December 31
                                                 1994         1993   
                                                    ($ thousands)
Revolving Credit Facility (1)                 $       -    $       -
Receivables Purchase Agreement (2)               40,000            -
Term Loan Agreement (3)                          19,000            -
Payable to Clipper shareholders (Note B)          6,774            -
Treadco Credit Agreement (4)                      3,000        7,000
Capitalized lease obligations (5)                51,060       49,419
Other                                             4,622        2,551 
                                                124,456       58,970
Less current portion                             65,161       15,239 
                                              $  59,295    $  43,731 

(1)

Revolving Credit Facility: The Company and certain banks are parties to a Credit Agreement with Societe Generale, as Agent and NationsBank of Texas as Co-Agent (the “Credit Agreement”) which provides funds available under a three-year Revolving Credit Facility of $150 million, including $40 million for letters of credit. There are no borrowings outstanding under the Revolving Credit Facility and approximately $32.7 million of letters of credit outstanding at December 31, 1994. The Revolving Credit Facility is payable on June 30, 1998. The Credit Agreement also requires mandatory prepayments to be made under certain circumstances, including the sales of certain assets and net cash proceeds from the issuance of certain equity or debt securities.

The Company pays a commitment fee of 3/8% on the unused amount under the Revolving Credit Facility.

Amounts advanced under the Credit Agreement bear interest, at the Company’s option, at a rate per annum of either: (i) the greater of (a) the agent bank’s prime rate and (b) the Federal Funds Rate plus 1/2%; or (ii) LIBOR plus 3/4%.

The Credit Agreement contains various covenants which limit, among other things, dividends, indebtedness, capital expenditures, loans and investments, as well as requiring the Company to meet certain financial tests. As of December 31, 1994, these covenants have been met. If there is an event of default which is not remedied or waived within 10 days, the Credit Agreement will become secured to the extent of amounts then outstanding of all of the Company’s receivables (excluding receivables sold under the receivables purchase agreement), revenue equipment, real property and TREADCO common stock included in the borrowing base (subject to certain exceptions). ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued

(2)

On March 2, 1994, ABF, Renaissance Funding Corp. (“Renaissance”) and Societe Generale entered into a receivables purchase agreement. The agreement allows ABF to sell to Renaissance an interest in up to $55 million in a pool of receivables. The term can range from 30 to 180 days, at ABF’s option. At the end of the term, ABF is required to repurchase any uncollected receivables. At December 31, 1994, ABF had $40 million financed through this facility. The interest rate under this agreement is variable based on underlying commercial paper rates, which was 5.9% as of December 31, 1994.

(3)

The Company entered into a ten-year, $20 million term loan agreement dated as of April 25, 1994 with NationsBank of Texas, N.A., as agent, and Societe Generale Southwest Agency. The proceeds from the agreement are being used to finance the construction of the Company’s new corporate office building which is expected to be completed in February 1995 (Note I). Amounts borrowed under the agreement bear interest at 8.07%. The Company shall repay the outstanding amount in 40 equal quarterly installments of $500,000 plus interest, which began on July 15, 1994.

(4)

TREADCO is a party to a revolving credit facility with Societe Generale (the “TREADCO Credit Agreement”) providing for borrowings of up to the lesser of $12 million or the applicable borrowing base. Borrowings under the TREADCO Credit Agreement are collateralized by accounts receivable and inventory. Borrowings under the agreement bear interest, at TREADCO’s option, at 1% above the bank’s LIBOR rate, or at the higher of the bank’s prime rate or the “federal funds rate” plus 1/2%. At December 31, 1994, the interest rate was 7.1%. At December 31, 1994, TREADCO had $3 million outstanding under the Revolving Credit Agreement. The TREADCO credit agreement is payable in September 1997. TREADCO pays a commitment fee of 3/8% on the unused amount under the TREADCO Credit Agreement.

The TREADCO Credit Agreement contains various covenants which limit, among other things, dividends, disposition of receivables, indebtedness and investments, as well as requiring TREADCO to meet certain financial tests which have been met. Under the TREADCO Credit Agreement, TREADCO’s assets are subject to pledge and, therefore, are available for use only by that subsidiary.

(5)

Includes approximately $49,100,000 relative to leases of carrier revenue equipment with an aggregate net book value of approximately $49,856,000 at December 31, 1994. These leases have a weighted average interest rate of approximately 7.0%. Also includes approximately $1,960,000 relative to leases of various terminals and a data processing building expansion, financed by Industrial Revenue Bond Issues, with a weighted average interest rate of approximately 7.4%. The net book value of the related assets was approximately $2,897,000 at December 31, 1994.

Annual maturities on long-term debt, excluding capitalized lease obligations (see Note I), in 1995 through 1999 aggregate approximately $50,065,000; $3,113,000; $5,931,000; $2,466,000 and $2,483,000, respectively.

Interest paid, net of interest capitalized of $582,000, was $6,656,000 in 1994, $7,226,000 in 1993, and $22,174,000 in 1992. Interest capitalized in 1993 and 1992 was not material. 

The Company is a party to an interest rate cap arrangement to reduce the impact of increases in interest rates on its floating-rate long-term debt. The Company will be reimbursed for the difference in interest rates if the LIBOR rate exceeds a fixed rate of 9% applied to notional amounts, as defined in the contract, ranging from $50 million as of December 31, 1994 to $2.5 million as of October 1999. As of December 31, 1994, the LIBOR rate was 6.5%; therefore, no amounts were due to the Company under this arrangement. Fees totaling $385,000 were paid in 1994 to enter into this arrangement. These fees are being amortized to interest expense over the life of the contract.

A subsidiary of the Company is party to an interest rate exchange agreement with Citibank, with a notional amount of $3,520,000 as of December 31, 1994, that is used to convert the variable interest rate on bonds to a fixed rate of interest. The terms of the agreement require the Company to pay 11.45% interest and receive the Citibank base rate, calculated on the notional amount. Payments under the agreement are recognized as an adjustment to interest expense. The agreement expires in January 1996.