Rust color in hot water

pdg35

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I noticed today that the hot water from my faucets (kitchen, both baths) has a rusty color to it once I let it run hot for about 3-5 seconds. When I turn the faucets to cold, the water runs clear. Is this a hot water heater problem or something else? My heater is gas, is about 11 years old now, and I was already looking to replace it. I hadn't seen any signs of failure until today...unless this is caused by something else. Any ideas?
 
Thanks for confirming what I thought. Looks like I'll be changing out a water heater this week!

Merry Christmas.
 
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