Debt

9 Months Ended

Oct. 31, 2021

Debt Disclosure [Abstract]

Debt

Debt

The carrying values of the Company's borrowings were as follows (in millions):

Instrument	Date of issuance	Maturity date	Contractual interest rate	Outstanding principal as of October 31, 2021		October 31, 2021		January 31, 2021
2023 Senior Notes	April 2018	April 2023	3.25%	$	1,000	$	998	$	996
Loan assumed on 50 Fremont	February 2015	June 2023	3.75%	187		187		190
2024 Senior Notes	July 2021	July 2024	0.625%	1,000		997		0
Slack Convertible Notes	July 2021 (1)	April 2025	0.50%	11		16		0
2028 Senior Notes	April 2018	April 2028	3.70%	1,500		1,492		1,491
2028 Senior Sustainability Notes	July 2021	July 2028	1.50%	1,000		990		0
2031 Senior Notes	July 2021	July 2031	1.95%	1,500		1,487		0
2041 Senior Notes	July 2021	July 2041	2.70%	1,250		1,234		0
2051 Senior Notes	July 2021	July 2051	2.90%	2,000		1,976		0
2061 Senior Notes	July 2021	July 2061	3.05%	1,250		1,234		0
Total carrying value of debt				$	10,698	10,611		2,677
Less current portion of debt						(20)		(4)
Total noncurrent debt						$	10,591	$	2,673

(1) Assumed in July 2021 acquisition of Slack.

The Company was in compliance with all debt covenants as of October 31, 2021.

The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above as of October 31, 2021 and January 31, 2021 was $10.8 billion and $2.8 billion, respectively. These fair values were determined based on the closing trading price per $100 of the Senior Notes as of the last day of trading of the third quarter of fiscal 2022 and the last day of trading of fiscal 2021, respectively, and are deemed Level 2 liabilities within the fair value measurement framework.

The contractual future principal payments for all borrowings as of October 31, 2021 were as follows (in millions):

Fiscal period:
Remaining three months of fiscal 2022	$	1
Fiscal 2023	4
Fiscal 2024	1,182
Fiscal 2025	1,000
Fiscal 2026	11
Thereafter	8,500
Total principal outstanding	$	10,698

July 2021 Notes

In July 2021 the Company issued $8.0 billion aggregate principal amount of senior unsecured Senior Notes (collectively, the “July 2021 Notes”), with maturities ranging from 2024 to 2061. The proceeds from this offering, net of discounts and debt issuance costs, was $7.9 billion. Interest on each of the July 2021 Notes is payable semi-annually in arrears. The Company may redeem any portion of the July 2021 Notes, either in whole or in part, at any time, subject to certain early redemption provisions.

An amount equal to the net proceeds from the 2028 Senior Sustainability Notes will be allocated to finance or refinance, in whole or in part, one or more new or existing green or social projects that satisfy certain criteria. The remainder of the net proceeds from the July 2021 Notes were used to partially fund the cash consideration payable by the Company for the Slack acquisition, as well as related fees, costs and expenses. For more information regarding the acquisition of Slack, see Note 6 “Business Combinations.”

Slack Convertible Notes

In connection with the July 2021 acquisition of Slack, the Company assumed $863 million aggregate principal amount of 0.50 percent Convertible Senior Notes due 2025 (the “Slack Convertible Notes”) with a fair value of $1.3 billion as of the acquisition date. Under the indenture governing the Slack Convertible Notes (the “Indenture”), the Slack Convertible Notes bear semi-annual interest payments at 0.50 percent. The Slack Convertibles Notes mature on April 15, 2025, unless earlier converted or redeemed. On the date of the acquisition, the Company notified noteholders of their right to convert their notes under the terms of the Indenture. For the three months ended October 31, 2021, the Company paid $1.3 billion in cash to settle converted notes for $852 million of the $863 million aggregate principal balance of the Slack Convertible Notes. Through the date of filing of this Form 10-Q, the Company has received conversion notices for the majority of remaining outstanding amounts of unconverted notes as of October 31, 2021, which the Company expects to settle in cash in the fourth quarter of fiscal 2022.

Slack Capped Calls

In connection with the acquisition of Slack, the Company additionally assumed certain capped call contracts which Slack negotiated with multiple financial institutions as counterparties. The capped calls were intended to reduce or offset the potential dilution or negative cash outflows in the event of conversion of the Slack Convertible Notes. The Company agreed with the counterparties on settlement terms for these contracts, and the capped calls were settled in full in July 2021, which resulted in the Company’s receipt of aggregate cash proceeds of $168 million.

Revolving Credit Facility

In December 2020, the Company entered into a Credit Agreement with Citibank, N.A., as administrative agent, and certain other institutional lenders (the “Revolving Loan Credit Agreement”) that provides for a $3.0 billion unsecured revolving credit facility (“Credit Facility”) and that matures in December 2025. The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes which may include, without limitation, financing the consideration for, fees, costs and expenses related to any acquisition.

There were no outstanding borrowings under the Credit Facility as of October 31, 2021. The Company continues to pay a commitment fee on the available amount of the Credit Facility, which is included within other expense in the Company's condensed consolidated statements of operations.

Interest Expense on Debt

The following table sets forth total interest expense recognized related to debt (in millions), which is included within other expense in the Company’s condensed consolidated statements of operations:

	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
Contractual interest expense	$	69	$	24	$	128	$	72
Amortization of debt discounts and debt issuance costs	3		1		17		3
	$	72	$	25	$	145	$	75