XML 70 R19.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Credit Facilities and Long-term Debt | 12 Months Ended
--- | ---
Dec. 31, 2023
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 Dates |  | 2023 |  | 2022
Long-term debt: |  |  |  |  |  |
Used and service loaner vehicle inventory financing commitments |  | Various dates through Apr 2026 |  | $ | 902.8 |  |  | $ | 877.2 |
Revolving lines of credit |  | Various dates through Apr 2026 |  | 1,620.7 |  |  | 927.6 |
Warehouse facilities |  | Various dates through Jul 2026 |  | 587.0 |  |  | 930.0 |
Non-recourse notes payable |  | Various dates through Apr 2031 |  | 1,705.6 |  |  | 422.2 |
4.625% Senior notes due 2027 |  | Dec 2027 |  | 400.0 |  |  | 400.0 |
4.375% Senior notes due 2031 |  | Jan 2031 |  | 550.0 |  |  | 550.0 |
3.875% Senior notes due 2029 |  | Jun 2029 |  | 800.0 |  |  | 800.0 |
Real estate mortgages, finance lease obligations, and other debt |  | Various dates through Dec 2050 |  | 730.7 |  |  | 653.1 |
Total long-term debt |  |  |  | 7,296.8 |  |  | 5,560.1 |
Less: unamortized debt issuance costs |  |  |  | (31.8) |  |  | (29.1) |
Less: current maturities (net of current debt issuance costs) |  |  |  | (109.6) |  |  | (20.5) |
Long-term debt, net |  |  |  | $ | 7,155.4 |  |  | $ | 5,510.5 |
Credit Facilities US Bank Syndicated Credit Facility On February 9, 2023, we amended our existing syndicated credit facility (USB credit facility), comprised of 21 financial institutions, including eight manufacturer-affiliated finance companies, maturing April 29, 2026. This USB credit facility provides for a total financing commitment of $4.6 billion, which may be further expanded, subject to lender approval and the satisfaction of other conditions, up to a total of $5.5 billion. The allocation of the financing commitment is for up to $800 million in used vehicle inventory floorplan financing, up to $1.7 billion in revolving financing for general corporate purposes, including acquisitions and working capital, up to $2.1 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:
Commitment | Annual Interest Rate at December 31, 2023
New vehicle floor plan | 6.58%
Used vehicle floor plan | 6.88%
Service loaner floor plan | 6.68%
Revolving line of credit | 6.48%
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. 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.
Commitment | Annual Interest Rate at December 31, 2023
Wholesale flooring facility | 6.46%
Used vehicle flooring facility | 6.71%
Daily rental facility | 6.66%
Wholesale leasing facility | 6.76%
Working capital revolving facility | 6.71%
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. Wells Fargo Syndicated Real Estate Facility On February 9, 2023, 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 $196.0 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 1.10%-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, 2023, we had $195.8 million drawn 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, 2023, we had $100.0 million drawn on the Ally credit facility. JPM Warehouse facility On July 20, 2023, we amended our securitization facility for our auto loan portfolio (JPM warehouse facility) with JPMorgan Chase Bank, as administrative agent and account bank, providing initial commitments for borrowings of up to $1.0 billion. The JPM warehouse facility matures on July 18, 2025. The interest rate on the JPM warehouse facility varies based on the Daily Simple SOFR rate plus 1.15% to 1.95%. As of December 31, 2023, we had $395.0 million drawn on the JPM warehouse facility. Mizuho Warehouse facility On July 20, 2023, we amended our securitization facility for our auto loan portfolio (Mizuho warehouse facility), with Mizuho Bank Ltd. as administrative agent and account bank, providing initial commitments for borrowings of up to $750 million and matures on July 20, 2026. The interest rate on the Mizuho warehouse facility varies based on the Daily Simple SOFR rate plus 1.20%. As of December 31, 2023, we had $192 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 2023, we issued $1.9 billion in non-recourse notes payable related to quarterly asset-backed term funding transactions. Below is a summary of outstanding non-recourse notes payable issued:
($ in millions) | Balance as of December 31, 2023 | Initial Principal Amount | Issuance Date | Interest Rate Range | Final Distribution Date
LAD Auto Receivables Trust 2021-1 Class A-D | $ | 97.4 |  | $ | 344.4 |  | 11/24/21 | 1.30% to 3.99% | Various dates through Nov 2029
LAD Auto Receivables Trust 2022-1 Class A-C | 150.6 |  | 298.1 |  | 08/17/22 | 5.21% to 6.85% | Various dates through Apr 2030
LAD Auto Receivables Trust 2023-1 Class A-D | 315.0 |  | 479.7 |  | 02/14/23 | 5.48% to 7.30% | Various dates through Jun 2030
LAD Auto Receivables Trust 2023-2 Class A-D | 402.1 |  | 556.7 |  | 05/24/23 | 5.42% to 6.30% | Various dates through Feb 2031
LAD Auto Receivables Trust 2023-3 Class A-D | 349.4 |  | 415.4 |  | 08/23/23 | 5.95% to 6.92% | Various dates through Dec 2030
LAD Auto Receivables Trust 2023-4 Class A-D | 391.1 |  | 421.2 |  | 11/15/23 | 5.71% to 7.37% | Various dates through Apr 2031
Total non-recourse notes payable | $ | 1,705.6 |  | $ | 2,515.5 |  |  |  |
Senior Notes Below is a summary of outstanding senior notes issued:
($ in millions) | Principal Amount | Earliest Redemption Date | % Currently Redeemable | Current Redemption Price | Maturity Date | Interest Payment Dates
4.625% Senior notes due 2027 | $400.0 | 12/15/22 | 100% | 102.313% | 12/15/27 | Jun 15, Dec 15
3.875% Senior notes due 2029 | 800.0 | 06/01/24 | 40% | 103.875% | 06/01/29 | Jun 1, Dec 1
4.375% Senior notes due 2031 | 550.0 | 10/15/25 | 40% | 104.375% | 01/15/31 | Jan 15, Jul 15
Total senior notes | $1,750.0 |  |  |  |  |
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 8.5% at December 31, 2023. The mortgages are payable in various installments through July 1, 2038. As of December 31, 2023, we had fixed interest rates on 79.6% 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, 2023. The leases have terms extending through August 2037. Our other debt includes sellers’ notes and debt associated with our Canadian Financing Operations. The interest rates associated with our other debt ranged from 2.3% to 10.0% at December 31, 2023. This debt, which totaled $7.0 million at December 31, 2023, is due in various installments through February 28, 2029. Future Principal Payments The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2023 was as follows:
Year Ending December 31, |  | ($ in millions)
2024 |  | $ | 82.3 |
2025 |  | 75.4 |
2026 |  | 51.0 |
2027 |  | 476.2 |
2028 |  | 109.6 |
Thereafter |  | 1,686.3 |
Total principal payments |  | $ | 2,480.8 |
This table does not include future payments related to revolving lines of credit or non-recourse notes payable.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration