Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value of Financial Assets and Liabilities

The following table details the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis, as well as non-recurring fair value measurements that we completed during 2013 and 2012 due to the impairment of non-financial assets (in millions):

	Fair Value at Measurement Date Using
				Quoted Prices		Significant
				in Active		Other			Significant
	Balance at			Markets for		Observable			Unobservable
	December 31,			Identical Assets		Inputs			Inputs
	2013			(Level 1)		(Level 2)			(Level 3)
Fair Value Measurements on a Recurring Basis:
Assets
Interest rate swap derivatives (1)	$	1		$	—	$	1		$	—
Foreign currency forward sale contracts (1)		3			—		3			—
Liabilities
Interest rate swap derivatives (1)		(3	)		—		(3	)		—
Foreign currency forward sale contracts (1)		(6	)		—		(6	)		—
Fair Value Measurements on a Non-recurring Basis:
Impaired hotel properties held and used (2)		9			—		—			9
	Fair Value at Measurement Date Using
				Quoted Prices		Significant
				in Active		Other			Significant
	Balance at			Markets for		Observable			Unobservable
	December 31,			Identical Assets		Inputs			Inputs
	2012			(Level 1)		(Level 2)			(Level 3)
Fair Value Measurements on a Recurring Basis:
Assets
Interest rate swap derivatives (1)	$	7		$	—	$	7		$	—
Foreign currency forward sale contracts (1)		5			—		5			—
Liabilities
Interest rate swap derivatives (1)		(6	)		—		(6	)		—
Fair Value Measurements on a Non-recurring Basis:
Impaired hotel properties held and used (2)		34			—		—			34

(1) These derivative contracts have been designated as hedging instruments.

(2) The fair value measurements are as of the measurement date of the impairment and may not reflect the book value as of December 31, 2013 and December 31, 2012, respectively.

Interest Rate Swap Derivatives Designated as Cash Flow Hedges

Interest rate swap derivatives designated as cash flow hedges. We have designated our floating-to-fixed interest rate swap derivatives as cash flow hedges. The purpose of the interest rate swaps is to hedge against changes in cash flows (interest payments) attributable to fluctuations in variable rate debt. The derivatives are valued based on the prevailing market yield curve on the date of measurement. We also evaluate counterparty credit risk when we calculate the fair value of the swaps. Changes in the fair value of the derivatives are recorded to other comprehensive income (loss) on the accompanying balance sheets. The hedges were fully effective as of December 31, 2013. The following table summarizes our interest rate swap derivatives designed as cash flow hedges (in millions):

							Change in Fair Value
	Total						Gain (Loss)
Transaction	Notional		Maturity	Swapped			Year ended December 31,
Date	Amount		Date	Index	All-in-Rate		2013		2012
November 2011 (1)	A$	62	November 2016	Reuters BBSY	6.7	%	$	1	$	(2)
February 2011 (2)	NZ$	79	February 2016	NZ$ Bank Bill	7.15	%	$	2	$	—

(1) The swap was entered into in connection with the A$82 million ($71 million) mortgage loan on the Hilton Melbourne South Wharf.

(2) The swap was entered into in connection with the NZ$105 million ($87 million) mortgage loan on seven properties in New Zealand.

Foreign Currency Sale Contracts

Foreign Investment Hedging Instruments. We have five foreign currency forward sale contracts that hedge a portion of the foreign currency exposure resulting from the eventual repatriation of our net investment in foreign operations. These derivatives are considered hedges of the foreign currency exposure of a net investment in a foreign operation and are marked-to-market with changes in fair value recorded to other comprehensive income (loss) within the equity portion of our balance sheet. The foreign currency forward sale contracts are valued based on the forward yield curve of the foreign currency to U.S. dollar forward exchange rate on the date of measurement. We also evaluate counterparty credit risk when we calculate the fair value of the derivatives. The following table summarizes our foreign currency forward sale contracts (in millions):

Currently Outstanding						Change in Fair Value - All Contracts
	Total
	Transaction		Total
	Amount in		Transaction		Forward	Gain (Loss)
Transaction	Foreign		Amount		Purchase	Year ended December 31,
Date Range	Currency		in Dollars		Date Range	2013			2012
May 2008-January 2013	€	120	$	163	May 2014-January 2016	$	(5	)	$	4

Draws on Credit Facility that are Designated as Net Investments in International Operations

In addition to the foreign currency forward sale contracts, we have designated a portion of the foreign currency draws on our credit facility as hedges of net investments in foreign operations. As a result, currency translation adjustments in the designated credit facility draws are recorded to other comprehensive income (loss) within the equity portion of our balance sheet, which adjustments offset a portion of the translation adjustment related to our foreign investments. The following table summarizes the draws on our credit facility that are designated as hedges of net investments in international operations (in millions):

	Balance		Balance		Gain (Loss)
	Outstanding		Outstanding in		Year ended December 31,
Currency	US$		Foreign Currency		2013		2012
Canadian dollars (1)	$	29	C$	31	$	2	$	—
Euros	$	102	€	74	$	(5)	$	(2)

(1) We have drawn an additional $71 million on the credit facility in Canadian dollars that has not been designated as a hedging instrument.

Fair Values of Certain Financial Liabilities and Other Financial Instruments

Fair Value of Other Financial Assets and Liabilities. We did not elect the fair value measurement option for any of our other financial assets or liabilities. The fair values of secured debt and our credit facility are determined based on the expected future payments discounted at risk-adjusted rates. Senior Notes and the Exchangeable Senior Debentures are valued based on quoted market prices. The fair values of financial instruments not included in this table are estimated to be equal to their carrying amounts. The fair value of certain financial assets and liabilities and other financial instruments are shown below (in millions):

	As of December 31,
	2013				2012
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial liabilities
Senior notes (Level 1)	$	2,647	$	2,766	$	3,038	$	3,296
Exchangeable Senior Debentures (Level 1)		371		603		531		725
Credit facility (Level 2)		946		946		763		763
Mortgage debt and other, excluding capital leases (Level 2)		793		802		1,078		1,094