Long-Term Obligations and Commitments

12 Months Ended

Jul. 31, 2021

Long-Term Obligations and Commitments [Abstract]

Long-Term Obligations and Commitments

8. Long-Term Obligations and Commitments

Senior Unsecured Notes

In June 2020 we issued four series of senior unsecured notes (together, the Notes) pursuant to a public debt offering. The proceeds from the issuance were $1.98 billion, net of debt discount of $2 million and debt issuance costs of $15 million.

The carrying value of the Notes was as follows at the date indicated:

	July 31,		July 31,		Effective
(In millions)	2021		2020		Interest Rate
Senior unsecured notes issued June 2020:
0.650% notes due July 2023	$	500	$	500	0.837%
0.950% notes due July 2025	500		500		1.127%
1.350% notes due July 2027	500		500		1.486%
1.650% notes due July 2030	500		500		1.767%
Total senior unsecured notes	2,000		2,000
Unamortized discount and debt issuance costs	(14)		(17)
Net carrying value senior unsecured notes	$	1,986	$	1,983

Interest is payable semiannually on January 15 and July 15 of each year. The discount and debt issuance costs are amortized to interest expense over the term of the Notes under the effective interest method. We paid $24 million for interest on the Notes during the twelve months ended July 31, 2021 and no interest during the twelve months ended July 31, 2020.

The Notes are senior unsecured obligations of Intuit and rank equally with all existing and future unsecured and unsubordinated indebtedness of Intuit and are redeemable by us at any time, subject to a make-whole premium. Upon the occurrence of change of control transactions that are accompanied by certain downgrades in the credit ratings of the Notes, we will be required to repurchase the Notes at a repurchase price equal to 101% of the aggregate outstanding principal plus any accrued and unpaid interest to but not including the date of repurchase. The indenture governing the Notes requires us to comply with certain covenants. For example, the Notes limit our ability to create certain liens and enter into sale and leaseback transactions. As of July 31, 2021 we were compliant with all covenants governing the Notes.

Secured Revolving Credit Facility

On February 19, 2019 a subsidiary of Intuit entered into a $300 million secured revolving credit facility with a lender to fund a portion of our loans to qualified small businesses. The revolving credit facility is secured by cash and receivables of the subsidiary and is non-recourse to Intuit Inc. We have entered into several amendments to the secured revolving credit facility, most recently on July 16, 2021, primarily to extend the commitment term and maturity date. Under the amended agreement, $150 million of the facility is committed and $150 million is uncommitted. Advances accrue interest at LIBOR plus 1.5%. Unused portions of the committed credit facility accrue interest at a rate ranging from 0.25% to 0.75%, depending on the total unused committed balance. The commitment term is through July 17, 2023 and the final maturity date is January 17, 2024. The amended agreement allows for the transition of the benchmark interest rate used to calculate finance charges from LIBOR to the Secured Overnight Finance Rate (SOFR) plus related benchmark adjustments that represent the prevailing

market convention for dollar-denominated syndicated credit facilities. The agreement includes certain affirmative and negative covenants, including financial covenants that require the subsidiary to maintain specified financial ratios. As of July 31, 2021 we were compliant with all required covenants. At July 31, 2021, $48 million was outstanding under this facility and the weighted-average interest rate was 3.21%, which includes the interest on the unused committed portion. The outstanding balance is secured by cash and receivables of the subsidiary totaling $199 million. Interest on the facility is payable monthly. We paid $3 million for interest on the secured revolving credit facility during each of the twelve months ended July 31, 2021 and 2020.

Future principal payments for long-term debt at July 31, 2021 were as shown in the table below.

(In millions)
Fiscal year ending July 31,
2022	$	—
2023	500
2024	48
2025	500
2026	—
Thereafter	1,000
Total commitments	$	2,048

Other Long-Term Obligations

Other long-term obligations were as follows at the dates indicated:

	July 31,
(In millions)	2021		2020
Long-term income tax liabilities	$	24	$	10
Total dividend payable	17		12
Long-term deferred revenue	8		13
Other	15		17
Total long-term obligations	64		52
Less current portion (included in other current liabilities)	(11)		(10)
Long-term obligations due after one year	$	53	$	42

Unconditional Purchase Obligations

In the ordinary course of business we enter into certain unconditional purchase obligations with our suppliers. These are agreements to purchase products and services that are enforceable, legally binding, and specify terms that include fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payments.

Annual minimum commitments under purchase obligations at July 31, 2021 were as shown in the table below.

(In millions)	Purchase Obligations
Fiscal year ending July 31,
2022	$	205
2023	147
2024	68
2025	58
2026	53
Thereafter	—
Total commitments	$	531