Credit Facilities and Long-Term Debt

Below is a summary of our outstanding balances on credit facilities and long-term debt (in thousands):



December 31,	2017			2016
Floor plan notes payable: non-trade	$	1,802,252		$	1,506,895
Floor plan notes payable	116,774			94,602
Total floor plan debt	$	1,919,026		$	1,601,497

Used vehicle inventory financing facility	$	177,222		$	211,000
Revolving lines of credit	94,568			142,507
Real estate mortgages	469,969			428,367
5.25% Senior notes due 2025	300,000			—
Other debt	12,512			11,191
Total long-term debt outstanding	1,054,271			793,065
Less: unamortized debt issuance costs	(6,919		)	(2,184		)
Less: current maturities (net of current debt issuance costs)	(18,876		)	(20,965		)
Long-term debt	$	1,028,476		$	769,916

Credit Facility

On August 1, 2017, we amended our existing credit facility to increase the total financing commitment to $2.4 billion which matures in August 2022. This syndicated credit facility is comprised of 18 financial institutions, including seven manufacturer-affiliated finance companies. Under our credit facility we are permitted to allocate up to $1.9 billion in new vehicle inventory floor plan financing and up to a total of $500 million in used vehicle inventory floor plan financing and in revolving financing for general corporate purposes, including acquisitions and working capital. This credit facility may be expanded to $2.75 billion total availability, subject to lender approval. All borrowings from, and repayments to, our lending group are presented in the Consolidated Statements of Cash Flows as financing activities.

The availability of the revolving line of credit under our syndicated credit facility is determined according to a borrowing base comprised of a portion of certain accounts, receivables, invoices, inventory and equipment. The borrowing base is reduced by the sum of the outstanding aggregate principal balance of new and used vehicle floor plan loans and new and used swing line loans.

Our obligations under our revolving syndicated credit facility are secured by a substantial amount of our assets, including our inventory (including new and used vehicles, parts and accessories), equipment, accounts receivable (and other rights to payment) and our equity interests in certain of our subsidiaries. Under our revolving syndicated credit facility, our obligations relating to new vehicle floor plan loans are secured only by collateral owned by borrowers of new vehicle floor plan loans under the credit facility.

We have the ability to deposit up to $50 million in cash in Principal Reduction (PR) accounts associated with our new vehicle floor plan commitment. The PR accounts are recognized as offsetting credits against outstanding amounts on our new vehicle floor plan commitment and would reduce interest expense associated with the outstanding principal balance. As of December 31, 2017, we had no balances in our PR accounts.

If the outstanding principal balance on our new vehicle inventory floor plan commitment, plus requests on any day, exceeds 95% of the loan commitment, a portion of the revolving line of credit must be reserved. The reserve amount is equal to the lesser of $15.0 million or the maximum revolving line of credit commitment less the outstanding balance on the line less outstanding letters of credit. The reserve amount decreases the revolving line of credit availability and may be used to repay the new vehicle floor plan commitment balance.

The interest rate on the credit facility varies based on the type of debt, with the rate of one-month LIBOR plus 1.25% for new vehicle floor plan financing, one-month LIBOR plus 1.50% for used vehicle floor plan financing; and a variable interest rate on the revolving financing ranging from the one-month LIBOR plus 1.25% to 2.50%, depending on our leverage ratio. The annual interest rate associated with our new vehicle floor plan commitment was 2.82% at December 31, 2017. The annual interest rate associated with our used vehicle inventory financing facility and our revolving line of credit was 3.07% at December 31, 2017.

Under the terms of our credit facility we are subject to financial covenants and restrictive covenants that limit or restrict our incurring additional indebtedness, making investments, selling or acquiring assets and granting security interests in our assets.

Under our credit facility, we are required to maintain the ratios detailed in the following table:



Debt Covenant Ratio	Requirement	As of December 31, 2017
Current ratio	Not less than 1.10 to 1	1.21 to 1
Fixed charge coverage ratio	Not less than 1.20 to 1	2.82 to 1
Leverage ratio	Not more than 5.00 to 1	2.59 to 1

Other Lines of Credit

We have other lines of credit with a total financing commitment of $3.5 million for general corporate purposes, including acquisitions and working capital. Substantially all of these other lines of credit mature in 2019 and have interest rates ranging up to 2.94%. As of December 31, 2017, $0.6 million was outstanding on these other lines of credit.

Floor Plan Notes Payable

We have floor plan agreements with manufacturer-affiliated finance companies for certain new vehicles and vehicles that are designated for use as service loaners. The interest rates on these floor plan notes payable commitments vary by manufacturer and are variable rates. As of December 31, 2017, $116.8 million was outstanding on these agreements at interest rates ranging up to 5.50%. Borrowings from, and repayments to, manufacturer-affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows.

Real Estate Mortgages and Other Debt

We have mortgages associated with our owned real estate. Interest rates related to this debt ranged from 2.8% to 5.0% at December 31, 2017. The mortgages are payable in various installments through October 2034. As of December 31, 2017, we had fixed interest rates on 78.9% of our outstanding mortgage debt.

Our other debt includes capital leases and sellers’ notes. The interest rates associated with our other debt ranged from 3.1% to 8.0% at December 31, 2017. This debt, which totaled $12.5 million at December 31, 2017, is due in various installments through December 2050.

5.25% Senior Notes Due 2025

On July 24, 2017, we issued $300 million in aggregate principal amount of 5.25% Senior Notes due 2025 ("the Notes") to eligible purchasers in a private placement under Rule 144A and Regulation S of the Securities Act of 1933. Interest accrues on the Notes from July 24, 2017 and is payable semiannually on February 1 and August 1. The first interest payment is due on February 1, 2018. We may redeem the Notes in whole or in part at any time prior to August 1, 2020 at a price equal to 100% of the principal amount plus a make-whole premium set forth in the Indenture and accrued and unpaid interest. After August 1, 2020, we may redeem some or all of the Notes subject to the redemption prices set forth in the Indenture. If we experience specific kinds of changes of control, as described in the Indenture, we must offer to repurchase the Notes at 101% of their principal amount plus accrued and unpaid interest to the date of purchase.

Future Principal Payments

The schedule of future principal payments associated with real estate mortgages, our 5.25% Senior Notes and other debt as of December 31, 2017 was as follows (in thousands):



Year Ending December 31,
2018	$	18,948
2019	47,888
2020	40,236
2021	43,291
2022	61,103
Thereafter	571,014
Total principal payments	$	782,480