DEBT

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

DEBT

DEBT

Revolving Credit Facility

In August 2019, the Company entered into a $2.0 billion five-year unsecured revolving credit facility with a group of lenders. U.S. Dollar-denominated borrowings under the revolving credit facility will bear interest, at the Company’s option, at a rate per annum equal to either (i) the London Inter-bank Offered Rate, or if such London Inter-bank Offered Rate is no longer available, the agreed alternate rate of interest ("LIBOR") (but no less than 0%) for the interest period in effect for such borrowing plus an applicable margin ranging from 0.875% to 1.50%; or (ii) the sum of (x) the greatest of (a) JPMorgan Chase Bank, N.A.'s prime lending rate, (b) the U.S. federal funds rate plus 0.50% and (c) LIBOR (but no less than 0%) for an interest period of one month plus 1.00%, plus (y) an applicable margin ranging from 0% to 0.50%. Following an amendment to the revolving credit facility in December 2021, (i) Euro-denominated borrowings under the revolving credit facility will bear

interest at a rate per annum equal to the Euro Interbank Offered Rate ("EURIBOR"), or if EURIBOR is no longer available, the agreed alternate rate of interest (but no less than 0%) for the interest period in effect for such borrowing and (ii) Pounds Sterling-denominated borrowings under the revolving credit facility will bear interest at a rate per annum equal to the Sterling Overnight Index Average ("SONIA"), or if SONIA is no longer available, the agreed alternate rate of interest (but no less than 0%), in each case, plus an applicable margin ranging from 0.875% to 1.50%. Undrawn balances available under the revolving credit facility are subject to commitment fees at the applicable rate ranging from 0.07% to 0.20%.

The revolving credit facility provides for the issuance of up to $80 million of letters of credit as well as borrowings of up to $100 million on same-day notice, referred to as swingline loans. Other than swingline loans, which are available only in U.S. Dollars, borrowings and letters of credit under the revolving credit facility may be made in U.S. Dollars, Euros, British Pounds Sterling and any other foreign currency agreed to by the lenders. The proceeds of loans made under the facility can be used for working capital and general corporate purposes, including acquisitions, share repurchases and debt repayments. At December 31, 2021 and 2020, there were no borrowings outstanding and $4 million of letters of credit issued under this revolving credit facility.

Upon entering into this revolving credit facility, the Company terminated its prior $2.0 billion five-year revolving credit facility entered into in June 2015. During the six months ended June 30, 2019, the Company made short-term borrowings under the prior revolving credit facility totaling $400 million with a weighted-average interest rate of 3.5%, which were repaid prior to June 30, 2019.

The current revolving credit facility contains a maximum leverage ratio covenant, compliance with which is a condition to the Company's ability to borrow thereunder. In 2020, the Company amended the revolving credit facility to (i) suspend the maximum leverage ratio covenant through and including the three months ending March 31, 2022, which was replaced with a $4.5 billion minimum liquidity covenant based on unrestricted cash, cash equivalents, short-term investments and unused capacity under this revolving credit facility and (ii) increase the permitted maximum leverage ratio from and including the three months ending June 30, 2022 through and including the three months ending March 31, 2023. The Company agreed not to declare or make any cash distribution and not to repurchase any of its shares (with certain exceptions including in connection with tax withholding related to shares issued to employees) unless (i) prior to the delivery of financial statements for the three months ending June 30, 2022, it has at least $6.0 billion of liquidity on a pro forma basis, based on unrestricted cash, cash equivalents, short-term investments and unused capacity under this revolving credit facility and (ii) after the delivery of financial statements for the three months ending June 30, 2022, it is in compliance on a pro forma basis with the maximum leverage ratio covenant then in effect. Such restriction ends upon delivery of financial statements required for the three months ending June 30, 2023, or the Company has the ability to terminate this restriction earlier if it demonstrates compliance with the original maximum leverage ratio covenant in the revolving credit facility. Beginning with the three months ending June 30, 2022, the minimum liquidity covenant will cease to apply and the maximum leverage ratio covenant, as increased, will again be in effect.

Outstanding Debt

Outstanding debt at December 31, 2021 consists of the following (in millions):

 

December 31, 2021	Outstanding Principal Amount		Unamortized Debt Discount and Debt Issuance Cost		Carrying Value
Current liabilities:
0.8% (€1 Billion) Senior Notes due March 2022	$	1,137	$	—	1,137
2.15% (€750 Million) Senior Notes due November 2022	853		(1)		852
Total current liabilities	$	1,990	$	(1)	$	1,989
Long-term debt:
2.75% Senior Notes due March 2023	$	500	$	(1)	$	499
2.375% (€1 Billion) Senior Notes due September 2024	1,137		(5)		1,132
3.65% Senior Notes due March 2025	500		(1)		499
0.1% (€950 Million) Senior Notes due March 2025	1,080		(4)		1,076
0.75% Convertible Senior Notes due May 2025	863		(99)		764
3.6% Senior Notes due June 2026	1,000		(4)		996
1.8% (€1 Billion) Senior Notes due March 2027	1,137		(3)		1,134
3.55% Senior Notes due March 2028	500		(2)		498
0.5% (€750 Million) Senior Notes due March 2028	853		(5)		848
4.625% Senior Notes due April 2030	1,500		(9)		1,491
Total long-term debt	$	9,070	$	(133)	$	8,937

Outstanding debt at December 31, 2020 consists of the following (in millions):

December 31, 2020	Outstanding Principal Amount		Unamortized Debt Discount and Debt Issuance Cost		Carrying Value
Current liabilities:
0.9% Convertible Senior Notes due September 2021	$	1,000	$	(15)	$	985
Long-term debt:
0.8% (€1 Billion) Senior Notes due March 2022	$	1,223	$	(1)	$	1,222
2.15% (€750 Million) Senior Notes due November 2022	919		(4)		915
2.75% Senior Notes due March 2023	500		(1)		499
2.375% (€1 Billion) Senior Notes due September 2024	1,223		(7)		1,216
3.65% Senior Notes due March 2025	500		(2)		498
4.1% Senior Notes due April 2025	1,000		(5)		995
0.75% Convertible Senior Notes due May 2025	863		(128)		735
3.6% Senior Notes due June 2026	1,000		(4)		996
1.8% (€1 Billion) Senior Notes due March 2027	1,223		(2)		1,221
4.5% Senior Notes due April 2027	750		(5)		745
3.55% Senior Notes due March 2028	500		(2)		498
4.625% Senior Notes due April 2030	1,500		(11)		1,489
Total long-term debt	$	11,201	$	(172)	$	11,029

Fair Value of Debt

At December 31, 2021 and 2020, the estimated fair value of the outstanding debt was approximately $12.1 billion and $14.0 billion, respectively, and was considered a "Level 2" fair value measurement (see Note 6). Fair value was estimated based upon actual trades at the end of the reporting period or the most recent trade available as well as the Company's stock price at the end of the reporting period. The estimated fair value of the Company's debt in excess of the outstanding principal amount at December 31, 2021 and 2020 primarily relates to the conversion premium on the Convertible Senior Notes and the outstanding Senior Notes due April 2030.

Convertible Senior Notes

If the note holders exercise their option to convert, the Company delivers cash to repay the principal amount of the notes and delivers shares of common stock or cash, at its option, to satisfy the conversion value in excess of the principal amount. If the Company's convertible debt is redeemed or converted prior to maturity, a gain or loss on extinguishment is recognized. The gain or loss is the difference between the fair value of the debt component immediately prior to extinguishment and its carrying value. To estimate the fair value of the debt at the conversion date, the Company estimates the borrowing rate, considering the credit rating and similar debt of comparable corporate issuers without the conversion feature.

Description of Convertible Senior Notes

In April 2020, the Company issued $863 million aggregate principal amount of Convertible Senior Notes due May 2025 with an interest rate of 0.75% (the "May 2025 Notes"). The Company paid $19 million in debt issuance costs during the year ended December 31, 2020 related to this offering. The May 2025 Notes are convertible, subject to certain conditions, into the Company's common stock at a conversion price of $1,886.44 per share. The May 2025 Notes are convertible, at the option of the holder, prior to November 1, 2024, upon the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the Company's common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 130% of the conversion price in effect for the notes on the last trading day of the immediately preceding quarter. In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of the May 2025 Notes in a transaction in which the consideration paid to holders of the Company's common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the May 2025 Notes in an aggregate value ranging from $0 to $235 million depending upon the date of the transaction and the then current stock price of the Company. Starting on November 1, 2024, holders will have the right to convert all or any portion of the May 2025 Notes, regardless of the Company's stock price. The May 2025 Notes may not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the May 2025 Notes for cash in certain circumstances. Interest on the May 2025 Notes is payable on May 1 and November 1 of each year. At December 31, 2021, the if-converted value of the May 2025 Notes exceeded the aggregate principal amount by $166 million.

In August 2014, the Company issued $1.0 billion aggregate principal amount of Convertible Senior Notes due September 2021, with an interest rate of 0.9% (the "September 2021 Notes"). In September 2021, in connection with the maturity of the September 2021 Notes, the Company paid $1.0 billion to satisfy the aggregate principal amount due and an additional $86 million conversion premium in excess of the principal amount.

In May 2013, the Company issued $1.0 billion aggregate principal amount of Convertible Senior Notes due June 2020, with an interest rate of 0.35% (the "June 2020 Notes"). In June 2020, in connection with the maturity of the outstanding June 2020 Notes, the Company paid $1.0 billion to satisfy the aggregate principal amount due and an additional $245 million conversion premium in excess of the principal amount.

Cash-settled convertible debt, such as the Company's convertible senior notes, is separated into debt and equity components at issuance and each component is assigned a value. The value assigned to the debt component is the estimated fair value, at the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value, representing the value assigned to the equity component, is recorded as a debt discount. Debt discount is amortized using the effective interest rate method over the period from the origination date through the stated maturity date. The Company estimated the borrowing rates at debt origination to be 4.10% for the May 2025 Notes, 3.18% for the September 2021 Notes and 3.13% for the June 2020 Notes, considering its credit rating and similar debt of the Company or comparable corporate issuers without the conversion feature. The yield to maturity was estimated at an at-market coupon priced at par.

Debt discount after tax of $100 million ($130 million before tax) related to the May 2025 Notes and $83 million ($143 million before tax) related to the September 2021 Notes less debt issuance costs allocated to the equity component of the respective convertible notes was recorded in "Additional paid-in capital" in the balance sheet at debt origination.

Based on the closing price of the Company's common stock for the prescribed measurement periods for the three months ended December 31, 2021 and 2020, the contingent conversion thresholds on the May 2025 Notes were not exceeded and therefore the notes were not convertible.

The following table summarizes the interest expenses and weighted-average effective interest rates related to the convertible senior notes (in millions, except for interest rates). The remaining period for amortization of debt discount and debt issuance costs is the period until the stated maturity date for the respective debt.

	For the Year Ended December 31,
	2021			2020			2019
Coupon interest expense	$	13		$	15		$	12
Amortization of debt discount and debt issuance costs	43			54			50
Total interest expense	$	56		$	69		$	62
Weighted-average effective interest rate	3.8		%	3.5		%	3.2		%

Other Senior Notes

In March 2021, the Company issued Senior Notes due March 2025 with an interest rate of 0.1% for an aggregate principal amount of 950 million Euros and Senior Notes due March 2028 with an interest rate of 0.5% for an aggregate principal amount of 750 million Euros. The proceeds from the issuance of these Senior Notes were used to redeem the April 2025 Notes and the April 2027 Notes.

In March 2021, the Company delivered notices to the holders of the April 2025 Notes and the April 2027 Notes for the redemption, on April 3, 2021, of all the outstanding notes at the respective redemption prices determined as per the indenture governing the Notes, plus accrued and unpaid interest to, but not including the redemption date. In April 2021, the Company paid $1.1 billion and $868 million to redeem the April 2025 Notes and the April 2027 Notes, respectively. In addition, the Company paid the applicable accrued and unpaid interest. In the Consolidated Statement of Operations for the year ended December 31, 2021, the Company recorded a loss, before tax, of $242 million on the early extinguishment of these Senior Notes, being the difference between the carrying value of the Notes and the amount paid for their redemption.

Other senior notes, including the Senior Notes issued in March 2021, had a total carrying value of $10.2 billion and $10.3 billion at December 31, 2021 and 2020, respectively. Debt discount and debt issuance costs are amortized using the effective interest rate method over the period from the origination date through the stated maturity date. The following table summarizes the information related to other senior notes outstanding at December 31, 2021:

Other Senior Notes	Date of Issuance	Effective Interest Rate(1)		Timing of Interest Payments
0.8% Senior Notes due March 2022	March 2017	0.94	%	Annually in March
2.15% Senior Notes due November 2022	November 2015	2.27	%	Annually in November
2.75% Senior Notes due March 2023	August 2017	2.88	%	Semi-annually in March and September
2.375% Senior Notes due September 2024	September 2014	2.54	%	Annually in September
3.65% Senior Notes due March 2025	March 2015	3.76	%	Semi-annually in March and September
0.1% Senior Notes due March 2025	March 2021	0.30	%	Annually in March
3.6% Senior Notes due June 2026	May 2016	3.70	%	Semi-annually in June and December
1.8% Senior Notes due March 2027	March 2015	1.86	%	Annually in March
3.55% Senior Notes due March 2028	August 2017	3.63	%	Semi-annually in March and September
0.5% Senior Notes due March 2028	March 2021	0.63	%	Annually in March
4.625% Senior Notes due April 2030	April 2020	4.72	%	Semi-annually in April and October

(1)    Represents the coupon interest rate adjusted for deferred debt issuance costs, premiums or discounts existing at the origination of the debt.

The following table summarizes the interest expenses related to other senior notes (in millions):

	For the Year Ended December 31,
	2021		2020		2019
Coupon interest expense	$	257	$	264	$	160
Amortization of debt discount and debt issuance costs	10		9		6
Total interest expense	$	267	$	273	$	166

The Company designates certain portions of the aggregate principal value of the Euro-denominated debt as a hedge of the foreign currency exposure of the net investment in certain Euro functional currency subsidiaries. For the years ended December 31, 2021 and 2020, the carrying value of the portion of Euro-denominated debt, designated as a net investment hedge, ranged from $2.5 billion to $5.1 billion and from $1.8 billion to $3.2 billion, respectively. The foreign currency transaction gains or losses on the Euro-denominated debt that is designated as a hedging instrument for accounting purposes are recorded in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. The foreign currency transaction gains or losses on the Euro-denominated debt that is not designated as a hedging instrument are recognized in "Other income (expense), net" in the Consolidated Statements of Operations.