Derivative Financial Instruments

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Interest Rate Swaps

The Company fixes the LIBOR portion of its US dollar denominated variable rate borrowings (Note 8) with interest rate swap derivative arrangements as follows:

As of September 30, 2015
Notional Value	Effective Date	Expiration Date	Fixed Rate
(In $ millions)			(In percentages)
500	January 2, 2014	January 2, 2016	0.94

As of December 31, 2014
Notional Value	Effective Date	Expiration Date	Fixed Rate
(In $ millions)			(In percentages)
500	January 2, 2014	January 2, 2016	1.02

Foreign Currency Forwards and Swaps

Gross notional values of the foreign currency forwards and swaps are as follows:

	As of September 30, 2015	As of December 31, 2014
	(In $ millions)
Total	788	1,336

Cross-currency Swaps

On March 31, 2015, the Company settled its cross-currency swap agreements with notional values of $250 million/€193 million, expiring September 11, 2020, and $225 million/€162 million, expiring April 17, 2019, in exchange for cash of $88 million. The Company recorded a net loss of $1 million, which is included in Other income (expense), net in the unaudited interim consolidated statement of operations. The Company classifies cash flows from derivative instruments designated as cash flow hedges in the same category of the consolidated statement of cash flows as the cash flows from the items being hedged. Accordingly, the settlement of the cross-currency swap agreements is included in Net cash provided by (used in) operating activities in the unaudited interim consolidated statement of cash flows for the nine months endedSeptember 30, 2015.

Information regarding changes in the fair value of the Company's derivative and non-derivative instruments is as follows:

	Gain (Loss) Recognized in Other Comprehensive Income (Loss)			Gain (Loss) Recognized in Earnings (Loss)
	Three Months Ended September 30,						Statement of Operations Classification
	2015	2014		2015	2014
	(In $ millions)
Designated as Cash Flow Hedges
Interest rate swaps	—	—		—	(1	)	Interest expense
Cross-currency swaps	—	(9	)	—	25		Other income (expense), net; Interest expense
Total	—	(9	)	—	24
Designated as Net Investment Hedges
3.250% Notes	—	9		—	—		Foreign currency translation
Total	—	9		—	—
Not Designated as Hedges
Foreign currency forwards and swaps	—	—		—	(4	)	Foreign exchange gain (loss), net; Other income (expense), net
Total	—	—		—	(4	)

	Gain (Loss) Recognized in Other Comprehensive Income (Loss)			Gain (Loss) Recognized in Earnings (Loss)
	Nine Months Ended September 30,							Statement of Operations Classification
	2015	2014		2015		2014
	(In $ millions)
Designated as Cash Flow Hedges
Interest rate swaps	—	(1	)	—		(3	)	Interest expense
Cross-currency swaps	—	(13	)	46		28		Other income (expense), net; Interest expense
Total	—	(14	)	46		25
Designated as Net Investment Hedges
3.250% Notes	28	9		—		—		Foreign currency translation
Term C-2 and Term C-3 loans(1)	—	—		—		—		Foreign currency translation
Total	28	9		—		—
Not Designated as Hedges
Interest rate swaps	—	—		(1	)	—		Interest expense
Foreign currency forwards and swaps	—	—		(68	)	(9	)	Foreign exchange gain (loss), net; Other income (expense), net
Total	—	—		(69	)	(9	)

______________________________

⁽¹⁾  During the three months ended March 31, 2015, the Company designated the Euro-based principal amount of its Term C-2 loan and its Term C-3 loan as a net investment hedge of its investment in a wholly-owned international subsidiary whose functional currency is the Euro to mitigate the volatility caused by the changes in foreign currency exchange rates of the Euro with respect to the US dollar.

See Note 15 - Fair Value Measurements for further information regarding the fair value of the Company's derivative instruments.

Certain of the Company's foreign currency forwards and swaps and interest rate swaps permit the Company to net settle all contracts with the counterparty through a single payment in an agreed upon currency in the event of default or early termination of the contract, similar to a master netting arrangement. The Company's interest rate swap agreements are subject to cross collateralization under the Guarantee and Collateral Agreement entered into in conjunction with the Term loan borrowings (Note 8).

Information regarding the gross amounts of the Company's derivative instruments and the amounts offset in the unaudited consolidated balance sheets is as follows:

	As of September 30, 2015	As of December 31, 2014
	(In $ millions)
Derivative Assets
Gross amount recognized	2	55
Gross amount offset in the consolidated balance sheets	—	—
Net amount presented in the consolidated balance sheets	2	55
Gross amount not offset in the consolidated balance sheets	2	4
Net amount	—	51

	As of September 30, 2015	As of December 31, 2014
	(In $ millions)
Derivative Liabilities
Gross amount recognized	6	23
Gross amount offset in the consolidated balance sheets	—	—
Net amount presented in the consolidated balance sheets	6	23
Gross amount not offset in the consolidated balance sheets	2	4
Net amount	4	19