Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

Note 20. Segment Information

Our hotel business is segregated into three separate hotel segments: (i) the Americas, (ii) Europe, Africa and the Middle East (“EAME”), and (iii) Asia Pacific. The vacation ownership and residential business is a separate segment.

Our reportable segments each have a division president who is responsible for the management of the division. Each division president reports directly to our Chief Executive Officer who is also the Chief Operating Decision Maker (“CODM”). Financial information for each reportable segment is reviewed by the CODM to assess performance and make decisions regarding the allocation of resources.

Each hotel segment generates its earnings through a network of owned, leased, consolidated and unconsolidated joint venture hotels and resorts operated primarily under our proprietary brand names including St. Regis^®, The Luxury Collection^®, W^®, Westin^®, Le Méridien^®, Sheraton^®, Four Points^® by Sheraton, Aloft^®, and Element^®, as well as hotels and resorts which are managed or franchised under these brand names in exchange for fees.

The management of our vacation ownership and residential sales business is conducted by the vacation ownership and residential segment. The vacation ownership and residential segment generates its earnings through the acquisition, development and operation of vacation ownership resorts, marketing and selling of VOIs and residential units, and providing financing to customers who purchase such interests.

The CODM primarily evaluates the operating performance of a segment based on segment earnings. We define segment earnings as net income attributable to our common stockholders before interest expense, taxes, depreciation and amortization, as well as our share of interest expense, depreciation and amortization associated with our unconsolidated joint ventures. Segment earnings also excludes certain recurring and nonrecurring items, such as restructuring costs and other special charges, gains (losses) on debt extinguishment and gains (losses) on asset dispositions and impairments. Residential revenue generated at hotel properties is recorded in the corresponding geographic hotel segment. General, administrative and other expenses directly related to the segments are included in the calculation of segment earnings, whereas corporate general, administrative and other expenses are not included in the segment earnings calculation. In addition to revenues recorded within our four segments, we also have other revenues from managed and franchised properties, which primarily represent the reimbursement of costs incurred on behalf of managed property owners. These revenues, together with the corresponding expenses, are not recorded within the segments. Other corporate unallocated revenues and earnings primarily relate to other license fee income and are also reported outside of segment revenues.

The following tables present revenues, segment earnings, earnings from unconsolidated ventures, capital expenditures, total assets, and investments in unconsolidated ventures for our reportable segments (in millions):

	Three Months  Ended September 30,				Nine Months  Ended September 30,
	2013		2012		2013		2012
Revenues:
Americas (a)	$	366	$	392	$	1,143	$	1,221
EAME		175		152		459		410
Asia Pacific		87		81		244		239
Vacation ownership and residential		197		204		736		1,026
Total segment revenues (b)		825		829		2,582		2,896
Other revenues from managed and franchised hotels		663		603		1,965		1,828
Other corporate revenues – unallocated		20		23		62		64
	$	1,508	$	1,455	$	4,609	$	4,788

(a) Includes revenues of $251 million and $269 million for the three months ended September 30, 2013 and 2012, respectively, and $693 million and $840 million for the nine months ended September 30, 2013 and 2012, respectively, from hotels located in the United States of America.

(b) Besides the United States of America, no other country contributed more than 10% of our total revenues.

	Three Months  Ended September 30,						Nine Months  Ended September 30,
	2013			2012			2013			2012
Segment earnings:
Americas	$	141		$	134		$	449		$	421
EAME		70			60			161			141
Asia Pacific		54			47			151			149
Vacation ownership and residential		57			47			235			237
Total segment earnings		322			288			996			948
Other corporate unallocated		20			23			64			65
Corporate selling, general, administrative and other – unallocated		(41	)		(36	)		(111	)		(118	)
Gain (loss) on asset dispositions and impairments, net		3			1			(5	)		(7	)
Restructuring and other special (charges) credits		22			—			23			11
Adjustments to equity earnings (a)		(14	)		(10	)		(33	)		(31	)
Interest expense		(26	)		(39	)		(79	)		(135	)
Loss on early extinguishment of debt, net		—			—			—			(15	)
Depreciation and amortization		(65	)		(61	)		(195	)		(186	)
Discontinued operations		—			23			70			15
Income tax benefit (expense)		(64	)		(19	)		(223	)		(127	)
Net income attributable to Starwood	$	157		$	170		$	507		$	420

(a) Includes impairment losses, interest expense, depreciation and amortization expense related to equity earnings not allocated to segment earnings.

	Three Months  Ended September 30,				Nine Months  Ended September 30,
	2013		2012		2013		2012
Earnings from unconsolidated ventures included in segment earnings:
Americas	$	6	$	6	$	24	$	22
EAME		—		1		—		3
Asia Pacific		7		7		24		24
Vacation ownership and residential		—		—		1		1
Total earnings from unconsolidated ventures	$	13	$	14	$	49	$	50

	Three Months  Ended September 30,						Nine Months  Ended September 30,
	2013			2012			2013			2012
Capital expenditures:
Americas	$	70		$	59		$	174		$	132
EAME		4			23			24			72
Asia Pacific		2			11			12			13
Vacation ownership and residential (a)		(6	)		(1	)		(18	)		7
Total segment capital expenditures		70			92			192			224
Other corporate unallocated		20			16			55			52
	$	90		$	108		$	247		$	276

(a) Represents gross inventory capital expenditures less cost of sales of $(13) million and $(7) million for the three months ended September 30, 2013 and 2012, respectively, and $(33) million and $(10) million for the nine months ended September 30, 2013 and 2012, respectively. Additionally, includes development capital of $7 million and $6 million for the three months ended September 30, 2013 and 2012, and $15 million and $17 million for the nine months ended September 30, 2013 and 2012, respectively.

	September 30, 2013		December 31, 2012
Assets:
Americas (a)	$	2,175	$	2,229
EAME (b)		937		911
Asia Pacific		659		574
Vacation ownership and residential (a)		1,286		1,445
Total segment assets (c)		5,057		5,159
Other corporate assets		3,906		3,702
	$	8,963	$	8,861

(a) Includes long-lived assets of $1.5 billion and $1.6 billion at September 30, 2013 and December 31, 2012, respectively, located in the United States of America.

(b) Includes long-lived assets of $370 million and $366 million at September 30, 2013 and December 31, 2012, respectively, located in Italy.

(c) Besides the United States and Italy, no other country contributed more than 10% of our total long-lived assets.

	September 30, 2013		December 31, 2012
Investments in unconsolidated ventures:
Americas	$	68	$	71
EAME		25		25
Asia Pacific		141		143
Vacation ownership and residential		18		21
Total investments in unconsolidated ventures	$	252	$	260