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Credit Facilities and Long-term Debt | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Credit Facilities and Long-term Debt | Credit Facilities and Long-Term Debt Below is a summary of our outstanding balances on credit facilities and long-term debt (in millions):
|  | December 31,
(Dollars in millions) |  | 2020 |  | 2019
Floor plan notes payable: non-trade |  | $ | 1,563.0 |  |  | $ | 1,642.4 |
Floor plan notes payable |  | 234.2 |  |  | 425.2 |
Total floor plan debt |  | $ | 1,797.2 |  |  | $ | 2,067.6 |
Used and service loaner vehicle inventory financing commitments |  | $ | — |  |  | $ | 149.0 |
Revolving lines of credit |  | 39.0 |  |  | — |
Real estate mortgages |  | 611.5 |  |  | 597.7 |
Finance lease obligations |  | 246.4 |  |  | 30.5 |
5.250% Senior notes due 2025 |  | 300.0 |  |  | 300.0 |
4.625% Senior notes due 2027 |  | 400.0 |  |  | 400.0 |
4.375% Senior notes due 2031 |  | 550.0 |  |  | — |
Other debt |  | 2.4 |  |  | 3.1 |
Total long-term debt outstanding |  | 2,149.3 |  |  | 1,480.3 |
Less: unamortized debt issuance costs |  | (18.6) |  |  | (10.4) |
Less: current maturities (net of current debt issuance costs) |  | (66.0) |  |  | (39.3) |
Long-term debt |  | $ | 2,064.7 |  |  | $ | 1,430.6 |
Credit Facility Our syndicated credit facility (credit facility) is comprised of 19 financial institutions, including seven manufacturer-affiliated finance companies, with a maturity date of January 2025. We have the option to reallocate the commitments, provided that the used vehicle inventory floor plan financing commitment does not exceed 16.5% of aggregate commitments, the revolving loan commitment does not exceed 18.75% of aggregate commitments, the service loaner floor plan financing commitment does not exceed $100 million, and the sum of these commitments plus the new vehicle inventory floor plan financing commitment does not exceed the aggregate total financing commitment of $2.8 billion. Additionally, we may request an increase in the aggregate new vehicle floor plan commitment of up to $400 million, provided that the aggregate commitment does not exceed $3.2 billion. All borrowings from, and repayments to, our lending group are presented in the Consolidated Statements of Cash Flows as financing activities. Our obligations under our 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 subsidiaries. Under our credit facility, our obligations relating to new vehicle floor plan loans are secured only be collateral owned by borrowers of new vehicle floor plan loans under the credit facility. The interest rate on the credit facility, as amended, varies based on the type of debt, with the rate of one-month LIBOR plus 1.10% for new vehicle floor plan financing, one-month LIBOR plus 1.40% for used vehicle floor plan financing; and a variable interest rate on the revolving financing ranging from the one-month LIBOR plus 1.00% to 2.00%, depending on our leverage ratio. The annual interest rate associated with our new vehicle floor plan commitment was 1.24% at December 31, 2020. The annual interest rate associated with our used vehicle inventory financing commitment was 1.54% at December 31, 2020. The annual interest rate associated with our service loaner inventory financing commitment was 1.34% at December 31, 2020. The annual interest rate associated with our revolving line of credit was 1.14% at December 31, 2020. 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, 2020
Current ratio |  | Not less than 1.10 to 1 |  | 1.48 to 1
Fixed charge coverage ratio |  | Not less than 1.20 to 1 |  | 3.91 to 1
Leverage ratio |  | Not more than 5.75 to 1 |  | 2.74 to 1
Other Lines of Credit Our other lines of credit include commitments of up to $80.0 million, secured by certain assets from select Chrysler locations and all Ford locations. These other lines of credit mature in 2021 and have interest rates up to 5.70%. As of December 31, 2020, no amounts were outstanding on these other lines of credit. On July 14, 2020, we entered into a five-year real estate backed facility with eight financial institutions, including two manufacturer affiliated finance companies, maturing in July 2025. The real-estate backed credit facility provides a total financing commitment of up to $251.5 million in working capital financing for general corporate purposes, including acquisitions and working capital, collateralized by real estate and certain other assets owned by us. The interest rate on this credit facility uses one-month LIBOR plus a margin ranging from 2.00%-2.50% based on our leverage ratio, or a base rate of 0.75% plus a margin. The facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties by us. Financial covenants include requirements to maintain minimum current and fixed charge coverage ratios, and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with U.S. Bank National Association as administrative agent.As of December 31, 2020, no amounts were outstanding on the real estate backed facility. On July 31, 2020, we entered into a securitization facility which provides initial commitments for borrowings of up to $150.0 million and matures in July 2022. As of December 31, 2020, we had $39.0 million drawn on the securitization facility. 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. As discussed above in “Operating Activities” in “Liquidity and Capital Resources”, during 2019 we entered a floor plan agreement with Chrysler Capital. This facility provides floor plan financing for new vehicle inventory at select Chrysler stores. This facility adds to our existing facility with Ford Motor Credit Company. The interest rates on these floor plan notes payable commitments vary by manufacturer and are variable rates. As of December 31, 2020, $234.2 million was outstanding on these agreements at interest rates ranging up to 5.25%. Borrowings from and repayments to manufacturer-affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows. Real Estate Mortgages, Finance Lease Obligations, and Other Debt We have mortgages associated with our owned real estate. Interest rates related to this debt ranged from 1.9% to 5.3% at December 31, 2020. The mortgages are payable in various installments through August 1, 2038. As of December 31, 2020, we had fixed interest rates on 76.2% of our outstanding mortgage debt. We have finance lease obligations with some of our leased real estate. Interest rates related to this debt ranged from 1.9% to 8.5% at December 31, 2020. The leases have terms extending through August 2037. Our other debt includes sellers’ notes. The interest rates associated with our other debt ranged from 4.4% to 5.3% at December 31, 2020. This debt, which totaled $2.4 million at December 31, 2020, is due in various installments through August 2037. 5.250% Senior Notes Due 2025 On July 24, 2017, we issued $300.0 million in aggregate principal amount of 5.250% senior notes due 2025 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 was paid 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. 4.625% Senior Notes Due 2027 On December 9, 2019, we issued $400.0 million in aggregate principal amount of 4.625% senior notes due 2027 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 December 9, 2019 and is payable semiannually on June 15 and December 15. We may redeem the notes in whole or in part, on or after December 15, 2022, at the redemption prices set forth in the indenture. Prior to December 15, 2022, we may redeem the notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a make-whole premium set forth in the indenture. In addition, prior to December 15, 2022, we may redeem up to 40% of the notes from the proceeds of certain equity offerings. Upon certain change of control events (as set forth in the indenture), the holders of the notes may require us to repurchase all or a portion of the notes at a purchase price of 101% of their principal amount plus accrued and unpaid interest, if any, to the date of purchase. 4.375% Senior Notes Due 2031 On October 9, 2020, we issued $550.0 million in aggregate principal amount of 4.375% senior notes due January 15, 2031 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 October 9, 2020 and is payable semiannually on January 15 and July 15. We may redeem the notes in whole or in part, on or after October 15, 2025, at the redemption prices set forth in the indenture. Prior to October 15, 2025, we may redeem the notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a make-whole premium set forth in the indenture. In addition, prior to October 15, 2025, we may redeem up to 40% of the notes from the proceeds of certain equity offerings. Upon certain change of control events (as set forth in the indenture), the holders of the notes may require us to repurchase all or a portion of the notes at a purchase price of 101% of their principal amount plus accrued and unpaid interest, if any, to the date of purchase. Future Principal Payments The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2020 was as follows:
Year Ending December 31, |  | (Dollars in millions)
2021 |  | $ | 69.4 |
2022 |  | 78.9 |
2023 |  | 148.0 |
2024 |  | 87.5 |
2025 |  | 448.3 |
Thereafter |  | 1,278.2 |
Total principal payments |  | $ | 2,110.3 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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