Note 16: Geographic and Business Segment Information

We have two operating segments, our consolidated hotels and unconsolidated hotels. Our unconsolidated hotels operating segment does not meet the definition of a reportable segment, thus our consolidated hotels is our only reportable segment. We evaluate our consolidated hotels primarily based on hotel adjusted earnings before interest expense, taxes and depreciation and amortization (“EBITDA”). Hotel Adjusted EBITDA is calculated as EBITDA, further adjusted to exclude:

•

Gains or losses on sales of assets for both consolidated and unconsolidated investments;

•

Gains or losses on foreign currency transactions;

•

Transition costs related to our establishment as an independent, publicly traded company;

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Share-based compensation expense;

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Non-cash impairment losses; and

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Other items that we believe are not representative of our current or future operating performance.

The following table presents revenues for our consolidated hotels reconciled to our consolidated amounts and Hotel Adjusted EBITDA to net income:

	Year Ended December 31,
	2017			2016			2015
	(in millions)
Revenues:
Total consolidated hotel revenue	$	2,727		$	2,704		$	2,668
Other revenue		64			23			20
Total revenues	$	2,791		$	2,727		$	2,688

Hotel Adjusted EBITDA	$	758		$	804		$	811
Other revenue		64			23			20
Casualty and impairment loss, net		(26	)		(15	)		—
Depreciation and amortization expense		(288	)		(300	)		(287	)
Corporate general and administrative		(68	)		(71	)		(83	)
Other expenses		(63	)		(19	)		(16	)
Interest income		2			2			1
Interest expense		(124	)		(181	)		(186	)
Equity in earnings from investments in affiliates		40			3			22
(Loss) gain on foreign currency transactions		(4	)		3			—
Income tax benefit (expense)		2,346			(82	)		(118	)
Other items⁽¹⁾		(6	)		(28	)		135
Net income	$	2,631		$	139		$	299

⁽¹⁾	For 2015, includes $143 million of gain on sale of assets, net.

The following table presents total assets for our consolidated hotels, reconciled to consolidated amounts:

	December 31,
	2017		2016
	(in millions)
Consolidated hotels	$	9,623	$	9,747
All other		91		87
	$	9,714	$	9,834

The following table presents total revenues and property and equipment, net for each of the geographical areas in which we operate:

	As of and for the Year Ended December 31,
	2017				2016				2015
	Revenues		Property and Equipment, net		Revenues		Property and Equipment, net		Revenues			Property and Equipment, net
	(in millions)
United States⁽¹⁾⁽²⁾	$	2,618	$	8,089	$	2,580	$	8,300		$	2,524		$	8,422
United Kingdom		96		80		80		74			94			108
All other		77		142		67		167			70			146
	$	2,791	$	8,311	$	2,727	$	8,541		$	2,688		$	8,676

⁽¹⁾

Includes revenues of $13 million for each of the years ended December 31, 2017, 2016 and 2015, respectively, from our laundry operations which is not part of our segment. Also includes property and equipment, net of $5 million, $4 million and $3 million as of December 31, 2017, 2016 and 2015, respectively, from our laundry operations.

⁽²⁾	Excludes $31 million of property and equipment, net classified as held for sale as of December 31, 2017.