Caci International Inc 10-Q, filed Oct 24, 2024

Caci International Inc (CACI)

10-Q 2024-10-24 For: 2024-09-30

Added on April 12, 2026

About this 10-Q

Caci International Inc filed this 10-Q on October 24, 2024, covering the quarter ended September 30, 2024.

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.06B; up 11.2% from $1.85B a year earlier
Net income: $120.18M; up 39.7% from net income of $86.05M a year earlier
Diluted EPS: $5.33; up 41.8% from $3.76 a year earlier

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Delaware						54-1345888
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CACI	New York Stock Exchange


		PAGE
PART I:	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Operations	3

	Condensed Consolidated Statements of Comprehensive Income	4

	Condensed Consolidated Balance Sheets	5

	Condensed Consolidated Statements of Cash Flows	6

	Condensed Consolidated Statements of Shareholders’ Equity	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19

Item 4.	Controls and Procedures	19

PART II:	OTHER INFORMATION	21

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Mine Safety Disclosures	23

Item 5.	Other Information	23

Item 6.	Exhibits	24

	Signatures	25


	Three Months Ended September 30,
	2024		2023
Revenues	$	2,056,889	$	1,850,147
Costs of revenues:
Direct costs	1,414,424		1,272,918
Indirect costs and selling expenses	427,946		404,633
Depreciation and amortization	34,678		35,247
Total costs of revenues	1,877,048		1,712,798
Income from operations	179,841		137,349
Interest expense and other, net	23,970		25,571
Income before income taxes	155,871		111,778
Income taxes	35,694		25,731
Net income	$	120,177	$	86,047
Basic earnings per share	$	5.39	$	3.80
Diluted earnings per share	$	5.33	$	3.76
Weighted-average basic shares outstanding	22,304		22,647
Weighted-average diluted shares outstanding	22,539		22,894


	Three Months Ended September 30,
	2024		2023
Net income	$	120,177	$	86,047
Other comprehensive income (loss):
Foreign currency translation adjustment	16,170		(9,201)
Change in fair value of interest rate swap agreements, net of tax	(17,676)		5,432
Total other comprehensive loss, net of tax	(1,506)		(3,769)
Comprehensive income	$	118,671	$	82,278


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	September 30, 2024		June 30, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	440,706	$	133,961
Accounts receivable, net	1,069,611		1,031,311
Prepaid expenses and other current assets	236,781		209,257
Total current assets	1,747,098		1,374,529
Goodwill	4,166,015		4,154,844
Intangible assets, net	457,087		474,354
Property, plant and equipment, net	191,379		195,443
Operating lease right-of-use assets	339,748		305,637
Supplemental retirement savings plan assets	101,909		99,339
Accounts receivable, long-term	14,130		13,311
Other long-term assets	165,697		178,644
Total assets	$	7,183,063	$	6,796,101
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	61,250	$	61,250
Accounts payable	263,535		287,142
Accrued compensation and benefits	242,059		316,514
Other accrued expenses and current liabilities	434,254		413,354
Total current liabilities	1,001,098		1,078,260
Long-term debt, net of current portion	1,761,623		1,481,387
Supplemental retirement savings plan obligations, net of current portion	119,906		111,208
Deferred income taxes	156,933		169,808
Operating lease liabilities, noncurrent	380,480		325,046
Other long-term liabilities	111,417		112,185
Total liabilities	$	3,531,457	$	3,277,894
COMMITMENTS AND CONTINGENCIES (NOTE 9)
Shareholders’ equity:
Preferred stock $0.10 par value, 10,000 shares authorized, no shares issued or outstanding	$	—	$	—
Common stock $0.10 par value, 80,000 shares authorized; 43,045 shares issued and 22,305 outstanding at September 30, 2024 and 43,042 shares issued and 22,301 outstanding at June 30, 2024	4,305		4,304
Additional paid-in capital	645,917		631,191
Retained earnings	4,480,717		4,360,540
Accumulated other comprehensive loss	(14,028)		(12,522)
Treasury stock, at cost (20,740 and 20,740 shares, respectively)	(1,465,305)		(1,465,306)


Total shareholders’ equity	3,651,606		3,518,207
Total liabilities and shareholders’ equity	$	7,183,063	$	6,796,101


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Shareholders’ Equity
	Shares	Amount								Shares	Amount
Balance at June 30, 2024	43,042	$	4,304	$	631,191	$	4,360,540	$	(12,522)	20,740	$	(1,465,306)	$	3,518,207
Net income	—	—		—		120,177		—		—	—		120,177
Stock-based compensation expense	—	—		15,391		—		—		—	—		15,391
Tax withholdings on restricted share vestings	3	1		(567)		—		—		—	—		(566)
Other comprehensive loss, net of tax	—	—		—		—		(1,506)		—	—		(1,506)
Repurchases of common stock	—	—		(144)		—		—		8	(3,098)		(3,242)
Treasury stock issued under stock purchase plans	—	—		46		—		—		(8)	3,099		3,145
Balance at September 30, 2024	43,045	$	4,305	$	645,917	$	4,480,717	$	(14,028)	20,740	$	(1,465,305)	$	3,651,606

Balance at June 30, 2023	42,923	$	4,292	$	546,334	$	3,940,616	$	(4,916)	20,126	$	(1,261,992)	$	3,224,334
Net income	—	—		—		86,047		—		—	—		86,047
Stock-based compensation expense	—	—		10,024		—		—		—	—		10,024
Tax withholdings on restricted share vestings	6	1		(598)		—		—		—	—		(597)
Other comprehensive loss, net of tax	—	—		—		—		(3,769)		—	—		(3,769)
Repurchases of common stock	—	—		39,087		—		—		585	(193,744)		(154,657)
Treasury stock issued under stock purchase plans	—	—		38		—		—		(8)	2,613		2,651
Balance at September 30, 2023	42,929	$	4,293	$	594,885	$	4,026,663	$	(8,685)	20,703	$	(1,453,123)	$	3,164,033


	Domestic		International		Total
Balance at June 30, 2024	$	3,974,823	$	180,021	$	4,154,844
Goodwill acquired (1)	—		74		74
Foreign currency translation	636		10,461		11,097
Balance at September 30, 2024	$	3,975,459	$	190,556	$	4,166,015


	September 30, 2024						June 30, 2024
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
Customer contracts and related customer relationships	$	697,112	$	(363,603)	$	333,509	$	695,944	$	(353,159)	$	342,785
Acquired technologies	271,381		(147,803)		123,578		271,285		(139,716)		131,569
Total intangible assets	$	968,493	$	(511,406)	$	457,087	$	967,229	$	(492,875)	$	474,354


	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Domestic		International		Total		Domestic		International		Total
Cost-plus-fee	$	1,280,010	$	—	$	1,280,010	$	1,134,435	$	—	$	1,134,435
Fixed-price	439,240		36,016		475,256		467,216		34,861		502,077
Time-and-materials	277,071		24,552		301,623		193,517		20,118		213,635
Total	$	1,996,321	$	60,568	$	2,056,889	$	1,795,168	$	54,979	$	1,850,147


Description of Contract Related Balance	Financial Statement Classification	September 30, 2024		June 30, 2024
Billed and billable receivables	Accounts receivable, net	$	906,720	$	885,552
Contract assets – current unbilled receivables	Accounts receivable, net	162,891		145,759
Contract assets – current costs to obtain	Prepaid expenses and other current assets	6,505		6,142
Contract assets – noncurrent unbilled receivables	Accounts receivable, long-term	14,130		13,311
Contract assets – noncurrent costs to obtain	Other long-term assets	14,327		12,310
Contract liabilities – current deferred revenue and other contract liabilities	Other accrued expenses and current liabilities	(158,624)		(139,745)
Contract liabilities – noncurrent deferred revenue and other contract liabilities	Other long-term liabilities	(4,624)		(4,607)


	September 30, 2024		June 30, 2024
Materials, purchased parts and supplies	$	74,889	$	77,743
Work in process	15,084		13,331
Finished goods	37,341		27,365
Total	$	127,314	$	118,439


	As of and for the Three Months Ended September 30,
	2024		2023
Beginning balance:	$	250,000	$	200,000
Sales of receivables	959,019		695,260
Cash collections	(985,229)		(718,427)
Outstanding balance sold to Purchaser: (1)	223,790		176,833
Cash collected, not remitted to Purchaser (2)	(96,953)		(80,542)
Remaining sold receivables	$	126,837	$	96,291


	Three Months Ended September 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	120,177	$	86,047
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,678		35,247
Amortization of deferred financing costs	549		547


Stock-based compensation expense	15,391		10,024
Deferred income taxes	(7,086)		(7,812)
Changes in operating assets and liabilities, net of effect of business acquisitions:
Accounts receivable, net	(35,770)		(111,159)
Prepaid expenses and other assets	(40,308)		(37,343)
Accounts payable and other accrued expenses	(10,561)		154,469
Accrued compensation and benefits	(75,614)		(90,511)
Income taxes payable and receivable	30,609		23,803

Operating lease liabilities and assets, net	(1,054)		(868)
Long-term liabilities	3,650		7,644
Net cash provided by operating activities	34,661		70,088
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(11,476)		(13,991)
Acquisitions of businesses	(251)		(347)
Other	—		1,974
Net cash used in investing activities	(11,727)		(12,364)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings under bank credit facilities	1,289,000		732,500
Principal payments made under bank credit facilities	(1,009,313)		(640,156)

Proceeds from employee stock purchase plans	3,098		3,156
Repurchases of common stock	(3,242)		(140,364)
Payment of taxes for equity transactions	(187)		(697)
Net cash provided by (used in) financing activities	279,356		(45,561)
Effect of exchange rate changes on cash and cash equivalents	4,455		(2,393)
Net change in cash and cash equivalents	306,745		9,770
Cash and cash equivalents, beginning of period	133,961		115,776
Cash and cash equivalents, end of period	$	440,706	$	125,546
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION


	September 30, 2024		June 30, 2024
Bank credit facility – term loans	$	1,117,812	$	1,133,125
Bank credit facility – revolver loans	710,000		415,000
Principal amount of long-term debt	1,827,812		1,548,125
Less unamortized discounts and debt issuance costs	(4,939)		(5,488)
Total long-term debt	1,822,873		1,542,637
Less current portion	(61,250)		(61,250)
Long-term debt, net of current portion	$	1,761,623	$	1,481,387


	Three Months Ended September 30,
	2024		2023		Change
	Dollars						Percent
Department of Defense	$	1,534,533	$	1,352,306	$	182,227	13.5	%
Federal Civilian Agencies	439,371		407,344		32,027		7.9
Commercial and other	82,985		90,497		(7,512)		(8.3)
Total	$	2,056,889	$	1,850,147	$	206,742	11.2	%


	Three Months Ended September 30,
	2024		2023
Net cash provided by operating activities	$	34,661	$	70,088
Net cash used in investing activities	(11,727)		(12,364)
Net cash provided by (used in) financing activities	279,356		(45,561)
Effect of exchange rate changes on cash and cash equivalents	4,455		(2,393)
Net change in cash and cash equivalents	$	306,745	$	9,770


Description of Financial Instrument	Financial Statement Classification	Fair Value Hierarchy	September 30, 2024		June 30, 2024
			Fair Value
Contingent consideration	Other accrued expenses and current liabilities	Level 3	$	(3,621)	$	(3,061)
Contingent consideration	Other long-term liabilities	Level 3	$	(5,323)	$	(13,737)

Interest rate swap agreements	Other long-term liabilities	Level 2	$	(3,825)	$	—
Interest rate swap agreements	Prepaid expenses and other current assets	Level 2	$	1,312	$	—
Interest rate swap agreements	Other long-term assets	Level 2	$	12,188	$	33,327


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 2024	7,580	$	427.66	7,580	797,292
August 2024	—	—		—	797,292
September 2024	—	—		—	797,292
Total	7,580	$	427.66	7,580


	CACI International Inc
	Registrant

Date: October 24, 2024	By:	/s/ John S. Mengucci
		John S. Mengucci President, Chief Executive Officer and Director (Principal Executive Officer)

Date: October 24, 2024	By:	/s/ Jeffrey D. MacLauchlan
		Jeffrey D. MacLauchlan Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

Date: October 24, 2024	By:	/s/ Eric F. Blazer
		Eric F. Blazer Senior Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)


JPMORGAN CHASE BANK, N.A.
By:			/s/ Michael Mastronikolas
			Name: Michael Mastronikolas Title: Vice President


CACI INTERNATIONAL INC.
By:			/s/ Jeffrey D. MacLauchlan
			Name: Jeffrey D. MacLauchlan Title: Executive Vice President, Chief Financial Officer, and Treasurer


Borrower:			CACI International Inc., a Delaware corporation (the “Borrower”).
Administrative Agent:			JPMorgan Chase Bank, N.A. (“JPMCB”) will act as sole and exclusive administrative agent (in such capacity, the “Interim Administrative Agent”) for a syndicate of banks, financial institutions and other lenders, excluding any Disqualified Institutions (the “Interim Lenders”), and will perform the duties customarily associated with such roles.
Interim Facility Lead Arrangers and Bookrunners:			JPMCB will act as lead arranger and bookrunner for the Interim Facility (together with its designated affiliates and any additional joint lead arrangers or bookrunners appointed pursuant to Section 2 of the Commitment Letter (if any), each in such capacity, an “Interim Facility Lead Arranger” and, together, the “Interim Facility Lead Arrangers”), and will perform the duties customarily associated with such roles.
Interim Facility:			A senior secured bridge loan facility (the “Interim Facility” and the loans thereunder, the “Interim Loans”) in an aggregate principal amount of $750 million minus the aggregate gross cash proceeds received by Borrower and its subsidiaries on or prior to the Closing Date from any Replacement Financing.
Use of Proceeds:			The proceeds of the borrowings under the Interim Facility, together with, the proceeds of any Replacement Financing consummated on or before the Closing Date and the proceeds of any revolving loans made on the Closing Date under the Existing Credit Agreement (as defined below) shall be used on the Closing Date solely to finance, in part, the Acquisition, repayment of indebtedness under that Credit Agreement, dated October 20, 2022 (as amended), among the Target, Mainstreet Bank, as administrative agent and the lender party thereto (the “Acquired Business Debt Refinancing”) and to pay fees and expenses incurred in connection with the Transactions.
Availability:			The Interim Facility will be available in a single drawing on the Closing Date. Amounts borrowed under the Interim Facility that are repaid or prepaid may not be reborrowed.


Guarantees:			Each Guarantor of the existing credit facilities under the Existing Credit Agreement (as defined below) (the “Existing Facilities”) will guarantee (the “Guarantees”) the Interim Facility on a senior secured basis, subject to the same exceptions and limitations applicable to such Guarantors’ guarantees of the Borrower’s obligations under the Existing Credit Agreement. The Guarantees will be automatically released upon release of the corresponding guarantees of such obligations under the Existing Credit Agreement and other material indebtedness; provided that such released Guarantees shall be reinstated if such released Guarantors are required to subsequently guarantee obligations under the Existing Credit Agreement or other material indebtedness.
Security:			Subject to the Funds Certain Provisions, the Interim Facility and the payment guarantees thereunder will be secured by the same assets that are required to secure the Existing Facilities (collectively, the “Collateral”) and on a pari passu basis with the obligations in respect of the Existing Facilities. The relative rights and priorities in the Collateral among the Interim Facility and Existing Facilities will be set forth in a customary intercreditor agreement, dated as of the Closing Date, in form and substance reasonably satisfactory to the Interim Administrative Agent and the Borrower. “Existing Credit Agreement” means the Amended and Restated Credit Agreement, dated as of December 13, 2021, among the Borrower, the subsidiaries of the Borrower from time to time party thereto, Bank of America, N.A., in its capacity as administrative agent and the lenders from time to time party thereto (as amended, amended and restated, supplemented or otherwise modified through the date of the Commitment Letter (or as otherwise consented to by the Lead Arrangers)).
Interest Rates:			As set forth on Annex I hereto.
Interest Payments and Calculation:			Same as the Existing Credit Agreement.
Default Rate:			Same as the Existing Credit Agreement.
Cost and Yield Protection:			Same as the Existing Credit Agreement.
Maturity:			The Interim Facility will mature on the date that is 364 days after the Closing Date (the “Interim Loan Maturity Date”).
Documentation Standard:			The credit agreement and associated documents for the Interim Facility (together, the “Interim Facility Documentation”) (i) shall be based upon the Existing Credit Agreement and the related associated documents with modifications for “interim facility” specific provisions that are not applicable to the Existing Credit Agreement, and (ii) shall contain the terms and conditions set forth in this Interim Facility Term Sheet (collectively, the “Documentation Standard”), in each case, subject to the Funds Certain Provisions.


Mandatory Prepayments:			Subject to the Documentation Standard, mandatory prepayments shall be required (i) from 100% of the proceeds of equity issuances and debt issuances with exceptions to be agreed and (ii) subject to exceptions and reinvestment rights substantially consistent with the Existing Facilities (and an exception allowing required prepayments of secured debt), asset sale and casualty event proceeds. Prior to the Closing Date and subject to certain exceptions to be mutually agreed, commitments in respect of the Interim Facility shall be automatically and permanently reduced on a dollar-for-dollar basis by: (i) the incurrence of any indebtedness (other than revolving indebtedness) for borrowed money by the Borrower or any of its subsidiaries or the receipt by the Borrower or any of its affiliates of commitments in respect of indebtedness (other than revolving indebtedness) for borrowed money (including commitments in respect of the Best Efforts Term Loan A Facility and Best Efforts Term Loan B Facility) so long as the conditions to borrowing of such indebtedness on the Closing Date are not more restrictive than the conditions to borrowing of the Interim Facility on the Closing Date; (ii) the incurrence of any revolving indebtedness for borrowed money by the Borrower or any of its subsidiaries or the receipt by the Borrower or any of its affiliates of revolving commitments in respect of indebtedness for borrowed money (other than revolving indebtedness incurred in order to finance the acquisition identified to the Lead Arrangers as “Cirrus” and the Transactions; provided that, with respect to the acquisition identified as “Cirrus”, such revolving indebtedness incurred in order to finance such acquisition may not exceed in the aggregate $340.0 million), in each case in excess of an aggregate principal amount of $525.0 million and so long as the conditions to borrowing of such indebtedness on the Closing Date are not more restrictive than the conditions to borrowing of the Interim Facility on the Closing Date; (iii) the issuance and sale of any debt securities (including the Notes Financing or any debt securities convertible or exchangeable into equity securities or hybrid debt-equity securities) by the Borrower or any of its subsidiaries; (iv) 100% of the net cash proceeds from issuances of new equity by the Borrower (including the Equity Financing); provided that proceeds of the following equity issuances shall be excluded: (i) equity issuances made pursuant to employee compensation and benefit plans, (ii) issuances of new equity to the shareholders and option holders of the Target in connection with the Acquisition and (iii) equity issued to sellers as consideration for any other acquisition by the Borrower or its subsidiaries; and (v) 100% of the net cash proceeds from any non-ordinary course sale or other disposition of assets (including as a result of casualty or condemnation) (it being agreed that any transaction excluded from the definition of “Disposition” in the Existing Credit Agreement (other than any recovery event) shall be considered in the ordinary course of business) by Borrower and its subsidiaries; provided that the proceeds of the following transactions shall be excluded: (i) each voluntary asset disposition in an individual amount (which shall include a series of related dispositions) not in excess of an amount to be agreed and (ii) any non-ordinary course sale or other disposition that are reinvested, or committed to be reinvested, in assets to be used in the Borrower’s business within 12 months of receipt of such proceeds.

Optional Prepayments:			The Interim Loans may be prepaid at par prior to the Interim Loan Maturity Date, in whole or in part without premium or penalty, upon written notice, at the option of the Borrower, at any time, together with accrued and unpaid interest to the prepayment date and break funding payments, if applicable.
Conditions Precedent to Borrowing:			The availability of the Interim Facility and the funding of the Interim Loans on the Closing Date will be subject only to Funding Conditions, subject in each case to the Funds Certain Provisions.
Representations and Warranties:			Consistent with the Existing Credit Agreement with such changes as are appropriate to reflect the interim loan nature of the Interim Loans.
Affirmative and Negative Covenants:			Consistent with the Documentation Standard.
Financial Covenants:			Same as the Existing Credit Agreement.
Events of Default:			Consistent with the Documentation Standard.


Assignments and Participation:			Each Interim Lender will be permitted to make assignments in minimum amounts of $1,000,000 to other entities approved by (x) the Interim Administrative Agent and (y) so long as no event of default has occurred and is continuing, the Borrower, each such approval not to be unreasonably withheld or delayed; provided, however, that (i) no approval of the Borrower shall be required in connection with assignments to other Interim Lenders or any of their affiliates or approved funds, (ii) the Borrower shall be deemed to have given consent to an assignment if it shall have failed to respond to a written notice thereof within 5 business days and (iii) no approval of the Interim Administrative Agent shall be required in connection with assignments to other Interim Lenders. Each Interim Lender will also have the right, without consent of the Borrower or the Interim Administrative Agent, to assign as security all or part of its rights under the Interim Facility Documentation to any Federal Reserve Bank. Interim Lenders will be permitted to sell participations with voting rights limited to customary significant matters consistent with the Documentation Standard. An assignment fee in the amount of $3,500 will be charged with respect to each assignment unless waived by the Interim Administrative Agent in its sole discretion. Assignments of loans under the Interim Facility to the Borrower or any of their subsidiaries shall not be permitted.
Waivers and Amendments:			Consistent with the Documentation Standard.
Expenses and Indemnification:			Consistent with the Documentation Standard.
Governing Law and Forum:			New York.
Counsel to the Interim Administrative Agent and the Interim Facility Lead Arrangers:			Simpson Thacher & Bartlett LLP.


Interest Rates:			The Borrower may elect that the Interim Loans comprising each borrowing be maintained as: ABR Loans (as defined below), which shall bear interest at a rate per annum equal to the ABR (as defined below) plus the Applicable Margin (as defined below); or Term Benchmark (as defined below) Loans, which shall bear interest at a rate per annum equal to the Adjusted Term SOFR Rate (as defined below) plus the Applicable Margin. As used herein: “ABR” means the highest of (i) the rate of interest last quoted by The Wall Street Journal in the U.S. as the prime rate in effect (the “Prime Rate”), (ii) the NYFRB Rate from time to time plus 0.5% and (iii) the Adjusted Term SOFR Rate for a one month interest period plus 1%. “ABR Loans” means the borrowings made under the Interim Facility bearing interest based upon ABR. “Adjusted Term SOFR Rate” means the Term SOFR Rate, plus 0.10%; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of calculating such rate. “Applicable Margin” means (x) 0.50%, in the case of ABR Loans and (y) 1.50%, in the case of Term Benchmark Loans; provided that from and after the delivery by the Borrower to the Interim Administrative Agent of the Borrower’s financial statements for the period ending one full fiscal quarter following the Closing Date, the Applicable Margin for Interim Loans shall be determined in accordance with the Pricing Grid set forth below (the “Pricing Grid”) (with the level being set based on the Consolidated Total Net Leverage Ratio (as defined in the Existing Credit Agreement)); provided further that the interest rates set forth in the pricing grid below shall increase by an additional 25 basis points at the end of each subsequent three-month period for as long as the Interim Loans are outstanding. Consolidated Total Net Leverage Ratio Term Benchmark Loans ABR Loans < 1.00:1.00 1.00% 0.00% ≥ 1.00:1.00 but < 2.00:1.00 1.125% 0.125% ≥ 2.00:1.00 but < 2.75:1.00 1.25% 0.25% ≥ 2.75:1.00 but < 3.25:1.00 1.50% 0.50% ≥ 3.25:1.00 but < 4.00:1.00 1.75% 0.75% ≥ 4.00:1.00 2.00% 1.00% “CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator). “Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding business day by the NYFRB as the federal funds effective rate, provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to zero for the purposes of calculating such rate. “Floor” means the benchmark rate floor, if any, provided in the Interim Facility Documentation initially (as of the execution of the Interim Facility Documentation, the modification, amendment or renewal of the Interim Facility Documentation or otherwise) with respect to the Adjusted Term SOFR Rate and/or the Term SOFR Rate. For the avoidance of doubt the initial Floor for the Adjusted Term SOFR Rate shall be 0%. “Interest Period” means, with respect to the Term Benchmark, a period of one, three or six months. “NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day; provided, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for the purposes of calculating such rate. “Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in U.S. Dollars by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding business day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate). “SOFR” means, with respect to any business day, a rate per annum equal to the secured overnight financing rate for such business day published by the NYFRB on the NYFRB’s on the immediately succeeding business day. “Term Benchmark” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted Term SOFR Rate. “Term SOFR Rate” means, for any Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such Interest Period, as such rate is published by the CME Term SOFR Administrator. “Term SOFR Reference Rate” means, for any day and time, for any tenor comparable to the applicable Interest Period, the rate per annum published by the CME Term SOFR Administrator and identified by the Interim Administrative Agent as the forward-looking term rate based on SOFR. “U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. The Interim Facility Documentation will contain provisions to be mutually agreed with respect to a replacement of the Adjusted Term SOFR Rate.


Interim Facility Duration Fee:			If the Interim Loans are funded on the Closing Date, you agree to pay to each Initial Lender, for its own account, a duration fee (the “Interim Facility Duration Fee”) equal to (i) 0.50% of the aggregate principal amount of the Interim Loans of such Initial Lender outstanding on the date that is 90 days after the Closing Date, which shall be due and payable in full in cash on such date (or if such date is not a business day, the next business day), (ii) 0.75% of the aggregate principal amount of the Interim Loans of such Initial Lender outstanding on the date that is 180 days after the Closing Date, which shall be due and payable in full in cash on such date (or if such date is not a business day, the next business day) and (iii) 1.00% of the aggregate principal amount of the Interim Loans of such Initial Lender outstanding on the date that is 270 days after the Closing Date, which shall be due and payable in cash on such date (or if such date is not a business day, the next business day).
Ticking Fee			The Borrower will pay a fee (the “Ticking Fee”), for the ratable benefit of the Lenders, in an amount equal to 0.225% per annum of the daily aggregate amount of the commitments under the Interim Facility, accruing from and including the day that is 90 days following the date of the Commitment Letter and to but excluding the Fee Payment Date (as defined below), which fee shall be payable upon the Fee Payment Date (or earlier termination of the commitments with respect to the Interim Facility). For the purposes hereof, “Fee Payment Date” means the earlier of (i) termination or expiration of the commitments under the Interim Facility and (ii) the Closing Date. The Ticking Fee shall be calculated on the basis of a 360-day year (and on the basis of the actual number of days elapsed).