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v3.25.1

Debt | 3 Months Ended
--- | ---
Mar. 31, 2025
Debt Disclosure [Abstract] |
Debt | DEBT Non-Vehicle Long-Term Debt Non-vehicle long-term debt consisted of the following:
Debt Description |  | Maturity Date |  | Interest Payable |  | March 31, 2025 |  | December 31, 2024
4.5% Senior Notes |  | October 1, 2025 |  | April 1 and October 1 |  | $ | 450.0 |  |  | $ | 450.0 |
3.8% Senior Notes |  | November 15, 2027 |  | May 15 and November 15 |  | 300.0 |  |  | 300.0 |
1.95% Senior Notes |  | August 1, 2028 |  | February 1 and August 1 |  | 400.0 |  |  | 400.0 |
4.75% Senior Notes |  | June 1, 2030 |  | June 1 and December 1 |  | 500.0 |  |  | 500.0 |
2.4% Senior Notes |  | August 1, 2031 |  | February 1 and August 1 |  | 450.0 |  |  | 450.0 |
3.85% Senior Notes |  | March 1, 2032 |  | March 1 and September 1 |  | 700.0 |  |  | 700.0 |
5.89% Senior Notes |  | March 15, 2035 |  | March 15 and September 15 |  | 500.0 |  |  | — |
Revolving credit facility |  | July 18, 2028 |  | Monthly |  | — |  |  | — |
Finance leases and other debt |  | Various dates through 2041 |  |  |  | 344.5 |  |  | 350.0 |
|  |  |  |  |  | 3,644.5 |  |  | 3,150.0 |
Less: unamortized debt discounts and debt issuance costs |  | (21.8) |  |  | (17.9) |
Less: current maturities |  |  |  |  |  | (518.2) |  |  | (518.5) |
Long-term debt, net of current maturities |  |  |  | $ | 3,104.5 |  |  | $ | 2,613.6 |
Senior Unsecured Notes and Credit Agreement On February 24, 2025, we issued $500.0 million aggregate principal amount of 5.89% Senior Notes due 2035, which were sold at 99.995% of the aggregate principal amount. The interest rates payable on our 4.5% Senior Notes, 3.8% Senior Notes, and 4.75% Senior Notes are subject to adjustment upon the occurrence of certain credit rating events as provided in the indentures for these senior unsecured notes. Under our amended and restated credit agreement, we have a $1.9 billion revolving credit facility that matures on July 18, 2028. The credit agreement also contains an accordion feature that allows us, subject to credit availability and certain other conditions, to increase the amount of the revolving credit facility, together with any added term loans, by up to $500.0 million in the aggregate. As of March 31, 2025, we had no borrowings outstanding under our revolving credit facility. We have a $200.0 million letter of credit sublimit as part of the revolving credit facility. The amount available to be borrowed under the revolving credit facility is reduced on a dollar-for-dollar basis by the cumulative amount of any outstanding letters of credit, which was $0.8 million at March 31, 2025, leaving a borrowing capacity under our credit agreement of $1,899.2 million at March 31, 2025. As of March 31, 2025, this borrowing capacity was limited under the maximum consolidated leverage ratio contained in our credit agreement to $1,857.6 million. Our revolving credit facility provides for a commitment fee on undrawn amounts ranging from 0.125% to 0.20% and interest on borrowings at SOFR plus a credit spread adjustment of 0.10% or the base rate, in each case plus an applicable margin. The applicable margin ranges from 1.125% to 1.50% for SOFR borrowings and 0.125% to 0.50% for base rate borrowings. The interest rate charged for our revolving credit facility is affected by our leverage ratio. Within the meaning of Regulation S-X, Rule 3-10, AutoNation, Inc. (the parent company) has no independent assets or operations. If guarantees of our subsidiaries were to be issued under our existing registration statement, we expect that such guarantees would be full and unconditional and joint and several, and any subsidiaries other than the guarantor subsidiaries would be minor. Other Long-Term Debt At March 31, 2025, we had finance leases and other debt obligations of $344.5 million, which are due at various dates through 2041. Commercial Paper We have a commercial paper program pursuant to which we may issue short-term, unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $1.9 billion. The interest rate for the commercial paper notes varies based on duration and market conditions. The maturities of the commercial paper notes may vary, but may not exceed 397 days from the date of issuance. Proceeds from the issuance of commercial paper notes are used to repay borrowings under the revolving credit facility, to finance acquisitions, and for strategic initiatives, working capital, capital expenditures, share repurchases, and/or other general corporate purposes. We use the revolving credit facility under our credit agreement as a liquidity backstop for borrowings under the commercial paper program. A downgrade in our credit ratings could negatively impact our ability to issue, or the interest rates for, commercial paper notes. At March 31, 2025, we had $340.0 million of commercial paper notes outstanding with a weighted-average annual interest rate of 4.8% and a weighted-average remaining term of 1 day. At December 31, 2024, we had $630.0 million of commercial paper notes outstanding with a weighted-average annual interest rate of 4.9% and a weighted-average remaining term of 9 days. Non-Recourse Debt Non-recourse debt relates to financed auto loans receivable of our captive auto finance company funded through a combination of warehouse facilities, asset-backed term funding transactions, and free cash flows from operations. Non-recourse debt outstanding at March 31, 2025, and December 31, 2024, consisted of the following:
| March 31, 2025 |  | December 31, 2024
Warehouse facilities | $ | 1,060.4 |  |  | $ | 801.5 |
Term securitization debt of consolidated VIEs | 19.9 |  |  | 24.7 |
| 1,080.3 |  |  | 826.2 |
Less: unamortized debt discounts and debt issuance costs | (0.1) |  |  | (0.2) |
Less: current maturities | (41.3) |  |  | (28.3) |
Non-recourse debt, net of current maturities | $ | 1,038.9 |  |  | $ | 797.7 |
The timing of principal payments on the non-recourse debt is based on the timing of principal collections and defaults on the related auto loans receivable. The current portion of non-recourse debt represents the portion of the payments received from the auto loans receivable that are due to be distributed as principal payments on the non-recourse debt in the following period. We recognize transfers of auto loans receivable into the warehouse facilities and term securitizations (together, “non-recourse debt”) as secured borrowings, which result in recording the auto loans receivable and the related non-recourse debt on our Unaudited Condensed Consolidated Balance Sheets. The non-recourse debt is structured to legally isolate the auto loans receivable, which can only be used as collateral to settle obligations of the related non-recourse debt. The term securitization trusts and investors and the creditors of the warehouse facilities have no recourse to our assets for payment of the debt beyond the related auto loan receivables, the amounts on deposit in reserve accounts, and the restricted cash from collections on auto loans receivable. Warehouse Facilities We have three warehouse facility agreements with certain banking institutions through wholly-owned, bankruptcy-remote, special purpose entities, primarily to finance the purchase and origination of auto loans receivable. We fund auto loans receivable through these warehouse facilities, which are secured by the eligible auto loans receivable pledged as collateral. We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. At March 31, 2025, our warehouse facilities utilized SOFR-based interest rates, as well as interest rates based on a lender’s asset-backed commercial paper conduit. Our warehouse facilities had a weighted-average interest rate of 5.3% at March 31, 2025, and 5.4% at December 31, 2024. The aggregate capacities under our warehouse facilities as of March 31, 2025, were as follows:
|  | March 31, 2025
Warehouse facilities: |  |
August 31, 2025 expiration |  | $ | 400.0 |
October 1, 2025 expiration |  | 300.0 |
October 17, 2025 expiration |  | 450.0 |
Aggregate capacity |  | $ | 1,150.0 |
Unused capacity |  | $ | 89.6 |
The remaining borrowing capacity of $89.6 million was limited to $0.2 million based on the eligible auto loans receivable that have been pledged as collateral. Term Securitizations We have term securitizations that were put in place to provide long-term funding for certain auto loans receivable initially funded through the warehouse facilities. In these transactions, a pool of auto loans receivable is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust (“term securitization trust”). The term securitization trust issues asset-backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized receivables. We are required to evaluate the term securitization trusts for consolidation. We retain the servicing rights for the auto loans receivable that were funded through the term securitizations. In our capacity as servicer of the underlying auto loans receivable, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the trusts and are required to consolidate them. The term securitization debt of consolidated variable interest entities (“VIEs”) consists of various notes with interest rates ranging from 2.11% to 4.45% and maturity dates ranging from April 2027 to May 2028. Term securitization debt is expected to become due and be paid prior to the final legal maturities based on amortization of the auto loans receivable pledged as collateral. The term securitization agreements require certain funds to be held in restricted cash accounts to provide additional collateral for the borrowings or to be applied to make payments on the securitization debt. Restricted cash of consolidated VIEs under the various term securitization agreements totaled $3.4 million as of March 31, 2025, and $3.4 million as of December 31, 2024, and is included in Other Current Assets and Other Assets in our Unaudited Condensed Consolidated Balance Sheets. Auto loans receivable pledged to the term securitization debt of consolidated VIEs totaled $19.7 million as of March 31, 2025, and $24.5 million as of December 31, 2024.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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