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Long-term Debt | 9 Months Ended
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Mar. 31, 2016
Long-Term Debt [Abstract] |
Long-term Debt |
6. | Long-term Debt
Long-term debt consisted of the following (in thousands):
|  | March 31, |  |  | June 30, |
|  | 2016 |  |  | 2015 |
Bank credit facility – term loans |  | $ | 1,046,324 |  |  | $ | 779,297 |
Bank credit facility – revolver loans |  |  | 457,000 |  |  |  | 295,000 |
Principal amount of long-term debt |  |  | 1,503,324 |  |  |  | 1,074,297 |
Less unamortized debt issuance costs (1) |  |  | (17,922 | ) |  |  | (10,733 | )
Total long-term debt |  |  | 1,485,402 |  |  |  | 1,063,564 |
Less current portion |  |  | (53,965 | ) |  |  | (38,965 | )
Long-term debt, net of current portion |  | $ | 1,431,437 |  |  | $ | 1,024,599 |
(1) | Balance as of June 30, 2015 has been adjusted for the reclassification of debt issuance costs related to the adoption of ASU 2015-03. See Note 2 for additional information. |
Bank Credit Facility The Company has a $1,981.3 million credit facility (the Credit Facility), which consists of an $850.0 million revolving credit facility (the Revolving Facility) and a $1,131.3 million term loan (the Term Loan). The Revolving Facility has subfacilities of $100.0 million for same-day swing line loan borrowings and $25.0 million for stand-by letters of credit. At any time and so long as no default has occurred, the Company has the right to increase the Revolving Facility or the Term Loan in an aggregate principal amount of up to the greater of $400.0 million or an amount subject to 2.75 times senior secured leverage, calculated assuming the Revolving Facility is fully drawn, with applicable lender approvals. The Credit Facility is available to refinance existing indebtedness and for general corporate purposes, including working capital expenses and capital expenditures. The Credit Facility was amended during the third quarter of FY16 in connection with the Company’s acquisition of NSS (s ee Note 3). CACI financed the transaction by borrowing $250.0 million under its existing Revolving Facility and by entering into an eighth amendment and first incremental facility amendment to its Credit Facility to allow for the inc urrence of $300.0 million in additional Term Loans. The Revolving Facility is a secured facility that permits continuously renewable borrowings of up to $850.0 million. As of March 31, 2016, the Company had $457.0 million outstanding under the Revolving Facility, no borrowings on the swing line and an outstanding letter of credit of $0.4 million. The Company pays a quarterly facility fee for the unused portion of the Revolving Facility. The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $13.5 million through June 30, 2018 and $27.0 million thereafter until the balance is due in full on June 1, 2020. As of March 31, 2016, the Company had $1,046.3 million outstanding under the Term Loan. The interest rates applicable to loans under the Credit Facility are floating interest rates that, at the Company’s option, equal a base rate or a Eurodollar rate plus, in each case, an applicable rate based upon the Company’s consolidated total leverage ratio. As of March 31, 2016, the effective interest rate, including the impact of the Company’s floating-to-fixed interest rate swap agreements and excluding the effect of amortization of debt financing costs, for the outstanding borrowings under the Credit Facility was 3.0 percent. The Credit Facility requires the Company to comply with certain financial covenants, including a maximum senior secured leverage ratio, a maximum total leverage ratio and a minimum fixed charge coverage ratio. The Credit Facility also includes customary negative covenants restricting or limiting the Company’s ability to guarantee or incur additional indebtedness, grant liens or other security interests to third parties, make loans or investments, transfer assets, declare dividends or redeem or repurchase capital stock or make other distributions, prepay subordinated indebtedness and engage in mergers, acquisitions or other business combinations, in each case except as expressly permitted under the Credit Facility. As of March 31, 2016, the Company was in compliance with all of the financial covenants. A majority of the Company’s assets serve as collateral under the Credit Facility. The Company recorded $18.7 million of debt issuance costs as of March 31, 2016. All debt issuance costs are being amortized from the date incurred to the expiration date of the Credit Facility. As of March 31, 2016, the unamortized balance of $17.9 million is included as a reduction to the carrying value of long-term debt. Convertible Notes Payable Effective May 16, 2007, the Company issued at par value $300.0 million convertible notes (the Convertible Notes) which matured on May 1, 2014. Upon maturity, the aggregate conversion value was $406.8 million. Accordingly, the Company paid note holders the outstanding principal value totaling $300.0 million in cash and issued approximately 1.4 million shares of our common stock for the remaining aggregate conversion value. Concurrently with the issuance of our common stock upon conversion, the Company received 1.4 million shares of our common stock pursuant to the terms of the call option hedge transaction described below. The Company included these shares within treasury stock on our consolidated balance sheet. In connection with the issuance of the Convertible Notes in May 2007, we entered into separate call option hedge and warrant transactions to reduce the potential dilutive impact upon the conversion of the Convertible Notes. The Call Options and the Warrants (each as defined below) are separate and legally distinct instruments that bind CACI and the counterparties and have no binding effect on the holders of the Convertible Notes. Call Options and Warrants The Company purchased in a private transaction at a cost of $84.4 million call options (the Call Options) to purchase approximately 5.5 million shares of its common stock at a price equal to the conversion price of $54.65 per share. The cost of the Call Options was recorded as a reduction of additional paid-in capital. The Call Options allowed CACI to receive shares of its common stock from the counterparties equal to the amount of common stock related to the excess conversion value that CACI would pay the holders of the Convertible Notes upon conversion. The Company exercised the call options upon the maturity and conversion of the Convertible Notes and received 1.4 million shares of our common stock. In addition, the Company sold warrants (the Warrants) to issue approximately 5.5 million shares of CACI common stock at a strike price of $68.31 per share. The proceeds from the sale of the Warrants totaled $56.5 million and were recorded as an increase to additional paid-in capital. The Warrants settled daily over 90 trading days which began in August 2014 and ended in December 2014. We issued 497,550 shares for settlement of the Warrants. Cash Flow Hedges The Company periodically uses derivative financial instruments as part of a strategy to manage exposure to market risks associated with interest rate fluctuations. The Company has entered into several floating-to-fixed interest rate swap agreements for an aggregate notional amount of $600.0 million which hedge a portion of the Company’s floating rate indebtedness. The swaps mature at various dates through 2020. The Company has designated the swaps as cash flow hedges. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these swaps are designated as effective or ineffective. Realized gains and losses in connection with each required interest payment are reclassified from accumulated other comprehensive income or loss to interest expense. The Company does not hold or issue derivative financial instruments for trading purposes. The effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive loss for the three and nine months ended March 31, 2016 and 2015 is as follows (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Gain (loss) recognized in other comprehensive income |  | $ | (5,621 | ) |  | $ | (5,050 | ) |  | $ | (9,637 | ) |  | $ | (9,064 | )
Amounts reclassified to earnings from accumulated other comprehensive loss |  |  | 2,040 |  |  |  | 1,908 |  |  |  | 6,854 |  |  |  | 5,104 |
Net current period other comprehensive income (loss) |  | $ | (3,581 | ) |  | $ | (3,142 | ) |  | $ | (2,783 | ) |  | $ | (3,960 | )
The aggregate maturities of long-term debt at March 31, 2016 are as follows (in thousands):
Twelve months ending March 31, |  |  |  |
2017 |  | $ | 53,965 |
2018 |  |  | 53,965 |
2019 |  |  | 94,438 |
2020 |  |  | 107,930 |
2021 |  |  | 1,193,026 |
Principal amount of long-term debt |  |  | 1,503,324 |
Less unamortized debt issuance costs |  |  | (17,922 | )
Total long-term debt |  | $ | 1,485,402 |

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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