Business Context and Reporting Period
This Form 8-K was filed on April 19, 2013, by SAIC, Inc. and Science Applications International Corporation. The filing reports the entry into a material definitive agreement regarding the company's credit facilities in anticipation of a corporate spin-off of its technical, engineering, and enterprise information technology services business.
Key Financial Metrics
The filing does not provide specific values for revenue, profit, cash flow, margins, or total debt levels. However, it notes that as of the report date, no borrowings were outstanding under the Amended and Restated Four Year Credit Agreement.
Material Changes
On April 19, 2013, the company entered into Amendment No. 1 to its Credit Agreement dated March 11, 2011. Key changes include:
- EBITDA Calculation: Permits the add-back of certain expenses related to the anticipated spin-off.
- Debt Calculation: Excludes debt incurred in connection with the spin-off transaction from Consolidated Funded Debt calculations.
- Covenants: Modifies the required Consolidated Funded Debt to EBITDA ratio.
- Term Extension: Extends the agreement term by one year to March 11, 2017.
Outlook, Risks, and Management Commentary
The amendment is specifically designed to accommodate the financial mechanics of an anticipated spin-off transaction. The filing does not contain forward-looking guidance on revenue or earnings, nor does it detail specific risks beyond the structural changes to the credit agreement. The primary contingency addressed is the successful execution of the spin-off and the associated debt and expense treatments.
Investor Verification Checklist
- Verify the specific expenses eligible for add-back in the EBITDA calculation related to the spin-off.
- Confirm the exact revised Consolidated Funded Debt to EBITDA ratio required under the amendment.
- Monitor the timeline and regulatory approval status of the anticipated spin-off of the technical and IT services business.
- Review the full text of Exhibit 10.1 for detailed lender terms and conditions.