Debt and Credit Facilities |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt and Credit Facilities | Debt and Credit Facilities On December 20, 2022, we entered into a $1.075 billion unsecured credit facility with a group of lenders (the “2022 Credit Agreement”), replacing our previous credit facilities. The 2022 Credit Agreement is scheduled to mature on December 20, 2027, and has a $100.0 million maximum limit for the aggregate amount of letters of credit issued. Revolving credit loans drawn under the 2022 Credit Agreement bear interest, at our option, at (i) the Base Rate (the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, or (c) the one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.10%), plus a margin ranging between 0.125% and 0.750%, or (ii) Term SOFR plus 0.10% and a margin ranging between 1.125% and 1.750%. Swingline loans drawn under the 2022 Credit Agreement bear interest at the Base Rate, as defined above, plus a margin ranging between 0.125% and 0.750%. The 2022 Credit Agreement also requires us to pay quarterly (i) a letter of credit commission on the daily amount available to be drawn under such standby letters of credit at rates ranging between 1.125% and 1.750% per annum and (ii) a nonrefundable commitment fee on the average daily unused amount of the commitment at rates ranging between 0.125% and 0.250% per annum. The margin, letter of credit commission, and commitment fee rates are based on our ratio of net funded debt to earnings before interest, income taxes, depreciation and amortization (“EBITDA”). There are no scheduled principal payments due on the 2022 Credit Agreement until the maturity date, and interest is payable in arrears at periodic intervals not to exceed three months. Availability of such funds under the 2022 Credit Agreement is conditional upon various customary terms and covenants. Such covenants include, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of net funded debt to EBITDA and (ii) to exceed a minimum ratio of EBITDA to interest expense. As of June 30, 2025, we were in compliance with these covenants. We have entered into variable-for-fixed interest rate swap agreements in order to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness. Under the terms of our interest rate swap agreements, we receive monthly variable-rate interest payments based on one-month Term SOFR and make monthly fixed-rate interest payments as specified in the interest rate swap agreements. We have designated our interest rate swap agreements as cash flow hedges. Changes in fair value of outstanding derivatives in cash flow hedges are recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income until earnings are impacted by the hedged transactions. Subsequent to the end of the quarter, in July 2025, two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $40.0 million matured and we entered into two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $60.0 million, maturing in July 2028. For additional information regarding our interest rate swaps, see Note 5 – Fair Value and Note 11 - Subsequent Events. On March 27, 2025, the Company and Werner Receivables Company, LLC (“WRC”), a newly-formed wholly-owned subsidiary of the Company, entered into a Loan Security Agreement (“LSA”) with various lenders. The LSA is scheduled to terminate on March 27, 2028, unless extended by the parties and is subject to earlier termination as provided in the LSA. The LSA is a secured borrowing that is collateralized by eligible receivables, for which the Company is the servicing agent. WRC is a bankruptcy remote, special purpose entity and the borrower under the LSA. The Company has contributed and from time to time sells a designated pool of eligible accounts receivables to WRC which, in turn, may borrow funds under the LSA on a revolving basis. The collateral is available to satisfy the claims related to the lenders’ interests in the receivables and unavailable to satisfy claims of the Company and its subsidiaries. The LSA does not qualify for sale treatment. Accordingly, the Company’s eligible receivables remain on our condensed consolidated balance sheets in accounts receivable, trade, less allowance. Subject to eligible receivables, the maximum amount of funding available to WRC is $300.0 million, which may increase to $350.0 million upon WRC’s request and acceptance by the lenders. Borrowings under the LSA bear interest at (i) a commercial paper rate or (ii) one-month Term SOFR, plus 0.10%. The LSA also requires us to pay nonrefundable drawn and undrawn fees on the average daily used and unused amounts of the commitment, respectively. The LSA is subject various affirmative and negative covenants, representations and warranties, and default and termination provisions customary for facilities of this type, including a minimum borrower’s net worth covenant. As of June 30, 2025, we were in compliance with these covenants. The following table presents total debt (in thousands):
(1) As of June 30, 2025, our outstanding revolving credit loan balance under the 2022 Credit Agreement consisted of: •$75.0 million at a weighted average variable interest rate of 5.90%; •$40.0 million which is effectively fixed at 6.45% with interest rate swap agreements through July 2025; •$90.0 million which is effectively fixed at 6.12% with interest rate swap agreements through July 2026; •$75.0 million which is effectively fixed at 6.23% with an interest rate swap agreement through April 2027; •$75.0 million which is effectively fixed at 6.09% with an interest rate swap agreement through May 2027; and •$75.0 million which is effectively fixed at 5.14% with an interest rate swap agreement through August 2028. Our total available borrowing capacity was $644.1 million as of June 30, 2025, consisting of $639.1 million under the 2022 Credit Agreement after considering $5.9 million in stand-by letters of credit under which we are obligated, and $5.0 million under the LSA. Availability under the LSA is calculated as follows (in thousands):
For information regarding the fair value of our debt, see Note 5 – Fair Value. At June 30, 2025, the aggregate maturities of future debt principal payments are as follows (in thousands):
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