Derivative Instruments (Notes)

3 Months Ended

Mar. 31, 2014

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 March 31, 2014, 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, we entered into an interest rate cap agreement with $4,664.1 million notional amount at a LIBOR cap rate of 4.5% and which terminates February 13, 2015. This is not designated as a hedge for accounting purposes and 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 Consolidated Condensed 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 March 31, 2014 and December 31, 2013, none of our derivative instruments were designated as accounting hedges.

Fair Value of Derivative Instruments
(In millions)		Asset Derivatives				Liability Derivatives
		Fair Value				Fair Value
Derivatives instruments	Balance Sheet Location	March 31, 2014		December 31, 2013		March 31, 2014			December 31, 2013
Interest rate swaps	Accrued expenses and other current liabilities	$	—	$	—	$	(130.8	)	$	—
Interest rate swaps	Deferred credits and other	—		—		—			(165.9		)
Interest rate caps	Deferred charges and other	*		*		—			—
Total		$	—	$	—	$	(130.8	)	$	(165.9	)

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* Amount rounds to zero.

Effect of Derivative Instruments on Net Loss and Comprehensive Loss
(In millions)		Three Months Ended March 31,
Derivatives designated as hedging instruments	Location of Loss Recognized in Net Loss	2014		2013
Amount of loss reclassified from AOCL into net loss (effective portion)	Interest expense	$	—	$	3.9

Effect of Non-designated Derivative Instruments on Net Loss
(In millions)		Three Months Ended March 31,
Derivatives not designated as hedging instruments	Location of Loss Recognized in Net Loss	2014		2013
Net periodic cash settlements and accrued interest (1)	Interest expense	$	43.4	$	42.2
Total expense related to derivatives	Interest expense	8.4		21.2

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