Business Context and Reporting Period
Company: Science Applications International Corporation (SAIC)
Filing Type: Form 8-K (Current Report)
Date of Report: February 12, 2020
Event Date: January 21, 2020
SAIC entered into a Master Accounts Receivable Purchase Agreement with MUFG Bank, Ltd. to establish a financing facility for the sale of eligible receivables arising from contracts with U.S. federal government agencies.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or existing debt levels. It details a new financing arrangement with the following specific metrics:
- Facility Limit: Up to $200 million.
- Facility Term: One year.
- Transaction Structure: Continuous non-recourse true sale of eligible receivables.
- Use of Proceeds: General corporate purposes.
Material Changes
The primary material change is the creation of a new direct financial obligation and off-balance sheet arrangement via the entry into the Purchase Agreement and a corresponding Performance Undertaking. The Performance Undertaking guarantees the obligations of the Initial Sellers (SAIC and Engility Services, LLC) and any future subsidiary sellers added to the agreement.
Guidance, Outlook, and Risks
Management Commentary: The Company expects to utilize proceeds from the facility for general corporate purposes. The Facility Limit is subject to adjustment based on the availability of eligible receivables and satisfaction of certain conditions.
Risks and Contingencies: The filing incorporates the full terms of the Purchase Agreement and Performance Undertaking by reference. The transaction involves a guarantee of subsidiary obligations, creating a direct financial obligation for the registrant.
Investor Verification Checklist
- Review the full text of the Master Accounts Receivable Purchase Agreement (Exhibit 10.1) for specific eligibility criteria of receivables.
- Examine the Performance Undertaking (Exhibit 10.2) to understand the scope of the guarantee provided by SAIC.
- Verify the impact of this non-recourse true sale structure on the Company's balance sheet and liquidity ratios in subsequent quarterly reports.
- Monitor future filings for any adjustments to the $200 million Facility Limit.