BUSINESS SEGMENTS

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTS

We are a diversified lodging company with operations in four business segments:

• North American Full-Service, which includes the Marriott Hotels, Marriott Conference Centers, JW Marriott, Renaissance Hotels, Renaissance ClubSport, Gaylord Hotels, and Autograph Collection properties located in the United States and Canada;

• North American Limited-Service, which includes the Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, and TownePlace Suites properties, located in the United States and Canada, and, before its sale in the 2012 second quarter, our Marriott ExecuStay corporate housing business;

• International, which includes the Marriott Hotels, JW Marriott, Renaissance Hotels, Autograph Collection, Courtyard, AC Hotels by Marriott, Fairfield Inn & Suites, Residence Inn, and Marriott Executive Apartments properties located outside the United States and Canada; and

• Luxury, which includes The Ritz-Carlton, Bulgari Hotels & Resorts, and EDITION properties worldwide (together with residential properties associated with some of The Ritz-Carlton hotels).

In addition, before the spin-off, our former Timeshare segment consisted of the timeshare operations and timeshare development business that we transferred to MVW in conjunction with the spin-off. We continue to include our former Timeshare segment's historical financial results for periods before the spin-off in our historical financial results as a component of continuing operations as reflected in the tables that follow. See Footnote No. 15, "Spin-off" for more information on the spin-off.

We evaluate the performance of our segments based largely on the results of the segment without allocating corporate expenses, income taxes, or indirect general, administrative, and other expenses. We allocate gains and losses, equity in earnings or losses from our joint ventures, and divisional general, administrative, and other expenses to each of our segments. “Other unallocated corporate” represents that portion of our revenues, general, administrative, and other expenses, equity in earnings or losses, and other gains or losses that we do not allocate to our segments. "Other unallocated corporate" includes license fees we receive from our credit card programs and license fees from MVW, after the spin-off.

Revenues

($ in millions)	2013		2012		2011
North American Full-Service Segment	$	6,601	$	5,965	$	5,450
North American Limited-Service Segment	2,601		2,466		2,358
International Segment	1,522		1,330		1,278
Luxury Segment	1,794		1,765		1,673
Former Timeshare Segment	—		—		1,438
Total segment revenues	12,518		11,526		12,197
Other unallocated corporate	266		288		120
	$	12,784	$	11,814	$	12,317

Net Income

($ in millions)	2013			2012			2011
North American Full-Service Segment	$	451		$	407		$	351
North American Limited-Service Segment	478			472			382
International Segment	160			192			175
Luxury Segment	108			102			74
Former Timeshare Segment	—			—			(217		)
Total segment financial results	1,197			1,173			765
Other unallocated corporate	(203		)	(204		)	(302		)
Interest expense and interest income(1)	(97		)	(120		)	(107		)
Income taxes	(271		)	(278		)	(158		)
	$	626		$	571		$	198

⁽¹⁾  The $164 million of interest expense shown on the Income Statement for year-end 2011 includes $43 million that we allocated to our former Timeshare segment.

Equity in Losses of Equity Method Investees

($ in millions)	2013			2012			2011
North American Full-Service Segment	$	4		$	2		$	1
North American Limited-Service Segment	3			2			(2		)
International Segment	(6		)	(2		)	(4		)
Luxury Segment	(4		)	(13		)	(10		)
Former Timeshare Segment	—			—			—
Total segment equity in losses	(3		)	(11		)	(15		)
Other unallocated corporate	(2		)	(2		)	2
	$	(5	)	$	(13	)	$	(13	)

Depreciation and Amortization

($ in millions)	2013		2012		2011
North American Full-Service Segment	$	45	$	38	$	31
North American Limited-Service Segment	21		16		23
International Segment	31		24		26
Luxury Segment	23		17		28
Former Timeshare Segment	—		—		29
Total segment depreciation and amortization	120		95		137
Other unallocated corporate	7		7		7
	$	127	$	102	$	144

Assets

($ in millions)	At Year-End 2013		At Year-End 2012
North American Full-Service Segment	$	1,662	$	1,517
North American Limited-Service Segment	470		492
International Segment	1,154		1,056
Luxury Segment	1,440		1,174
Total segment assets	4,726		4,239
Other unallocated corporate	2,068		2,103
	$	6,794	$	6,342

Equity Method Investments

($ in millions)	At Year-End 2013		At Year-End 2012
North American Full-Service Segment	$	13	$	13
North American Limited-Service Segment	44		44
International Segment	113		100
Luxury Segment	29		29
Total segment equity method investments	199		186
Other unallocated corporate	8		9
	$	207	$	195

Goodwill

($ in millions)	North American Full-Service Segment		North American Limited-Service Segment			International Segment		Luxury Segment		Total Goodwill
Year-end 2011 balance:
Goodwill	$	335	$	126		$	298	$	170	$	929
Accumulated impairment losses	—		(54		)	—		—		(54		)
	$	335	$	72		$	298	$	170	$	875
Year-end 2012 balance:
Goodwill	$	335	$	125		$	298	$	170	$	928
Accumulated impairment losses	—		(54		)	—		—		(54		)
	$	335	$	71		$	298	$	170	$	874
Year-end 2013 balance:
Goodwill	$	335	$	125		$	298	$	170	$	928
Accumulated impairment losses	—		(54		)	—		—		(54		)
	$	335	$	71		$	298	$	170	$	874

Capital Expenditures

($ in millions)	2013		2012		2011
North American Full-Service Segment	$	128	$	9	$	8
North American Limited-Service Segment	8		19		11
International Segment	37		38		52
Luxury Segment	181		306		40
Former Timeshare Segment	—		—		13
Total segment capital expenditures	354		372		124
Other unallocated corporate	50		65		59
	$	404	$	437	$	183

Segment expenses include selling expenses directly related to the operations of the businesses, aggregating $49 million in 2013, $53 million in 2012, and $354 million in 2011 (approximately 82 percent of which were for our former Timeshare segment for the period before the spin-off).

Our Financial Statements include the following related to operations located outside the United States for our segments:

1. Revenues of $2,149 million in 2013, $1,912 million in 2012, and $1,945 million in 2011;

2. Segment financial results of $269 million in 2013, $283 million in 2012, and $172 million in 2011. The 2013 segment financial results consisted of segment income of $91 million from Asia, $84 million from the Americas (excluding the United States), $50 million from Continental Europe, $26 million from the United Kingdom and Ireland, and $18 million from the Middle East and Africa; and

3. Fixed assets of $238 million in 2013 and $491 million in 2012. We include fixed assets located outside the United States at year-end 2013 and year-end 2012 in the “Property and equipment” caption in our Balance Sheets. Also, we had $341 million of fixed assets in 2013 classified in the "Assets held for sale" caption in our Balance Sheet. See Footnote No. 7, "Acquisitions and Dispositions" for more information.