Liquidity

For a description of our outstanding debt as of March 31, 2015, please refer to the “Debt and Financing” footnote in our Consolidated Financial Statements.

Credit Facility Covenants

Our Term Loan credit agreement has certain financial covenants that, among other things, restricts certain capital expenditures and requires us to maintain a maximum total leverage ratio (defined as Consolidated Total Debt divided by Consolidated Adjusted EBITDA as defined below). On September 25, 2014, the Company entered into Amendment No. 1 to its Credit Agreement (the “Credit Agreement Amendment”), which amended the Term Loan to, among other things, adjust the maximum permitted total leverage ratio through December 31, 2016 and increase the applicable interest rate over the same period.

Our Credit Agreement Amendment total maximum leverage ratio covenants are as follows:



Four Consecutive Fiscal Quarters Ending	Maximum Total Leverage Ratio	Four Consecutive Fiscal Quarters Ending	Maximum Total Leverage Ratio
March 31, 2015	5.00 to 1.00	September 30, 2016	3.75 to 1.00
June 30, 2015	4.75 to 1.00	December 31, 2016	3.50 to 1.00
September 30, 2015	4.50 to 1.00	March 31, 2017	3.25 to 1.00
December 31, 2015	4.25 to 1.00	June 30, 2017	3.25 to 1.00
March 31, 2016	4.00 to 1.00	September 30, 2017	3.25 to 1.00
June 30, 2016	3.75 to 1.00	December 31, 2017 and thereafter	3.00 to 1.00

Consolidated Adjusted EBITDA, defined in our Credit Agreement Amendment as “Consolidated EBITDA,” is a measure that reflects our earnings before interest, taxes, depreciation, and amortization expense, and is further adjusted for, among other things, letter of credit fees, equity-based compensation expense, net gains or losses on property disposals and certain other items, including restructuring professional fees, nonrecurring consulting fees, expenses associated with certain lump sum payments to our International Brotherhood of Teamsters (“IBT”) employees and the results of permitted dispositions and discontinued operations. Consolidated Total Debt, as defined in our Credit Agreement Amendment, is the aggregate principal amount of indebtedness outstanding. Our total leverage ratio for the four consecutive fiscal quarters ended March 31, 2015 was 3.90 to 1.00.

We believe that our results of operations will be sufficient to allow us to comply with the covenants in the Credit Agreement Amendment, fund our operations, increase working capital as necessary to support our planned revenue growth and fund capital expenditures for at least the next twelve months. In order for us to maintain compliance with the maximum total leverage ratio over the tenor of the Term Loan, we must achieve operating results which reflect continuing improvement over our recent results.

Our ability to satisfy our liquidity needs and meet future stepped-up covenant requirements is primarily dependent on improving our profitability. Improvements to our profitability include continued successful implementation and realization of productivity and efficiency initiatives as well as increased volume and pricing improvements, some of which are outside of our control.

In the event our operating results indicate we will not meet our maximum total leverage ratio, we will take action to improve our maximum total leverage ratio which may include paying down our outstanding indebtedness with either cash on hand or from cash proceeds from equity issuances. The issuance of equity is outside of our control and there can be no assurance that we will be able to issue additional equity at terms that are agreeable to us or that we would have sufficient cash on hand to pay down debt in order to meet the maximum total leverage ratio.

Risks and Uncertainties Regarding Future Liquidity

Our principal sources of liquidity are cash and cash equivalents, available borrowings under our ABL Facility and any prospective net operating cash flows from operations. The unused line of credit that may actually be drawn is limited by certain financial covenants. As of March 31, 2015, the amount that actually may be drawn on the ABL Facility was $39.2 million. As of March 31, 2015, we had cash and cash equivalents of $136.4 million, and cash and cash equivalents and amounts able to be drawn on our ABL Facility totaling $175.6 million. For the three months ended March 31, 2015, we used net cash of $25.8 million for our operating activities.

Our principal uses of cash are to fund our operations, including making contributions to our single-employer pension plans and various multi-employer pension funds, and to meet our other cash obligations including, but not limited to, paying cash interest and principal on our funded debt, payments on our equipment leases and funding capital expenditures.

Our ABL Facility credit agreement, among other things, restricts certain capital expenditures and requires that the Company, in effect, maintain availability of at least 10% of the lesser of the aggregate amount of commitments from all lenders or the borrowing base.

We have a considerable amount of indebtedness. As of March 31, 2015, we had $1,093.6 million in aggregate par value of outstanding indebtedness, the majority of which matures in 2019. We also have considerable future funding obligations for our single-employer pension plans and various multi-employer pension funds. We expect our funding obligations for the remainder of 2015 for our single-employer pension plans and multi-employer pension funds will be $47.0 million and $66.1 million, respectively. In addition, we have, and will continue to have, substantial operating lease obligations. As of March 31, 2015, our minimum rental expense under operating leases for the remainder of the year is $48.7 million. As of March 31, 2015, our operating lease obligations through 2025 totaled $206.4 million and is expected to increase as we lease additional revenue equipment.

Our capital expenditures for the three months ended March 31, 2015 and 2014 were $21.3 million and $11.7 million, respectively. These amounts were primarily for purchases of used tractors and trailers and refurbished engines for our revenue fleet. Additionally, for the three months ended March 31, 2015, we entered into new operating leases for revenue equipment for $47.6 million, payable over the average lease term of four years.