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NOTES PAYABLE AND DEBT | 12 Months Ended
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Dec. 31, 2023
Debt Disclosure [Abstract] |
NOTES PAYABLE AND DEBT | NOTES PAYABLE AND DEBT The Company had short-term and long-term debt outstanding as follows:
| December 31,
(in millions) | 2023 |  | 2022
Short-term debt |  |  |
Short-term borrowings | $ | 70 |  |  | $ | 58 |
Long-term debt |  |  |
3.375% Senior notes due 03/15/25 ($384 million par value) | 384 |  |  | 499 |
5.000% Senior notes due 10/01/25 ($453 million par value)1 | 477 |  |  | 840 |
2.650% Senior notes due 07/01/27 ($1,100 million par value) | 1,093 |  |  | 1,092 |
7.125% Senior notes due 02/15/29 ($121 million par value) | 120 |  |  | 120 |
1.000% Senior notes due 05/19/31 (€1,000 million par value) | 1,088 |  |  | 1,051 |
4.375% Senior notes due 03/15/45 ($500 million par value) | 495 |  |  | 495 |
Term loan facilities, finance leases and other | 53 |  |  | 45 |
Total long-term debt | 3,710 |  |  | 4,142 |
Less: current portion | 3 |  |  | 2 |
Long-term debt, net of current portion | $ | 3,707 |  |  | $ | 4,140 |
_____________________________ 1 These notes include the fair value step up of $24 million and $65 million as of December 31, 2023 and 2022, respectively, related to the Delphi Technologies acquisition in 2020. The fair value step up was calculated based on observable market data and is amortized as a reduction to interest expense over the remaining life of the instrument using the effective interest method. In September 2023, the Company purchased and extinguished $438 million of Senior notes due in 2025, comprised of $115 million and $323 million face value of its 3.375% and 5.000% Senior notes, respectively. Total cash consideration paid was $430 million. The Company recorded a gain of approximately $28 million during the year ended December 31, 2023, consisting of an $8 million gain related to a cash settlement below the face value of the 2025 notes and $20 million related to the write-off of a portion of the unamortized fair value step up on the 5.000% Senior notes due in 2025 from the Delphi Technologies acquisition in 2020 and a portion of the unamortized discount on the 3.375% Senior notes due in 2025 that was recorded at the time of that note issuance. The gain on extinguishment was recorded to Interest expense, net, in the Consolidated Statement of Operations. On May 19, 2021, in anticipation of the acquisition of AKASOL and to refinance the Company’s €500 million 1.800% Senior notes due in November 2022, the Company issued €1.0 billion in 1.000% Senior notes due May 2031. Interest is payable annually in arrears on May 19 of each year. On June 18, 2021, the Company repaid its €500 million 1.80% Senior notes due November 2022 and incurred a loss on debt extinguishment of $20 million, which is reflected in Interest expense, net in the Consolidated Statement of Operations. The Company may utilize uncommitted lines of credit for short-term working capital requirements. As of December 31, 2023 and 2022, the Company had $70 million and $58 million, respectively, in borrowings under these facilities, which are classified in Notes payable and other short-term debt in the Consolidated Balance Sheets. The short-term borrowings primarily relate to a European money market loan with an interest rate of Euribor plus 1.75% that is callable upon immediate notice by either party. The weighted average interest rate on short-term borrowings outstanding as of December 31, 2023 and 2022 was 3.5% and 0.9%, respectively. The weighted average interest rate on all borrowings outstanding, including the effects of outstanding swaps, as of December 31, 2023 and 2022 was 2.3% and 2.5%, respectively. The following table provides details on Interest expense, net included in the Consolidated Statements of Operations. Interest expense primarily relates to interest on the Company’s fixed rate Senior notes, net of any amortization of premium or discount. Interest income primarily relates to interest received on cash and investments and interest received on the Company’s net investment hedges. Interest income has been favorably impacted by rising interest rates.
| Year Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Interest expense | $ | 73 |  |  | $ | 71 |  |  | $ | 82 |
(Gain) loss on debt extinguishment | (28) |  |  | — |  |  | 20 |
Interest income | (35) |  |  | (20) |  |  | (11) |
Interest expense, net | $ | 10 |  |  | $ | 51 |  |  | $ | 91 |
Annual principal payments required as of December 31, 2023 are as follows:
(in millions) |
2024 | $ | 73 |
2025 | 846 |
2026 | 8 |
2027 | 1,107 |
2028 | 8 |
After 2028 | 1,743 |
Total payments | $ | 3,785 |
Less: unamortized premiums, net of discount | (5) |
Total short and long-term debt | $ | 3,780 |
The Company’s long-term debt includes various covenants, none of which are expected to restrict future operations. The Company has a $2 billion multi-currency revolving credit facility that allows the Company to increase the facility by $1 billion with bank group approval. This facility was renewed in September 2023 and now matures in September 2028. The credit agreement contains customary events of default and one key financial covenant, which is a debt-to-EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) ratio. The Company was in compliance with the financial covenant at December 31, 2023. At December 31, 2023 and 2022, the Company had no outstanding borrowings under this facility. The Company’s commercial paper program allows the Company to issue $2 billion of short-term, unsecured commercial paper notes under the limits of its multi-currency revolving credit facility. Under this program, the Company may issue notes from time to time and use the proceeds for general corporate purposes. The Company had no outstanding borrowings under this program as of December 31, 2023 and 2022. The total current combined borrowing capacity under the multi-currency revolving credit facility and commercial paper program cannot exceed $2 billion. As of December 31, 2023 and 2022, the estimated fair values of the Company’s senior unsecured notes totaled $3,304 million and $3,530 million, respectively. The estimated fair values were $353 million and $567 million lower than carrying value at December 31, 2023 and 2022, respectively. Fair market values of the senior unsecured notes are developed using observable values for similar debt instruments, which are considered Level 2 inputs as defined by ASC Topic 820. The carrying values of the Company’s multi-currency revolving credit facility, commercial paper program and other debt facilities approximate fair value. The fair value estimates do not necessarily reflect the values the Company could realize in the current markets. The Company had outstanding letters of credit of $37 million and $31 million at December 31, 2023 and 2022, respectively. The letters of credit typically act as guarantees of payment to certain third parties in accordance with specified terms and conditions.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
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