3.	Investments in Affiliates

We own investments in joint ventures that are accounted for under the equity method of accounting. The debt of the Euro JV and Asia/Pacific JV is non-recourse to, and not guaranteed by, us. The debt of the Hyatt Place JV and the construction loan for the Maui JV is jointly and/or severally guaranteed by the partners of the joint ventures. Investments in affiliates consist of the following (in millions):

	As of December 31, 2014
	Ownership			Our			Our Portion
	Interests			Investment			of Debt		Total Debt		Assets
Euro JV	32.1 - 33.4		%	$	348		$	388	$	1,186	Nineteen hotels in Europe
Asia/Pacific JV		25	%		22			9		37	One hotel in Australia and a 36% interest in three operating hotels and four hotels under development in India
Maui JV		67	%		61			64		96	131-unit vacation ownership project in Maui, Hawaii
Hyatt Place JV		50	%		7			16		31	One hotel in Nashville, Tennessee
Philadelphia Marriott Downtown		11	%		(5	)		25		227	One hotel in Philadelphia, PA
Total				$	433		$	502	$	1,577

	As of December 31, 2013
	Ownership			Our		Our Portion
	Interests			Investment		of Debt		Total Debt		Assets
Euro JV	32.1 - 33.4		%	$	374	$	444	$	1,363	Nineteen hotels in Europe
Asia/Pacific JV		25	%		20		10		39	One hotel in Australia and a 36% interest in two operating hotels and five hotels under development in India
Maui JV		67	%		16		34		50	131-unit vacation ownership project in Maui, Hawaii
Hyatt Place JV		50	%		5		12		24	One hotel in Nashville, Tennessee
Total				$	415	$	500	$	1,476

European Joint Venture

We own general and limited partner interests in the Euro JV that consists of two separate funds, with the other partners thereof including APG Strategic Real Estate Pool NV, an affiliate of a Dutch Pension Fund, and Jasmine Hotels Pte Ltd, an affiliate of the real estate investment company of the Government of Singapore Investment Corporation Pte Ltd (“GIC RE”). We own a combined 32.1% ownership interest of Euro JV Fund I and a combined 33.4% interest of Euro JV Fund II. We do not consolidate the Euro JV due to the ownership structure and substantive participating rights of the non-Host limited partners, including approval over financing, acquisitions and dispositions, and annual operating and capital expenditures budgets. The joint venture agreement expires in 2021, subject to two one-year extensions. As of December 31, 2014, the total assets of the Euro JV are approximately €1.9 billion ($2.3 billion). As asset manager of the Euro JV funds, we earn asset management fees based on the amount of equity commitments and equity invested, which in 2014, 2013 and 2012 were approximately $16 million, $15 million and $13 million, respectively.

As of December 31, 2014, the partners have funded approximately €647 million, or 94%, of the total equity commitment for Euro JV Fund I and €364 million, or 81%, of the total equity commitment for Euro JV Fund II. On April 17, 2013 and June 25, 2013, the Euro JV partners executed amendments of the Euro JV partnership agreement in order to provide the funds necessary for a €95 million principal reduction associated with the refinancing of a mortgage loan secured by a portfolio of six properties, as well as to provide funds for general joint venture purposes, to extend the commitment period of Euro JV Fund I to December 2015 and to extend the commitment period of Euro JV Fund II by one year to June 2014 through the exercise of the extension option. Effective June 27, 2014, the Euro JV partners executed an amendment and restatement of the Euro JV partnership agreement which allows contributions to the joint venture in the form of loans, as opposed to only equity contributions and amended the agreement to extend the commitment period for Euro JV Fund II by one year to June 27, 2015. The partners expect to utilize the remaining equity commitment for Euro JV Fund I for capital expenditures and financing needs.

In April 2014, the Euro JV made a cash distribution to its partners totaling €37 million, of which Host’s share was €12 million ($17 million).

On September 30, 2014, Euro JV Fund II acquired a 90% ownership interest in the 394-room Grand Hotel Esplanade in Berlin. The hotel was acquired based on an aggregate gross value of €81 million ($102 million), and is subject to a mortgage loan of approximately €48 million ($61 million) with a margin of 219 basis points over the Euro Interbank Offered Rate (“Euribor”). The loan is non-recourse to the Euro JV. We contributed approximately €10 million ($14 million) to the Euro JV in connection with this acquisition, partially funded through a draw on our credit facility.

On October 16, 2014, the Euro JV Fund I sold the 350-room Sheraton Skyline Hotel & Conference Centre for £33 million ($53 million) plus certain customary closing adjustments and recognized a gain of approximately £8 million ($12 million). In connection with the sale, the Euro JV repaid the associated mortgage loan of £21.1 million ($34 million).

On August 29, 2013, Euro JV Fund II acquired the 465-room Sheraton Stockholm Hotel in Sweden for approximately €102 million ($135 million). In connection with the acquisition, the Euro JV entered into a €61 million ($81 million) mortgage loan with an interest rate of 5.67% that matures in 2018. The loan is non-recourse to the Euro JV. We contributed approximately €14 million ($19 million) to the Euro JV in connection with this acquisition, funded through a draw on our credit facility.

On October 22, 2013, Euro JV Fund II sold the Courtyard Paris La Defense West – Colombes for €19 million ($26 million) plus certain customary closing adjustments and recognized a gain of approximately €1.7 million ($2.3 million). In connection with the sale, the Euro JV repaid the associated €10.4 million ($14.4 million) mortgage loan.

The Euro JV has €980 million ($1,186 million) of mortgage debt, including debt incurred in its recent acquisitions, all of which is non-recourse to us. A default of the Euro JV mortgage debt does not trigger a default under any of our debt. On July 3, 2014, the Euro JV refinanced the €69 million ($94 million) loan secured by three properties in Brussels with Natixis, reducing the outstanding principal amount of the mortgage loan to €47.8 million using funds provided by the partners. Interest on the new loan is a combination of fixed and floating for an initial all-in rate of 2.0% and has a maturity date of July 3, 2019. On June 20, 2013, the Euro JV refinanced a mortgage loan secured by six properties, extending the maturity date to 2016, with a one year extension option subject to meeting certain conditions. The loan has a fixed and floating rate component with an initial interest rate of 4.5%. In connection with the refinancing, the joint venture reduced the outstanding principal amount of the mortgage loan from €337 million ($446 million) to €242 million ($320 million). We funded our portion of the principal reduction, as well as certain closing costs and other funding requirements, through a €37 million ($48 million) draw on our credit facility.

We have entered into four foreign currency forward sale contracts in order to hedge the foreign currency exposure resulting from the eventual repatriation of our net investment in the Euro JV. The forward purchases will occur between August 2015 and May 2017. We have hedged €177 million (approximately $228 million) of our investment through these contracts and designated draws under our credit facility in Euros. See Note 12 – “Fair Value Measurement” for further information.

Our unconsolidated investees analyze their properties for impairment throughout the year when events or circumstances occur that indicate the carrying amount may not be recoverable. A property is considered to be impaired when the sum of the future undiscounted cash flows over its remaining estimated holding period is less than the carrying amount of the asset. If a property is impaired, an expense is recorded for the difference between the fair value and the carrying amount of the hotel. In 2013, we recognized an expense of approximately $15 million reflecting our share of the impairment of one such property in equity in earnings (losses) of affiliates.

Asia/Pacific Joint Venture

We own a 25% general and limited partner interest in the Asia/Pacific JV, the other partner of which is RECO Hotels JV Private Limited, an affiliate of GIC RE. The Asia/Pacific JV may be terminated after a period of seven years, which occurs in March of 2015. Due to the ownership structure and the substantive participating rights of the non-Host limited partner, including approval over financing, acquisitions and dispositions, and annual operating and capital expenditures budgets, the Asia/Pacific JV is not consolidated in our financial statements. The commitment period for the equity contributions to the joint venture expired in March of 2012. As a result, unanimous approval of the joint venture partners is necessary to fund additional acquisitions. Certain funding commitments remain, however, related to existing investments.

As of December 31, 2014, the Asia/Pacific JV partners have invested approximately $83 million (of which our share was $21 million) in a joint venture in India with Accor S.A. and InterGlobe Enterprises Limited, in which the Asia/Pacific JV holds a 36% interest. This joint venture owns two hotels in Bangalore and one in Chennai and is developing four additional properties in Chennai and Delhi. The three hotels that are operating and the four hotels under development will be managed by Accor under the Pullman, ibis and Novotel brands.

Maui Joint Venture

In December 2014, we opened Hyatt Ka’anapali Beach, A Hyatt Residence Club, in which we hold a 67% non-controlling interest. The 131–unit vacation ownership project in Maui, Hawaii is adjacent to our Hyatt Regency Maui Resort & Spa. The development costs were funded with a $110 million construction loan and member contributions. As of December 31, 2014, $86 million has been drawn on the construction loan. The construction loan is jointly and severally guaranteed by both partners and matures in December 2015. Additionally, the joint venture has issued $10 million of debt to fund loans to the timeshare owners, which loans all are nonrecourse to Host. As of December 31, 2014, we have contributed land valued at $36 million, approximately $8 million of pre-formation expenditures and additional contributions of $43 million. Development costs as of December 31, 2014 totaled $180 million. In 2014, sales of the timeshares totaled $54 million.

Combined Financial Information of Unconsolidated Investees

Combined summarized balance sheet information for our affiliates is as follows (in millions):

	As of December 31,
	2014		2013
Property and equipment, net	$	2,369	$	2,362
Timeshare inventory		178		106
Other assets		424		376
Total assets	$	2,971	$	2,844
Debt	$	1,577	$	1,476
Other liabilities		163		135
Equity		1,231		1,233
Total liabilities and equity	$	2,971	$	2,844

Combined summarized operating results for our affiliates is as follows (in millions):

	Year ended December 31,
	2014			2013			2012
Total revenues	$	776		$	617		$	428
Operating expenses
Expenses		(568	)		(489	)		(346	)
Depreciation and amortization		(91	)		(131	)		(56	)
Operating profit (loss)		117			(3	)		26
Interest expense		(79	)		(59	)		(43	)
Gain on disposition		12			2			—
Net income (loss)	$	50		$	(60	)	$	(17	)