Current Liabilities

12 Months Ended

Jul. 31, 2017

Other Liabilities Disclosure [Abstract]

7. Current Liabilities

Short-Term Debt

Short-term debt at July 31, 2016 included $500 million of 5.75% senior unsecured notes due on March 15, 2017, less the unamortized discount. During the third quarter of fiscal 2017 we repaid those notes when they became due using cash from operations. We paid $29 million in cash for interest on the notes during each of the twelve months ended July 31, 2017, July 31, 2016, and July 31, 2015.

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 July 31, 2017, $488 million was outstanding under the term loan, of which $50 million was classified as short-term debt. See Note 8, “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 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 fiscal year ended July 31, 2017. During the twelve months ended July 31, 2017 we borrowed and repaid $150 million under this revolving credit facility and at July 31, 2017 no amounts were outstanding. We paid $1 million in cash for interest on the revolving credit facility during the twelve months ended July 31, 2017 and $2 million in cash for interest on revolving credit facilities during the twelve months ended July 31, 2016.

Other Current Liabilities

Other current liabilities were as follows at the dates indicated:



	July 31,
(In millions)	2017		2016
Executive deferred compensation plan liabilities	$	83	$	69
Reserve for promotional discounts and rebates	19		14
Reserve for product returns	7		7
Current portion of license fee payable	10		10
Current portion of deferred rent	6		6
Current portion of dividend payable	9		5
Interest payable	—		11
Other	44		39
Total other current liabilities	$	178	$	161