Current Liabilities

6 Months Ended

Jan. 31, 2022

Other Liabilities Disclosure [Abstract]

Current Liabilities

6. Current Liabilities

Short-Term Debt

On November 1, 2021 we terminated our amended and restated credit agreement dated May 2, 2019 (2019 Credit Facility) and entered into a credit agreement with certain institutional lenders with an aggregate principal amount of $5.7 billion, which

includes a $1 billion unsecured revolving credit facility that matures on November 1, 2026 and a $4.7 billion unsecured term loan that matures on November 1, 2024.

On November 1, 2021 we borrowed the full $4.7 billion under the unsecured term loan to fund a portion of the cash consideration for the acquisition of Mailchimp. See Note 7, "Long-Term Obligations and Commitments," for more information regarding the term loan.

Unsecured Revolving Credit Facility

The credit agreement we entered into on November 1, 2021 includes a $1 billion unsecured revolving credit facility that will expire on November 1, 2026. Under this agreement we may, subject to certain customary conditions including lender approval, on one or more occasions increase commitments under the unsecured 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 unsecured revolving credit facility accrue interest at rates that are equal to, at our election, either (i) the alternate base rate plus a margin that ranges from 0.0% to 0.1%, or (ii) the Secured Overnight Finance Rate (SOFR) plus a margin that ranges from 0.69% to 1.1%. Actual margins under either election will be based on our senior debt credit ratings. The credit agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total gross debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 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. As of January 31, 2022 we were compliant with all required covenants. At January 31, 2022 no amounts were outstanding under the unsecured revolving credit facility. We paid no interest on the unsecured revolving credit facility during the six months ended January 31, 2022. We paid $1 million of interest on our previous unsecured revolving credit facility during the six months ended January 31, 2021.

Other Current Liabilities

Other current liabilities were as follows at the dates indicated:

(In millions)	January 31, 2022		July 31, 2021
Executive deferred compensation plan liabilities	$	155	$	153
Current portion of operating lease liabilities	76		66
Reserve for returns and credits	65		21
Accrued sales and property taxes	52		5
Reserve for promotional discounts and rebates	27		10
Merchant and consumer payments processing reserves	10		10
Current portion of dividend payable	10		9
Interest payable	5		1
Income taxes payable	2		3
Amounts due for share repurchases	—		17
Other	73		66
Total other current liabilities	$	475	$	361

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.