Note 5. Debt and Financing Arrangements

At June 30, 2017, our primary financing arrangement was the $400 million unsecured credit facility discussed below, which provides us with the capital necessary to meet our working capital needs as well as the flexibility to continue with our strategic initiatives, including business acquisitions and share repurchases. In addition to the discussion below, refer to our Annual Report on Form 10-K for the year ended December 31, 2016 for additional details of our debt and financing arrangements.

Bank Debt

We have a $400 million unsecured credit facility with Bank of America as agent for a group of eight participating banks that matures in July 2019. The balance outstanding under the credit facility was $210.6 million and $191.4 million at June 30, 2017 and December 31, 2016, respectively.

Interest rates for the six months ended June 30, 2017 and 2016 were as follows:

	Six Months Ended
	June 30,
	2017		2016
Weighted average rates		2.60%		2.38%
Range of effective rates	2.19% - 4.75%		1.82% - 3.50%

We have approximately $140 million of available funds under the credit facility at June 30, 2017, net of outstanding letters of credit of $2.3 million. The credit facility provides us with operating flexibility and funding to support seasonal working capital needs and other strategic initiatives such as acquisitions and share repurchases. As of June 30, 2017, we were in compliance with our debt covenants.

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Available funds under the credit facility are based on a multiple of earnings before interest, taxes, depreciation and amortization as defined in the credit facility, and are reduced by letters of credit, license bonds, other indebtedness and outstanding borrowings under the credit facility.

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Under the credit facility, loans are charged an interest rate consisting of a base rate or Eurodollar rate plus an applicable margin, letters of credit are charged based on the same applicable margin, and a commitment fee is charged on the unused portion of the credit facility.

Interest Expense

During the three and six months ended June 30, 2017 and 2016, we recognized interest expense as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Credit facility (1)	$	1,692	$	1,731	$	3,209	$	3,251
2006 Notes (2)		—		2		—		8
Total interest expense	$	1,692	$	1,733	$	3,209	$	3,259

(1)

Components of interest expense related to the credit facility include amortization of deferred financing costs, commitment fees and line of credit fees.

(2)

During the second quarter of 2016, we redeemed the remaining 3.125% Convertible Senior Subordinated Notes (the “2006 Notes”) for $750 thousand in cash plus accrued interest under an optional early redemption provision.