Reportable Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Reportable Segment Information

Reportable Segment Information

Franchising: Franchising includes the Company's hotel franchising operations consisting of its eleven brands. The eleven brands are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation system fees, procurement services revenue and other franchising related revenue. The Company is obligated under its franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. These services do not represent separate reportable segments as their operations are directly related to the Company's franchising business. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in franchising revenues and are offset by the related expenses paid for marketing and reservation activities to calculate franchising operating income.

SkyTouch Technology: SkyTouch Technology ("SkyTouch") is a division of the Company that develops and markets cloud-based technology products to hoteliers not under franchise agreements with the Company.

The Company evaluates its segments based primarily on the results of the segment without allocating corporate expenses, income taxes or indirect general and administrative expenses. Equity in earnings or losses from joint ventures is allocated to the Company's franchising segment. Corporate and other expenses consist primarily of overhead selling, general and administrative costs such as finance, legal, human resources and other general administrative expenses that are not allocated to the Company's two segments. As described in Note 7, certain interest expenses related to the Company's marketing and reservation activities are allocated to the franchising segment. The Company does not allocate the remaining interest expense, interest income, other gains and losses or income taxes to its segments.

Financial results for the years ended December 31, 2012 and 2011, have been updated to reflect the financial results for the Company's SkyTouch segment which was established as a separate segment in 2013. The financial results related to SkyTouch were previously reported as a component of Corporate & Other.

The following tables present the financial information for the Company's segments:

	Year Ended December 31, 2013
	Franchising		SkyTouch Technology			Corporate & Other			Elimination Adjustments			Consolidated
	(In thousands)
Revenues	$	724,617	$	33		$	—		$	—		$	724,650
Operating income (loss)	248,253		(9,994		)	(42,011		)	—			196,248
Depreciation and amortization	22,295		398			2,378			(16,015		)	9,056
Income (loss) from continuing operations, before income taxes	248,887		(9,994		)	(80,221		)	—			158,672
Capital expenditures	12,079		2,295			19,023			—			33,397
Total assets	300,292		2,303			253,827			—			556,422
	Year Ended December 31, 2012
	Franchising		SkyTouch Technology			Corporate & Other			Elimination Adjustments			Consolidated
	(In thousands)
Revenues	$	692,728	$	—		$	—		$	—		$	692,728
Operating income (loss)	236,013		(3,370		)	(39,163		)	—			193,480
Depreciation and amortization	20,111		10			2,102			(14,532		)	7,691
Income (loss) from continuing operations, before income taxes	236,225		(3,370		)	(63,349		)	—			169,506
Capital expenditures	13,998		107			1,338			—			15,443
Total assets	322,434		101			209,367			—			531,902
	Year Ended December 31, 2011
	Franchising		SkyTouch Technology			Corporate & Other			Elimination Adjustment			Consolidated
	(In thousands)
Revenues	$	640,602	$	—		$	—		$	—		$	640,602
Operating income (loss)	214,750		—			(42,233		)	—			172,517
Depreciation and amortization	18,554		—			2,262			(13,319		)	7,497
Income (loss) from continuing operations, before income taxes	213,253		—			(54,542		)	—			158,711
Capital expenditures	9,553		—			1,371			—			10,924
Total assets	280,414		—			187,946			—			468,360

The Company conducts its international franchise operations through a combination of direct franchising and master franchising relationships. Master franchising relationships allow the use of the Company’s brands by third parties in foreign countries. Direct franchising operations are primarily conducted through wholly-owned subsidiaries. The results of the Company's international operations are included in the franchising segment. Revenues generated by foreign operations, including royalty, marketing and reservations system fees and other revenues for the years ended December 31, 2013, 2012 and 2011 were $57.3 million, $55.6 million and $54.8 million respectively. Long-lived assets related to international operations were $8.6 million, $8.2 million and $9.1 million as of December 31, 2013, 2012 and 2011, respectively. All other long-lived assets of the Company are associated with domestic activities. The Company's investment in equity method investees at December 31, 2013, 2012 and 2011 was $32.3 million, $27.5 million, and $4.3 million, respectively. These investments are included as a component of total assets for the Company’s franchising segment.