Business Segment Information

9 Months Ended

Sep. 30, 2019

Note 12: Business Segment Information

As of September 30, 2019, 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 from hotel operations, adjusted to exclude:

•

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

•

Gains or losses on foreign currency transactions;

•

Share-based compensation expense;

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Non-cash impairment losses; and

•

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:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(in millions)
Revenues:
Total consolidated hotel revenue	$	650		$	633		$	1,975		$	1,998
Other revenues		22			19			59			53
Total revenues	$	672		$	652		$	2,034		$	2,051

Hotel Adjusted EBITDA	$	183		$	171		$	573		$	573
Other revenues		22			19			59			53
Casualty (loss) gain and impairment loss, net		(8	)		1			(8	)		1
Depreciation and amortization expense		(61	)		(69	)		(184	)		(208	)
Corporate general and administrative expense		(14	)		(16	)		(47	)		(47	)
Acquisition costs		(59	)		—			(65	)		—
Other operating expenses		(23	)		(19	)		(61	)		(54	)
Gain on sales of assets, net		1			2			20			98
Interest income		2			2			5			4
Interest expense		(33	)		(32	)		(98	)		(94	)
Equity in earnings from investments in affiliates		3			4			18			16
Loss on foreign currency transactions		(2	)		(1	)		(2	)		(4	)
Income tax expense		—			—			(12	)		(13	)
Other gain (loss), net		1			(2	)		1			106
Other items		(3	)		(5	)		(9	)		(9	)
Net income	$	9		$	55		$	190		$	422

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

	September 30, 2019		December 31, 2018
	(in millions)
Consolidated hotels	$	11,551	$	9,305
All other		69		58
Total	$	11,620	$	9,363