Current Liabilities

6 Months Ended

Jan. 31, 2017

Other Liabilities Disclosure [Abstract]

Short-Term Debt

On March 12, 2007 we issued $500 million of 5.75% senior unsecured notes due on March 15, 2017. We carried these notes at face value less the unamortized discount in short-term debt on our balance sheets at January 31, 2017 and July 31, 2016. The notes are redeemable by Intuit at any time, subject to a make-whole premium, and include covenants that limit our ability to grant liens on our facilities and to enter into sale and leaseback transactions, subject to significant allowances. We remained in compliance with these covenants at all times during the quarter ended January 31, 2017. Interest on the notes is payable semi-annually on March 15 and September 15. We paid $14 million in cash for interest on the notes during the six months ended January 31, 2017 and $14 million in cash for interest on the notes during the six months ended January 31, 2016.

On February 1, 2016 we entered into a master credit agreement with certain institutional lenders for a five-year credit facility in an aggregate principal amount of $1.5 billion. The master credit agreement includes a $500 million unsecured term loan and a $1 billion unsecured revolving credit facility. At January 31, 2017, $500 million was outstanding under the term loan, of which $37 million was classified as short-term debt. See Note 6, “Long-Term Obligations and Commitments – Long-Term Debt,” for more information regarding the term loan.

Unsecured Revolving Credit Facilities

The master credit agreement we entered into on February 1, 2016 also includes a $1 billion unsecured revolving credit facility that will expire on February 1, 2021. Under the master credit agreement we may, subject to certain customary conditions, on one or more occasions increase commitments under the revolving credit facility in an amount not to exceed $250 million in the aggregate and may extend the maturity date up to two times. Advances under the revolving credit facility accrue interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.0% to 0.5% or the London Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5%. Actual margins under either election will be based on our senior debt credit ratings. The master credit agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 as of any date and a ratio of annual EBITDA to annual interest expense of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. We remained in compliance with these covenants at all times during the quarter ended January 31, 2017. During the six months ended January 31, 2017 we borrowed $150 million under this revolving credit facility and at January 31, 2017 $150 million was outstanding. We paid $1 million in cash for interest on the revolving credit facility during the six months ended January 31, 2017 and $1 million in cash for interest on a previous revolving credit facility during the six months ended January 31, 2016.

Other Current Liabilities

Other current liabilities were as follows at the dates indicated:



(In millions)	January 31, 2017		July 31, 2016
Reserve for product returns	$	53	$	7
Reserve for rebates	42		14
Current portion of license fee payable	10		10
Current portion of deferred rent	7		6
Interest payable	11		11
Amounts due for share repurchases	7		—
Executive deferred compensation plan liabilities	76		69
Other	48		44
Total other current liabilities	$	254	$	161

The balances of several of our other current liabilities, particularly our reserves for product returns and rebates, are affected by the seasonality of our business. See Note 1, “Description of Business and Summary of Significant Accounting Policies – Seasonality,” for more information.