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Credit Facilities and Long-term Debt
 12 Months Ended
Dec. 31, 2022
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:
December 31,
($ in millions)Maturity Dates20222021
Long-term debt:
Used and service loaner vehicle inventory financing commitmentsVarious dates through Apr 2026$877.2 $500.0 
Revolving lines of creditVarious dates through Apr 2026927.6 129.9 
Warehouse facilitiesVarious dates through Nov 2025930.0 90.0 
Total lines of credit2,734.8 719.9 
Real estate mortgagesVarious dates through Jan 2043580.1 592.9 
Finance lease obligationsVarious dates through Aug 203756.4 53.6 
4.625% Senior notes due 2027
Dec 2027400.0 400.0 
4.375% Senior notes due 2031
Jan 2031550.0 550.0 
3.875% Senior notes due 2029
Jun 2029800.0 800.0 
Other debtVarious dates through Jan 202416.6 1.9 
Total long-term debt outstanding5,137.9 3,118.3 
Less: unamortized debt issuance costs(29.1)(26.5)
Less: current maturities (net of current debt issuance costs)(20.5)(223.7)
Long-term debt, less current maturities$5,088.3 $2,868.1 
Non-recourse notes payable
Various dates through Apr 2030$422.2 $317.6 

Credit Facilities
US Bank Syndicated Credit Facility
On November 21, 2022, we amended our existing syndicated credit facility (USB credit facility), comprised of 20 financial institutions, including eight manufacturer-affiliated finance companies, maturing April 29, 2026.

This USB credit facility provides for a total financing commitment of $3.75 billion, which may be further expanded, subject to lender approval and the satisfaction of other conditions, up to a total of $4.5 billion. The allocation of the financing commitment is for up to $800 million in used vehicle inventory floorplan financing, up to $1.5 billion in revolving financing for general corporate purposes, including acquisitions and working capital, up to $1.4 billion in new vehicle inventory floorplan financing, and up to $50 million in service loaner vehicle floorplan financing. We have the option to reallocate the commitments under this USB credit facility, provided that the aggregate revolving loan commitment may not be more than 40% of the amount of the aggregate commitment, and the aggregate service loaner vehicle floorplan commitment may not be more than the 3% of the amount of the aggregate commitment. 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 USB 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 USB 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 USB credit facility.

The interest rate on the USB credit facility varies based on the type of debt, with the rate of one-day SOFR plus a credit spread adjustment of 0.10% plus a margin of 1.10% for new vehicle floor plan financing, 1.40% for used vehicle floor plan financing, 1.20% for service loaner floor plan financing, and a variable interest rate on the revolving financing ranging from 1.00% to 2.00% depending on our leverage ratio. The annual interest rates associated with our floor plan commitments are as follows:
CommitmentAnnual Interest Rate at December 31, 2022
New vehicle floor plan5.51%
Used vehicle floor plan5.81%
Service loaner floor plan5.51%
Revolving line of credit5.41%
Under the terms of our USB 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 USB credit facility, we are required to maintain the ratios detailed in the following table:
Debt Covenant RatioRequirementAs of December 31, 2022
Fixed charge coverage ratio
Not less than 1.20 to 1
5.81 to 1
Leverage ratio
Not more than 5.75 to 1
1.36 to 1

Bank of Nova Scotia Syndicated Credit Facility
On June 3, 2022, we entered into a syndicated credit agreement with The Bank of Nova Scotia as agent (BNS credit facility), comprised of six financing institutions, including two manufacturer-affiliated finance companies.

The BNS credit facility provides for a total financing commitment of approximately $1.1 billion CAD, including a working capital revolving credit facility of up to $100 million CAD, a wholesale flooring facility for new vehicles up to $500 million CAD, used vehicle flooring facility of up to $100 million CAD, wholesale leasing facility of up to $400 million CAD, and daily rental vehicle facility up to $25 million CAD.

CommitmentAnnual Interest Rate at December 31, 2022
Wholesale flooring facility5.76%
Used vehicle flooring facility6.01%
Daily rental facility5.96%
Wholesale leasing facility6.06%
Working capital revolving facility6.01%

All Canadian facilities other than the wholesale flooring facility, which is a demand facility, mature on June 3, 2025. The credit agreement includes various financial and other covenants typical of such agreements. As of December 31, 2022, we were in compliance with all such covenants.

Wells Fargo Syndicated Real Estate Facility
On November 30, 2022, we amended our existing syndicated real estate backed facility with Wells Fargo Bank, National Association, as agent (WFB credit facility), which includes eight financial institutions, including two manufacturer affiliated finance companies, maturing July 14, 2025.

The WFB credit facility currently provides a total financing commitment of up to $216.2 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 the WFB credit facility uses Daily Simple SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 2.00%-2.50% based on our leverage ratio.

The WFB credit 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 fixed charge coverage ratio 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, 2022, no amounts were outstanding on the WFB credit facility.

Ally Real Estate Facility
On December 28, 2022, we amended our existing real estate backed facility with Ally Bank (Ally Capital in Hawaii, Mississippi, Montana and New Jersey), as lender. The credit agreement matures on September 12, 2025 and provides for a revolving line of credit facility (Ally credit facility) of up to $300 million and is secured by real estate owned by us. The Ally credit facility will bear interest at a rate per annum equal to the greater of 3.00% or the prime rate designated by Ally Bank, minus 40 basis points. The Ally credit facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties. Financial covenants, including the requirements to maintain minimum fixed charge coverage ratio and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with US Bank National Association as administrative agent. The covenants restrict us from disposing of assets and granting additional security interests. As of December 31, 2022, no amounts were outstanding on the Ally credit facility.
JPM Warehouse facility
On November 17, 2022, we amended our existing securitization facility for our auto loan portfolio (JPM warehouse facility) with JPMorgan Chase Bank, as administrative agent and committed lender, and Chariot Funding LLC, as conduit lender.

The JPM warehouse facility provides initial commitments for borrowings of up to $1.0 billion and matures on July 29, 2024. The interest rate on the JPM warehouse facility varies based on JPM’s Commercial Paper rate plus 1.70%. As of December 31, 2022, we had $785.0 million drawn on the JPM warehouse facility.

Mizuho Warehouse facility
On November 1, 2022, we entered into a loan agreement, establishing a securitization facility for our auto loan portfolio (Mizuho warehouse facility), with Mizuho Bank Ltd. as administrative agent and account bank.

The Mizuho warehouse facility provides initial commitments for borrowings of up to $500 million and matures on November 1, 2025. The interest rate on the Mizuho warehouse facility varies based on the Daily Simple SOFR rate plus 1.30%. As of December 31, 2022, we had $145 million drawn on the Mizuho warehouse facility.

Non-Recourse Notes Payable
DFC auto loans receivable are temporarily funded through our warehouse facilities until they can be funded through non-recourse asset-backed term transactions. These non-recourse funding vehicles are structured to legally isolate the auto loans receivable, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in insolvency, receivership or conservatorship proceedings. Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans receivable. We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles.

In August 2022, we issued $298.1 million in non-recourse notes payable related to the asset-backed term funding transaction. Below is a summary of outstanding non-recourse notes payable issued:
($ in millions)Balance as of December 31, 2022Initial Principal AmountIssuance DateInterest RateFinal Distribution Date
LAD Auto Receivables Trust 2021-1 Class A$115.0 $282.8 11/19/211.30%08/17/26
LAD Auto Receivables Trust 2021-1 Class B18.3 18.3 11/19/211.94%11/16/26
LAD Auto Receivables Trust 2021-1 Class C26.0 26.0 11/19/212.35%04/15/27
LAD Auto Receivables Trust 2021-1 Class D17.2 17.2 11/19/213.99%11/15/29
LAD Auto Receivables Trust 2022-1 Class A207.2 259.7 08/09/225.21%06/15/27
LAD Auto Receivables Trust 2022-1 Class B15.5 15.5 08/09/225.87%09/15/27
LAD Auto Receivables Trust 2022-1 Class C23.0 22.9 08/09/226.85%04/15/30
Total non-recourse notes payable$422.2 $642.4 

Senior Notes
Below is a summary of outstanding senior notes issued:
($ in millions)Principal AmountEarliest Redemption Date% Currently RedeemableCurrent Redemption PriceMaturity DateInterest Payment Dates
4.625% Senior notes due 2027
$400.012/15/22100%102.313%12/15/27Jun 15, Dec 15
4.375% Senior notes due 2031
550.010/15/2540%104.375%01/15/31Jan 15, Jul 15
3.875% Senior notes due 2029
800.006/01/2440%103.875%06/01/29Jun 1, Dec 1
Total senior notes$1,750.0

On August 1, 2021, we redeemed in full the aggregate $300 million principal amount of our 5.250% senior notes due 2025 at a redemption price equal to 102.625% of the principal amount of the notes plus accrued and unpaid interest thereon. This early redemption resulted in a $10.3 million loss on extinguishment of debt, presented as a component of “Other (expense) income, net” in our Consolidated Statement of Operations for the year ended December 31, 2021.
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 3.0% to 8.0% at December 31, 2022. The mortgages are payable in various installments through July 1, 2038. December 31, 2022, we had fixed interest rates on 71.7% 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 2.5% to 8.5% at December 31, 2022. The leases have terms extending through August 2037.

Our other debt includes sellers’ notes and debt associated with our Pfaff Leasing operations. The interest rates associated with our other debt ranged from 2.3% to 10.0% at December 31, 2022. This debt, which totaled $16.6 million at December 31, 2022, is due in various installments through February 28, 2029.

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, 2022 was as follows:
Year Ending December 31,($ in millions)
2023$26.7 
202474.8 
202574.1 
202649.3 
2027473.8 
Thereafter1,688.9 
Total principal payments$2,387.6 
This table does not include future payments related to revolving lines of credit, non-recourse notes payable, and other debt associated with our Pfaff Leasing operations.