Starwood 2012 Annual Report Download - page 174

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS
In September 2011, the FASB issued ASU No. 2011-09, “Compensation-Retirement Benefits-
Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer
Plan”. This subtopic addresses concerns from users of financial statements on the lack of transparency about an
employer’s participation in a multiemployer pension plan. The disclosures also will indicate the financial health
of all of the significant plans in which the employer participates and assist a financial statement user to access
additional information that is available outside of the financial statements. The subtopic is effective for annual
reporting periods ending after December 15, 2011. We adopted this topic as of December 31, 2011 (see Note 19).
In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to
Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This topic
clarifies the application of existing fair value measurements and disclosure requirements and certain changes to
principles and requirements for measuring fair value. This update is to be applied prospectively and is effective
during interim and annual periods beginning after December 15, 2011. We adopted this ASU on January 1, 2012
(see Note 24).
On January 1, 2010, we adopted ASU No. 2009-17, “Consolidations (Topic 810): Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities,” and we concluded we are the
primary beneficiary of the qualifying special purpose entities (“QSPEs”) used in our securitization transactions.
Accordingly, we began consolidating the QSPEs on January 1, 2010 and recorded the assets and liabilities of the
QSPEs, a $26 million (net of tax) decrease in beginning retained earnings and a $1 million decrease to
stockholders’ equity.
Note 3. Earnings (Losses) per Share
The following is a reconciliation of basic earnings per share to diluted earnings per share for income from
continuing operations attributable to Starwood’s common shareholders (in millions, except per share data):
Year Ended December 31,
2012 2011 2010
Earnings Shares
Per
Share Earnings Shares
Per
Share Earnings Shares
Per
Share
Basic earnings from continuing operations
attributable to Starwood’s common
shareholders ........................ $470 193 $2.44 $502 189 $2.65 $310 183 $1.70
Effect of dilutive securities:
Employee options and restricted stock
awards .......................... — 4 — 6 — 7
Diluted earnings from continuing operations
attributable to Starwood’s common
shareholders ........................ $470 197 $2.39 $502 195 $2.57 $310 190 $1.63
Approximately 1.3 million shares, 1.2 million shares and 4.8 million shares were excluded from the
computation of diluted shares in 2012, 2011 and 2010, respectively, as their impact would have been anti-
dilutive.
Note 4. Significant Acquisitions
During the year ended December 31, 2011, we executed a transaction with our former partner in a joint
venture that owned three luxury hotels in Austria. In connection with the transaction, we acquired substantially
the entire interest in two of the hotels in exchange for our interest in the third hotel and a cash payment of
approximately $27 million by us. We previously held a 47.4% ownership interest in the hotels. In accordance
F-17