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Risk management and financial instruments (Tables)
 6 Months Ended
Jun. 30, 2019
Derivative Instruments and Fair Value Disclosures [Abstract]  
Schedule of interest rate risk
Our exposure to interest rate risk relates mainly to our floating rate debt and balances of surplus funds placed with financial institutions. We manage this risk through the use of derivative arrangements. We have set out our exposure to interest rate risk on our net debt obligations at June 30, 2019 in the table below:
(In $ millions)
 
Principal outstanding

 
Hedging instruments - see below

 
Net exposure

 
Impact of 1% increase in rates - see below

Senior Credit Facilities
 
5,662

 
4,500

 
1,162

 
36

Debt contained within VIEs
 
645

 
—

 
645

 
6

Total floating rate debt obligations
 
6,307

 
4,500

 
1,807

 
42

Senior secured notes (1)
 
458

 
—

 
N/A

 
—

Less: Cash and Restricted Cash
 
(1,469
)
 
—

 
(1,469
)
 
(15
)
Net debt
 
5,296

 
4,500

 
338

 
27


(1) The interest on the senior secured notes is fixed and therefore does not have exposure to interest rate fluctuations
Schedule of sensitivity analysis
The LIBOR rate applied on our debt at June 30, 2019 was 2.33%. Therefore, the interest cap would mitigate the impact of 46% of a theoretical 1% point increase in the LIBOR rate. This is set out in the below table.
(In $ millions)
 
Amount

 
Impact of 1% point increase in rates (before impact of interest rate cap)

 
Less: impact of interest rate cap

 
Impact of 1% point increase in rates (after impact of interest rate cap)

 
 
 
 
 
 
 
 
 
Senior Credit Facility debt - hedged
 
4,500

 
45

 
(21
)
 
24

Senior Credit Facility debt - not hedged
 
1,162

 
12

 
—

 
12

Total Senior Credit Facility Debt
 
5,662

 
57

 
(21
)
 
36
Schedule of realized and unrealized gains and losses
Gains and losses on derivatives reported in our Consolidated Statement of Operations included the following:
(In $ millions)
 
Successor

 
 
Predecessor

 
Successor



Predecessor

(Loss)/gain recognized in the Consolidated Statement of Operations relating to derivative financial instruments
 
Three months ended June 30, 2019

 
 
Three months ended June 30, 2018

 
Six months ended June 30, 2019



Six months ended June 30, 2018

Interest rate cap agreement
 
(6
)
 
 
(7
)
 
(33
)
 
 
(7
)
Archer convertible debt instrument
 
—

 
 
7

 
—

 
 
4

Interest rate swap agreements not qualified as hedge accounting
 
—

 
 
(1
)
 
—

 
 
(1
)
Loss on derivative financial instruments
 
(6
)
 
 
(1
)
 
(33
)
 
 
(4
)
Schedule of derivative financial instruments
Derivative financial instruments included in our Consolidated Balance Sheet, within "Other Assets" included the following:
 
(In $ millions)
Maturity date
Applicable rate
Outstanding principal - June 30, 2019

As at June 30, 2019

As at December 31, 2018

 
 
Interest rate cap
June 2023
2.87% LIBOR cap
4,500

7

39

 
 
 
 
 
7

39
Schedule of fair value of financial instruments measured at amortized cost
The carrying value and estimated fair value of our financial instruments that are measured at amortized cost at June 30, 2019 and December 31, 2018 are as follows:
 
 
Successor
 
Successor
 
 
As at June 30, 2019
 
As at December 31, 2018
(In $ millions)
 
Fair
value

 
Carrying
value

 
Fair
value

 
Carrying
value

Assets
 
 
 
 
 
 
 
 
Related party loans receivable (1) (Level 2)
 
489

 
489

 
476

 
476

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Secured credit facilities (Level 2)
 
5,449

 
5,532

 
5,388

 
5,519

Credit facilities contained within variable interest entities (Level 2)
 
611

 
621

 
612

 
626

Senior secured notes (Level 1)
 
445

 
458

 
770

 
769

Related party loans payable by the VIE (Level 2)
 
227

 
232

 
222

 
226

(1)  
Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis 
Schedule of financial instruments measured at fair value on a recurring basis
The carrying value and estimated fair value of our financial instruments that are measured at fair value on a recurring basis at June 30, 2019 (Successor) and December 31, 2018 (Successor) are as follows:
 
 
Successor
 
Successor
 
 
As at June 30, 2019
 
As at December 31, 2018
(In $ millions)
 
Fair
value

 
Carrying
value

 
Fair
value

 
Carrying
value

Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents (Level 1)
 
1,251

 
1,251

 
1,542

 
1,542

Restricted cash (Level 1)
 
218

 
218

 
461

 
461

Marketable securities (Level 1)
 
22

 
22

 
57

 
57

Related party loans receivable - Archer convertible debt (Level 3)
 
49

 
49

 
43

 
43

Interest rate cap (Level 2)
 
7

 
7

 
39

 
39

Temporary equity
 
 
 
 
 
 
 
 
Redeemable non-controlling interest (Level 3)
 
37

 
37

 
38

 
38