XML 32 R14.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Long-Term Obligations and Commitments | 6 Months Ended
--- | ---
Jan. 31, 2022
Debt Disclosure [Abstract] |
Long-Term Obligations and Commitments |
7. 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 dates indicated:
(In millions) | January 31, 2022 |  | July 31, 2021 |  | Effective 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 | (12) |  |  | (14) |  |  |
Net carrying value senior unsecured notes | $ | 1,988 |  |  | $ | 1,986 |  |  |
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 $12 million in interest on the Notes during each of the six months ended January 31, 2022 and 2021. 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 January 31, 2022 we were compliant with all covenants governing the Notes.
Term Loan
On November 1, 2021 we 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. 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 customer 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 mar gin that range 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. The credit agreement includes customary affirmative and negative covenants. See Note 6, "Current Liabilities - Unsecured Revolving Credit Facility," for more information. At January 31, 2022, $4.7 billion was outstanding under the term loan. The carrying value of the term loan is net of debt issuance costs and approximates its fair value. We paid $9 million in interest on the term loan during the six months ended January 31, 2022. We paid $2 million in interest on our previous term loan under the 2019 Credit Facility during the six months January 31, 2021.
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 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 January 31, 2022 we were compliant with all required covenants. At January 31, 2022, $50 million was outstanding under this facility and the weighted-average interest rate was 2.81%, which includes the interest on the unused committed portion. The outstanding balance is secured by cash and receivables of the subsidiary totaling $268 million. Interest on the facility is payable monthly. We paid $1 million of interest on the secured revolving credit facility during the six months ended January 31, 2022 and $1 million during the six months ended January 31, 2021. Future principal payments for long-term debt at January 31, 2022 were as shown in the table below.
(In millions) |
Fiscal year ending July 31, |
2022 (excluding the six months ended January 31, 2022) | $ | — |
2023 | 500 |
2024 | 50 |
2025 | 5,200 |
2026 | — |
Thereafter | 1,000 |
Total future principal payments for long-term debt | $ | 6,750 |
Other Long-Term Obligations
Other long-term obligations were as follows at the dates indicated:
(In millions) | January 31, 2022 |  | July 31, 2021
Income tax liabilities | $ | 25 |  |  | $ | 24 |
Dividend payable | 11 |  |  | 8 |
Deferred revenue | 5 |  |  | 8 |
Other | 32 |  |  | 13 |
Total other long-term obligations | $ | 73 |  |  | $ | 53 |
Unconditional Purchase Obligations
We describe our purchase obligations in Note 8 to the financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2021. In September 2021 we signed an agreement that includes non-cancellable commitments of $555 million through July 31, 2044 for an exclusive naming rights partnership with the Los Angeles Clippers for the Intuit Dome, a new sports facility. The commitment is $1.5 million per year for the first three years and $27.5 million per year for the remainder of the agreement. Additionally, in November 2021 we amended an existing cloud services agreement for an additional five years. Under the amended agreement, we have an annual minimum commitment of $150 million per year and a total minimum purchase commitment of $1.2 billion over the five year contract term. There were no other significant changes in our purchase obligations during the six months ended January 31, 2022.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration