FLOORPLAN NOTES PAYABLE

12 Months Ended

Dec. 31, 2021

The Company’s floorplan notes payable consisted of the following (in millions):


	December 31,
	2021		2020
Revolving Credit Facility — floorplan notes payable	$	511.7	$	901.6
Revolving Credit Facility — floorplan notes payable offset account	(268.6)		(160.4)
Revolving Credit Facility — floorplan notes payable, net	243.1		741.2
Other non-manufacturer facilities	51.9		25.3
Floorplan notes payable — credit facility and other, net	$	295.0	$	766.5

FMCC facility	$	22.8	$	111.2
FMCC facility offset account	(3.3)		(16.0)
FMCC facility, net	19.5		95.2
Other manufacturer affiliate facilities	216.5		225.5
Floorplan notes payable — manufacturer affiliates, net	$	236.0	$	320.8

Floorplan Notes Payable — Credit Facility

Revolving Credit Facility

In the U.S., the Company has a $1.75 billion revolving syndicated credit arrangement with 21 participating financial institutions that matures on June 27, 2024 (“Revolving Credit Facility”). The Revolving Credit Facility consists of two tranches: (i) a $1.70 billion maximum capacity tranche for U.S. vehicle inventory floorplan financing (“U.S. Floorplan Line”) which the outstanding balance, net of offset account discussed below, is reported in Floorplan notes payable — credit facility and other, net; and (ii) a $349.0 million maximum capacity and $50.0 million minimum capacity tranche (“Acquisition Line”), which is not due until maturity of the Revolving Credit Facility and is therefore classified in Long-term debt on the Consolidated Balance Sheets — refer to Note 14. Debt for additional discussion. The capacity under these two tranches can be re-designated within the overall $1.75 billion commitment, subject to the aforementioned limits. The Acquisition Line includes a $100 million sub-limit for letters of credit. As of December 31, 2021 and 2020, the Company had $12.6 million and $17.8 million, respectively, in outstanding letters of credit.

On December 30, 2021, the Revolving Credit Facility was amended to replace LIBOR with SOFR. The U.S. Floorplan Line bears interest at rates equal to SOFR plus 121 basis points for new vehicle inventory and SOFR plus 151 basis points for used vehicle inventory. The weighted average interest rate on the U.S. Floorplan line was 1.18% as of December 31, 2021, excluding the impact of the Company’s interest rate swap derivative instruments. The Acquisition Line bears interest at SOFR or a SOFR equivalent plus 100 to 200 basis points, depending on the Company’s total adjusted leverage ratio, on borrowings in USD, Euros or GBP. The U.S. Floorplan Line requires a commitment fee of 0.15% per annum on the unused portion. Amounts borrowed by the Company under the U.S. Floorplan Line for specific vehicle inventory are to be repaid upon the sale of the vehicle financed and in no case is a borrowing for a vehicle to remain outstanding for greater than one year. The Acquisition Line requires a commitment fee ranging from 0.15% to 0.40% per annum, depending on the Company’s total adjusted leverage ratio, based on a minimum commitment of $50.0 million less outstanding borrowings.

In conjunction with the Revolving Credit Facility, the Company had $2.6 million and $3.6 million of related unamortized debt issuance costs as of December 31, 2021 and 2020, respectively, which are included in Prepaid expenses and Other long-term assets in the Company’s Consolidated Balance Sheets and amortized over the term of the facility.

Under the Revolving Credit Facility, dividends are permitted to the extent that no event of default exists, and the Company is in compliance with the financial covenants contained therein. The indentures governing the 4.00% Senior Note and certain mortgage term loans also contain restrictions on the Company’s ability to pay dividends and to repurchase shares of outstanding common stock. After giving effect to the applicable restrictions on share repurchases and certain other transactions under the debt agreements, the Company was limited to $279.2 million of such restrictions as of December 31, 2021.

Floorplan Notes Payable — Manufacturer Affiliates

FMCC Facility

The Company has a $300.0 million floorplan arrangement with FMCC for financing of new Ford vehicles in the U.S. (the “FMCC Facility”). This facility bears interest at the higher of the actual U.S. Prime rate or a Prime floor of 4.00%, plus 150 basis points minus certain incentives. The interest rate on the FMCC Facility was 5.50% before considering the applicable incentives as of December 31, 2021.

Other Manufacturer Facilities

The Company has other credit facilities in the U.S. and the U.K. with financial institutions affiliated with manufacturers for financing of new, used and rental vehicle inventories. As of December 31, 2021, borrowings outstanding under these facilities totaled $216.5 million, comprised of $91.5 million in the U.S., with annual interest rates ranging from approximately 1% to 5%, and $125.0 million in the U.K., with annual interest rates ranging from less than 1% to approximately 4%.

Offset Accounts

Offset accounts consist of immediately available cash used to pay down the U.S. Floorplan Line and FMCC Facility, and therefore offset the respective outstanding balances in the Company’s Consolidated Balance Sheets. The offset accounts are the Company’s primary options for the short-term investment of excess cash.