Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

Note 16. 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. During the second quarter of 2016, we have classified the results of our vacation ownership business, formerly the vacation ownership and residential segment, as discontinued operations in our consolidated statements of operations for all periods presented. See Note 4, Discontinued Operations, for additional information.

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®, Element®, and Tribute Portfolio^TM, as well as hotels and resorts which are managed or franchised under these brand names in exchange for fees.

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 (credits), 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 three 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				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Revenues:
Americas	$	344	$	360	$	655	$	703
EAME		114		133		200		231
Asia Pacific		69		67		137		132
Total segment revenues		527		560		992		1,066
Other revenues from managed and franchised hotels		680		653		1,333		1,281
Other corporate revenues — unallocated		39		28		65		53
	$	1,246	$	1,241	$	2,390	$	2,400

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Segment earnings:
Americas	$	178		$	177		$	331		$	335
EAME		52			51			81			80
Asia Pacific		42			44			90			90
Total segment earnings		272			272			502			505
Other corporate income — unallocated		37			29			65			55
Corporate selling, general, administrative and other expenses    — unallocated		(33	)		(41	)		(67	)		(84	)
Gain (loss) on asset dispositions and impairments, net		(114	)		—			(112	)		14
Restructuring and other special (charges) credits		(16	)		(12	)		(48	)		(37	)
Adjustments to equity earnings (a)		(8	)		(7	)		(16	)		(12	)
Interest expense		(26	)		(27	)		(48	)		(56	)
Depreciation and amortization		(60	)		(63	)		(120	)		(123	)
Income tax expense		(87	)		(33	)		(118	)		(69	)
Discontinued operations		(228	)		18			(211	)		42
Net income attributable to Starwood	$	(263	)	$	136		$	(173	)	$	235

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