Starwood 2012 Annual Report Download - page 130

approximately $9 million in severance costs. Other changes took place in early 2013, and we expect to record
additional severance costs in the first quarter of 2013.
Year Ended
December 31,
2012
Year Ended
December 31,
2011
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Restructuring and Other Special Charges
(Credits), Net ........................ $(12) $68 $(80) n/m
n/m = not meaningful
As a result of a court ruling, during the year ended December 31, 2012, we recorded a favorable adjustment
of $11 million to reverse a portion of our litigation reserve associated with a pending appeal of an unfavorable
decision in a lawsuit. During the year ended December 31, 2011, we recorded a charge of approximately $70
million related to an unfavorable decision in the above mentioned lawsuit.
Year Ended
December 31,
2012
Year Ended
December 31,
2011
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Depreciation and Amortization ........... $251 $265 $(14) (5.3)%
The decrease in depreciation and amortization expense for the year ended December 31, 2012, when
compared to the same period of 2011, was primarily due to reduced depreciation expense from sold hotels and
hotels reclassified to assets held for sale, partially offset by additional depreciation related to capital expenditures
in the last twelve months. The decrease was also due to a reduction in amortization expense from certain
intangible assets that are now fully amortized.
Year Ended
December 31,
2012
Year Ended
December 31,
2011
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Operating Income ...................... $912 $630 $282 44.8%
The increase in operating income for the year ended December 31, 2012, when compared to the
corresponding period of 2011, was primarily due to the increase in operating income of approximately $144
million related to vacation ownership and residential sales and the $74 million increase in management fees and
franchise fees and other income. During the year ended December 31, 2012, we also recorded an $11 million
benefit from a favorable adjustment to a litigation reserve compared to a charge, in 2011, of $70 million related
to an unfavorable decision in this same lawsuit. Increases in selling, general, administrative and other expenses
of $18 million and a decrease in owned hotel operating income of $12 million were partially offset by the $14
million decrease in depreciation and amortization expense.
Year Ended
December 31,
2012
Year Ended
December 31,
2011
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Equity Earnings (Losses) and Gains and
(Losses) from Unconsolidated Ventures,
Net ................................ $25 $11 $14 n/m
The increase in equity earnings (losses) and gains and (losses) from unconsolidated joint ventures, net for
the year ended December 31, 2012, when compared to the same period of 2011, was primarily due to improved
operating results at several properties owned by joint ventures in which we hold non-controlling interests, and a
$2 million gain realized on the disposal of a non-core asset. Additionally, in 2011, we experienced approximately
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