Derivative Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Derivative Instruments – Interest Rate Swap Agreements

We use interest rate swaps to manage the mix of our debt between fixed and variable rate instruments. As of December 31, 2013, we had eight interest rate swap agreements outstanding with notional amounts totaling $5,750.0 million that were not designated as accounting hedges. These interest rate swaps reset monthly or quarterly and expire on January 25, 2015. The difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense for the related debt. Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows. Changes in the fair value of the swap agreements are recognized in interest expense.

Derivative Instruments – Interest Rate Cap Agreements

We have an interest rate cap agreement to partially hedge the risk of future increases in the variable rate of the CERP Financing. In February 2013, in conjunction with exercising the option to extend the maturity of the former CMBS Financing to 2014, we entered into a new agreement, which is effective from February 13, 2013 and terminates February 13, 2015, and is for a notional amount of $4,664.1 million at a LIBOR cap rate of 4.5%. This is not designated as a hedge for accounting purposes as a result, changes in fair value of the interest rate cap are recognized in interest expense.

We have an interest rate cap agreement to partially hedge the risk of future increases in the variable rate of the PHW Las Vegas senior secured loan. The interest rate cap agreement is for a notional amount of $501.4 million at a LIBOR cap rate of 7.0%. Changes in fair value of the interest rate cap are recognized in interest expense.

Derivative Instruments – Impact on Financial Statements

None of our derivative instruments are offset, and the fair values of assets and liabilities are recognized in the Consolidated Condensed Balance Sheets. As of December 31, 2013, none of our derivative instruments were designated as accounting hedges.

Fair Values of Derivative Instruments

		Asset Derivatives				Liability Derivatives
		Fair Value				Fair Value
(In millions)	Balance Sheet Location	2013		2012		2013			2012
Interest rate swaps	Deferred credits and other	$	—	$	—	$	(165.9	)	$	(306.4	)
Interest rate cap	Deferred credits and other	*		*		—			—
Total		$	—	$	—	$	(165.9	)	$	(306.4	)

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* Amount rounds to zero.

Effect of Derivative Instruments on Net Loss and Comprehensive Loss

(In millions)		Years Ended December 31,
Derivatives designated as accounting hedges	Location of (Gain) or Loss Recognized in Net Loss	2013		2012		2011
Loss recognized in AOCL (effective portion)	Other Comprehensive Loss	$	—	$	—	$	64.3
Loss reclassified from AOCL into net loss      (effective portion)	Interest Expense	4.0		28.4		265.7
Gain recognized in net loss (ineffective portion)	Interest Expense	—		—		(53.4		)

Effect of Non-designated Derivative Instruments on Net Loss

(In millions)		Years Ended December 31,
Derivatives not designated as accounting hedges	Location of Loss	2013		2012		2011
Net periodic cash settlements and accrued interest (1)	Interest expense	$	172.0	$	169.6	$	201.1
Total expense for derivatives	Interest expense	$	34.4	$	140.0	$	184.2

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⁽¹⁾The derivative settlements under the terms of the interest rate swap agreements are recognized as interest expense and are paid monthly.