Long-Term Obligations and Commitments

3 Months Ended

Oct. 31, 2018

5. Long-Term Obligations and Commitments

Long-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, which includes a $500 million unsecured term loan. Under the master credit 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 $500 million in the aggregate. The term loan accrues interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.125% to 0.875% or LIBOR plus a margin that ranges from 1.125% to 1.875%. Actual margins under either election will be based on our senior debt credit ratings. The master credit agreement includes customary affirmative and negative covenants. See Note 4, “Current Liabilities – Unsecured Revolving Credit Facility,” for more information. The term loan is subject to quarterly principal payments, which began in July

2017, of 2.5% of the original loan amount, with the balance payable on February 1, 2021. At October 31, 2018, $425 million was outstanding under the term loan, of which $50 million was classified as short-term debt. The carrying value of the term loan approximates its fair value. Interest on the term loan is payable monthly. We paid $4 million for interest on the term loan during the three months ended October 31, 2018 and $3 million during the three months ended October 31, 2017.

Other Long-Term Obligations

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



(In millions)	October 31, 2018			July 31, 2018
Total deferred rent	$	48		$	47
Long-term income tax liabilities	61			61
Total license fee payable	10			9
Total dividend payable	10			14
Other	14			15
Total long-term obligations	143			146
Less current portion (included in other current liabilities)	(23		)	(27		)
Long-term obligations due after one year	$	120		$	119

Operating Lease Commitments and Unconditional Purchase Obligations

We describe our operating lease commitments and purchase obligations in Note 9 to the financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2018. There were no significant changes in our operating lease commitments or purchase obligations during the three months ended October 31, 2018.