Debt and Financing Arrangements

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt and Financing Arrangements

2. Debt and Financing Arrangements

At December 31, debt consisted of the following (in thousands):

	December 31, 2022		December 31, 2021
Credit Agreement with Banks, described below	$	—	$	—
Finance Leases, described below		31,008		50,404
Total debt		31,008		50,404
Less: current portion of long-term debt		14,519		19,396
Long-term debt, less current portion	$	16,489	$	31,008

The Company's liquidity needs arise primarily from capital investment in new equipment, land and structures, information technology and letters of credit required under insurance programs, as well as funding working capital requirements.

The Company is party to a credit agreement with a group of banks to fund capital investments, letters of credit and working capital needs.

Credit Agreements

At December 31, 2022, the Company was a party to a Sixth Amended and Restated Credit Agreement with a banking group (the Amended Credit Agreement), which provided up to a $300 million line of credit through February 2024. The Amended Credit Agreement also had an accordion feature that allowed for an additional $100 million availability, subject to certain conditions and availability of lender commitments. Under the Amended Credit Agreement, the Company was required to maintain a minimum debt service coverage ratio set at 1.25 to 1.00 and a maximum leverage ratio set at 3.25 to 1.00. The Amended Credit Agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement. The Amended Credit Agreement contained certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default. At December 31, 2022 and 2021, the Company had no outstanding borrowings and outstanding letters of credit of $31.2 million and $29.3 million, respectively, under the Amended Credit Agreement.

On February 3, 2023, the Company entered into a new unsecured credit agreement with a banking group (the 2023 Credit Agreement) and terminated the Amended Credit Agreement. The 2023 Credit Agreement maintains the amount of the previous line of credit of $300 million and extends the term until February 2028. The 2023 Credit Agreement contains an accordion feature that allows the Company to increase the size of the facility by up to $150 million, subject to certain conditions, for a total borrowing capacity of up to $450 million. Under the 2023 Credit Agreement, the Company is subject to a maximum consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00 with the potential to be temporarily increased in the event the Company makes an acquisition that meets certain criteria. The 2023 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default. Under the 2023 Credit Agreement, if an event of default occurs, the banks will be entitled to take various actions, including the acceleration of amounts due.

Finance Leases

The Company is obligated under finance leases with seven-year terms which include obligations collateralized by revenue equipment totaling $31.0 million and $50.4 million as of December 31, 2022 and 2021, respectively. Amortization of assets held under the finance leases is included in depreciation and amortization expense.

The estimated fair value of the finance leases at December 31, 2022 and 2021 is $31.2 million and $50.8 million, respectively, which is based on current market interest rates for similar types of financial instruments, reflective of Level 2 inputs.

Other

The Company paid cash for interest of $2.3 million, $3.0 million, and $5.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.