Debt

12 Months Ended

Jul. 31, 2022

Debt Disclosure [Abstract]

Debt

8. Debt

The carrying value of our debt was as follows at the dates indicated:

	July 31,		July 31,		Effective
(In millions)	2022		2021		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%
Term loan	4,700		—
Secured revolving credit facility	230		48
Total principal balance of long-term debt	6,930		2,048
Unamortized discount and debt issuance costs	(16)		(14)
Total carrying value of long-term debt	$	6,914	$	2,034
Short-term debt	$	499	$	—
Long-term debt	$	6,415	$	2,034

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.

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 $23 million and $24 million of interest on the Notes during the twelve months ended July 31, 2022 and 2021, respectively.

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, 2022, we were compliant with all covenants governing the Notes.

Unsecured Credit Facility

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 $4.7 billion unsecured term loan that matures on November 1, 2024, and a $1 billion unsecured revolving credit facility that matures on November 1, 2026 (2021 Credit Facility).

The 2021 Credit Facility 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 July 31, 2022, we were compliant with all required covenants.

Term Loan. 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. Under this agreement we may, subject to certain customary conditions, on one or more occasions increase commitments under the term loan in an amount not to exceed $400 million in the aggregate. The term loan accrues 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 0.125% or SOFR plus a margin that ranges from 0.625% to 1.125%. Actual margins under either election will be based on our senior debt credit ratings. Interest on the term loan is payable monthly. At July 31, 2022, $4.7 billion was outstanding under the term loan. The carrying value of the term loan is net of debt issuance costs of $5 million as of July 31, 2022 and approximates its fair value. We paid $42 million of interest on the term loan during the twelve months ended July 31, 2022. We paid $2 million and $9 million of interest on our previous term loan under the 2019 Credit Facility during the twelve months ended July 31, 2021 and 2020, respectively.

Unsecured Revolving Credit Facility. The 2021 Credit Facility 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. At July 31, 2022, no amounts were outstanding under the unsecured revolving credit facility. We paid no interest on the unsecured revolving credit facility during the twelve months ended July 31, 2022. We paid $1 million and $2 million of interest on our previous unsecured revolving credit facility during the twelve months ended July 31, 2021 and 2020, respectively.

Secured Revolving Credit Facility

On February 19, 2019, a subsidiary of Intuit entered into a 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 18, 2022, primarily to increase the facility limit, extend the commitment term and maturity date and update the benchmark interest rate. Under the amended agreement, the facility limit is $500 million, of which $300 million is committed and $200 million is uncommitted. Advances accrue interest at adjusted daily simple SOFR 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 18, 2025, and the final maturity date is July 20, 2026. The agreement includes certain affirmative and negative covenants, including financial covenants that require the subsidiary to maintain specified financial ratios. As of July 31, 2022, we were compliant with all required covenants. At July 31, 2022, $230 million was outstanding under this facility and the weighted-average interest rate was 3.96%, which includes the interest on any unused committed portion. The outstanding balance is secured by cash and receivables of the subsidiary totaling $615 million. Interest on the facility is payable monthly. We paid $2 million, $3 million, and $3 million of interest on the secured revolving credit facility during each of the twelve months ended July 31, 2022, 2021 and 2020, respectively.

Future principal payments for long-term debt at July 31, 2022 were as shown in the table below.

(In millions)
Fiscal year ending July 31,
2023	$	500
2024	—
2025	5,200
2026	230
2027	500
Thereafter	500
Total future principal payments for long-term debt	$	6,930