v3.25.1
Debt And Financing
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Debt and Financing Debt and Financing
Other than the Company's accounts receivable securitization as discussed in Note 5, the Company's long-term debt consisted of the following:
March 31, 2025December 31, 2024
(In thousands)
2021 Term Loan A-2, due September 3, 2026, net 1 2
349,277 349,149 
2021 Term Loan A-3, due September 3, 2026, net 1 2
769,500 779,411 
2023 Term Loan, due September 3, 2026, net 1 3
249,540 249,459 
Revenue equipment installment notes 1 4
169,514 192,255 
Prudential Notes, net 1
8,674 16,611 
Other6,491 6,722 
Total long-term debt, including current portion1,552,996 1,593,607 
Less: current portion of long-term debt(140,448)(148,294)
Long-term debt, less current portion$1,412,548 $1,445,313 
March 31, 2025December 31, 2024
(In thousands)
Total long-term debt, including current portion$1,552,996 $1,593,607 
2021 Revolver, due September 3, 2026 1 5
280,000 232,000 
Long-term debt, including revolving line of credit$1,832,996 $1,825,607 
1Refer to Note 12 for information regarding the fair value of debt.
2As of March 31, 2025, the carrying amounts of the 2021 Term Loan A-2 and 2021 Term Loan A-3 were net of $0.7 million and $0.5 million in deferred loan costs, respectively. As of December 31, 2024, the carrying amounts of the 2021 Term Loan A-2 and 2021 Term Loan A-3 were net of $0.9 million and $0.6 million in deferred loan costs, respectively.
3As of March 31, 2025, the carrying amount of the 2023 Term Loan was net of $0.5 million in deferred loan costs. As of December 31, 2024, the carrying amounts of the 2023 Term Loan was net of $0.5 million in deferred loan costs.
4The revenue equipment installment loans were assumed at the close of the U.S. Xpress Acquisition and have a weighted average interest rate of 4.72% and 4.68% as of March 31, 2025 and December 31, 2024, respectively.
5The Company also had outstanding letters of credit of $18.2 million and $18.1 million under the 2021 Revolver, primarily related to workers' compensation and self-insurance liabilities for both March 31, 2025 and December 31, 2024, respectively. The Company also had outstanding letters of credit of $242.6 million and $246.0 million under a separate bilateral agreement which do not impact the availability of the 2021 Revolver as of March 31, 2025 and December 31, 2024, respectively.
Credit Agreements
2021 Debt Agreement — On September 3, 2021, the Company entered into the $2.3 billion 2021 Debt Agreement (an unsecured credit facility) with a group of banks, replacing the Company's prior debt agreements. The 2021 Debt Agreement included the 2021 Term Loan A-1 which was paid off on December 3, 2022. On August 6, 2024, the Company entered into the 2024 Amendment which, among other things, extended the maturity of the Company's 2021 Term Loan A-2 from September 3, 2024 to September 3, 2026, increased the size of the 2021 Term Loan A-2 from $200 million to $350 million, aligned the applicable margin for the 2021 Term Loan A-2 with that of the rest of the credit facility, transitioned the reference rate for the credit facility from BSBY to SOFR, and made other conforming changes. The following table presents the key terms of the 2021 Debt Agreement as amended by the 2024 Amendment:
2021 Term Loan A-22021 Term Loan A-3
2021 Revolver 2
2021 Debt Agreement Terms(Dollars in thousands)
Maximum borrowing capacity$350,000$800,000$1,100,000
Final maturity dateSeptember 3, 2026September 3, 2026September 3, 2026
Interest rate margin reference rateSOFR + credit spread adjustment 10 basis pointsSOFR + credit spread adjustment 10 basis pointsSOFR + credit spread adjustment 10 basis points
Interest rate minimum margin 1
0.88%0.88%0.88%
Interest rate maximum margin 1
1.50%1.50%1.50%
Minimum principal payment — amount$—$10,000$—
Minimum principal payment — frequencyOnceQuarterlyOnce
Minimum principal payment — commencement dateSeptember 3, 2026September 30, 2024September 3, 2026
1The interest rate margin for the 2021 Term Loans and 2021 Revolver is based on the Company's consolidated leverage ratio. As of March 31, 2025, interest accrued at 5.92% on the 2021 Term Loan A-2, 5.92% on the 2021 Term Loan A-3, and 5.92% on the 2021 Revolver.
2The commitment fee for the unused portion of the 2021 Revolver is based on the Company's consolidated leverage ratio, and ranges from 0.1% to 0.2%. As of March 31, 2025, commitment fees on the unused portion of the 2021 Revolver accrued at 0.2% and outstanding letter of credit fees accrued at 1.5%.
Pursuant to the 2021 Debt Agreement, the 2021 Revolver and the 2021 Term Loans contain certain financial covenants with respect to a maximum net leverage ratio and a minimum consolidated interest coverage ratio. The 2021 Debt Agreement provides flexibility regarding the use of proceeds from asset sales, payment of dividends, stock repurchases, and equipment financing. In addition to the financial covenants, the 2021 Debt Agreement includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the 2021 Debt Agreement may be accelerated, and the lenders' commitments may be terminated. The 2021 Debt Agreement contains certain usual and customary restrictions and covenants relating to, among other things, dividends (which are restricted only if a default or event of default occurs and is continuing or would result therefrom), liens, affiliate transactions, and other indebtedness. As of March 31, 2025, the Company was in compliance with the covenants under the 2021 Debt Agreement.
Borrowings under the 2021 Debt Agreement are made by Knight-Swift Transportation Holdings Inc. and are guaranteed by certain of the Company's material domestic subsidiaries (other than its captive insurance subsidiaries, driving academy subsidiary, and bankruptcy-remote special purpose subsidiary).
2023 Term Loan — On June 22, 2023, the Company entered into the $250.0 million 2023 Term Loan (an unsecured credit facility) with a group of banks. The 2023 Term Loan matures on September 3, 2026. There are no scheduled principal payments due until maturity. The 2023 Term Loan contains terms similar to the 2021 Debt Agreement. The proceeds received from the 2023 Term Loan were used to pay fees, commissions and expenses in connection with the Company's acquisition of U.S. Xpress. The interest rate applicable to the 2023 Term Loan is subject to a leverage-based grid and as of March 31, 2025 is equal to SOFR plus the 0.1% SOFR adjustment plus 1.75%. As of March 31, 2025, interest accrued at 6.17% on the 2023 Term Loan.
U.S. Xpress' Revenue Equipment Installment Notes — In connection with the U.S. Xpress Acquisition, the Company assumed revenue equipment installment notes with various lenders to finance tractors and trailers. Payments are due in monthly installments with final maturities at various dates through March 15, 2028, and the notes are secured by related revenue equipment with a net book value of $147.4 million as of March 31, 2025. Terms generally range from 48 months to 84 months. The interest rates as of March 31, 2025 range from 2.0% to 7.17%.
2021 Prudential Notes — The 2021 Prudential Notes previously allowed ACT to borrow up to $125 million, less amounts currently outstanding with Prudential Capital Group, provided that certain financial ratios are maintained. The 2021 Prudential Notes have interest rates ranging from 4.05% to 4.40% and various maturity dates ranging from January 2025 through January 2028. The 2021 Prudential Notes are unsecured and contain usual and customary restrictions on, among other things, the ability to make certain payments to stockholders, similar to the provisions of the Company's 2021 Debt Agreement. As of March 31, 2025, the Company was in compliance with the covenants under the 2021 Prudential Notes.
Fair Value Measurement — See Note 12 for fair value disclosures regarding the Company's debt instruments.