Debt and Financing

Our outstanding debt as of March 31, 2019 consisted of the following:



As of March 31, 2019 (in millions)	Par Value			Discount			Debt Issuance Costs			Book Value				Average Effective Interest Rate
Term Loan	$	573.0		$	(7.3	)	$	(6.0	)	$	559.7		^(a)	11.6	%
ABL Facility	—			—			—			—				N/A
Secured Second A&R CDA	26.8			—			(0.1		)	26.7				8.0	%
Unsecured Second A&R CDA	46.7			—			(0.2		)	46.5				8.0	%
Lease financing obligations	238.0			—			(0.4		)	237.6				15.1	%
Total debt	$	884.5		$	(7.3	)	$	(6.7	)	$	870.5
Current maturities of Term Loan	(18.0		)	—			—			(18.0		)
Current maturities of lease financing obligations	(4.1		)	—			—			(4.1		)
Current maturities of Unsecured Second A&R CDA	(1.5		)	—			—			(1.5		)
Long-term debt	$	860.9		$	(7.3	)	$	(6.7	)	$	846.9


(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 March 31, 2019, our maximum availability under our ABL Facility was $48.1 million. Our Managed Accessibility was $9.1 million, which represents the maximum amount we would access on the ABL Facility and is adjusted for eligible receivables plus eligible borrowing base cash measured at March 31, 2019.

For the March 31, 2019 borrowing base certificate, which was filed in April of 2019, we reduced restricted cash $20.0 million by transferring the funds to our operating cash accounts. Our cash and cash equivalents and Managed Accessibility were $155.7 million. For the December 31, 2018 borrowing base certificate, which was filed in January of 2019, we transferred $25.0 million of cash into restricted cash to maintain the 10% threshold, as permitted under the ABL Facility, which transfer effectively put our cash and cash equivalents and Managed Accessibility to $203.8 million.

The table below summarizes cash and cash equivalents and Managed Accessibility as of March 31, 2019 and December 31, 2018:



(in millions)	March 31, 2019		December 31, 2018
Cash and cash equivalents	126.6		227.6
Changes to restricted cash	20.0		(25.0		)
Managed Accessibility	9.1		1.2
Total cash and cash equivalents and Managed Accessibility	$	155.7	$	203.8

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
March 31, 2019	3.25 to 1.00	June 30, 2020	3.00 to 1.00
June 30, 2019	3.25 to 1.00	September 30, 2020	2.75 to 1.00
September 30, 2019	3.25 to 1.00	December 31, 2020	2.75 to 1.00
December 31, 2019	3.00 to 1.00	March 31, 2021	2.75 to 1.00
March 31, 2020	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, non-cash impairment charges 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 March 31, 2019 was 2.76 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 calculation of 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 consistent with levels achieved during 2018. Maintaining results will depend on a number of factors including our ability to successfully implement the provisions of the new labor agreement with our union employees. The union employees approved the National Master Freight Agreement and all but one supplemental agreement on May 3, 2019. In accordance with the IBT’s ratification procedures, the approved labor agreement will not take effect until the remaining issues pertaining to the one supplemental agreement are resolved. Once effective, the approved labor agreement is set to expire on March 31, 2024.

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:



	March 31, 2019				December 31, 2018
(in millions)	Book Value		Fair value		Book Value		Fair value
Term Loan	$	559.7	$	569.5	$	559.4	$	546.0
Lease financing obligations	237.6		234.9		242.2		234.7
Second A&R CDA	73.2		73.0		73.3		70.0
Total debt	$	870.5	$	877.4	$	874.9	$	850.7

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).