DEBT

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

Revolving Credit Facility

In May 2023, the Company entered into a five-year unsecured revolving credit facility with a group of lenders. The revolving credit facility extends a revolving line of credit of up to $2.0 billion to the Company and provides for the issuance of up to $80 million of letters of credit, as well as up to $100 million of borrowings on same-day notice, referred to as swingline loans. Other than the swingline loans, which are available only in U.S. dollars, the revolving loans and the letters of credit are available in U.S. dollars, Euros, Pounds Sterling, and any other currency agreed to by the administrative agent and each of the lenders. The revolving credit facility contains a maximum leverage ratio covenant, compliance with which is a condition to the Company's ability to borrow.

Borrowings under the revolving credit facility will bear interest at a rate determined by reference to benchmark rates plus an applicable spread (ranging from 0% to 1.375%) based on the Company's leverage or credit rating at the time of the borrowing. Undrawn balances available under the revolving credit facility are subject to commitment fees at the applicable rate determined by reference to the Company's leverage or credit rating.

Upon entering into this new revolving credit facility, the Company terminated the $2.0 billion five-year revolving credit facility entered into in August 2019. At June 30, 2023 there were no borrowings outstanding and $17 million of letters of credit issued under the new revolving credit facility. At December 31, 2022, there were no borrowings outstanding and $14 million of letters of credit issued under the prior revolving credit facility. See Note 12 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on the prior revolving credit facility.

Outstanding Debt

Outstanding debt at June 30, 2023 consists of the following (in millions): 

June 30, 2023	Outstanding  Principal  Amount		Unamortized Debt Discount and Debt Issuance Cost		Carrying  Value
Current liabilities:
0.75% Convertible Senior Notes due May 2025	$	863	$	(8)	$	855
Total current liabilities	$	863	$	(8)	$	855
Long-term debt:
2.375% (€1 Billion) Senior Notes due September 2024	$	1,091	$	(2)	$	1,089
3.65% Senior Notes due March 2025	500		(1)		499
0.1% (€950 Million) Senior Notes due March 2025	1,036		(2)		1,034
3.6% Senior Notes due June 2026	1,000		(2)		998
4.0% (€750 Million) Senior Notes due November 2026	818		(3)		815
1.8% (€1 Billion) Senior Notes due March 2027	1,091		(2)		1,089
3.55% Senior Notes due March 2028	500		(2)		498
0.5% (€750 Million) Senior Notes due March 2028	818		(3)		815
3.625% (€500 Million) Senior Notes due November 2028	546		(4)		542
4.25% (€750 Million) Senior Notes due May 2029	818		(5)		813
4.625% Senior Notes due April 2030	1,500		(8)		1,492
4.5% (€1 Billion) Senior Notes due November 2031	1,091		(7)		1,084
4.125% (€1.25 Billion) Senior Notes due May 2033	1,364		(16)		1,348
4.75% (€1 Billion) Senior Notes due November 2034	1,091		(9)		1,082
Total long-term debt	$	13,264	$	(66)	$	13,198

Outstanding debt at December 31, 2022 consists of the following (in millions):

December 31, 2022	Outstanding  Principal  Amount		Unamortized Debt Discount and Debt Issuance Cost		Carrying  Value
Current liabilities:
2.75% Senior Notes due March 2023	$	500	$	—	$	500
Total current liabilities	$	500	$	—	$	500
Long-term debt:
2.375% (€1 Billion) Senior Notes due September 2024	$	1,067	$	(3)	$	1,064
3.65% Senior Notes due March 2025	500		(1)		499
0.1% (€950 Million) Senior Notes due March 2025	1,014		(3)		1,011
0.75% Convertible Senior Notes due May 2025	863		(9)		854
3.6% Senior Notes due June 2026	1,000		(3)		997
4.0% (€750 Million) Senior Notes due November 2026	800		(3)		797
1.8% (€1 Billion) Senior Notes due March 2027	1,067		(2)		1,065
3.55% Senior Notes due March 2028	500		(2)		498
0.5% (€750 Million) Senior Notes due March 2028	800		(3)		797
4.25% (€750 Million) Senior Notes due May 2029	800		(6)		794
4.625% Senior Notes due April 2030	1,500		(9)		1,491
4.5% (€1 Billion) Senior Notes due November 2031	1,067		(7)		1,060
4.75% (€1 Billion) Senior Notes due November 2034	1,067		(9)		1,058
Total long-term debt	$	12,045	$	(60)	$	11,985

Fair Value of Debt

At June 30, 2023 and December 31, 2022, the estimated fair value of the outstanding debt was approximately $14.3 billion and $12.4 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 June 30, 2023 primarily relates to the conversion premium on the convertible senior notes due in May 2025. As of December 31, 2022, the outstanding principal amount of the Company's debt exceeded the fair value of debt mainly due to the increase in interest rates partially offset by the conversion premium on the convertible senior notes due in May 2025.

Convertible Senior Notes

In April 2020, the Company issued $863 million aggregate principal amount of convertible senior notes due in 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 the issuance. 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. 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. At June 30, 2023 and December 31, 2022, the estimated fair

value of the May 2025 Notes was $1.3 billion and $1.2 billion, respectively, and was considered a "Level 2" fair value measurement (see Note 6). For the three and six months ended June 30, 2023 and 2022, the weighted-average effective interest rate related to the convertible senior notes was 1.2%.

Based on the closing sales prices of the Company's common stock for the prescribed measurement periods, the May 2025 Notes were convertible at the option of the holder during the second calendar quarter of 2023 and continue to be convertible during the third calendar quarter of 2023. The May 2025 Notes are classified as "Short-term debt" in the Consolidated Balance Sheet as of June 30, 2023.

Other Senior Notes

In May 2023, the Company issued senior notes due November 2028 with an interest rate of 3.625% for an aggregate principal amount of 500 million Euros and senior notes due May 2033 with an interest rate of 4.125% for an aggregate principal amount of 1.25 billion Euros. The proceeds from the issuance of these senior notes are available for general corporate purposes, including to repurchase shares of the Company's common stock.

In March 2023, the Company repaid $500 million on the maturity of the Senior Notes due March 2023. In March 2022, the Company repaid $1.1 billion on the maturity of Senior Notes due March 2022. In addition, the Company paid the applicable accrued and unpaid interest relating to each of these senior notes.

Other senior notes had a total carrying value of $13.2 billion and $11.6 billion at June 30, 2023 and December 31, 2022, 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. 

Interest expense related to other senior notes consists primarily of coupon interest expense of $100 million and $192 million for the three and six months ended June 30, 2023, respectively, and $56 million and $114 million for the three and six months ended June 30, 2022, respectively.

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 six months ended June 30, 2023 and 2022, the carrying value of the portion of Euro-denominated debt, designated as a net investment hedge, ranged from $5.9 billion to $7.5 billion and from $4.2 billion to $5.6 billion, respectively.