Debt and Financing

Our outstanding debt as of September 30, 2018 consisted of the following:



As of September 30, 2018 (in millions)	Par Value			Discount			Debt Issuance Costs			Book Value				Average Effective Interest Rate
Term Loan	$	582.0		$	(8.5	)	$	(6.9	)	$	566.6		^(a)	11.1	%
ABL Facility	—			—			—			—				N/A
Secured Second A&R CDA	26.9			—			(0.1		)	26.8				7.9	%
Unsecured Second A&R CDA	48.2			—			(0.2		)	48.0				7.9	%
Lease financing obligations	247.3			—			(0.6		)	246.7				14.5	%
Total debt	$	904.4		$	(8.5	)	$	(7.8	)	$	888.1
Current maturities of Term Loan	(18.0		)	—			—			(18.0		)
Current maturities of lease financing obligations	(5.6		)	—			—			(5.6		)
Current maturities of Unsecured Second A&R CDA	$	(1.5	)	$	—		$	—		$	(1.5	)
Long-term debt	$	879.3		$	(8.5	)	$	(7.8	)	$	863.0


(a)	Variable interest rate of 1, 3 or 6-month LIBOR, with a floor of 1.0%, plus a fixed margin of 8.50%.

ABL Facility Availability

Our principal sources of liquidity are cash and cash equivalents, available borrowings under our asset-based loan facility (the

“ABL Facility”) and any prospective net cash flow from operations. As of September 30, 2018, our availability under our ABL Facility was $73.9 million, which is derived by reducing the amount that may be advanced against eligible receivables plus eligible borrowing base cash by certain reserves imposed by the ABL Agent and our $345.0 million of outstanding letters of credit. Our Managed Accessibility was $32.0 million, which is the measure of availability management uses based on the ABL requirement to maintain availability in an amount at least equal to or above 10% of the collateral line cap. Our cash and cash equivalents and Managed Accessibility were $225.2 million as of September 30, 2018.

Credit Facility Covenants

The credit agreement (the “Term Loan Agreement”) governing our term loan facility (the “Term Loan”) has certain financial covenants, that, among other things, restrict certain capital expenditures and require us to comply with a maximum total leverage ratio covenant (defined as Consolidated Total Debt divided by Consolidated Adjusted EBITDA as defined below).

Our 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
September 30, 2018	3.50 to 1.00	March 31, 2020	3.00 to 1.00
December 31, 2018	3.50 to 1.00	June 30, 2020	3.00 to 1.00
March 31, 2019	3.25 to 1.00	September 30, 2020	2.75 to 1.00
June 30, 2019	3.25 to 1.00	December 31, 2020	2.75 to 1.00
September 30, 2019	3.25 to 1.00	March 31, 2021	2.75 to 1.00
December 31, 2019	3.00 to 1.00	June 30, 2021 and thereafter	2.50 to 1.00

Consolidated Adjusted EBITDA, defined in our Term Loan Agreement 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 certain property disposals, restructuring charges, transaction costs related to issuances of debt, non-recurring consulting fees, expenses associated with certain lump sum payments to our union employees and the gains or losses from permitted dispositions and discontinued operations. Consolidated Total Debt, as defined in our Term Loan Agreement, is the aggregate principal amount of indebtedness outstanding. Our total leverage ratio for the four consecutive fiscal quarters ending September 30, 2018 was 3.13 to 1.00.

Impacts to our consolidated financial statements due to the implementation of ASC 842, Leases, on January 1, 2019 will not impact our compliance with the financial covenants included in our Term Loan Agreement as changes in generally accepted accounting principles subsequent to the date of the agreement are not required to be implemented for purposes of covenant calculations.

We believe that our results of operations will be sufficient to allow us to comply with the covenants in the Term Loan Agreement, 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. Our ability to satisfy our liquidity needs and meet future stepped-up covenants beyond the next twelve months is dependent upon our ability to achieve operating results that reflect improvement over our 2017 results. Means for improving our profitability may include streamlining our support structure and networks, as well as ongoing successful implementation and realization of pricing, productivity and efficiency initiatives, in addition to increased volume and shipments, and increasing capital expenditures, some of which are outside of our control.

Fair Value Measurement

The book value and estimated fair values of our long-term debt, including current maturities and other financial instruments, are summarized as follows:



	September 30, 2018				December 31, 2017
(in millions)	Book Value		Fair value		Book Value		Fair value
Term Loan	$	566.6	$	595.4	$	576.8	$	596.9
Lease financing obligations	246.7		249.4		254.6		257.7
Second A&R CDA	74.8		76.8		74.7		75.3
Total debt	$	888.1	$	921.6	$	906.1	$	929.9

The fair values of the Term Loan and the Second Amended and Restated Contribution Deferral Agreement (the “Second A&R CDA”) were estimated based on observable prices (level two inputs for fair value measurements). The fair value of the lease financing obligations is estimated using a publicly-traded secured loan with similar characteristics (level three input for fair value measurement).