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Long-Term Debt | 12 Months Ended
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Dec. 31, 2018
Debt Disclosure [Abstract] |
LONG-TERM DEBT | LONG-TERM DEBT The Company carries its long-term debt at face value, net of applicable discounts and capitalized debt issuance costs. Long-term debt consisted of the following (in thousands):
|  | December 31,
|  | 2018 |  | 2017
5.00% Senior Notes (aggregate principal of $550,000 at December 31, 2018 and 2017) |  | $ | 543,730 |  |  | $ | 542,063 |
5.25% Senior Notes (aggregate principal of $300,000 at December 31, 2018 and 2017) |  | 296,735 |  |  | 296,151 |
Acquisition Line |  | 31,842 |  |  | 26,988 |
Real Estate Related & Other Long-Term Debt |  | 445,248 |  |  | 440,845 |
Capital lease obligations related to real estate, maturing in varying amounts through December 2037 with a weighted average interest rate of 8.4% and 10.4%, respectively |  | 48,612 |  |  | 51,665 |
|  | 1,366,167 |  |  | 1,357,712 |
Less current maturities of long-term debt |  | 84,678 |  |  | 39,528 |
|  | $ | 1,281,489 |  |  | $ | 1,318,184 |
Short-Term Financing The Company includes short-term financing loans within Current maturities of long-term debt and short-term financing, in the Company’s Consolidated Balance Sheets. As of December 31, 2018, the Company had a short-term financing arrangement in Brazil that totaled $0.7 million, which represented borrowings of $2.4 million and repayments of $1.3 million during the twelve months ended December 31, 2018. At December 31, 2018, the Company had two short-term working capital loans with third-party financial institutions in the U.K. that totaled $7.6 million, which represented borrowings of $37.9 million and repayments of $43.3 million during the twelve months ended December 31, 2018. At December 31, 2017, short-term borrowings under the U.K. third-party loans totaled $13.3 million. In addition, current maturities of long-term debt and short-term financing as of December 31, 2017, included an unsecured loan agreement with a third-party financial institution in the U.S. that totaled $24.7 million. During the twelve months ended December 31, 2018, the Company repaid the entire balance under the U.S. unsecured loan. 5.00% Senior Notes On June 2, 2014, the Company issued 5.00% senior unsecured notes with a face amount of $350.0 million (“5.00% Notes”). Subsequently, on September 9, 2014, the Company issued an additional $200.0 million of 5.00% Notes at a discount of 1.5% from face value. The 5.00% Notes mature on June 1, 2022 with interest due semiannually, in arrears, on June 1 and December 1 of each year. The Company may redeem some or all of the 5.00% Notes at specified prices, plus accrued and unpaid interest. The Company may be required to purchase the 5.00% Notes if it sells certain assets or triggers the change in control provisions defined in the 5.00% Notes indenture. The 5.00% Notes are senior unsecured obligations and rank equal in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of its future subordinated debt. The 5.00% Notes are guaranteed by substantially all of the Company’s U.S. subsidiaries. The U.S. subsidiary guarantees rank equally in the right of payment to all of the Company’s U.S. subsidiary guarantor’s existing and future subordinated debt. In addition, the 5.00% Notes are structurally subordinated to the liabilities of its non-guarantor subsidiaries and are subject to customary covenants, including a restricted payment basket and debt limitations. The restricted payment basket calculation under the terms of the 5.00% Notes is the same as under the Credit Facility Restricted Payment Basket. The 5.00% Notes were registered with the Securities and Exchange Commission in June 2015. The 5.00% Notes are presented net of unamortized underwriters’ fees, discount and debt issuance costs of $6.3 million as of December 31, 2018, which are being amortized over the term of the 5.00% Notes. 5.25% Senior Notes On December 8, 2015, the Company issued 5.25% senior unsecured notes with a face amount of $300.0 million (“5.25% Notes”). The 5.25% Notes mature on December 15, 2023 with interest due semiannually, in arrears, on June 15 and December 15 of each year. The Company may redeem some or all of the 5.25% Notes at specified prices, plus accrued and unpaid interest. The Company may be required to purchase the 5.25% Notes if it sells certain assets or triggers the change in control provisions defined in the 5.25% Notes indenture. The 5.25% Notes are senior unsecured obligations and rank equal in right of payment to all of the Company’s existing and future senior unsecured debt and senior in right of payment to all of its future subordinated debt. The 5.25% Notes are guaranteed by substantially all of the Company’s U.S. subsidiaries. The U.S. subsidiary guarantees rank equally in the right of payment to all of the Company’s U.S. subsidiary guarantor’s existing and future subordinated debt. In addition, the 5.25% Notes are structurally subordinated to the liabilities of its non-guarantor subsidiaries and are subject to customary covenants, including a restricted payment basket and debt limitations. The restricted payment basket calculation under the terms of the 5.25% Notes is the same as under the Credit Facility Restricted Payment Basket. The 5.25% Notes are presented net of unamortized underwriters’ fees, discount and debt issuance costs of $3.3 million as of December 31, 2018, which are being amortized over the term of the 5.25% Notes. Acquisition Line The Revolving Credit Facility, which includes the Acquisition Line, has the total borrowing capacity of $1.8 billion and matures on June 17, 2021. The Acquisition Line provides a maximum of $360.0 million and a minimum of $50.0 million for working capital and general corporate purposes, including acquisitions. See Note 12, “Credit Facilities,” for further discussion on the Company’s Revolving Credit Facility and Acquisition Line. Real Estate Related and Other Long-Term Debt The Company, as well as certain of its wholly-owned subsidiaries, has entered into separate term mortgage loans in the U.S. with three of its manufacturer-affiliated finance partners - TMCC, BMWFS and FMCC, as well as several third-party financial institutions (collectively, “U.S. Notes”). The U.S. Notes may be expanded for borrowings related to specific buildings and/or properties and are guaranteed by the Company. Each of the U.S. Notes was made in connection with, and is secured by mortgage liens on, the real property owned by the Company that is mortgaged under the loans. The U.S. Notes bear interest at fixed rates between 3.25% and 4.69%, and at variable indexed rates plus a spread between 1.50% and 2.50% per annum. The U.S. Notes consist of 60 term loans for an aggregate principal amount of $420.1 million. As of December 31, 2018, borrowings outstanding under the U.S. Notes totaled $343.8 million, with $67.9 million classified as Current maturities of long-term debt and short-term financing in the accompanying Consolidated Balance Sheets, as compared to $350.0 million outstanding with $26.4 million classified as Current maturities of long-term debt and short-term financing as of December 31, 2017. During 2018, the Company made additional net borrowings and principal payments of $42.7 million and $48.9 million, respectively. The U.S. Notes are presented net of unamortized underwriters’ fees, discount, and debt issuance costs of $0.6 million as of December 31, 2018, which are being amortized over the terms of the mortgage loans. The agreements provide for monthly payments based on 15 or 20-year amortization schedules and mature between January 2019 and November 2032. The U.S. Notes are cross-collateralized and cross-defaulted with each other. The Company has entered into 18 separate term mortgage loans in the U.K. with third-party financial institutions, which are secured by the Company’s U.K. properties. These mortgage loans (collectively, “U.K. Notes”) are denominated in British pound sterling and are being repaid in monthly installments that will mature by September 2034. As of December 31, 2018, borrowings under the U.K. Notes totaled $73.8 million, with $7.6 million classified as Current maturities of long-term debt and short-term financing in the accompanying Consolidated Balance Sheets, as compared to $79.2 million outstanding with $7.4 million classified as Current maturities of long-term debt and short-term financing as of December 31, 2017. During 2018, the Company made additional borrowings and principal payments of $12.1 million and $12.5 million, respectively, associated with the U.K. Notes. Additionally, during 2018, the Company has entered into an unsecured loan agreement in the U.K. with a third-party financial institution that matures in March 2028. As of December 31, 2018, borrowings under the agreement totaled $18.5 million, with $2.0 million classified as a Current maturities of long-term debt and short-term financing in the accompanying Consolidated Balance Sheets. The Company has a separate term mortgage loan in Brazil with a third-party financial institution (the “Brazil Note”). The Brazil Note is denominated in Brazilian real and is secured by one of the Company’s Brazilian properties, as well as a guarantee from the Company. The Brazil Note is being repaid in monthly installments that will mature by April 2025. As of December 31, 2018, borrowings under the Brazil Note totaled $2.5 million, with $0.3 million classified as a Current maturity of long-term debt and short-term financing in the accompanying Consolidated Balance Sheets. At December 31, 2017, borrowings under the Brazil Note totaled $3.3 million, with $0.4 million classified as a Current maturities of long-term debt and short-term financing in the accompanying Consolidated Balance Sheets. During 2018, the Company made no additional borrowings and made principal payments of $0.5 million associated with the Brazil Note. The Company also has a working capital loan agreement with a third-party financial institution in Brazil. The principal balance on the loan is due by February 2020 with interest only payments being made until the due date. As of December 31, 2018 and 2017, borrowings under the Brazilian third-party loan totaled $5.7 million and $6.6 million, respectively. During 2018, the Company made no additional borrowings or principal payments. Fair Value of Long-Term Debt The Company’s outstanding 5.00% Notes had a fair value of $521.6 million and $567.9 million as of December 31, 2018 and December 31, 2017, respectively. The Company’s outstanding 5.25% Notes had a fair value of $286.5 million and $310.9 million as of December 31, 2018 and December 31, 2017, respectively. The carrying value of the Company’s fixed interest rate borrowings included in Real estate related and other long-term debt totaled $79.5 million and $86.8 million as of December 31, 2018 and December 31, 2017, respectively. The fair value of such fixed interest rate borrowings was $76.2 million and $92.9 million as of December 31, 2018 and December 31, 2017, respectively. The fair value estimates are based on Level 2 inputs of the fair value hierarchy available as of December 31, 2018 and December 31, 2017. The Company determined the estimated fair value of its long-term debt using available market information and commonly accepted valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, these estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. The use of different assumptions and/or estimation methodologies could have a material effect on estimated fair values. The carrying value of the Company’s variable rate debt approximates fair value due to the short-term nature of the interest rates. All Long-Term Debt Total interest expense on the 5.00% Notes and 5.25% Notes for the years ended December 31, 2018, 2017, and 2016 was $43.3 million, $43.3 million, and $43.3 million, respectively, excluding amortization of discounts and capitalized cost of $2.2 million, $2.2 million, and $2.1 million, respectively. Total interest expense on real estate related and other long-term debt, as well as the Acquisition Line, for the years ended December 31, 2018, 2017 and 2016, was $20.3 million, $15.0 million and $13.7 million, respectively. These amounts exclude the impact of the interest rate derivative instruments related to various variable-rate, real estate related mortgage loans of $0.5 million, $1.9 million, and $2.3 million for the years ended December 31, 2018, 2017, and 2016, respectively. In addition, the Company recognized $9.5 million, $8.2 million and $6.6 million of total interest expense related to capital leases and various other notes payable, net of interest income, for the years ended December 31, 2018, 2017 and 2016, respectively. The Company capitalized $1.3 million, $1.6 million, and $0.7 million of interest on construction projects in 2018, 2017 and 2016, respectively. The aggregate annual maturities of long-term debt, excluding unamortized capitalized debt issuance costs of $3.1 million, for the next five years are as follows (in thousands):
| Total
Years Ended December 31, |
2019 | $ | 84,865 |
2020 | 56,408 |
2021 | 93,233 |
2022 | 593,389 |
2023 | 371,834 |
Thereafter | 169,549 |
Total | $ | 1,369,278 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: 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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