Long-Term Debt and Financing Arrangements

12 Months Ended

Dec. 31, 2013

Long-Term Debt and Financing Arrangements

NOTE 10. Long-Term Debt and Financing Arrangements

In December 2013, we amended our Credit Agreement to reduce the interest rate and commitment fees and extend the term until December 2018. The maximum unsecured borrowing capacity remained at $50.0 million. The interest rate under the Credit Agreement ranges from LIBOR plus 1.00% to 1.75% or Prime to Prime plus 0.75%. The commitment fees charged on the unused line of credit are between 0.10% and 0.25% per annum. The financial covenants require a total leverage ratio of not more than 3.0 to 1.0 and an interest coverage ratio of not less than 2.0 to 1.0.

We have standby letters of credit that expire in 2014. As of December 31, 2013, our letters of credit were $5.2 million.

Our unused and available borrowings under our bank revolving line of credit were $44.8 million as of December 31, 2013 and $46.3 million as of December 31, 2012. We were in compliance with our debt covenants as of December 31, 2013.

We entered into a Master Loan and Security Agreement in April 2013 containing various Equipment Notes (“Notes”). The Notes provided financing for eighty 2014 Peterbilt tractors. The Notes have terms that expire between May 14, 2018 and June 19, 2018 and bear interest at rates between 1.9% and 2.0%. The Notes require quarterly principal and interest payments of $0.5 million.

Our outstanding debt is as follows (in thousands):


	Period Ended
	December 31, 2013			December 31, 2012
Equipment Notes due by June 19, 2018 with quarterly principal and interest payments of $480,000 commencing on August 14, 2013; interest is paid quarterly at a fixed rate between 1.9% and 2.0%	$	8,246		$	—

Less current portion		(1,771	)		—

Total long-term debt	$	6,475		$	—

Aggregate principal payments, in thousands, due subsequent to December 31, 2013, are as follows:


2014	$	1,771
2015		1,806
2016		1,841
2017		1,877
2018		951

	$	8,246

In 2011, we entered into a lease agreement for 3,126 chassis for a period of 10 years. We are accounting for this lease as a capital lease. Interest on this capital lease obligation is based on interest rates that approximate currently available interest rates; therefore, indebtedness under this capital lease obligation approximates fair value.

We paid interest of $0.9 million, $1.0 million and $0.3 million in 2013, 2012 and 2011, respectively, related to this capital lease.

- 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.

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