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DEBT | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt Disclosure [Abstract] |
DEBT | DEBT The Company had short-term and long-term debt outstanding as follows:
| December 31,
(in millions) | 2024 |  | 2023
Short-term debt |  |  |
Short-term borrowings | $ | 61 |  |  | $ | 70 |
Long-term debt |  |  |
3.375% Senior notes due 03/15/25 ($334 million par value) | 334 |  |  | 384 |
5.000% Senior notes due 10/01/25 | — |  |  | 477 |
2.650% Senior notes due 07/01/27 ($1,100 million par value) | 1,095 |  |  | 1,093 |
7.125% Senior notes due 02/15/29 ($121 million par value) | 120 |  |  | 120 |
4.950% Senior notes due 08/15/29 ($500 million par value) | 495 |  |  | — |
1.000% Senior notes due 05/19/31 (€1,000 million par value) | 1,022 |  |  | 1,088 |
5.400% Senior notes due 08/15/34 ($500 million par value) | 493 |  |  | — |
4.375% Senior notes due 03/15/45 ($500 million par value) | 495 |  |  | 495 |
Term loan facilities, finance leases and other | 46 |  |  | 53 |
Total long-term debt | 4,100 |  |  | 3,710 |
Less: current portion | 337 |  |  | 3 |
Long-term debt, net of current portion | $ | 3,763 |  |  | $ | 3,707 |
On August 16, 2024, the Company issued $500 million of 4.950% senior notes due August 2029 and $500 million of 5.400% senior notes due August 2034, primarily to retire the Company’s outstanding senior notes due in 2025. Interest is payable semi-annually in arrears on February 15 and August 15 of each year. These senior notes are not guaranteed by any of the Company’s subsidiaries. In August 2024, the Company announced that it had commenced tender offers to purchase for cash certain of the Company’s outstanding 3.375% senior notes due in March 2025 (the “March 2025 Senior Notes”) and the 5.000% senior notes due in October 2025 (the “October 2025 Senior Notes”). Pursuant to the tender offers, the Company purchased and extinguished $50 million of the March 2025 Senior Notes and $110 million of the October 2025 Senior Notes. On November 1, 2024, the Company redeemed the remaining $343 million outstanding October 2025 Senior Notes at a make-whole redemption price of 101 percent. The tender offers and redemption resulted in a net gain on debt extinguishment of $10 million, primarily related to the write-off of the remaining unamortized fair value up to the October 2025 Senior Notes. The net gain on debt extinguishment is recorded to Interest expense, net, in the Consolidated Statement of Operations. 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 March 2025 and October 2025 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 October 2025 Senior Notes from the Delphi Technologies acquisition in 2020 and a portion of the unamortized discount on the March 2025 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. The Company may utilize uncommitted lines of credit for short-term working capital requirements. As of December 31, 2024 and 2023, the Company had $61 million and $70 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, 2024 and 2023 was 4.0% and 3.5%, respectively. The weighted average interest rate on all borrowings outstanding, including the effects of outstanding swaps, as of December 31, 2024 and 2023 was 2.8% and 2.3%, 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) | 2024 |  | 2023 |  | 2022
Interest expense | $ | 84 |  |  | $ | 73 |  |  | $ | 71 |
Interest income | (54) |  |  | (35) |  |  | (20) |
Gain on debt extinguishment | (10) |  |  | (28) |  |  | — |
Interest expense, net | $ | 20 |  |  | $ | 10 |  |  | $ | 51 |
Annual principal payments required as of December 31, 2024 are as follows:
(in millions) |
2025 | $ | 398 |
2026 | 27 |
2027 | 1,103 |
2028 | 2 |
2029 | 623 |
After 2029 | 2,044 |
Total payments | $ | 4,197 |
Less: unamortized premiums, net of discount | (36) |
Total short and long-term debt | $ | 4,161 |
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 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, 2024. At December 31, 2024 and 2023, 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, 2024 and 2023. 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, 2024 and 2023, the estimated fair values of the Company’s senior unsecured notes totaled $3,797 million and $3,304 million, respectively. The estimated fair values were $257 million and $353 million lower than carrying value at December 31, 2024 and 2023, 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 $29 million and $37 million at December 31, 2024 and 2023, 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 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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