Caci International (CACI) Risk Analysis

We have several debt instruments, including a senior secured credit facility (the Credit Facility), senior secured term loans (Term Loan B and Term Loan B-2), and senior unsecured notes (2033 Notes and 2033 Notes-2). These debt instruments impose certain operating and financial restrictions on us and require us to meet certain financial covenants. These restrictions may significantly limit or prohibit us from engaging in certain transactions, including: - incurring or guaranteeing certain amounts of additional debt;- paying dividends or other distributions to our stockholders or redeeming, repurchasing, or retiring our capital stock in excess of specific limits;- making certain investments, loans, and advances;- granting liens or other security interests to third parties, creating liens to secure indebtedness, and exceeding specific levels of liens on our assets;- issuing or selling equity in our subsidiaries;- selling certain assets currently held by us, including certain sale and lease-back transactions;- prepaying certain subordinated indebtedness;- amending or modifying certain agreements, including those related to indebtedness; and - engaging in certain mergers, consolidations, or acquisitions. The failure to comply with any of these covenants would cause a default under our debt instruments through cross-default provisions. A default, if not waived, could cause our debt to become immediately due and payable. In such situations, we may not be able to repay our debt or borrow sufficient funds to refinance it, and even if new financing is available, it may not contain terms that are acceptable to us. We have been in compliance with all covenants since inception of the Credit Facility, Term Loan B, Term Loan B-2, 2033 Notes, and 2033 Notes-2.

Our contracts and task orders with the federal government are typically awarded through a competitive bidding process. We expect that much of the business that we will seek in the foreseeable future will continue to be awarded through competitive bidding. Budgetary pressures and changes in the procurement process have caused many government customers to increasingly purchase goods and services through IDIQ contracts, GSA schedule contracts and other government-wide acquisition contracts. These contracts, some of which are awarded to multiple contractors, have increased competition and pricing pressure, requiring that we make sustained post-award efforts to realize revenues under each such contract. In addition, in consideration of the practice of agencies awarding work under such contracts that is arguably outside the intended scope of the contracts, both the GSA and the DoW have initiated programs aimed to ensure that all work fits properly within the scope of the contract under which it is awarded. The net effect of such programs may reduce the number of bidding opportunities available to us. Moreover, even if we are highly qualified to work on a particular new contract, we might not be awarded business because of the federal government's policy and practice of maintaining a diverse contracting base. This competitive bidding process presents a number of risks, including the following: - we bid on programs before the completion of their design, which may result in unforeseen technological difficulties and cost overruns;- we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win; and - we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win. In addition to the challenges of the bidding process, our business could be adversely affected by our competitors protesting major contract awards. Defending against these challenges can result in significant expenses and any such protest or challenge could lead to the resubmission of bids on modified specifications, an unfavorable modification, or the termination, reduction, or complete loss of an awarded contract. Even an unsuccessful bid protest could delay the initiation, startup, and funding of the work under these contracts and may cause our actual results to differ materially and adversely from those anticipated. If we are unable to win particular multi-year contracts, we may be prevented from providing to customers services that are purchased under those contracts for a number of years. If we are unable to consistently win new contract awards over any extended period, our business and prospects will be adversely affected and that could cause our actual results to differ materially and adversely from those anticipated. In addition, upon the expiration of a contract, if the customer requires further services of the type provided by the contract, there is frequently a competitive rebidding process. There can be no assurance that we will win any particular bid, or that we will be able to replace business lost upon expiration or completion of a contract, and the termination or non-renewal of any of our significant contracts could cause our actual results to differ materially and adversely from those anticipated.

The federal government may change its procurement practices, or adopt new contracting rules and regulations, as a result of an increased focus on affordability, efficiencies, business systems and recovery of costs. Any initiatives or changes to current procurement practices, including, but not limited to increased usage of fixed-price contracts, multiple-award contracts, small business set-aside contracts, new socio-economic requirements, or changes to the basis upon which it reimburses our compensation and other expenses or otherwise limit such reimbursements could have adverse effects on our business. In addition, although we continue to expand our portfolio of technology solutions, changes to service-based procurement practices may also adversely affect our performance. As new contracting methods could be costly or administratively difficult for us to satisfy, they could impair our ability to obtain new contracts or win re-competed contracts or adversely affect our future profit margin which could cause actual results to differ materially and adversely from those anticipated. Specifically, certain federal agencies are increasingly using alternative or rapid acquisition pathways for emerging technologies, including flexible contracting approaches such as "other transaction authority" agreements. These acquisition methods differ from traditional FAR based processes and may involve requirements, such as participation by non-traditional contractors or cost-sharing obligations, that could limit our ability to qualify or compete effectively. If we are unable to adapt to these evolving procurement approaches or meet the associated eligibility, technical, or administrative requirements, we may be unable to pursue certain strategic opportunities in high-growth areas. As a result, our ability to capture new awards, expand into developing mission areas, or achieve expected levels of performance and growth could be adversely affected.

Cybersecurity and Unauthorized Access We rely on the confidentiality, integrity, and availability of our information systems, the systems of our third-party service providers, and the systems we operate for customers. Cybersecurity incidents, including malware, ransomware, phishing campaigns, credential compromise, and other unauthorized intrusions, could result in the loss, corruption, or exposure of data or disruptions to our operations or those of our customers. Consistent with industry trends, we continue to experience attempts to gain unauthorized access to our systems and information. Although past incidents have not had a material adverse impact and we actively invest in detection, response, and mitigation capabilities, the nature of these threats continues to evolve, and we cannot predict the impact of any future event. A significant cybersecurity incident could result in operational delays, remediation costs, reputational harm, legal or regulatory exposure, or the loss of current or future business. Operational, Infrastructure, and Other Non-Cyber Systems Failures Our operations depend on the performance and reliability of our internal networks, data centers, communication systems, critical facilities, and utilities. Systems failures, including software defects, hardware malfunctions, third-party service outages, natural disasters, power disruptions, or other physical or environmental events, could interrupt our ability to perform on customer contracts or conduct normal business operations. Our property and business interruption insurance may be inadequate to compensate us for all resulting losses. In addition, the systems and networks we maintain for our customers, even when designed with redundancy and resiliency features, may also experience failures or service interruptions. If these systems fail or are disrupted, we could face claims for damages, contract termination, or loss of revenue. Any such event could cause our actual results to differ materially and adversely from those anticipated.