Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Note 18. 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. See Note 20, Planned Spin-off, for a discussion of our plans for a spin-off of our vacation ownership business.

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, depreciation and amortization associated with our unconsolidated joint ventures, excluding certain recurring and nonrecurring items, such as restructuring and other special charges, 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 represent the reimbursement of costs incurred on behalf of managed and franchised property owners. These revenues, together with the corresponding expenses, are not recorded within our 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 and segment earnings for our reportable segments (in millions):

	Three Months Ended March 31,
	2015		2014
Revenues:
Americas (a)	$	369	$	390
EAME		98		119
Asia Pacific		65		82
Vacation ownership and residential		186		172
Total segment revenues		718		763
Other revenues from managed and franchised hotels		672		672
Other corporate revenues – unallocated		25		23
	$	1,415	$	1,458

(a) Includes revenues of $267 million and $263 million for the three months ended March 31, 2015 and 2014, respectively, from hotels located in the United States of America. No other country contributed more than 10% of our total revenues.

	Three Months Ended March 31,
	2015			2014
Segment earnings:
Americas	$	165		$	176
EAME		29			24
Asia Pacific		46			56
Vacation ownership and residential		49			44
Total segment earnings		289			300
Other corporate unallocated		26			23
Corporate selling, general, administrative and other – unallocated		(41	)		(42	)
Gain (loss) on asset dispositions and impairments, net		14			(36	)
Restructuring and other special (charges) credits		(31	)		—
Adjustments to equity earnings (a)		(5	)		(9	)
Interest expense		(32	)		(24	)
Depreciation and amortization		(69	)		(68	)
Discontinued operations		—			1
Income tax benefit (expense)		(52	)		(8	)
Net income attributable to Starwood	$	99		$	137

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