Current Liabilities

12 Months Ended

Jul. 31, 2020

Other Liabilities Disclosure [Abstract]

7. Current Liabilities

Short-Term Debt

On May 2, 2019 we entered into an amended and restated credit agreement with certain institutional lenders with an aggregate principal amount of $1.4 billion, including a $400 million unsecured term loan that matures on February 1, 2021 and a $1 billion unsecured revolving credit facility that matures on May 2, 2024.

Under the amended and restated credit agreement we may, subject to certain customary conditions including lender approval, 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 Bank of America's alternate base rate plus a margin that ranges from 0.0% to 0.125% or the London Interbank Offered Rate (LIBOR) 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. The amended and restated 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 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. As of July 31, 2020 we were compliant with all required covenants. The term loan is subject to quarterly principal payments of $12.5 million through October 31, 2020, with the balance payable on February 1, 2021. At July 31, 2020, $338 million was outstanding under the term loan and was classified as short-term debt on our consolidated balance sheet. The carrying value of the term loan approximates its fair value. Interest on the term loan is payable monthly. We paid $9 million for interest on the term loan during the twelve months ended July 31, 2020, $15 million during the twelve months ended July 31, 2019, and $13 million during the twelve months ended July 31, 2018.

Unsecured Revolving Credit Facility

The amended and restated credit agreement we entered into on May 2, 2019 includes a $1 billion unsecured revolving credit facility that will expire on May 2, 2024. 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 Bank of America's alternate base rate plus a margin that ranges from 0.0% to 0.1% or LIBOR 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 amended and restated credit agreement includes customary affirmative and negative covenants. See “Short-Term Debt” above for more information. At July 31, 2020, $1 billion was outstanding under this revolving credit facility. We paid $2 million for interest on the unsecured revolving credit facility during the twelve months ended July 31, 2020 and $5 million during the twelve months ended July 31, 2018. We paid no interest on the unsecured revolving credit facility during the twelve months ended July 31, 2019. In August 2020, we repaid the $1 billion outstanding under this revolving credit facility.

Other Current Liabilities

Other current liabilities were as follows at the dates indicated:



	July 31,
(In millions)	2020		2019
Executive deferred compensation plan liabilities	$	123	$	108
Current portion of operating lease liabilities	46		—
Reserve for returns and credits	24		24
Reserve for promotional discounts and rebates	11		11
Current portion of dividend payable	6		7
Current portion of deferred rent	—		6
Interest payable	3		—
Other	84		46
Total other current liabilities	$	297	$	202