Debt (Tables)

12 Months Ended

Dec. 31, 2012

Debt

Debt consists of the following (in millions):

	As of December 31,
	2012		2011
Series O senior notes, with a rate of 6 3/8% due March 2015	$	—	$	650
Series Q senior notes, with a rate of 6 3/4% due June 2016		550		800
Series S senior notes, with a rate of 6 7/8% due November 2014		—		498
Series T senior notes, with a rate of 9% due May 2017		391		390
Series V senior notes, with a rate of 6% due November 2020		500		500
Series X senior notes, with a rate of 5 7/8% due June 2019		497		496
Series Z senior notes, with a rate of 6% due October 2021		300		300
Series B senior notes, with a rate of 5 1/4% due March 2022		350		—
Series C senior notes, with a rate of 4 3/4% due March 2023		450		—
2004 Exchangeable Senior Debentures, with a rate of 3 1/4% due April 2024		175		175
2007 Exchangeable Senior Debentures, with a rate of 2 5/8% due April 2027		—		385
2009 Exchangeable Senior Debentures, with a rate of 2 1/2% due October 2029		356		342
Senior notes, with rate of 10.0% due May 2012		—		7
Total senior notes		3,569		4,543
Credit facility revolver		263		117
Credit facility term loan due July 2017		500		—
Mortgage debt (non-recourse) with an average interest rate of 4.5% and 5.0% at December 31, 2012 and 2011, maturing through November 2016		993		1,006
Other		86		87
Total debt	$	5,411	$	5,753

Outstanding Debentures

The following table details our outstanding Debentures:

As of December 31, 2012

Maturity date

Next put option date

Redemption date

Outstanding principal amount

Current exchange rate for each $1,000 of principal

Current equivalent exchange price

Exchangeable share equivalents

(in millions)

(in shares)

(in shares)

2009 Debentures

10/15/2029

10/15/2015

10/20/2015

$

400

72.8701

$

13.72

29.1 million

2004 Debentures

4/15/2024

4/15/2014

4/19/2009

175

67.4215

$

14.83

11.8 million

Total

$

575

Initial Allocations Between Debt and Equity Components of Debenture

The following table details the initial allocations between the debt and equity components of the Debentures, net of the original issue discounts, based on the effective interest rate at the time of issuance, as well as the debt balances (in millions):

							As of December 31, 2012
	Initial Face Amount		Initial Debt Value		Initial Equity Value		Face Amount Outstanding		Debt Carrying Value		Unamortized Discount
2009 Debentures	$	400	$	316	$	82	$	400	$	356	$	44
2004 Debentures		500		413		76		175		175		—
Total	$	900	$	729	$	158	$	575	$	531	$	44

Interest Expense for Debentures

Interest expense recorded for the Debentures consists of the following (including interest expense for our 2007 Debentures that were redeemed in 2012) (in millions):

	Year ended December 31,
	2012		2011		2010
Contractual interest expense (cash)	$	19	$	31	$	34
Non-cash interest expense due to discount amortization		17		31		32
Total interest expense	$	36	$	62	$	66

Mortgage Debt Issuances and Repayments

We had the following mortgage debt issuances and repayments since January 2011:

Transaction Date	Property	Rate			Maturity Date		Amount
							(in millions)
Issuances/Assumptions
June 2012	Hyatt Regency Reston (1)		3.3	%		7/1/2016	$	100
November 2011	Hilton Melbourne South Wharf (2)		6.4	%		11/23/2016		79
February 2011	New Zealand Hotel Portfolio (3)		6.6	%		2/18/2016		80
Repayments/Transfer
April 2012	JW Marriott, Washington, D.C. (4)		7.5	%		4/2/2013		(113	)
June 2011	Le Méridien Piccadilly (5)		1.99	%		1/20/2012		(52	)
March 2011	Four Canadian properties		5.2	%		3/1/2011		(132	)

(1) The floating interest rate is equal to 1-month LIBOR plus 310 basis points. The rate shown reflects the rate in effect at December 31, 2012. We have the option to extend the maturity for one year, subject to certain conditions.

(2) The floating interest rate is equal to the 3-month BBSY plus 230 basis points. In addition, we entered into separate swap agreements that fix 75% of the loan at an all-in rate of 6.7% and cap the remaining 25% at an all-in interest rate of 9.9%. The rate shown reflects the rate in effect at December 31, 2012.

(3) The floating interest rate is equal to the 3-month New Zealand Bank Bill Rate plus 120 basis points plus an additional commitment fee of 120 basis points per annum. In addition, we entered into a swap agreement that fixes 75% of the loan at an all-in rate of 7.15%. The rate shown reflects the rate in effect at December 31, 2012.

(4) We prepaid the mortgage including an exit fee of $1 million.

(5) In connection with the transfer of Le Méridien Piccadilly to the Euro JV, we transferred the associated mortgage. This floating rate mortgage is based on LIBOR plus 118 basis points and reflects the rate in effect at the time of transfer. The mortgage loan had been assumed at acquisition of the property in June 2010.

Aggregate Debt Maturities

Aggregate debt maturities are as follows (in millions):

	As of December 31, 2012
2013	$	278
2014		642
2015		675
2016		822
2017		940
Thereafter		2,100
		5,457
Unamortized (discounts) premiums, net		(55	)
Fair value hedge adjustment		8
Capital lease obligations		1
	$	5,411

Interest Expense

The following items are included in interest expense (in millions):

	Year ended December 31,
	2012(1)			2011(1)			2010(1)
Interest expense	$	373		$	371		$	383
Interest expense for discontinued operations		—			—			1
Amortization of debt premiums/discounts, net (2)		(18	)		(32	)		(34	)
Amortization of deferred financing costs		(12	)		(11	)		(12	)
Non-cash gains/(losses) on debt extinguishments		(9	)		(4	)		(1	)
Change in accrued interest		4			(4	)		10
Interest paid (3)	$	338		$	320		$	347

(1) Interest expense and interest paid for 2012, 2011 and 2010 includes cash prepayment premiums of approximately $21 million, $5 million and $20 million, respectively.

(2) Primarily represents the amortization of the debt discount on our Debentures, which is non-cash interest expense.

(3) Does not include capitalized interest of $6 million, $4 million and $3 million during 2012, 2011 and 2010, respectively.