Debt | DEBT The following is a summary of debt outstanding, net of unamortized issuance costs and discounts, as of June 30, 2020 and December 31, 2019, respectively: June 30, 2020 December 31, 2019 (in millions) Term Loan A Facility (net of $6 and $3 unamortized issuance costs) $ 669 $ 691 Senior Notes at 5.00% (net of $10 and $10 unamortized issuance costs and $2 and $2 discount, respectively) 788 788 Revolving Credit Facility 500 — Finance lease liabilities and other 15 16 Total debt 1,972 1,495 Less: current portion (58) (40) Long-term debt $ 1,914 $ 1,455 Credit Agreement On September 7, 2017, Delphi Technologies and its wholly-owned subsidiary Delphi Powertrain Corporation entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), with respect to $1.25 billion in senior secured credit facilities, which became effective in conjunction with the Separation. The Credit Agreement consists of a senior secured five-year $750 million term loan facility due December 2022 (the “Term Loan A Facility”) and a $500 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders party thereto and JPMorgan Chase Bank, N.A. We incurred $9 million of issuance costs in connection with the Credit Agreement. As of June 30, 2020, there was $500 million drawn on the Revolving Credit Facility. The Credit Facilities are subject to an interest rate, at our option, of either (a) the Administrative Agent’s Alternate Base Rate (“ABR” as defined in the Credit Agreement) or (b) the London Interbank Offered Rate (the “Adjusted LIBOR Rate” as defined in the Credit Agreement) (“LIBOR”), in each case, plus an applicable margin that is based on our corporate credit ratings, as more particularly described below (the “Applicable Rate”). In addition, the Credit Agreement requires payment of additional interest on certain overdue obligations on terms and conditions customary for financings of this type. The interest rate period with respect to LIBOR interest rate options can be set at one-, two-, three-, or six-months as selected by us in accordance with the terms of the Credit Agreement (or other period as may be agreed by the applicable lenders). We may elect to change the selected interest rate over the term of the Credit Facilities in accordance with the provisions of the Credit Agreement. The Applicable Rates charged to the Company on the specified date are set forth below: June 30, 2020 December 31, 2019 LIBOR plus ABR plus LIBOR Plus ABR plus Revolving Credit Facility 2.025 % 1.025 % 1.450 % 0.450 % Term Loan A Facility 2.375 % 1.375 % 1.750 % 0.750 % The Credit Agreement was amended on February 10, 2020. Pursuant to the amendment, the applicable interest rate margins for the Term Loan A Facility will increase or decrease from time to time between 1.50% and 2.25% per annum (for LIBOR loans) and between 0.50% and 1.25% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Pursuant to the amendment, the applicable interest rate margins for the Revolving Credit Facility will increase or decrease from time to time between 1.30% and 1.75% per annum (for LIBOR loans) and between 0.30% and 0.75% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. In light of current economic conditions and uncertainties arising in connection with the COVID-19 pandemic, the Credit Agreement was further amended on May 4, 2020. Pursuant to the second amendment, the applicable interest rate margins for the Term Loan A Facility will increase or decrease from time to time between 2.00% and 2.75% per annum (for LIBOR loans) and between 1.00% and 1.75% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Pursuant to the second amendment, the applicable interest rate margins for the Revolving Credit Facility will increase or decrease from time to time between 1.80% and 2.25% per annum (for LIBOR loans) and between 0.80% and 1.25% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Accordingly, the Applicable Rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR or future changes in our corporate credit ratings. The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, with respect to our and our subsidiaries’ equity interests. In addition, the Credit Agreement requires that we maintain a consolidated net leverage ratio of Consolidated Total Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement (the “Original Ratio”). The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events. Pursuant to the Credit Agreement amendment on February 10, 2020, for any fiscal quarter ending on or prior to September 30, 2019 or after December 31, 2020, the Company must maintain a consolidated net leverage ratio of not greater than 3.5 to 1.0 and for any fiscal quarter ending on or after December 31, 2019 and on or prior to December 31, 2020 a consolidated net leverage ratio of not greater than 4.0 to 1.0. Pursuant to the second Credit Agreement amendment on May 4, 2020, the net leverage ratio definition was amended to be Consolidated Secured Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement (the “Revised Ratio”). For any fiscal quarter ending on or prior to March 31, 2020, the Company must maintain the Revised Ratio of not greater than 4.25 to 1.0 stepping down by 0.5x every quarter starting the quarter ended June 30, 2021, and reverting back to the Original Ratio starting the quarter ended March 31, 2022 to be maintained at a level no greater than 4.0 to 1.0. The Company was in compliance with the Credit Agreement covenants as of June 30, 2020. Senior Notes On September 28, 2017, Delphi Technologies PLC issued $800 million in aggregate principal amount of 5.00% senior unsecured notes due 2025 in a transaction exempt from registration under the Securities Act (the “Senior Notes”). The Senior Notes indenture contains certain restrictive covenants, including with respect to Delphi Technologies’ (and subsidiaries) ability to incur liens, enter into sale and leaseback transactions and merge with or into other entities. The Company was in compliance with the Senior Notes covenants as of June 30, 2020. Other Financing Receivable factoring —The Company is party to a €225 million accounts receivable factoring facility for certain subsidiaries in Europe. This facility is currently suspended. The facility would be accounted for as short-term debt and borrowings would be subject to the availability of eligible accounts receivable. Collateral is not required related to these trade accounts receivable. This facility matures on November 28, 2022 and will automatically renew on a non-committed, indefinite basis unless terminated by either party. Borrowings bear interest at LIBOR plus a margin for borrowings denominated in British pounds and Euro Interbank Offered Rate ("EURIBOR") plus a margin for borrowings denominated in Euros. The current applicable margin will increase or decrease from time to time between 0.45% and 0.85% based on changes to our corporate credit ratings. There were no amounts outstanding on the European accounts receivable factoring facility as of June 30, 2020 and December 31, 2019. The Company entered into arrangements with various financial institutions to sell eligible trade receivables from certain Aftermarket customers in North America and Europe. These arrangements can be terminated at any time subject to prior written notice. The receivables under these arrangements are sold to a third party without recourse to the Company and are therefore accounted for as true sales. During the three and six months ended June 30, 2020, $31 million and $62 million of receivables were sold under these arrangements, and expenses of less than $1 million and $1 million were recognized within interest expense, respectively. During the three and six months ended June 30, 2019, $43 million and $74 million of receivables were sold under these arrangements, and expenses of $1 million and $2 million were recognized within interest expense, respectively. In addition, during the six months ended June 30, 2019, one of the Company’s European subsidiaries factored, without recourse, $21 million of receivables related to certain foreign research credits to a financial institution. This transaction was accounted for as a true sale of the receivables, and the Company therefore derecognized this amount from other long-term assets in the consolidated balance sheet. During the six months ended June 30, 2019, less than $1 million of expenses were recognized within interest expense related to these transactions. Finance leases —There were approximately $14 million and $14 million of finance lease obligations outstanding as of June 30, 2020 and December 31, 2019, respectively. Interest —Cash paid for interest related to debt outstanding, including the effect of interest rate and cross currency swaps, totaled $31 million and $35 million, for the six months ended June 30, 2020 and 2019, respectively. |