8-KMaterial AgreementsFinancial Events

INTUIT INC. 8-K Report, Material Agreement (Feb 2, 2016)

Filed February 2, 2016For Securities:INTU

Summary

Intuit Inc. (INTU) announced on February 1, 2016, the execution of a new five-year Credit Agreement, establishing a $1.5 billion credit facility. This facility replaces their previous $500 million agreement, significantly increasing their borrowing capacity. The new facility comprises a $500 million unsecured Term Loan and a $1 billion unsecured revolving credit facility, both maturing on February 1, 2021, with options for extension and incremental increases up to $750 million. This expanded credit line provides Intuit with greater financial flexibility for general corporate purposes, including strategic initiatives like share repurchases and potential future acquisitions. The company has already drawn $750 million under this new facility. The agreement includes customary covenants and events of default, with specific financial maintenance requirements such as a debt-to-EBITDA ratio not exceeding 3.25 to 1.00.

Key Highlights

  • 1Intuit entered into a new $1.5 billion five-year credit facility, replacing a previous $500 million agreement.
  • 2The new facility includes a $500 million unsecured Term Loan and a $1 billion unsecured revolving credit facility.
  • 3The credit facility matures on February 1, 2021, with provisions for extensions and up to $750 million in incremental increases.
  • 4Borrowed funds are designated for general corporate purposes, including share repurchases and acquisitions.
  • 5Intuit has already borrowed $750 million under the new facility as of February 1, 2016.
  • 6The agreement includes covenants such as maintaining a consolidated debt to consolidated annual EBITDA ratio of not greater than 3.25 to 1.00.
  • 7Interest rates are based on the alternate base rate or LIBOR, plus an applicable margin that varies with Intuit's senior debt credit ratings.

Frequently Asked Questions

This 8-K filing announces Intuit Inc.'s entry into a new $1.5 billion credit agreement, which provides a significant increase in its available borrowing capacity. It also details the termination of a previous, smaller credit facility.

The new facility is for $1.5 billion and matures on February 1, 2021. It consists of a $500 million unsecured Term Loan and a $1 billion unsecured revolving credit facility. The company also has the option to increase commitments by up to $750 million and extend the maturity date of the revolving facility.

The increased borrowing capacity from $500 million to $1.5 billion significantly enhances Intuit's financial flexibility. This provides ample resources for general corporate purposes, including funding share repurchases, supporting organic growth, and executing strategic acquisitions.

Yes, the credit agreement includes customary covenants, notably a requirement for Intuit to maintain a consolidated debt to consolidated annual EBITDA ratio of not greater than 3.25 to 1.00, and a consolidated annual EBITDA to consolidated annual interest charges ratio of not less than 3.00 to 1.00.