Current Liabilities

6 Months Ended

Jan. 31, 2018

Other Liabilities Disclosure [Abstract]

5. Current Liabilities

Short-Term Debt

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, 2018, $463 million was outstanding under the term loan, of which $50 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 Facility

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 quarter ended January 31, 2018. During the six months ended January 31, 2018 we borrowed $800 million under this revolving credit facility and at January 31, 2018 $640 million was

outstanding. We paid $3 million and $1 million for interest on the revolving credit facility during the six months ended January 31, 2018 and January 31, 2017 respectively.

Other Current Liabilities

Other current liabilities were as follows at the dates indicated:



(In millions)	January 31, 2018		July 31, 2017
Executive deferred compensation plan liabilities	$	94	$	83
Reserve for promotional discounts and rebates	37		19
Reserve for product returns	51		7
Current portion of license fee payable	10		10
Current portion of deferred rent	6		6
Current portion of dividend payable	6		9
Other	47		44
Total other current liabilities	$	251	$	178

The balances of several of our other current liabilities, particularly our reserves for product returns and promotional discounts 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.