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v3.24.2

Debt | 3 Months Ended
--- | ---
Jun. 30, 2024
Debt Disclosure [Abstract] |
Debt | Debt Debt consisted of the following on the dates below:
| June 30, 2024 |  | March 31, 2024 |
| Interest Rate |  | Outstanding Balance |  | Interest Rate |  | Outstanding Balance |
Term Loan A | 6.679 | % |  | $ | 1,577,813 |  |  | 6.677 | % |  | $ | 1,588,125 |  |
Senior Notes due 2028 | 3.875 | % |  | 700,000 |  |  | 3.875 | % |  | 700,000 |  |
Senior Notes due 2029 | 4.000 | % |  | 500,000 |  |  | 4.000 | % |  | 500,000 |  |
Senior Notes due 2033 | 5.950 | % |  | 650,000 |  |  | 5.950 | % |  | 650,000 |  |
Less: Unamortized debt issuance costs and discount on debt |  |  | (25,274) |  |  |  |  | (26,309) |  |
Total |  |  | 3,402,539 |  |  |  |  | 3,411,816 |  |
Less: Current portion of long-term debt |  |  | (72,188) |  |  |  |  | (61,875) |  |
Long-term debt, net of current portion |  |  | $ | 3,330,351 |  |  |  |  | $ | 3,349,941 |  |
Credit Agreement Booz Allen Hamilton Inc. (“Booz Allen Hamilton”), Booz Allen Hamilton Investor Corporation (“Investor”), and certain wholly owned subsidiaries of Booz Allen Hamilton are parties to a Credit Agreement dated as of July 31, 2012, as amended (the “Credit Agreement”), with certain institutional lenders and Bank of America, N.A., as Administrative Agent, Collateral Agent and Issuing Lender. As of June 30, 2024, the Credit Agreement provided Booz Allen Hamilton with a $1,577.8 million Term Loan A (“Term Loan A”) and a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), with a sub-limit for letters of credit of $200.0 million. As of June 30, 2024, the maturity date of Term Loan A and the Revolving Commitments is September 7, 2027. Voluntary prepayments of Term Loan A and the Revolving Loans are permitted at any time, in minimum principal amounts, without premium or penalty. Booz Allen Hamilton’s obligations and the guarantors’ guarantees under the Credit Agreement were secured by a first priority lien on substantially all of the assets (including capital stock of subsidiaries) of Booz Allen Hamilton, Investor and the subsidiary guarantors, subject to certain exceptions set forth in the Credit Agreement and related documentation; such security was released in connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P. On September 7, 2022 (the “Ninth Amendment Effective Date”), the previously outstanding Term Loan B loans under the Credit Agreement were prepaid in full. On July 27, 2023 (the “Tenth Amendment Effective Date”), Booz Allen Hamilton entered into a Tenth Amendment (the “Amendment”) to the Credit Agreement (as amended prior to the Tenth Amendment Effective Date, the “Existing Credit Agreement” and, as amended by the Amendment, the “Amended Credit Agreement”) with Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and the lenders and other financial institutions party thereto, in order to make permanent certain changes to the Existing Credit Agreement in connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P and prepaying the Term Loan B loans in full and to make certain additional changes in connection therewith, including, among other things, (i) removing the requirements for the obligations under the Amended Credit Agreement to be secured, (ii) removing the requirement for any subsidiary or other affiliate of Booz Allen Hamilton (other than the Company) to provide any guarantee of the obligations under the Amended Credit Agreement, and (iii) removing or modifying certain covenants applicable to Booz Allen Hamilton. Pursuant to the Amendment, all guarantees in respect of the Existing Credit Agreement have been released. The Amendment did not impact any of the terms of the Credit Agreement related to amortization or payments. On the Tenth Amendment Effective Date in connection with the Amendment, the Company entered into a Guarantee Agreement (the “Guarantee Agreement”) in favor of the Administrative Agent, pursuant to which the Company guarantees on an unsecured basis the obligations of Booz Allen Hamilton under the Amended Credit Agreement subject to certain conditions. Pursuant to the Amended Credit Agreement Booz Allen Hamilton has the option, though not any obligation, to join one or more of its domestic subsidiaries as a guarantor under the Guarantee Agreement. Term Loan A amortizes in consecutive quarterly installments in an amount equal to (i) on the last business day of each full fiscal quarter that begins after the Ninth Amendment Effective Date but on or before the two year anniversary of the Ninth Amendment Effective Date, 0.625% of the stated principal amount of Term Loan A and (ii) on the last business day of each full fiscal quarter that begins after the two year anniversary of the Ninth Amendment Effective Date but before the five year anniversary of the Ninth Amendment Effective Date, 1.25% of the stated principal amount of Term Loan A. The remaining balance of Term Loan A will be payable upon maturity. The rate at which Term Loan A and the Revolving Loans bear interest will be based either on Term SOFR (subject to a 0.10% adjustment and a floor of zero) for the applicable interest period or a base rate (equal to the highest of (i) the administrative agent’s prime corporate rate, (ii) the overnight federal funds rate plus 0.50% and (iii) three-month Term SOFR (subject to a 0.10% adjustment and a floor of zero) plus 1.00%), in each case plus an applicable margin, payable at the end of the applicable interest period and in any event at least quarterly. The applicable margin for Term Loan A and the Revolving Loans ranges from 1.00% to 2.00% for Term SOFR loans and zero to 1.00% for base rate loans, in each case based on the lower of (i) the applicable rate per annum determined pursuant to a consolidated total net leverage ratio grid and (ii) the applicable rate per annum determined pursuant to a ratings grid. Unused Revolving Commitments are subject to a quarterly fee ranging from 0.10% to 0.35% based on the lower of (i) the applicable fee rate per annum determined pursuant to a consolidated total net leverage ratio grid and (ii) the applicable fee rate per annum determined pursuant to a ratings grid. Booz Allen Hamilton has also agreed to pay customary letter of credit and agency fees. The Company occasionally borrows under the Revolving Credit Facility for our working capital needs. During the first quarter of fiscal 2024, we borrowed $75.0 million on our Revolving Credit Facility for working capital needs, which was subsequently repaid in the second quarter of fiscal 2024. There were no borrowings during the first quarter of fiscal 2025 and as of June 30, 2024 and March 31, 2024, respectively, there was no outstanding balance on the Revolving Credit Facility. Borrowings under Term Loan A, and if used, the Revolving Credit Facility, incur interest at a variable rate. As of June 30, 2024, The Company had interest rate swaps with an aggregate notional amount of $550.0 million. These instruments hedge the variability of cash outflows for interest payments on a portion of the Company’s floating rate borrowings under the Credit Agreement. The Company's objectives in using cash flow hedges are to reduce volatility due to interest rate movements and to add stability to interest expense (See Note 9, “Derivatives,” to our condensed consolidated financial statements). Interest payments made on the Company’s term loan during the quarter ended June 30, 2024 and 2023, respectively, were $26.8 million and $26.1 million. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. In connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P, certain activities previously restricted by certain negative covenants are permitted subject to pro forma compliance with the financial covenants and no events of default having occurred or are continuing. In addition, Booz Allen Hamilton is required to meet certain financial covenants at each quarter end, specifically the consolidated net total leverage ratio. As of June 30, 2024 and March 31, 2024, Booz Allen Hamilton was in compliance with all financial covenants associated with its debt and debt-like instruments. Senior Notes The following table summarizes the material terms of the Company’s Senior Notes as of June 30, 2024:
| Indenture Date | Principal | Interest Rate | Maturity Date | Interest Payable | Issuance Costs
Senior Notes due 2033 | 8/4/2023 | $ | 650,000 |  | 5.950% | 8/4/2033 | February and August 4 | $ | 12,400 |
Senior Notes due 2029 | 6/17/2021 | 500,000 |  | 4.000% | 7/1/2029 | July and January 1 | 6,500 |
Senior Notes due 2028 | 8/24/2020 | 700,000 |  | 3.875% | 9/1/2028 | March and September 1 | 9,200 |
Total |  | $ | 1,850,000 |  |  |  |  | $ | 28,100 |
Interest is payable semi-annually in cash in arrears, with the principal due at maturity. Issuance Costs were recorded as an offset against the carrying value of respective debt and are being amortized to interest expense over the term of the respective debt. For further information on the Senior Notes, including terms, conditions, restrictions and redemption options, see Note 10, “Debt,” of the Company’s consolidated financial statements included in the fiscal 2024 Annual Report on Form 10-K. All Senior Notes’ indentures contain certain covenants, events of default and other customary provisions. In connection with the Senior Notes obtaining investment grade ratings from Moody's and S&P in January 2023, certain negative covenants in the indentures governing the Senior Notes 2028 and Senior Notes 2029 were suspended, and the related guarantees were released. The Senior Notes due 2033 are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Booz Allen Hamilton Holding Corporation, pursuant to the relevant indenture. Interest Expense Interest expense consisted of the following:
|  |  | Three Months Ended June 30,
|  |  |  |  | 2024 |  | 2023
|  |  | (In thousands)
Term Loan A |  |  |  |  | 26,789 |  |  | 26,103 |
Revolving Credit Facility |  |  |  |  | — |  |  | 17 |
Senior Notes |  |  |  |  | 21,450 |  |  | 11,781 |
Amortization of Debt Issuance Cost (DIC) and Original Issue Discount (OID) (1) |  |  |  |  | 1,351 |  |  | 1,027 |
Interest Rate Swaps |  |  |  |  | (3,760) |  |  | (3,568) |
Other |  |  |  |  | 101 |  |  | 114 |
Total Interest Expense |  |  |  |  | $ | 45,931 |  |  | $ | 35,474 |
(1) DIC and OID on the Term Loans and Senior Notes are recorded as a reduction of long-term debt in the condensed consolidated balance sheet and are amortized ratably over the life of the related debt using the effective rate method. DIC on the Company’s Revolving Credit Facility is recorded as a long-term asset on the condensed consolidated balance sheet and amortized ratably over the term of the Revolving Credit Facility.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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