Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value of Financial Assets and Liabilities

The following tables detail the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015, respectively (in millions):

	Fair Value at Measurement Date Using
	Balance at September 30, 2016			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Fair Value Measurements on a Recurring Basis:
Assets
Foreign currency forward sale contracts⁽¹⁾	$	7		$	—	$	7		$	—
Liabilities
Foreign currency forward sale contracts ⁽¹⁾		(1	)		—		(1	)		—


	Fair Value at Measurement Date Using
	Balance at December 31, 2015			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Fair Value Measurements on a Recurring Basis:
Assets
Foreign currency forward sale contracts⁽¹⁾	$	17		$	—	$	17		$	—
Liabilities
Interest rate swap derivatives ⁽¹⁾		(1	)		—		(1	)		—
___________

(1)

These derivative contracts have been designated as hedging instruments.

Interest Rate Swap Derivatives Designated as Cash Flow Hedges

For the third quarter and year-to-date 2016, we recorded a gain of $1 million on our interest rate swap derivative designated as a cash flow hedge. The following table summarizes our outstanding contract (in millions):

Total Notional

Maturity

Swapped

All-in-

Transaction Date

Amount

Date

Index

Rate

November 2011 ⁽¹⁾

November 2016

Reuters BBSY

6.7

___________

(1)

The swap was entered into in connection with the A$86 million ($66 million) mortgage loan on the Hilton Melbourne South Wharf.

Foreign Currency Sale Contracts

The following table summarizes our foreign currency forward sale contracts (in millions):

Currently Outstanding						Change in Fair Value - All Contracts
	Total
	Transaction Amount in		Total Transaction			Gain (Loss)					Gain (Loss)
Transaction Date	Foreign		Amount		Forward Purchase	Quarter ended September 30,					Year-to-date ended September 30,
Range	Currency		in Dollars		Date Range	2016			2015		2016			2015
May 2014-January 2016	€	100	$	118	May 2017-January 2018	$	(1	)	$	—	$	(2	)	$	10
November 2014	C$	25	$	22	November 2016	$	—		$	2	$	(1	)	$	3

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

The following table summarizes the draws on our credit facility that are designated as hedges of net investments in foreign operations (in millions):

		Balance		Balance			Gain (Loss)							Gain (Loss)
		Outstanding		Outstanding in			Quarter ended September 30,							Year-to-date ended September 30,
Currency		US$		Foreign Currency			2016				2015			2016				2015
Canadian dollars ⁽¹⁾	$		35	C$	46	$		—		$		3	$		(2	)	$		4
Euros	$		87	€	77	$		(1	)	$		—	$		(3	)	$		7
Australian dollars	$		38	A$	50	$		(1	)	$		—	$		—		$		—
___________

(1)

We have drawn an additional $46 million on the credit facility in Canadian dollars, which draw has not been designated as a hedging instrument.

Fair Values of Certain Financial Liabilities and Other Financial Instruments

The fair value of certain financial liabilities is shown below (in millions):

	September 30, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities
Senior notes (Level 1)	$	2,379	$	2,594	$	2,376	$	2,452
Credit facility (Level 2)		1,306		1,312		1,291		1,298
Mortgage debt and other, excluding capital leases (Level 2)		66		66		199		199