excluded from Adjusted EBITDA are not separately evaluated. Adjusted EBITDA is defined as net income attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term loan securitization transactions), income taxes, depreciation and amortization, excluding share-based compensation expense and adjusted for certain items that affect the comparability or our operating performance. Our reconciliation of the aggregate amount of Adjusted EBITDA for our reportable segments to consolidated net income attributable to common shareholders is presented below.
Revenues
 
Three Months Ended
 
Nine Months Ended
($ in millions)
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Vacation Ownership
$
967

 
$
709

 
$
2,849

 
$
1,875

Exchange & Third-Party Management
112

 
40

 
351

 
40

Total segment revenues
1,079

 
749

 
3,200

 
1,915

Corporate and other
3

 
1

 
10

 
1

 
$
1,082

 
$
750

 
$
3,210

 
$
1,916

Adjusted EBITDA and Reconciliation to Net Income (Loss) Attributable to Common Shareholders
 
Three Months Ended
 
Nine Months Ended
($ in millions)
September 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Adjusted EBITDA Vacation Ownership
$
195

 
$
123

 
$
574

 
$
315

Adjusted EBITDA Exchange & Third-Party Management
56

 
19

 
180

 
19

Reconciling items:
 
 
 
 
 
 
 
Corporate and other
(61
)
 
(42
)
 
(203
)
 
(95
)
Interest expense
(31
)
 
(14
)
 
(100
)
 
(23
)
Tax (provision) benefit
(10
)
 
2

 
(50
)
 
(15
)
Depreciation and amortization
(33
)
 
(18
)
 
(106
)
 
(29
)
Share-based compensation expense
(9
)
 
(13
)
 
(29
)
 
(23
)
Certain items
(116
)
 
(93
)
 
(202
)
 
(138
)
Net (loss) income attributable to common shareholders
$
(9
)
 
$
(36
)
 
$
64

 
$
11


Assets
($ in millions)
At September 30, 2019
 
At December 31, 2018
Vacation Ownership
$
6,801

 
$
7,275

Exchange & Third-Party Management
1,161

 
1,182

Total segment assets
7,962

 
8,457

Corporate and other
1,097

 
561

 
$
9,059

 
$
9,018



We conduct business globally, and our operations outside the United States represented approximately 13 percent and 14 percent of our revenues, excluding cost reimbursements, for the three months ended September 30, 2019 and September 30, 2018, respectively, and 13 percent of our revenues, excluding cost reimbursements, for each of the nine months ended September 30, 2019 and September 30, 2018.